Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-13810 | |
Entity Registrant Name | SOCKET MOBILE, INC. | |
Entity Central Index Key | 0000944075 | |
Entity Tax Identification Number | 94-3155066 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 40675 Encyclopedia Circle | |
Entity Address, City or Town | Fremont | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94538 | |
City Area Code | (510) | |
Local Phone Number | 933-3000 | |
Title of 12(b) Security | Common stock, $0.001 Par Value per Share | |
Trading Symbol | SCKT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,323,121 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 3,205,893 | $ 3,727,871 | $ 12,635,228 | $ 16,066,855 |
Cost of revenues | 1,787,696 | 2,073,012 | 6,492,981 | 8,248,652 |
Gross profit | 1,418,197 | 1,654,859 | 6,142,247 | 7,818,203 |
Operating expenses: | ||||
Research and development | 1,206,452 | 1,096,400 | 3,643,501 | 3,271,122 |
Sales and marketing | 1,002,206 | 864,702 | 3,013,577 | 2,729,016 |
General and administrative | 608,094 | 641,184 | 2,130,691 | 2,112,504 |
Total operating expenses | 2,816,752 | 2,602,286 | 8,787,769 | 8,112,642 |
Operating loss | (1,398,555) | (947,427) | (2,645,522) | (294,439) |
Interest expense, net | (76,440) | (43,092) | (169,709) | (133,703) |
Net loss before income taxes | (1,474,995) | (990,519) | (2,815,231) | (428,142) |
Income tax benefit (expense) | 150,000 | 116,485 | (16,000) | 0 |
Net loss | $ (1,324,995) | $ (874,034) | $ (2,831,231) | $ (428,142) |
Net loss per share: | ||||
Basic | $ (0.16) | $ (0.11) | $ (0.34) | $ (0.05) |
Diluted | $ (0.16) | $ (0.11) | $ (0.34) | $ (0.05) |
Weighted average shares outstanding: | ||||
Basic | 7,319,782 | 7,153,210 | 7,197,371 | 7,202,239 |
Diluted | 7,319,782 | 7,153,210 | 7,197,371 | 7,202,239 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,093,555 | $ 3,623,469 |
Accounts receivable, net | 1,559,679 | 2,659,861 |
Inventories, net | 5,529,143 | 5,601,691 |
Prepaid expenses and other current assets | 617,280 | 617,188 |
Deferred cost on shipments to distributors | 246,700 | 266,327 |
Total current assets | 11,046,357 | 12,768,536 |
Property and equipment: | ||
Machinery and office equipment | 2,415,339 | 1,533,087 |
Computer equipment, software and website development | 3,302,095 | 2,715,121 |
5,717,434 | 4,248,208 | |
Accumulated depreciation | (3,159,811) | (2,590,999) |
Property and equipment, net | 2,557,623 | 1,657,209 |
Intangible assets, net | 1,591,193 | 1,693,927 |
Other long-term assets | 250,715 | 250,239 |
Deferred tax assets | 8,652,419 | 8,668,419 |
Operating lease right-of-use asset | 3,208,084 | 3,559,658 |
Total assets | 27,306,391 | 28,597,988 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,268,399 | 1,665,028 |
Accrued payroll and related expenses | 642,322 | 742,541 |
Deferred revenue on shipments to distributors | 595,975 | 594,793 |
Short term portion of deferred service revenue | 20,334 | 22,599 |
Note Payable – current portion | 125,000 | |
Subordinated convertible notes payable, net of discount | 150,000 | 147,409 |
Subordinated convertible notes payable, net of discount-related party | 2,834,402 | 1,230,530 |
Operating lease – current portion | 474,030 | 444,529 |
Total current liabilities | 5,985,462 | 4,972,429 |
Long-term portion of deferred service revenue | 12,757 | 11,767 |
Operating lease - long-term portion | 2,932,748 | 3,292,035 |
Total liabilities | 8,930,967 | 8,276,231 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common Stock, Value, Issued | 7,323 | 7,090 |
Additional paid-in capital | 68,250,740 | 67,157,650 |
Treasury stock | (1,037,988) | (829,563) |
Accumulated deficit | (48,844,651) | (46,013,420) |
Total stockholders’ equity | 18,375,424 | 20,321,757 |
Total liabilities and stockholders’ equity | $ 27,306,391 | $ 28,597,988 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |
Common Stock, Shares Authorized | 20,000,000 | |
Common Stock, Shares, Issued | 7,682,443 | 7,355,967 |
Common Stock, Shares, Outstanding | 7,323,193 | 7,089,676 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 7,184 | $ 66,139,630 | $ (46,100,351) | $ 20,046,463 | |
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 7,183,874 | ||||
Vesting of restricted stocks | $ 91 | (91) | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 91,134 | ||||
Restricted stock retired for tax withholding | $ (26) | (115,189) | (115,215) | ||
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (26,157) | ||||
Exercise of stock option | $ 24 | 39,508 | 39,532 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 24,200 | ||||
Stock-based compensation | 223,446 | 223,446 | |||
Net loss | 341,933 | 341,933 | |||
Ending balance, value at Mar. 31, 2022 | $ 7,273 | 66,287,304 | (45,758,418) | 20,536,159 | |
Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 7,273,051 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 7,184 | 66,139,630 | (46,100,351) | 20,046,463 | |
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 7,183,874 | ||||
Stock-based compensation | 735,378 | ||||
Net loss | (428,142) | ||||
