DVLT - NASDAQ

Welcome to the WiSA Technologies’s Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mod. A brief Q&A session will follow the formal Presentation. As a reminder the conference call is being recorded. With us today are Brett Moyer, CEO and President; and CFO, George Oliva. Before turning the call over to Brett, I would like to remind everyone today’s presentation contains Forward-Looking Statements within the meaning of Section 27-A of the Securities Act of 1933, as amended in Section 21-E 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, rate of growth, the 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 Securities and Exchange Commission, 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 from our 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. With that, I will turn the call over to Brett. Go ahead, Brett.

Thank you, David. And thank you, ladies and gentlemen, for joining George and I in this Q2 update. Last year, the company initiated a strategic vision to expand our technology solutions beyond the niche audio file market that we dominate, the solutions that can reach the broad consumer electronic market. The primary investments that were undertaken included expanding our R&D effort and patent filings, hiring the former HDMI executives to build strategic partnerships in the industry, expands WiSA’s role to work with retailers and directly with the consumer. Today, in addition to our Q2 results, we will discuss why now for these investments, the size of the market opportunity, the technology roadmap for each market segment and the anticipated revenue ramp. So why now. When you think about where the industry has evolved, there is enormous work on spatial algorithms. There is release of codecs that can give you that three-dimensional sound by both Dolby Atmos and DTS, WiFi chips have become significantly faster and lower cost, even at a point that some of the IoT chips like the expressive chip we have a partnership with can become useful in multichannel versus wireless sound. As we all saw in the last two-years being in our COVID case, content is prevalent. It is streamed everywhere from every device. Yet, when we are watching that content, it is not the same as when you are in a theater, when you are in a stadium, when you are at a concert or symphony, that audio sound is half the experience, not just the video. So we got the content, how do we bring the rest of the audio to market. And then the third leg here is, when you look at the TVs, they have gone 1k, 2k, 4k, 8k. They are running out of display technology that is meaningful to the consumer. So, how do you continue to grow your business as a TV manufacturer? You synchronize audio to your TV and integrate audio solutions to build your P&L. So we think those three factors create a great opportunity for spatial audio and for WiSA Technologies. Now where do we fit in that space, because we are not the content guys, we are not the WiFi media guys and we are not the codecs, but we are the transport. So what our engineering team knows how to do is synchronize a lot of speakers, keep the latency low, make sure we work in a in a heavily congested WiFi space. So we get audio from the turn from the smart device to the speaker. And that is our role to support the other three legs of this tool. We have been successful with our original technology launch. Most of you have tracked us. So you have seen these brands, but these are really the premium brands in the industry. The audio guys are some of the highest performing audio speaker companies in the world. So we have a great reputation to launch this new endeavor. Number one, we take the IP developed in originally with WiSA HT, we extended and developed the WiSA association that moved from a test organization, a certification organization to a broad consumer reaching organization, which we will talk about a little bit. We are now launching the first product with our IP called WiSA DS that is on a 2.4 gigahertz high performance. And then following that, we will take the IP that we are working with in DS and move it to a 5-gigahertz solution, which lets us add more features and reduce latency, as well as license IP. So three technologies, one existing, two start and ship this year, third one coming next year. WiSA HT, WiSA DS for sound bars and TV integration, WiSA E for IP licensing and speak -- smart speakers and all other devices. So when you look at the whole market, WiSA is the only company that is able to offer a low cost module for sound bars, a mid-range solution for all smart devices and a premium solution for those audio file customers that we have today. And we are the only company that is being able to span to breadth of solutions and cost points. When you look at the market size, this dramatically increases our market size. We showed you this slide last time, but just for the refresher, we are going from a 40, 50, 60 million TAM to several hundred million with WiSA DS to over a