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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000944075-05-000014.txt : 20050223
<SEC-HEADER>0000944075-05-000014.hdr.sgml : 20050223
<ACCEPTANCE-DATETIME>20050223161410
ACCESSION NUMBER:		0000944075-05-000014
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050223
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050223
DATE AS OF CHANGE:		20050223

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOCKET COMMUNICATIONS INC
		CENTRAL INDEX KEY:			0000944075
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPUTERS [3571]
		IRS NUMBER:				943155066
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13810
		FILM NUMBER:		05634552

	BUSINESS ADDRESS:	
		STREET 1:		37400 CENTRAL COURT
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560
		BUSINESS PHONE:		5107442700

	MAIL ADDRESS:	
		STREET 1:		37400 CENTRAL COURT
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form-8k0205.htm
<TEXT>
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<HTML><HEAD><TITLE>Untitled Document</TITLE>

<BODY bgColor=#ffffff>
<DIV align=left>
<HR>

<DIV align=center><FONT face="Times New Roman, Times, serif" size=3><B><FONT
size=4>UNITED STATES<BR></FONT></B></FONT><FONT
face="Times New Roman, Times, serif" size=4><STRONG>SECURITIES AND EXCHANGE
COMMISSION</STRONG></FONT></DIV></DIV>
<P align=center><FONT face="Times New Roman, Times, serif" size=3>Washington,
D.C. 20549<BR><BR><BR><B>FORM 8-K</B><BR><BR><BR></FONT><FONT
face="Times New Roman, Times, serif" size=3><B>CURRENT REPORT</B><BR></FONT></P>
<P align=center><FONT face="Times New Roman, Times, serif" size=3>Pursuant to
Section 13 or 15(d) of </FONT><FONT face="Times New Roman, Times, serif"
size=3>the Securities Exchange Act of 1934<BR><B><BR></B></FONT></P>
<P align=center><FONT face="Times New Roman, Times, serif" size=3><B>February
  23 </B></FONT><B><FONT face="Times New Roman, Times, serif" size=3>, 2005</FONT></B><FONT face="Times New Roman, Times, serif" size=3><BR>
  Date of
Report <BR>(date of earliest event reported)</FONT></P>
<P align=center><FONT face="Times New Roman, Times, serif"
size=3><BR></FONT></P>
<P align=center><FONT face="Times New Roman, Times, serif" size=5><STRONG><FONT
size=4>SOCKET COMMUNICATIONS, INC. </FONT></STRONG></FONT><FONT
face="Times New Roman, Times, serif"><BR><FONT size=2>(Exact name of Registrant
as specified in its charter) </FONT></FONT></P>
<P>&nbsp;
<TABLE cols=3 width="100%">

  <TR>
    <TD height=30>
      <CENTER><FONT face="Times New Roman, Times, serif" size=3>Delaware
      </FONT></CENTER></TD>
    <TD height=30>
      <CENTER><FONT face="Times New Roman, Times, serif" size=3>001-13810
      </FONT></CENTER></TD>
    <TD height=30>
      <CENTER><FONT face="Times New Roman, Times, serif" size=3>94-3155066
      </FONT></CENTER></TD></TR>
  <TR>
    <TD>
      <CENTER><FONT face="Times New Roman, Times, serif" size=2>(State or other
      jurisdiction of incorporation) </FONT></CENTER></TD>
    <TD>
      <CENTER><FONT face="Times New Roman, Times, serif" size=2>(Commission File
      Number) </FONT></CENTER></TD>
    <TD>
      <CENTER><FONT face="Times New Roman, Times, serif" size=2>(IRS employer
      identification number) </FONT></CENTER></TD></TR>
  </TABLE><FONT
face="Times New Roman, Times, serif"><BR></FONT>
<P align=center><FONT face="Times New Roman, Times, serif" size=3>37400 Central
Court<BR>Newark, CA 94560</FONT><FONT
face="Times New Roman, Times, serif"><BR><FONT size=2>(Address of principal
executive offices, including zip code) </FONT></FONT></P>
<P align=center><FONT face="Times New Roman, Times, serif" size=3>(510) 744-2700
</FONT><FONT face="Times New Roman, Times, serif"><BR><FONT size=2>(Registrant's
telephone number, including area code) <BR><BR><BR></FONT></FONT></P>
<DIV align=left></DIV>
<DIV align=left>
<HR>
</DIV><BR>
<P><FONT face="Times New Roman, Times, serif"><B>ITEM 2.02 RESULTS OF OPERATIONS
  AND FINANCIAL CONDITION</B><BR>
  </FONT></P>
<P><font face="Times New Roman, Times, serif" size="3">On February 23, 2005, Socket
  Communications, Inc. issued a press release reporting its results for the three
