What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 266 added, 174 removed, 780 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, 2024

September 30, 2024

December 31, 2023

5 unchanged sentences

Property and equipment, net

Notes receivable

Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity / (Deficit)

9 unchanged sentences

375,000 shares authorized;

0 and 38,335 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

0 and 38,335 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Stockholders’ Equity / (Deficit):

1 unchanged sentence

300,000,000 shares authorized;

4,921,434 and 222,380 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

7,767,828 and 222,380 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and six months ended June 30, 2024 and 2023

For the three and nine months ended September 30, 2024 and 2023

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

6 unchanged sentences

Loss from operations

Interest expense, net

Change in fair value of warrant liabilities

Interest income (expense), net

Decrease (increase) in fair value of warrant liabilities

Loss on debt extinguishment

Other expense, net

Other income (expense), net

Loss before provision for income taxes

1 unchanged sentence

Deemed dividend on conversion of Series B preferred for common stock and repurchase of Series B preferred stock

Deemed dividend on issuance of common stock and warrants in connection with amendment to warrants to purchase common stock

Net loss attributable to common stockholders

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the three and six months ended June 30, 2024 and 2023

For the three and nine months ended September 30, 2024 and 2023

(in thousands, except share and per share data)

22 unchanged sentences

Balance as of June 30, 2024

Stock-based compensation

Issuance of common stock in connection with warrant amendment

Issuance of common stock in connection with warrant exercise

Restricted stock awards cancelled

Issuance of common stock to vendors

Balance as of September 30, 2024

Convertible Preferred Stock

15 unchanged sentences

Balance as of June 30, 2023

Stock-based compensation

Issuance of common stock in connection with warrant exercise

Balance as of September 30, 2023

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023 as well as a 1-for-150 reverse stock split effected in April 2024, as discussed in Note 1.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Amortization of debt discounts

Change in fair value of warrant liability

Increase (decrease) in fair value of warrant liability

Loss on extinguishment of convertible note payable

7 unchanged sentences

Cash flows from investing activities:

Issuance of note receivable

Issuance of notes receivable

Purchases of property and equipment

1 unchanged sentence

Cash flows from financing activities:

Proceeds from issuance of common stock in connection with warrant exercise

Proceeds from issuance of common stock and warrants, net of offering costs

Proceeds from issuance of common stock, prefunded warrants and warrants, net of issuance costs

Proceed from issuance of common stock in connection with warrant exercise

Proceed from exercises of Series B preferred stock warrants

Proceeds from issuance of short-term loan, net of issuance costs

Proceeds from exercise of warrants

Repurchase of Series B preferred stock warrants

Repayment of short-term loan

Repayment of convertible note payable

Repayment of convertible note payable, net of issuance costs

Repayment of finance lease

10 unchanged sentences

Deemed dividend on conversion of Series B preferred stock and repurchase of Series B preferred stock

Unpaid financings issuance costs

Cashless exercise of warrants

Repurchase of Series B preferred stock warrants

Issuance of common stock to vendors

Cashless exercise of warrants

Warrant exercise in connection with loan settlement

Issuance of common stock in connection with Series B preferred stock

Unpaid financings issuance costs

Issuance of warrant liability in connection with February 2023 offering

2 unchanged sentences

Deferred offering costs reclassed from prepaid expenses

Accrual of legal fees for the short-term loan

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies

4 unchanged sentences

Nasdaq Compliance

The Company is currently in compliance with the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”), subject to the monitorings described below.

The Company is currently in compliance with the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”), subject to the monitoring described below.

On April 29, 2024, Nasdaq notified the Company in a letter that the Company has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550 (a)(2) (the “Minimum Bid Price Requirement”) as required by a hearing panel’s decision on April 5, 2024.

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

27 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

6 unchanged sentences

The Company performs credit evaluations of its customers’ financial condition and may, in certain circumstances, require full or partial payment in advance of shipping.

As of June 30, 2024 and December 31, 2023, there was no allowance for credit losses.

As of June 30, 2024, the Company had four customers accounting for 43 %, 33 %, 12 %and 11 % of accounts receivable.

As of September 30, 2024 and December 31, 2023, there was no allowance for credit losses.

As of September 30, 2024, the Company had three customers accounting for 33 %, 25 %, and 22 % of accounts receivable.

As of December 31, 2023, the Company had two customers accounting for 71 % and 20 % of accounts receivable.

The Company had four customers accounting for 33 %, 27 %, 20 % and 11 % of its net revenue for the three months ended June 30, 2024.

The Company had four customers accounting for 28 %, 27 %, 19 % and 10 % of its net revenue for the six months ended June 30, 2024.

The Company had four customers accounting for 35 %, 13 %, 12 % and 11 % of its net revenue for the three months ended June 30, 2023.

The Company had two customers accounting for 29 % and 17 % of its net revenue for the six months ended June 30, 2023.

The Company had one customer accounting for 56 % of its net revenue for the three months ended September 30, 2024.

The Company had three customers accounting for 38 %, 15 % and 12 % of its net revenue for the nine months ended September 30, 2024.

The Company had three customers accounting for 40 %, 28 %, and 21 % of its net revenue for the three months ended September 30, 2023.

The Company had four customers accounting for 22 %, 17 %, 16 % and 15 % of its net revenue for the nine months ended September 30, 2023.

