{"url_path":"/sec/sckt/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 Quantitative and Qualitative Disclosures About Market Risk","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/944075/0000944075-26-000040-index.html","accession_number":"0000944075-26-000040","cik":"0000944075","ticker":"SCKT","issuer_name":"SOCKET MOBILE, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/944075/0000944075-26-000040-index.html","primary_entity_key":"0000944075","primary_entity_name":"SOCKET MOBILE, INC."},"word_count":255,"has_tables":true,"body_markdown":"Item 3. Quantitative and Qualitative Disclosures About Market Risk\n\n \n\n**Interest Rate Risk**\n\n** **\n\nOur exposure to market risk from changes in interest\nrates primarily relates to our bank credit line facilities. Borrowings under these facilities, which provide up to $1.0 million in capacity,\nbear interest at a variable rate based on the lender’s prime rate (subject to a minimum of 4.25%) plus 0.75%. Accordingly, any increase\nin interest rates could result in higher interest expense on outstanding balances under both the term loan and credit line facilities.\n\n \n\nForeign Currency Risk\n\n \n\nA substantial majority of our revenue, expense and\npurchasing activities are transacted in U.S. dollars. However, we require our European distributors to purchase our products in Euros\nand we pay the expenses of our European employees in Euros and British pounds. We may enter into selected future purchase commitments\nwith foreign suppliers that may be paid in the local currency of the supplier. Based on a sensitivity analysis of our net foreign currency\ndenominated assets at the end of the quarter ended March 31, 2026, an adverse change of 10% in exchange rates would have resulted in an\nincrease in our net loss for the first quarter of 2026 of approximately $38,800. For the first quarter of 2026, the actual net adjustment\nfor the effects of changes in foreign currency on cash balances, collections, payables, and derivatives used to hedge foreign currency\nrisks, was a net loss of approximately $7,800. We will continue to monitor and assess our risks related to foreign currency fluctuations.\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n 19 \n\n[Index](#Index)"}