billion with WiSA E. And the price parallels are HT is the most expensive, WiSA DS is probably 65%, 70%, less than HT and WiSA E is right in the middle. So that chart of feature cost goes from the lower left hand, all the way up to the right. And no matter what your objective is, whether you need IP licensing or a complete module, we are able to handle the whole market. So the role of WiSA, which has expanded dramatically in the last 12-months, I think it was this time last year that we talked about WiSA stores and the first one was amazon.com/wisa. And we expected to get five or six last year. Today, we did announce that we expect to expand that and by another three to five, and materially, we now have inbound request from retailers asking, how do they become a WiSA certified retailer? How do they set up a WiSA store? And what are the requirements? That is a big swing in terms of momentum for WiSA, when 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. With the consumer marketing, you saw us grow web traffic from relatively nothing to two million consumers last year. This year we will increase that to three million between two and three million. That is lower than our previous guidance. And that is as a result of consumer patterns changing and what they are buying now that people are leaving the COVID cave. We saw a change in demand, both through our customers as well as our marketing with WiSA. So we shifted more of the marketing dollars out of Q2 and Q3 into the fall selling season. When people come back from their vacations, come back from their first trips, come back from eating restaurants and they are back in their house thinking about what to do for the fall and winter. And finally for WiSA critical to that was we did launch invest and then launch the SoundSend. And as you can see below the SoundSend, actually provides to the industry, the safety of knowing they design speakers, and there will be a WiSA HT SoundSend. There will be a WiSA E SoundSend interoperable standards. The industry has responded with some great awards including the 2022 winner for Smart Home Excellence. And we will continue to support that product so that the consumer and the retailer and the speaker guys know there is a product that will connect WiSA speakers to any Smart TV. So new information on this slide, but for the new people joining this call, WiSA DS has one primary competitor that dominates the wireless speakers in the sound bar and the sound bar trans either sub woofer or rear speakers. WiSA DS comparing to that can offer more channels that we can do up firing as well as rear speakers and a sub-woofer. It has a stronger performance in a congested wireless space and is substantially cheaper. So we think all three of that positions us strongly. Now we have launched this particular feature of 5.1.4 capability in March. COVID has hampered our ability to go to Asia, but our Asian team has already generated 12 companies that are going through the testing evaluation cycle. And they break out between eight companies focused on sound bars, three companies focused on integrating testing and for the possible integration into TVs and one company that is launching a product for the auto aftermarket. We expect at least two of these will go into production in Q4 this year. So how does all this technology evolve over time? So if you start at 2023, you have we WiSA HT, the gen one modules, you have the speaker systems, you have WiSA DS and WiSA E modules all in market next year. Now WiSA E will just be getting there late in the year and we will launch platinum speakers into the market with WiSA E with a WiSA E sound set. And again, what is the purpose of that? Not to be a speaker company, but to prove to potential customers that we perform well in the retail and perform well in the consumer home and we are a safe technology to adopt. So WiSA E will start in 2023 and build that is the blue color. WiSA DS modules will start in Q4 this year in terms of revenue and continue to build we think it is a strong product and it builds continuously through 2024. Speakers will grow as a result of our effort to prove WiSA E, a viable technology and performing well with consumers and the G-1WiSA HT modules will have new design starts throughout next year and then slowly ramp down over the next three or four years. From an IP position from our investment in the last 12-months to the next six, fundamentally change our position in terms of a patent holdings, we have now got 12 issued or in the process of review or filings. That is from the benefit of the 12-years we have been working at it. And again, this is all about, do you have an engineering team that knows how to handle sync latency, congested WiFi space, and audio repair. And the engineering team has done fabulous at developing WiSA DS and WiSA E. We are really excited at that performance as it measures against competition. So now I would like to turn the slides, the presentation over to George our CFO.