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

15 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

27 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

During the three months ended June 30, 2024 and 2023, net revenue consisted of the following:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

During the three and nine months ended September 30, 2024 and 2023, net revenue consisted of the following:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

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

The Company does not have any material contract assets as of June 30, 2024 and December 31, 2023.

During the six month ended June 30, 2024, the Company did not recognize any revenue that was included in the contract liabilities balance as of December 31, 2023.

The Company does not have any material contract assets as of September 30, 2024 and December 31, 2023.

September 30,

(in thousands)

Contract Liabilities

During the nine months ended September 30, 2024, the Company recognized approximately $ 4,000 of revenue that was included in the contract balances as of December 31, 2023.

Revenue by Geographic Area

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

Research and Development

Research and development costs are charged to operations as incurred and includes salaries, consulting expenses and an allocation of facility costs.

Research and development costs are charged to operations as incurred and include salaries, consulting expenses and an allocation of facility costs.

Advertising Costs

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

Advertising costs for the three and six months ended June 30, 2024 were $ 117,000 and $ 264,000 , respectively.

Advertising costs for the three and six months ended June 30, 2023 were $ 118,000 and $ 273,000 , respectively.

Advertising costs for the three and nine months ended September 30, 2024 were $ 201,000 and $ 465,000 , respectively.

Advertising costs for the three and nine months ended September 30, 2023 were $ 238,000 and $ 511,000 , respectively.

Comprehensive Loss

1 unchanged sentence

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

For the three and six months ended June 30, 2024 and 2023, the Company’s comprehensive loss is the same as its net loss.

For the three and nine months ended September 30, 2024 and 2023, 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 and six months ended June 30, 2024 and 2023.

dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and nine months ended September 30, 2024 and 2023.

Net Loss per Common Share

6 unchanged sentences

For purposes of the diluted net loss per common share calculation, Series A 8 % Senior Convertible Preferred Stock (“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.

Net loss is adjusted for any deemed dividends to preferred stockholders to compute income available to common stockholders.

As of June 30, 2024, warrants to purchase 9,793,531 shares of common stock, 260,441 shares of restricted stock, 16 shares of restricted stock issued under an inducement grant and 14 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, 2023, warrants to purchase 37,572 shares of common stock, 69 shares of restricted stock, 18 shares of restricted stock issued under an inducement grant and 36 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

Net loss is adjusted for any deemed dividends to preferred and common stockholders to compute income available to common stockholders.

As of September 30, 2024, warrants to purchase 9,375,730 shares of common stock, 698,279 shares of restricted stock, 70,016 shares of restricted stock issued under an inducement grants and 14 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 September 30, 2023, warrants to purchase 37,569 shares of common stock, 69 shares of restricted stock, 18 shares of restricted stock issued under an inducement grant and 36 shares underlying 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 Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Business and Summary of Significant Accounting Policies, continued

2 unchanged sentences

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is “more-likely-than-not” that some portion or all of the deferred tax assets will not be realized.

The Company has recognized valuation allowances against its deferred tax assets as of June 30, 2024 and December 31, 2023.

The Company has recognized valuation allowances against its deferred tax assets as of September 30, 2024 and December 31, 2023.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

4 unchanged sentences

The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense.

As of June 30, 2024 and December 31, 2023, the Company recognized no interest and penalties.

As of September 30, 2024 and December 31, 2023, the Company recognized no interest and penalties.

Recently Adopted Accounting Pronouncements

19 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Going Concern

The condensed consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business.

As of June 30, 2024, the Company had cash and cash equivalents of $ 6.1 million and reported net cash used in operations of $ 9.0 million during the six months ended June 30, 2024.

As of September 30, 2024, the Company had cash and cash equivalents of $ 3.9 million and reported net cash used in operations of $ 13.3 million during the nine months ended September 30, 2024.

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.

11 unchanged sentences

Inventories (in thousands):

September 30,

Raw materials

2 unchanged sentences

Total inventories

Note receivable:

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Balance Sheet Components, continued

Property and equipment, net (in thousands):

September 30,

Machinery and equipment

Accumulated depreciation and amortization

Property and equipment, net

Depreciation and amortization expense for the three months ended September 30, 2024 and 2023 were approximately of $ 11,000 and $ 18,000 , respectively.

Depreciation and amortization expense for the nine months ended September 30, 2024 and 2023 were approximately $ 59,000 and $ 82,000 , respectively.

Notes receivable:

On June 13, 2024, the Company entered into a Senior Secured Promissory Note and Security Agreement (“Promissory Note and Security Agreement”) with an unaffiliated third-party company (“the Borrower”).

3 unchanged sentences

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

Note receivable is included in other assets on the condensed consolidated balance sheets.

As described in Note 11 – Subsequent Events, on October 23, 2024, the Borrower and the Company agreed to amend the June 2024 Note maturity date to January 31, 2025.

On August 7, 2024, the Company entered into a second Promissory Note and Security Agreement with the Borrower.

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 100,000 (“August 2024 Note”).

The August 2024 Note matures on December 5, 2024.

Borrowings under the August 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

As described in Note 11 – Subsequent Events, on October 23, 2024, the Borrower and the Company agreed to amend the August 2024 Note maturity date to January 31, 2025.

On September 23, 2024, the Company entered into a third Promissory Note and Security Agreement with the Borrower.

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 73,485 (“September 2024 Note”).

The September 2024 Note matures on December 5, 2024.

