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UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of
The Securities
Exchange Act of 1934
October
27, 2023
Date
of Report
(Date
of earliest event reported)
SOCKET
MOBILE, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-13810 |
|
94-3155066 |
(State
or other jurisdiction of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
40675
Encyclopedia Circle
Fremont,
CA 94538
(Address
of principal executive offices, including zip code)
(510)
933-3000
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common
stock, $0.001 Par Value per Share |
SCKT |
NASDAQ |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405)
or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
2.02 Results of Operations and Financial Condition
On
October 27, 2023, Socket Mobile, Inc. issued a press release reporting its results for the three and nine months ended September 30, 2023. The
full text of the press release is furnished as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits.
Exhibit
No. |
|
Description |
|
|
|
99.1 |
|
Text
of press release, dated October 27, 2023, titled "Socket Mobile Reports Third Quarter and Nine-Month 2023 Results". |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
|
SOCKET
MOBILE, INC. |
|
|
|
|
By: |
/s/
Lynn Zhao |
|
|
|
Name:
Lynn Zhao
Vice
President, Finance and Administration
and
Chief Financial Officer |
Date:
October 27, 2023
Exhibit
99.1
Socket
Mobile Reports Third Quarter and Nine-Month 2023 Results
FREMONT,
Calif., – October 27, 2023 – Socket Mobile, Inc. (NASDAQ: SCKT), a leading provider of data capture and delivery solutions
for enhanced workplace productivity, today reported financial results that are determined in accordance with generally accepted accounting
principles in the United States (“GAAP”) for the three and nine months ended September 30, 2023.
Third
Quarter 2023 Financial Highlights:
| • | Revenue
decreased 14% to $3.2 million, compared to $3.7 million in the prior-year quarter, and decreased
by 37% sequentially compared to $5.1 million in Q2 2023. |
| • | Gross
margin declined to 44.2%, compared to 44.4% in the prior-year quarter and 51.8% in the preceding
quarter. The decrease in gross margins was primarily due to the allocation of manufacturing
overhead costs across lower shipments during the quarter ended September 30, 2023. |
| • | Operating
expenses for the third quarter of 2023 totaled $2.8 million, an increase of 8.2% compared
to operating expenses of $2.6 million in the prior-year quarter, and a decrease of 4.3% sequentially
in the preceding quarter. |
| • | Operating
loss was $1.4 million compared to an operating loss of $947,000 for the prior-year quarter,
and operating loss of $292,000 in the preceding quarter. |
| • | The
cash balance was $3.1 million as of September 30, 2023, compared to $3.4 million as of June
30, 2023, and $3.6 million as of December 31, 2022. |
“In
Q3, our distribution partners reduced their inventories by 50% in response to ongoing market uncertainty and elevated interest rates,
significantly impacting our Q3 revenue. Sales to resellers and end-users were substantially higher than the reported revenue, which is
calculated based on sales to distributors with a reserve for estimated product returns. We believe that sales to resellers and end-users
provide a more accurate picture of the underlying demand in our business. Throughout the quarter, we maintained a focus on managing
liquidity and expenses while continuing to invest in critical projects,” said Kevin Mills, president, and chief executive officer.
“We
launched several new products in Q3. The XtremeScan product line, comprised of XtremeScan Case XC100, XtremeScan XS930, and
XtremeScan Grip XG930, is designed for iPhone series 15, 14, 13 and 12. This product family is engineered to withstand harsh
industrial conditions, offering robust scanning capabilities with superior durability and support. The launch of the XtremeScan
series represents a significant milestone in our commitment to delivering high-quality data capture solutions for our customers in
industrial and manufacturing markets.
“We’ve
also introduced the C860, an advanced camera-based subscription solution. It’s designed for users with more demanding scanning
needs, those working in challenging conditions, or those dealing with poorly printed or damaged barcodes. The C860 is a follow-on to
our free camera-based scanner, the C820, launched in Q2. There are no licensing fees for App providers, enabling them to service a wide
range of customers with various data capture requirements by integrating CaptureSDK into their applications. This approach enables developers
to service price-sensitive end-users with the free C820 and address performance-sensitive needs with the C860. The monthly subscription
fee is $5.99, available for purchase via the Apple Store or Google Play,” continued Mills.
“Our
CaptureSDK was upgraded in Q3 and is fully compatible with iOS 17. It supports our complete range of barcode scanners and NFC readers/writers
across the entire Socket Mobile product line, ensuring that iOS and Android application developers can fully meet their data capture
requirements and maximize performance for their end-users. Socket Mobile CaptureSDK has been integrated into thousands of applications
across various industries.
“During
Q3, our team remained focused on delivering these critical products, which we believe will enable Socket Mobile to return to growth and
profitability” concluded Mills.
Conference
Call
The
management of Socket Mobile will hold a conference call today at 2 P.M. Pacific (5 P.M. Eastern) to discuss the quarterly results and
outlook for the future. The dial-in number to access the live conference call is (800) 237-1091 toll-free from within the U.S.
or (848) 488-9280 (toll).
About
Socket Mobile, Inc.
