What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-11 · 187 added, 144 removed, 480 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, 2022

June 30, 2022

December 31, 2021

17 unchanged sentences

1,250,000 shares authorized;

0 shares outstanding as of March 31, 2022 and December 31, 2021, respectively (liquidation preference of $ 0 )

0 shares outstanding as of June 30, 2022 and December 31, 2021, respectively (liquidation preference of $ 0 )

Stockholders’ Equity:

1 unchanged sentence

200,000,000 shares authorized;

16,883,464 and 15,819,059 shares outstanding as of March 31, 2022 and December 31, 2021, respectively

16,899,822 and 15,819,059 shares outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2022 and 2021

For the three and six months ended June 30, 2022 and 2021

(in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

11 unchanged sentences

Convertible preferred stock dividend

Deemed dividend on exchange of convertible preferred stock for common stock

Net loss attributable to common stockholders

3 unchanged sentences

WISA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

For the three months ended March 31, 2022 and 2021

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

For the three and six months ended June 30, 2022 and 2021

(in thousands, except share and per share data)

1 unchanged sentence

Common Shares

Comprehensive

Stockholders’

Paid-in Capital

Equity (Deficit)

Balance as of December 31, 2021

4 unchanged sentences

Balance as of March 31, 2022

Stock-based compensation

Release of vested restricted common stock

Restricted stock awards cancelled

Balance as of June 30, 2022

Convertible Preferred Stock

Common Shares

Comprehensive

Stockholders’

Paid-in Capital

Equity (Deficit)

Balance as of December 31, 2020

5 unchanged sentences

Balance as of March 31, 2021

Issuance of common stock upon warrant exercise

Warrants issued in connection with warrant exercise

Convertible preferred stock dividend

Exchange of convertible preferred stock for common stock

Warrants issued upon exchange of convertible preferred stock for common stock

Deemed dividend on exchange of convertible preferred stock

Stock-based compensation

Issuance of common stock to vendor

Balance as of June 30, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2022 and 2021

(in thousands, except share and per share data)

Three Months Ended March 31,

For the six months ended June 30, 2022 and 2021

(in thousands)

Six Months Ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Warrant inducement expense

Stock-based compensation

Depreciation and amortization

Warrant inducement expense

Expense for issuance of common stock for services

Changes in operating assets and liabilities:

9 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock upon warrant exercises, net of issuance costs

Repayment of capital lease

Proceeds from issuance of common stock upon warrant exercises, net of issuance costs

Net cash (used in) provided by financing activities

4 unchanged sentences

Cash paid for interest

Cash paid for income taxes

Noncash Investing and Financing Activities:

Exchange of convertible preferred stock for common stock

Deemed dividend on exchange of convertible preferred stock for common stock

Issuance of warrants in connection with exchange of preferred stock

Convertible preferred stock dividend

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies

2 unchanged sentences

Our business is to deliver the best-in-class immersive wireless sound technology for intelligent devices and next generation home entertainment systems through the sale of module components to audio companies as well as audio products to resellers and consumers.

NASDAQ Notification

On June 23, 2022, the Company received a written notification (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), because the closing bid price of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), was below $1.00 per share for the previous thirty (30) consecutive business days.

The Notice has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq Capital Market under the ticker “WISA”.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until December 20, 2022 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement.

If at any time during the Compliance Period, the bid price of the Common Stock closes at or above $1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed.

Basis of Presentation

14 unchanged sentences

These reclassifications did not result in any change in previously reported net loss, total assets or stockholders’ equity.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

Concentration of Credit Risk and Other Risks and Uncertainties

5 unchanged sentences

The Company performs credit evaluations of its customers’ financial condition as necessary, and sometimes requires partial payment in advance of shipping.

As of March 31, 2022 and December 31, 2021, there was no allowance for doubtful accounts.

As of March 31, 2022, the Company had four customers accounting for 34 %, 23 %, 18 % and 10 % of accounts receivable.

As of March 31, 2021, the Company had four customers accounting for 33 %, 30 %, 16 % and 11 % of accounts receivable.

