Good day, everyone, and welcome to the Socket Mobile Q4 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 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 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 manufacture 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 any such forward-looking statements. On the call with me today are Kevin Mills, Chief Executive Officer; and Lynn Zhao, Chief Financial Officer. Now I'll turn the call over to Kevin. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to discuss our performance for the fiscal year 2025. In 2025, we operated within a very challenging macroeconomic and distribution environment. While sales volumes were impacted by these external headwinds, I am pleased to report that we made significant progress strengthening our product portfolio, expanding our technology capabilities and enhancing the overall value we deliver to our customers. Despite the volume pressure, our gross margins remained resilient. This is a direct result of our disciplined cost management and a relentless focus on operational efficiency. We took deliberate steps this year to reinforce our financial position and preserve the resources necessary to support our longer-term innovation and service goals. We advanced our position in the mobile data capture market through a series of critical innovations designed to meet the needs of a more integrated digital world. We launched CaptureSDK 2.0, a unified next-generation development toolkit to simplify the lives of developers, making it easier than ever to build seamless integrations across both iOS and Android platforms. We introduced the SocketScan S721 with Bluetooth Low Energy for faster pairing and lower power usage. We also expanded our ruggedized line with the XtremeScan v16e, the DuraScan D751 NFC and RFID reader, and the compact DuraScan D764 for direct part marking applications. A notable highlight for our enterprise strategy occurred on December 18 when our XtremeScan product was featured in the Apple Connected Worker series. This Apple-hosted invitation-only webinar series is specifically designed for major companies interested in transitioning their workforce to iOS-based devices. With over 50 large companies in attendance, we saw significant interest in our XtremeScan solutions. While we recognize that projects with large-scale enterprises require time to mature, the first step is demonstrating what is possible. We were honored to showcase our solutions on this platform and expect to spend a significant portion of 2026 pursuing the high-value opportunities that have already surfaced from this event. We also strengthened our international presence, particularly in the APAC region. We received official approval in Japan for our S370 and S550 as certified My Number Card readers. This milestone enables broader use in government services and digital identity authentication, contributing to growing engagement across retail, industrial and enterprise markets. Looking ahead, we remain focused on delivering dependable, high-quality data capture solutions that help our customers improve productivity and stay competitive. We have continued to invest in product development and global reach because we believe these investments drive long-term value. We are proud of the progress we have achieved in 2025 and we sincerely appreciate the trust and support of our customers and partners as we continue to build for the future. With that said, I will now turn the call over to Lynn.

Thank you, Kevin. Good afternoon, everyone. Thank you for joining today's call. Our Q4 revenue of $4 million decreased 18% year-over-year from $4.8 million in the prior year quarter, but increased 28% sequentially from $3.1 million in Q3 2025. Gross margin for Q4 was 50% compared to 51% in Q4 2024 and 48% in Q3 2025. Operating expenses for Q4 were $2.6 million, representing a 10% year-over-year decrease and a 2% sequential increase from the preceding quarter. We recorded a Q4 operating loss of $730,000 compared to a $513,000 loss in Q4 2024 and a $1.2 million loss in the preceding quarter. In Q4, driven by the cumulative losses in recent years, we recognized a one-time adjustment to establish a full valuation allowance of $10.7 million against our deferred tax assets in accordance with ASC 740. Net loss per share for Q4 was $1.43 compared to $0.00 per share in Q4 2024 and a loss of $0.15 per share in Q3 2025. Q4 adjusted EBITDA was a loss of $94,000 compared to an EBITDA gain of $140,000 in Q4 2024 and a $540,000 loss in Q3 2025. The revenue for the year was $50 million, a 20% decrease year-over-year compared to $19 million in 2024. Gross margin for the year was 49.7% compared to 50.4% in 2024. Operating expenses totaled $10.7 million, down 10% from $11.9 million in 2024, primarily reflecting employee cost management initiatives. We reported a full-year operating loss of $3.7 million compared to an operating loss of $2.8 million in 2024. Net loss per share was $1.81 in 2025 compared to $0.30 in 2024. Adjusted EBITDA for 2025 was negative $1.2 million compared to negative $320,000 in 2024. Turning to the balance sheet. We ended 2025 with $2 million in cash. During the year, we used $1.4 million in operating activities, invested $5.5 million in capital expenditures, and raised $1.5 million through issuance of subordinated convertible notes. As of December 31, 2025, the inventory net of reserves was $4.2 million compared to $4.9 million at the end of the prior year. This concludes our prepared remarks. I will now turn the call over to the operator for questions.

Kevin, can you comment a little bit? We're 7 weeks into 2026. How are you feeling about the business right now?

I think we got off to a reasonably good start in January. So we're feeling okay. We have a lot of activity subject to the follow-up we did for the Apple event in December. So we've been extremely busy. Overall, I would say we're on track for a reasonable Q1. So I wouldn't say we're overly optimistic or pessimistic. I think things are kind of as expected as we started the year.

Okay. Another one. We've been trying to get into the warehousing and logistics business for a while now. Have we had any successes yet?

Yes. We have one large customer who is, I suppose, a Fortune, I don't know, 10 or thereabout company that we have deployed with. We have something in the region of 150 units being used on a daily basis. I think based on the feedback we've gotten, we've been able to update the units, and we feel that the second generation, which we announced in December, is substantially stronger. I think with the benefit of hindsight, we covered the camera in the initial rollout of our XtremeScan. And I think that we didn't realize how integral to many applications the camera is and that we incorrectly determined that the scanning would supersede the camera, which turned out to be not the case. In our second generation, which we focused on the 16e, we have corrected that and the camera is now fully available to the user. And we've also been able to improve a number of other shortcomings in the product based on the feedback we've got and the tests we've done. So I really feel that the V2 product, which we're in the process of now starting to ship, is a large step forward in terms of the overall performance and benefit to the end user. So we feel particularly good about that.

We have no further questions at this time. Lynn, I'll turn the program back over to you for any additional or closing comments.

Okay. Thank you everyone for your time and for joining the call. Wishing you a good rest of the day.

That concludes our meeting today. You may now disconnect.