Good afternoon, ladies and gentlemen, and welcome to today's Rekor Systems Inc. Conference Call. My name is Ciarmoli, and I will be your coordinator for today. As a reminder, this conference call is being recorded for replay purposes. Before we get started, I would like to read you the company's abbreviated Safe Harbor statement. I want to remind you that statements made in this conference call concerning future revenues, results of operations, financial position, markets, economic conditions, products and product releases, partnerships, and any other statements that may be construed as a prediction of future performance or events are forward-looking statements. Such statements can involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. We ask that you refer to the full disclaimer in our earnings release. You should also review a description of the risk factors contained in our annual and quarterly filings with the SEC. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. I want to turn the presentation over to Mr. Eyal Hen, CFO of Rekor Systems.

Hi, everyone. Thank you for taking the time to join us for Rekor's year-end results. We are excited to share our team's progress over the year that ended December 31, 2022, and update you on key business topics. On the call with me today are our CEO, Robert Berman, and our President and COO, David Desharnais. David will provide additional insights on our business, and others will have remarks on recent offerings and provide standards. But first, I'll review our relevant metrics. With revenue from 1,000 traffic services in the last six months of 2022, we have accelerated growth and returned revenue under our sales model. As you may recall, in the third quarter of 2021, we made a strategic shift in our business model to emphasize recurring revenue more than point-in-time revenue. Our goal is to provide more value and flexibility for our customers through subscription-based data services and software offers. As a consequence, we saw strong growth in recurring revenues in 2022. The percentage of recurring revenue selected in total revenue was 66% for the 12 months ended December 31, 2022, compared to 40% for the 12 months ended December 31, 2021. This has provided us with a solid foundation for strength and stability in our revenues for the long term. In the third quarter of 2022, we also undertook significant streamlining measures to achieve a notable reduction in operating expenses. During the fourth quarter, we saw the full impact of these activities. Operating expenses across our general and administrative, sales and marketing, and research and development expenses decreased by $4 million during the fourth quarter of 2022, compared to the third quarter of 2022. These reductions are designed to scale back longer-range projects as we concentrate on near-term infrastructure spending opportunities in North America. Now let me highlight some other details in the financial results for the 12 months ending December 31, 2022, and some more recent developments. Due to a significant change in market capitalization, we recognized a goodwill impairment of $34.8 million in the third quarter of 2022. On December 31, 2022, we sold our low-margin legacy automated traffic safety enforcement business units for $3.4 million, and the results are categorized as discontinued operations on our P&L. In January 2023, we finalized a $15 million senior secured note transaction led by our CEO, Robert Berman. On Friday, we also finalized a $10 million registered direct offering, which was priced at market under Nasdaq Rules. Revenue for the year ended December 31, 2022, was $19.9 million compared to $11.6 million in the same period last year, an increase of 72%. Total revenue with discontinued operations was $22.3 million for the year ended December 31, 2022, compared to $14.3 million for the year ended December 31, 2021. Recurring revenue for the 12 months ended December 31, 2022, increased by $8.5 million compared to the same period last year. This represents an increase in recurring revenue of 182% for the 12-month period ended December 31, 2022, compared to the same period the previous year. Performance obligations increased to $21.1 million as of December 31, 2022, compared to $14.7 million as of December 31, 2021. We are particularly pleased to share that our revenue and recurring revenue have continued to climb with significant improvements in 2022 compared to 2021. In fact, 66% of total revenue for the 12 months ended December 31, 2022, was recurring revenue compared to only 40% of the same period in the previous year. As I mentioned before, we're working hard at streamlining our business. We invested in our growth by adding new hires to our engineering, sales, and marketing teams in the first half of 2022 as we integrated the latest technology into our suite of product and service offerings. We also experienced an increase in payroll and payroll-related expenses relating to our STS acquisition. Total operating expenses for the year ended December 31, 2022, were $60 million, not including the goodwill impairment, compared to $38.9 million during the year ended December 31, 2021. We have been keeping a watchful eye on our expenses, evaluating our results carefully and managed to maintain a firm grip on our operating expenses. These efforts have already paid off, and we are pleased to share that we have managed to reduce our expenses by $3.9 million in the last six months of 2022 compared to the first six months of the year, despite the inclusion of the full six months of STS expenses. While we are excited about the future, we'll continue to manage our expenses while investing in our growth and delivering the best possible value to our stakeholders. With these remarkable results, we're interested in the future and look forward to continuing to drive growth and profitability. During the third quarter of 2022, we experienced a significant decline in our market capitalization, which we deemed a triggering event related to goodwill. As a result, we've made an impairment assessment as of September 30, 2022, and determined that we had an impairment related to goodwill in the amount of $34.8 million. Our adjusted gross margin for the year ended December 31, 2022, decreased to 45% from 61% in the same period last year. The decline in margin for the year ended December 31, 2022, is primarily attributable to lower margin on STS revenue, which we are working to improve with new technology. With the expansion of our customer footprint and installed technology base, we expect to see improvements in our adjusted gross margin in the future. Adjusted EBITDA for the year ended December 31, 2022, and 2021 increased to a loss of $37.4 million from a loss of $22.8 million, respectively. This increase in loss was due to the investments I've discussed previously to position us for future growth. However, as a result of the more recent streamlining activities, we have seen a decrease in loss from the second quarter of 2022. Rekor has released enhanced key performance indicators to provide better visibility and a more detailed view of our success and progress as we've changed our revenue model in September 2021. We believe that these KPIs will give our shareholders a better insight into our business over time. During the year ended December 31, 2022, we won $22 million on new contracts compared to only $8.9 million in total contract value won during the same period in 2021. As of December 31, 2022, our remaining contract performance obligation amounted to $21.1 million. We expect to recognize approximately 59% of this amount over the succeeding 12 months. This represents a remarkable increase of $6.7 million or 45% compared to $14.7 million of performance obligations as of December 31, 2021. We believe that our KPIs will continue to improve as we continue to build relationships and expand our presence. Moving to our financial condition and liquidity. On Friday, we announced a registered direct offering for $10 million. The transaction provides us with the liquidity we need to continue and execute our strategy. Robert will elaborate on the transaction later. As a result of the transaction, we will file our 10-K shortly. Our cash balance on December 31, 2022, was $2.5 million, a decrease from $24.1 million as of December 31, 2021. We had a working capital deficit as of December 31, 2022, of $6 million, down from working capital of $16.9 million as of December 31, 2021. The decrease in working capital was primarily due to a reduction in cash and cash equivalents. This decline was primarily due to the increase in our loss from operations as we position the company for future growth and reflect the cash required to acquire STS. The reduction in cash was partially offset by a net cash inflow of $22.8 million as part of our 2022 at-market sales agreement, which was terminated in December of this year. In January, we announced the closing of senior secured notes in the aggregate amount of up to $15 million led by our CEO, Robert Berman, with participation from other new and existing investors. At closing, $12.5 million was funded. We are confident regarding Rekor's growth prospects because we are experiencing strong momentum in our market. As you'll hear from David in just a moment, we are taking a strategic approach to our investments, focusing on rapidly increasing our margins to maximize profitability. With this approach, we fully expect to see significant improvements in our margins in the near future. Our company remains firmly committed to creating shareholder value and making decisions that will benefit our long-term shareholders. We are dedicated to delivering consistent growth and are excited about the opportunities that lie ahead. Thank you for your continued support as we work toward achieving our goals together. With that, I will now turn the call over to David.

