Business context and reporting period
This is WISA Technologies, Inc.’s unaudited Form 10-Q for the three months ended March 31, 2022—not a filing identified as Datavault AI Inc. The filing describes a business selling wireless-audio modules and consumer audio products, while developing software-based wireless audio solutions. Investors should verify the company and filing identity against the original SEC record.
Financial results and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $566,000 | $1.153 million; down 51% |
| Gross profit and margin | $62,000; 11.0% | $295,000; 25.6% |
| Operating expenses | $3.963 million | $3.015 million |
| Net loss | $3.904 million | $3.292 million |
| Operating cash flow | $(4.034) million | $(2.771) million |
At March 31, 2022, cash and cash equivalents were $9.061 million, versus $13.108 million at year-end 2021. Current assets were $16.512 million and current liabilities $3.827 million. Total liabilities were $3.986 million; the filing reports no conventional outstanding borrowings, but does report $33,000 of finance lease obligations and $289,000 of operating lease liabilities. Total assets were $16.972 million and stockholders’ equity $12.986 million. Inventory rose to $6.227 million from $4.780 million.
Material changes versus the prior comparable period
- Component revenue fell $689,000, partly offset by a $102,000 increase in consumer audio product sales. Management attributed weaker component sales in part to customers delaying orders amid supply-chain disruption.
- Gross margin declined as lower sales volumes were spread over fixed manufacturing costs.
- Research and development, sales and marketing, and general and administrative expenses increased by $364,000, $426,000, and $158,000, respectively.
- Cash used in operations increased by $1.263 million, with inventory growth a primary factor. The prior-year quarter included $5.095 million of net warrant-exercise proceeds; no such proceeds were reported in Q1 2022.
- Common shares outstanding increased from 15,819,059 at December 31, 2021 to 16,883,464 at March 31, 2022.
Outlook, risks, and unusual items
Management said current liquid assets were expected to fund operations through the balance of fiscal 2022, but also disclosed substantial doubt about the company’s ability to continue as a going concern for the twelve months from the report date. The company expected operating losses to continue and said it would need additional equity or debt financing; the substantial doubt was not alleviated. An at-the-market program permits up to $4.5 million of stock sales, but no shares had been sold under it by March 31, 2022.
- Key risks include dependence on sole-source suppliers and contractors in China and Japan, customer and supplier supply-chain disruption, customer concentration, uncertain product acceptance, competition, and the need for additional capital. Three customers generated 77% of Q1 2022 revenue; four customers represented 85% of accounts receivable.
- The company reported no material pending legal proceeding and no off-balance-sheet arrangements. Management stated disclosure controls were effective as of March 31, 2022.
- There was no Q1 2022 warrant inducement expense; Q1 2021 included $567,000. The 2020 PPP loan had been forgiven in 2021.
- The company adopted lease accounting standard ASC 842 on January 1, 2022, recording right-of-use assets and lease liabilities; it said adoption did not affect operating results or cash flows.
- Related-party activity included purchases of speaker products from Hansong Technology, a company associated with a director. The company reported owing Hansong approximately $949,000 at March 31, 2022.
The filing provides no specific revenue, earnings, or margin guidance.
Important facts for investors to verify
- Confirm the filing’s registrant: the document is for WISA Technologies, Inc., despite the request metadata naming Datavault AI Inc.
- Assess funding runway and financing availability in light of the unalleviated going-concern doubt, quarterly operating cash burn, and unused ATM capacity.
- Track component revenue, customer order timing, inventory levels, and supplier concentration.
- Review potential dilution from the increase in shares outstanding, outstanding warrants, and equity-compensation awards.
- Evaluate the scale and terms of related-party transactions, including the balance owed to Hansong Technology.