Good day and welcome to the Summit Wireless Technologies Third Quarter 2019 Update Conference Call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mary Magnani with LHA Investor Relations. Please go ahead.

Thank you, Michelle and good morning everyone. I would like to welcome you to Summit Wireless Technologies’ third quarter 2019 update call. Please note there is an accompanying presentation posted on the Summit Wireless website in the Investor Relations section. With us today is Summit Wireless CEO, Brett Moyer and CFO, George Olivo. Also with us today is Tony Ostrom, President of WiSA. Before I turn the call over to Brett, I would like to remind everyone of the Safe Harbor statement referenced in the SEC filings. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for certain forward-looking statements, including statements made during the course of today’s call. Statements contained herein that are not based upon current or historical facts are forward-looking in nature and constitute forward-looking statements within the meaning of section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934. Such forward-looking statements reflect the company’s expectations about its future operating results, performance and opportunities. These forward-looking statements are based on information currently available to the company and are subject to a number of risks, uncertainties and other factors that could cause the company’s actual results, performance, prospects and opportunities to differ materially from those expressed in or implied by these forward-looking statements. For a more detailed discussion of some of the ongoing risks and uncertainties of the company’s business, I’ll refer you to the company’s various filings with the Securities and Exchange Commission. Now, it’s my pleasure to turn the call over to Summit’s CEO, Brett Moyer. Please go ahead, Brett.

Thank you, Mary. I would love to welcome all investors and potential investors to the call. First I would like to introduce George Olivo who joined us as CFO. He will be at the LD Micro Conference in December and at the Investor Happy Hour at CES. For those who would like to meet him. Welcome, George. Do you have any comments before we get started?

Thank you, Brett. I appreciate the opportunity. I would just like to say I am very excited about the category. And since joining the company I have been very impressed with the level of customer engagement both in terms of quality and quantity. And I am looking forward to helping the company grow.

Alright. Thanks, George. So, today we have some new as well as existing investors. So, we are going to do a brief update in terms of the market, our technology and the WiSA adoption. But the main meat of this call is to go over the second wave and the broad wave of products that are being introduced last quarter, this quarter and at CES. It’s pretty substantial and we are going to spend a fair amount of time on that, as well as the enormous investment our partners are making to promote WiSA when they launch their products. So with that a quick update. The market opportunity for us is all the smart devices that exist ultimately, whether it’s a phone, a tablet, a PC or the TV. They are all great pictures, thin, poor audio and no way to get audio, yet they all stream a lot of video, a lot of sports, a lot of e-sports and gaming with multi-channel content. So, you have rear sound, ceiling sound for Atmos, front sound. So, the consumer has a problem though, how do they get that sound out? So, our mission is to make sure it is very simple for the consumer to get multi-channel audio into the room, be immersed in that action and deliver it so that we can have a great entertainment experience. Now from a technology perspective, there is three critical features that Summit Technology enables in WiSA. When you have video you want to hear the action at the same time, so there is low latency. Second, when you have more than one speaker in a room, if it is two, eight or any number in between all those speakers have to play in the audio at the same time you see it with…

Thank you, sir. As Brett said, I am Tony Ostrom. I am the President of the WiSA Association. And while we are still bringing new members on board, and we are still certifying new products and working with them through that development process, one of the most exciting things that we are seeing currently happening is, to Brett’s point, a significant investment from our members in marketing, training and merchandising products that have been certified and are coming to market. And historically we have seen brands do this independently with their own unique solution for a consumer and at their own retailers that are part of their retailer base. Now what we are seeing is a true category approach. We are seeing members work together, we are seeing retailers that understand the category and are providing merchandising areas for these members to participate and actively build this wireless home audio category. These are exciting. And a great example of that on this slide is what we have seen recently rollout across Magnolia Home Theater stores within the Best Buy organization. And if you are picking a retailer globally to start this initiative and really put a great first step forward, it would be Best Buy and Magnolia Home Theater and they are participating at a very high level. And the brands that are doing that in this particular opportunity are LG, Axiim and Klipsch speakers. So, we really couldn’t have asked for better initial partners. They have worked together to put this display concept together. They have worked with the retailer. And they are really bringing their products to market as part of a category and showing how they interoperate and a premium TV company with a premium electronics company and a premium speaker company working together to say, look,…