Thank you, Eyal. Good afternoon, everyone, and thank you for joining us today. I'm David Desharnais, the President and COO of Rekor. I've just recently passed the one-year mark as part of the leadership team here, and I must say it's been an incredible privilege and honor to shape the future of our company and have the opportunity to change the course of an entire industry. Though it has been quite a challenging year given the geopolitical, macroeconomic, and overall market volatility and uncertainty, it has also been a remarkable year of transformation, growth, and opportunity for Rekor. I'm looking forward to sharing some highlights of what we've accomplished in the past year and our plans for future growth. Rekor stands at the forefront of innovation, leading the charge as the premier provider of roadway intelligence and data-driven mobility insights on a global scale. As a technology company, we are changing the course of the public safety, urban mobility, and transportation market segments with our cutting-edge, AI-driven solutions, enabling smarter, safer, and more sustainable streets for all communities. Over the past year, as you just heard from Eyal, we had prioritized driving key performance indicators such as revenue, annual recurring revenue, performance obligations, and operational efficiencies across people, processes, and technology. And as Eyal also highlighted in his remarks, we have achieved significant progress on all of these metrics in 2022 both quarter-over-quarter and year-over-year. Starting with operational efficiencies, like many tech companies, we continued to make tough but important choices to help right-size our business and instill financial and operational disciplines across people, processes, and technologies. As part of our operational efficiencies, in late 2022, we divested our Automated Traffic Safety Enforcement business, commonly known as the red light and speed camera ticket business. This move was a strategic shift towards prioritizing our core data services businesses, as the ATSE business was labor-intensive and had low-profit margins, and was entering into a heavy technology refresh cycle, which would serve as a distraction from our core focus. While we divested our ATSE interests, at the same time, we focused on completing the integration of Rekor's two strategic acquisitions, Waycare and Southern Traffic Services or STS. This has resulted in significant advantages and synergies on the technology and business front for Rekor as we enter 2023, allowing us to advance our leading technology and vertical expertise in the transportation markets and expand our footprint while simultaneously increasing our visibility and momentum with major industry influencers such as the U.S. Department of Transportation, Federal Highway Administration, Intelligent Transportation Systems, and the American Association of State Highway and Transportation Officials. We have also forged new partnerships with dozens of transportation data and technology leaders including Safe Fleet, Drakewell, Cintra, Wejo, Blyncsy, Predict iQ, Tomorrow.io, Waze, Amazon Web Services, and many others. An example of significant advantages and synergies from our acquisitions, we recently announced the formation of the Rekor partner network, which extends the work that we started with third-party data providers several years ago, and now has been expanded and is considered to be one of the most comprehensive hubs for mobility data and transportation information in the industry. Today, the Rekor partner network boasts 40 partners connecting data from various sources that cover 95% of U.S. roadways, 28% of auto OEMs, close to $14 million connected and electric vehicles and $20 trillion data points globally. Why does this matter? With 65% of U.S. roadways rated in poor condition, traffic congestion and greenhouse gas emissions measuring the highest-ever recorded, and a tragic 43,000 fatalities and millions more seriously injured every year on our roadways, there has never been more demand and call for states, municipalities, city, and roadway managers to understand exactly what is moving on their streets and in their communities in real-time and predictably, and to take proactive and immediate informed decisions. Rekor is uniquely positioned to answer that call with our growing expanding Rekor partner network. Another example of where our acquisitions have brought significant advantages and synergies is with STS's 30 years of traffic engineering and data collection expertise coupled with the deep relationships they have forged across multiple state departments of transportation and commercial entities. In the second half of 2022, we successfully integrated STS's traffic and data collection expertise with Rekor's next-generation AI and machine-learning technologies and IoT edge devices, always-on, always-connected, always-learning, forming a connected digital infrastructure and a new operating system for the roadways. It is important to note that every public and private roadway or intersection project always starts with planning, and planning always starts with collecting data from the roadway. This is where Rekor's strength and differentiation really shine. And there are literally millions of these traffic studies conducted across the U.S. annually, and every state and municipality in the country is required to provide traffic class, count, and speed reports to the Federal Highway Administration to receive federal transportation funds. This integration of STS and Rekor has positioned us to be the leading provider of non-intrusive AI-driven real-time traffic data collection and analytic services in the industry. With over 30,000 data collection sites, more than 60,000 lanes, and hundreds of thousands of miles of roadway already under management, we are now expanding this footprint across the U.S. with our recently-announced breakthrough Edge Max and Edge Flex solutions for both permanent and short-term traffic studies. We see these solutions as significant growth drivers for revenue and pipeline into 2023. Now I would like to provide some key highlights in each of our business segments coming into the year, including urban mobility, transportation management, and the licensing of our vehicle identification software and license plate recognition technology across public agencies and commercial entities around the world. First, let's talk about our progress in urban mobility. Traditional approaches to capturing roadway and infrastructure analytics for planning and engineering employ expensive manual processes and antiquated technology to capture a fraction of the information needed for a fraction of the time. This market segment is ripe for disruption, and we are well positioned to benefit from this industry transformation. Emerging opportunity in the fall of 2022, we pre-announced our new AI-based Edge Max and Edge Flex roadway data collection systems, designed to help our customers capture high-resolution roadway data using AI and transform it into holistic traffic insights for vehicle classification, counts, and