SOCKET MOBILE, INC. 8-K

What Happened
Socket Mobile, Inc. announced it completed a $500,000 secured subordinated convertible note financing on March 27, 2026 to boost working capital. The notes carry a 3‑year term maturing March 27, 2029, bear 10% annual interest payable quarterly in cash, and are secured by company assets. The principal is convertible at the holder’s option into common stock at $0.90 per share. Chairman Charlie Bass participated in the financing; a special committee of disinterested directors approved the transaction.

Key Details

• Amount raised: $500,000 (secured subordinated convertible notes).
• Term & maturity: 3 years; maturity date March 27, 2029.
• Interest: 10% per year, cash interest paid quarterly.
• Conversion: Holder may convert principal into common stock at $0.90/share (≈555,556 shares if full $500K converted).
• Repayment option: Holder may demand repayment of principal plus accrued interest any time after March 27, 2027.
• Security & priority: Notes are secured by the company’s assets and are subordinated to debts owed to Western Alliance Bank (senior lender).
• Default: Failure to pay principal or any interest payment (after a 5‑day delinquency) constitutes an event of default.
• Registration: Company will use reasonable efforts to file a registration statement for resale of conversion shares by June 30, 2026.
• Related party: Chairman Charlie Bass participated; transaction was approved by a special committee of disinterested directors.

Why It Matters
This financing provides near-term working capital for Socket Mobile while increasing secured, subordinated debt on the balance sheet and adding a potential source of equity dilution through conversion at $0.90 per share. Investors should note the 10% cash interest cost, the subordinate claim of these notes relative to the company’s senior lender, and the planned registration statement (target June 30, 2026) that would allow resale of any shares issued on conversion.