Ending balance, value at Sep. 30, 2022 | $ 7,137 | 66,870,795 | $ (653,684) | (46,528,493) | 19,695,755 |
Shares, Outstanding, Ending Balance at Sep. 30, 2022 | 7,137,112 | 180,942 | |||
Beginning balance, value at Mar. 31, 2022 | $ 7,273 | 66,287,304 | (45,758,418) | 20,536,159 | |
Shares, Outstanding, Beginning Balance at Mar. 31, 2022 | 7,273,051 | ||||
Vesting of restricted stocks | $ 1 | (1) | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 1,200 | ||||
Restricted stock retired for tax withholding | 30 | $ 30 | |||
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (387) | ||||
Exercise of stock option | $ 19 | 41,950 | 41,969 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 19,390 | ||||
Stock-based compensation | 251,534 | 251,534 | |||
Treasury shares purchased | $ 91 | (91) | $ 377,950 | 377,950 | |
Stock Repurchased During Period, Shares | (90,913) | ||||
Treasury Stock, Shares, Acquired | 90,913 | ||||
Net loss | 103,959 | 103,959 | |||
Treasury shares purchased | (91) | 91 | (377,950) | (377,950) | |
Ending balance, value at Jun. 30, 2022 | $ 7,202 | 66,580,908 | $ (377,950) | (45,654,459) | 20,555,701 |
Shares, Outstanding, Ending Balance at Jun. 30, 2022 | 7,202,341 | 90,913 | |||
Exercise of stock option | $ 25 | 29,399 | 29,424 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 24,800 | ||||
Stock-based compensation | 260,398 | 260,398 | |||
Treasury shares purchased | $ 90 | (90) | $ 275,734 | 275,734 | |
Stock Repurchased During Period, Shares | (90,029) | ||||
Treasury Stock, Shares, Acquired | 90,029 | ||||
Net loss | (874,034) | (874,034) | |||
Treasury shares purchased | (90) | 90 | (275,734) | (275,734) | |
Ending balance, value at Sep. 30, 2022 | $ 7,137 | 66,870,795 | $ (653,684) | (46,528,493) | 19,695,755 |
Shares, Outstanding, Ending Balance at Sep. 30, 2022 | 7,137,112 | 180,942 | |||
Beginning balance, value at Dec. 31, 2022 | $ 7,090 | 67,157,650 | $ (829,563) | $ (46,013,420) | 20,321,757 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 7,089,676 | 266,291 | |||
Vesting of restricted stocks | $ 148 | (148) | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 147,972 | ||||
Restricted stock retired for tax withholding | $ (54) | $ 54 | |||
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (53,647) | ||||
Exercise of stock option | $ 39 | $ 33,666 | 33,705 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 38,909 | ||||
Stock-based compensation | 295,833 | 295,833 | |||
Treasury shares purchased | $ (93) | 93 | $ (208,425) | (208,425) | |
Stock Repurchased During Period, Shares | (92,959) | ||||
Treasury Stock, Shares, Acquired | 92,959 | ||||
Net loss | (993,420) | (993,420) | |||
Treasury shares purchased | 93 | (93) | 208,425 | 208,425 | |
Ending balance, value at Mar. 31, 2023 | $ 7,130 | 67,487,148 | $ (1,037,988) | (47,006,840) | 19,449,450 |
Shares, Outstanding, Ending Balance at Mar. 31, 2023 | 7,129,951 | 359,250 | |||
Beginning balance, value at Dec. 31, 2022 | $ 7,090 | 67,157,650 | $ (829,563) | $ (46,013,420) | 20,321,757 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 7,089,676 | 266,291 | |||
Stock-based compensation | 880,508 | ||||
Net loss | (2,831,231) | ||||
Ending balance, value at Sep. 30, 2023 | $ 7,323 | 68,250,740 | $ (1,037,988) | $ (48,844,651) | 18,375,424 |
Shares, Outstanding, Ending Balance at Sep. 30, 2023 | 7,323,193 | 359,250 | |||
Beginning balance, value at Mar. 31, 2023 | $ 7,130 | 67,487,148 | $ (1,037,988) | (47,006,840) | 19,449,450 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2023 | 7,129,951 | 359,250 | |||
Vesting of restricted stocks | $ 93 | (93) | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 93,180 | ||||
Restricted stock retired for tax withholding | |||||
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (598) | ||||
Exercise of stock option | $ 85 | 156,525 | 156,610 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 85,000 | ||||
Stock-based compensation | 306,416 | 306,416 | |||
Net loss | (512,816) | (512,816) | |||
Ending balance, value at Jun. 30, 2023 | $ 7,308 | 67,949,996 | $ (1,037,988) | (47,519,656) | 19,399,660 |
Shares, Outstanding, Ending Balance at Jun. 30, 2023 | 7,307,533 | 359,250 | |||
Vesting of restricted stocks | $ 1 | (1) | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 1,035 | ||||
Restricted stock retired for tax withholding | $ (1) | 1 | |||
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (375) | ||||
Exercise of stock option | $ 15 | 22,485 | 22,500 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 15,000 | ||||
Stock-based compensation | 278,259 | 278,259 | |||
Net loss | (1,324,995) | (1,324,995) | |||
Ending balance, value at Sep. 30, 2023 | $ 7,323 | $ 68,250,740 | $ (1,037,988) | $ (48,844,651) | $ 18,375,424 |
Shares, Outstanding, Ending Balance at Sep. 30, 2023 | 7,323,193 | 359,250 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating activities | ||
Net loss | $ (2,831,231) | $ (428,142) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock-based compensation | 880,508 | 735,378 |
Depreciation and amortization | 671,547 | 575,328 |
Amortization of debt discount | 24,011 | 24,818 |