speed according to the exacting standards of the Federal Highway Administration and U.S. Department of Transportation. Whether it be passenger vehicles or mixed-axle commercial trucks, or any of the 13 specific duty vehicle classes present on our roadways, Rekor provides ground truth insights both in real-time and historically, allowing agencies to better organize and execute roadway planning and city-building initiatives in a smart, safe, and future-proof way. Government agencies, many businesses also need to understand and manage the vehicle flow patterns, types, and other important analytics regarding vehicles in their geographies, whether it is engineering front or collecting roadway data for their customers, corporate monitoring traffic across campuses, or a real estate developer planning a specific area. The capture of accurate holistic roadway data is valuable for each of these unique use cases. Since announcing our new Edge Max and Edge Flex solutions, we are encouraged by the multiple reverse inquiries and strong engagement from more than 40% of the U.S. states so far, confirming interest in deploying our non-intrusive AI-driven data collection systems across their states. This is all new pipeline for us and it is growing rapidly. I'm pleased to highlight several significant customer wins as examples, including a seven-year contract to provide AI-based traffic data collection to the Florida Department of Transportation and the City of Tallahassee, covering 18 counties in the Panhandle region of Florida. We're also proud to have secured new and extended contracts and task orders with state departments of transportation across the U.S., such as Pennsylvania, Mississippi, Alabama, and Ohio. Our advanced non-intrusive edge-based data collection technology is being used to support the digitization of transportation infrastructure and the shift to ubiquitous AI-based traffic studies across these states. I'm also pleased to highlight that our project with the Philadelphia Navy Yard and the City of Brotherly Love serves as a real-world large-scale laboratory site to push the boundaries of our traffic analytics capabilities and solutions in a one-of-a-kind public-private partnership with Amazon Web Services. Rekor's technology is analyzing traffic patterns across the full scope of the metro area, providing critical insights into traffic flow, visitor volume, types of vehicles, and the impact of those visitors and vehicles, including environmental insights such as electric vehicle volumes, electric vehicle charging station placement, and greenhouse gas emission analytics. The work that we've done with Philadelphia is a shining example of practical here-and-now AI-based smart city applications. The icing on the cake here is that this project also earned us the AWS Smart City Competency for smart urban transportation, which is a distinction held by only a handful of companies worldwide. Another key milestone to highlight is our recently announced partnership with Drakewell, the newest Rekor partner network member. Rekor is providing fast, accurate, and easily shareable traffic data analytics for transportation agencies and corporations and private firms worldwide. Rekor seamlessly integrates with our Edge Max and Edge Flex data collection systems, covering all aspects of the Department of Transportation's traffic data programs. Rekor's customers include eight U.S. and two international Departments of Transportation. Our partnership is a launching pad for multiple expansion opportunities, making it simple for the Departments of Transportation everywhere to adapt and access our next-generation AI-based approach for real-time traffic analytics. Now let me shift gears to another one of our segments called transportation management. In this business segment, our mission is to help traffic management centers and agencies shift from being siloed and reactive to being integrated, interoperable, and proactive in our approach to managing roadways, providing the necessary modern tools to help them save lives, improve traffic flow, and reduce pollution in their cities. Rekor's traffic management platform revolutionizes the way traffic operations and management centers operate by providing an unparalleled set of real-time and predictive tools and the most complete and holistic view of their roadways. With this insight, the platform empowers decision-makers to take swift and effective action to enhance safety, sustainability, and efficiency for citizens across their communities, setting a new standard for Intelligent Traffic Management. Our traffic management solutions have consistently proven to identify more incidents faster than conventional methods to enable proactive traffic management through advanced crash risk predictions and to do this collaboratively, connecting agencies and stakeholders including notifications and alerts to citizens and the public. As comprehensive cross-agency platform, Rekor offers specific applications for traffic management, freeway service patrol, first responders, and maintenance crews, aligning all to better address traffic challenges while arming them with the vital information needed to identify, manage, and recover from incidents, events, and irregularities on the roadways. Now, as funds from the $1.2 trillion bilateral infrastructure law continue to be unlocked in 2023, we are seeing an increase in our opportunities and pipeline growth as well. Along this line, I'm excited to highlight some recent customer wins and milestones in our transportation management business segment. One example is our recent multiyear contract win with Texas, the second largest state in the U.S. Using Rekor, the Texas Department of Transportation or TxDOT is building a first-ever comprehensive real-time source of roadway intelligence for the state. Our Rekor traffic management platform will serve as the hub for TxDOT, providing accurate insights for predictive high-potential crash hotspots, leveraging real-time connected vehicle data and multiple third-party data sources. This means traffic management in TxDOT will be able to receive alerts for incidents like crashes, abandoned vehicles, and roadway debris in real-time and from a single source of truth. This will enable the agency to collaborate and respond quickly and proactively to high-risk areas, enhancing the safety of its vast network of roadways. Our program with TxDOT is a significant achievement for Rekor as it expands our value and presence across one of the largest and most extensive traffic management centers in the nation. As another example of progress in this segment, Rekor has been chosen by the Central Ohio Transit Authority or COTA for its further integrated mobility innovation transit program, an initiative designed to improve roadway safety and transit services across 13 Ohio counties. In addition, we have also been selected by the Missouri Department of Transportation for their new strategic highway safety plan called Show-Me Zero, as they aim to reverse rising traffic fatalities on the roadways. Tapping into the new