Socket Mobile, Inc.

Everyone, and welcome to SACHS Mobile Incorporated Q2 2025 earnings call. My name is Elvis, 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, mobile data collection products, including details on timing, distribution, and market acceptance of products, and statements predicting the trends, sales, market conditions, and opportunities in the markets in which SACHS 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 several factors, including, but not limited to, the risk that manufacturer of SACHS 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 SACHS application partners and current distribution channels may choose not to distribute products or may be unsuccessful in doing so, the risk of acceptance of SACHS products in vertical application markets may not happen as anticipated. As well as other risks described in SOCKIT, most recent formed 10K and 10Q reports filed with the Securities and Exchange Commission. SOCKIT does not undertake any obligation to update any 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. Now I'll turn the call over to Kevin Mills. Kevin, please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us today. Our revenue for Q2 was $4 million, a decrease of 20% over Q2 2024. We recorded margins of 50%, a slight decrease from the margins of 51% in Q2 2024. Our operating loss was 700,000, compared to our operating loss of 500,000 in Q2 2024. Overall, Q2 was another difficult quarter. Revenue came in lower than expected, as we saw weakness in both our domestic and international businesses. Uncertainty in the business environment has resulted in the delay or postponement of numerous projects. In addition, the level of general deployment seems to have slowed across the board. On the positive side, we did deliver our first extreme scan products to a large industrial customer. And according to them, the deployment has been flawless, which is a very positive sign. Unfortunately, they have delayed a significant portion of the deployment to 2026. Dave will provide more color on the extreme scan progress opportunity in a few moments. As you believe the market will remain soft during the rest of 2025, we will have to continue to manage our expenses lightly. In Q2, our expenses were lower than in Q1, so we were able to record an evener loss of just over $100,000. Significantly better than the $481,000 evener loss recorded in Q1. We will control costs and sustain investments in research and development and Apple sales relative opportunities. Most of the Apple relative opportunities are significant, and even getting a few of them would have a significant long-term benefit. We understand that this will strain our resources in the short term and force us to manage our expenses accordingly. Therefore, our outlook has changed. We now expect to be even and neutral rather than profitable in the second half of 2025. With that, I'm now trying to call over to Dave.

Thank you, Kevin, and good afternoon, everyone. As Kevin said, today I'd like to highlight a few of the milestones that we achieved in Q2. We have invested a lot in our expansion into the industrial scanning and handheld computing markets over the last two years. Those investments are struggling to bear fruit. We've seen a lot of interest from a variety of customers in warehousing and logistics, manufacturing, mining, oil and gas, energy, and construction. Life-scale testing is underway, and we've received purchase orders from multiple Fortune 50 companies at this point. As Kevin mentioned, the initial rollouts have gone exceptionally well. The ruggedized scanning market is large, and our entry into this space will help us diversify our business beyond retail. We expect the momentum of this space to continue building for us in the coming quarters and years. Our Xune Scan product line is comprised of three different configurations. Xune Scan case, the Xune Scan handheld, and the Xune Scan typical grill, all designed for iPhones. And now we are offering models with iPhone 16E inside, marking our entrance into the mobile handheld computing market. Xune 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 environments. And now we are starting to gain real traction in the ruggedized mobile handheld computing market. Our new product and technology investments will extend our reach and diversify our customer base. Ultimately, this will make us more sustainable and less dependent on retail, as we become a more complete data capture company. With that, I'll turn it over to