One Stop Systems, Inc.

Ladies and gentlemen, thanks for standing by. We will be starting in just about a minute. Once again, thanks for standing by. We'll be starting in about a minute. Thank you. Good afternoon and thank you for joining us today to discuss One Stop Systems financial results for the second quarter ended June 30th, 2023. With us today are the company's president and chief executive officer, Mike Knowles, and its chief financial officer, John Morrison. They are joined by the company's Chief Product Officer, Jim Eisen. Following their remarks, we will open the call to your questions. Then, before we conclude the call, I will provide some important information regarding the forward-looking statements made by management during the call. I would like to remind everyone that the call will be recorded and made available for replay in the Investors section of the company's website. Now, I would like to turn the call over to OSS President and CEO, Mike Knoll. Sir, please go ahead.

Thank you, Darrell, and good afternoon, everyone.

In the first half of 2023, OSS implemented strategic organizational changes designed to accelerate our growth, particularly focused on ramping up our defense business and our AI transportable product sales. To support this strategy, on June 5th, the company appointed me president and CEO, allowing me to leverage my experience and expertise in the global defense and commercial markets to accelerate the implementation of our strategy and grow revenue. As an update to the Board of Director reprofiling that was previously disclosed, I'd like to announce that Jack Harrison, who has been serving as Chair of the Nominations and Governance Committee, and Sita Lohman, who has been serving as Chair of the Compensation Committee, have resigned from the OSS Board of Directors effective as of the end of Q3. I want to thank Jack and Sita for their numerous contributions. In their place, I'm pleased to announce that, effective as of the end of Q3, Michael Dumont and I will be joining the OSS Board of Directors. Mr. Dumont is a retired three-star admiral whose career includes having served as a deputy commander of U.S. Northern Command and vice commander of North American Aerospace Defense Command, otherwise known as NORAD. Admiral Dumont currently serves as interim president of the California State University Maritime Academy. He is also a licensed attorney with both defense and commercial experience and currently serves on the board of directors of the Marines Memorial Association, the board of advisors of Data Miner, the National Security Advisory Council of the U.S. Global Leadership Coalition, as well as the OSS Advisory Board. We are actively pursuing additional re-profiling activities for Q4. I'd also like to note that we've recently announced the addition of Robert Kalbaugh to the team as Vice President of Sales, reporting to me. Robert brings over 30 years of defense business development and domain experience in defense and commercial markets. I've had the privilege to work with Robert for a decade, and I'm confident that we will be able to leverage our experiences to enhance and improve our sales and marketing efforts to accelerate our strategy. Robert has taken leadership of our sales and marketing organization and is already active with customers, driving the team and updating tools and processes to create added efficiency, grow pipeline, and drive near-term and long-term bookings. Jim Ison has retained a position as Chief Product Officer and now has the opportunity to focus his full attention and efforts within the product organization to ensure we continue to bring a roadmap of leadership products to the market. I appreciate his efforts over the past six months, having led both the sales, marketing, and product organization. Since assuming the position of CEO two months ago, I've had the opportunity to meet and engage with customers and companies in the defense and commercial markets. Through these engagements, I've been able to build my confidence and reaffirm the current company strategy and the opportunities in the AI transportable space. Having done so, I don't see the need for major adjustments to the strategy. I'm confident the strategy and product focus remain valid because the markets continue to be backed by strong demand for AI, sensor fusion, and autonomy at the edge. I've observed how our products work across both defense and commercial applications and can serve as the underpinning for building a balanced defense and commercial business portfolio. I believe that our current business model will strategically serve our company and investors well. What I am focused on is leveraging my experience to further drive and accelerate the strategy and build greater momentum and pipeline. During these past two months, I've explored opportunities to create broader partnerships within our core markets and with artificial intelligence software providers. We believe that these partnerships will unlock our ability to deliver fully integrated, higher-value solutions for our customers so they can more successfully leverage artificial intelligence and machine learning operations for their direct mission or business objectives. OSS has established a good foundation for operations in the defense market, and as I have familiarized myself with the business and its operations, I will be implementing further improvements towards executing on our strategy. For example, AI and sensor fusion applications within the defense market are consistently moving more into the classified space where additional opportunity exists. To participate in this environment and capture these opportunities, we will need to have a security cleared facility and create a cleared workforce. In this regard, I've already implemented actions on these efforts and we expect to receive our facility clearance from the U.S. government by the end of the year. In addition, we have already trained a facility security officer. We have also initiated discussions with our customers based on classified opportunities and will leverage these to add a secure classified information facility referred to as a SCIF, and further broaden and enhance our opportunities in the classified space. From a business and organizational perspective, we will work to strengthen our operations to better execute in the defense market. At the appropriate time, we will look to enhance our team by adding a contract specialist to deal with the complexities of defense contracting, auditing, and negotiating. We will move to certify our cost and accounting systems and further mature our international traffic and arms regulations, or ITAR, process. To this end, we have the opportunity to leverage the Defense Mentor Protege Program to assist and guide us in these areas through defense prime contractors. We are actively engaged in discussions with multiple primes at this time. I also anticipate further developing our opportunity pipeline identification and forecast modeling process over the second half of this year. I've seen a need for improvement in existing models and approach. This is consistent with the stage of maturation of OSS in the defense market. Improvement in these areas will allow for better assessment of forecasts and opportunity timing. Additional observations over the past few months indicate that we have a talented and motivated employee base. There is strong technical and product expertise in an innovation-driven environment that can deliver on products that will meet existing and future market requirements for rugged data center class edge processing. This will ensure we remain on the forefront of introducing the newest and highest level of performance for which OSS has made a reputation. I'm also excited that we have an experienced operations team and facilities with capacity to meet projected growth and demand. Overall, the company has an energetic culture with a sense of urgency to succeed, reminiscent of environments I've worked in where I've seen the greatest success and growth. I am pleased that my engagement with customers have validated the capability and scale of the solutions we can bring to both defense and commercial markets. The scale from our high-end Ritual products to our mid-tier SDS products and lower-end Cernys and Donati products give us the flexibility to deliver scalable performance at varying price points, which align to our customers' requirements. Additionally, our PCI Express and storage products provide an added dimension of performance and value to our customers in attaining not only the highest levels of compute, but also the lowest latency and most flexible storage solution. As we look at the company's forecasted performance, we will be met with revenue challenges due to opportunity delays. Fortunately, these delays, especially in the defense market, are not inconsistent with my experience and are not a reflection of the strategy, product offerings, or value of opportunity in this market. We are also seeing a softening in the timing of the commercial market, including consolidation and delays in autonomous trucking and a conservative approach to increasing hardware spending. Having said that, I have confidence in our strategy, our product offerings, and our ability to build a robust pipeline. As we execute in Q3 and Q4, our focus will be to build upon what I have discussed here today to grow and accelerate sales and revenue. Now, before coming further, I'd like to ask John to provide the financial details for the quarter and Jim to expand further on customer wins and products. John?