infrastructure bill funding with Missouri, we are combining our traffic management expertise, integration of multiple datasets across multiple ecosystem players, and bringing our deep expertise in marrying our Rekor Edge IoT devices to connect the dots across software, data, and hardware systems to provide the most comprehensive and complete view of Missouri's highways for the state's traffic management center. Other noteworthy successes in 2022 included our partnership with Cintra, one of the largest private developers of transportation infrastructure in the world, where together, we secured a multi-year contract to serve as the technology platform for Oregon's connected vehicle and data ecosystem. This program supports the Oregon statewide road usage charge initiatives, and our selection was the result of being down-selected from a pool of 14 major competitors. This is an important achievement given that electric vehicle ownership is rapidly displacing federal and state gas tax revenues, and the work we are doing with Oregon has been monitored closely by multiple other states. In addition to our partnership with Oregon and Cintra, we also expanded our solutions in other Departments of Transportation across the U.S. in 2022, including California's Metropolitan Transportation Commission, as well as Colorado, Kansas, and Alabama State, representing new multi-year contracts to Rekor. We also achieved a significant contract extension with Ayalon Highways in Israel, highlighting our reputation for excellence and our global scale. These successes are tangible evidence of the differentiation we deliver to our customers every day and the ability to serve the evolving needs of the transportation industry. While our urban mobility and transportation management business segments have gained significant traction and growth in the past year, I'm also pleased to highlight our momentum in the direct sale and licensing of our software and technology across public safety, law enforcement, and security industries in various commercial use cases. In the past year, we've secured multiple new major contracts and partnerships and continue to extend our leadership in AI-driven vehicle identification, license plate recognition, and comprehensive roadway intelligence solutions in the public safety business segments. For example, we've made significant inroads in the commercial market over the past year with our vehicle identification and ALPR software and systems being chosen by a major American amusement park corporation to improve traffic management and security capabilities. This corporation, with most theme parks and water parks combined of any amusement park company, hosted over 30 million guests annually and ranked seventh in the world in terms of attendance. In addition to this, Rekor also added the Las Vegas Palms Casino Resort as its eighth major casino customer, cementing our Vehicle Identification and LPR solutions as a new gold standard for the gaming industry with leading casino operators in Nevada, New York, and California selecting Rekor for their security across properties. Our partnership with Safe Fleet is another prime example of traction and growth in the past year across our public safety business segments. As a renowned provider of safety solutions for fleet vehicles nationally, Safe Fleet leads the market in a wide range of industries including law enforcement, transit, and the school bus market nationwide. We recently announced a multi-year licensing agreement with Safe Fleet deploying our advanced technology and their next-generation violation detection platforms for transit, law enforcement, and school bus stop arm violation detection platforms. All three platforms are focused growth pillars for Safe Fleet's business, and we are pleased to play a role in helping them achieve their objectives. This also presents a significant growth opportunity for Rekor with the potential to be inside and connected with thousands of fleet vehicles across states and nationally with our advanced vehicle recognition and enforcement technologies. In addition, Rekor is also playing a mission-critical role in safeguarding the security of our nation. Our vehicle recognition technology meets the exacting standards of federal agencies and is being utilized at key locations worldwide. We are proud to serve the federal government across multiple agencies already, and we have received yet another significant purchase order extension for our technology and software deployment domestically and internationally. Speaking of international growth, I'm pleased to also highlight that one of the largest states in Mexico has selected and is now deploying our vehicle recognition software and hardware across 1,800 locations across the region, representing the largest vehicle recognition and roadway intelligence deployment in Mexico's history as they aim to improve the public safety and security of millions of Mexican citizens. There's one more area that I want to highlight with you as part of my business update. This is regarding our Rekor e-commerce platform, the channel that deserves recognition. Our e-commerce platform offers a secure and seamless shopping experience for vehicle identification and LPR technology licensing, serving customers worldwide in over 90 countries. The growth of our software-as-a-service or SaaS licensing business has been remarkable over the past years with revenue increasing from $0.4 million in 2019 to $1.7 million in 2022, representing an astounding 280% growth over the period and surpassing 1200 active monthly subscribers in 2022, all with little investment in marketing. As we look ahead to 2023, we expect continued and accelerated growth of our e-commerce channel and of course, across each of our business segments as well. So, Rekor, we are moving into scale now and truly believe the best is yet to come. To conclude my remarks today, once again, it has been an honor and a privilege to help guide the transformation of Rekor over this past year as President and COO. It has been a remarkable year of transformation growth and opportunity, and we are reshaping the industry. Our progress and advancements in 2022 were significant and made possible by our leading-edge technology, strategic partnerships, and by the dedicated and committed employees who work tirelessly to navigate the challenging business climate and deliver against our growth objectives and financial results. Looking forward, Rekor is well-positioned for growth and scale. We have technical differentiation in each of our business lines, a first-mover advantage, massive market tailwinds, strong partnerships, and clients that hold us to the highest standards in a growth flywheel, all contributing to our continued success. We're excited about our path forward for the Company and grateful for our shareholders' continued support and trust in the Company and leadership. I'd like to thank you all for joining me today, and I look forward to speaking with you soon. I'm pleased now to hand the call over to Robert Berman, our CEO, for final remarks and for Q&A.

