SiliconBeat

Socket Mobile, which reported June 30 to its lender, Silicon Valley Bank, that it was out of compliance for a second month in a row with covenants of its loan, announced today the second amendment to the agreement since it was first drawn up Dec. 31.

The most recent changes included an agreement by the bank to waive the non-compliance portion of the agreement for April and May, and possibly June, that would have otherwise found the company to be in default.

The previous “quick ratio target” covenant — calculated by dividing cash and cash equivalents plus eligible accounts receivable by current liabilities minus deferred revenue — was replaced by Socket Mobile’s agreement to maintain “at all times” a minimum balance with the bank of at least $1 million in unrestricted cash and cash equivalents, up from a previous minimum of $250,000.

Under the agreement, Socket is permitted to borrow up to $2.5 million based on the amount of “qualified receivables” from customers. The interest rate is the greater Silicon Valley Bank’s prime rate plus 2 percent, or 6 percent.

In December. Socket Mobile let go 12 percent of its staff in order to “align its cost structure with current economic conditions in light of slowing business spending due to the current economic downturn.”