Socket
Mobile is a leading provider of data capture and delivery solutions for enhanced productivity in workforce mobilization. Socket Mobile’s
revenue is primarily driven by the deployment of third-party barcode enabled mobile applications that integrate Socket Mobile’s
cordless barcode scanners and contactless reader/writers. Mobile Applications servicing the specialty retailer, field service, digital
ID, transportation, and manufacturing markets are the primary revenue drivers. Socket Mobile has a network of thousands of developers
who use its software developer tools to add sophisticated data capture to their mobile applications. Socket Mobile is headquartered in
Fremont, Calif. and can be reached at +1-510-933-3000 or www.socketmobile.com. Follow
Socket Mobile on LinkedIn, Twitter, and keep up with our latest News and Updates.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding
new mobile computer and data collection products, including details on the timing, distribution, and market acceptance of the products,
and statements predicting trends, sales, market conditions, and opportunities in the markets in which we sell our products. Such statements
involve risks and uncertainties, and actual results could differ materially from the results anticipated in such forward-looking statements
as a result of a number of factors, including, but not limited to, the risk that our new products may be delayed or not rollout as predicted,
if ever, due to technological, market, or financial factors, including the availability of necessary working capital, the risk that market
acceptance and sales opportunities may not happen as anticipated, the risk that our application partners and current distribution channels
may choose not to distribute the new products or may not be successful in doing so, the risk that acceptance of our new products in vertical
application markets may not happen as anticipated, and other risks described in our most recent Form 10-K and 10-Q reports filed with
the Securities and Exchange Commission.
Socket
Mobile Investor Contact: |
Lynn
Zhao |
Chief
Financial Officer |
510-933-3016 |
lynn@socketmobile.com |
Socket
is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective owners.
©
2023, Socket Mobile, Inc. All rights reserved.
–
Financial tables to follow –
Socket
Mobile, Inc.
Condensed
Summary Statements of Operations (Unaudited)
(Amounts
in thousands except per share)
| |
Three months ended Sept 30, | |
Nine months ended Sept 30, |
| |
2023 | |
2022 | |
2023 | |
2022 |
Revenue | |
$ | 3,206 | | |
$ | 3,728 | | |
$ | 12,635 | | |
$ | 16,067 | |
Cost of revenue | |
| 1,788 | | |
| 2,073 | | |
| 6,493 | | |
| 8,249 | |
Gross margin | |
| 1,418 | | |
| 1,655 | | |
| 6,142 | | |
| 7,818 | |
Gross margin percent | |
| 44.2 | % | |
| 44.4 | % | |
| 48.6 | % | |
| 48.7 | % |
Research & development
| |
| 1,207 | | |
| 1,096 | | |
| 3,643 | | |
| 3,271 | |
Sales & marketing | |
| 1,002 | | |
| 865 | | |
| 3,014 | | |
| 2,729 | |
General & administrative | |
| 608 | | |
| 641 | | |
| 2,131 | | |
| 2,112 | |
Total operating expenses | |
| 2,817 | | |
| 2,602 | | |
| 8,788 | | |
| 8,112 | |
Operating income (loss) | |
| (1,399 | ) | |
| (947 | ) | |
| (2,646 | ) | |
| (294 | ) |
Interest expense, net | |
| (76 | ) | |
| (43 | ) | |
| (170 | ) | |
| (134 | ) |
Income tax benefit (expense) | |
| 150 | | |
| 116 | | |
| (16 | ) | |
| — | |
Net loss | |
$ | (1,325 | ) | |
$ | (874 | ) | |
$ | (2,832 | ) | |
$ | (428 | ) |
Net loss per share: | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.16 | ) | |
$ | (0.11 | ) | |
$ | (0.34 | ) | |
$ | (0.05 | ) |
Fully diluted | |
$ | (0.16 | ) | |
$ | (0.11 | ) | |
$ | (0.34 | ) | |
$ | (0.05 | ) |
Weighted average shares outstanding: Basic Fully diluted | |
| 7,320 7,320 | | |
| 7,153 7,153 | | |
| 7,197 7,197 | | |
| 7,202 7,202 | |
Socket
Mobile, Inc.
Condensed
Summary Balance Sheets
(Amounts
in Thousands)
| |
(Unaudited) September 30, 2023 | |
December 31, 2022* |
Cash | |
$ | 3,094 | | |
$ | 3,624 | |
Accounts receivable | |
| 1,560 | | |
| 2,660 | |
Inventories | |
| 5,528 | | |
| 5,602 | |
Deferred costs on shipments to distributors | |
| 247 | | |
| 266 | |
Other current assets | |
| 617 | | |
| 617 | |
Property, equipment and computer software, net | |
| 2,558 | | |
| 1,657 | |
Deferred tax assets | |
| 8,652 | | |
| 8,668 | |
Intangible assets, net | |
| 1,591 | | |
| 1,694 | |
Operating leases right-of-use assets | |
| 3,208 | | |
| 3,560 | |
Other long-term assets | |
| 251 | | |
| 250 | |
Total assets | |
$ | 27,306 | | |
$ | 28,598 | |
Accounts payable and accrued liabilities | |
$ | 1,911 | | |
$ | 2,407 | |
Bank non-formula loan | |
| — | | |
| 125 | |
Subordinated convertible notes payable, net of discount | |
| 150 | | |
| 147 | |
Subordinated convertible notes payable, net of discount-related party | |
| 2,834 | | |
| 1,231 | |
Deferred revenue on shipments to distributors | |
| 596 | | |
| 595 | |
Deferred service revenue | |
| 33 | | |
| 34 | |
Operating lease liabilities | |
| 3,407 | | |
| 3,737 | |
Total liabilities | |
| 8,931 | | |
| 8,276 | |
Common stock | |
| 68,258 | | |
| 67,165 | |
Accumulated deficit | |
| (48,845 | ) | |
| (46,013 | ) |
Treasury stock | |
| (1,038 | ) | |
| (830 | ) |
Total equity | |
| 18,375 | | |
| 20,322 | |
Total liabilities and equity | |
$ | 27,306 | | |
$ | 28,598 | |
*Derived
from audited financial statements.
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