  months and year ended December 31, 2004. A copy of the press release is furnished
  as Exhibit 99.1.</font><FONT
face="Times New Roman, Times, serif"><BR>
  </FONT></P>
<P><FONT face="Times New Roman, Times, serif"><B>ITEM 9.01. FINANCIAL STATEMENTS
  AND EXHIBITS</B><BR>
  </FONT></P>
<P><FONT face="Times New Roman, Times, serif">(c) Exhibits.</FONT><FONT
face="Times New Roman, Times, serif"></FONT><FONT
face="Times New Roman, Times, serif"></FONT></P>
<P>&nbsp;</P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=left border=0>

  <TR vAlign=bottom>
    <TD width=215 height=54>
      <DIV align=center><FONT face="Times New Roman, Times, serif">Exhibit
      Number</FONT></DIV></TD>
    <TD width=29 height=54>&nbsp;</TD>
    <TD width=680 height=54>
      <DIV align=center><FONT
      face="Times New Roman, Times, serif">Description</FONT></DIV></TD></TR>
  <TR vAlign=top>
    <TD vAlign=top align=middle width=215>----------------------------</TD>
    <TD width=29>&nbsp;</TD>
    <TD width=680>
      <DIV
      align=center>---------------------------------------------------------------------------------------------</DIV></TD></TR>
  <TR vAlign=top>
    <TD width=215>
      <DIV align=center><FONT
      face="Times New Roman, Times, serif">99.1</FONT></DIV></TD>
    <TD width=29>&nbsp;</TD>
    <TD width=680><FONT face="Times New Roman, Times, serif">Text of press release,
      dated February 23, 2005, titled "</FONT>Socket Communications Reports Profitable
      Year, Record Annual Revenue of $26.1 million and 21% Year-over-year Growth
      <FONT face="Times New Roman, Times, serif">".</FONT></TD>
  </TR>
  </TABLE>
<P>&nbsp;</P>
<P><FONT face="Times New Roman, Times, serif" size=3><BR></FONT></P>
<P><FONT face="Times New Roman, Times, serif" size=3><BR></FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P> </P>
<HR>

<P align=center><FONT
face="Times New Roman, Times, serif"><B>SIGNATURE</B><BR></FONT></P>
<P><FONT face="Times New Roman, Times, serif">Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.</FONT><FONT face="Times New Roman, Times, serif"
size=3><BR></FONT></P>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<BLOCKQUOTE><TR><TD>&nbsp;</TD> <TD>&nbsp;</TD> </TR><TR><TD>&nbsp;</TD>
  <TD>&nbsp;</TD> </TR><TR><TD>&nbsp;</TD> <TD>&nbsp;</TD>
  </TR><TR><TD>&nbsp;</TD> <TD>&nbsp;</TD> </TR><TR><TD>&nbsp;</TD>
  <TD>&nbsp;</TD> </TR><TR><TD>&nbsp;</TD> <TD>&nbsp;</TD>
  </TR><TR><TD>&nbsp;</TD> <TD>&nbsp;</TD> </TR><TR><TD>&nbsp;</TD>
  <TD>&nbsp;</TD> </TR>
  <P align=left> </P><TR valign="bottom"
align="left"></TR></BLOCKQUOTE></DIR></DIR></DIR></DIR></DIR>
<DIV align=left>
  <TABLE height=135 cellSpacing=0 cellPadding=0 width=847 align=left border=0>

    <TR>
      <TD width=470>
        <DIV align=left></DIV>
      </TD>
      <TD width=23>&nbsp;</TD>
      <TD width=348><font face="Times New Roman, Times, serif"><B>SOCKET COMMUNICATIONS,
        INC.</B></font></TD>
    </TR>
    <TR>
      <TD width=470>&nbsp;</TD>
      <TD width=23>&nbsp;</TD>
      <TD width=348><font face="Times New Roman, Times, serif">(Registrant)</font></TD>
    </TR>
    <TR>
      <TD width=470>&nbsp;</TD>
      <TD width=23>&nbsp;</TD>
      <TD width=348>&nbsp;</TD>
    </TR>
    <TR>
      <TD width=470>
        <DIV align=left></DIV>
      </TD>
      <TD width=23>&nbsp;</TD>
      <TD width=348>&nbsp;</TD>
    </TR>
    <TR>
      <TD width=470 height=19>
        <DIV align=left><FONT face="Times New Roman, Times, serif">Date: February
          23, 2005</FONT></DIV>
      </TD>
      <TD width=23 height=19><FONT
      face="Times New Roman, Times, serif">By:</FONT></TD>
      <TD width=348 height=19><FONT face="Times New Roman, Times, serif"><U>/s/
        David W. Dunlap</U></FONT></TD>
    </TR>
    <TR>
      <TD width=470 height=69>
        <DIV align=left></DIV>
      </TD>
      <TD width=23 height=69>&nbsp;</TD>
      <TD width=348 height=69><FONT face="Times New Roman, Times, serif">David
        W. Dunlap<BR>
        Vice President, Finance and Administration <BR>
        and Chief Financial Officer<BR>
        </FONT></TD>
    </TR>

  </TABLE>
