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FREMONT, Calif. - Socket Mobile, Inc. (NASDAQ: SCKT), a provider of data capture and delivery solutions, has completed a secured subordinated convertible note financing for $1.5 million. The financing is aimed at bolstering the company’s working capital balances. According to InvestingPro data, the company has been quickly burning through cash, with negative free cash flow of $1.94 million in the last twelve months and an overall weak financial health score.
The three-year notes, set to mature on May 30, 2028, carry a 10% interest rate with quarterly cash payments. Starting May 30, 2026, the note holders can demand repayment of the principal and accrued interest. These notes are backed by company assets and are subordinate to the current debts with senior lender Western Alliance Bank. The company’s current debt-to-equity ratio stands at 0.39, with a concerning Altman Z-Score of -1.85, suggesting potential financial distress. Discover more detailed financial metrics and insights with InvestingPro, which offers comprehensive analysis of over 1,400 US stocks.
Note holders have the option to convert their notes into common stock shares at a conversion price of $1.07 per share, which was the closing price on the Nasdaq Capital Market on May 30, 2025, and also the price at the close of this financing.
The financing saw participation from several Socket Mobile insiders, including Chairman Charlie Bass, CEO Kevin Mills, CFO Lynn Zhao, Board Director Bill Parnell, Controller Jason Wu, CTO Eric Glaenzer, and Enrico Mills, Kevin Mills’ adult son.
Further information regarding this financing will be disclosed in a Form 8-K filing by the company with the SEC.
Socket Mobile specializes in data capture solutions, primarily through barcode-enabled mobile applications used in various industries such as retail, field service, and transportation. The company is headquartered in Fremont, Calif., with a developer network that incorporates its data capture technology into mobile applications.
This financial move is based on a press release statement and is intended to strengthen Socket Mobile’s working capital, indicating a strategic step in the company’s financial management.
In other recent news, Socket Mobile Inc. reported a 20% year-over-year decline in revenue for the first quarter of 2025, totaling $4 million. The company’s diluted loss per share was $0.13, aligning with analysts’ forecasts. Despite the revenue drop, Socket Mobile is focusing on the industrial scanning and handheld computing markets with new product launches, such as the ExtremeScan IXG and IXS series for iOS. Operating expenses were reduced to $2.9 million, while the gross margin slightly decreased to 50.4% from 51% in the previous year. The company expects to achieve positive EBITDA in the second quarter of 2025 and aims for profitable operations later in the year. Socket Mobile is working to mitigate tariff impacts through strategic collaborations with customers, particularly in the U.S. industrial market. The company has also renewed its $3 million domestic bank credit line, which will mature in April 2026. These developments come as Socket Mobile navigates challenges in both domestic and international markets.
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