Exhibit 99.1 Socket Mobile Reports Fourth Quarter 2023 and Full Year Results FREMONT, Calif., – March 5, 2024 – 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 twelve months ended December 31, 2023. Fourth Quarter 2023 Financial Highlights: Full Year 2023 Financial Hi ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The company reported decreased revenue and increased net loss for Q3 and first nine months of 2023, with declining assets and equity, and negative operating cash flow offset by financing activities [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) Revenues decreased by 14% in Q3 and 21% in the first nine months of 2023, resulting in wider net losses for both periods Condensed Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2023 ($) | Three Months Ended Sep 30, 2022 ($) | Nine Months Ended Sep 30, 2023 ($) | Nine Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $3,205,893 | $3,727,871 | $12,635,228 | $16,066,855 | | **Gross Profit** | $1,418,197 | $1,654,859 | $6,142,247 | $7,818,203 | | **Operating Loss** | $(1,398,555) | $(947,427) | $(2,645,522) | $(294,439) | | **Net Loss** | $(1,324,995) | $(874,034) | $(2,831,231) | $(428,142) | | **Diluted Net Loss Per Share** | $(0.16) | $(0.11) | $(0.34) | $(0.05) | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) As of September 30, 2023, total assets decreased to $27.3 million, liabilities increased to $8.9 million, and stockholders' equity declined to $18.4 million Condensed Balance Sheet Highlights (Unaudited) | Metric | September 30, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $11,046,357 | $12,768,536 | | **Total Assets** | $27,306,391 | $28,597,988 | | **Total Current Liabilities** | $5,985,462 | $4,972,429 | | **Total Liabilities** | $8,930,967 | $8,276,231 | | **Total Stockholders' Equity** | $18,375,424 | $20,321,757 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations significantly increased to $(522,529) for the first nine months of 2023, with financing activities providing $1.46 million Cash Flow Summary (Nine Months Ended September 30) | Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | $(522,529) | $(30,182) | | **Net Cash Used in Investing Activities** | $(1,469,227) | $(910,603) | | **Net Cash (Used in) Provided by Financing Activities** | $1,461,842 | $(917,759) | | **Net Decrease in Cash** | $(529,914) | $(1,858,544) | | **Cash at End of Period** | $3,093,555 | $4,237,342 | [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes highlight $1.6 million convertible note financing, bank covenant waivers, significant customer concentrations, and substantial inventory purchase commitments - The company obtained waivers from its bank for failing to meet **minimum adjusted EBITDA requirements** in Q1 and Q3 2023[42](index=42&type=chunk)[43](index=43&type=chunk) - In May 2023, the company completed a **secured subordinated convertible note financing of $1.6 million**, maturing in May 2026 and convertible at **$1.34 per share**[48](index=48&type=chunk) Revenue Concentration by Major Customer (Nine Months Ended Sep 30) | Customer | 2023 (%) | 2022 (%) | | :--- | :--- | :--- | | BlueStar, Inc. | 23% | 22% | | Ingram Micro Inc. | 22% | 27% | | ScanSource, Inc. | * | 13% | - As of September 30, 2023, the company has **non-cancelable purchase commitments for inventory** amounting to approximately **$7.16 million**[74](index=74&type=chunk) [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 21% year-to-date revenue decline to inventory reductions, with stable gross margins, increased operating expenses, and new working capital from a $1.6 million convertible note [The Company and its Products](index=23&type=section&id=The%20Company%20and%20its%20Products) Socket Mobile offers Bluetooth-connected data capture solutions, including barcode scanners and RFID/NFC readers, with product families like SocketScan and a comprehensive SDK - The company's primary products are **cordless data capture devices** (barcode scanning, RFID/NFC) that connect to mobile devices via Bluetooth[81](index=81&type=chunk) - Product families include **SocketScan, DuraScan®, DuraSled, the new industrial-grade XtremeScan**, and the **software-based SocketCam**[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The company provides a **Software Developer Kit (CaptureSDK)** to application providers to integrate data capture capabilities into their mobile applications[88](index=88&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenue for the first nine months of 2023 fell 