As of June 30, 2022 and December 31, 2021, there was no allowance for doubtful accounts.

As of June 30, 2022, the Company had one customer accounting for 76 % of accounts receivable.

As of December 31, 2021, the Company had two customers accounting for 35 %, and 27 % of accounts receivable.

The Company had three customers accounting for 36 %, 25 % and 16 % of its net revenue for the three months ended March 31, 2022.

The Company had five customers accounting for 37 %, 12 %, 12 %, 11 % and 11 % of its net revenue for the three months ended March 31, 2021.

The Company had five customers accounting for 25 %, 12 %, 12 %, 12 % and 10 % of its net revenue for the three months ended June 30, 2022.

The Company had four customers accounting for 21 %, 16 %, 13 % and 13 % of its net revenue for the six months ended June 30, 2022.

The Company had two customers accounting for 44 % and 10 % of its net revenue for the three months ended June 30, 2021.

The Company had four customers accounting for 28 %, 18 %, 10 %, and 10 % of its net revenue for the six months ended June 30, 2021.

The Company’s future results of operations involve a number of risks and uncertainties.

Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Summary of Significant Accounting Policies, continued

The Company relies on sole-source suppliers to manufacture some of the components used in its product.

5 unchanged sentences

In the event that an offering is terminated, deferred offering costs will be expensed.

As of March 31, 2022 and 2021, the Company had capitalized $ 125,000 and $ 0 , respectively, of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet.

As of June 30, 2022 and December 31, 2021, the Company had capitalized $ 125,000 and $ 83,000 , respectively, of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet.

Convertible Financial Instruments

2 unchanged sentences

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

When the Company has determined that the embedded conversion options and warrants should be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

4 unchanged sentences

The Company assesses classification of its warrants for shares of common stock and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Summary of Significant Accounting Policies, continued

In an equity-classified freestanding financial instrument, as of the date that a down round feature is triggered, the Company measures the fair value of the instrument without the down round feature (that is, before the strike price is reduced) and the fair value of the financial instrument with a strike price that reflects the adjustment from the down round.

15 unchanged sentences

Our revenue arrangements do not contain significant financing components.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

Sales to certain distributors are made under arrangements which provide the distributors with price adjustments, price protection, stock rotation and other allowances under certain circumstances.

5 unchanged sentences

If a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional before we transfer a good or service to the customer, those amounts are classified as contract liabilities which are included in other current liabilities when the payment is made or it is due, whichever is earlier.

During the three months ended March 31, 2022 and 2021, net revenue consisted of the following:

For the Three Months Ended March 31,

During the three and six months ended June 30, 2022 and 2021, net revenue consisted of the following:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Consumer Audio Products

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Summary of Significant Accounting Policies, continued

Contract Balances

3 unchanged sentences

Accounts receivables are recorded when the right to this consideration becomes unconditional.

We do not have any material contract assets as of March 31, 2022 and December 31, 2021.

We do not have any material contract assets as of June 30, 2022 and December 31, 2021.

(in thousands)

8 unchanged sentences

(iii) not to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

In addition, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

6 unchanged sentences

Compensation cost for restricted stock units and restricted stock awards is recognized using the straight-line method over the requisite service period.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Summary of Significant Accounting Policies, continued

Advertising Costs

Advertising costs are charged to sales and marketing expenses as incurred.

Advertising costs for the three months ended March 31, 2022 and 2021 were $ 171,000 and $ 132,000 , respectively.

Advertising costs for the three and six months ended June 30, 2022 were $ 231,000 and $ 404,000 , respectively.

Advertising costs for the three and six months ended June 30, 2021 were $ 167,000 and $ 299,000 , respectively.

Comprehensive Loss

1 unchanged sentence

Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss.

For the three months ended March 31, 2022 and 2021, the Company’s comprehensive loss is the same as its net loss.

For the three and six months ended June 30, 2022 and 2021, the Company’s comprehensive loss is the same as its net loss.

