Thank you, David, and good morning, ladies and gentlemen. Thank you for joining us on WiSA Technologies Q1 Investor Update. Today, we'll go over a quick overview of WiSA for any new investors or listeners. We'll cover WiSA E's competitive advantage and how we architect it when going to market. We'll discuss licensing deals and financial highlights. And finally, we'll talk a little bit about the shareholder vote on May 31, designed to encourage everybody to get out and vote. For the highlights, when we launched WiSA E late last year and started licensing it in Q4, we think that's a major inflection point for the company that will start demonstrating itself in revenue in the second half of this year and for the industry. Because as we'll talk about later in this presentation, it is a very powerful platform, this software that we've developed for transmission. And in October, we announced we would start licensing it to TV and set-top box companies for the transmission piece of it, not the piece in the speaker. And to date, in the first 6 months, we've signed 5 licenses, which we think is a terrific start to a new technology. We continue to have a strong portfolio of patents in the wireless space for multichannel high-resolution audio. Uniquely to us, we have the WiSA Association referred to as WiSA LLC, which is designed to ensure there's interoperability between products that have the source of content with a WiSA E transmitter and have a WiSA E receiver, and that organization works with both sides for interoperability testing, works with retailers to ensure they understand what WiSA E does and to make sure the branding is properly displayed so that consumers know which products work with which. This is modeled after how HDMI started and went to market, and we're continuing to build that out. And finally, fortunately for us, while this is powerful and innovative new technology, WiSA E, we have the great advantage of launching it into a premier customer base, and we'll go through a few of those today. But we've been selling the highest performance wireless multichannel audio for 11 years. That customer base is very supportive of us, albeit they understand that we had a very expensive solution that we've now addressed. All right. So what's immersive audio, spatial audio? You think about the innovation that's going on in video recording and mixing and the audio industry, and we're all trying to create an environment, whether it's a bedroom, a family room, a patio, or a garage, to make the audio sound like you would experience it if you were there in the concert, at the symphony, at the NFL game, or in the movie theater. That's what spatial audio or immersive audio aims to do, to create a three-dimensional audio experience for the consumer. This picture in the shaded green is demonstrating what they're trying to achieve. So, Dolby has Atmos, which is their immersive technology. Google has IAMF, which is their solution, and Xperi has DTS:X. All of them are trying to simplify the way you understand all the audio that occurs when you're at that event or at that movie theater or in the NFL stadium—audible from above, behind, and to your side. When you go wireless and avoid using wired speakers, it becomes easy for the consumer to set up and enjoy that immersive audio. And that's where we come in. We are not the publishers. We are not YouTube creating content or Hollywood. We are not the WiFi network, and we are not one of the technology companies that have the audio decoders for immersive audio. What we are is we believe we provide the best solution to transport that audio from the source device, whether it's a TV, phone, or projector, to the audio devices in that room flawlessly, with the best sync, the tightest latency, and the most reliable signal. So we are the transport. Second, we are the association that ensures that consumers know what products work with whom and that manufacturers build products that are compatible with each other. I mentioned earlier that we have a strong customer base that has used us over the last 10 years. This is a summary of some of the bigger ones, but it's important when you're launching a new technology not to be a new company with a new technology; we're a well-established company with a powerful new technology, which we'll talk more about. So the power of WiSA E—you would have heard a lot about home theater 5 or 10 years ago—but that's really not the focus. The focus is to get that immersive audio in any platform, room, or area in your house where you want to enjoy audio. So when you look at the sources we had at CES, you had 2 TV companies showcasing WiSA E, 2 set-top boxes demonstrating WiSA E in our suite, and a third set-top box in a private suite. You had a Google phone and a Samsung tablet— all of these sources were able to play WiSA E to the same speakers in the room. And we think that's important; you don't want to have Bluetooth. Like with Bluetooth, it works with any Bluetooth device, but it won't work with everything else. We want any WiFi-enabled device to be able to play with the same speakers in that room, regardless of how it connects. That's what we demonstrated at CES, and that's what we are trying to do going forward. Now, why do we think WiSA E is so powerful? Historically, we have always focused on high-performance audio transmission. We have not given that up. But now, with a software solution, we cross into the world of universality for technology vendors. We can implement WiSA E across all the major SoCs. We demonstrated it on MediaTek, Amlogic, and Qualcomm SoCs at CES. We can use different operating systems currently like Google, but there's no reason we won't expand in the future into web OS or other operating systems. But for now, all resources are directed towards the Android operating system by Google. Finally, we're agnostic to WiFi. We've shown that our software can be loaded onto various chips. When the industry looks at us, they know that they have a broad line of TVs with different SoCs in it and different WiFi chips, which means the same audio products they design will work with any TVs regardless of the SoC and WiFi chip they choose. And that's powerful for them because they don't have to design one set