Amortization of operating lease ROU asset | 351,574 | 399,177 |
Deferred tax expenses (benefits) | 16,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,100,182 | 764,047 |
Inventories | 72,548 | (995,403) |
Prepaid expenses and other current assets | (92) | (181,024) |
Other assets | (476) | (222,248) |
Accounts payable and accrued expenses | (396,629) | (451,911) |
Accrued payroll and related expenses | (100,219) | (46,731) |
Net deferred revenue on shipments to distributors | 20,809 | 69,708 |
Deferred service revenue | (1,275) | 6,127 |
Net change in operating lease liability | (329,786) | (279,306) |
Net cash used in operating activities | (522,529) | (30,182) |
Investing activities | ||
Purchases of PP&E including software and website development | (1,469,227) | (910,603) |
Net cash used in investing activities | (1,469,227) | (910,603) |
Financing activities | ||
Common stocks repurchased | (208,425) | (653,684) |
Proceeds from subordinated convertible notes payable, net of discount - related party | 1,582,452 | |
Repayments of note payable | (125,000) | (375,000) |
Proceeds from stock options exercised | 212,815 | 110,925 |
Net cash (used in) provided by financing activities | 1,461,842 | (917,759) |
Net decrease in cash and cash equivalents | (529,914) | (1,858,544) |
Cash and cash equivalents at beginning of period | 3,623,469 | 6,095,886 |
Cash and cash equivalents at end of period | 3,093,555 | 4,237,342 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 161,893 | 122,197 |
Supplemental disclosure of non-cash activities | ||
Payroll tax liability for retired restricted stock | 115,215 | |
Property acquired under operating lease | $ 3,862,511 |
NOTE 1 _ Basis of Presentation
NOTE 1 — Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 1 — Basis of Presentation | NOTE 1 Basis of Presentation The accompanying unaudited condensed financial statements of Socket Mobile, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
NOTE 2 _ Summary of Significant
NOTE 2 — Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 2 — Summary of Significant Accounting Policies | NOTE 2 — Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. In response to recent volatility in the financial markets in March 2023, the Company entered into an Insured Cash Sweep (“ICS”) Deposit Placement Agreement with IntraFi Network LLC facilitated by its bank, Bridge Bank - a division of Western Alliance Bank. The ICS program provides the Company’s demand or savings products with access to unlimited FDIC insurance, which helps the Company to keep the full amount of the deposit on its balance sheet and provides additional security during times of market uncertainty. As of September 30, 2023 and December 31, 2022, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and debt approximate fair value due to the relatively short period of time to maturity. Revenue Recognition and Deferred Revenue $595,975 $246,700 $594,793 $266,327 SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 The Company also earns revenue from its SocketCare extended warranty program, which provides extended warranty and accidental breakage coverage for selected products. Customers can purchase a SocketCare warranty at the time of product purchase, which provides coverage for a three-year or a five-year term. Revenues from SocketCare services are recognized ratably over the life of the extended warranty contract. For the quarters ended September 30, 2023 and 2022, SocketCare revenue was approximately $5,100 $5,623 $33,000 Cost of Sales and Gross Margins Cost of sales primarily consists of the costs to manufacture our products, including the costs of materials, contract manufacturing, shipping costs, personnel and related expenses including stock-based compensation, equipment and facility expenses, warranty costs and inventory excess and obsolete provisions. The factors that affect our gross margins are the cost of materials, the mix of products and the extent to which we are able to efficiently utilize our manufacturing capacity. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. The Company adopted ASU 2016-02 effective January 1, 2019. On September 30, 2023, the balances of right-of-use assets and liabilities for the operating lease were $3,208,084 $3,406,778 $3,559,658 $3,736,564 Recently Issued Financial Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 |
NOTE 3 _ Intangible Assets
NOTE 3 — Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
NOTE 3 — Intangible Assets | NOTE 3 — Intangible Assets In 2021, the Company entered into the Technology Transfer Agreement with SpringCard SAS (“SpringCard”). The Unaudited Condensed Balance Sheets include the intangible assets of the acquired technology at the carrying amount, net of amortization of $1,591,193 The intangible assets are amortized on a straight-line basis over their estimated useful lives of fifteen years, beginning on April 1, 2021. As of September 30, 2023, the estimated future amortization of these intangible assets is as follows: Fiscal Year Amount 2023 (October 1, 2023 to December 31, 2023) $ 31,824 2024 127,296 2025 127,296 2026 127,296 2027 127,296 Thereafter 1,050,185 Total $ 1,591,193 |