Foreign Currency

5 unchanged sentences

Cumulative gains and losses from the translation of these operations’ financial statements are reported as a separate component of stockholders’ equity, while foreign currency transaction gains or losses, resulting from re-measuring local currency to the U.S.

dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three months ended March 31, 2022 and 2021.

dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and six months ended June 30, 2022 and 2021.

Net Loss per Common Share

2 unchanged sentences

For purposes of the diluted net loss per common share calculation, Series A Preferred Stock, warrants exercisable for common stock, restricted stock units and shares issuable upon the conversion of convertible notes payable are considered to be potentially dilutive securities.

For the three months ended March 31, 2022, warrants to purchase 4,474,303 shares of common stock, 1,568,725 shares of restricted stock, 297,083 shares of restricted stock issued under an inducement grant and 427,391 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

For the three months ended March 31, 2021, warrants to purchase 5,530,600 shares of common stock, 250,000 shares of convertible preferred stock, 730,869 shares of restricted stock awards and 643,974 shares of restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

As of June 30, 2022, warrants to purchase 4,440,660 shares of common stock, 1,579,232 shares of restricted stock, 290,625 shares of restricted stock issued under an inducement grant and 421,558 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

As of June 30, 2021, warrants to purchase 4,496,924 shares of common stock, 740,869 shares of restricted stock and 647,474 shares of underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

Recently Adopted Accounting Pronouncements.

Adoption of ASC 842

The Company adopted FASB’s ASU No.

Adoption of Accounting Standards Codification ("ASC") 842

The Company adopted Financial Accounting Standards Board’s ("FASB") Accounting Standards Update ("ASU") No.

2016-02, Leases (“Topic 842”), as of January 1, 2022, using the modified retrospective approach.

1 unchanged sentence

In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and the Company elected the hindsight practical expedient to determine the lease term for existing leases.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Summary of Significant Accounting Policies, continued

Adoption of the new standard resulted in the recording of operating lease right-of-use assets of $ 212,000 and lease liabilities of $ 327,000 , as of January 1, 2022.

17 unchanged sentences

Total liabilities and stockholders’ equity

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Business and Summary of Significant Accounting Policies, continued

Recently Issued and Not Yet Adopted Accounting Pronouncements

14 unchanged sentences

We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated financial statements as a result of future adoption.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Going Concern

1 unchanged sentence

The Company has incurred net operating losses each year since inception.

As of March 31, 2022, the Company had cash and cash equivalents of $ 9.1 million and reported net cash used in operations of $ 4.0 million during the three months ended March 31, 2022.

In December 2021, the Company entered into an “at-the-market” sales agreement with Maxim Group LLC (the “Agent”), pursuant to which the Company may sell from time to time, shares of its common stock having an aggregate offering price of up to $ 4.5 million through the Agent.

As of March 31, 2022, the Company has not sold any shares of common stock under the ATM Program.

As of June 30, 2022, the Company had cash and cash equivalents of $ 4.8 million and reported net cash used in operations of $ 8.3 million during the six months ended June 30, 2022.

In December 2021, the Company entered into an “at-the-market” (“ATM”) sales agreement with Maxim Group LLC (the “Agent”), pursuant to which the Company may sell from time to time, shares of its common stock having an aggregate offering price of up to $ 4.5 million through the Agent.

As of June 30, 2022, the Company has not sold any shares of common stock under the ATM Program.

The Company expects operating losses to continue in the foreseeable future because of additional costs and expenses related to research and development activities, plans to expand its product portfolio, and increase its market share.

4 unchanged sentences

These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months from the date of this report.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Going Concern, continued

Management of the Company intends to raise additional funds through the issuance of equity securities or debt.

9 unchanged sentences

Total inventories

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Balance Sheet Components, continued

Property and equipment, net (in thousands):

5 unchanged sentences

Property and equipment, net

Depreciation and amortization expense for the three months ended March 31, 2022 and 2021 was $ 29,000 and $ 19,000 , respectively.

The cost and accumulated depreciation of assets acquired under finance lease included in machinery and equipment in the above table as of March 31, 2022 were $ 72,000 and $ 38,000 respectively.

