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NOTE 6 — Secured Subordinated Convertible Notes Payable
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
NOTE 6 — Secured Subordinated Convertible Notes Payable

NOTE 6 — Secured Subordinated Convertible Notes Payable

 

The Company has issued multiple series of secured subordinated convertible notes (collectively, the “Notes”) between 2020 and 2026. 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

 

             
Issuance Year  Principal Issued  Principal Outstanding*  Maturity Date  Conversion Price
2020   $1,400,000   $1,400,000   August 30, 2027  $1.46 
2023   $1,600,000   $1,600,000   May 26, 2028  $1.34 
2024   $1,000,000   $1,000,000   August 21, 2027  $0.9515 
2025   $1,500,000   $1,350,000   May 30, 2028  $1.07 
2026   $500,000   $500,000   March 27, 2029  $0.90 
*Principal outstanding as of June 30, 2026. 

 

 

SOCKET MOBILE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

June 30, 2026

 

The amortization of debt discounts was $3,159 and $6,804 for the three and six months ended June 30, 2026, respectively, compared to $3,645 and $7,291 for the same periods in 2025.

 

Total interest expense recognized related to the convertible notes were $151,892 and $292,579 for the three and six months ended June 30, 2026, respectively, compared to $116,112 and $218,388 for the same periods in 2025.