Thank you, David. As Eyal mentioned earlier in the call, on Friday we announced a registered direct offering for $10 million. Given the turmoil in the world and banking sector creating severe market headwinds, the decision was made to access the shelf overnight before this earnings call. For those of you that are not aware, the Company shelf is remeasured with the filing of its 10-K, but at our present market cap, our shelf would have fallen to Baby Shelf Rules, allowing for the company to access less than a couple of million dollars at best if needed. Our conversations with strategic investors continue, and we've had offers. However, to date, those have come with way too many strings and conditions where Rekor's independence will be impaired. The overnight offering strengthened Rekor's hand and put cash on the balance sheet to continue funding our growth. Mind you, we do business with almost all of the companies we're talking to about a broader relationship and capital, so we need to be careful about tossing the baby out with the bathwater. As David stated, as we look ahead in 2023, we expect continued and accelerated growth across all of our business segments. Consequently, for the first time, we are pleased to be providing revenue guidance for the fiscal year 2023 in the range of $45 million to $55 million in revenue, with EBITDA of negative $26 million to $28 million this year, and profitable by the end of 2023. Furthermore, we are forecasting 2024's revenue in the range of $120 million to $130 million with $8.5 million to $15 million in positive EBITDA. This growth is achievable because our technology is replacing legacy technology, which is at the end-of-life and has not changed in more than 60 years. For those of you that are concerned about Rekor's share count, I will say that we have been extremely judicious with our stock over the past years. We have invested more than $100 million in our technology. In addition to making two significant and important acquisitions with less than 78 million shares on a fully diluted basis. We were able to accomplish this because we did access the equity markets at various pricing at various times from $1.40 to $12 per share. We funded the R&D and productization of our solutions when we had the resources to prudently maintain a first-mover advantage. Now we are focused on maintaining that first-mover advantage with efficiencies and scale. The time will come when this technology will be monetized and reflected in our share price, and given the size of this market opportunity, our share count is less than one might think. Rekor started as a startup in public company attire, and I believe we are now a seasoned entity with the credibility, customer trust, technology, and resources to see this through. Now, I would like to open the floor for any questions you may have. Please don't hesitate to ask. We're here to provide transparency and clarity, and we're eager to address any and all concerns or inquiries you may have.

