Socket Mobile, Inc.

Welcome to the Socket Mobile, Inc. Q4 2023 earnings call. My name is Jen, and I will 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 Socket Mobile sells its products. Such statements include 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 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. 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 that 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-Q reports filed with the Securities and Exchange Commission. Socket does not undertake any obligation to update such forward-looking statements. On the call with me today are Kevin Mills, Chief Executive Officer, Dave Holmes, Chief Business Officer, and Lin Zhao, Chief Financial Officer. I will now turn the call over to Kevin Mills. Mr. Mills, you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today. Our 2023 revenue was $17 million, a 20% decrease compared to $21.2 million in 2022. 2023, we had an operating loss of 3.1 million compared to an operating loss of 446,000 in 2022. Our 2023 financial performance was below our expectations. However, we believe that the 17 million in reported revenue does not accurately reflect the underlying demand for our products and services. In 2023, Our sales out, that is sales from our distribution partners to resellers and then customers, totaled 19.1 million, a 2.8% decrease from 2022 sales out, which were 19.7 million. We view sales out as the key metric in determining the underlying strength of the business. While demand did soften in 2023, The timing of shipments to distributors in LACE 2022, which had a positive impact on reported sales in 2022, also had a negative impact on reported sales in 2023 and made the year-over-year decline dramatic. Our 2023 revenue was also impacted by reductions in distributor inventory and reserve adjustments as our distribution partners rebalance their inventory levels based on the current demand and supply situation. On the positive side, in 2023, we did complete many of our longer-term projects and were able to launch several significant products, products that we believe will be major contributors to revenue in the coming quarters. I would now like to turn the call over to Dave Holmes, who will provide an update on the significant products and milestones achieved in 2023 and how they will impact our business moving forward. Dave.

Thank you, Kevin. Good afternoon, everyone. As Kevin said, today I'd like to highlight a few of the significant milestones that we achieved in 2023 and talk a little bit about how our investments and innovation are helping transform Socket Mobile into a more comprehensive data capture company. We launched several new products in 2023. At the end of the year, we launched SocketCam C860, an advanced camera-based scanning solution. SocketCam C860 is a follow-on to our free camera-based scanner, SocketCam C820, launched earlier in 2023. C860 offers an upgrade path for users on both iOS and Android platforms, and is tailored for users with more demanding scanning needs, those working in challenging conditions, or those dealing with poorly printed or damaged barcodes. There are no licensing fees for our app providers to include SocketCam into their apps. They simply integrate our capture SDK with SocketCam enabled into their applications. This enables them to service a wide variety of end users with various data capture requirements. from price sensitive end users with our free C820 and address performance sensitive needs with the C860 or any of our hardware scanners. App end users access the capabilities of SocketCam C860 via monthly subscription fee. Our XtremeScan product line was also introduced in 2023. It's comprised of three different configurations. Extreme Scan Case, Extreme Scan, and Extreme Scan Grip, all designed for iPhone, and work with iPhone 15, 14, 13, and 12. This product family represents a significant milestone in our commitment to delivering high-quality data capture solutions for our customers in industrial, manufacturing, warehousing, oil and gas, and airports. Extreme Scan is designed to enable iPhones to withstand harsh industrial conditions, offering robust scanning capabilities with military-grade durability. This opens the door to new customer segments that demand the ultimate performance in the most difficult conditions. Both socket cam and extreme scan are gaining traction with earlier adopters. Each has gone through extensive testing by our customers and app partners. We're getting a lot of good feedback and starting to see initial orders come in. We also made progress with our NFC products in 2023. Our SocketScan S550 NFC Mobile Wallet Reader is Apple certified to comply with Apple VAST protocol, enabling seamless integration with Apple Wallet. Additionally, it meets Sony's Felica standard and Cypress international security standards. Also, our SocketScan S370 Universal NFC and QR Code Mobile Wallet Reader received the certification from NFC Forum These certifications empower our NFC products to cater to a wide range of needs, including wallet passes, digital mobile driver's licenses, and non-traditional payments. Our new Socket products will extend our reach and diversify our customer base. Socket Cam will provide Socket Mobile with a recurring revenue stream each month. Ultimately, this will make us more diversified and sustainable and less dependent on retail. we become a more complete hardware and software data capture company. With that, I'll turn it over to Lynn for more details on our financial results. Lynn?