Thank you, Brett. The Q2 revenues were 946,000, it is down 40% from the same quarter in a previous year, but up 67% sequentially from Q1.The gross margin was 20 points down from 29% in the previous year but up from 11% sequentially from Q1. Operating expenses were 4.3 million, including half a million of non-cash expenses, primarily stock expense compared to 3.3 million in the previous year with 400K of non-cash expenses. The increase in OpEx was due in large part to our engineering efforts as Brett has discussed. The loss for the quarter was 4.1 million compared to 4.6 million in the prior year. The larger loss in the prior year despite lower OpEx was due to a non-cash charge we took in relation to converting the preferred last year to common. The ending cash for the quarter was approximately $4.8 million. In terms of guidance for the rest of the year, we expect revenue to continue to increase sequentially in Q3 compared to Q2 and increased additionally in Q4 compared to Q3. As module volumes increase the margin should continue to improve into the mid-20s. And then with the cash on hand, combination with increasing revenue, decreasing inventories and the three million in financing that we announced this morning should be sufficient to fund our execution into 2023. As we mentioned, we signed a definitive agreement with our largest shareholder for three million of net funding on convertible notes. And that includes warrants that are priced at a $1, approximately two million warrants at a $1. And that is it. I will turn it over to Brett.

Thank you, George. So in summary, before we go to Q&A, which will be opened to all investors that have questions, the team has a high competency of technical skills that has been proven out with some premium audio brands, we are rapidly launching the IP that we put on to the expressive module and that will start generating in Q4. WiSA has expanded its role and starting to bring inbound contacts from retailers, which is a significant shift in its performance and we got a very strong IP position that we think sets up for continued growth in the next four years. And with that David, I would like to open it up for questions.

Great. Thanks, Brett. Now we will be conducting the Q&A session. [Operator Instructions] We will take our first question here and proceed. Is that okay?

Okay. Go ahead. And you can ask your question now.

Okay. Great. Jack Vander here speaking from analysts from Maxim Group. How are you doing today? Appreciate the update. I will throw the question for Brett. Actually, a quick housekeeping question. Just a quick one. What do you guys expect to release the full financial statements in the 10-Q?

Probably very soon within an hour, I guess. We might have to wait. We might be required to wait till close the market. Today regardless -.

Yes. No worries there. Appreciate it there. Okay. Then Brent, maybe as for the revenue guide, it looks like we are now expecting sequential growth in the third quarter and then sequential growth in the fourth quarter. Just any additional color you can provide there on the top-line and then maybe any additional thoughts an overall revenue potential for 2023?

Okay. So what we see and I think probably you have seen it reported out in other, since lasted to report out in other earnings calls. But we do see that the consume we saw in our own internal tracking through the WiSA association that consumer shifted a demand shifted at the end of April. So we think that has been followed up in orders coming in from our partners as well as reported out in [Sono’s] (Ph) case. So we are just being more conservative until we see that demand come back. We get the consumer desire being consumers, ourselves that get the hell out of the house. But we think that turns around back in the fall. So we see sequentially growing revenue. We are just not forecasting yet how that impacts the full-year. For 2023 - What is that?

Understood there. And now move on to 3023 then.

So 2023, we are expecting a strong year between DS coming in, WiSA E coming in, WiSA E rolled into speakers, probably knocks a hundred dollars off of MSRP. So in the world of inflation, consumer buying a hundred dollars is everything. Every hundred dollars is higher conversions and sell through. So we think 2023 is up against this year up against last year. Whatever reference point you want to use. And we think the feedback we have gotten out of those first 12 companies that, and a couple of them are really grinding WiSA DS. It has been extremely positive, in their words, shockingly strong performance for a 2.4 GHz solution. So we think as that rolls into next year in 2024, that is a strong revenue driver.

Great. And then, yes, actually just to that point, just for clarity. So WiSA DS will be shipping. This is shipping this year when exactly. And then WiSA E is there a specific timeline for that during 2023, when that is going to shipped, is it the end of the year? Is there a particular quarter?

Yes, so I misspoke on WiSA E in my presentation, we will actually start sampling WiSA E in Q4 this year, so there is four or five beta customers that we are talking to and we will select four or five of them, depending on our bandwidth to work with them, to test evaluate, and just like we did with DS. So that won’t generate revenue, but just in terms of technology and shippable maturity, we expect to have those four or five beta customers with modules, with WiSA E to test and bang up in Q4. WiSA DS that will - we will have two companies - Well, we have two companies that are planning to go into production, which means we are shipping during Q4.

That would be an official launch. That would be a commercial ready product in the fourth quarter with those two customers for WiSA DS?

Yes.

Okay, great. And then, let’s see. How about your because I’m waiting for the balance sheet. I’m not sure maybe I missed it, but can you provide an update on your inventory levels currently? And then how you expect your inventory levels to move going into two the back after this year? And then just anything or you have heard or any update with your customers, with their end inventory situation?

Yes. George, you want to take the inventory piece?

