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NOTE 5 — Bank Financing Arrangements

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

NOTE 5 — Bank Financing Arrangements

NOTE 5 — Bank Financing Arrangements

The Company initially entered into a Business Financing Agreement with Western Alliance Bank (the “Bank”), an Arizona corporation, on February 27, 2014, and this agreement has been amended and extended through the years.

Seventh Financing Agreement

On January 8, 2020, the Company entered into the Seventh Business Financing Modification Agreement with the Bank which extended the maturity date of the Company’s revolving line of credit to January 31, 2022.

Eighth Financing Agreement

On August 28, 2020, the Company entered into the Eighth Business Financing Modification Agreement and Consent with the Bank. The Bank consented to the issuance of subordinated debt in the amount less than $2,000,000, at an annual interest rate of less than 10%, such debt maturing in no sooner than 3 years.

SOCKET MOBILE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2021

Amended and Restated Business Financing Agreement

On January 29, 2021, the Company entered into an Amended and Restated Business Financing Agreement (the “Financing Agreement”) with the Bank. The Financing Agreement increased the Company’s Domestic Line of Credit to $3.0 million, including a $2.0 million revolving facility and a $1.0 million nonformula loan. The $1.0 million nonformula loan was enrolled in the CalCap Collateral Support Program (the “CalCap Loan”) and advanced on February 16, 2021. The Company will make a principal reduction payment of $125,000, plus all accrued but unpaid interest on the 30th day of each of April, July, October and January. The Financing Agreement also extended the maturity date of both the Domestic Line of Credit and EXIM Line of Credit to January 31, 2023.

Amounts outstanding under the CalCap Loan as of September 30, 2021 are as follows:


		September 30, 2021
Current portion of CalCap Loan		$	500,000
Long-term portion of CalCap Loan			250,000
CalCap Loan		$	750,000

Interest expense on the CalCap Loan for the three and nine months ended September 30, 2021 was $10,104 and $27,656, respectively. Accrued interest payable related to the amounts outstanding under the CalCap Loan at September 30, 2021 was $2,083.

During the nine months ended September 30, 2020, total repayment of the term loan, initiated in March 2018 (the “Term Loan”), was $333,333. The total amount borrowed under the domestic and international lines of credit was $5,630,000 and the total repayment was $7,042.449.

Interest expense on the Term Loan for the three and nine months ended September 30, 2020 was $229 and $6,152, respectively. Interest expense on the amounts drawn under the Company’s bank credit lines during the three and nine months ended September 30, 2020 was $1,077 and $20,461, respectively. Accrued interest payable related to the amounts outstanding under the bank credit facilities at September 30, 2020 was $373.