Depreciation and amortization expense for the three months ended June 30, 2022 and 2021 was $ 31,000 and $ 20,000 , respectively.

Depreciation and amortization expense for the six months ended June 30, 2022 and 2021 was $ 60,000 and $ 39,000 , respectively.

The cost and accumulated depreciation of assets acquired under finance lease included in machinery and equipment in the above table as of June 30, 2022 were $ 72,000 and $ 44,000 respectively.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Balance Sheet Components, continued

Accrued liabilities (in thousands):

Customer advances

Accrued vacation

Accrued rebate

Customer advances

Lease liability

Accrued compensation

Operating lease liabilities

Accrued audit fees

8 unchanged sentences

The PPP Loan could be prepaid by us at any time prior to maturity with no prepayment penalties.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Borrowings, continued

During the third quarter of 2021, the Company received full loan forgiveness for obligations related to the PPP Loan.

11 unchanged sentences

The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 by level within the fair value hierarchy, are as follows:

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Fair Value Measurements, continued

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 by level within the fair value hierarchy, are as follows:

(in thousands)

March 31, 2022

June 30, 2022

Quoted prices

4 unchanged sentences

Warrant liability

There were no transfers between Level 1, 2 or 3 during the three months ended March 31, 2022 or March 31, 2021.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Fair Value Measurements, continued

There were no changes in fair value of the Company’s warrant liability measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021.

The warrant liability is not significant at March 31, 2022 and there are no material changes to the significant unobservable inputs from December 31, 2021.

There were no transfers between Level 1 , 2 or 3 during the three and six months ended June 30, 2022 or June 30, 2021.

There were no changes in fair value of the Company’s warrant liability measured at fair value using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2022 and 2021.

The warrant liability is not significant at June 30, 2022 and there are no material changes to the significant unobservable inputs from December 31, 2021.

Convertible Preferred Stock and Stockholders’ Equity

6 unchanged sentences

The fair value of the derivative liability at the issuance of the Series A Preferred Stock was $ 216,000 , which was recorded as a derivative liability with the offset recorded as a discount to the Series A Preferred Stock.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

On June 4, 2021, the Company and Lisa Walsh (the “Investor”) entered into an exchange agreement pursuant to which the Company exchanged with the Investor, all outstanding shares of Series A Preferred Stock, for 250,000 shares of common stock and warrants to purchase up to 187,500 shares of Common Stock.

1 unchanged sentence

Immediately following the exchange, the Company no longer had a derivative liability or any preferred stock outstanding.

As of March 31, 2022, there are 1,250,000 shares of preferred stock authorized, but there are no shares issued or outstanding .

As of June 30, 2022, there are 1,250,000 shares of preferred stock authorized, but there are no shares issued or outstanding .

Carve-Out Plan

7 unchanged sentences

For fiscal year 2022, up to 1,265,525 shares of common stock are available for participants under the LTIP.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

For the three months ended March 31, 2022, 218,267 shares of restricted stock issued under the LTIP, were released with an intrinsic value of approximately $ 254,000 .

No shares of restricted stock issued under the LTIP, were released in the three months ended March 31, 2021.

A summary of activity related to restricted stock awards (excluding the deferred shares) for the three months ended March 31, 2022 is presented below:

For the three and six months ended June 30, 2022, 4,684 and 222,951 shares of restricted stock issued under the LTIP, were released with an intrinsic value of approximately $ 3,000 and $ 257,000 , respectively.

For the three and six months ended June 30, 2021, 0 and 352 shares of restricted stock, respectively, were released with an intrinsic value of approximately $ 0 and $ 2,000 , respectively.

A summary of activity related to restricted stock awards (excluding the deferred shares) for the six months ended June 30, 2022 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2022

Non-vested as of March 31, 2022

As of March 31, 2022, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 2,940,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 3.0 years.