Borrowings under the June 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

As described in Note 11 – Subsequent Events, on October 23, 2024, the Borrower and the Company agreed to amend the September 2024 Note maturity date to January 31, 2025.

The Company evaluates the collectability of the notes receivable regularly and assesses a need for an allowance for credit losses based on historical experience, current conditions, and reasonable forecasts.

As of September 30, 2024, no allowance for credit losses has been deemed necessary for the outstanding notes receivable.

At September 30, 2024, the Company had recognized approximately $ 3,000 of interest income on the Notes Receivable.

There was no note receivable at December 31, 2023.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Balance Sheet Components, continued

Property and equipment, net (in thousands):

Machinery and equipment

Accumulated depreciation and amortization

Property and equipment, net

Depreciation and amortization expense for the three months ended June 30, 2024 and 2023 were approximately of $ 28,000 and $ 32,000 , respectively.

Depreciation and amortization expense for the six months ended June 30, 2024 and 2023 were approximately $ 48,000 and $ 65,000 , respectively.

Accrued liabilities (in thousands):

September 30,

Accrued vacation

Customer advance

Accrued audit fees

1 unchanged sentence

Accrued rebate

Customer advance

Accrued compensation

Accrued lease liability, current portion

Accrued compensation

Accrued other

5 unchanged sentences

The Company used the net proceeds primarily for working capital and general corporate purposes.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Borrowings, continued

The Convertible Note matured on August 15, 2024, does not bear interest and ranks senior to the Company’s existing and future indebtedness and is secured to the extent and as provided in the Security Agreements.

The Convertible Note, with an original maturity date of August 15, 2024, does not bear interest and ranks senior to the Company’s existing and future indebtedness and is secured to the extent and as provided in the Security Agreements.

The Convertible Note is convertible in whole or in part at the option of the Convertible Note Investor into shares of Common stock (the “Conversion Shares”) at the Conversion Price (as defined below) at any time following the date of issuance of the Convertible Note.

5 unchanged sentences

In connection with the Private Placement, the Company entered into a placement agency agreement with Maxim (the “Placement Agency Agreement”), and agreed to issue to Maxim, a warrant to purchase up to an aggregate of 13 shares of common stock (the “Maxim Warrant”) at an initial exercise price of $ 14,955.00 per share, which is exercisable at any time on or after the six-month anniversary of the closing date of the Private Placement and will expire on the fifth ( 5 th ) anniversary of its date of issuance.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Borrowings, continued

Effective August 24, 2022, the Company and the Investor agreed to amend Section 3.1(b) of the Convertible Note to provide that the Conversion Price could not be lower than the Floor Price until stockholder approval has been obtained, after which stockholder approval the Floor Price may be reduced to no lower than $ 37.50 , subject to adjustment pursuant to the terms of the Convertible Note.

9 unchanged sentences

On November 28, 2022, the Company entered into a waiver of rights (the “Waiver”) with the New Convertible Note Investor, pursuant to which the New Convertible Note Investor agreed to waive certain prohibitions under the August Purchase Agreement with respect to the offering of units in December 2022 in exchange for the issuance by the Company, on the closing date of such offering, of an additional number of Series A warrants to purchase shares of common stock (“Series A Warrants”) and an additional number of Series B warrants to purchase shares of common stock (“Series B Warrants”) equal to the quotient obtained by dividing $ 750,000 by the public offering price for the units sold in the offering (such Warrants, the “Waiver Warrants”).

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Borrowings, continued

In connection with the public offering the Company consummated on December 1, 2022 (the “December 2022 Offering”), the Company issued 357 Series A Warrants and 357 Series B Warrants to the New Convertible Note Investor (See Note 6).

9 unchanged sentences

In addition, the Company had the right to request additional funding under the Loan and Security Agreement.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Borrowings, continued

Borrowings under the Meriwether Loan bore interest at a rate per annum equal to 18 %.

10 unchanged sentences

In connection with the January 2024 Promissory Notes, the Company received gross proceeds of $ 600,000 , before fees and other expenses associated with the transaction.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Borrowings, continued

The January 2024 Promissory Note was to mature on the earlier to occur of:

6 unchanged sentences

The debt discounts were to be amortized to interest expense over the respective term using the effective interest method.

In connection with the full repayment of the January 2024 Promissory Notes, the Company recognized $ 1,260,000 of interest expense in the six months ended June 30, 2024.

In connection with the full repayment of the January 2024 Promissory Notes, the Company recognized $ 1,260,000 of interest expense in the nine months ended September 30, 2024.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Fair Value Measurements

8 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 June 30, 2024 and December 31, 2023 by level within the fair value hierarchy, are as follows:

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by level within the fair value hierarchy, are as follows:

(in thousands)

June 30, 2024

September 30, 2024

Quoted prices

Warrant liabilities

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Fair Value Measurements, continued

(in thousands)

2 unchanged sentences

Warrant liabilities

There were no transfers between Level 1, 2 or 3 during the three and six months ended June 30, 2024 or 2023.

There were no transfers between Level 1, 2 or 3 during the three and nine months ended September 30, 2024 or 2023.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Fair Value Measurements, continued

Warrant Liabilities

The following table includes a summary of changes in fair value of the Company’s warrant liabilities measured at fair value using significant unobservable inputs (Level 3) as of June 30, 2024 and 2023.