Alright. Thank you, Tony. And I will note that both these video clips and the where to buy or learn more clips are live. So, if you download the presentation you can click right through. Finally, a couple slides in terms of wrapping up where we are. So, looking forward, you can look forward to more speaker brands launching their first product. We haven’t talked about them today, they are not public and they haven’t soft launched. But that will be – you will see that continuously through the next two quarters. And very exciting is you will see the next WiSA Ready TV brand launch. It will support 8K video as well as it will have TVs that have or do not have internal speakers. So, if it doesn’t have internal speakers, that means it needs a WiSA dongle of one type or another and to connect to the WiSA speakers for audio. So, we are actively working with them. The projects are in design both the dongle, the speakers and the TV. So, you will see that next year as well as others. Then from a WiSA activity, there is two things coming up that you can look at. First of all, the technical steering committee has been created at WiSA for integrating the IP that Summit is developing, which would go onto soundbars, TVs, phones. And second, the current WiSA standard supports eight speakers, and those eight speakers are defined as a 7.1 surround sound. And Atmos has ceiling sound. So, all we have to do is to find those speaker types so that when a transmitter sends a signal it knows that it’s going to the left front up or the right rear up speaker for an Atmos configuration. So, you will see us announce supporting…

Thank you. [Operator Instructions] And we will take our first question from Daniel Carlson with Tailwinds Research. Please go ahead.

Hey, guys. Thanks for taking my questions and congrats on all the progress you have made. The first question I had for you in today’s announcement you talked about a TV manufacturer with no speakers and requiring WiSA speakers around it. So, I am just wondering if you can talk about, are you putting a transmitter chip in the TV or can you use the existing Wi-Fi chips in those TVs with different software on it, how does that work exactly?

It would be a WiSA Ready TV and it will use an external dongle.

Okay. And is there….

Just like LG now has WiSA Ready TVs with an external dongle.

Is there also a need to see it embedded in the TV without the dongle in the future, is that something on your roadmap?

It is. That’s the key point around developing the IP licensable version. TVs generally do not have the pricing power to embed a chip of our nature into it. But so first is WiSA Ready formats, second is IP licensing into the TV market.

Got it. Okay. And Tony, I think this is a question more for you possibly, but when I look at the – I am a believer that wireless speakers is the future and Sonos has done a good job with the whole house, but certainly not with the surround sound systems. Are there any companies that you are working with that support you guys in surround sound that are looking at a whole house solution that integrates your product into that?

Yes, a few of the systems that have been – we have been integrated into and a few of them that are coming out are kind of cross-functional in nature where they have chosen one of the multi-room audio solutions for that purpose and they have chosen us for the single room multi-channel purpose. And really the technologies that are available to do whole house, to your point, aren’t really suited to do something around a video screen due to they are multi-channel – lacking multi-channel capabilities or their ability to their definition, they may not be high enough definition. Typically their latency isn’t where it needs to be to not have some kind of lip-synch issues and we have all those things solved. So, we have seen a couple that are taking a different technology for that multi-room purpose, but then integrating us.

Well, specifically you have got Harman’s soundbar with Google Cast for streaming music, right, Harman is using Google.

Yes. The Savant system does many different multi-room control – has multiple different multi-room control features, but they chose WiSA as the single-room solution because we just meet all those criteria and exceed all those criteria where others may fall short.

Got it, okay. So basically when you look at these guys like Magnolia who are doing custom installs, they can integrate this into the whole house with no problem on one app controlling everything, right?