NOTE 4 _ Inventories
NOTE 4 — Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
NOTE 4 — Inventories | NOTE 4 — Inventories Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories on September 30, 2023 and December 31, 2022 were as follows: September 30, December 31, 2023 2022 Raw materials and sub-assemblies $ 5,876,769 $ 6,193,453 Finished goods 533,317 289,181 Inventory reserves (880,943 ) (880,943 ) Inventory, net $ 5,529,143 $ 5,601,691 |
NOTE 5 _ Bank Financing Arrange
NOTE 5 — Bank Financing Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTE 5 — Bank Financing Arrangements | NOTE 5 — Bank Financing Arrangements The Company initially entered into a Business Financing Agreement with Western Alliance Bank (the “Bank”), an Arizona corporation, on February 27, 2014, and this agreement has been amended and extended through the years. Amended and Restated Business Financing Agreement On January 29, 2021 2.0 million 1.0 million SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 First Business Financing Modification Agreement On February 9, 2022, the Company entered into the First Business Financing Modification Agreement with the Bank. The Bank consented to the share repurchase program of up to $1.8 million. Future audit of accounts receivables will be performed once every twelve months. The Bank increased the credit limit for business credit cards to $250,000. Second Business Financing Modification Agreement and Waiver of Defaults On January 25, 2023, the Company entered into the Second Business Financing Modification Agreement and Waiver of Defaults with the Bank, which extended the maturity date of the Company’s revolving lines of credit to January 31, 2025. Third Business Financing Modification Agreement and Waiver of Defaults On May 26, 2023, the Company entered into the Third Business Financing Modification Agreement, Waiver of Defaults and Consent with the Bank. As part of the agreement, the bank has waived the default resulting from the Company’s failure to meet the minimum adjusted EBITDA requirement in the quarter ended March 31, 2023. Additionally, the bank has provided consent for the issuance of additional subordinated debt during May 2023. Waiver of Defaults On October 30, 2023, the Company entered into the Waiver of Default with the Bank. As part of the agreement, the bank has waived the default resulting from the Company’s failure to meet the minimum adjusted EBITDA requirement in the quarter ended September 30, 2023. The Company did not borrow any amounts on its bank credit lines as of September 30, 2023 and December 31, 2022. |
NOTE 6 _ Secured Subordinated C
NOTE 6 — Secured Subordinated Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTE 6 — Secured Subordinated Convertible Notes Payable | NOTE 6 — Secured Subordinated Convertible Notes Payable On August 31, 2020, the Company completed a secured subordinated convertible note financing of $1,530,000 $1,350,000 The funds raised are used to increase the Company’s working capital balances. The notes have a three-year term and accrue interest at 10% $1.46 $96,515 $1,530,000 SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 On November 16, 2022, the Company and the requisite holders of the outstanding notes entered into a Secured Subordinated Convertible Note Extension Agreement (the “Extension Agreement”). This agreement extended the maturity date of the remaining balance of $1.4 million from August 30, 2023, to August 30, 2024. All other terms and conditions of the notes remain unchanged and in full force and effect. On May 26, 2023, the Company completed a secured subordinated convertible note financing of $1,600,000 10% $1.34 Total interest expense recognized related to the convertible notes for the three and nine months ended September 30, 2023 was $82,594 $185,023 $43,560 $129,531 |
NOTE 7 _ Segment Information an
NOTE 7 — Segment Information and Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
NOTE 7 — Segment Information and Concentrations | NOTE 7 — Segment Information and Concentrations Segment Information The Company operates in the mobile barcode scanning and RFID/NFC data capture market. Mobile scanning typically consists of mobile devices such as smartphones or tablets, with mobile scanning or NFC peripherals for data collection, and third-party vertical applications software. The Company distributes its products in the United States and foreign countries primarily through distributors and resellers. The Company markets its products primarily through application developers whose applications are designed to work with the Company’s products. SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 Revenues by geographic areas for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues: Americas $ 2,328,696 $ 2,678,380 $ 9,307,625 $ 12,041,965 Europe 514,158 486,073 1,734,446 2,137,008 Asia Pacific 363,039 563,418 1,593,157 1,887,882 Total revenues $ 3,205,893 $ 3,727,871 $ 12,635,228 $ 16,066,855 Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations. Major Customers Customers who accounted for at