For June 30, 2024, the fair value of the common warrants was determined using the Black-Scholes Model based on the following key inputs and assumptions:

For September 30, 2024, the fair value of the common warrants was determined using the Black-Scholes Model based on the following key inputs and assumptions:

common stock price of $ 1.77 ;

8 unchanged sentences

In connection with this reclassification the Company reclassed approximately $ 41.9 million from warrant liabilities to additional paid in capital.

For the six months ended June 30,

For the nine months ended September 30,

(in thousands)

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

4 unchanged sentences

The 38,335 shares of Series B Preferred Stock outstanding as of December 31, 2023, were to become mandatorily redeemable on October 15, 2025 in the amount of $ 3,833,500 .

Through various dates during the six months ended June 30, 2024, holders of Series B Preferred Stock Warrants exercised their warrants into 29,332 shares of Series B Preferred Stock at an exercise price of $ 35.72 per share.

Through various dates during the nine months ended September 30, 2024, holders of Series B Preferred Stock Warrants exercised their warrants into 29,332 shares of Series B Preferred Stock at an exercise price of $ 35.72 per share.

For each exercised Series B Preferred Stock Warrant, the holder received one share of Series B Preferred Stock and one New Common Stock Warrant.

7 unchanged sentences

Conversion of Series B Preferred Stock

Through various dates during the six months ended June 30, 2024, the holders of 5,000 shares of Series B Preferred Stock converted their shares into 8,038 shares of Common Stock.

Through various dates during the nine months ended September 30, 2024, the holders of 5,000 shares of Series B Preferred Stock converted their shares into 8,038 shares of common stock.

Unamortized discounts to the Series B Preferred Stock of $ 269,000 were immediately recorded as a deemed dividend as of conversion date.

4 unchanged sentences

Other Deemed Dividends

Amortization and accretion of discounts for all Series B Preferred Stock during the six months ended June 30, 2024 amounted to $ 192,000 , which were also recorded as a deemed dividend to the holders of Series B Preferred Stock.

The total of deemed dividends (as discussed in this section, the Conversion of Series B Preferred Stock and February 2024 Series B Preferred Stock and Series B Preferred Stock Warrants Repurchase sections above) amounted to $ 5,842,000 for the six months ended June 30, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s condensed consolidated statement of operations.

Amortization and accretion of discounts for all Series B Preferred Stock during the nine months ended September 30, 2024 amounted to $ 192,000 , which were also recorded as a deemed dividend to the holders of Series B Preferred Stock.

The total of deemed dividends (as discussed in this section, the Conversion of Series B Preferred Stock and February 2024 Series B Preferred Stock and Series B Preferred Stock Warrants Repurchase sections above) amounted to $ 5,842,000 for the nine months ended September 30, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s condensed consolidated statement of operations.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

6 unchanged sentences

At a Special Meeting of Stockholders on March 15, 2024, the Company’s stockholders further approved an amendment to the LTIP to increase the annual share limit of common stock that may be issued only for the 2024 fiscal year under the LTIP from 8 % of the shares of common stock outstanding to 15 % of the shares of common stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP).

As of June 30, 2024, up to 477,774 shares of common stock are available for grants to participants under the LTIP.

A summary of activity related to restricted stock awards for the six months ended June 30, 2024 is presented below:

As of September 30, 2024, up to 466,000 shares of common stock are available for grants to participants under the LTIP.

A summary of activity related to restricted stock awards for the nine months ended September 30, 2024 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2024

Non-vested as of June 30, 2024

As of June 30, 2024, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 1,620,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2 years.

For the six months ended June 30, 2024, 774 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of less than $ 2,000 .

For the six months ended June 30, 2023, 24 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of less than $ 5,000 .

Non-vested as of September 30, 2024

As of September 30, 2024, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 2,442,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.2 years.

For the nine months ended September 30, 2024, 22,050 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of approximately $ 38,000 .

For the nine months ended September 30, 2023, 24 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of less than $ 5,000 .

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

2020 Stock Incentive Plan

A summary June 30, 2024 is presented below:

A summary September 30, 2024 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2024

Non-vested as of June 30, 2024

As of June 30, 2024, there was no unamortized compensation costs.

For the six months ended June 30, 2024, 1 share of common stock was issued upon vesting of outstanding restricted stock units pursuant to the 2020 Stock Incentive Plan with an intrinsic value of less than $ 1,000 .

For the six months ended June 30, 2023, no shares of common stock, issued under the 2020 Stock Incentive Plan, were released.

Inducement Grant

Non-vested as of September 30, 2024

As of September 30, 2024, there was no unamortized compensation costs.

For the nine months ended September 30, 2024, 1 share of common stock was issued upon vesting of outstanding restricted stock units pursuant to the 2020 Stock Incentive Plan with an intrinsic value of less than $ 1,000 .

For the three and nine months ended September 30, 2023, 71 shares of common stock, issued under the 2020 Stock Incentive Plan, were released with an intrinsic value of $ 92.00 .

Inducement Grants

On September 13, 2021, the Company issued 21 shares of restricted common stock to Eric Almgren, the Company’s Chief Strategist, as an inducement grant (“September 2021 Inducement Grant”).

As of June 30, 2024, the unamortized compensation cost related to the unvested September 2021 Inducement Grant was approximately $ 57,000 which is being amortized on a straight-line basis over a period of approximately 0.2 years.