</DIV>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<HR>

<P align=center><FONT face="Times New Roman, Times, serif"><B>EXHIBIT
INDEX</B></FONT></P>
<P align=center>&nbsp;</P>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td width=215 height=54>
      <div align=center><font face="Times New Roman, Times, serif">Exhibit Number</font></div>
    </td>
    <td width=29 height=54>&nbsp;</td>
    <td width=680 height=54>
      <div align=center><font
      face="Times New Roman, Times, serif">Description</font></div>
    </td>
  </tr>
  <tr valign=top>
    <td valign=top align=middle width=215>----------------------------</td>
    <td width=29>&nbsp;</td>
    <td width=680>
      <div
      align=center>---------------------------------------------------------------------------------------------</div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215>
      <div align=center><font
      face="Times New Roman, Times, serif">99.1</font></div>
    </td>
    <td width=29>&nbsp;</td>
    <td width=680><font face="Times New Roman, Times, serif">Text of press release,
      dated February 23, 2005, titled "</font>Socket Communications Reports Profitable
      Year, Record Annual Revenue of $26.1 million and 21% Year-over-year Growth
      <font face="Times New Roman, Times, serif">".</font></td>
  </tr>
</table>
<P>&nbsp;</P>
<P align=center>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<HR>

<P>&nbsp;</P>
<DIV align=left>
<DIV align=left></DIV></DIV></BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1 CHARTER
<SEQUENCE>2
<FILENAME>pressrelease.htm
<TEXT>
<html>
<head>
<title>Untitled Document</title>

</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif" size="3"><b>Exhibit
  99.1</b></font></p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif" size="3"><b><font size="4">For Immediate
  Release</font></b></font></p>
<p><font face="Times New Roman, Times, serif" size="3">For further information,
  contact:<br>
  </font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0" align="left">
  <tr valign="bottom">
    <td width="291" height="25"><font face="Times New Roman, Times, serif" size="3">David
      Dunlap, CFO</font></td>
    <td width="190" height="25"><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp</font></td>
    <td width="493" height="25">Stephen D. Axelrod, CFA</td>
  </tr>
  <tr valign="bottom">
    <td width="291" height="20"><font face="Times New Roman, Times, serif" size="3">Socket
      Communications, Inc.</font></td>
    <td width="190" height="20"><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp</font></td>
    <td width="493" height="20">Wolfe Axelrod Weinberger Associates, LLC</td>
  </tr>
  <tr valign="bottom">
    <td width="291" height="20"><font face="Times New Roman, Times, serif" size="3">(510)
      744-2735</font></td>
    <td width="190" height="20"><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp</font></td>
    <td width="493" height="20">(212) 370-4500</td>
  </tr>
  <tr valign="bottom">
    <td width="291" height="20">email: dave@socketcom.com</td>
    <td width="190" height="20">&nbsp;</td>
    <td width="493" height="20">email: steve@wolfeaxelrod.com</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3"><b> Socket
  Communications Reports Profitable Year, Record Annual Revenue of $26.1 million
  and 21% Year-over-year Growth </b><br>
  <i>Growth attributed to new products and increased enterprise demand for mobile
  workforce productivity</i><br>
  <br>
  </font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>NEWARK, CA, February
  23, 2005</b> - Socket Communications, Inc. (NASDAQ: SCKT), the Mobile Connection&#153;
  Company, today reported record revenue and profits for the year ended December
  31, 2004. Revenue for the year was $26.1 million, an increase of 21 percent
  compared to revenue of $21.6 million for the previous year. Net income applicable
  to common stockholders was $288,000 or $0.01 per share compared to a net loss
  applicable to common stockholders of ($2.0) million or ($0.07) per share for
  2003.</font></p>
<p>Revenue for the fourth quarter of 2004 was $6.5 million, an increase of 7 percent