21% to $12.6 million due to inventory reductions, while gross margin remained stable and operating expenses increased - The revenue decline for Q3 and the first nine months of 2023 (**14% and 21% respectively**) was primarily attributed to **distribution partners reducing inventories** due to market uncertainty and high interest rates[92](index=92&type=chunk) Operating Expense Changes (Nine Months Ended Sep 30, 2023 vs 2022) | Expense Category | 2023 ($) | 2022 ($) | Change | | :--- | :--- | :--- | :--- | | Research and development | $3,644,000 | $3,271,000 | +11% | | Sales and marketing | $3,014,000 | $2,729,000 | +10% | | General and administrative | $2,131,000 | $2,113,000 | +1% | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash used in operations was $(523,000) for the first nine months of 2023, offset by $1.46 million from financing activities, with significant contractual obligations - **Net cash used in operating activities** was approximately **$523,000** in the first nine months of 2023, compared to **$30,000** in the same period of 2022[101](index=101&type=chunk) - Financing activities in the first nine months of 2023 provided **$1.46 million**, mainly from a **$1.58 million note financing**, offset by **$208,000 in stock repurchases** and a **$125,000 loan repayment**[105](index=105&type=chunk) Contractual Cash Obligations as of September 30, 2023 | Contractual Obligations | Total ($) | Less than 1 year ($) | | :--- | :--- | :--- | | Unconditional purchase obligations | $7,162,000 | $6,701,000 | | Operating lease | $3,952,000 | $634,000 | | **Total** | **$11,114,000** | **$7,335,000** | [Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risks include interest rate fluctuations on unused variable-rate credit facilities and foreign currency exchange rates, with a 10% adverse change impacting Q3 2023 net loss by $27,000 - **Interest rate risk** is tied to the company's revolving credit lines, which have variable rates based on the lender's prime rate, with **no outstanding balances**[110](index=110&type=chunk) - **Foreign currency risk** exists as European sales are denominated in Euros and British pounds; a **10% adverse change** would have increased the **Q3 2023 net loss by about $27,000**[111](index=111&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting - The **CEO and CFO concluded** that the company's **disclosure controls and procedures are effective**[113](index=113&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[114](index=114&type=chunk) [Part II. Other Information](index=31&type=section&id=Part%20II.%20Other%20Information) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including profitability challenges, reliance on limited suppliers and distributors, bank covenant compliance, dependence on application providers, intense competition, and potential dilution - The company may **not return to profitability** and may require **additional capital** in the future, which may not be available on reasonable terms[119](index=119&type=chunk)[121](index=121&type=chunk) - The company must remain in **compliance with bank covenants** to maintain its lines of credit and has received **waivers for past non-compliance**[122](index=122&type=chunk) - Sales are highly dependent on a **few key distributors** (Ingram Micro and BlueStar represented **~45% of sales** in the first nine months of 2023) and on **third-party application providers** integrating Socket Mobile's products[123](index=123&type=chunk)[136](index=136&type=chunk) - The business is exposed to **supply chain risk**, as several component parts are produced by a **limited number of suppliers**[127](index=127&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[163](index=163&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Filed exhibits include CEO and CFO certifications as required by Sarbanes-Oxley Act, along with the XBRL Interactive Data File - Filed exhibits include **CEO and CFO certifications** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and the **XBRL document**[163](index=163&type=chunk)

Socket Mobile, Inc. (NASDAQ:SCKT) Q3 2023 Earnings Conference Call October 27, 2023 5:00 PM ET Company Participants Kevin Mills - President & CEO David Holmes - Chief Business Officer Lynn Zhao - CFO Conference Call Participants Chris Sakai - Singular Research Operator Welcome to the Socket Mobile Inc. Q3 2023 Earnings Call. My name is Jen, and I will be your operator for today's call. Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements within the me ...

