Item 1.01 Entry Into a Material Definitive Agreement

On January 8, 2020, Socket Mobile ("we" or the "Company") entered into a Seventh Business Financing Modification Agreement (the "Financing Agreement") with Western Alliance Bank, an Arizona corporation ("Lender"), which, among other things, extends the maturity date of the Company's revolving line of credit to January 31, 2022. The original Financing Agreement was dated February 27, 2014 with subsequent modifications dated February 26, 2016, March 20, 2017, January 31, 2018, June 4, 2018, July 30, 2018 and June 14, 2019.

The Financing Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, grant liens, make investments, incur indebtedness, merge or consolidate, dispose of assets, make acquisitions, pay dividends or make distributions, repurchase stock, enter into transactions with affiliates and enter into restrictive agreements, in each case subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with an asset coverage ratio of 1.25 to 1, measured monthly.

The Financing Agreement also contains customary events of default including, among others, payment defaults, breaches of covenants, bankruptcy and insolvency events, cross defaults with certain material indebtedness, judgment defaults, and breaches of representations and warranties. Upon an event of default, Lender may declare all or a portion of our outstanding obligations payable to be immediately due and payable and exercise other rights and remedies provided for under the Financing Agreement.

The foregoing description of the Financing Agreement is qualified in its entirety by reference to the full text of the Seventh Business Financing Modification Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 hereof is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits





(d) Exhibits.



Exhibit No.    Description

10.1           Seventh Business Financing Modification Agreement dated as of
               January 8, 2020

© Edgar Online, source Glimpses