Yes, hi, good afternoon. Thanks for taking my questions. Robert, I appreciate you giving some more insight into the potential for this business going forward here. I mean, just to that point, can you speak to some of the underlying assumptions that are driving confidence and not only providing guidance for the next couple of years, but pretty robust growth versus kind of where we ended at in 2022? So any sort of additional insight on that front would be very helpful.

Yes, sure, Zach. Thank you. Look, we've spent several years positioning ourselves for just this right. There aren't that many people on this call, right? I mean, it's just not that many people paying attention to it, and I think that's the same with infrastructure and the infrastructure bill and the whole concept of infrastructure moving to a new world, which is putting a digital layer over it. I believe we positioned ourselves exactly there. When we introduced the technology back at the ITS World Congress in the fall of '22 to do what's mandated, which is count, classify, and speed by every state, every state does the same thing for 60 or 70 years. How does the federal government distribute gasoline excise taxes, right? So inductive loops, mechanical counters, buggy whips, carriages, and so on and so forth. This is not that interesting to a lot of people, right? So, therefore, they don't pay attention to it. The confidence in the growth comes from the fact that we've introduced technology that traffic engineers want. They want a way to do this without intruding on roadways, digging up the roadways, having people get harmed and creating congestion, so on and so forth. And that's where it comes from. We see it in the reverse inquiries, as David mentioned, almost 40% of the states saying, okay, can you really do this? Come show us. So it's being out there, working with the states, and seeing the demand for the technology, and it's there, and that's what we've been working towards for all of this year. That's what gives us the confidence that we can do this and beyond.