Our second quarter inventory was relatively flat from Q1, but Q1, we saw an increase. As our customers have rescheduled orders out, we are also having to reschedule our vendors out. 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. We don’t really have a lot of visibility of our customer’s inventory. I don’t know Brett, you can talk to that.

We do not. So, but we do, we are in the channel. I will say the feedback coming from the retailer side of the channel is that there is going to be healthy promotions and discounting in the fall around consumer electronics. So that leaves us to believe that as demand shift, that our customers have been chasing product, cause of all the part shortages and logistics challenge, we still see part shortage issues impacting our customers. Logistic challenges of getting stuff out of manufactured in Asia into North America or Europe seem to have abated largely, but we now have customers that are putting out large POs to try to circumvent part shortages. And now as consumer demand has shifted somewhat, at least temporarily for these four or five months, we think that builds a promotional opportunity for good discounts for consumers in the fall.

Okay. Helpful color there. Well guys, I appreciate the update. Thank you, George. Thank you, Brett.

And just to confirm your question about the queue, the queue will be filed at the close of market.

Excellent. Thank you very much, George.

Okay. Moving on, let’s go to, it is caller number ending in 3186. I think that is Kevin, do you want to un-mute your line, dial star six.

Hi Brett. Hi George. Can you hear me okay. Kevin Dede here, H.C. Wainwright.

Yes. Good morning, Kevin.

Thanks for having me on the call and thanks for the help with handling the call. Alright, so you touched on this a little bit, Brett. You touched on an abatement in source. I was hoping you could sort of add a little more color on that, I guess a little more curious about the environment in China, given the pretty testy COVID restrictions. It doesn’t seem to me that you are seeing a manufacturing issue. I just wanted to confirm that.

Well, so in terms of COVID and China it is nasty, where it impacts us most is being able to send, you know, senior executives from here to there to, you know, really show the vision of the product lines. So we have to depend on people in country. We can’t get in or out of China. We from a part shortage, we know there is still sporadic part shortages. So that is impacting some of our customers. And there is no question, but logistically, you know, once stuff gets built is flowing.

Great. Yes. So that is kind of where I was going. I mean, things are getting built and you see that people are able to meet orders, at least your customers see that trend, I guess strengthening which seemed to be an issue earlier in the year.

Yes. We think now whether it is because people are pushing, I mean, we have seen customers push out orders, you know, we think it is around consumer demand, so pushed out orders frees up inventory right. So we don’t, we do know from, we have an ODM in China on our Board. So we do know there is still part shortages in the space, but I would say the industry has probably gone 75 to 80%, back to normal.

Okay. Good to hear. So you remarked in during your presentation that brands, I guess a limited return on increased performance and I guess pixel count on large screen TVs. Right. And so you mentioned that you think they are going to try to exploit the, you know, the sound experience as an avenue to boost margin and correct. I’m just wondering like, yes. I’m just wondering how much real evidence do you have of that?

Well, there is two brands that have been doing it, for a couple years. One is Visio and one is Samsung. So if you look at their product lines and they are merchandising at retail, they are heavily I want to say I don’t want to say integrated as and they work flawlessly. But they are heavily merchandised together, number one. Number two, we have seen through the WiSA association a number of retailers that do very well with bundles. Now you can bundle a soundbar or you can bundle enclave or plat. So again, if the retailers are seeing it, the brands will see it. And then if you take one step further back in the cycle, here we are launching WiSA DS out of the 12 companies that are actively digging into it, eight of them are looking at it for soundbars.

Okay. So does that mean the soundbar comes with the television like, 3D packaged with the TV, or is it an merchandising at point of sale?

But the important nuance is that, it will the TV, you will find it and turn it on with a little consumer issue. So that is our play, right. So why would you integrate WiSA DS into your TV? I mean, this is what B&Os has been doing with us for 10-years. There is a WiSA module inside every one of their TVs. It finds every WiSA speaker in that room. So our position, which we think resonates is that, having wireless integration in the TV to with this interoperable speaker standard creates an opportunity for the TV brand to link their TV and their audio to one sale.

Okay. But the audio doesn’t have to be of their brand.

It does not.

Right. That is the beauty of it. Okay.

Right.