Well, yes, because if you look at it, we are basically – at the end of the day we are a wire replacement and it seems like I am oversimplifying it and I am, because what it takes to be that really good multi-channel wire replacement is actually extremely complicated and that is why no one else has done it. But at the end of the day whatever signal they can’t get to the transmitter, the WiSA Certified transmitter can go to all the WiSA certified speakers in that room. So, look at us as a node in that whole home chain. So, whatever you can get to the theater we will take care of broadcasting it to all the speakers. That may be any service through any multi-room technology, whatever we get in we will broadcast back out to the WiSA speakers in that room.

Got it. Okay. And then, Brett, you talked a little bit without any numbers here about an exciting part from an investor standpoint which is getting out there and selling more of these products. The Best Buy rollout is awesome, but what are the next steps to accelerate revenue? And is there a chance we are going to see a 7-figure, which in my mind is an inflection point for the stock possibly, a seven-figure revenue number to Q4?

Yes, so let’s just take the first part. The inflection part is really these product launches. That’s why we focused on them today. When you start rolling out $800, $900, $1,400 high-performing products into retail that’s our inflection and I think that’s all there. Now on the given week and the given month that’s all unfolding rapidly. It’s within our abilities to have a 7-figure quarter. We are not guiding or committing to anything until we see how the rollouts occur this quarter.

Got it. That’s it for me. Thanks guys. I appreciate it.

Thank you.

[Operator Instructions] We will take our next question from Ed Woo with Ascendiant Capital.

Yes, thank you for taking my question. My question is on the price point, how low do you think you could get these products down in the next couple of years? Do you think we could see sub $500?

So I think on the current hardware solution you will see promotional offers in the $599 to $699 range. I think the point we are trying to drive with the next generation IP is to be able to get below $500. Now that’s talking as a 5.1 solution, but there are offerings that will come out as 3.1 or 2.1 that can today go under $500 and some of our partners are looking at those configurations to be launched.

Great. And then in terms of just initial response from consumers as we head into this holiday it looks like the consumer is relatively strong. What are you hearing from some of your partners in terms of their displays out at the retail stores like Magnolia, Best Buy? What are they saying about their expectations for just holiday?

Yes. So, I was in a Magnolia store near my house in California and the sales person stepped away, and I might have searched WiSA on the browser on the computer screen. It turned out to be the training system for Best Buy. And here were a list of comments that were all from people who just took the WiSA training course that they had and it was all fabulous. You would see like awesome, can’t wait. There wasn’t one negative comment. There was a lot of enthusiasm around there. So, that plus the response by the press since CES I think indicates where the consumer will be. It’s really just down to blocking and tackling execution by the speaker brands and our partners to get this rolled out.

Great. I know we are heading into CES last year was a big announcement year for you. I know you probably don’t want to disclose anything, but should we expect similar type of announcements this year?

We expect to have a very active PR calendar over the next 6 months.

Great.

Yes.

Thank you and good luck.

And we will take our next question from Kevin Cornelius, Private Investor. Please go ahead.

Thanks. Yes, good morning. Exciting times certainly it sounds like. My question is more along the lines of what kind of volume or possibly market penetration numbers would you look at to really start to move the needle for Summit as a company? Clearly you have got early adopters coming in, but have you guys gauged as what kind of market penetration or volume are you going to need to really make the financial move happen for the company?

So, the answer is yes, we have gauged it. There is different metrics that we can look at. So we have had a presentation out there that looked at WiSA Ready TVs, but there is a simpler one, Kevin, I think that if you just think about 20 million soundbars, we picked up 5% of that volume we would be in the $40 million revenue range quickly. So, we like soundbars, we love the soundbars that have WiSA in it particularly. But we think having discrete speakers around the soundbar, both in front and back, gives a much better sound. So, that would be the easiest metric to gauge in terms of penetration. 5% of the soundbar market makes us a $40 million to $50 million company in 10,000 foot level analysis.

And there are no further questions.

Okay. Then I would like to thank everybody for participating in the call today. Look forward to seeing you at either the conferences or particularly at CES where you will be able to get a good cross-section of products being launched all in one meeting. Thank you.

And this concludes today’s conference. We thank you for your participation. You may now disconnect.