  compared to revenue of $6.0 million for the same quarter a year ago. Net income
  applicable to common stockholders for the fourth quarter was $116,000, or $0.00
  per share, compared to a net loss applicable to common stockholders for the
  fourth quarter a year ago of ($109,000) or ($0.00) per share. The fourth quarter
  of 2004 was Socket's fourth consecutive profitable quarter.</p>
<p>The balance sheet at December 31, 2004 included cash of $5.9 million, a current
  ratio of 1.8 to one, equity of $17.0 million and no long term debt. </p>
<p>&quot;Socket's growth in 2004 was driven by new products and by enterprise
  deployment of mobile computers that improve mobile workforce communications
  and productivity using Socket products,&quot; said Kevin Mills, President and
  CEO. </p>
<p>&quot;Data collection was our fastest growing product family in 2004, with
  revenue increasing 56 percent over the previous year and representing 40 percent
  of our 2004 revenue compared to 31 percent of revenue in 2003. Over the past
  several years, we have expanded our family of bar code scanning products for
  collecting data with a mobile computer. Our CF and SDIO plug-in bar code scanners
  and our Cordless Hand Scanner using Bluetooth wireless technology all contributed
  to our growth. Our data collection products are being adopted by third party
  software developers and integrators in building productivity enhancing enterprise
  solutions.&quot; </p>
<hr>
<p>&quot;We also achieved revenue growth in our family of embedded products. Socket
  provides embedded solutions using Bluetooth wireless technology for use in ruggedized
  industrial PDA's and other mobile devices. Embedded products revenue in 2004
  grew 43 percent over the previous year and represented 14 percent of our 2004
  revenue compared to 12 percent of revenue in 2003.&quot;</p>
<p>&quot;Our connectivity product revenue declined by 4 percent in 2004 compared
  to the previous year and represented 32 percent of our 2004 revenue compared
  to 40 percent of revenue in 2003. Connectivity product revenue in the second
  half of the year was affected by model changeovers of Pocket PCs resulting in
  order delays while new models became available. These transitions are now completed,
  and we expect a return to growth in our connectivity product family.&quot;<br>
  <br>
  &quot;According to Gartner, a leading provider of research and analysis on the
  global information technology industry, Windows CE (which includes Pocket PCs)
  became the number one Personal Digital Assistant (PDA) operating system in 2004
  when it accounted for 43 percent of PDA shipments, up from 37.7 percent worldwide
  in 2003. Gartner also reported that nearly half of all PDAs are now purchased,
  or reimbursed, by enterprises.&quot;* </p>
<p>&quot;We are strengthening our support to the developer community with the
  tools needed to enable data collection and connectivity in mobile device applications
  for enterprises using technologies applicable to mobile devices. These technologies
  include Wireless LAN, Bluetooth, GPS and RFID. We will also be expanding our
  focus beyond Pocket PCs during 2005 by broadening support for a wide range of
  mobile computing platforms including tablets and notebooks, Smartphones using
  both Windows Mobile and Symbian operating systems, and mobile devices from PalmOne
  and Research-In-Motion. We believe that increasing our market reach by supporting
  our existing products on new platforms will provide excellent opportunities
  for growth, and should reduce our dependence on the Pocket PC during future
  product transitions.&quot;</p>
<p> *Source: Gartner &quot;RIM Sparked PDA Market to Grow 6.6 Percent in 2004&quot;,
  T. Kort et al., Feb 2005.</p>
<p><b>Other Financial Information </b></p>
<p>Total revenue for the year and quarter ended December 31, 2004 and revenue
  growth by product family in 2004 over the corresponding periods in 2003 in millions
  of dollars were as follows:</p>
<table cellspacing=1 cellpadding=1 width=708 align=center border=1>
  <tr valign=bottom>
    <td width="38%" height=20>
      <div align="left"><font face="Times New Roman, Times, serif" size="3"><b>Product
