Oblong Inc.

Good day, everyone, and welcome to the Oblong Incorporated Second Quarter 2021 Earnings Results Call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Brett Moss, Hayden IR. Please go ahead.

Thank you, Operator. I'd like to welcome everybody to today's call. Hosting the call today are Oblong Chairman and CEO Peter Holst and CFO David Clark. Please be aware that some of the comments made during our call may contain forward-looking statements within the meaning of federal securities laws. Statements about our beliefs and expectations containing words such as may, could, would, will, should, believe, expect, anticipate, and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding our operations and our future results that could cause actual results to differ materially from management's current expectations. In addition, today's call includes non-GAAP financial measures. Reconciliation of such measures to GAAP measures is contained in the press release issued today. We encourage you to review the safe harbor statement and risk factors contained in the company's earnings release and findings with the SEC including, without limitation, our most recent annual report on Form 10-K and other periodic reports that identify specific risk factors and may also cause actual results or events to differ maturely from those described in the forward-looking statements. Copies of the company's most recent reports on Form 10-K and 10-Q may be obtained on the company's website, oblong.com, or SEC website, sec.gov. The company does not undertake to publicly update or revise any forward-looking statements after the call or date of this call. I would also like to remind everyone that this call will be available for replay through August 25th. A link to the website replay of the call is also provided in the earnings release and is available on the company's website, oblong.com. And now to the caller, the CEO of Oblong, Peter Hulse. Peter, the floor is yours.

Thanks, Brett, and thanks, Christine, and thank you, everyone, who has taken the time to join the call today. During the second quarter, the company made significant progress in product development, team expansion, capital formation, and customer engagement. While we continue to see a prolonged effect of COVID on most of the return to office initiatives, our momentum, both internally and externally, remains very positive and directionally sound. In terms of financial results for the second quarter, they were generally in line with our expectations and prior guidance, given the macro effects of COVID variants on office usage across the globe. Revenue was $2 million, up moderately from the prior quarter, as were sales of our core product mezzanine. Gross margins also had an uptick and losses narrowed proportionally. On a year-over-year basis, revenue was down, although virtually all of that variance is directly attributable to either non-core or discontinued products and services we believe are incongruent with our vision of the product in the future. With respect to product development, we launched an updated trial version of our multi-share service and added some interesting user experience features. Based on great feedback from our testing group, our team is very nimble and functional in the engineering area as they work on transitioning from hardware-based systems to hybrid systems and designs that accommodate both in-room and remote engagement from the cloud. Recently, we've seen user engagement pick up, and the feedback we've received suggests there are a number of potential verticals and specific use cases for multi-share or multi-stream technology. We will continue to develop around those recurring themes with the primary goal of having a fulsome beta version available later this year. If you have a chance, please visit us at multishare.us to join our trial program. In Q2, we expanded our engineering and product design team by about 30%, adding both on and near-shore resources wholly focused on cloud and development for the iOS and Android market as we look to innovate some of our legacy capabilities into more frictionless experiences through apps on your laptops or handheld devices. As part of the journey from on-premises solutions to cloud, we added Amanda Messbauer to our leadership team as VP of Sales at the beginning of August. With over 20 years' experience in selling B2B cloud services for the likes of Evernote and Accruant, Amanda, along with three new salespeople added in the last 90 days, are forming a great team whose mission will be to consultatively engage current and new customers on the future of the hybrid workforce. Lastly, we added Debbie Meredith and Matt Bloomberg to our board of directors. Their respective accomplishments in technology companies are too long to mention on this call, but I can absolutely say their collective experience, pragmatism, and deep technical acumen will add significant value for our shareholders in the future. Toward the end of June, we completed an offering raising $11.5 million of net proceeds, which will be used primarily for product development, marketing, and sales initiatives. At June 30th, the company had $13 million in cash in the bank, a very simplified capital structure, and $2.4 million in loan obligations to the Small Business Administration, which were subsequently forgiven in late July in holds. The company has no debt obligations outstanding as of today. On the revenue front, we've often discussed one of the key catalysts in our evolution being some material form of, or at least how the media might describe it as, a quote unquote return to the office. The truth is no one truly knows when or what that looks like, because frankly, the concept of a new normal won't resemble anything close to the old normal. Its crystal clear productivity metrics are being reframed, and those who embrace digitization of workflows and workspaces in particular will lead their respective markets in the future. To better understand a modern perspective on work today and in the future, I'd encourage everyone to read a recent article from McKinsey titled, It's Time for Leaders to Get Real About Hybrid. Aside from McKinsey being a longtime client, we share a very common view of how and where tomorrow's workforce will connect and produce products and services in the future. One quote in the article that particularly and perfectly aligns with Oblong's vision of meetings goes as follows. The norms surrounding meetings are ripe for refreshing. Who needs to attend which meetings, for how long, and in what format? How can meetings be redesigned in a way that maximizes efficiency, accelerates effective decision-making, and builds connectivity and social cohesion. The answers aren't clear yet, but companies will figure them out by trial and error, by testing and learning. And with that backdrop, that's exactly what Oblong has been doing, testing and learning. As previously stated, we are already testing versions of our multi-share service, but we are also getting traction with various proof of concepts from companies in manufacturing, entertainment, aerospace, consulting, and financial services industries, all of whom have recently inquired about trialing or testing our in-room products, as they too look to transform their workspaces and increase employee engagement in the future. We believe these investments in our customers today and in the future will pay substantial dividends as our products become more easily consumable from the cloud. David, I'll pass it over to you.