UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(X)

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

( )

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______.

Commission file number 1-13810

SOCKET MOBILE, INC.

(Exact name of registrant as specified in its charter)

Delaware

94-3155066

(State or other jurisdiction of

incorporation or organization)

(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)

Securities registered pursuant to Section 12(b) of the Exchange 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

Securities registered pursuant to Section 12(g) of the Exchange Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Smaller reporting company [X]

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. [ ]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. [ ]

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

As of June 30, 2024, the aggregate market value of the registrant’s Common Stock ($0.001 par value) held by non-affiliates of the registrant was $6,231,799 based on the closing sale price as reported on the NASDAQ Marketplace system.

The number of shares of Common Stock ($0.001 par value) outstanding as of March 21, 2025: 7,952,988 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10, 11, 12, 13, and 14 of Part III are incorporated by reference from the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on June 4, 2025. Such Proxy Statement will be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

TABLE OF CONTENTS


PART I
	Item 1.	Business	1
	Item 1A.	Risk Factors	8
	Item 1B.	Unresolved Staff Comments	17
	Item 1C.	Cybersecurity	17
	Item 2.	Properties	18
	Item 3.	Legal Proceedings	18
	Item 4.	Mine Safety Disclosures	18

PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
	Item 6.	Selected Financial Data	20
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	27
	Item 8.	Financial Statements and Supplementary Data	27
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	54
	Item 9A.	Controls and Procedures	54
	Item 9B.	Other Information	55
	Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	55

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	56
	Item 11.	Executive Compensation	56
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	56
	Item 14.	Principal Accounting Fees and Services	56

PART IV
	Item 15.	Exhibits, Financial Statement Schedules	57

SIGNATURES			58

Index to Exhibits			59

	Years Ended December 31,
(Amounts in thousands, except per share)	2020			2021		2022			2023			2024
Income Statement Data:
Revenues	$	15,700		$	23,199	$	21,238		$	17,034		$	18,763
Gross profit	$	8,335		$	12,436	$	10,366		$	8,463		$	9,311
Operating expenses	$	12,686		$	9,739	$	10,812		$	11,584		$	11,914
Net income (loss) before income taxes	$	(3,330	)	$	2,564	$	(621	)	$	(3,363	)	$	(2,793	)
Income tax benefit (expense)	$	51		$	1,903	$	708		$	1,444		$	551
Net income (loss)	$	(3,279	)	$	4,466	$	87		$	(1,919	)	$	(2,242	)
Net income (loss) per share: Basic	$	(0.51	)	$	0.58	$	0.01		$	(0.27	)	$	(0.30	)
Diluted	$	(0.51	)	$	0.48	$	0.01		$	(0.27	)	$	(0.30	)
Weighted average shares outstanding:
Basic		6,036			6,991		7,185			7,230			7,558
Diluted		6,036			8,923		7,533			7,230			7,558

		At December 31,
		2020			2021		2022			2023			2024
Balance Sheet Data:
Cash and cash equivalents	$	2,122		$	6,096	$	3,624		$	2,827		$	2,492
Total assets	$	15,609		$	25,575	$	28,598		$	28,742		$	27,346

Bank line of credit	$	—		$	—	$	—		$	—		$	—
Term loan	$	—		$	625	$	125		$	—		$	—
Related party convertible notes payable	$	1,272		$	1,201	$	1,231		$	2,836		$	3,818
Convertible notes payable	$	170		$	144	$	147		$	150		$	150
Operating lease	$	741		$	258	$	3,737		$	3,292		$	2,817

Total stockholders’ equity	$	11,173		$	20,046	$	20,322		$	19,420		$	18,161

	Quarter Ended (unaudited)
(Amounts in thousands, except per share amounts)	Mar 31, 2023			Jun 30, 2023			Sep 30, 2023			Dec 31, 2023			Mar 31, 2024			Jun 30, 2024			Sep 30, 2024			Dec 31, 2024
Summary Quarterly Data:
Revenue	$	4,312		$	5,117		$	3,206		$	4,399		$	4,978		$	5,081		$	3,872		$	4,831
Cost of revenue		2,240			2,466			1,788			2,078			2,473			2,497			1,975			2,366
Gross profit		2,072			2,651			1,418			2,321			2,505			2,584			1,897			2,465
Operating expenses:
Research and development		1,247			1,190			1,207			1,188			1,208			1,232			1,162			1,119
Sales and marketing		1,006			1,004			1,002			1,003			1,031			1,154			1,122			1,106
General and administrative		774			749			608			605			751			733			644			651
Total operating expenses		3,027			2,943			2,817			2,796			2,990			3,119			2,928			2,876
Interest expense, net		(38	)		(55	)		(76	)		(73	)		(72	)		(73	)		(84	)		(102	)
Income tax (expense) benefit		—			(166	)		150			1,460			—			—			—			551
Net income (loss)	$	(993	)	$	(513	)	$	(1,325	)	$	912		$	(557	)	$	(608	)	$	(1,115	)	$	38
Basic net income (loss) per share	$	(0.12	)	$	(0.06	)	$	(0.16	)	$	0.11		$	(0.07	)	$	(0.08	)	$	(0.15	)	$	0.00
Fully diluted net income (loss) per share	$	(0.12	)	$	(0.06	)	$	(0.16	)	$	0.08		$	(0.07	)	$	(0.08	)	$	(0.15	)	$	0.00