        Family</b></font></div>
    </td>
    <td width="16%" height=20>
      <p align="center"><font face="Times New Roman, Times, serif" size="3"><b>2004<br>
        Revenue </b></font></p>
    </td>
    <td width="14%" height=20>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><b>%
        Growth <br>
        (Decline) </b></font></p>
    </td>
    <td width="18%" height=20>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>Q4
        2004 <br>
        Revenue</b></font></div>
    </td>
    <td width="14%" height=20 valign="top">
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>%
        Growth<br>
        (Decline) </b></font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=31>Data Collection Products</td>
    <td width="16%" height=31>
      <p align="center"><font face="Times New Roman, Times, serif" size="3">$10.4</font></p>
    </td>
    <td width="14%" height=31>
      <p align=center><font face="Times New Roman, Times, serif" size="3">56%</font></p>
    </td>
    <td width="18%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">$2.8</font></div>
    </td>
    <td width="14%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">42%</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17>Connection Products</td>
    <td width="16%" height=17>
      <p align="center">8.3</p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(4%)</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1.8</font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(26)%</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17>Serial Products</td>
    <td width="16%" height=17>
      <p align="center"><font face="Times New Roman, Times, serif" size="3">3.7</font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3%&nbsp;</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">&nbsp;0.9</font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">&nbsp;3%</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17><font face="Times New Roman, Times, serif" size="3">Embedded
      Products</font></td>
    <td width="16%" height=17>
      <p align="center">3.7</p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">43%</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1.0</font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">41%</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17>
      <div align="left"><font face="Times New Roman, Times, serif" size="3">Totals</font></div>
    </td>
    <td width="16%" height=17>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">$26.1</font></div>
    </td>
    <td width="14%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">21%</font></div>
    </td>
    <td width="18%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">$6.5</font></div>
    </td>
    <td width="14%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">7%</font></div>
    </td>
  </tr>
</table>
<p>&nbsp; </p>
<hr>
<p>Gross profit on sales was 51 percent for the year and quarter ended December
  31, 2004 compared to 50 percent for the corresponding periods a year ago. The
  higher margins resulted from product cost reduction programs partially offset
  by reductions in product pricing and from changes in product mix, where higher
  margin products have become a greater percentage of the total sales mix in 2004.</p>
<p>Research and development expense was approximately $3.6 million for the year
  and $0.9 million for the quarter ended December 31, 2004 compared to $3.4 million
  and $0.9 million respectively for the same periods a year ago. </p>
<p>Sales and marketing expense increased to $5.9 million for the year and $1.5
  million for the quarter ended December 31, 2004 compared to $5.2 million and
  $1.3 million respectively for the same periods a year ago. These increases resulted
  from moderate increases in sales and marketing headcount in 2004 and increased
  advertising, promotion and outside services.</p>
<p>General and administrative expense increased to $3.1 million for the year and
  decreased to $0.6 million for the quarter ended December 31, 2004 compared to
  $2.9 million and $0.8 million, respectively, for the same periods a year ago.
