PR Newswire | Nov 17, 2020 06:31AM EST

11/17 05:30 CST

Socket Mobile Takes Goodwill Impairment Charge in Q3 2020 NEWARK, Calif., Nov. 17, 2020

NEWARK, Calif., Nov. 17, 2020 /PRNewswire/ -- Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator of data capture and delivery solutions for enhanced productivity, announced today that it has completed the annual goodwill impairment test required by generally accepted accounting principles. As a result of the lower stock price from the beginning of 2020 through the annual goodwill measurement date of September 30th, the Company concluded that an adjustment to its fair value was required.

The non-cash impairment charge totaled $4.4 million and was recorded in the Company's Q3 2020 results. The impairment charge does not affect the Company's cash position, cash flow from operating activities, bank debt covenants, and does not have any impact on future operations.

The revised financial tables reflecting the goodwill impairment can be found at the end of this press release. For detailed information, please refer to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 at https://www.sec.gov/Archives/edgar/data/944075/000094407520000048/q3-2020.htm

About Socket Mobile, Inc.Socket Mobile is a leading provider of data capture and delivery solutions for enhanced productivity in workforce mobilization. Socket Mobile's revenue is primarily driven by the deployment of third-party barcode enabled mobile applications that integrate Socket Mobile's cordless barcode scanners and contactless reader/writers. Mobile Applications servicing the specialty retailer, field service, transportation, and manufacturing markets are the primary revenue drivers. Socket Mobile has a network of thousands of developers who use its software developer tools to add sophisticated data capture to their mobile applications. Socket Mobile is headquartered in Newark, Calif. and can be reached at +1-510-933-3000 or www.socketmobile.com. Follow Socket Mobile on Facebook, Twitter @socketmobile and on our sockettalk blog.

Socket Mobile Investor Contact:Lynn ZhaoChief Financial Officer510-933-3016lynn@socketmobile.com

Socket is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective owners.(c) 2020, Socket Mobile, Inc. All rights reserved.

-- Revised financial tables to follow --

Socket Mobile, Inc. Summary Statements of Operations (Unaudited) (Amounts in Thousands except per share amounts and percentages)



Three months ended SeptNine months ended Sept 30, 30,

2020 2019 2020 2019

$ 11,044 $ 14,668Revenue $ 4,109 $ 4,980

Cost of revenue 1,835 2,344 5,186 7,003

Gross margin 2,274 2,636 5,858 7,665

Gross margin percent 55.3% 52.9% 53.0% 52.3%

Research & development 681 1,015 2,421 2,906

Sales & marketing 658 785 2,148 2,312

General & administrative 486 707 1,741 2,053

Goodwill impairment charges 4,427 -- 4,427 --

Total operating expenses 6,252 2,507 10,737 7,271

Operating income (loss) (3,978) 129 (4,879) 394

Other income -- -- 70 --

Interest income (expense), net(24) (25) (51) (83)

Income tax (expense) benefit (1) (10) (1) (85)

Net income (loss) $ $ 94 $ (4,861)$ (4,003)* * 226

Earnings (loss) per share: Basic $ (0.62)* $ 0.02 $ (0.76)* $ 0.04 Diluted $ (0.62)* $ $ (0.76)* $ 0.04 0.01

Weighted average shares outstanding: 6,038 5,999 6,020 5,980 Basic 6,038 6,317 6,020 6,237 Diluted

*Included goodwill impairment adjustment of $4.43 million recorded as ofSeptember 30, 2020

Socket Mobile, Inc. Condensed Summary Balance Sheets (Amounts in Thousands)



September 30,December 31, 2020 2019**

Cash $ 1,775 $ 959

Accounts receivable, net 2,359 2,837

Inventories, net 3,362 3,179

Deferred cost on shipments to distributors 179 234

Other current assets 317 312

Property and equipment, net 835 864

Goodwill -- 4,427

Deferred tax assets 5,507 5,507

Operating leases right-of-use assets 704 937

Other long-term assets 170 202

Total assets $ 15,208* $ 19,458

Accounts payable and accrued liabilities $ 2,417 $ 2,651

Bank line of credit -- 1,413

Notes payable 1,059 333

Subordinated convertible notes payable, net of 168 -- discount

Subordinated convertible notes payable, net of 1,265 -- discount-related party

Deferred revenue on shipments to distributors 557 611

55 Deferred service revenue 74

Operating lease liabilities 1,134 855

Other liabilities -- 8

Total liabilities 6,376 6,224

61,073 Common stock 61,532

Accumulated deficit (52,700)* (47,839)

Total equity 8,832* 13,234

Total liabilities and equity $ 15,208* $ 19,458

*Included goodwill impairment adjustment of $4.43 million recorded as ofSeptember 30, 2020

**Derived from audited financial statements.

View original content to download multimedia: http://www.prnewswire.com/news-releases/socket-mobile-takes-goodwill-impairment-charge-in-q3-2020-301174223.html

SOURCE Socket Mobile, Inc.