The Company recorded stock-based compensation of $ 64,000 and $ 128,000 related to this grant for three and six months ended June 30, 2024.

As of June 30, 2024, 16 shares are unvested.

For the six months ended June 30, 2024, no shares of restricted stock were released under the September 2021 Inducement Grant.

A summary of activity related to restricted stock units under the Company’s Technical Team Retention Plan of 2022 (the “2022 Plan”) for the six months ended June 30, 2024 is presented below:

As of September 30, 2024, all compensation cost related to the September 2021 Inducement Grant was expensed.

The Company recorded stock-based compensation of $ 40,000 and $ 168,000 related to this grant for three and nine months ended September 30, 2024.

As of September 30, 2024, 16 shares are unvested.

For the nine months ended September 30, 2024, no shares of restricted stock were released under the September 2021 Inducement Grant.

On September 30, 2024, the Company issued 70,000 shares of restricted common stock at a fair value per share of $ 1.77 , to Stanley Mbugua, the Company’s Vice President of Finance, as an inducement grant (“September 2024 Inducement Grant”).

As of September 30, 2024, the unamortized compensation cost related to the unvested September 2024 Inducement Grant was approximately $ 124,000 which is being amortized on a straight-line basis over a period of approximately 3.0 years.

The Company did not record any stock-based compensation related to this grant for three and nine months ended September 30, 2024.

As of September 30, 2024, 70,000 shares are unvested.

A summary of activity related to restricted stock units under the Company’s Technical Team Retention Plan of 2022 (the “2022 Plan”) for the nine months ended September 30, 2024 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2024

Non-vested as of June 30, 2024

As of June 30, 2024, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 94,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2 years.

For the six months ended June 30, 2024, 3 shares of common stock were issued upon vesting of outstanding restricted stock units pursuant to the 2022 Plan with an intrinsic value of less than $ 1,000 .

For the six months ended June 30, 2023, no shares of common stock, issued under the 2022 Plan, were released.

Non-vested as of September 30, 2024

As of September 30, 2024, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 82,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.7 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

For the nine months ended September 30, 2024, 3 shares of common stock were issued upon vesting of outstanding restricted stock units pursuant to the 2022 Plan with an intrinsic value of less than $ 1,000 .

For the nine months ended September 30, 2023, no shares of common stock, issued under the 2022 Plan, were released.

February 2023 Offering

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April 2023 Offering

On April 7, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company issued and sold to such investors (i) in a registered direct offering, 4,954 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 9,908 shares of Common Stock, at an initial exercise price of $ 211.50 per share of Common Stock (the “April 2023 Offering”).

On April 7, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company issued and sold to such investors (i) in a registered direct offering, 4,954 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 9,908 shares of common stock, at an initial exercise price of $ 211.50 per share (the “April 2023 Offering”).

On April 12, 2023, the Company closed the April 2023 Offering and received net proceeds of approximately $ 1.0 million, after deducting fees payable to the financial advisor and other offering expenses.

October 2023 Warrant Repurchase

On October 16, 2023, the Company and certain of its common stock warrants holders entered into an arrangement where the Company agreed to repurchase outstanding common stock purchase warrants exercisable for an aggregate of up to 30,978 shares of Common Stock, at an exercise prices ranging from $ 193.50 to $ 286.50 per share of Common Stock for a total of $ 2,323,000 .

On October 16, 2023, the Company and certain of its common stock warrants holders entered into an arrangement where the Company agreed to repurchase outstanding common stock purchase warrants exercisable for an aggregate of up to 30,978 shares of common stock, at an exercise prices ranging from $ 193.50 to $ 286.50 per share for a total of $ 2,323,000 .

The repurchased warrants were previously classified as equity warrants and at the date of repurchase a charge was recorded to additional paid-in capital.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

20 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

11 unchanged sentences

The fair value of such shares will be amortized over the service period of each agreement which ranged from 6 months to 12 months .

The shares of common stock will be issued in July 2024.

The shares of common stock were issued in July 2024.

Exchange Agreements

On September 10, 2024, the Company entered into exchange agreements (each, an “Exchange Agreement”) with certain holders (the “Holders”) of common stock purchase warrants exercisable for an aggregate of up to 5,135,182 shares of common stock, originally issued on February 13, 2024 and having a then-current exercise price of $ 1.83 (such warrants, the “February 2024 Warrants”).

Pursuant to the Exchange Agreements, the Holders agreed to exchange their February 2024 Warrants for newly issued common stock purchase warrants exercisable for an aggregate of up to 5,135,182 shares of common stock, at an exercise price of $ 2.21 per share (such warrants, the “Exchange Warrants”, and such shares of common stock issuable upon exercise thereof, the “Exchange Warrant Shares”).