Got it, that's helpful. And I think David might have mentioned it in some of his commentaries, but are some of your end-customers starting to get access to infrastructure funding at this point where it's able to accelerate some of these deployments? Just curious on what you're seeing on that front.

Zach, that's a really interesting question, but I want to separate the transportation bill from what funding has already been available. What we're talking about is funding that has been there for the past decades. David, can go into the new stuff coming, and that has to do with the things we're doing with the Waycare acquisition, right? But the stuff we're discussing now is already funded.

Yes, Robert. I can complement that. In regards to the Department of Transportation gaining access to the infrastructure bill or bilateral infrastructure law, as it's now called, those are accessible through grants, and states are already submitting applications for these grants. We are working with states to help them in the submission process to put the technology layer, the digital layer that's required in some of these grants that involve technology and digitization. We are starting to see that now open up, and states are aggressively moving to capture their fair share or unfair shares, in some cases, to obtain those funds. So yes, we are starting to see that happen, and it is driving a significant uptick in our pipeline in our transportation management business, in particular. But going back to Robert's point, when we look at urban mobility and the classification count and speed opportunities ahead of us, these are funds available now. It's not tied to the infrastructure bill funds at all. This is money that's there to access today. So we have the ability to monetize today, as well as into the future, using both of those sources.

Got it, that's helpful. And final question from me, Robert. I appreciate the guidance into the adjusted EBITDA side as well. I mean, obviously, the recent direct capital-raising here overnight, but I mean, can you talk about potential cash needs as you continue to ramp up pretty significantly into the second half of this year?

Yes, I believe that between the note offering and the registered direct offering, we are very confident that we can achieve profitability in 2023. We are optimistic about our current position. A significant factor in this comes from our acquisition of STS, which had already established the pay-for-data concept. The difference lies in using an inductive loop that costs about $40,000 and requires extensive road excavation and time, compared to deploying a system that can typically achieve the same results at a much lower cost and without the road damage and disruption. We anticipate growth primarily driven by urban mobility. It's important to highlight this because there are only a few participants on this call now, but we expect many more in the future. Our efforts are disrupting a long-standing practice that has not changed significantly over the last 60 to 70 years, using technology that has been stagnant. States are mandated to make these changes, and we can now fulfill this need with the advanced technology we've been developing, like edge processing and roadside machine vision. This process starts with vehicle identification and recognition, moving on to vehicle classification. States have been seeking these solutions but have not found a provider. We are ready to meet this demand, which is why we are confident about our goals for 2023 and 2024.

Understood. Well, thanks for taking my questions and best of luck here in the coming quarters.

Yes, thanks, Zach.

Yes, thanks for taking my call. Definitely impressed with the management team, and it shows reflection of ALPRs. One of my questions is, within the United States, it seems to be a lot of activity with the contracts and technology, but outside the U.S. overseas, besides Israel, it's been a little quiet. Can we expect that to change?

That's a really good question. So let me start by saying this: almost every government in the world, even in very slowly developing countries, how do they budget the roadways? They look at the tonnage going across the road over a period of time, 5, 10, 15, 20 years and they extrapolate an idea of what they think they might require to repair, replace, and maintain that road. They do this with very rudimentary methods. They do mechanical counting of vehicles, and in some places they actually put people on roads and count vehicles. Everybody uses the same concept to determine how to maintain and repair, replace the roadways. It starts with that, and if there is a different way to collect roadway data, that’s where it begins. The beauty about what Rekor has done is it’s created a single system with multiple capabilities. Not only can we go and collect the data and tell you what’s crossing your roadways, how much tonnage the emissions from the tonnage are crossing the road, so on and so forth, but it can also be used for public safety, and in other cases, without touching the device. It is one device that does it all, right? Once it's there, you can toggle things on, toggle things off. I think what you're going to see is that this is going to expand beyond the U.S. It's going to extend well beyond U.S. borders. I can tell you today that we know that there are companies installing inductive loops all around the world. They're doing it in South Korea, they're doing it in Europe, they're installing these things all over the place because technology is pretty much the same. If you drive to any traffic intersection, look when you get to the intersection and see cuts on the road. What that is is an inductive loop that feels the weight of your vehicle crossing it and there's some magnetic field there that measures the number of axles and triggers a timer. This is the 21st century; you don't need to do that. So the answer to your question is the same technologies used outside the U.S. certainly, almost and the majority of the developed world. So hopefully, we'll see it expand.

And also, I believe, since I mentioned Israel, I think I read somewhere you plan on implementing the bus transit technology also in the future?

Well, that's the same thing we're doing with COTA and Ohio. We're helping them route their buses because they're able to schedule more in real-time where the buses are so that somebody can look at their phone— which we're all used to doing—and figure, okay, my bus is 3 minutes early, it's 10 minutes late; I can plan my schedule. So again, this comes from the same technology and that's the point. It's one piece of technology that does all of this; it's just a matter of toggling on, toggling off. We started with vehicle ID. For those who have been following Rekor for a few years, you know that. It all starts with vehicle identification, license plate recognition, looking at the vehicle, and from there, machine learning takes over, and you just train and train and train and you can look at different things. So that's exactly the point. Whether you're looking at bus schedules, train schedules, or tractor-trailers pulling in and out of ports, it doesn’t matter. The system that we built can do all of that. We're still in the very early stages of it. For whatever reason, roads, bridges, tunnels are not all exciting to the investment community. They brought us TikTok so that you can post a video, but this is probably the largest segment of the economy, infrastructure, when you look around the world. You have to put a layer of digital infrastructure over part of the infrastructure, and that's what we're doing. Someday, like I said, there will be thousands of you on these calls, not just several hundred.