of audio products and are not constrained in future generations of TVs. We are open to any device. For us, again, the consumer must be able to use it everywhere—be it on a TV, mobile device, set-top box, or projector. We've demonstrated it working on all those platforms, and we think we'll roll it out broadly. That all presents great technical challenges. In our first 5 months, what we've seen is the ability to approach TV and set-top box companies and say, 'Look, this will not change your bill of materials cost'—that's a game changer. Nobody else can go in and say that and be agnostic to device and cross different SoC platforms. That lets the TV or set-top box manufacturers design features for consumers without incurring additional costs unless they decide to buy the audio and trigger its use. For example, the fifth license we mentioned includes an activation fee, and if the consumer buys the audio speakers, then a royalty is paid back to us. For products that aren't attached to audio, there's no bill of materials cost—which is a significant factor for TV and set-top box manufacturers. In those 5 licenses that we have signed, the new information to note is that there is at least one TV, one set-top box, and one projector included. We've already penetrated 3 of the market segments and expect to secure at least 3 more this year, ending with 8 licenses. All these licenses are with multinational companies, so we have a solid strategy on technology. With licensed products already in motion, we plan to let the strategy go to market and generate revenue. We see the TV as the primary focus, start with that, and then expand into set-top boxes, phones, or tablets. Once the license is secured on a source device, our revenue stream has multiple facets. It can include royalties upon activation or a straight license. Any audio product connecting to it will receive an Rx module from us, featuring WiSA E functionality. Thus, we earn revenue from that. Any customization incurred is organized through engineering service fees, and we will also offer annual support contracts. Consumers only see the TV that features WiSA E, which affords them flexibility based on their budget, use case, and room size. If they want a subwoofer because the TV lacks base, that's a simple addition. If they wish to add front or rear speakers to enhance their sound experience, they can do that. All these configurations can be achieved through WiSA E if their TV supports them. Lastly, we are exploring options for headphones and combinations of soundbars and Atmos speakers to generate a dome effect with audio. From an industry perspective, we are witnessing substantial innovation with TVs and audio. I think this is the first time in 20 or 25 years that I can say that. We even see TVs experimenting with upfiring speakers or Atmos technology at the front of the room, which means consumers will desire rear-firing Atmos speakers to complement that superior TV quality. We've signed 5 licenses and expect to finalize at least 3 more this year. What does this mean for you, the investor? No multinational will sign a WiSA E license without undergoing technical tests, which indicates their confidence in WiSA E's performance. Across all agreements, important items will be included in licensing arrangements, such as royalty rate, activation pricing, and engineering services. From there, brands will typically outline their product roadmap to decide if they do a high-end or low-end rollout. At times, the announcement of a license signifies the commencement of the brand’s decision-making process following its technical tests. In such cases, we sometimes finalize the license only after initial discussions, as was with our fifth license. For those trying to build out a model, consider that a TV might see an audio attachment rate anywhere from single digits up to 20-25%. If they are attaching audio, a minimum of 1 Rx speaker (likely a subwoofer) is expected. From our financial guidance for 2024, we anticipate revenue in the second half from our licensees. We also expect to sign 3 more licensees in this timeframe. Additionally, we are beginning to observe traditional customers, our audio file customers, starting to reorder WiSA HT, which is a positive sign. It indicates their stock from the COVID purchasing cycle is now aligned, and they are beginning to place new orders with us. As anyone following the company has noticed, we have conducted a series of financings, essential for us in several respects. Firstly, the $8 million is now on our balance sheet, which will ensure we have the cash needed to adequately launch WiSA E and roll out new products. Secondly, our shareholder equity has been bolstered through issuing shares, which enhances our application to maintain our NASDAQ listing. We have met the minimum bid but still need to comply with net shareholder equity, which we believe we have largely accomplished. Lastly, regarding the shareholder meeting, if you haven't determined how to vote your shares and you are a shareholder of record from March, please email [email protected] and the proxy solicitor will assist you in identifying how to vote your shares. It is crucial we achieve a quorum of 50.1%. So please vote, whether yes, no, or abstain, so we can conduct the company’s business on your behalf. Proposal #2 may have been misinterpreted. We propose lowering the quorum threshold from 50% to approximately 30-33%, making it easier to conduct our business. Like many micro-cap or small-cap stocks, we have a large base of small shareholders. This change will facilitate business execution without incurring substantial costs in pursuit of reaching a 50.1% quorum. Each adjournment or new mailing incurs significant expenses, which we have incurred over the past 6 months while attempting to gain shareholder approval. This is ultimately for your benefit. The reverse proposal 1 requested by the Board intent is to support our NASDAQ application and ensure we maintain compliance with the $1 minimum bid requirement. There are no current plans to implement it, but it remains an option if needed. Finally, proposals 3 and 4, which pertain to warrants issued to investors who financed the company during challenging times, require your approval.
