Socket Mobile Strengthens Balance Sheet with a Secured Subordinated Convertible Note Financing of $1.5 Million

Socket Mobile (NASDAQ: SCKT) has secured $1.5 million through a subordinated convertible note financing.

Rhea-AI Summary

Socket Mobile (NASDAQ: SCKT) has secured $1.5 million through a subordinated convertible note financing. The notes have a 3-year term maturing on May 30, 2028, with a 10% interest rate payable quarterly. Noteholders can convert the principal into company shares at $1.07 per share or request repayment after May 30, 2026. The financing is secured by company assets and subordinated to Western Alliance Bank debts. Key participants include company insiders such as Chairman Charlie Bass, CEO Kevin Mills, CFO Lynn Zhao, and other executives. The funds will be used to boost working capital balances.

Positive

• Secured $1.5 million in additional working capital to strengthen balance sheet
• Strong insider participation in the financing shows management confidence
• Flexible terms with 3-year maturity provides operational runway

Negative

• 10% interest rate indicates relatively high cost of capital
• Potential dilution risk if notes are converted to shares
• Additional debt burden and asset encumbrance through security agreement

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FREMONT, Calif., June 2, 2025 /PRNewswire/ -- Socket Mobile, Inc. (NASDAQ: SCKT), a leading provider of data capture and delivery solutions for enhanced productivity, today announced completion of a secured subordinated convertible note financing of $1,500,000. The proceeds will be used to increase the Company's working capital balances.

The notes have a three-year term and will mature on May 30, 2028. The interest rate on the notes is 10%, payable quarterly in cash. The holder of each note may require the Company to repay the principal amount of the note plus accrued interest at any time after May 30, 2026. The notes are secured by the assets of the Company and are subordinated to the Company's debts with Western Alliance Bank, its senior lender. The principal amount of each note is convertible at any time, at the option of the holder, into shares of the Company's common stock at a conversion price of $1.07 per share, the closing price of the common stock on the Nasdaq Capital Market on May 30, 2025, and the most recent closing price as of the closing of the financing. 

Participants in the financing include: Charlie Bass, Chairman of the Company's Board of Directors; Kevin Mills, the Company's Chief Executive Officer and Board Director; Lynn Zhao, the Company's Chief Financial Officer and Board Director; Bill Parnell, a Board Director; Jason Wu, the Company's Controller; Eric Glaenzer, the Company's Chief Technical Officer; and Enrico Mills, the adult son of Kevin Mills.

Additional details regarding the financing will be provided in Form 8-K to be filed by the Company with the SEC.

About Socket Mobile:
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 readers/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, X, and keep up with our latest News and Updates.

Socket 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.

© 2025, Socket Mobile, Inc. All rights reserved.

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SOURCE Socket Mobile, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is the size and purpose of Socket Mobile's (SCKT) convertible note financing?

Socket Mobile secured $1.5 million in convertible note financing to increase the company's working capital balances

What is the interest rate and maturity of SCKT's convertible notes?

The notes have a 10% interest rate payable quarterly and a three-year term maturing on May 30, 2028

What is the conversion price for Socket Mobile's convertible notes?

The notes are convertible into Socket Mobile common stock at $1.07 per share, based on the closing price on May 30, 2025

Who participated in Socket Mobile's convertible note financing?

Participants included company insiders such as Chairman Charlie Bass, CEO Kevin Mills, CFO Lynn Zhao, and other executives and board members

When can SCKT noteholders request repayment?

Noteholders can request repayment of principal plus accrued interest at any time after May 30, 2026