Financial Performance - Total revenues for Q2 2023 were approximately $5.1 million, a decrease of 15% from $6.05 million in Q2 2022[95] - Gross profit margins for Q2 2023 were 51.8%, an improvement from 50.2% in Q2 2022, attributed to higher margins from direct online sales[96] - The decline in revenues was primarily due to weakness in the retail POS market, which is the main revenue source[95] Expenses - Research and development expenses for Q2 2023 were approximately $1.19 million, a 6% increase from $1.12 million in Q2 2022[97] - Sales and marketing expenses for Q2 2023 were approximately $1.01 million, reflecting a 4% increase from $964,000 in Q2 2022[98] - General and administrative expenses for Q2 2023 were approximately $749,000, a slight decrease of 2% from $761,000 in Q2 2022[99] - The company anticipates R&D expenses to remain at similar levels for the remainder of the year[97] Cash Flow - Net cash used in operating activities for the first half of 2023 was approximately $528,000, compared to net cash provided of $599,000 in the first half of 2022[105] - Net cash provided by financing activities was approximately $1,439,000 in the first half of 2023, a significant increase from net cash used of approximately $546,000 in the comparable period a year ago[109] - The company completed secured subordinated note financing of $1,582,000 in 2023, alongside proceeds from employee stock options amounting to $190,315[109] Investments - In the first half of 2023, the company invested approximately $1,104,000 in manufacturing tooling, firmware development, website development, and leasehold improvements, compared to $560,000 in the same period of 2022[109] Financial Obligations - Total contractual obligations as of June 30, 2023, amounted to $12,047,000, with $8,082,000 due within one year[113] - The company has a revolving credit line facility of up to $2.5 million, with variable interest rates based on the lender's prime rate, which could increase interest expenses if rates rise[116] Foreign Currency Risks - An adverse change of 10% in foreign exchange rates could have increased the company's net loss by approximately $30,000 for the second quarter of 2023[117] - The actual net adjustment for foreign currency effects on cash balances, collections, and payables was a loss of approximately $2,500 for the second quarter of 2023[117] - The company continues to monitor and assess risks related to foreign currency fluctuations to mitigate potential impacts on financial performance[117] Accounting Policies - Significant accounting policies include Revenue Recognition, Accounts Receivable Reserves, and Inventory Valuation, which may affect reported financial results[110] - The company had no off-balance sheet arrangements as of June 30, 2023[114]

Socket Mobile, Inc. (NASDAQ:SCKT) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET Company Participants Kevin Mills - President & Chief Executive Officer Dave Holmes - Chief Business Officer Lynn Zhao - Chief Financial Officer Conference Call Participants Chris Sakai - Singular Research Operator Welcome to the Socket Mobile Inc. Q2 2023 Earnings Call. My name is Paul, and I will be your operator for today's call. Before we begin, I'd like to remind everyone that this conference call may contain fo ...

Financial Performance - Revenues for Q1 2023 were $4,312,178, a decrease of 31.6% compared to $6,293,002 in Q1 2022[9] - Gross profit for Q1 2023 was $2,072,487, down 33.8% from $3,127,662 in Q1 2022[9] - Operating loss for Q1 2023 was $(955,412), compared to an operating income of $463,704 in Q1 2022[9] - Net loss for Q1 2023 was $(993,420), compared to a net income of $341,933 in Q1 2022, resulting in a net loss per share of $(0.12)[9] - Total revenues for Q1 2023 were approximately $4.3 million, a 31% decrease from $6.3 million in Q1 2022, primarily due to distribution inventory balancing activities[83] - Gross profit margins decreased to 48.1% in Q1 2023 from 49.7% in the same period last year, attributed to lower production volumes[84] - The company reported a net loss of $993,420 for Q1 2023, compared to a net income of $341,933 in Q1 2022[55] - Basic net loss per share for Q1 2023 was $(0.12), a decrease from a net income of $0.04 per share in Q1 2022[55] Assets and Liabilities - Total current assets decreased to $11,948,021 as of March 31, 2023, from $12,768,536 as of December 31, 2022[11] - Cash and cash equivalents at the end of Q1 2023 were $2,963,308, down from $3,623,469 at the beginning of the quarter[17] - Total liabilities increased to $8,478,108 as of March 31, 2023, compared to $8,276,231 as of December 31, 2022[12] - Stockholders' equity decreased to $19,449,450 as of March 31, 2023, from $20,321,757 as of December 31, 2022[12] - The balances of right-of-use assets and liabilities for operating leases were $3,443,826 and $3,630,508, respectively, as of March 31, 2023, compared to $3,559,658 and $3,736,564 on December 31, 2022[27] Cash Flow and Expenses - Operating cash flow for Q1 2023 was $105,665, compared to $(452,413) in Q1 2022[17] - The company incurred stock-based compensation of $295,833 in Q1 2023, up from $223,446 in Q1 2022[17] - Research and development expenses increased by 18% to approximately $1,247,000 in Q1 2023, compared to $1,054,000 in Q1 