Andrea Electronics Corporation

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Andrea Electronics Corporation Investor
Conference Call May 13, 2002
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Conference Call Agenda I. Introduction of
Participants II. Forward Looking
Statement III. Financial Analysis IV. Overview
of Post Q4 2001 Significant Events V. Update of
Targeted Goals for 2002 VI. Questions
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I. Introduction of Participants
Christopher P. Sauvigne, President and Chief
Executive Officer Richard A. Maue, Chief
Financial Officer and Corporate Secretary
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II. Forward Looking Statement
This presentation may contain "forward-looking
statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The
words "anticipates," "believes," "estimates,"
"expects," "intends," "plans," "seeks,"
variations of such words, and similar expressions
are intended to identify forward-looking
statements. These statements are not guarantees
of future performance and involve matters that
are subject to certain risks, uncertainties and
assumptions that are difficult to predict,
including economic, competitive, governmental,
technological and other factors, that may affect
the business and prospects of Andrea Electronics
Corporation (the "Company"). The Company
cautions investors about the following
significant factors, which, among others, have in
some cases affected the Company's actual results
and are in the future likely to affect the
Company's actual results and could cause them to
differ materially from those expressed in any
forward- looking statements the rate at which
Andrea Anti-Noise, DSDA, DFTA and other Andrea
technologies and products are accepted in the
marketplace the competitiveness of Andrea
Anti-Noise, DSDA, DFTA and other Andrea products
and technologies in terms of technical
specifications, quality, price, reliability and
service the sufficiency of the Company's funds
for research and development, marketing and
general and administrative expenses infringement
and other disputes relating to patents and other
intellectual property rights held or licensed by
the Company or third parties the Company's
continuing ability to enter and maintain
collaborative relationships with other
manufacturers, software authoring and publishing
companies, and distributors the emergence of new
competitors in the marketplace the Company's
ability to compete successfully against
established competitors with greater resources
the uncertainty of future governmental
regulation the Company's ability to obtain
additional funds and general economic
conditions. These and other similar factors are
discussed under the heading "Cautionary Statement
Regarding Forward-looking statements" included in
the Management's Discussion and Analysis of
Financial Condition and Results of Operations in
the Company's Annual Report on Form 10-K and in
the Company's Annual Report to shareholders, and
in documents subsequently filed by the Company
with the Securities and Exchange Commission.
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III. Financial Analysis

• Income Statement Discussion Points
• Net Revenue decreased approximately 31 over
  Q12001, and decreased approximately 14 over
  Q42001, before fourth quarter restructuring
  charges
• Gross profit margin increased approximately
  8.6 of sales over Q12001, and increased 7.2
  of sales over Q42001, before fourth quarter
  restructuring charges
• Research and development expenses decreased
  approximately 9 over Q12001 and increased
  approximately 12 over Q42001
• Selling, general and administrative expenses
  decreased approximately 35
• and 25, over Q12001 and Q42001, respectively.

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III. Financial Analysis (cont.)

• Balance Sheet Discussion Points
• Cash and cash equivalents of approximately 3.4
  million at
• March 31, 2002
• Current Ratio of approximately 2.2 to 1 at March
  31, 2002
• Working capital of approximately 6.7 million
• Summary of Aggregate Series B Conversions During
  Q12002
• January 2002 - 40 Preferred Shares converted
  into
• 748 thousand Common Shares
• March 2002 - 37 Preferred Shares converting
  into
• 805 thousand Common Shares

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IV. Overview of Significant Year-to-Date 2002
Events Analog Devices - Andrea / Analog
demonstrate technology at Spring IDF - Andrea
/ Analog demonstrate Andreas noise
canceling technologies running on Analogs
SHARC DSP processor at the 2002 Embedded
Systems Conference - Andrea generates
additional 4 million in royalties for
noise canceling technologies from Analog
Devices - John R. Croteau, Analogs Director
of Computer Products and Services,
appointed to Andreas Board of Directors
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IV. Overview of Significant Year-to-Date 2002
Events (cont.) - Andrea Launches New
American Teleservices Association Endorsed
Call Center Headsets - Andrea Receives
Patent for Critical Digital Noise Canceling
Technology - Andrea Appoints New External
Board Members Louis Libin James M.
Griffin - Andrea Receives Patent
for PureAudio Noise Canceling Technology
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V. Update on Targeted Goals for 2002
Business Line Goal Update Overall Create
Strategic Alliances - Ongoing discussions for
enhanced distribution, continue in
telematics, manufacturing, and access
videoconferencing and to working capital
with hardware manufacturers Restructure
outstanding - Initial discussions
held convertible preferred stock Ongoing
effort Digital Audio Leverage technology
platform, - Numerous meetings held
Technologies distribution channels provided in
U.S., Asia and Europe by Analog
Devices Maintain RD spending to - RD
spending on track retain DAT
portfolio Anti-Noise Products Launch call
center products - Products launched -
Additional products being developed and
should be ready for market Q3 Aircraft
Communication Maintain Prior Years - Revenues
on target Systems Revenue Base Continue
Integration of DAT - Several demonstrations
of into aircraft product offerings
technology performed with extremely
positive feedback
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VI. Questions / Answers