The Exchange Warrants are immediately exercisable.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Warrant Side Letter Agreements

Also on September 10, 2024, following completion of the transactions contemplated by the September 2024 Warrant Inducement (see below), the Company entered into side letter agreements (each, a “Side Letter Agreement”) with the Holders with respect to (i) those certain common stock purchase warrants of the Company, originally issued to the Holders on March 27, 2024, as amended (the “March 2024 Warrants”), (ii) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 19, 2024, as amended (the “1st April 2024 Warrants”), (iii) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 23, 2024 (the “2nd April 2024 Warrants”), (iv) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 30, 2024 (the “3rd April 2024 Warrants”), (v) those certain common stock purchase warrants of the Company, originally issued to the Holders on May 15, 2024 (the “1st May 2024 Warrants”), and (vi) those certain common stock purchase warrants of the Company, originally issued to the Holders on May 17, 2024 (the “2nd May 2024 Warrants”, and collectively with the March 2024 Warrants, the 1st April 2024 Warrants, the 2nd April 2024 Warrants, the 3rd April 2024 Warrants, and the 1st May 2024 Warrants, the “Original Warrants”), which Holders are also parties to (i) that certain securities purchase agreement, dated as of March 26, 2024 (the “March 2024 Purchase Agreement”), (ii) that certain securities purchase agreement, dated as of April 17, 2024 (the “1st April 2024 Purchase Agreement”), (iii) that certain securities purchase agreement, dated as of April 19, 2024 (the “2nd April 2024 Purchase Agreement”), (iv) that certain securities purchase agreement, dated as of April 26, 2024 (the “3rd April 2024 Purchase Agreement”), (v) that certain securities purchase agreement, dated as of May 13, 2024 (the “1st May 2024 Purchase Agreement”), and (vi) that certain securities purchase agreement, dated as of May 15, 2024 (the “2nd May 2024 Purchase Agreement”, and collectively with the March 2024 Purchase Agreement, the 1st April 2024 Purchase Agreement, the 2nd April 2024 Purchase Agreement, the 3rd April 2024 Purchase Agreement, and the 1st May Purchase Agreement, the “Original Purchase Agreements”) with the Company.

Pursuant to the Side Letter Agreements, (a) the Holders agreed to (i) amend the “Fundamental Transaction” provisions in the Original Warrants, so that the “Black Scholes Value” clauses in such provisions will be removed in their entirety, effective immediately following receipt of stockholder approval of (a) the issuance of the New Warrant Shares (as defined below) and (b) the issuance of shares of common stock pursuant to the alternative cashless exercise provisions of the 1st April 2024 Warrants, the 2nd April 2024 Warrants, the 3rd April 2024 Warrants, the 1st May 2024 Warrants, and the 2nd May 2024 Warrants, (ii) remove the “Stockholder Meeting” provisions in the March 2024 Purchase Agreement, effective immediately, (iii) amend the “Stockholder Meeting” provisions in the remaining Original Purchase Agreements such that the Company is first obligated to call a stockholder meeting to approve the issuance of the shares of common stock issuable upon exercise of the Original Warrants no later than December 31, 2024, and thereafter, to re-call a stockholder meeting, if necessary, every six months until such stockholder approval is obtained, and (iv) remove the “Subsequent Equity Sales” and “Registration Statement” provisions in the March 2024 Purchase Agreement;

and (b) as inducements to and in consideration for each Holder’s agreement to amend the Original Warrants and the Original Purchase Agreements in accordance with the applicable Side Letter Agreement, the Company agreed to issue to the Holders an aggregate of 887,356 shares of common stock (the “New Shares”) and common stock purchase warrants (each, a “New Warrant”, and collectively, the “New Warrants”) exercisable for up to an aggregate of 5,391,747 shares of common stock (the “New Warrant Shares”), such New Shares to be issued upon execution of the Side letter Agreements, and such New Warrants to be issued upon the receipt of stockholder approval referred to in (a)(i) above.

The New Warrants will have a per share exercise price equal to $ 2.21 , will contain 4.99 / 9.99 % beneficial ownership limitations, will be exercisable at any time on or after the Stockholder Approval Date (as defined in the New Warrants) and will expire five years thereafter.

Once exercisable, the New Warrants may be exercised, in certain circumstances, on a cashless basis pursuant to the formula contained in the New Warrants.

The holder of a New Warrant may also effect an “alternative cashless exercise” commencing on the Stockholder Approval Date.

In such event, the aggregate number of shares of common stock issuable in such alternative cashless exercise pursuant to any given notice of exercise electing to effect an alternative cashless exercise shall equal the product of (x) the aggregate number of shares of common stock that would be issuable upon exercise of the New Warrant in accordance with the terms of the New Warrant if such exercise were by means of a cash exercise rather than a cashless exercise and (y) 1.0 .

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

The fair value of the 887,356 shares of common stock was calculated to be approximately $ 2.1 million, based on the common stock price of the date of issuance of $ 2.40 .

The incremental fair value of the Exchange Warrants was calculated to be approximately $ 123,000 and was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of the exchange of $ 2.40 ;

expected yield of 0.0 %;

expected volatility of 143 %;

risk-free interest rate of 3.43 % and expected life of 5 years.

The fair value of approximately $ 2,253,000 , which is the combination of the issuance of 887,356 common shares and the Exchange Warrants were treated as equity instruments.

The approximately $ 2,253,000 is considered a deemed dividend for the three and nine months ended September 30, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s condensed consolidated statement of operations.

For the three months ended September 30, 2024, the Company’s board of directors approved the issuance of a total of 100,000 shares of common stock to one vendor for financial advisory services.

The fair value of such common shares was calculated to be $ 240,000 and was recorded to other assets and additional paid in capital.

The fair value of such shares will be amortized over the service period of 12 months .

The shares of common stock were issued in July 2024.

Warrants for Shares of Common Stock

A summary of the warrant activity and related information for the six months ended June 30, 2024 and the year ended 2023 is provided as follows.

A summary of the warrant activity and related information for the nine months ended September 30, 2024 and the year ended 2023 is provided as follows.

