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
February
24, 2021
Date of Report
(Date of earliest
event reported)
SOCKET
MOBILE, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-13810
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94-3155066
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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39700 Eureka Drive
Newark, CA 94560
(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:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
stock, $0.001 Par Value per Share
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SCKT
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NASDAQ
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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 February 24, 2021, Socket Mobile, Inc. issued a press
release reporting its results for the three and twelve months ended December 31, 2020. The full text of the press release is
furnished as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Description
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99.1
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Text
of press release, dated February 24, 2021, titled "Socket
Mobile Reports Fourth Quarter and Full Year 2020 Results".
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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.
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SOCKET MOBILE, INC.
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Date: February 24, 2021
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/s/ Lynn Zhao
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Lynn Zhao
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Vice President, Finance and Administration
and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Number
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Description
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99.1
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Text
of press release, dated February 24, 2021, titled "Socket
Mobile Reports Fourth Quarter and Full Year 2020 Results".
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Exhibit
99.1
Socket
Mobile Reports Fourth Quarter and Full Year 2020 Results
Profitable fourth quarter and improved liquidity
NEWARK,
Calif., – February 24, 2021 – Socket Mobile, Inc. (NASDAQ: SCKT),
a leading innovator of data capture and delivery solutions for enhanced workplace productivity,
today reported financial results for the fourth quarter and year ended December 31, 2020.
The
2020 fourth quarter revenue was $4.7 million compared to $4.6 million in the fourth quarter of 2019. Gross margin from the fourth
quarter of 2020 was 53.2 percent compared to 53.1 percent from the same period in 2019. Operating expenses for the fourth quarter
decreased 12.4 percent to $1.9 million, compared to $2.2 million in fourth quarter of 2019. Net income attributable to common
shareholders for the fourth quarter of 2020 was $1.6 million, or $0.26 per basic and $0.23 per fully diluted share, compared to
a net income of $0.06 million or 0.01 per basic and fully diluted share for the same period last year. Net income for the fourth
quarter 2020 includes a one-time non-cash gain upon debt extinguishment of $1.1 million related to the loan forgiveness under
the Paycheck Protection Program (PPP).
Revenue
for the full year of 2020 was $15.7 million
compared to $19.3 million in 2019. Gross margin for 2020 was 53.1 percent compared to 52.5 percent in 2019. Operating results
in 2020 were a net loss of $0.54 per basic and fully diluted share or $3.3 million, which includes a non-cash goodwill impairment
charge of $4.4 million and a non-cash gain upon debt extinguishment of $1.1 million related to the forgiveness of the Company’s
PPP loan, compared to a net income of $0.05 per basic and fully diluted share or $0.3 million in 2019.
As
of December 31, 2020, cash more than doubled from December 31, 2019 to $2.1 million which resulted from improved operational performance
and the secured subordinated convertible note financing completed in August 2020. Loans payable decreased to $1.4 million from
$1.7 million. Shareholders’ equity on December 31, 2020 decreased by $2.6 million from December 31, 2019 to $10.6 million
primarily due to the non-cash goodwill impairment charge of $4.4 million.
Kevin
Mills, president and chief executive officer, commented, “Our fourth quarter was another encouraging period in which revenue
continued on its upward trajectory from the 2020 low point in the second quarter. We also improved liquidity with increased cash
and reduced debts.
“Throughout
2020, we managed our costs while investing into our businesses and developing and launching new products. We introduced DuraScan
D755, a medical-grade, universal scanner designed and built for healthcare environments. We also launched DuraSled for XCover
Pro and iPhone SE 2020, a one-handed solution that combines the iPhone or Android devices with a scanner. We delivered S550 Contactless
Reader/Writer that is certified with both Apple Pay “VAS” and Google Wallet, and that complies with Apple and Google
NFC protocol on iPhones and Android devices. Our products continue to be well-received by our customers.
“We
believe our performance demonstrates the strength inherent in our operations and testifies to the resilience of our enterprise.
I want to thank all of our employees for their extraordinary efforts to support our customers under these challenging conditions.
“Despite
the vaccine rollout, the COVID-19 pandemic continues to impact economic activity worldwide in 2021. We will continue to manage
the risks while safely pursuing opportunities in the COVID-19 environment. Our primary goals for 2021 continue to be revenue growth
and profitability.” Mills concluded.