least 10% of the Company’s total revenues for the three and nine months ended September 30, 2023 and 2022 were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 BlueStar, Inc. 21 % 31 % 23 % 22 % Ingram Micro Inc. 20 % 16 % 22 % 27 % ScanSource, Inc. * * * 13 % * Customer accounted for less than 10% of the Company’s total revenue Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company invests its cash in demand deposit accounts in banks and the Company has not experienced losses on the investments. The Company’s trade accounts receivables are primarily with distributors. The Company performs ongoing credit evaluations of its customers’ financial condition, but the Company generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. Customers who accounted for at least 10% of the Company’s accounts receivable balances on September 30, 2023 and December 31, 2022 were as follows: September 30, December 31, 2023 2022 BlueStar, Inc. 31 % 46 % Ingram Micro Inc. 17 % 14 % ScanSource, Inc. 15 % 11 % Concentration of Suppliers Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to increased demand, or due to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. The Company’s inability to procure certain materials could have a material adverse effect on the Company’s results. For the three months ended September 30, 2023 and 2022, top three suppliers accounted for 52% 55% 18% 31% |
NOTE 8 _ Stock-Based Compensati
NOTE 8 — Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
NOTE 8 — Stock-Based Compensation | NOTE 8 — Stock-Based Compensation The Company recognizes the compensation cost in the financial statements for all stock-based awards to employees, including grants of stock options and restricted stock, based on the fair value of the awards as of the date that the awards are issued. Compensation cost for stock-based awards is recognized on a straight-line basis over the vesting period. The fair values of stock options are generally determined using a binomial lattice valuation model which incorporates assumptions about expected volatility, risk-free interest rate, dividend yield, and expected life. There were no 49,000 Restricted stock shares are issued to employees, consultants, and board directors and are held in escrow by the Company until the shares vest. Vesting is contingent upon the recipients remaining as continuing service providers on each of the vesting dates. In the event of termination of service or employment, unvested shares revert back to the Company. Shares are registered at the time of grant, allowing share owners to vote at the annual stockholder meeting. These shares of restricted stock are granted at zero cost basis. Compensation cost for the restricted stock is recognized on a straight-line basis over the vesting period. For the nine months ended September 30, 2023 and 2022, the Company awarded 459,720 330,700 As of September 30, 2023, there were 1,002,135 Total stock-based compensation expenses for the three and nine months ended September 30, 2023 were $278,259 $880,508 $260,398 $735,378 |
NOTE 9 _ Net Income (Loss) Per
NOTE 9 — Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 9 — Net Income (Loss) Per Share | NOTE 9 — Net Income (Loss) Per Share The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net loss $ (1,324,995 ) $ (874,034 ) $ (2,831,231 ) $ (428,142 ) Net loss allocated to restricted stock award 159,196 92,388 351,024 42,794 Adjusted net loss for basic earnings per share $ (1,165,799 ) $ (781,646 ) $ (2,480,207 ) $ (385,348 ) Convertible note interest — — — — Adjusted net loss before interest for diluted earnings per share $ (1,165,799 ) $ (781,646 ) $ (2,480,207 ) $ (385,348 ) Denominator: Weighted average shares outstanding used in computing net loss per share: Basic 7,319,782 7,153,210 7,197,371 7,202,239 Effect of dilutive stock options — — — — Effect of convertible note weighted shares — — — — Diluted 7,319,782 7,153,210 7,197,371 7,202,239 Net loss per share applicable to common stockholders: Basic $ (0.16 ) $ (0.11 ) $ (0.34 ) $ (0.05 ) Diluted $ (0.16 ) $ (0.11 ) $ (0.34 ) $ (0.05 ) SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 In the three and nine months ended September 30, 2023, 1,152,384 2,152,934 50,000 In the three and nine months ended September 30, 2022, 1,334,522 50,000 |
NOTE 10 _ Income Taxes
NOTE 10 — Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
NOTE 10 — Income Taxes | NOTE 10 — Income Taxes The Company recorded income tax benefit (expense) of $150,000 ($16,000) $116,485 zero |
NOTE 11 _ Commitments and Conti