In connection with February 2023 Offering, the Company issued common stock purchase warrants to investors to purchase up to 5,833 shares of the Company’s common stock, at an initial exercise price of $ 1,573.50 per share.

5 unchanged sentences

risk-free interest rate of 3.67 % and expected life of 5 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with March 2023 Offering, the Company issued common stock purchase warrants to investors to purchase up to 11,163 shares of the Company’s common stock, at an initial exercise price of $ 286.50 per share.

13 unchanged sentences

The May Inducement Warrants are callable by the Company at a redemption price of $ 75.00 per May Inducement Warrant, provided that the resale of the shares of common stock underlying the May Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

July 2023 Warrant Inducement

2 unchanged sentences

In exchange for the exercises of the May Inducement Warrants, the Company issued July Inducement Warrants exercisable for an aggregate of up to 3,400 shares of common stock at an initial exercise price of $ 193.50 per share.

The inducement offering period closed at 5:00 p.m.

EDT on August 8, 2023.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Each July Inducement Warrant was immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

24 unchanged sentences

risk-free interest rate of 4.21 % and expected life of 5 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

On March 26, 2024, the Company entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with certain holders of (i) the New Common Stock Warrants, (ii) the common stock purchase warrants dated January 23, 2024 (the “January 2024 Warrants”), and (iii) the February Common Warrants (together with the New Common Stock Warrants and the January 2024 Warrants, the “Original Warrants”), whereby the holders agreed to (i) amend the New Common Stock Warrants and the January 2024 Warrants so such warrants shall not be exercisable until one or more certificates of amendment to the Company’s certificate of incorporation, as amended, are filed with the Secretary of State of the State of Delaware to effectuate an increase in authorized shares of capital stock of the Company and a reverse stock split of the Company’s outstanding shares of common stock;

7 unchanged sentences

risk-free interest rate of 4.63 % and expected life of 5 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with the Second April 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 542,856 shares of the Company’s common stock, at an initial exercise price of $ 5.06 per share.

26 unchanged sentences

risk-free interest rate of 4.35 % and expected life of 5 years.

During the three months ended June 30, 2024, 438,611 warrants, including pre-funded warrants, to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 556,000 .

In addition, during the three months ended June 30, 2024, 3,225 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance 3,211 shares of common stock.

During the three months ended June 30, 2023, 1,486,132 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 1,895,000 .

In addition, during the three months ended June 30, 2023, 17,143 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance 12,856 shares of common stock.

Information regarding warrants for common stock outstanding and exercisable as of June 30, 2024 is as follows:

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

September 2024 Warrant Inducement

On September 10, 2024, the Company entered into warrant exercise inducement offer letters (the “September 2024 Inducement Letters”) with holders of the Exchange Warrants pursuant to which the Company agreed to issue new inducement warrants (the “September 2024 Inducement Warrants”) to purchase a number of shares of common stock equal to 65 % of the number of shares of common stock received upon exercise of the Exchange Warrants during the period provided for in the September 2024 Inducement Letters, with such September 2024 Inducement Warrants to be issued on substantially the same terms as the Exchange Warrants.

The holders exercised 1,193,721 Exchange Warrants pursuant to the September 2024 Inducement Letters, and the Company received aggregate gross proceeds of approximately $ 2.6 million from such exercises.

In exchange for the exercises of the Exchange Warrants, the Company issued September 2024 Inducement Warrants exercisable for an aggregate of up to 775,920 shares of common stock at an exercise price of $ 2.21 per share.

Each September 2024 Inducement Warrant is subject to shareholder approval and will expire on the fifth anniversary of such approval.

As amended, the inducement offering period is set to close at 5:00 p.m.

ET on November 30, 2024.

The grant date fair value of the 775,920 warrants was approximately $ 1,574,000 , which were treated as equity instruments.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of between $ 1.71 and $ 2.40 ;

expected yield of 0 %;

expected volatility of 143 %;

risk-free interest rate of between 3.43 % and 3.52 % and expected life of 5 years.

During the three months ended September 30, 2024, 1,193,721 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 2.4 million.

During the nine months ended September 30, 2024, 1,632,332 warrants, including pre-funded warrants, to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 2.9 million.

In addition, during the nine months ended September 30, 2024, 3,225 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance 3,211 shares of common stock.

During the three months ended September 30, 2023, 3,400 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 617,000 .

During the nine months ended September 30, 2023, 19,031 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 9.8 million.

Information regarding warrants for common stock outstanding and exercisable as of September 30, 2024 is as follows:

Weighted Average

1 unchanged sentence

Exercisable as of

June 30, 2024

September 30, 2024

$ 1.83 - $ 2.21

1 unchanged sentence

$ 5.06 - $ 6.00

$ 1,574.00 - $ 30,000.00

$ 38,250.00 - $ 262,500.00

* Weighted average

Warrants exercisable as of September 30, 2024 exclude warrants to purchase 2,780,207 shares of common stock issued to investors that participated in the March 2024 Offering that require shareholder approval prior to the warrants being exercisable.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Warrants exercisable as of June 30, 2024 exclude warrants to purchase 7,139,469 shares of common stock issued to investors that participated in the February Public Offering and March 2024 Offering that require shareholder approval prior to the warrants being exercisable.

