SOCKET MOBILE, INC.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
SCKT$0.28+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000944075-25-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000944075-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 48 previous paragraphs and 48 current paragraphs.
38 unchanged; 5 reworded; 5 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Total revenues for the second quarter of 2025 were approximately $4.04 million, reflecting a 20% decline compared to $5.08 million in the same period last year. The decrease reflects continued softness in customer demand. In addition, concerns over potential tariff disruptions caused a significant slowdown in distributor inventory purchases, leading to reduced bookings in Q2 and impacting our gross shipments.
Current report
Our gross profit margin on sales reached 49.9% in Q2 2025, slightly lower from 50.9% in the same period last year. The margin held steady despite lower revenue, supported by ongoing cost control efforts and the use of lower-cost components in several high-volume SKUs.
Current report
In the second quarter of 2025, engineering expenses were approximately $1,101,000, reflecting a 11% decrease compared to approximately $1,232,000 in Q2 2024. The reduction was primarily driven by cost-cutting initiatives, particularly lower employee-related costs.
Current report
In the second quarter of 2025, the Company incurred approximately $569,000 in general and administrative expenses, reflecting a 22% decrease from approximately $733,000 in the same quarter of 2024. The reduction was primarily driven by cost-cutting initiatives, including lower employee-related costs and reduced spending on outside professional services.
Current report
Net cash provided by financing activities was $1,500,000 in the first half of 2025, compared to $24,000 in the same period of 2024. The 2025 amount primarily reflects proceeds from a secured subordinated note financing completed during the quarter, while 2024 financing activities consisted solely of proceeds from stock option exercises.
Removed paragraphs (5)
Previous report
Total revenues for the first quarter of 2025 were approximately $4.0 million, reflecting a 20% decline compared to $5.0 million in the same period last year. This decrease is primarily attributed to weaker demand in both domestic and international markets. In Q1, we experienced reduced purchasing activity from key customers, which negatively impacted sales volumes. While we remain confident in our long-term growth prospects, these short-term fluctuations are largely due to less robust demand for our products during this quarter.
Previous report
Our gross profit margin on sales reached 50.4% in Q1 2025, slightly up from 50.3% in the same period last year. Despite the lower revenue in this quarter, we have successfully maintained our gross margin, demonstrating effective cost control and operational efficiency.
Previous report
In the first quarter of 2025, engineering expenses were approximately $1,132,000, reflecting a 6% decrease compared to approximately $1,208,000 in Q1 2024. This reduction is primarily due to a decrease in headcount, including retirements and other personnel changes, as well as the reduction in equity expense resulting from the cancellation of old grants.
Previous report
In the first quarter of 2025, the Company incurred approximately $653,000 in general and administrative expenses, reflecting a 13% decrease from approximately $751,000 in the same quarter of 2024. This reduction was primarily due to a decrease in equity expenses resulting from the cancellation of old grants.
Previous report
Net cash provided by financing activities for the three months ended March 31, 2025 was zero, compared to net cash provided by financing activities of $23,750 in the comparable period a year ago. Financing activities in 2024 consisted of proceeds of employee stock options exercised.
Reworded paragraphs (5)
Previous wording
Sales and marketing expenses in the first quarter of 2025 totaled approximately $1,106,000, reflecting a 7% increase compared to approximately $1,031,000 in the same quarter last year. This increase was primarily driven by higher headcount.
Current wording
Sales and marketing expenses in the second quarter of 2025 totaled approximately $1,025,000, reflecting an 11% decrease compared to approximately $1,154,000 in the same quarter last year. The reduction was primarily driven by cost-cutting initiatives, particularly lower employee-related costs.
Previous wording
Interest expense and other, net of interest income and other, was approximately $100,000 in the first quarter of 2025 compared to $72,000 in the first quarter of 2024. Interest expenses in the first quarter of both 2025 and 2024 were related to interest on secured subordinated convertible notes payable (see “NOTE 6 — Secured Subordinated Convertible Notes Payable” for more information). There were no outstanding balances of credit lines during the first three months of 2025 or 2024.
