SOCKET MOBILE, INC.
For the period ended Sep 30, 2025. Filed Nov 7, 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.
Sep 30, 2025 · Filed Nov 7, 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 2025-06-30; filed 2025-08-14.
0000944075-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0000944075-25-000083
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 51 current paragraphs.
37 unchanged; 4 reworded; 9 added; 7 removed; 0 previous and 1 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 (9)
Current report
Total revenues for the third quarter of 2025 were approximately $3.1 million, representing a 20% decline compared to $3.9 million in the same period last year. For the nine-month period, revenue decreased by 20.2% to approximately $11.1 million from $13.9 million in the prior year. The decrease primarily reflects slower distributor bookings and reduced channel inventory during the quarter. In addition, several deployment deals were delayed as customers remained cautious with spending and focused on cash preservation
Current report
Our gross profit margin on sales reached 47.7% in Q3 2025, slightly lower from 49% in the same period last year. For the nine-month period, the margin was 49.5%, down from 50.1% in 2024. The decline primarily reflects the impact of fixed overhead costs spread over a lower revenue base.
Current report
Research and development expense in the three and nine months ended September 30, 2025, were approximately $1.0 million and $3.3 million, respectively, representing decreases of 12% and 10% compared to $1.2 million and $3.6 million in the corresponding periods a year ago. The reduction in expenses primarily reflects management-implemented cost-saving measures which resulted in lower employee costs. We anticipate a slight increase in the general and administrative expenses for the remainder of the year.
Current report
Sales and marketing expenses in the three and nine months ended September 30, 2025, were approximately $0.9 million and $3.1 million, respectively, representing decreases of 17% and 7% compared to $1.1 million and $3.3 million in the corresponding periods a year ago. The reduction was primarily driven by cost-cutting initiatives, particularly lower employee-related costs. We anticipate a slight increase in the general and administrative expenses for the remainder of the year.
Current report
General and administrative expenses in the three and nine months ended September 30, 2025 were approximately $0.58 million and $1.8 million, respectively, representing a decrease of 10% and 15% compared to expenses of approximately $0.64 million and $2.1 million in the corresponding periods a year ago. The reduction was primarily driven by cost-cutting initiatives, including lower employee-related costs and reduced spending on outside professional services. We anticipate a slight decrease in the general and administrative expenses for the remainder of the year.
Current report
In the first nine months of 2025, changes in operating assets and liabilities resulted in net cash used in operating activities of approximately $513,000, primarily due to operating lease payments, a reduction in accrued payroll expenses, an increase in prepaid expenses, and a decrease in accounts payable. These uses of cash were partially offset by cash released from lower inventory balance as of September 30, 2025.
Current report
In the first nine months of 2024, changes in operating assets and liabilities resulted in net cash used in operating activities of approximately $120,000, primarily due to operating lease payments. This was partially offset by a release of cash from a reduced accounts receivable balance as of September 30, resulting from lower shipment levels at the end of the quarter.
Current report
Net cash provided by financing activities was approximately $1.5 million in the first nine months of 2025, compared to net cash provided of approximately $1.0 million in the comparable period a year ago. In 2025, financing activities consisted of the completion of secured subordinated note financing of $1,500,000. In contrast, financing activities in 2024 consisted primarily of the completion of secured subordinated note financing of approximately $989,000, and the proceeds of employee stock options in the amount of $23,750.
Removed paragraphs (7)
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous report
We have determined that utilization of existing net operating losses against future taxable income is not limited by Section 382 of the Internal Revenue Code. Future ownership changes, however, may limit our ability to fully utilize the existing net operating loss carryforwards against any future taxable income. We will continue to monitor the likelihood to realize the value of deferred tax assets in the future.
Previous 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.
Reworded paragraphs (4)
Previous 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.
Current wording
Interest expense, net of interest income, in the three and nine months ended September 30, 2025 was approximately $140,000 and $355,000, respectively, compared to approximately $84,000 and $229,000, respectively, in the same periods one year ago. Interest expense was related to interest on the secured subordinated convertible notes payable (see “NOTE 6 — Secured Subordinated Convertible Notes Payable” of the notes to consolidated financial statements for more information).
Previous 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.
Current wording
We did not record any income tax expense for the three and nine months ended September 30, 2025 and 2024. As of September 30, 2025 and December 31, 2024, our deferred tax assets, primarily representing future income tax savings from the application of net operating loss carry forwards, were valued at $10,663,419 and $10,663,419, respectively.
Previous 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.
Current wording
As reflected in our Statements of Cash Flows, net cash used in operating activities was approximately $1,600,000 in the first nine months of 2025, compared to net cash used in operating activities of approximately $434,000 in the first nine months of 2024. We calculate net cash used in operating activities by adjusting our net loss (approximately a net loss of approximately $3.0 million and $2.3 million in the first nine months of 2025 and 2024, respectively) with 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 benefits. These amounts totaled approximately $1.9 million and $2.0 million in the first nine months 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.
Previous 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.
Current wording
In the first nine months of 2025 and 2024, we invested approximately $376,000 and $564,000, respectively, in manufacturing tooling, firmware development, website development, and leasehold improvements. In 2024, these investing activities were offset by proceeds from a tenant improvements allowance amounting to $72,800.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
There were no outstanding balances of credit lines during the three and nine months ended September 30, 2025 and 2024.