And also towards the affiliate contract maybe, or that's the one to pilot, or can we expect that to be any contract PR in the future?

Well, it started as a pilot with AWS and we expect it to evolve into more, right? And I think that the information that we've given the city is such that they understand its value, and I think we'll see it expand from there. I will tell you that as David said, having AWS as a partner and then bulging for the proficiency of our technology is important. We're getting there, it's just early for us. Because we're public, it may seem late, but we've only been around for a few years, so it's still early in this game.

Yes, with also the Oklahoma PR today and the uninsured motor vehicles, is that drawing interest from any other states also?

You know, it hasn't at this point. We started it. We had a number of states that were interested in reducing the number of uninsured vehicles. I have no idea why the stage owners— and the number of uninsured motor vehicles on the state's roadway has decreased a little over 40% in a self-funded program. I do think that over time, given this is 21st-century contactless compliance, whether it's registration, motor vehicle inspections, uninsured, whatever it might be, there are better things for law enforcement officers to know than calling people over for minor traffic infractions. This is a system that Rekor built that works well. It’s the same system that counts, classifies, and speeds.

And also, how many did you mention steering away from the pilots? What's the difference between a pilot and proof of capability?

These are major differences. I'll let David address this. David, maybe you can address the capability and start with South Carolina.

Yes, no problem. The distinction you could make between a proof-of-concept versus a proof-of-capability. The proof-of-concept—we're not trying to prove the concept, the concept has been proven—it’s more about the capability in that particular environment for that state on particular roadways. It’s more about the refinement for their specific needs. They may have a specific type of environment, like heavy dust on a road, or they may have particular or unique vehicles that are there that from a machine-learning training perspective, we may not have enough experience to train sufficiently. Proof of capability is really to put the devices on the roadside for them and train for their specific environmental conditions, which is very fast, actually. That’s what we mean when we say proof of capability versus a proof-of-concept.

I'm sorry.

Oh, yes, indeed, yes. I mean, it's literally like four to six weeks, maybe initially or six to eight. But I expect that to come down because there's something called transfer learning. When you learn it in one environment, it closes the gap with multiple other environments at the same time. A proof of capability might take one or two, what is called the sprint in the R&D terms to close on that particular environment that really captures more and more of all the environments we expect to see in the envelope. So yes, does that answer your question?

Yes, it definitely does. I appreciate it. And also, my last question, I did have one more with Mexico and the technology across 1,800 locations. I don't remember anything being mentioned in the length of the contract or potential revenue. Can we expect something from that in the near future?

Well, it's a good question. We have now several thousand devices operating in multi cities and parts of Mexico and different states. It started back with Monterey, a few years ago if you look at our announcements. When it comes to public safety, a lot of these governmental entities that are predominantly public safety and law enforcement do not want us to talk about it because the people they’re watching find out about it. We do the best we can to accommodate that. The good news is that it's grown in Mexico from 2019 to today to several thousand from a few hundred devices out there and we see that happening in other places as well. Same thing with our business with the U.S. DoD. It’s grown significantly. If you go back through the years and look at the contracts we've had with the DoD, they don’t—we can't really talk about where the technology is being used. I don't think they want folks to know where it's being used, but it's being used. The important thing is that it's being used and these are significant contracts.

And we have reached the end of the question-and-answer session. I'll now turn the call back over to Robert Berman for closing remarks.

Yes, thank you. Look, thanks, everybody, and I can tell you looking at the attendance list here. Rekor is very fortunate, and I feel very fortunate, and I'm sure I speak for the rest of the team. We've got a really great group of shareholders that have been with us and supported the company so far. It’s not an easy thing to do, right? All I can tell you is that if—and I've always said this, we're public. But if we were private, you might consider yourselves flies on the wall inside of some big D.C. office listening to all this stuff, and you might not see the company for a few more years, but that's what creates the opportunity. Rekor has been around for just several years. I think we've made tremendous progress; it's been like balancing on the head of a pen to try to just work because we went public. But as I said in my earlier remarks, we're no longer a startup. This company is after the races, and I think in '23 and beyond, you're going to see significant growth. Consider yourselves very fortunate to be part of a very small club. This is probably going to grow significantly. So with that, I thank everyone for coming to the call. Thank you for all your support.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.