2022, driven by new product development and hiring[85] - Sales and marketing expenses rose by 12% to approximately $1,007,000 in Q1 2023, up from $900,000 in the same quarter last year, mainly due to additional hiring[86] - General and administrative expenses increased by 9% to approximately $774,000 in Q1 2023, compared to $710,000 in Q1 2022, primarily due to higher equity-based compensation[87] - Cash payments for operating lease liabilities were $153,181 in Q1 2023, up from $132,010 in Q1 2022[63] Revenue Sources and Customer Base - Major customers for the three months ended March 31, 2023 included Ingram Micro, Inc. at 23% and BlueStar, Inc. at 20% of total revenues[46] - SocketCare revenue for the quarters ended March 31, 2023 and 2022 was approximately $5,600 and $5,400, respectively, with unrecognized service revenue at approximately $34,000 as of March 31, 2023[25] - Company’s sales are significantly dependent on a limited number of distributors, with Ingram Micro® and BlueStar representing approximately 43% and 47% of worldwide sales in Q1 2023 and 2022, respectively[130] Strategic Risks and Market Conditions - Company faces risks from a limited number of qualified suppliers for essential components, which could adversely affect financial results[120] - Company must rapidly develop and introduce new products to remain competitive, as the market is prone to rapidly changing technology[123] - The expensing of employee stock options and restricted stocks will continue to adversely affect net income and earnings per share, making profitability harder to achieve[146] - The company’s ability to forecast demand accurately is crucial, as miscalculations could lead to excess inventory or production capacity issues[128] - Events outside the company's control, such as natural disasters or health epidemics, could materially impact business operations and financial condition[150] Stock and Shareholder Information - As of May 9, 2023, the company had 7,130,853 shares of common stock outstanding, with substantial shares freely tradable in the public market[155] - The company had 1,262,028 shares of common stock subject to outstanding options and 1,068,934 shares of restricted stock outstanding as of May 9, 2023[156] - The trading price of the company's common stock fluctuated between a high of $4.84 and a low of $1.47 from January 1, 2022, to the date of the report, indicating high volatility[158]

[PART I](index=4&type=section&id=PART%20I) This section covers the company's business operations, associated risks, and foundational corporate information [Business](index=5&type=section&id=Item%201.%20Business) Socket Mobile, Inc. provides cordless data capture solutions, including barcode scanners and RFID/NFC devices, for mobile applications globally - Socket Mobile, Inc. is a leading provider of data capture solutions for workforce mobilization, with its common stock trading on NASDAQ under 'SCKT'[14](index=14&type=chunk)[15](index=15&type=chunk) - Primary products include Bluetooth-connected cordless barcode scanners and RFID/NFC devices, compatible with major mobile OS, supported by a Software Developer Kit (CaptureSDK)[17](index=17&type=chunk)[24](index=24&type=chunk) - Product families encompass SocketScan, DuraScan (IP54-rated), DuraSled, and Contactless RFID/NFC reader/writers, with SocketCam C820 software scanner introduced in Q1 2022[18](index=18&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - Manufacturing is subcontracted globally, with final assembly in Fremont, California, and worldwide distribution through a two-tier network including major distributors[25](index=25&type=chunk)[37](index=37&type=chunk) - The company's mission is to provide innovative, cost-effective data capture tools for mobile businesses, guided by core values of Accountability, Customer Focus, Excellence, Integrity, and Mutual Respect[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company differentiates in a competitive market through its CaptureSDK, software, and strong brand reputation for durable, dependable, and ergonomic products compatible with major mobile OS[39](index=39&type=chunk)[41](index=41&type=chunk) - As of December 31, 2022, the company had **56 employees** across sales, engineering, finance, and operations[49](index=49&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from global economic conditions, operational dependencies, intense competition, intellectual property challenges, and external geopolitical factors - Key risks include global economic deterioration, uncertainty of sustained profitability, and potential challenges in securing additional capital on favorable terms[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Operational risks stem from dependence on application provider success, reliance on limited component suppliers, and the need for continuous new product development in a rapidly evolving market[57](index=57&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - Significant risks include intense competitive pressures, challenges in forecasting product demand, and reliance on major distributors, with Ingram Micro® and BlueStar accounting for approximately **50% of worldwide sales in 2022**[67](index=67&type=chunk)[68](index=68&type=chunk)[71](index=71&type=chunk) - Intellectual property protection is critical, facing risks of insufficient safeguards, potential infringement claims, and the necessity to redesign products due to evolving industry standards[77](index=77&type=chunk)[80](index=80&type=chunk)[84](index=84&type=chunk) - External risks encompass economic, political, and regulatory challenges in export sales, potential disruptions from natural disasters or health epidemics, and geopolitical instability[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - No unresolved staff comments[104](index=104&type=chunk) [Properties](index=18&type=section&id=Item%202.