  The increases for the year and the decrease in the fourth quarter of 2004 were
  primarily due to the costs of defending a patent litigation lawsuit initiated
  by Khyber Technologies in 2003 that was settled in the third quarter of 2004
  with the purchase by the Company of a patent from Khyber for $0.6 million. The
  patent was capitalized as an intangible asset purchase during the third quarter
  of 2004 and is being amortized over the life of the patent. </p>
<p>Preferred stock dividends are paid quarterly to the remaining holders of Series
  F Convertible Preferred Stock issued in March 2003. Holders of Series F Preferred
  Stock may convert their shares into common stock at any time, with mandatory
  conversion in March 2006. Dividends in 2003 also included dividends paid to
  the holder of Series E Convertible Redeemable Preferred stock, which was fully
  converted into common stock in the third quarter of 2003. Charges for preferred
  stock accretion in 2003 related to the conversion of Series E Preferred Stock
  and to the issuance of Series F Preferred Stock.</p>
<hr>
<p>The Company's balance sheet at December 31, 2004 included a cash balance of
  $5.9 million, reflecting a net decrease of $0.5 million from the cash balance
  of $6.4 million at December 31, 2003. Sources of cash in 2004 included increased
  borrowings on the Company's bank line of credit of $1.4 million, proceeds from
  the exercise of stock options and warrants of $0.2 million, and positive cash
  flow from operations before working capital changes of $1.2 million. Cash was
  used to fund working capital increases of $1.8 million reflecting increases
  in inventory and receivables and reductions in payables, completion of the repayment
  of a note payable to Nokia Corporation of $0.5 million in the first and second
  quarters for technology and a business acquired in 2002, purchase of property,
  equipment and tooling throughout the year of $0.4 million, and purchase of a
  bar code scanning patent for $0.6 million in the third quarter from Khyber Technologies.
</p>
<p>The Company has completed the evaluation, testing and audit of its internal
  controls over financial reporting required by Section 404 of the Sarbanes-Oxley
  legislation. Management will include a report in its annual report on Form 10-K
  for the year ended December 31, 2004 certifying to the effectiveness of its
  internal controls.</p>
<p><b>Quarterly Management Conference Call</b><br>
  Management of Socket will hold a conference call today at 2 p.m. Pacific time
  to discuss the quarterly results and outlook for the future. The call will be
  carried live and available via replay. Participants may join the call by telephone
  at (800) 240-7305 or (303) 262-2143, or hear a replay via telephone at (800)
  405-2236 or (303) 590-3000, using access code 11024224#, for a week following
  the call. The call may also be broadcasted over the Internet on CCBN and may
  be accessed through the Company's website at www.socketcom.com/about/conference.asp
  .</p>
<p><b>About Socket Communications</b><br>
  Socket Communications, Inc., the Mobile Connection&#153; Company, provides a
  broad range of connectivity and data collection products for mobile devices
  using Microsoft's Windows Mobile, CE, XP, and Palm, RIM, and Symbian-based operating
  systems. These mobile devices include PDAs, Smartphones, Tablet PCs and notebooks
  that support standard expansion mechanisms. Socket's Mobility Friendly&#153;
  products are feature-rich while promoting ease of use and lead the market with
  the smallest footprint and the most Battery Friendly&reg; power consumption
  in their class. Socket's Development Services team provides hardware developers
  with solutions using mobilityIC&#153; interface chips, KwikBlue&#153; modules
  with embedded Bluetooth&reg; Wireless Technology, as well as other technologies
  implemented in Socket's wide range of products. Socket is headquartered in Newark,
  California and can be reached at 510-744-2700 or www.socketcom.com. </p>
<p><br>
  <b>Forward Looking Statements</b><br>
  This press release contains forward looking statements within the meaning of
  Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
  Securities Exchange Act of 1934, as amended, including statements forecasting
  future financial results and operating activities, market acceptance of our
  products, expectations for general market growth of handheld computers and other
  mobile computing devices, growth in demand for our products, expansion of the
  markets that we serve, expansion of the distribution channels for our products,
  adoption of our embedded products by third-party manufacturers of electronic
  devices, and the timing of the introduction and availability of new products.
