Socket Mobile, Inc.

Welcome to the Q4 2021 and Annual Financial Results Management Conference call. My name is Adrienne and I'll be your operator for today's call. Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended. Such forward-looking statements include, but are not limited to, statements regarding mobile data collection and mobile data collection products, including details on timing, distribution, and market acceptance of products and statements predicting the trends, sales, and market conditions and opportunities in the markets in which the socket mobile sells its products. Such statements involve risks and uncertainties and actual results could differ materially from the results anticipated in such forward-looking statements because of a number of factors including, but not limited to, The risk that the manufacturer of Socket's products may be delayed or not rolled out as predicted due to technological, market, or financial factors, including the availability of product components and necessary working capital. The risk that market acceptance and sales opportunities may not happen as anticipated, and the risk that Socket's application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so. The risk of acceptance of Socket's products in vertical application markets may not happen as anticipated, as well as other risks described in Socket's most recent form, 10-K, and 10 key reports filed with the Securities and Exchange Commission. Socket does not undertake any obligation to update any forward-looking statements. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star then 1 on your touch-tone phone. Please note this conference is being recorded. On the phone with me, I have Kevin Mills, President and CEO, David Holmes, Chief Business Officer, and Lynn Zhao, Chief Financial Officer. I'll now turn the call over to Kevin Mills. Kevin, you may begin.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us today. I want to start with a quick review of 2021 and our Q4 results, and I'll hand the call over to Dave Holmes. who will outline the product adjustments and improvements in our go-to-market strategy. We believe these improvements will enable Socket Mobile to maintain its track record of growth for the next few years. 2021 was a very good year for Socket Mobile. We grew our revenue by 48% to $23.1 million. We maintained our gross margin in the 53% range and reported operating income of $2.7 million. Lin Zhao will provide a more detailed breakdown of our financial results in a few minutes. Our 2021 results show the progress we have made as a company over the past 12 months. We achieved these results in a very difficult environment by maintaining our focus on the data capture market and a great deal of hard work by our amazing team here at Socket Mobile. The improvements also highlight the benefit of our application-driven business model and the leverage it brings over time as we continue to benefit from the success of our application partners. Switching to our Q4 results, in Q4, we grew our revenue by 31% to $6.1 million. Our gross margins were slightly lower at 52.1%, primarily due to increased costs associated with supply chain difficulties, resulting in an operating income of $700,000 for the quarter. These are very good results for Q4, which is a seasonally weak quarter for retail-related deployments. So we enter 2022 a significantly stronger and better company than we entered 2021. In addition to the financial progress we made in 2021. We also learned a great deal from our application partners and feel we are much better positioned to serve their going forward data capture needs. I'd now like to turn the call over to Dave Holmes, who will outline how we will better serve this market moving forward. Dave.

Thank you, Kevin, and good afternoon, everyone. When I joined Socket in the middle of last year, we embarked on a mission to strengthen our strategy to become a more comprehensive data capture company. We made great strides in the NFC market, which you may have heard about in our previous calls, and today I'd like to highlight another key element of that strategy. The announcement we made earlier this week introducing the SocketCam C820. This is the first member of the new SocketCam software product family that turns any mobile device into a high performance barcode scanner. We think this is a critical piece in the data capture journey. Today, socket mobile scanners are primarily used in the performance sensitive portion of the data capture market, which we have a commanding market share in. However, our application partners have end users with different data capture needs and are often not data capture experts. They typically only add our capture SDK to support socket scanners when their customers run into performance issues. Our research and experience tell us that data capture is a journey, and our end customer's requirements evolve over time. Through our customer feedback, we know that roughly 70% of our end users started out using a keyboard or camera-based scanning before they came to a socket scanner. While free scanning works very well in low-volume, well-lit environments, it can struggle as volumes increase or conditions become more difficult. The addition of the C820 will allow our development partners to bring Socket's scanning expertise and capabilities to a much wider audience, allowing our app partners to serve all their end users from the price sensitive to the performance sensitive with one integration. Enabling the app for the entire journey allows the developers to service a much bigger audience, eliminates the burden of lengthy and technical onboarding processes, and allows the end customers to select the best tool for their particular situation. We will continue investing in the SocketCam family to offer data capture solutions that benefit our developer community and end users. We have an advanced version available. We will have an advanced version available on the subscription basis later this year. And we think this is a critical evolution in how Socket serves the entire data capture journey. With that, I'll turn it over to Lynn for more details on our financial results. Lynn?