Good morning, and welcome to the Acorn Energy 2023 First Quarter Conference Call. [Operator Instructions] As a reminder, today’s conference is being recorded. I will now turn the call over to Tracy Clifford, CFO of Acorn Energy and COO of its OmniMetrix operating subsidiary. Ms. Clifford, you may begin.

Thank you. Welcome, everyone, to today’s call. As a reminder, many of the remarks that follow and answers to questions may be forward-looking. These statements are subject to various risks and uncertainties. For example, the operating and financial performance of the company in 2023 and future years is subject to risks associated with disruptions to business operations and customer demand resulting from the company executing its operating strategy, maintaining high customer renewal rates and growing its customer base as well as from changes in technology, changes in the competitive landscape and changes in the financial and economic environment. Forward-looking statements are based on management’s beliefs and the assumptions made using information currently available pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. There are no assurances that Acorn or OmniMetrix will be able to achieve management’s growth goals in 2023 or future periods, and the company undertakes no obligation to disclose revisions to such forward-looking statements to reflect events or circumstances occurring after today. A full discussion of the risks and uncertainties that may affect the company is included in our 10-K under risk factors as filed with the Securities and Exchange Commission. A reconciliation of non-GAAP financial metrics to corresponding GAAP measures is provided in today’s press release, available in the Investor Relations section of the company’s website at acornenergy.com. I’ll now turn the call over to Jan Loeb, CEO of Acorn and our OmniMetrix operating subsidiary. Jan?

Thank you, Tracy. Good morning, and thank you all for joining our call. It’s been less than two months since our Q4 call, so I’ll keep my comments brief and leave plenty of time for your questions. We are pleased to report that our monitoring revenue returned to growth in Q1 2023, following negative year-over-year comparisons in 2022, principally due to the impact of the sunsetting of 3G wireless technology. With the transition behind us, Q1 2023 margin revenue grew modestly over Q1 2022, providing the first quarter of year-over-year growth since Q4 2021. As we’ve mentioned in the past, the wireless provider sunsetting of legacy 3G wireless technology required our customers to upgrade to next-generation LTE wireless systems. This wireless network upgrade drove an increase in replacement sales of new remote monitoring equipment in 2022. However, it also had a negative impact on our base of monitoring endpoints, as a small percentage of customers either chose to not upgrade and thus let their annual monitoring service lapse or they switched to a competitor’s product such as an OEM solution. Due to this cycle, our Q1 2023 hardware revenue decreased 4.7% compared to Q1 2022. Reflecting the offsetting impacts on hardware and monitoring, Acorn’s total revenue was flat at $1.75 million in Q1 2023. Note that monitoring revenue gross margins are approximately double those on hardware. Also, we consider monitoring revenues to be annual recurring revenues, or ARRs, because setting aside unusual events such as sunsetting, typically, over 90% of monitoring service plans renew upon expiration. The return to monitoring ARR growth, with its high profitability, enabled us to trim our Q1 2023 net loss to $85,000 from a net loss of $123,000 a year ago. Given these trends and our high gross margin contribution, we believe Acorn is on…

Thanks, Jan. I wanted to note that we filed our 10-K this morning. I’ll run through some key elements related to our reported results and then we can turn it back to the operator for any investor question. In the remarks that follow I’ll compare Q1 of this year to Q1 of last year for income statement items and for balance sheet items will generally compare March 31, 2023 to December 31, 2022. Also the numbers I discuss are consolidated on a GAAP basis except for cash basis revenue, which as Jan mentioned is reconciled to GAAP revenue in today’s press release. Q1 2023 reported revenue was flat versus Q1 2022 at approximately $1.75 million in each period. Our primary wireless provider AT&T stopped supporting 3D wireless units in February of 2022, impacting the prior year period as Jan previously noted. Notably, Q1 2022 hardware revenue and cash basis revenue were higher than they otherwise would’ve been creating less than favorable top line comparisons in Q1 2023. Hardware revenue was down 4.7% and cash basis revenue was down 9.9%. However, on a more favorable note, with the impact of sunsetting now concluded our higher margin and recurring monitoring revenue returned to year-over-year growth. Given a higher percentage of high margin monitoring revenue in our mix, our Q1 2023 gross profit margin increased to 75.2% of sales compared to 71.8% in Q1 2022, enabling us to generate $48,000 of additional gross profit. Total operating expenses increased 2.2% or $31,000 in Q1 2023 reflecting a 1% increase in SG&A expense and an 8% increase in research and development expenses. The nominal increase in SG&A expense was due in part to the timing of audit fees incurred at the corporate level, which were higher this year compared to prior year period in addition…

Thank you. [Operator Instructions] As I'm showing no questions at this time, this concludes our question-and-answer session. I would like to turn the conference back over to Jan Loeb for any closing remarks.

Thank you, everyone for your interest in Acorn Energy. We appreciate your support, and I'm happy to speak with investors or prospective investors or anybody who didn't want to ask a question on the call can certainly call us. You can set up a call with Tracy or myself or ask a question through our IR team whose contact information is in today's press release. Tracy and I look forward to updating investors on our Q2 conference call in August. Thank you again, and this concludes today's call.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.