NOTE 11 — Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 11 — Commitments and Contingencies | NOTE 11 — Commitments and Contingencies Operating Lease Obligations On May 1, 2022, the Company commenced a lease agreement for approximately 35,913 square feet at 40675 Encyclopedia in Fremont, California. This serves as the location for the Company’s Corporate Headquarters, including office space and manufacturing. Base monthly rent increases annually on May 1 st SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 The Company accounted for the lease as an operating lease under ASC 842 using the bank loan interest rate in effect on May 1, 2022 at 5.0% to discount future lease payments. The lease term expires on July 31, 2029, with a one-time option to renew for a period of five years. The renewal period is not included in the measurement of the leases as the Company is not reasonably certain of exercising it. As of September 30, 2023, the balances of right-of-use assets and liabilities were approximately $ 3.21 3.41 3.56 3.74 In July 2022, the Company also signed a two-year equipment operating lease agreement and the future lease payments are discounted at the interest rate of 5.5%. The operating lease expense was allocated in cost of goods sold and operating expenses based on department headcount and amounted to $162,108 $486,325 $162,108 $484,713 Cash payments included in the measurement of the Company’s operating lease liabilities were $156,857 $465,386 $102,053 $364,842 Future minimum lease payments for the operating lease in effect as of September 30, 2023 are shown below: Annual minimum payments: Amount 2023 (October 2023 through December 31, 2023) 156,857 2024 636,861 2025 652,883 2026 672,470 2027 692,644 Thereafter 1,139,070 Total minimum payments 3,950,785 Less: Present value factor (544,007 ) Total operating lease liabilities 3,406,778 Less: Current portion of operating lease (474,030 ) Long-term portion of operating lease $ 2,932,748 Purchase Commitments As of September 30, 2023, the Company has non-cancelable purchase commitments for inventory to be used in the ordinary course of business of approximately $7,162,000 SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 Legal Matters The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. The Company is currently not a party to any material legal proceedings. |
NOTE 12 _ Subsequent Events
NOTE 12 — Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
NOTE 12 — Subsequent Events | NOTE 12 — Subsequent Events The Company evaluated subsequent events and transactions that occurred between October 1, 2023, to the date of this report, which is when the unaudited condensed financial statements were issued. No subsequent events requiring adjustment or disclosure in the unaudited condensed financial statements were identified by the Company. |
NOTE 2 _ Summary of Significa_2
NOTE 2 — Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. |
Cash Equivalents and Fair Value of Financial Instruments | Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. In response to recent volatility in the financial markets in March 2023, the Company entered into an Insured Cash Sweep (“ICS”) Deposit Placement Agreement with IntraFi Network LLC facilitated by its bank, Bridge Bank - a division of Western Alliance Bank. The ICS program provides the Company’s demand or savings products with access to unlimited FDIC insurance, which helps the Company to keep the full amount of the deposit on its balance sheet and provides additional security during times of market uncertainty. As of September 30, 2023 and December 31, 2022, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and debt approximate fair value due to the relatively short period of time to maturity. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue $595,975 $246,700 $594,793 $266,327 SOCKET MOBILE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 The Company also earns revenue from its SocketCare extended warranty program, which provides extended warranty and accidental breakage coverage for selected products. Customers can purchase a SocketCare warranty at the time of product purchase, which provides coverage for a three-year or a five-year term. Revenues from SocketCare services are recognized ratably over the life of the extended warranty contract. For the quarters ended September 30, 2023 and 2022, SocketCare revenue was approximately $5,100 $5,623 $33,000 |
Cost of Sales and Gross Margins | Cost of Sales and Gross Margins Cost of sales primarily consists of the costs to manufacture our products, including the costs of materials, contract manufacturing, shipping costs, personnel and related expenses including stock-based compensation, equipment and facility expenses, warranty costs and inventory excess and obsolete provisions. The factors that affect our gross margins are the cost of materials, the mix of products and the extent to which we are able to efficiently utilize our manufacturing capacity. |
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. The Company adopted ASU 2016-02 effective January 1, 2019. On September 30, 2023, the balances of right-of-use assets and liabilities for the operating lease were $3,208,084 $3,406,778 $3,559,658 $3,736,564 |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. |
NOTE 3 _ Intangible Assets (Tab
NOTE 3 — Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Estimated Future Amortization of Intangible Assets | Fiscal Year Amount 2023 (October 1, 2023 to December 31, 2023) $ 31,824 2024 127,296 2025 127,296 2026 127,296 2027 127,296 Thereafter 1,050,185 Total $ 1,591,193 |
NOTE 4 _ Inventories (Tables)