Non-vested as of June 30, 2022

As of June 30, 2022, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 2,615,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.4 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

Inducement Grant

1 unchanged sentence

Such shares were issued outside the Company’s LTIP and 2020 Stock Incentive Plan (the “2020 Stock Plan”).

In accordance with the September 2021 Inducement Grant, 77,500 shares will vest monthly over a period of 36 months and the remaining 232,500 will vest in 77,500 increments, upon the achievement of certain company milestones related to the volume weighted average closing price per share of the Company’s common stock, as reported on NASDAQ, for the ten (10) consecutive days in which thresholds of the Company’s market capitalization of $ 75 million, $ 100 million and $ 150 million are achieved.

In accordance with the September 2021 Inducement Grant, 77,500 shares will vest monthly over a period of 36 months and the remaining 232,500 will vest in additional increments of 77,500 each, upon the achievement of certain company milestones related to the volume weighted average closing price per share of the Company’s common stock, as reported on Nasdaq, for the ten (10) consecutive days in which thresholds of the Company’s market capitalization of $ 75 million, $ 100 million and $ 150 million are achieved.

The September 2021 Inducement Grant was valued with an approximate value of $ 772,000 and will be amortized over 36 months.

As of March 31, 2022, the unamortized compensation costs related to the unvested September 2021 Inducement Grant was approximately $ 632,000 which is to be amortized on a straight-line basis over a period of approximately 2.5 years.

The Company recorded stock-based compensation of $ 64,000 related to this grant for the three months ended March 31, 2022.

As of March 31, 2022, 297,083 shares are unvested.

As of June 30, 2022, the unamortized compensation costs related to the unvested September 2021 Inducement Grant was approximately $ 569,000 which is to be amortized on a straight-line basis over a period of approximately 2.2 years.

The Company recorded stock-based compensation of $ 64,000 and $ 128,000 , respectively, related to this grant for the three and six months ended June 30, 2022.

As of June 30, 2022, 290,625 shares are unvested.

2020 Stock Incentive Plan

A summary of activity related to restricted stock units under the Company’s 2020 Stock Plan for the three months ended March 31, 2022 is presented below:

A summary of activity related to restricted stock units under the Company’s 2020 Stock Plan for the six months ended June 30, 2022 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2022

Non-vested as of March 31, 2022

As of March 31, 2022, the unamortized compensation costs related to the unvested restricted stock units was approximately $ 778,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.4 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

For the three months ended March 31, 2022, 5,668 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 7,000 .

No shares of restricted stock issued under the 2020 Stock Plan, were released in the three months ended March 31, 2021.

Non-vested as of June 30, 2022

As of June 30, 2022, the unamortized compensation costs related to the unvested restricted stock units was approximately $ 575,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.2 years.

For the three and six months ended June 30, 2022, 1,167 and 6,835 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 400 and $ 7,400 , respectively.

No shares of restricted stock issued under the 2020 Stock Plan, were released in the three and six months ended June 30, 2021.

Purchase Agreements

1 unchanged sentence

Any sales of shares of common stock pursuant to the Sales Agreement will be made pursuant to a shelf registration statement on Form S-3.

As of March 31, 2022, no shares had been sold under the Sales Agreement.

As of June 30, 2022, no shares had been sold under the Sales Agreement.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

Warrants for Shares of Common Stock

27 unchanged sentences

The fair value was recorded as professional services with the offset to additional paid-in capital.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

Information regarding warrants for common stock outstanding and exercisable as of March 31, 2022 is as follows:

Information regarding warrants for common stock outstanding and exercisable as of June 30, 2022 is as follows:

Weighted Average

1 unchanged sentence

Exercisable as of

March 31, 2022

June 30, 2022

$ 1.52 - $ 2.61

4 unchanged sentences

* Weighted average

Warrants exercisable as of March 31, 2022 exclude warrants to purchase 10,000 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Convertible Preferred Stock and Stockholders’ Equity , continued

Warrants exercisable as of June 30, 2022 exclude warrants to purchase 10,000 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones.

Additionally, warrants to purchase 20,722 shares of common stock which are shown above with a price of $ 15.80 are pre-funded warrants under which the holder must only pay $ 0.20 per share to complete the exercise.

