00:17 Greetings, and welcome to the WiSA Technologies formerly Summit Wireless Technologies' Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief Q&A session will follow the formal presentation. As a reminder, the conference is being recorded. With us today are Brett Moyer, CEO and President; and CFO, George Oliva. 00:40 Before turning the call over to Brett, I'd like to remind everyone that today's presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements, as a result of risks and uncertainties impacting the company's business, including current macroeconomic uncertainties associated with the COVID 19 pandemic; our inability to predict or measure supply chain disruptions resulting from the COVID-19 pandemic and other drivers; our ability to predict the timing of design wins, entering production and the potential future revenue associated with design wins, rates of growth; ability to predict customer demand for existing and future products and to secure adequate manufacturing capacity, consumer demand conditions affecting customers' end markets, the ability to hire, retain and motivate employees; the effects of competition, including price competition; technological, regulatory and legal developments; developments in the economy and financial markets and other risks detailed from time to time in the company's filings with the SEC, including those described in Risk Factors on our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. As revised or updated for any material changes described in any subsequently filed quarterly reports on Form 10-Q. The information in this presentation is as of the date hereof and the company undertakes no obligations to update unless required to do so by law. 02:22 With that, I will turn the call over to Brett. Go ahead, Brett.

02:28 Thank you, David. I'd like to welcome you ladies and gentlemen to our fourth quarter call. Hang, we have operator errors here. Okay. So exciting call today, lots of changes are going on and looking forward to walking through those changes and laying out the 2022 plan. Everybody is recognized why so whether you're a consumer in the industry and investor as really the highest wireless provider in the world, whether you're measuring channel count, lips sink, latency speaker sync, et cetera. What we have talked about and alluded to changes in the market that we see as big opportunities. 03:20 All right. So, the market opportunities that are being created now is, one, WiFi is getting better and what mean better it doesn't make it mean is, easier to do 6, 8, 10 and 12 channels in WiFi. But they are performing better, so we're at a point where in fact we can move our IP from our custom module to WiFi chips. Two, wireless speakers are everywhere, primarily interfacing with the Internet with Alexa and Google. But there is the opportunity and some are starting to do it to be multi-role they can be your -- your Internet interface and your music streaming player or they can act like rear speakers. 04:02 Third, consumers, we've all seen consumers buy a lot of TV's during the pandemic, large TVs. We're the logical purchase after that is audio to go around those TVs. And the audio codec companies which is Dolby and DTS. There supplying codecs that not only give you two dimensional audio, but three dimensional so, Dolby Atmos has ceiling sound, front sound, rear sound, side sound. So, the consumer has the ability to really create a bubble sound in the room that covers all levels of…

17:33 Thank you, Brett. So, we have been tracking website traffic as a key performance indicator. We were targeting 1 million unique user visits in 2021. We exceeded 2 million and we're projecting a target of 4 million visitors in 2022. If you look at our revenue 2021, we had a 172% growth and our guidance for 2022 is approximately 40% growth year-over-year. 18:10 Go to the next slide. So Q4 2021, we hit --we exceeded 2 million in revenue for the first time in the history of the company that was a 93% increase over the same quarter of the prior year. Our gross margin exceeded 30%, which was our target that we've been talking about, that's up from 24% in Q4 2020. Our operating expenses were $3.7 million, which included $0.5 million of non-cash expenses primarily stock comp expense, that was compared to $3.9 million of which 900 K was non-cash expenses. 18:53 The net loss for the quarter was $3.1 million compared to $3.7 million in the prior year same quarter. And we ended cash for the year at $13.1 million, which is what we had guided to. If you look at guidance where we were -- we are off to a slow start this year, but it's a back-ended year. We're going to have between 30% to 50% growth year-over-year for the full year. So, the midpoint is $9.2 million there for 2022. The gross margin, there is a lot of issues in the supply chain, things are going to bounce around, but we're still targeting 30 points, but we could be in the high '20s as well. And with the $13 million, we're starting the year that's enough cash to fund all of our initiatives we're talking about through the rest of the calendar year. 19:46 And with that, I'll turn it back to Brett.

19:49 Thank you, George. So, if you summarize toward the position of the company’s in, we are in, we have repositioned ourselves from the high-end audio file market to the very broad audio market. We have positioned ourselves to have four product lines by the end of this year, three modules plus IP. We have positioned significant growth despite supply chain issues in Q1 and the balance sheet is strong. But the sum of all this is we are in an explosive audio market driven by the consumer. We have the only comprehensive wireless offering to the industry to address that demand. We are the only interoperability standard that has not only serve interoperability for the market that needs it, but also building the retail market around it with the storefronts. So, we think we have solidly positioned the investment last year and this year to drive revenue growth this year and beyond and increase shareholder value. 20:57 So, with that, I'd like to turn the call over to David. He will moderate questions. I would ask you to state your name, your affiliation whether you with -- because we can see it on the SRAX platform. So, if you give us your name, your affiliation whether you are with a bank or investment firm or a private investor and ask your question. David?