  Such statements involve risks and uncertainties, and actual results could differ
  materially from the results anticipated in such forward looking statements as
  a result of a number of factors, including, but not limited to, the risk of
  delays in the availability of new products due to technological, market, or
  financial factors including the availability of necessary working capital, our
  ability to successfully introduce and market future products, our ability to
  effectively manage and contain our operating costs, the availability of announced
  handheld computer hardware and software, product delays associated with new
  model introductions and product changeovers, continued growth in demand for
  handheld computers, market acceptance of emerging standards such as Bluetooth
  and Wireless LAN and of our related connection and data collection products,
  the ability of our strategic partnerships to benefit our business as expected,
  our ability to enter into additional distribution relationships, or the other
  factors described in our most recent Form 10-K and 10-Q reports filed with the
  Securities and Exchange Commission.</p>
<p><i>Socket and Battery Friendly are registered trademarks of Socket Communications,
  Inc. The Mobile Connection Company, Mobility Friendly, MyNavigator and KwikBlue
  are trademarks of Socket Communications, Inc. The Bluetooth word mark and logos
  are owned by the Bluetooth SIG, Inc. and any use of such marks by Socket Communications,
  Inc. is under license. All other trademarks and trade names contained herein
  may be those of their respective owners. &copy; 2005, Socket Communications,
  Inc. All rights reserved.</i></p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3">--Financial
  tables to follow--</font></p>
<hr>
<p>&nbsp;</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=800 align=center border=1>
  <tr valign=bottom>
    <td colspan=5 height=70>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><b>Socket Communications, Inc. </b></font><br>
        <font face="Times New Roman, Times, serif"
      size=3><b>Condensed Summary Statements of Operations<br>
        (Amounts in Thousands except per share amounts) </b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>&nbsp;&nbsp; </font></p>
    </td>
    <td colspan=2 height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>Year ended
        Dec 31,</font></p>
    </td>
    <td colspan=2 height=17>
      <div align="center"><font face="Times New Roman, Times, serif" size=3>Three
        months ended Dec 31,</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>&nbsp;&nbsp; </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2004</u> </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2003</u> </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2004</u> </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2003</u> </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Revenue </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 26,130</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 21,611</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 6,451</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 6,006</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Cost of revenue </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>12,768</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>10,908</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,177</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,026</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Gross profit</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>13,362</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>10,703</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,274</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>2,980</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <blockquote>
        <p><font face="Times New Roman, Times, serif" size=3>Gross profit percent</font></p>
      </blockquote>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>51%</font> </p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>50%</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>51%</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>50%</font> </p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Research and development
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,658</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,449</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>918</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>869</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Sales and marketing
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>5,929</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>5,189</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>1,517</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>1,314</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>General and administrative
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,068</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>2,867</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>614</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>800</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17><font face="Times New Roman, Times, serif"
      size=3>Amortization of intangible technology</font></td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>397</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>410</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>106</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>91</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <blockquote>
        <p><font face="Times New Roman, Times, serif" size=3>Total operating expenses</font></p>
      </blockquote>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>13,052</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>11,915</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,155</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,074</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17><font face="Times New Roman, Times, serif"
      size=3>Interest (income) expense, net</font></td>
    <td width="17%" height=17>
      <div align=center>(28)</div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>38</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(9)</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(2)</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Net income (loss) </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>338</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>(1,250)
        </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>128 </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>(92) </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=29>
      <p><font face="Times New Roman, Times, serif" size=3>Deemed dividends/preferred
        stock accretion</font></p>
    </td>
    <td width="17%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>--</font></p>
    </td>
    <td width="15%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(565)</font> </p>
    </td>
    <td width="15%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>--</font></p>
    </td>
    <td width="17%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>--</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=28>
      <p><font face="Times New Roman, Times, serif" size=3>Preferred stock dividends</font></p>
    </td>
    <td width="17%" height=28>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(50)</font> </p>
    </td>
    <td width="15%" height=28>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(137)</font> </p>
    </td>
    <td width="15%" height=28>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(12)</font> </p>
    </td>
    <td width="17%" height=28>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(17)</font> </p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Net income (loss) applicable
        to common stockholders</font> </p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 288</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (1,952)
        </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 116</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (109)
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td valign=top width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Basic and diluted net
        income (loss) per share applicable to common stockholders</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 0.01</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (0.07)
        </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 0.00</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (0.00)
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">Weighted average
        shares outstanding: <br>
        </font><font face="Times New Roman, Times, serif" size="3">&nbsp&nbsp&nbsp&nbsp&nbspBasic<br>
        &nbsp&nbsp&nbsp&nbsp&nbspDiluted </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,061<br>
        33,969</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">26,301<br>
