WiSA Losses Widen; Plans Q4 Launch of DS Technology

WiSA’s Q2 revenue fell 40% to $946,000, from $1.6 million in the year-ago quarter, said Chief Financial Officer George Oliva on a Monday earnings call. Its net loss was $4.1 million vs. $3.4 million in Q2 2021, said an SEC filing. Gross margin shrank to 20% from 29%, due to lower sales volumes, said the corrected quarterly earnings release.

Also Monday, WiSA announced it issued a $3.6 million senior secured convertible note and warrant to Lind Global Macro Fund. At closing, $3 million in gross proceeds will be funded, with the net proceeds to be used by the company for general working capital. The combination of cash on hand, increasing revenue, decreasing inventory and the $3 million financing "should be sufficient to fund our execution into 2023," Oliva said.

WiSA expects sequential revenue growth in the second half, following a 67% revenue increase from Q1, said CEO Brett Moyer, acknowledging unpredictable consumer spending patterns for the fall season. Two new projects are expected to go into production in Q4, he said.

WiSA customers have been testing WiSA DS projects, including three TV brands, eight sound bar brands and one application for the automotive market, said Moyer. WiSA DS is a 2.4-GHz technology; the company will port DS to a 5-GHz solution in a future version, “which lets us add more features and reduce latency,” Moyer said.

In 2023, WiSA’s market offerings will include first-generation WiSA HT modules and speaker systems, WiSA DS and WiSA E modules, currently under development as an IP licensing solution, Moyer said. The company plans to launch WiSA E late last year in Platin speakers with a SoundSend wireless audio transmitter. WiSA’s Platin product will show potential customers “that we perform well” at retail and at home, and that "we’re a safe technology to adopt,” he said. WiSA will begin sampling WiSA E in Q4, Moyer said in Q&A.

WiSA is adding more WiSA stores, after launching on Amazon last year. It plans to add three to five this year, Moyer said, saying WiSA is getting “inbound requests” from retailers asking how they can become a certified retailer. “You can take WiSA-certified TVs or speakers and have the retailers aggregating them so that WiSA looks like one complete solution to the consumer.”

Website traffic reached 2 million last year; this year WiSA expects to bring in 2-3 million, lower than previously forecast due to “consumer patterns changing,” Moyer said. “Now that people are leaving the COVID cave, we saw a change in demand,” he said. Responding to lower demand, WiSA shifted marketing dollars out of Q2 and Q3 and will plug it into the fall to spur holiday season demand, he said.

Inventory increased in Q2 year on year to $6.2 million from $4.8 million, the company said. "As our customers have rescheduled orders out, we are also having to reschedule our vendors out," Oliva said. "So, to the extent that we can defer the excess purchases to next year, we should start to see our inventory come down in the second half of the year," he said.