Good morning and welcome to the WiSA Technologies special conference call to discuss its planned acquisition of CompuSystems Inc. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to David Barnard of Alliance Advisors Investor Relations. Please go ahead.
Greetings and welcome to WiSA Technologies special conference call to discuss its planned acquisition of CompuSystems. Again, I'm David Barnard with Alliance Advisors Investor Relations, and again, as a reminder, the conference is being recorded. On slide two, I'd like to remind everyone that today's conference call will include forward-looking statements which are subject to various risks and uncertainties that could cause actual results to differ materially from these statements. Any such forward-looking statements should be considered in conjunction with the cautionary statements in our release and risk factors discussed in our filings with the SEC. WiSA assumes no obligation to update any of these forward-looking statements except as required by law. We also refer you again to slide two and today's accompanying presentation for more information.
Turning to slide three, with us today are Nate Bradley, CEO of DataVault Holdings; Mark LoGiurato, CEO of CompuSystems; Brett Moyer, CEO and President of WiSA Technologies; and Michael Fazio, Controlling Investor of CompuSystems, who will be joining us for the Q&A today. With that, I'd like to turn the call over to Nate. Please go ahead, Nate.
Thank you very much, David. Appreciate that. Thank you, everyone, for taking the time. With two days left to go in this year, we are positioning DataVault WiSA to be well-positioned coming into the next year. And as we enter 2025, we have our focus on Data Sciences Division and Acoustic Division. And CompuSystems, the subject of today's call, is an acquisition we're making that's a bull's-eye within those two aspects of our operations. The Acoustic Sciences Division has a focus around technologies, and we've harnessed our ADIO technology in events. The M3 wallet technology of CompuSystems is a technology that CompuSystems developed to transition an event-based business into technology-based business, to go from high touch to high scale to high touch to no touch.
Having over 100 employees and a reputation as the leader in event registration, we were able to look at their lead generation capabilities, and the technology they had built really caught our attention. This bull's-eye includes our Data Sciences Division, which looked at CompuSystems in a different way. We looked at their historic value, their assets with respect to their data, and how much that data had been developed and how much quality they brought to that dataset over being a practitioner in the event space. CompuSystems is a bull's-eye for us. Creating revenue streams and value through events has been a focus of ADIO technology.
When we look at our ADIO technology and how we've proven it inside some of the largest event venues in the world, some of the largest sports and entertainment events held in this past couple of years, we've taken an Cpproach of working with high-end brands, perfecting the SDIO technology, and now, as we come to market, we look to CompuSystems, a company that has thousands of customers, that has done events around the world, and has a reputation as a leader in the space. Their 100 employees allow us to put feet on the ground and accelerate our model at DataVault and ADIO. CompuSystems has a reputation of not only caring for their customers but also developing a wealth of data for their customers.
All of these events and expos and registrations are developing a lifeblood of data that's helped CompuSystems customers achieve their goals, whether in sales or communications or internal events. We've been able to tap into HubSpot, Salesforce, Zoho, and other large CRM properties through CompuSystems' mastery of those platforms. They feed data into those systems. DataVault can look at those systems in terms of their value and their monetization capability. So we're very excited about the revenue streams that are created through events and the fact that CompuSystems is a leader in events and registration. Their lead generation system is second to none and feeds these larger systems that we also are integrated with on our DataVault platform. So DataVault and ADIO work seamlessly with the CompuSystems team and technologies to implement technologies at much greater scale.
We've accelerated our plans and moved into scale rapidly, prepared for 2025 with a system and a team that is robust and patented. As we enter market, we look at some of the pilot programs that we've created, real-world pilot programs. The Cowboy Christmas Las Vegas Event Center, we were able to do for over 300,000 people to engage with our technologies. We've had a recent event where our technologies were adopted at 78% of the audience present utilized the audio technology during the event. We have mobile marketing statistics from our pilots that prove that we are ready for scale.
And rather than going door-to-door or competing against companies like CompuSystems, we've decided to bring in the best company into our company, the best people into our company, the best relationships into our company that allow us to accelerate our plans of implementing technology at the highest level and bringing our patented solutions to the marketplace with a team that is trusted and utilized worldwide. We also have the addition of audio tours and aspects that CompuSystems has developed over many, many years with an expertise. So with this, I would like to turn it over to Mark to explain a little bit more about the business of CompuSystems, its past successes, and everything that they bring to the table for DataVault WiSA. So with that, I'd like to turn it over to Mark. Mark?
Thank you, Nate, so I'll give you a little background on CompuSystems. We're a 48-year-old trade show and conference registration company. We're based in the Chicago area, and as Nate said, we're regarded as the premier registration company for on-site and lead retrieval services throughout the industry. Our staff, on an annual basis, we register about 1.5 million people throughout the world from Australia to Europe, so we're a big international presence, and during the past two decades, we have registered over 50 million attendees and conference to our events. More importantly, we have relationships with every show producer in the industry. We have created the websites and managed the registration services for events such as CES in Vegas, the National Retail Show, and HIMSS, the largest event for healthcare and information services in the world.
