NOTE 4 — Secured Subordinated Convertible Notes Payable |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 4 — Secured Subordinated Convertible Notes Payable | NOTE 4 — Secured Subordinated Convertible Notes Payable
The Company has issued multiple series of secured subordinated convertible notes (collectively, the “Notes”) between 2020 and 2025. The Notes are secured by substantially all of the Company’s assets and are subordinated to the Company’s obligations under its senior credit facility with Western Alliance Bank.
All Notes bear interest at 10% per annum, payable quarterly in cash. Each series is convertible at the holder’s option into shares of the Company’s common stock at fixed conversion prices established at issuance. Beginning one year after issuance, holders may require the Company to repay principal and accrued interest. Failure to pay principal or interest when due (subject to a five-day grace period) constitutes an event of default.
Proceeds from the issuances were used for general working capital purposes.
In connection with certain issuances involving related parties, the transactions were reviewed and approved in accordance with the Company’s related-party transaction policies. The Company filed and obtained effectiveness of registration statements under the Securities Act of 1933, as amended, covering the resale of shares issuable upon conversion of the applicable Notes.
Summary of Secured Subordinated Convertible Notes
Total amortization of debt discount related to all convertible notes was $14,583 and $8,761 for the year ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the remaining debt discount balance was $16,993.
SOCKET MOBILE, INC. NOTES TO FINANCIAL STATEMENTS
Total interest expenses related to the convertible note were $502,939 and $336,491 for the years ended December 31, 2025 and 2024, respectively. |
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