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
November
17, 2020
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.) |
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:
| 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 November 17, 2020, Socket Mobile, Inc. issued a
press release reporting to include the goodwill impairment charge in its results for the three and nine months ended
September 30, 2020. The full text of the press release is furnished as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
|
Description |
| 99.1 |
|
Text
of press release, dated November 17, 2020, titled "Socket Mobile Takes Goodwill Impairment Charge in Q3 2020". |
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. |
| |
|
|
| |
|
|
| Date: November 17, 2020 |
|
|
/s/ Lynn Zhao |
| |
|
Lynn Zhao |
| |
|
Vice President, Finance and Administration
and Chief Financial Officer |
EXHIBIT INDEX
| Exhibit Number |
|
Description |
| 99.1 |
|
Text
of press release, dated November 17, 2020, titled "Socket Mobile Takes Goodwill Impairment Charge in Q3 2020". |
Exhibit 99.1
Socket
Mobile Takes Goodwill Impairment Charge in Q3 2020
NEWARK,
Calif., – November 17, 2020 – Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator of data capture and delivery
solutions for enhanced productivity, announced today that it has completed the annual goodwill impairment test required by generally
accepted accounting principles. As a result of the lower stock price from the beginning of 2020 through the annual goodwill measurement
date of September 30th, the Company concluded that an adjustment to its fair value was required.
The
non-cash impairment charge totaled $4.4 million and was recorded in the Company’s Q3 2020 results. The impairment charge
does not affect the Company’s cash position, cash flow from operating activities, bank debt covenants, and does not have
any impact on future operations.
The
revised financial tables reflecting the goodwill impairment can be found at the end of this press release. For detailed
information, please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020
at https://www.sec.gov/Archives/edgar/data/944075/000094407520000048/q3-2020.htm
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.
Socket
Mobile Investor Contact: |
| Lynn
Zhao |
| Chief
Financial Officer |
| 510-933-3016 |
| [email protected] |
Socket
is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective
owners.
©
2020, Socket Mobile, Inc. All rights reserved.
--
Revised financial tables to follow --
Socket
Mobile, Inc.
Summary
Statements of Operations (Unaudited)
(Amounts
in Thousands except per share amounts and percentages)
| | |
Three months ended Sept 30, | |
Nine months ended Sept 30, |
| | |
2020 | |
2019 | |
2020 | |
2019 |
| Revenue | |
$ | 4,109 | | |
$ | 4,980 | | |
$ | 11,044 | | |
$ | 14,668 | |
| Cost of revenue | |
| 1,835 | | |
| 2,344 | | |
| 5,186 | | |
| 7,003 | |
| Gross margin | |
| 2,274 | | |
| 2,636 | | |
| 5,858 | | |
| 7,665 | |
| Gross margin percent | |
| 55.3 | % | |
| 52.9 | % | |
| 53.0 | % | |
| 52.3 | % |
Research & development
| |
| 681 | | |
| 1,015 | | |
| 2,421 | | |
| 2,906 | |
| Sales & marketing | |
| 658 | | |
| 785 | | |
| 2,148 | | |
| 2,312 | |
| General & administrative | |
| 486 | | |
| 707 | | |
| 1,741 | | |
| 2,053 | |
| Goodwill impairment charges | |
| 4,427 | | |
| — | | |
| 4,427 | | |
| — | |
| Total operating expenses | |
| 6,252 | | |
| 2,507 | | |
| 10,737 | | |
| 7,271 | |
| Operating income (loss) | |
| (3,978 | ) | |
| 129 | | |
| (4,879 | ) | |
| 394 | |
| Other income | |
| — | | |
| — | | |
| 70 | | |
| — | |
| Interest income (expense), net | |
| (24 | ) | |
| (25 | ) | |
| (51 | ) | |
| (83 | ) |
| Income tax (expense) benefit | |
| (1 | ) | |
| (10 | ) | |
| (1 | ) | |
| (85 | ) |
| Net income (loss) | |
$ | (4,003 | )* | |
$ | 94 | | |
$ | (4,861 | )* | |
$ | 226 | |
Earnings (loss) per share:
Basic
Diluted | |
| $ (0.62 $ (0.62 | )* )* | |
| $ 0.02 $ 0.01 | | |
| $ (0.76 $ (0.76 | )* )* | |
| $ 0.04 $ 0.04 | |
Weighted average shares outstanding:
Basic
Diluted | |
| 6,038 6,038 | | |
| 5,999 6,317 | | |
| 6,020 6,020 | | |
| 5,980 6,237 | |
*Included
goodwill impairment adjustment of $4.43 million recorded as of September 30, 2020
Socket
Mobile, Inc.
Condensed
Summary Balance Sheets
(Amounts
in Thousands)
| | |
September 30, 2020
(Unaudited) | |
December 31, 2019** |
| Cash | |
$ | 1,775 | | |
$ | 959 | |
| Accounts receivable, net | |
| 2,359 | | |
| 2,837 | |
| Inventories, net | |
| 3,362 | | |
| 3,179 | |
| Deferred cost on shipments to distributors | |
| 179 | | |
| 234 | |
| Other current assets | |
| 317 | | |
| 312 | |
| Property and equipment, net | |
| 835 | | |
| 864 | |
| Goodwill | |
| — | | |
| 4,427 | |
| Deferred tax assets | |
| 5,507 | | |
| 5,507 | |
Operating leases right-of-use assets
| |
| 704 | | |
| 937 | |
| Other long-term assets | |
| 170 | | |
| 202 | |
| Total assets | |
$ | 15,208 | * | |
$ | 19,458 | |
| Accounts payable and accrued liabilities | |
$ | 2,417 | | |
$ | 2,651 | |
| Bank line of credit | |
| — | | |
| 1,413 | |
| Notes payable | |
| 1,059 | | |
| 333 | |
| Subordinated convertible notes payable, net of discount | |
| 168 | | |
| — | |
| Subordinated convertible notes payable, net of discount-related party | |
| 1,265 | | |
| — | |
| Deferred revenue on shipments to distributors | |
| 557 | | |
| 611 | |
| Deferred service revenue | |
| 55 | | |
| 74 | |
Operating lease liabilities
| |
| 855 | | |
| 1,134 | |
| Other liabilities | |
| — | | |
| 8 | |
| Total liabilities | |
| 6,376 | | |
| 6,224 | |
Common stock
| |
| 61,532 | | |
| 61,073 | |
| Accumulated deficit | |
| (52,700 | )* | |
| (47,839 | ) |
| Total equity | |
| 8,832 | * | |
| 13,234 | |
| Total liabilities and equity | |
$ | 15,208 | * | |
$ | 19,458 | |
*Included
goodwill impairment adjustment of $4.43 million recorded as of September 30, 2020
**Derived
from audited financial statements.
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