%20Properties) In February 2022, the company leased a **35,913 square-foot** facility in Fremont, California, for office and manufacturing operations - In February 2022, the company entered an operating lease for a **35,913 square-foot** facility in Fremont, California, for office and manufacturing[105](index=105&type=chunk) - The lease commenced May 1, 2022, for **87 months** at a monthly rent of **$50,278**, with **3% annual increases**[105](index=105&type=chunk) [Legal Proceedings](index=18&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is not currently a party to any material legal proceedings[106](index=106&type=chunk) [Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[107](index=107&type=chunk) [PART II](index=19&type=section&id=PART%20II) This section details the company's market for common equity, selected financial data, management's discussion and analysis, and financial statements [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'SCKT', with **7.12 million shares outstanding** as of March 24, 2023, and no dividends paid - The company's common stock trades on NASDAQ under 'SCKT', with **7,123,999 shares outstanding** as of March 24, 2023[5](index=5&type=chunk)[110](index=110&type=chunk) - The company has not paid dividends on its common stock, intending to retain future earnings for business reinvestment[110](index=110&type=chunk) Shares Repurchased in 2022 | Periods | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 11, 2022 to May 4, 2022 | 90,913 | $4.16 | | July 1, 2022 to August 10, 2022 | 90,029 | $3.06 | | October 1, 2022 to December 30, 2022 | 85,349 | $2.06 | | **Total** | **266,291** | **$829,563 (Approximate Dollar Value)** | - The common stock experienced significant volatility in 2022, with prices ranging from a high of **$35.00** to a low of **$0.76**[102](index=102&type=chunk) [Selected Financial Data](index=21&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial data, including income statement and balance sheet figures, from 2018 to 2022 Selected Income Statement Data (Years Ended December 31, in thousands) | Indicator | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $16,454 | $19,253 | $15,700 | $23,199 | $21,238 | | Gross profit | $8,456 | $10,101 | $8,335 | $12,436 | $10,366 | | Operating expenses | $9,042 | $9,494 | $12,686 | $9,739 | $10,812 | | Net income (loss) before income taxes | $(715) | $506 | $(3,330) | $2,564 | $(621) | | Income tax benefit (expense) | $144 | $(219) | $51 | $1,903 | $708 | | Net income (loss) | $(571) | $287 | $(3,279) | $4,466 | $87 | | Basic EPS | $(0.09) | $0.05 | $(0.51) | $0.58 | $0.01 | | Diluted EPS | $(0.09) | $0.05 | $(0.51) | $0.48 | $0.01 | Selected Balance Sheet Data (As of December 31, in thousands) | Indicator | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $1,085 | $959 | $2,122 | $6,096 | $3,624 | | Total assets | $19,148 | $20,009 | $15,609 | $25,575 | $28,598 | | Total stockholders' equity | $12,956 | $13,785 | $11,173 | $20,046 | $20,322 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operational results for 2022 and 2021, covering liquidity, capital resources, and detailed performance metrics - Net cash used in operating activities was **$0.11 million** in 2022, a decrease from **$2.1 million** provided in 2021, while net cash used in financing activities was **$1.2 million** in 2022, down from **$2.5 million** provided in 2021, mainly due to stock repurchases and loan repayments[118](index=118&type=chunk)[119](index=119&type=chunk) - The company maintains a **$2.5 million** revolving credit facility maturing January 31, 2025, with no outstanding drawings as of December 31, 2022[120](index=120&type=chunk) Revenue and Gross Margin Performance (2021 vs 2022) | Metric | 2022 | 2021 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenue | $21.2 million | $23.2 million | -8% | | SocketScan Revenue (% of total) | 80% | N/A | -4% | | DuraScan Revenue (% of total) | 14% | N/A | -22% | | Gross Margin | 48.8% | 53.6% | -4.8 percentage points | Operating Expenses (2021 vs 2022, in thousands) | Expense Category | 2022 | 2021 | Change (YoY) | | :--- | :--- | :--- | :--- | | Research and Development | $4,362 | $3,965 | +10% | | Sales and Marketing | $3,638 | $3,003 | +21% | | General and Administrative | $2,812 | $2,772 | +1% | | Total Operating Expenses | $10,812 | $9,739 | +11% | - The company recorded an income tax benefit of **$708,000** in 2022 (effective tax rate of **114.1%**) versus **$1.9 million** in 2021 (effective tax rate of **-45.6%**), influenced by R&D capitalization and amortization[148](index=148&type=chunk) Contractual Obligations as of December 31, 2022 (in thousands) | Contractual Obligations | Total | 1 year | 2 to 3 years | 