        26,301 </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,139<br>
        33,147 </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">29,336<br>
        29,336 </font></p>
    </td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=800 align=center border=1>
  <tr valign=bottom>
    <td colspan=5 height=70>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><b>Reconciliation of Net Income (Loss) to Cash Flow from (Used by)
        Operations <br>
        Before Working Capital Changes</b></font><font face="Times New Roman, Times, serif"
      size=3><b><br>
        </b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>&nbsp;&nbsp; <b>(Amounts
        in Thousands) </b></font></p>
    </td>
    <td colspan=2 height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>Year ended
        Dec 31,</font></p>
    </td>
    <td colspan=2 height=17>
      <div align="center"><font face="Times New Roman, Times, serif" size=3>Three
        months ended Dec 31,</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>&nbsp;&nbsp; </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2004</u></font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2003</u> </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2004</u></font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2003</u> </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Net income (loss)</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 338</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (1,250)</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 128</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (92)</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Add back Non-cash charges:</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Depreciation/amortization
        of property</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>466</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>569</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>124</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>128</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17><font face="Times New Roman, Times, serif"
      size=3>Amortization of intangible assets</font></td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>397</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>410</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>107</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>91</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Foreign currency (gains)
        loss </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>55</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(92)</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>14</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(43)</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Change in deferred
        rent </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>22</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>44 </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>6 </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>44</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Cash flow from (used
        by) operations*</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 1,278</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (319)
        </font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 379
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 128</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="40%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>*Excludes working capital
        changes </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
    <td width="13%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;</font></p>
    </td>
  </tr>
</table>
<p>&nbsp;</p>
<hr>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=695 align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height="61">
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><b>Socket Communications, Inc. <br>
        Condensed Summary Balance Sheets <br>
        (Amounts in Thousands</b></font>) </p>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=26 width="44%">&nbsp;</td>
    <td height=26 colspan="2">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">December
        31, </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=24 width="44%"><font face="Times New Roman, Times, serif" size=3>&nbsp</font></td>
    <td height=24 width="29%">
      <div align="center"><font face="Times New Roman, Times, serif" size=3>2004</font></div>
    </td>
    <td height=24 width="27%">
      <div align="center"><font face="Times New Roman, Times, serif" size=3>2003</font>*
      </div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Cash</font> </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 5,932</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 6,422</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Accounts receivable
        </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>4,009</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>3,648</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Inventories </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>2,941
        </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>1,737
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Other current assets</font>
      </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>160</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>210</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Property and equipment,
        net </font></p>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>479</font></div>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>585</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Goodwill </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>9,798
        </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>9,798
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Intangible technology</font>
      </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>952</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>711</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Other assets</font>
      </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>129</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>154</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Total Assets </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 24,400
        </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 23,265
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td colspan=3><font face="Times New Roman, Times, serif"
      size=3>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Accounts payable and
        accrued liabilities</font> </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 3,350</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 3,751</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Bank line of credit</font>
      </p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>2,949</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>1,567</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Deferred income on
        shipments to distributors</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>1,056</font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>852</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%"><font face="Times New Roman, Times, serif" size=3>Note payable</font></td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>--</font></div>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>505</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%"><font face="Times New Roman, Times, serif" size=3>Capital
      leases/other non-current liabilities</font></td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>93</font></div>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>92</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Common and convertible
        preferred stock </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>50,626
        </font></p>
    </td>
    <td width="29%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>50,460
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%">
      <p><font face="Times New Roman, Times, serif" size=3>Accumulated deficit</font>
      </p>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(33,674)</font></div>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(33,962)</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="44%"><font face="Times New Roman, Times, serif" size=3>Total Liabilities
      and Equity</font></td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif" size=3>$ 24,400
        </font></div>
    </td>
    <td width="29%">
      <div align=center><font face="Times New Roman, Times, serif" size=3>$ 23,265
        </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td colspan=3>
      <p><font face="Times New Roman, Times, serif" size=3>*Derived from audited
        financial statements. </font></p>
    </td>
  </tr>
</table>
<p align="center"># # #</p>
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