NOTE 4 — Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | September 30, December 31, 2023 2022 Raw materials and sub-assemblies $ 5,876,769 $ 6,193,453 Finished goods 533,317 289,181 Inventory reserves (880,943 ) (880,943 ) Inventory, net $ 5,529,143 $ 5,601,691 |
NOTE 7 _ Segment Information _2
NOTE 7 — Segment Information and Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Revenue By Geographic Areas | Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues: Americas $ 2,328,696 $ 2,678,380 $ 9,307,625 $ 12,041,965 Europe 514,158 486,073 1,734,446 2,137,008 Asia Pacific 363,039 563,418 1,593,157 1,887,882 Total revenues $ 3,205,893 $ 3,727,871 $ 12,635,228 $ 16,066,855 |
Customers who accounted for at least 10% of the Company's total revenues | Three Months Ended Nine Months Ended 2023 2022 2023 2022 BlueStar, Inc. 21 % 31 % 23 % 22 % Ingram Micro Inc. 20 % 16 % 22 % 27 % ScanSource, Inc. * * * 13 % |
Customers who accounted for at least 10% of the Company's accounts receivable balances | September 30, December 31, 2023 2022 BlueStar, Inc. 31 % 46 % Ingram Micro Inc. 17 % 14 % ScanSource, Inc. 15 % 11 % |
NOTE 9 _ Net Income (Loss) Pe_2
NOTE 9 — Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Reconciliation of basic shares to diluted shares and the computation of basic and diluted net income per share | Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net loss $ (1,324,995 ) $ (874,034 ) $ (2,831,231 ) $ (428,142 ) Net loss allocated to restricted stock award 159,196 92,388 351,024 42,794 Adjusted net loss for basic earnings per share $ (1,165,799 ) $ (781,646 ) $ (2,480,207 ) $ (385,348 ) Convertible note interest — — — — Adjusted net loss before interest for diluted earnings per share $ (1,165,799 ) $ (781,646 ) $ (2,480,207 ) $ (385,348 ) Denominator: Weighted average shares outstanding used in computing net loss per share: Basic 7,319,782 7,153,210 7,197,371 7,202,239 Effect of dilutive stock options — — — — Effect of convertible note weighted shares — — — — Diluted 7,319,782 7,153,210 7,197,371 7,202,239 Net loss per share applicable to common stockholders: Basic $ (0.16 ) $ (0.11 ) $ (0.34 ) $ (0.05 ) Diluted $ (0.16 ) $ (0.11 ) $ (0.34 ) $ (0.05 ) |
NOTE 11 _ Commitments and Con_2
NOTE 11 — Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments under the operating lease in effect as of September 30, 2022 | Annual minimum payments: Amount 2023 (October 2023 through December 31, 2023) 156,857 2024 636,861 2025 652,883 2026 672,470 2027 692,644 Thereafter 1,139,070 Total minimum payments 3,950,785 Less: Present value factor (544,007 ) Total operating lease liabilities 3,406,778 Less: Current portion of operating lease (474,030 ) Long-term portion of operating lease $ 2,932,748 |
NOTE 2 _ Summary of Significa_3
NOTE 2 — Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||||
Deferred Revenue, Current | $ 595,975 | $ 595,975 | $ 594,793 | ||
Deferred Costs and Other Assets | 246,700 | 246,700 | 266,327 | ||
Revenues | 3,205,893 | $ 3,727,871 | 12,635,228 | $ 16,066,855 | |
Deferred Revenue | 33,000 | 33,000 | |||
Operating Lease, Right-of-Use Asset | 3,208,084 | 3,208,084 | 3,559,658 | ||
Operating Lease, Liability | 3,406,778 | $ 3,406,778 | $ 3,736,564 | ||
Service [Member] | |||||
Product Information [Line Items] | |||||
Revenues | $ 5,100 | $ 5,623 |
Estimated Future Amortization o
Estimated Future Amortization of Intangible Assets (Details) | Sep. 30, 2023 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
2023 (October 1, 2023 to December 31, 2023) | $ 31,824 |
2024 | 127,296 |
2025 | 127,296 |
2026 | 127,296 |
2027 | 127,296 |
Thereafter | 1,050,185 |
Total | $ 1,591,193 |
NOTE 3 _ Intangible Assets (Det
NOTE 3 — Intangible Assets (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Business Combination and Asset Acquisition [Abstract] | ||
Intangible Assets, Net (Excluding Goodwill) | $ 1,591,193 | $ 1,693,927 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and sub-assemblies | $ 5,876,769 | $ 6,193,453 |
Finished goods | 533,317 | 289,181 |
Inventory reserves | (880,943) | (880,943) |
Inventory, net | $ 5,529,143 | $ 5,601,691 |
NOTE 5 _ Bank Financing Arran_2
NOTE 5 — Bank Financing Arrangements (Details Narrative) - USD ($) $ in Millions | 36 Months Ended | |
Dec. 31, 2023 | Jan. 29, 2021 | |
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Initiation Date | Jan. 29, 2021 | |
Domestic Revolving Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 |
NOTE 6 _ Secured Subordinated_2
NOTE 6 — Secured Subordinated Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 36 Months Ended | |||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | May 26, 2026 | Aug. 30, 2023 | May 26, 2023 | Aug. 31, 2020 | Aug. 28, 2020 | |
Debt Instrument [Line Items] | ||||||||||
[custom:NoteIssued-0] | $ 1,600,000 | $ 1,530,000 | ||||||||
Subordinated Borrowing, Interest Rate | 10% | 10% | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 1.34 | $ 1.46 | ||||||||
Payments of Debt Issuance Costs | $ 96,515 | |||||||||
[custom:InterestOnConvertibleDebt] | $ 82,594 | $ 43,560 | $ 185,023 | $ 129,531 | ||||||
Related Party [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
