MW WiSA sells stock at a more than 60% discount after its recent rocket ride
By Tomi Kilgore
Wireless sound company's stock had soared more than fivefold in two days after announcing licensing deals
Shares of WiSA Technologies Inc. were among the biggest decliners listed on the Nasdaq, but that registered as only a minor pullback following a fivefold rocket ride over the previous two sessions.
The wireless sound technology company's stock (WISA) had blasted 248.6% higher on Tuesday and ran up 51.6% on Wednesday, for a total two-day gain of 428.6%, after the company announced licensing agreements. That surge came after the stock closed on Monday at a record low of $1.75.
On Thursday, the stock dropped 26.6% in morning trading, enough to make it the fourth-biggest Nasdaq decliner, as the company took advantage of the rally to raise $750,000 through share sales.
The sales include an agreement to issue and sell 225,834 shares of common stock at $3.321 a share, which represented a 64.1% discount to Wednesday's closing price of $9.25. The company also sold warrants to buy up to 225,834 common shares, at an exercise price of $3.196.
The warrants will be exercisable as soon as they are issued, and will expire in five years.
As of March 27, the company had 250.9 million shares outstanding.
Separately, the company announced on Thursday what it called a "game-changing" licensing agreement for its WiSA E software with a "top-three" consumer electronics company.
"WiSA E will be used by a major CE manufacturer to embed high-quality immersive audio functionality in their devices - functionality that can be activated by the consumer in their home," said Chief Executive Brett Moyer.
The company didn't disclose financial terms of the agreement, but did say it will include royalty payments based on use of its transmitting software.
That follows the announcement on Tuesday, that kicked off the stock's surge, of another five-year WiSA E licensing agreement with a fourth major TV brand. The customer was unnamed, but WiSA called it a "multi-billion dollar revenue company."
Again, financial terms were not disclosed.
"With four major TV brands onboard, the market is clearly validating both our technology and our vision of enabling every immersive audio source device with low-cost capability to deliver high-quality interoperable wireless audio to consumers," said Tony Ostrom, president of WiSA subsidiary WiSA Association.
Because of the selloff prior to the big two-day rally, the stock was up just 115.6% in April. That follows an eight-month losing streak in which it plummeted 98.4%.
In the company's annual report filed on April 1, the company said there was "substantial doubt" about its ability to continue as a going concern, given its low cash levels, that fact that it has never recorded a yearly profit and that it expects to continue to lose money for the "foreseeable future."
-Tomi Kilgore
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April 18, 2024 10:57 ET (14:57 GMT)
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