21:24 Great. Yeah. Thanks, Brett. We have a question. I'll go to the first question, it's the dial-in from the number ending in 884. Unmute your line. There it is.

22:33 Hello.

22:35 There you go.

22:36 Can you hear me?

22:35 Okay.

22:36 Yes.

22:38 Great. This is Jack Van already, sell-side analyst at Maxim Group. Brett great results and George, thanks for taking my questions. Strong outlook. I wanted to just review, this is a record -- this was a record quarter for you guys in terms of revenue. So, it's great to see and George, just looking at your guide as well for the next year – I think it’s strong growth baked into that. Brett, maybe if you could just help me understand how much of a role, what were the key drivers of revenue for this quarter, particularly with the WiSA Wave? And then just all the moving parts with these new product launches, you have going on for next year for this year. What's kind of driving the revenue growth that George outlined? So, from, I guess, fourth quarter revenue drivers and then what's driving 2022’s revenue growth from a fundamental qualitative perspective? Thanks.

23:38 Yeah. So, what's driving our revenue growth Jack is the wireless modules. So, we do have the Platin Audio line that we sell, I believe that was roughly 450,000 in Q4 maybe, maybe 400 and obviously, that's always going to be strong in Q4 because of the seasonality of the consumer business. But when you look at what's driving 2022, the growth in 2021. This is design wins for wireless technology. I mean, if you go back 18 months, the brands we talked about them versus the brands now just within the certified world is significantly larger plus we just talked about a bunch of brands that we haven't talked about in the past. So, the Lovesac deal very important deal, Harman’s soundbars very important.

24:37 Got it. That's helpful. And then speaking of which I wanted to just zone in on the new -- the second-gen opportunity basically with Realtek and there was a product in the initial press announcements from, I'm not quite sure, maybe a month or so ago, that the initial product or sample maybe in the market by 2022 or like a demo version of it. Can you just provide an update there and when you actually expect a product for -- ready for consumers?

25:13 So we expect -- so we will -- so we’re -- today, we basically have announced a partner and we have announced the branding strategy. We will announce the actual first iteration of that product itself mid-year this year, so call it, sometime in Q3. We expect to sample it shortly thereafter. And we expect to release it to production by year-end.

25:42 That's awesome news. Okay. Great. That's exciting. And then let me just ask one more, the typical question around supply chain dynamics and maybe the impact or visibility of impact that you think it's having on some of your major brands. And how many brands do you have these days, is it still 70 plus consumer brands?

26:05 I believe so. We have started focusing more on how many brands are shipping, because one is members but more importantly is how many brands are shipping and that's over 30 now. But I think we're still in the same ballpark of brands in the association. You had a question before that, Jack?

26:32 Yeah. And then so of these 30 brands that are shipping, 30 or more brands that are shipping products, how are they -- what's your visibility or any color you could provide on potential impact or delays or just given the supply chain environment, any comments there?

26:50 Yes. So, supply chain obviously has been an issue for the industry as a whole for starting early last year from our communication out to you folks. It has not been an issue because we've been, we've managed expectations, so prior to supplied issues we thought we had a higher year last year than what we did, right. But what we are seeing in Q1 is a drop in business because a lot of that product that didn't get built showed up after Christmas. So, our brands, our consumer brands that are using our technology are sorting through, how does clean up their inventory positions before they go to the 2022 Christmas build. So, we have started a post Lunar New Year starting to see more PO activity that's impacted Q2, which is good. We have not seen any design losses or product EOLs. So, we're pretty confident. This is a short early in the year phenomenon until our customers get their inventory back in line. We do CPOs coming in even in Q1 for new designs. So, by time, we get into Q3 we're feeling good that all designs, whether they were last years or this years, they’re going to be meeting production in the back half of this year.

28:20 Okay. Great to hear. I appreciate the update. I'll hop back in the queue. Thanks.

28:27 Great. Thanks, Jack. Then I go to the next caller -- the question, ending in 884 that number. Actually, ending in 131. Go ahead and unmute your line, if you could. Here you go. We should be able to hear you.

29:05 Hello.

29:06 There you go.

29:07 Yeah. Hi. It's Marty Elbaum, Horizon Networks. Hey, Brett. How are you?

29:12 Hi, Marty.

29:15 A question I had for you, when -- could you give us some guidance as to when you see the loss -- the company really turning around and either breaking even or showing a profit because, if you lose $3 million a quarter, you're going to be out of money in a year?

29:35 Yes. So, we have not given guidance, but what I will say, Marty is, if you think about the TAM that we are driving to. We are all in at finishing and launching and introducing these all three technologies to the broad industry this year. So, when you think about where do we see P&L improvement, we believe that starts next year. I'll say that much, right, because you're not going after that 50 million, 60 million high end market. You're going after the whole market with three different profit, price points, three different performance levels. And that's fundamentally opens it up, so we believe using that $13 million of cash that we had at year-end is a very critical investment to open up our markets, so that we can grow revenue beyond the revenue that we've seen in the last three years that growth.