Current wording
Interest expense and other, net of interest income and other, was approximately $115,000 in the second quarter of 2025 compared to $72,000 in the second quarter of 2024. Interest expenses in the first quarter of both 2025 and 2024 were related to interest on secured subordinated convertible notes payable (see “NOTE 6 — Secured Subordinated Convertible Notes Payable” for more information). There were no outstanding balances of credit lines during the three and six months ended June 30, 2025 and 2024.
Previous wording
No income tax expense was recorded for the first quarter of 2025 or 2024. Our deferred tax asset, primarily representing future income tax savings from the application of net operating loss carry forwards, was valued at $10,663,419 on March 31, 2025.
Current wording
In the three and six months ended June 30, 2025, we did not record any income tax expense. As of June 30, 2025, our deferred tax asset, primarily representing future income tax savings from the application of net operating loss carry forwards, was valued at $10,663,419. In the three and six months ended June 30, 2024, we did not record any income tax expense. As of June 30, 2024, our deferred tax asset, primarily representing future income tax savings from the application of net operating loss carry forwards, was valued at $10,112,419.
Previous wording
As reflected in our Condensed Statements of Cash Flows, we used net cash of $732,970 from operating activities in the first quarter of 2025, compared to net cash used in operating activities of $94,890 in the same period last year. To calculate our net cash used in operating activities, we adjusted our net loss of $994,140 and $557,415 in the first quarter of 2025 and 2024, respectively, by adding back non-cash expenses such as stock-based compensation expense, depreciation and amortization, and deferred tax expenses and benefits, which amounted to $540,117 and $647,252 in the first quarters of 2025 and 2024, respectively. In addition, we analyze changes in operating assets and liabilities as a source or use of cash. In the first quarter of 2025, changes in operating assets and liabilities resulted in a net cash outflow of $278,947, primarily driven by increases in accounts receivable due to customer payment delays and higher inventory levels resulting from slower sales. This cash outflow was partially offset by an increase in accounts payable, reflecting our cash management efforts. In the first quarter of 2024, changes in operating assets and liabilities used a net cash outflow of $184,727, mainly due to increases in accounts receivable resulting from higher shipments.
Current wording
As reflected in our Statements of Cash Flows, net cash used in operating activities was approximately $1,197,000 in the first half of 2025, compared to net cash used in operating activities amounted to approximately $638,000 in the first half of 2024. We calculate net cash used in operating activities by adjusting our net loss (approximately a net loss of approximately $1,786,000 and a net loss of $1,165,000 in the first half of 2025 and 2024, respectively) with the items that did not require the use of cash. Those items include stock-based compensation expense, depreciation and amortization of equipment and intangible assets, amortization of debt discount and operating lease ROU assets, and deferred tax expenses (benefits). These amounts totaled approximately $1,246,000 and $1,314,000 in the first half of 2025 and 2024, respectively. In addition, we report increases in assets and reductions in liabilities as uses of cash and decreases in assets and increases in liabilities as sources of cash, together referred to as changes in operating assets and liabilities. In the first half of 2025, changes in operating assets and liabilities resulted in net cash used in operating activities of approximately $657,000. This was primarily due to operating lease payment, higher accounts receivable driven by increased shipment levels at the end of the quarter, and an increase in prepaid expenses. In the first half of 2024, changes in operating assets and liabilities resulted in net cash used in operating activities of approximately $787,000 which were primarily from increased accounts receivable levels driven by higher shipment levels at the end of the quarter and operating lease payments. The uses of cash were partially offset by reduction in inventory and increase in accounts payable.
Previous wording
In the first quarters of 2025 and 2024, we invested $52,304 and $56,442, respectively, in leasehold improvements, computer software development costs, and manufacturing tooling costs. In the first quarter of 2024, these investing activities were offset by proceeds from a tenant improvements allowance amounting to $72,800.
Current wording
In the first half of 2025 and 2024, we invested approximately $189,000 and $168,000, respectively, in leasehold improvements, computer software development costs, and manufacturing tooling costs. In Q1 2024, these investing activities were offset by proceeds from a tenant improvements allowance amounting to $72,800.