You talked about some -.

Go ahead.

No. I’m sorry. I interrupted.

No. I was just going to say that is the beauty of it. Merchandising wise from pick any brands, Skyworth or LG. Merchandising, they are going to merchandise their audio with their TVs. But having interoperability less consumer flexibility exactly. Isn’t that everybody wants you know, a $1,000 audio system around their TV. Someone $20,000 around their TV like a B&O situation.

Okay. You mentioned Amazon as your first retail location, and I know there was one other sort of name brand. Can you just talk about I mean, you did that you would expect -.

For stores.

Yes for stores, right yes, you mentioned that three to five more coming online. I was just kind of hoping you could spend on that and in conjunction, maybe talk about your confidence in the marketing spend, as you believe consumers will come back to the home experience.

Great. So right now, the stores are Amazon Beach, Electronic Express, Waltz. There is one or two that elude me right now.

There was one that began with an R if I remember correctly. I’m sorry Brett keep going.

Focus, Beach, waltz, Electronic Express and Amazon. That would be six. And then there is a handful, so we think three to five will make it by year end that have expressed their desire. Some are selling platin speakers or will and some are just merchandising WiSA. So you had hi certified for being SoundSend and compatible. There will be we hope other brands. We expect other brands to certify that. So that builds a bigger base at retail and more importance to have a storefront that aggregates all the WiSA products in one place for a consumer. So why do I think consumer demand comes back? I don’t think consumers going back into a COVID case, hopefully none of us want to be there. But you are under incredible price pressure with inflation. If you just think about the mentality of the consumer. You got your trips in, but you are going to come back and have to figure out how to make the family budget in the fall. And I think if you have good promotions trying to align production, inventory and demand around this, there will be a surge of consumer buying. From an audio side, TVs have done really well up until Q2. So there is a lot of TVs without audio around it. But the psychology, the consumer, I think, is still get out the house at the moment. And yes, look, do we spend more or less on marketing? It will depend on the results we see. I mean, we literally track it every single day.

Right. Can you speak to the results that you are seeing on Amazon? I mean, I noticed that your WiSA Wave figures look like they fell off considerably from the March of the June quarter -.

We took the spend down. I’m sorry in Q2. We took the marketing expense down in Q2. We saw a drop right after April. So when we looked at the May results, the consumer spend pattern changed. Now that is when we look at consumers coming into WiSA, where do they go afterwards? What is a conversion into a platin sale, which is super small? But that is our metric. And it changed quite a bit. So it doesn’t do us any good to drive consumers into the WiSA ecosystem to buy whatever product, whether it is LGTV or an enclave, if you know, they are not ready to buy. So, we dropped the full-year guidance. We dropped spending down on our plan in Q2 and Q3. And we have most of the money shifted to September through December. After kids go back to school after summer vacation with the start of football fall, the cold and hopefully no virus.

Right. Just monkeypox. The other question kind of comes up Brett on manufacturing then do you see the WiSA connected customers able to meet demand? Again, I apologize. You are just kind of going back to manufacturing as you see it in China.

Well, that is going to be SKU specific, ball parking, but I would say 80% of the SKU can meet demand now. There is certainly no reason they couldn’t meet demand from our side and never have been. But there still are part shortages that are out there, but the complexity of the problem has dropped quite a bit.

Could you just sort of walk me through the timeline then in order to meet demand in the September, December timeframe products got to be in manufacturing now or soon?

Correct. Has to be in manufacturing, late this October. If logistics are running well, which they currently are in other both time into a Harbor and into a port and out of the port. You have to be producing Q3 latest October. We have visibility of our Pos in Q3, therefore, right. Should they get rescheduled because of demand further down the pipe. We don’t have that visibility. We have visibility now to what our customers think they want to do now because they got to build now.

Right. Okay. Yes, no, thanks for taking me through that and answering the other questions, Brett, really appreciate it.

Yes. Thanks Kevin.

Great. We have a couple more questions queued up. Why don’t we go to - it is a caller with ending in 6291. If you could unmute your line dialing star six, could we unmute, there we go, please go ahead.

Well good morning, you guys, I have a few questions for you, Brett. So my first question is why did you do this type of financing that you announced today. Convertible security I don’t understand that. Can you explain to us why you did that?