Conference
Call
Management
of Socket Mobile will hold a conference call and web cast 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 call is (888) 424-8151 passcode 7255 653. From international locations,
obtain the local dial-in number through your web browser at http://web.meetme.net/r.aspx?p=11&a=UJBwvpKMZQnYJf. A live
and replay audio webcast of the conference call can be accessed through a link https://onlinexperiences.com/Launch/QReg/ShowUUID=8D3A8A23-06CB-4873-B36F-93A4A913B65A&LangLocaleID=1033.
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, 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 Newark, Calif. and can be reached at +1-510-933-3000 or www.socketmobile.com. Follow Socket Mobile on
Facebook, Twitter @socketmobile and on our sockettalk blog.
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 and 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.
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Socket
Mobile Investor Contact:
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Lynn
Zhao
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Chief
Financial Officer
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510-933-3016
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lynn@socketmobile.com
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Socket
is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective
owners.
©
2021, Socket Mobile, Inc. All rights reserved.
--
Financial tables to follow --
Socket
Mobile, Inc.
Condensed
Summary Statements of Operations
(Amounts
in thousands except per share amounts)
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Year ended Dec 31,
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Three months ended Dec 31,
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(Unaudited)
2020
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2019*
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(Unaudited)
2020
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2019*
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Revenue
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$
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15,700
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$
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19,253
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$
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4,655
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$
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4,584
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Cost of revenue
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7,365
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9,152
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2,179
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2,149
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Gross margin
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8,335
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10,101
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2,476
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2,435
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Gross margin percent
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53.1
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%
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52.5
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%
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53.2
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%
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53.1
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%
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Research & development
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3,140
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3,894
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719
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987
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Sales & marketing
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2,849
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3,015
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700
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703
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General & administrative
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2,270
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2,585
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529
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533
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Goodwill impairment charges
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4,427
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—
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—
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—
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Total operating expenses
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12,686
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9,494
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1,948
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2,223
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Extinguishment of debt income and other income
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1,119
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—
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1,049
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—
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Interest income (expense), net
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(98
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)
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(101
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)
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(46
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)
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(17
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)
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Net income (loss) before income taxes
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(3,330
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)
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506
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1,531
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195
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Income tax (expense) benefit
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51
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(219
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)
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52
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(134
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)
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Net income (loss)
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$
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(3,279
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)
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$
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287
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$
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1,583
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$
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61
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Net income (loss) per share:
Basic
Fully
Diluted
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$ (0.54)
$ (0.54)
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$ 0.05
$ 0.05
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$ 0.26
$ 0.23
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$ 0.01
$ 0.01
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Weighted average shares outstanding:
Basic
Fully Diluted
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6,036
6,036
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5,985
6,208
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6,084
7,033
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5,998
6,156
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*Derived
from audited financial statements.
Socket
Mobile, Inc.
Condensed
Summary Balance Sheets
(Amounts
in Thousands)
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December 31,
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(Unaudited)
2020
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2019*
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Cash
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$
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2,122
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$
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959
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Accounts receivable
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2,113
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2,837
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Inventories
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3,196
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3,179
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Deferred costs on shipments to distributors
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170
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234
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Other current assets
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335
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312
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Property and equipment, net
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848
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864
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Goodwill
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—
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4,427
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Deferred tax assets
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5,507
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5,507
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Operating leases right-of-use assets
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609
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937
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Other long-term assets
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159
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202
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Total assets
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$
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15,059
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$
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19,458
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Accounts payable and accrued liabilities
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$
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1,748
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$
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2,651
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Bank line of credit
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—
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1,413
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Notes payable
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—
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333
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Subordinated convertible notes payable, net of discount
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170
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—
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Subordinated convertible notes payable, net of discount-related party
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1,272
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—
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Deferred revenue on shipments to distributors
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451
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611
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Deferred service revenue
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54
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74
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Operating lease liabilities
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741
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|
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1,134
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Other liabilities
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—
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8
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Total liabilities
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$
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4,436
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$
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6,224
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Common stock
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61,740
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61,073
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Accumulated deficit
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(51,117
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)
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(47,839
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)
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Total stockholder equity
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$
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10,623
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$
|
13,234
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Total Liabilities and Equity
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$
|
15,059
|
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$
|
19,458
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*Derived
from audited financial statements.
#
# #