4 to 5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Unconditional purchase obligations | $8,674 | $8,409 | $265 | $— | $— | | Operating leases | $4,415 | $621 | $1,290 | $1,365 | $1,139 | | **Total** | **$13,089** | **$9,030** | **$1,555** | **$1,365** | **$1,139** | [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate risk from variable-rate loans and foreign currency risk, mainly from Euro and British pound transactions - Market risk exposure to interest rate changes primarily stems from variable-rate bank term loans and credit lines, based on the lender's prime rate plus **0.75%**[158](index=158&type=chunk) - Foreign currency risk originates from Euro and British pound transactions; a **10% adverse exchange rate change** would have decreased Q4 2022 net income by approximately **$24,000** if unhedged[159](index=159&type=chunk) - In Q4 2022, the net adjustment for foreign currency effects on cash, collections, payables, and derivatives resulted in a net gain of **$15,400**[159](index=159&type=chunk) [Financial Statements and Supplementary Data](index=32&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited financial statements for 2022 and 2021, including balance sheets, statements of operations, cash flows, and comprehensive notes - Sadler, Gibb & Associates, LLC issued an unqualified opinion on the financial statements for the years ended December 31, 2022 and 2021[162](index=162&type=chunk) - A critical audit matter was the Deferred Tax Asset Valuation Allowance Assessment, due to significant management estimates and assumptions in the undiscounted cash flow analysis[168](index=168&type=chunk)[169](index=169&type=chunk) Balance Sheet Highlights (As of December 31) | Asset/Liability | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $3,623,469 | $6,095,886 | | Total current assets | $12,768,536 | $14,380,788 | | Total assets | $28,597,988 | $25,575,101 | | Total current liabilities | $4,972,429 | $5,389,357 | | Total liabilities | $8,276,231 | $5,528,638 | | Total stockholders' equity | $20,321,757 | $20,046,463 | Statements of Operations Highlights (Years Ended December 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Revenues | $21,237,768 | $23,199,061 | | Gross profit | $10,366,456 | $12,436,444 | | Total operating expenses | $10,812,475 | $9,739,063 | | Operating income (loss) | $(446,019) | $2,697,381 | | Net income | $86,931 | $4,466,257 | | Basic Net income per share | $0.01 | $0.58 | | Fully diluted Net income per share | $0.01 | $0.48 | Statements of Cash Flows Highlights (Years Ended December 31) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(111,415) | $2,144,270 | | Net cash used in investing activities | $(1,183,188) | $(691,771) | | Net cash (used in) provided by financing activities | $(1,177,814) | $2,521,624 | | Net increase (decrease) in cash and cash equivalents | $(2,472,417) | $3,974,123 | | Cash and cash equivalents at end of year | $3,623,469 | $6,095,886 | - In 2021, the company acquired a perpetual, non-exclusive license to SpringCard SAS's Contactless Technology Package, issuing **184,332 shares** of common stock and a **10-year warrant**, with intangible assets amortized over **fifteen years**[236](index=236&type=chunk)[237](index=237&type=chunk) - Secured Subordinated Convertible Notes Payable, totaling **$1.53 million** (including **$1.35 million** from related parties), were extended to mature on August 30, 2024, accruing **10% interest** and convertible at **$1.46 per share**[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - As of December 31, 2022, the company held U.S. Federal net operating loss carryforwards of **$22.5 million** and R&D credit carryforwards of **$0.5 million**, with a full valuation allowance against R&D tax credits[281](index=281&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) - Subsequent events include the grant of **402,370 restricted stocks**, exercise of **29,195 stock options**, repurchase of **89,197 common shares**, and an ICS Deposit Placement Agreement for unlimited FDIC insurance[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - Not applicable[294](index=294&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[295](index=295&type=chunk) - Management assessed and concluded that the company's internal control over financial reporting was effective as of December 31, 2022, using the COSO framework[297](index=297&type=chunk)[298](index=298&type=chunk) - The company is exempt from auditor attestation on internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act as a non-accelerated filer[299](index=299&type=chunk) - No material changes occurred in internal control over financial reporting during the last fiscal quarter[301](index=301&type=chunk) [Other Information](index=57&type=section&id=Item%209B.