30:34 That's great. Hopefully will succeed in that area. I hope it works.

30:41 We're planning on it maybe I feel I have high confidence in our technical engineering team. I got high confidence in the sales team. We've added some very talented people, some of them, you guys are aware of being Eric and Steve. So, the two ring leaders behind the HDMI launched back in the day. We added a new country sales manager in Korea with very high relationships in LG and Samsung. So, we're prepared for success.

31:13 Great. That's wonderful news. Thank you.

31:18 Okay. We've got another question coming in here from the dial-in ending in 019. Unmute your line. There you go. Are you in?

31:48 Do we need to mute Marty?

31:50 I'm sorry.

31:52 Yeah. Go ahead and mute Marty and then?

31:55 Was it star six?

32:00 That's the unmute or just mute your phone and then you can dial this one here. And we have the phone number is 019 ending. We believe that might be David Lavigne, but I'm not 100% sure. You can unmute by dialing star six.

32:23 Now you can hear me a bit.

32:24 There you go.

32:26 I pushed it 3 times. So, it was me, okay. So, if I understand this, right. As we move forward in the product mix. I guess I'll call it, as the product mix shifts more to the embedded solution. Do we end up at a point then or is the goal to end up at a point where you're basically providing a license or a piece of software, I don't want to sort of the right term is there either. But that's just kind of a higher margin products. So, is that what we end up. It is more likely kind of a maybe a lower revenue much higher margin ways?

33:16 So that's a great question, David. First, I would say, I never like to give up revenue ever but what it does let us do, so when you think about that TAM ladder that we showed. The thing that the speakers need as they need a module. But what the big brands, if you think about penetrating a Samsung and LG let's just take those two big brands, right. What they need is control their own destiny. So, I look at it is we're expanding our revenue to IP licensing that's what the team in India is doing, but we will never give up the module revenue because that's not what speaker companies need. They just want to go buy in and they want to buy a wireless module and they want to know it connects to what getting sent to them, right. They're not going to go out, right.

34:13 So okay, so I said that wrong. So, I mean lower -- maybe lower unit revenues?

34:21 Yeah, but it's a vastly larger market.

34:27 I understand that.

34:28 Yeah. So just the soundbar market, we have a few great designs on WiSA HT, but in fact, there is a 42 million unit market this year. And we think there's a ton of upside around just that WiSA DS in expressive module. So yeah, it will be lower ASP sale, but it addresses 90% of the market or 95% of the market that we could not address.

34:59 And ultimately that will be a higher margin then…

35:04 Right. And we believe that new products offer a higher margin. So, George guided to 28% to 30% gross margin this year. And we have been targeting 30 points, we've seen cost increases on the WiSA HT module. We've made a choice for a couple of points. We have raised prices on those last year, but we're not going to push the price level any higher. But the new…

35:33 You get to a – I’m sorry.

35:36 Well, I was just going to say, so the margin structure, we're looking at whether it's the IP licensing, which is 100% margin. The auditors will figure out how to turn it in 95% margin, right. But there is no margin costs, right. The expressive module, the Realtek module sales we think that is higher than the 30 points that we've been guiding to.

35:59 Okay. That's what I was getting too. So, as I sort of absorbing all of this and I keep coming back to the term you used to on the other slides when you said you're really in the wireless transport business. So, I mean is it fair to say that what you're really trying to do ultimately is in terms of audio basically become a better solution to wireless transport of audio then . I know you've tried to stay away from that analogy in the past, but that seems to me I guess that's what that means to me, I mean, tell me if I'm wrong about that, I guess?

36:42 So there are some segments of the Bluetooth market that we are expressly deliberately competing against with the expressive module. WiFi is a better signal. There is better connectivity applications. There's more things you can do with it. So yes, now that's not the same as -- I don't think we're at the point where every Bluetooth speaker can become WiSA. But we're going to start taking that -- going after that business because certainly those Bluetooth subs there's little Bluetooth speakers that are floating around the TV and the soundbars those have serious performance issues that we can address.

37:25 Got it. Thank you.

37:27 At the moment, I don't show any other questions, if anyone has a question raise your hand -- otherwise, we'll wait just a minute. Otherwise, I will turn it back to Brett for closing remarks.

37:43 I think, David, you have to -- you have to unmute yourself again.

37:52 No.

37:53 Okay. I’d to thank you for attending today. We think this is, we had an exciting year last year with a lot of revenue growth with a couple of quarters were record revenue growth. We continue to see revenue grow in this year significantly, particularly in the back half so -- and we're really well positioned to address the wireless audio market going forward. And with that, I'd like to thank you and have a good day. Goodbye.