We're known for driving our engagement between exhibitors and attendees through our on-site lead retrieval services and providing high-quality leads through our proprietary app called CompuLEAD. CompuLEAD allows exhibitors to take registration off of the badges by just scanning attendees' badges and getting their demographics, but as an innovator in the registration industry, we're continually adding to our software offerings and have now developed new analytics to complement our latest product, M3. M3 is a game changer that enables the attendees to gather information seamlessly from exhibitors, whether it be videos or documents, so we're actually putting it in the attendees' hands to gather information, whether it's new products, displays, or conference sessions, white papers, etc. We're really looking forward to working with ADIO because now it enables us to move more easily into other verticals such as museums and sporting events.
And that's going to be a game changer for us as we grow our business along with ADIO. So I'm looking forward to 2025 and beyond. And I thank you for giving me a few seconds to explain CompuSystems.
Thank you, Mark. As you can see, significant revenue opportunities exist. The M3 Expo Wallet for exhibitors was a first foray into Web3 technologies by CompuSystems. We identified this as one of the key aspects of this acquisition. DataVault and CompuSystems together with the ADIO technology allows us to trigger events in these event venues in a mobile response modality that previously has not existed. We have a QR or a quick response code that rides over sound. We have exquisite data management and a team that is experienced in all aspects of event management. This includes protecting our clients and developing the most amount of data that we can from each event, each event having now a yield of ticket sales, food and beverage, and merchandise, but now another category, data.
Each event creating data that we can value and monetize moving forward. The idea behind this acquisition is to leverage the very best of both companies using a proprietary cloud of technology patents and patented technology that no one else in the world can bring to their customers. We've created a barrier to entry in that we have patented technology, a greater system in place around events and event management with CompuSystems. We also have a team of 100-plus that are focused on implementing our technology inside this scale, extending our lead and innovation in this industry, and providing a Web2 to Web3 transfer that automates and brings the CompuSystems revenues into a higher scalable, touchless, and fully automated process. We're very excited about this opportunity.
To frame it a little bit from the financial standpoint, I'd like to turn the call over to Brett Moyer. Brett.
Thank you, Nate. So next slide, please. All right. So from my perspective, for all the reasons that Mark and Nate have gone through, this is a very exciting transaction for us. It combines CompuSystems technology, but I call this a case study, the CompuSystems case study, because what's happening is this CompuSystems represents what we're doing with WiSA, with CompuSystems, with digital twinning, with the Verifi technology, right? So in all cases, what we're trying to move is move software and IT into non-hardware-based products, so licensing and software revenue. And if you look at the impact that CompuSystems did, they started their effort back in 2022 designing and building their M3. So historically, their margins have been in the 36%-38% range.
But as they look into 2025 and 2026, their margins now with M3 and ADIO being software margins, not just hardware people registering at front desk, selling printers, etc., their margin now starts to grow into close to and approach 60%. So when Nate and I are out talking, we're not just talking about CSI when we think about implementing IT and software and changing the fundamental business and the financial profile of the company. This is the model we're pursuing across the board, across all product lines, all right? We did put out guidance for 2025, and that guidance on CSI is $13-15 million in revenue with $3-4 million of EBITDA. So that's just getting started. That's off of their numbers. That hasn't measured any impact on the value ADIO brings.
So, we expect to strengthen their P&L over time and integrate that product, which we did announce maybe two weeks ago that they were integrated, started the integration process of ADIO. So with that, we're going to flip to the summary slide and open up, operator, the call for questions.
We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Once again, to ask a question, please press star, then one to enter the question queue.
Betsy, this is David with Alliance Advisors. We've got a question or two that came in. I'll just read one of them, I see. Actually, let me read one of the questions first, and then I know we can go back to the queue. It's a question from Mark, I think. Would it be a reasonable assumption that you can and will scale CSI's business without significantly added resources, particularly pertaining to personnel?
Yes. We have the staff on site with our current staff. To go into other verticals, we may add one or two salespeople that we know from the industry we've worked with prior, so they have a Rolodex of folks they can go after. But we're not significantly adding staff at all. One or two salespeople that will actually create revenue for us and pay for themselves.
Okay. David, do we have any other questions in the queue?
We do have a question from the audio side. The first question comes from Jim McIlree with Special Equities Group. Please go ahead.
Thank you. Congrats, guys. Can you help me understand a little bit what needs to happen in order to hit the guidance? Is that kind of a backlog-driven number, or do you need to go out and get that business? And then as part of that, is it second half loaded, or is it kind of progresses throughout the year? And is it a lot of customers, or is it dependent upon a handful, one or two or a handful of customers to hit the revenue numbers?