%20Other%20Information) This section reports no other information - None[302](index=302&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=57&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This disclosure is not applicable to the company - Not applicable[303](index=303&type=chunk) [PART III](index=58&type=section&id=PART%20III) This section incorporates information on directors, executive compensation, security ownership, related transactions, and accounting fees by reference [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders on June 7, 2023[306](index=306&type=chunk) [Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders on June 7, 2023[307](index=307&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=58&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and related stockholder matters are incorporated by reference, with **1.29 million securities** for outstanding options - Information is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders on June 7, 2023[308](index=308&type=chunk) Equity Compensation Plan Information (as of December 31, 2022) | | Number of securities to be issued upon exercise of outstanding options | Weighted average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 1,296,722 | $2.93 | 453,798 | [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders on June 7, 2023[311](index=311&type=chunk) [Principal Accounting Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the company's Proxy Statement for the Annual Meeting of Stockholders on June 7, 2023[312](index=312&type=chunk) [PART IV](index=59&type=section&id=PART%20IV) This section includes exhibits, financial statement schedules, and required signatures for the report [Exhibits, Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and a comprehensive index of exhibits filed or incorporated by reference - This section includes the Independent Registered Public Accounting Firm's Report, Balance Sheets, Statements of Income, Stockholders' Equity, Cash Flows, and Notes to Financial Statements[314](index=314&type=chunk) - All financial statement schedules are omitted as they are not applicable, not required, or the information is already included in the financial statements or notes[315](index=315&type=chunk) - A detailed Index to Exhibits lists all exhibits filed or incorporated by reference within this report[316](index=316&type=chunk)[317](index=317&type=chunk) [SIGNATURES](index=60&type=section&id=SIGNATURES) This section contains the required signatures of the company's officers and directors, affirming the report's filing on March 30, 2023 - The report is signed by the President and CEO, Chairman of the Board, VP of Finance and Administration and CFO, and other Directors, all dated March 30, 2023[320](index=320&type=chunk)[321](index=321&type=chunk) [Index to Exhibits](index=61&type=section&id=Index%20to%20Exhibits) This index provides a comprehensive list of all exhibits accompanying the Form 10-K, detailing each exhibit's number, description, and original filing reference - The index lists various exhibits, including corporate documents, financing agreements, equity incentive plans, and certifications[324](index=324&type=chunk)[325](index=325&type=chunk) - Each exhibit entry specifies its original filing for traceability of corporate and financial documents[327](index=327&type=chunk)

Socket Mobile, Inc. (NASDAQ:SCKT) Q4 2022 Earnings Conference Call February 22, 2023 5:00 PM ET Company Participants Kevin Mills - President and CEO Lynn Zhao - CFO David Holmes - Chief Business Officer Conference Call Participants Chris Sakai - Singular Research Operator Welcome to the Fourth Quarter and Full Year 2022 Financial Results for Socket Mobile. My name is Darrell, and I will be your operator for today's call. Before we begin, I'd like to remind everyone that this conference call may contain forw ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited statements show a significant revenue decline, a shift to net loss, and negative operating cash flow for the period [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) Revenues decreased 41% year-over-year in Q3 2022, leading to a net loss of $874,034 versus a prior-year profit Condensed Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $3,727,871 | $6,319,044 | $16,066,855 | $17,084,913 | | **Gross Profit** | $1,654,859 | $3,422,721 | $7,818,203 | $9,251,907 | | **Operating Income (Loss)** | ($947,427) | $953,773 | ($294,439) | $2,010,118 | | **Net Income (Loss)** | ($874,034) | $643,626 | ($428,142) | $3,473,635 | | **Diluted EPS** | ($0.11) | $0.07 | ($0.05) | $0.37 | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) Total assets and liabilities increased due to a new operating lease, while stockholders' equity slightly decreased Condensed Balance Sheet Data (Unaudited) | Metric | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $12,981,853 | $14,380,788 | | **Total Assets** | $28,197,023 | $25,575,101 | | **Total Current Liabilities** | $5,080,317 | $5,389,357 | | **Total Liabilities** | $8,501,268 | $5,528,638 | | **Total Stockholders' Equity** | $19,695,755 | $20,046,463 | [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity declined to $19.70 million, driven by a net loss and treasury stock repurchases - Key activities impacting stockholders' equity in the nine months ended September 30, 2022 include a net loss, **stock-based compensation of $735,378**, and the **repurchase of treasury shares for $653,684**[15](index=15&type=chunk)[20](index=20&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash from operations turned negative due to net loss and inventory growth, resulting in a $1.86 million cash decrease Cash Flow Summary (Nine Months Ended September 30) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | ($30,182) | $1,183,013 | | **Net cash used