Yes, so in general we have said our preference through financing is through strategic partnerships or using the ATM. We wanted to make sure our balance sheet was strengthened for the year end, but we didn’t want the dilution of, you know, an S1 at the moment at these prices. So by we wanted to let all this investment we made in the last 12-months, in the next six months roll into the market assuming that gives us a better opportunity for strategic partnerships and gives us a better opportunity to finance the effort at better stock prices. So this structure allowed us to secure, strengthen the balance sheet for the year end and pay it off with the future money if we need to or pay it off monthly using an ATM next year. I mean, we have six-months to start making payments. And you know, when you look at it, it is with our largest shareholder. So we think it is a supportive transaction to the strategy.

Okay. My next question is, I can under - listen, I think your share price seems to be suffering. It is been suffering for a while. I can’t understand, I’m a buyer of this stock. I think it is very cheap. I can’t understand. And we have spoken about this before. Why haven’t officers and directors purchased stock at this price? I don’t get it.

So that is a good question. the simple answer is officers and directors are right now in a quiet period and they have been for an extended period of time. And that will extend beyond the release of these financials. So they are not allowed to buy or sell at the moment, they are locked down.

Can we expect some support once you release these numbers?

No, that is what I’m saying. [Marty] (Ph), the directors and the Board is in an extended quiet period, right now.

Okay. I respect that.

Yes. And as much as they want to, or may want to, they cannot sell or buy.

Okay, great. That is great. My last question to you guys, Brett, can you explain to me, I’m a little confused about the announcement about the NVIDIA association. Can you go into some detail as to what that is all about and what does the future look like for the company with NVIDIA, if at all?

So NVIDIA joined WiSA, which is always a great sign when technology leader joins WiSA, strengthens the overall organization. We would not like, there is a number of members in WiSA that have not launched products. So and we don’t pre-announce anybody’s product. So it could be they are tracking us, because for some reason, we may not even know, could be they are working on a or they are working on a product. But we can’t discuss anybody’s products just like we can’t discuss who the three TV brands are that are digging into DS WiSA and DS to possibly integrate into the TVs. And some of them are members of WiSA, some of them are not. But what we talk about is WiSA organization and memberships, retail consumer tracking, but we never talk about somebody else’s product or product plans, before they are announced by the company.

Alright. I think it is great that seems like your work got a lot of exciting things in the future looks very bright for your company.

Like I can’t say enough about the talent of the engineering team and how well we have seen DS perform under some really rigorous testing in Asia. So, we are chopping at the bit to get the WiSA e-modules out and get a full product line out there to cover the whole industry.

Sounds great to me.

Thanks, Marty.

I think we have got one more question and time for one more question. So, it is the caller with ending in 6-0-3-0. If you could unmute your lines by dialing star six.

Yes. Thanks for taking my question. Has inflation impacted your margins at all or the stronger dollar?

Yes. Who is this?

This is Ed Woo at Ascendiant Capital.

Okay, Ed. The voice sounded familiar and I couldn’t place it. So can you repeat the question?

Yes. Has inflation or the strong dollar impacted your gross margins?

Inflation has impacted gross margin every production run on - every production run we have run for nine months has some component premium on it or assembly premium whether we are running modules or speakers. And inflation is partly driven by part shortages and partly driven by overall labor costs in the industry. But in terms of our P&L, Ed, it is not the most material. It doesn’t rank the Top Five things on the business.

Great. And then it looks like you have a great product strategy in the U.S. heading to the holiday. Can you talk a little bit about your European and international marketing strategy for WiSA?

w: Most of our European customers are really high-end audio file brands that are sold through, custom install, home theater shops. Whereas we start going out to try to talk to consumers in the millions you need some mass retail and the place we have it is in North America right now. And I think we get mass retail in Europe when we have WiSA E built into other brand speakers.

Great. thanks for answering my questions and wish your guys good luck. Thank you.

Thanks Ed.

And we are showing no further questions. Brett, if you want to have some closing remarks.

I would like to thank everybody for joining us. The team is pretty excited about the accomplishments we have made, and looking forward to talking with you in 90-days. Thank you.