Information regarding warrants for common stock outstanding and exercisable as of December 31, 2023 is as follows:

7 unchanged sentences

Warrants exercisable as of December 31, 2023 exclude warrants to purchase 1 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones and warrants to purchase 187,557 shares of common stock issued to investors that participated in the Inducement Agreement that requires shareholder approval prior to the warrants being exercisable.

The Company recorded no provision for income taxes for the three and six months ended June 30, 2024.

The Company recorded a provision for income taxes of $ 2,000 and $ 2,000 for the three and six months ended June 30, 2023, respectively.

The Company’s effective tax rate was 0.0 % for the three and six months ended June 30, 2024 and 2023.

The difference between the effective tax rate and the federal statutory tax rate for the three and six months ended June 30, 2024 and 2023 primarily relates to the valuation allowance on the Company’s deferred tax assets.

The Company recorded no provision for income taxes for the three and nine months ended September 30, 2024.

The Company recorded a provision for income taxes of $ 0 and $ 2,000 for the three and nine months ended September 30, 2023, respectively.

The Company’s effective tax rate was 0.0 % for the three and nine months ended September 30, 2024.

The Company’s effective tax rate was ( 0.02 )% for the nine months ended September 30, 2023.

The difference between the effective tax rate and the federal statutory tax rate for the three and nine months ended September 2023 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 June 30, 2024 and December 31, 2023, the Company retains a full valuation allowance on its deferred tax assets.

As of September 30, 2024 and December 31, 2023, 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 and six months ended June 30, 2024 and 2023 was calculated on a jurisdiction basis.

The provision for income taxes for the three and nine months ended September 30, 2024 and 2023 was calculated on a jurisdiction basis.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

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 June 30, 2024 and December 31, 2023 (in thousands):

The following table reflects our lease assets and our lease liabilities at September 30, 2024 and December 31, 2023 (in thousands):

September 30,

Operating lease right-of-use assets

5 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

Operating lease cost

1 unchanged sentence

Total lease cost

As of June 30, 2024, the maturity of operating lease liabilities was as follows (in thousands):

As of September 30, 2024, the maturity of operating lease liabilities was as follows (in thousands):

Payments due in:

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Commitments and Contingencies, continued

Lease Term and Discount Rate:

June 30, 2024

September 30, 2024

Weighted-average remaining lease term (in years)

4 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

Operating cash outflows from operating leases

10 unchanged sentences

Kristensen serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China, president of Platin Gate Aps, a company with focus on service-branding in lifestyle products as well as pro line products based in Denmark and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands.

For the three months ended June 30, 2024 and 2023, Hansong Technology purchased modules from the Company of approximately $ 10,000 and $ 24,000 , respectively, and made payments to the Company of approximately $ 0 and $ 189,000 , respectively.

At June 30, 2024 and 2023, Hansong Technology owed the Company approximately $ 39,000 and $ 29,000 , respectively.

For the three months ended June 30, 2024 and 2023, Hansong Technology sold speaker products to the Company of approximately $ 1,000 and $ 21,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 63,000 and $ 794,000 respectively.

At June 30, 2024 and 2023, the Company owed Hansong Technology approximately $ 163,000 and $ 350,000 , respectively.

For the six months ended June 30, 2024 and 2023, Hansong Technology purchased modules from the Company of approximately $ 35,000 and $ 48,000 , respectively, and made payments to the Company of approximately $ 0 and $ 189,000 , respectively.

For the six months ended June 30, 2024 and 2023, Hansong Technology sold speaker products to the Company of approximately $ 1,000 and $ 59,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 88,000 and $ 1,053,000 , respectively.

For the three months ended September 30, 2024 and 2023, Hansong Technology purchased modules from the Company of approximately $ 3,000 and $ 20,000 , respectively, and made payments to the Company of approximately $ 38,000 and $ 0 , respectively.

At September 30, 2024 and 2023, Hansong Technology owed the Company approximately $ 4,000 and $ 49,000 , respectively.

For the three months ended September 30, 2024 and 2023, Hansong Technology sold speaker products to the Company of approximately $ 0 and $ 24,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 96,000 and $ 50,000 , respectively.

At September 30, 2024 and 2023, the Company owed Hansong Technology approximately $ 67,000 and $ 324,000 , respectively.

For the nine months ended September 30, 2024 and 2023, Hansong Technology purchased modules from the Company of approximately $ 38,000 and $ 69,000 , respectively, and made payments to the Company of approximately $ 38,000 and $ 189,000 , respectively.

For the nine months ended September 30, 2024 and 2023, Hansong Technology sold speaker products to the Company of approximately $ 1,000 and $ 83,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 184,000 and $ 1,103,000 , respectively.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Related Parties, continued

As of June 30, 2024 and December 31, 2023, Mr.

As of September 30, 2024 and December 31, 2023, Mr.

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

8 unchanged sentences

See Note 4 Short-Term Loan for additional information.

As of June 30, 2024 and December 31, 2023, Mr.

As of September 30, 2024 and December 31, 2023, Mr.

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

3 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 and six months ended June 30, 2024 and 2023 was as follows:

Net revenue by geographic region for the three and nine months ended September 30, 2024 and 2023 was as follows:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

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

Subsequent Events

Notes Receivable - Maturity Date

On October 23, 2024, the Company and the Borrower agreed to extend the maturity dates of the June 2024 Note, August 2024 Note and September 2024 Note to January 31, 2025.

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