in investing activities** | ($910,603) | ($562,910) | | **Net cash (used in) provided by financing activities** | ($917,759) | $2,610,872 | | **Net (decrease) increase in cash** | ($1,858,544) | $3,230,975 | [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail a new headquarters lease, $9.5 million in purchase commitments, and high customer concentration - The company commenced a new lease for its corporate headquarters in Fremont, CA on May 1, 2022, with the lease term expiring on July 31, 2029, resulting in a **right-of-use asset of $3,674,173** as of September 30, 2022[72](index=72&type=chunk)[74](index=74&type=chunk) - As of September 30, 2022, the company had **non-cancelable purchase commitments for inventory amounting to approximately $9,494,000**[79](index=79&type=chunk) - A share repurchase program was authorized in January 2022, and the company repurchased **180,942 shares for $653,684** during the nine months ended September 30, 2022[60](index=60&type=chunk) Major Customer Revenue Concentration (Nine Months Ended Sep 30) | Customer | 2022 | 2021 | | :--- | :--- | :--- | | Ingram Micro Inc. | 27% | 29% | | BlueStar, Inc. | 22% | 25% | | ScanSource, Inc. | 13% | 11% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q3 revenue decline, lower gross margins, and the impact on liquidity and operating results - Q3 2022 revenue **decreased 41% YoY to $3.7 million**, attributed to weaker end-user demand and a reduction of inventory in the distribution channel[94](index=94&type=chunk) - Gross profit margins for Q3 2022 **decreased to 44.4% from 54.2%** in the prior year, driven by higher component and freight costs and lower production volumes[96](index=96&type=chunk) - Net cash used in operating activities was **approximately $30,000** in the first nine months of 2022, a sharp contrast to the **$1.18 million provided** in the same period of 2021, primarily due to the net loss and increased inventory levels[105](index=105&type=chunk)[106](index=106&type=chunk) Year-over-Year Operating Expense Changes (Three Months Ended Sep 30) | Expense Category | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Research and Development | $1,096,000 | $1,014,000 | +8.1% | | Sales and Marketing | $865,000 | $788,000 | +9.7% | | General and Administrative | $641,000 | $667,000 | -3.9% | [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from interest rate fluctuations and foreign currency exchange rates - Interest rate risk is tied to the company's bank term loan and credit line facilities, which have **variable interest rates** based on the lender's prime rate[114](index=114&type=chunk) - Foreign currency risk stems from sales denominated in Euros and British pounds, with a **net adjustment of approximately $37,000** in Q3 2022[115](index=115&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - Management concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by the report[117](index=117&type=chunk) - **No changes in internal control over financial reporting occurred** during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[118](index=118&type=chunk) [Part II. Other Information](index=30&type=section&id=Part%20II.%20Other%20Information) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces macroeconomic headwinds, supplier and distributor dependency, and intense market competition - The ongoing COVID-19 pandemic and deteriorating global economic conditions pose risks of **reduced product demand, manufacturing disruptions, and supply chain failures**[122](index=122&type=chunk)[124](index=124&type=chunk) - The company is dependent on a limited number of distributors; Ingram Micro and BlueStar represented approximately **49% of worldwide sales** in the first nine months of 2022[145](index=145&type=chunk) - Several component parts are sourced from a **limited number of suppliers**, creating a risk of shortages or delays that could materially affect financial results[137](index=137&type=chunk) - The market is characterized by **rapidly changing technology and short product life cycles**, requiring successful and timely introduction of new products to compete effectively[138](index=138&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 180,942 shares, with approximately $1.15 million remaining under the buyback program Share Repurchase Activity (Nine Months Ended Sep 30, 2022) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Apr 11 - May 4, 2022 | 90,913 | $4.16 | | Jul 1 - Aug 10, 2022 | 90,029 | $3.06 | | **Total** | **180,942** | **N/A** | [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including required CEO and CFO certifications under the Sarbanes-Oxley Act - The report includes required certifications from the CEO and CFO pursuant to the **Sarbanes-Oxley Act of 2002**[170](index=170&type=chunk)

Socket Mobile, Inc. (NASDAQ:SCKT) Q3 2022 Earnings Conference Call October 27, 2022 5:00 PM ET Corporate Participants Kevin Mills - President and Chief Executive Officer Lynn Zhao - Chief Financial Officer David Holmes - Chief Business Officer Conference Call Participants Chris Sakai - Singular Research John Harrington - Wells Fargo Operator Welcome to the Socket Mobile 2022 Third Quarter Financial Results Conference Call. My name is Darrell, and I will be your operator for today's call. Before we begin, I' ...