	Payments Due by Period
Contractual Obligations	Total		1 year		2 to 3 years		4 to 5 years		More than 5 years
Unconditional purchase obligations with contract manufacturers	$	6,159,000	$	5,844,000	$	315,000	$	—	$	—
Operating leases		3,165,000		657,000		1,369,000		1,139,000		—
Total contractual obligations	$	9,324,000	$	6,501,000	$	1,684,000	$	1,139,000	$	—


	December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	2,491,964		$	2,826,630
Accounts receivable, net		1,588,095			1,699,696
Inventories, net		4,941,500			5,409,047
Prepaid expenses and other current assets		430,719			440,730
Deferred cost on shipments to distributors		142,939			322,580
Total current assets		9,595,217			10,698,683

Property and equipment:
Machinery and office equipment		2,776,992			2,700,759
Computer equipment		3,732,733			3,631,945
Property and equipment, gross		6,509,725			6,332,704
Accumulated depreciation		(3,722,424	)		(3,299,503	)
Property and equipment, net		2,787,301			3,033,201

Intangible assets, net		1,432,073			1,559,369
Other long-term assets		263,634			249,715
Deferred tax assets		10,663,419			10,112,419
Operating lease right-of-use asset		2,604,137			3,088,087
Total assets	$	27,345,781		$	28,741,474


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	1,298,165		$	1,605,231
Accrued payroll and related expenses		678,768			579,974
Deferred revenue on shipments to distributors		392,543			825,670
Short term portion of deferred service revenue		17,886			19,885
Subordinated convertible notes payable, net of discount		150,000			150,000
Subordinated convertible notes payable, net of discount-related party		3,818,424			2,835,864
Operating lease – current portion		532,027			483,161
Total current liabilities		6,887,813			6,499,785

Long-term portion of operating lease		2,284,634			2,808,872
Long-term portion of deferred service revenue		12,839			12,813
Total liabilities		9,185,286			9,321,470

Commitments and contingencies		—			—
Stockholders’ equity:
Common stock, $0.001 par value: Authorized – 20,000,000 shares, Issued 7,964,881 and 7,695,371, and outstanding 7,605,631 and 7,336,121 at December 31, 2024 and December 31, 2023, respectively		7,606			7,336
Additional paid-in capital		69,365,801			68,383,230
Treasury stock, at cost (359,250 shares as of December 31, 2024 and 2023)		(1,037,988	)		(1,037,988	)
Accumulated deficit		(50,174,924	)		(47,932,574	)
Total stockholders’ equity		18,160,495			19,420,004
Total liabilities and stockholders’ equity	$	27,345,781		$	28,741,474


							Additional											Total
	Common Stock						Paid-In			Treasury Stock					Accumulated			Stockholders’
	Shares			Amount			Capital			Shares		Amount			Deficit			Equity
Balance on December 31, 2022		7,089,676		$	7,090		$	67,157,650			266,291	$	(829,563	)	$	(46,013,420	)	$	20,321,757
Vesting of restricted stock		255,687			256			(256	)		—		—			—			—
Restricted stock retired for tax withholding		(55,192	)		(56	)		(143,315	)		—		—			—			(143,371	)
Exercise of stock options		138,909			139			212,676			—		—			—			212,815
Stock-based compensation		—			—			1,156,382			—		—			—			1,156,382
Treasury shares purchased		(92,959	)		(93	)		93			92,959		(208,425	)		—			(208,425	)
Net income		—			—			—			—		—			(1,919,154	)		(1,919,154	)
Balance on December 31, 2023		7,336,121		$	7,336		$	68,383,230			359,250	$	(1,037,988	)	$	(47,392,574	)	$	19,420,004
Vesting of restricted stock		316,519			316			(316	)		—		—			—			—
Restricted stock retired for tax withholding		(72,009	)		(71	)		(95,134	)		—		—			—			(95,205	)
Exercise of stock options		25,000			25			23,725			—		—			—			23,750
Stock-based compensation		—			—			1,054,296			—		—			—			1,054,296
Net loss		—			—			—			—		—			(2,242,350	)		(2,242,350	)
Balance on December 31, 2024		7,605,631		$	7,606		$	69,365,801			359,250	$	(1,037,988	)	$	(50,174,924	)	$	18,160,495


Year		Balance at Beginning of Year		Charged to Costs and Expenses		Amounts Written Off		Balance at End of Year

	2024	$	40,651	$	—	$	—	$	40,651
	2023	$	40,651	$	—	$	—	$	40,651


Fiscal Year	Amount
2025		127,296
2026		127,296
2027		127,296
2028		127,296
2029		127,296
Thereafter		795,593
	$	1,432,073

SEC Form 10-K filed by Socket Mobile Inc.