14 unchanged sentences

The Company recorded a provision for income taxes of $ 0 for the three months ended March 31, 2022 and 2021.

The Company’s effective tax rate was 0.0 %for the three months ended March 31, 2022 and 2021.

The difference between the effective tax rate and the federal statutory tax rate for the three months ended March 31, 2022 and 2021 primarily relates to the valuation allowance on the Company’s deferred tax assets.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Income Taxes , continued

The Company recorded a provision for income taxes of $ 2,000 and $ 2,000 for the three and six months ended June 30, 2022, respectively, and $ 2,000 and $ 2,000 for the three and six months ended June 30, 2021, respectively.

The Company’s effective tax rate was ( 0.02 )% and ( 0.03 %) for the six months ended June 30, 2022 and 2021, respectively.

The difference between the effective tax rate and the federal statutory tax rate for the six months ended June 30, 2022 and 2021 primarily relates to the valuation allowance on the Company’s deferred tax assets.

For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes.

1 unchanged sentence

The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

As of March 31, 2022 and December 31, 2021, the Company retains a full valuation allowance on its deferred tax assets.

As of June 30, 2022 and December 31, 2021, the Company retains a full valuation allowance on its deferred tax assets.

The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods.

The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income.

The provision for income taxes for the three months ended March 31, 2022 and 2021 was calculated on a jurisdiction basis.

The provision for income taxes for the three and six months ended June 30, 2022 and 2021 was calculated on a jurisdiction basis.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Commitments and Contingencies

8 unchanged sentences

we recognize lease expense for these leases on a straight-line basis over the lease term.

The following table reflects our lease assets and our lease liabilities at March 31, 2022 (in thousands).

The following table reflects our lease assets and our lease liabilities at June 30, 2022 (in thousands).

Operating lease right-of-use assets

1 unchanged sentence

Operating lease liabilities, non-current

Operating lease liabilities, current, is included in Accrued Liabilities.

Operating lease liabilities, non-current, is included in Other Liabilities.

The components of lease costs were as follows (in thousands):

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2022

Operating lease cost

1 unchanged sentence

Total lease cost

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Commitments and Contingencies , continued

As of March 31, 2022, the maturity of operating lease liabilities was as follows (in thousands):

As of June 30, 2022, the maturity of operating lease liabilities was as follows (in thousands):

2022 (remaining 6 months)

1 unchanged sentence

Present value of lease liabilities

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Commitments and Contingencies , continued

Lease Term and Discount Rate:

March 31, 2022

June 30, 2022

Weighted-average remaining lease term (in years)

3 unchanged sentences

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2022

Operating cash outflows from operating leases

2 unchanged sentences

The equipment under the lease is collateral for the agreement and is included within property and equipment, net on the condensed consolidated balance sheets.

Future minimum lease commitments for the finance lease as of March 31, 2022 are as follows:

Future minimum lease commitments for the finance lease as of June 30, 2022 are as follows:

(in thousands)

8 unchanged sentences

Obligations under the finance lease are included in accrued liabilities and other liabilities on the condensed consolidated balance sheets.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

Commitments and Contingencies, continued

Contingencies

5 unchanged sentences

The Company’s management does not believe that any such matters, individually or in the aggregate, will have a materially adverse effect on the Company’s condensed consolidated financial statements.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 and 2021

Related Parties

3 unchanged sentences

Ltd, a company with focus on service-branding in lifestyle products as well as pro line products based in China and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands.

For the three months ended March 31, 2022 and 2021, Hansong Technology purchased modules from the Company of approximately $ 83,000 and $ 82,000 , respectively, and made payments to the Company of approximately $ 0 and $ 48,000 , respectively.

For the three months ended March 31, 2022 and 2021, Hansong Technology sold speaker products to the Company of approximately $ 457,000 and $ 626,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 299,000 and $ 210,000 , respectively.

At March 31, 2022 and 2021, the Company owed Hansong Technology approximately $ 949,000 and $ 621,000 , respectively.