[custom:NoteIssued-0] | $ 1,350,000 |
Revenue By Geographic Areas (De
Revenue By Geographic Areas (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Asia Pacific | $ 3,205,893 | $ 3,727,871 | $ 12,635,228 | $ 16,066,855 |
Total revenues | 3,205,893 | 3,727,871 | 12,635,228 | 16,066,855 |
Americas [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Asia Pacific | 2,328,696 | 2,678,380 | 9,307,625 | 12,041,965 |
Total revenues | 2,328,696 | 2,678,380 | 9,307,625 | 12,041,965 |
EMEA [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Asia Pacific | 514,158 | 486,073 | 1,734,446 | 2,137,008 |
Total revenues | 514,158 | 486,073 | 1,734,446 | 2,137,008 |
Asia Pacific [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Asia Pacific | 363,039 | 563,418 | 1,593,157 | 1,887,882 |
Total revenues | $ 363,039 | $ 563,418 | $ 1,593,157 | $ 1,887,882 |
Customers who accounted for at
Customers who accounted for at least 10% of the Company's total revenues (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||||
Blue Star [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
ScanSource, Inc. | 21 | 31 | 23 | 22 | |||
Ingram Micro [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
ScanSource, Inc. | 20 | 16 | 22 | 27 | |||
Scan Source [Member] | |||||||
Revenue, Major Customer [Line Items] | |||||||
ScanSource, Inc. | 0 | [1] | 0 | [1] | 0 | [1] | 13 |
[1]Customer accounted for less than 10% of the Company’s total revenue |
Customers who accounted for a_2
Customers who accounted for at least 10% of the Company's accounts receivable balances (Details) | Dec. 31, 2023 | Sep. 30, 2023 |
Blue Star [Member] | ||
Revenue, Major Customer [Line Items] | ||
ScanSource, Inc. | 46 | 31 |
Ingram Micro [Member] | ||
Revenue, Major Customer [Line Items] | ||
ScanSource, Inc. | 14 | 17 |
Scan Source [Member] | ||
Revenue, Major Customer [Line Items] | ||
ScanSource, Inc. | 11 | 15 |
NOTE 7 _ Segment Information _3
NOTE 7 — Segment Information and Concentrations (Details Narrative) - Supplier Concentration Risk [Member] | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue, Major Customer [Line Items] | |||
Percentage of inventory purchases from top three suppliers | 52% | 55% | |
Accounts payable balances with top two suppliers | 18% | 31% |
NOTE 8 _ Stock-Based Compensa_2
NOTE 8 — Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 0 | 49,000 | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 459,720 | 330,700 | ||||||
Common Stock, Other Shares, Outstanding | 1,002,135 | 1,002,135 | ||||||
Share-Based Payment Arrangement, Noncash Expense | $ 278,259 | $ 306,416 | $ 295,833 | $ 260,398 | $ 251,534 | $ 223,446 | $ 880,508 | $ 735,378 |
Reconciliation of basic shares
Reconciliation of basic shares to diluted shares and the computation of basic and diluted net income per share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||||||
Net loss | $ (1,324,995) | $ (512,816) | $ (993,420) | $ (874,034) | $ 103,959 | $ 341,933 | $ (2,831,231) | $ (428,142) |
Net loss allocated to restricted stock award | 159,196 | 92,388 | 351,024 | 42,794 | ||||
Adjusted net loss before interest for diluted earnings per share | (1,165,799) | (781,646) | (2,480,207) | (385,348) | ||||
Convertible note interest | ||||||||
Denominator: Weighted average shares outstanding used in computing net loss per share: | ||||||||
Basic | 7,319,782 | 7,153,210 | 7,197,371 | 7,202,239 | ||||
Effect of dilutive stock options | ||||||||
Effect of convertible note weighted shares | ||||||||
Diluted | 7,319,782 | 7,153,210 | 7,197,371 | 7,202,239 | ||||
Net loss per share applicable to common stockholders: | ||||||||
Basic | $ (0.16) | $ (0.11) | $ (0.34) | $ (0.05) | ||||
Diluted | $ (0.16) | $ (0.11) | $ (0.34) | $ (0.05) |
NOTE 9 _ Net Income (Loss) Pe_3
NOTE 9 — Net Income (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,152,384 | 1,334,522 | 2,152,934 | 1,334,522 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 50,000 | 50,000 |
NOTE 10 _ Income Taxes (Details
NOTE 10 — Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income Tax Expense (Benefit) | $ 150,000 | $ 116,485 | $ (16,000) | $ 0 |
Future minimum lease payments u
Future minimum lease payments under the operating lease in effect as of September 30, 2022 (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 (October 2023 through December 31, 2023) | $ 156,857 | |
2024 | 636,861 | |
2025 | 652,883 | |
2026 | 672,470 | |
2027 | 692,644 | |
Thereafter | 1,139,070 | |
Total minimum payments | 3,950,785 | |
Less: Present value factor | (544,007) | |
Total operating lease liabilities | 3,406,778 | $ 3,736,564 |
Less: Current portion of operating lease | $ (474,030) | $ (444,529) |
NOTE 11 _ Commitments and Con_3
NOTE 11 — Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating Lease, Right-of-Use Asset | $ 3,208,084 | $ 3,208,084 | $ 3,559,658 | ||
Operating Lease, Liability | 3,406,778 | 3,406,778 | $ 3,736,564 | ||
Operating Lease, Expense | 162,108 | $ 162,108 | 486,325 | $ 484,713 | |
Operating Lease, Payments | 156,857 | $ 102,053 | 465,386 | $ 364,842 | |
Purchase Obligation, to be Paid, Year One | $ 7,162,000 | $ 7,162,000 |