I think Mark can talk and address the customer and the backlog and the contract pipeline. Just from an expectation, Jim, we expect to close this in the first half of Q1 at some point. There's very few items left to close out this transaction, actually. Mark? Yeah, so this will be rolling out M3, etc., with ADIO. However, we've rolled out M3 for the last two years. We have a large pipeline. There are many trade show organizers that are buying it out for use at all their events. The next one coming up is in February of this year, the National Retail Show, so there's a lot going on there. We just finished the largest automotive aftermarket show, AAPEX SEMA, where they did a total buyout for their 1,400 clients, so we've got a lot of momentum going.
With the addition of ADIO onto it, it's just going to increase that. So we're ready to roll forward. Looking forward to it. It's exciting. It's exciting times at CompuSystems because we're not just a registration company anymore. We're software innovators. M3 proved that. And now with adding ADIO to that, it's just going to enhance our offerings out there to the industry.
Got it. Thank you. That helps. And can you give some indication of what the balance sheet is going to look like after the acquisition or the merger takes place?
From an equity perspective, or I mean, the terms have been filed in.
Yeah. I'm thinking in terms of cash, debt, and equity. I guess those are the primary things I'm interested in.
All right. Equity around this transaction is 10.6 million shares will be issued to CSI. There is $10 million of debt that is due six months and nine months and $5 million tranches that is convertible if we have less than $30 million of cash. From a cash perspective, with the strengthening of the technology and the valuation of the technology, the adding of CSI to the WiSA-based business, we have multiple conversations going on strategically how to fund that, which we won't have a problem achieving, I believe.
Got it. And then just my last one. Can you talk a little bit about who you view as the most important or the biggest threat in terms of competition that you see for CompuSystems?
Mark or Nate?
Yeah. Hey, Nate Bradley here. So reject the premise that we have competitors on many aspects of what we're offering in our technology stack. In terms of direct competitors to CSI, this acquisition catapulted us into the castle in terms of event management. We believe we're the premier. All others chase us in this space now. And respect to the head-to-head competition, there's obviously a number of event companies, registration companies, and others that are nipping at our heels. That distance between us and them drastically enhanced by the patent portfolios of WiSA, DataVault combined, the M3 wallet technology developed by CompuSystems is infused with the patent protection that we bring.
And we've also looked at, in terms of the Web3 aspects and the tokenomics, some of our competitors there, Coinbase and others of that ilk, the crypto side, are interesting challenges for us in terms of taking them on in the event space around immutable NFTs and NFT tickets and other aspects of this that we're bringing to the table. So kind of reject the premise that we have direct competitors on our feature sets. The competitors in the event space are pretty well defined. They all follow us now. That's great. Thank you. Appreciate the answer. And thanks for your patience with me. Good luck with everything. Congrats. Thank you.
Thanks, Jim.
Once again, if you would like to ask a question, please press star, then one to enter the question queue.
All right. So operator, if there's no more questions in the queue, I'd like to turn the call over to Nate for final comments.
Thank you, everyone, for joining us. If you do have additional questions, we're always here to answer them. We are very excited about the DataVault, WiSA, and CompuSystems combination. We're sorting out everything, but as a team. And the 100 people that come from CompuSystems enhance our existing 50 when you take DataVault and WiSA combined. So from a human resource standpoint, we've infused a tremendous amount of talent into our team and into our effort here. CompuSystems, with their reputation in the space, is something that we coveted. And we wanted also their team. Mark is an exceptional human being. He's worked so hard for so long. And this deal is something that we're very excited to bring to CompuSystems as we transition their business from Web2 to Web3.
And that leap is something that we're very excited to be part of, to be leading the industry in that area, and now to have a foothold that no other company can claim to have with respect to event registration, event management, and expertise, and a throughput, foot soldiers that we have now throughout the world that are bringing the DataVault solutions to bear. I'd also point out that our ADIO technology is drastically enhanced by the M3 wallet. There is an immutable record and other things that we can create in the tail of events. Events and event companies create data in their wake. And we are able to, for the first time, capture that data, show them a value, and bring monetization to bear. So our focus around all of our efforts is to bring data to monetization. DataVault has a system called the Information Data Exchange.
We are headed towards both an experiential and a monetization of data. When we look at the aspects of what CompuSystems brings to our company, we could not be more thrilled to have this team, this revenue, these customers, and all of our technology combined. With that, we're going to attack 2025. We wish everyone the best in the new year. Thank you for taking the time today to learn more about our company. We're very excited to kind of join forces and bring this company to the very next level starting at day one. We are very, very excited. Thank you very much, everyone, for your participation today.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.