As of March 31, 2022 and December 31, 2021, Mr.

For the three months ended June 30, 2022 and 2021, Hansong Technology purchased modules from the Company of approximately $ 108,000 and $ 151,000 , respectively, and made payments to the Company of approximately $ 0 and $ 0 , respectively.

For the three months ended June 30, 2022 and 2021, Hansong Technology sold speaker products to the Company of approximately $ 2,000 and $ 132,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 492,000 and $ 443,000 , respectively.

For the six months ended June 30, 2022 and 2021, Hansong Technology purchased modules from the Company of approximately $ 191,000 and $ 233,000 , respectively, and made payments to the Company of approximately $ 0 and $ 48,000 , respectively.

For the six months ended June 30, 2022 and 2021, Hansong Technology sold speaker products to the Company of approximately $ 459,000 and $ 757,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 790,000 and $ 653,000 , respectively.

At June 30, 2022 and 2021, the Company owed Hansong Technology approximately $ 459,000 and $ 309,000 , respectively.

At June 30, 2022 and 2021, Hansong Technology owed the Company approximately $ 191,000 and $ 199,000 , respectively.

As of June 30, 2022 and December 31, 2021, Mr.

Kristensen owned less than 1.0 % of the outstanding shares of the Company’s common stock.

4 unchanged sentences

and (ii) issue 10,000 shares of common stock for each partnership brought to fruition as a result of Meriwether Accelerators’ services and introduction, for up to 40,000 shares of Common Stock, which shares will have piggyback registration rights, in consideration for certain licensing services and strategic partnership collaborations to be provided by Meriwether Accelerators as set forth in such agreement.

For the three months ended March 31, 2022, the Company has paid Meriwether Accelerators $ 15,000 .

As of March 31, 2022, the Company has not issued any shares of common stock to Meriwether Accelerators under this agreement nor has it recorded any compensation expense related to the issuance of common stock.

As of March 31, 2022 and December 31, 2021, Mr.

For the three and six months ended June 30, 2022, the Company has paid Meriwether Accelerators $ 23,000 and $ 38,000 , respectively.

As of June 30, 2022, the Company has not issued any shares of common stock to Meriwether Accelerators under this agreement nor has it recorded any compensation expense related to the issuance of common stock.

As of June 30, 2022 and December 31, 2021, Mr.

Howitt owned less than 1.0 % of the outstanding shares of the Company’s common stock.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2022 and 2021

For the Six Months Ended June 30, 2022 and 2021

Segment Information

2 unchanged sentences

Net revenue from customers is designated based on the geographic region to which the product is delivered.

Net revenue by geographic region for the three months ended March 31, 2022 and 2021 was as follows:

Net revenue by geographic region for the three and six months ended June 30, 2022 and 2021 was as follows:

For the Three Months Ended

For the Six Months Ended

(in thousands)

1 unchanged sentence

Substantially all of our long-lived assets are located in the United States.

Subsequent Event

On August 15, 2022, WiSA Technologies, Inc.

(the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a senior secured convertible note in the principal amount of $ 3,600,000 (the “Convertible Note”) and a warrant (the “Warrant”) to purchase up to 2,097,022 shares of the Company’s common stock, $ 0.0001 par value per share (the “Common Stock”), in consideration for $ 3,000,000 .

Pursuant to the Purchase Agreement, upon the closing of the private placement of such Convertible Note and Warrant, pursuant to which Maxim Group LLC (“Maxim”), acted as placement agent (the “Private Placement”), the Company will receive gross proceeds of $ 3,000,000 , before fees and other expenses associated with the transaction, including but not limited to, an $ 105,000 commitment fee payable to the Investor.

The Company intends to use the net proceeds received by it in connection with the Private Placement primarily for working capital and general corporate purposes.

Additionally, the Company agreed to issue to Maxim a warrant to purchase up to an aggregate of 194,384 shares of Common Stock, subject to adjustment, as partial consideration for serving as Placement Agent in connection with the Private Placement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements