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<SEC-DOCUMENT>0000944075-05-000022.txt : 20050420
<SEC-HEADER>0000944075-05-000022.hdr.sgml : 20050420
<ACCEPTANCE-DATETIME>20050420163816
ACCESSION NUMBER:		0000944075-05-000022
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050420
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050420
DATE AS OF CHANGE:		20050420

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:		05762331

	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-8k0420.htm
<TEXT>
<html>
<head>

</head>

<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>April 20</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>
  <font size="2">(date of earliest event reported)</font></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 April 20, 2005, Socket
  Communications, Inc. issued a press release reporting its results for the three
  months ended March 31, 2005. 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" size="3">Text of
      press release, dated April 20, 2005, titled "Socket Communications Reports
      First Quarter Revenue of $6.0 million".</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: April
          20, 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" size="3">Text of
      press release, dated April 20, 2005, titled "Socket Communications Reports
      First Quarter Revenue of $6.0 million".</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>


</head>

<body bgcolor="#FFFFFF">
<p align="right"><b><font size="3">Exhibit 99.1</font></b></p>
<p><font size="3" face="Times New Roman, Times, serif"><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="108%" border="0" cellspacing="0" cellpadding="0" align="left">
  <tr valign="bottom">
    <td width="456" height="25"><font face="Times New Roman, Times, serif" size="3">David
      Dunlap, CFO</font></td>
    <td width="228" height="25"><font face="Times New Roman, Times, serif" size="3">Stephen
      D. Axelrod, CFA</font></td>
  </tr>
  <tr valign="bottom">
    <td width="456" height="20"><font face="Times New Roman, Times, serif" size="3">Socket
      Communications, Inc.</font></td>
    <td width="228" height="20"><font face="Times New Roman, Times, serif" size="3">Wolfe
      Axelrod Weinberger Associates, LLC</font></td>
  </tr>
  <tr valign="bottom">
    <td width="456" height="20"><font face="Times New Roman, Times, serif" size="3">(510)
      744-2735</font></td>
    <td width="228" height="20"><font face="Times New Roman, Times, serif" size="3">(212)
      370-4500</font></td>
  </tr>
  <tr valign="bottom">
    <td width="456" height="20">email: dave@socketcom.com</td>
    <td width="228" height="20">email: steve@wolfeaxelrod.com</td>
  </tr>
</table>
<p><font face="Times New Roman, Times, serif" size="3"> </font></p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<div align="center"> <font size="3" face="Times New Roman, Times, serif"><font size="6"><b><font size="5">Socket
  Communications Reports First Quarter Revenue of $6.0 million</font></b><br>
  </font></font><font size="3" face="Times New Roman, Times, serif"><b><i> <br>
  Mobile Bar Code Scanning Sales Affected Results</i></b></font> </div>
<p><font size="3" face="Times New Roman, Times, serif"><b>Newark, CA, April 20,
  2005</b> - Socket Communications, Inc. (NASDAQ: SCKT), the Mobile Connection&#153;
  Company, today reported revenue for the first quarter ended March 31, 2005 of
  $6.0 million. First quarter revenue decreased 11 percent compared to revenue
  of $6.7 million for the same quarter a year ago and decreased 7 percent compared
  to revenue of $6.5 million for the previous quarter. Net loss applicable to
  common stockholders for the first quarter was ($0.4) million, or ($0.01) per
  share, compared to net income applicable to common stockholders for the first
  quarter a year ago of $40,000 or $0.00 per share and net income for the previous
  quarter of $116,000 or $0.00 per share. </font></p>
<p>The balance sheet at March 31, 2005 included cash of $7.2 million, a current
  ratio of 1.6 to one, equity of $16.6 million and no long term debt. </p>
<p>The Company received orders of $7.6 million during the quarter, of which approximately
  $6.0 million met the criteria for revenue recognition. $0.8 million was shipped
  to distributors but revenue recognition was deferred as the products remained
  in distributor inventories at quarter-end, and $0.8 million increased the Company's
  backlog. The backlog of orders as of the end of March and shippable in the second
  quarter was $2.0 million.</p>
<p>"Despite our disappointment of not meeting our revenue growth expectations
  during the first quarter, we have maintained our margins, managed our expenses,
  and increased our cash," said Kevin Mills, President and Chief Executive Officer
  of Socket Communications. "We believe that the combination of growing and expanding
  mobile device markets, our extensive family of connectivity and data collection
  products to support these markets and a growing number of productivity-enhancing
  enterprise applications for mobile devices will fuel our return to revenue growth
  and profitability."</p>
<p>"The increasing pace of orders, although not reflected in our first quarter
  revenue, is a good indicator that our markets are responding to the new generation
  of Pocket PCs. Bar code scanning product sales, in particular, have an extended
  sales cycle that typically requires the integration of handheld computers, software
  applications and our bar code scanning products and involves extensive customer
  qualifications, field trials and extended deployments. Our pipeline of bar code
  scanning opportunities continues to grow and we expect revenue growth in this
  product family to resume in the second quarter."</p>
<p>"We recently announced that we will expand the markets we serve to include
  Symbian-based Series 60 and Series 80 SmartPhones and Blackberry handheld devices
  with Bluetooth Wireless Technology from Research-In-Motion (RIM). Our bar code
  scanning software for Symbian is now available free of charge online on Socket's
  website. We also announced a partnership with gate5 to bundle our GPS hardware
  with gate5's smart2go Mobile Navigator software. The software is designed to
  work on Symbian-based Series 60 and Series 80 SmartPhones and on Windows Mobile
  PDAs and will begin shipping in the second quarter. In addition, we are developing
  a version of our SocketScan bar code scanning software to enable bar code scanning
  on RIM Blackberry devices with Bluetooth wireless technology."</p>
<p>"We also plan to release during the second quarter our Wi-Fi Companion, an
  intuitive graphical software application with advanced tools that greatly improves
  the user's experience with WLAN connectivity, including finding and accessing
  networks. This companion software product is designed to work with most major
  WLAN software programs on Windows Mobile Pocket PCs."</p>
<p><font size="3" face="Times New Roman, Times, serif"><b><u>Additional Financial
  Information</u></b></font></p>
<p>The Company's balance sheet at March 31, 2005 included cash of $7.2 million,
  a net increase of $1.2 million from cash balances at December 31, 2004. Sources
  of cash consisted of working capital changes of $1.3 million (consisting of
  reductions in inventory, increases in accounts payable and increases in deferred
  income on shipments to distributors) and increased borrowings of $0.2 million
  on the Company's bank line of credit. Cash of $0.2 million was used to fund
  the operating loss and $0.1 million was used for investment in property and
  equipment. </p>
<p>Revenue by Product Family in millions of dollars was as follows:</p>
<table cellspacing=1 cellpadding=1 width=667 align=center border=1>
  <tr valign=bottom>
    <td width="30%" height=49>
      <div align="center"><b>Product Family</b></div>
    </td>
    <td width="22%" height=49>
      <p align="center"><font face="Times New Roman, Times, serif" size=3><b>Q1
        2005<br>
        Revenue<br>
        (millions) </b></font></p>
    </td>
    <td width="22%" height=49>
      <p align=center><font face="Times New Roman, Times, serif" size=3><b>% Growth
        <br>
        (Decline) over<br>
        Q4 2004</b></font></p>
    </td>
    <td width="26%" height=49>
      <div align="center"><font face="Times New Roman, Times, serif" size=3><b>%
        Growth <br>
        (Decline) over<br>
        Q1 2004</b></font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=31>Bar Code Scanning Products</td>
    <td width="22%" height=31>
      <p align="center"><font face="Times New Roman, Times, serif" size=3>$2.1</font></p>
    </td>
    <td width="22%" height=31>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(23%)</font></p>
    </td>
    <td width="26%" height=31>
      <div align="center">(12%)</div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>Connectivity Products</td>
    <td width="22%" height=17>
      <p align="center"> 2.1</p>
    </td>
    <td width="22%" height=17>
      <p align=center>16%</p>
    </td>
    <td width="26%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>(19%)</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=18>Embedded Products</td>
    <td width="22%" height=18>
      <p align="center">0.9</p>
    </td>
    <td width="22%" height=18>
      <p align=center><font face="Times New Roman, Times, serif" size=3>(12%)&nbsp;</font></p>
    </td>
    <td width="26%" height=18>
      <p align=center><font face="Times New Roman, Times, serif" size=3>&nbsp;6%</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>Peripheral Connection Products</td>
    <td width="22%" height=17>
      <p align="center">0.9</p>
    </td>
    <td width="22%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(3%)</font></p>
    </td>
    <td width="26%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>0%</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <div align="center">Totals</div>
    </td>
    <td width="22%" height=17>
      <div align="center"><font face="Times New Roman, Times, serif"
      size=3>$6.0</font></div>
    </td>
    <td width="22%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(7%)</font></div>
    </td>
    <td width="26%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(11%)</font></div>
    </td>
  </tr>
</table>
<p><font size="3" face="Times New Roman, Times, serif"><br>
  </font>Q1 2005 revenue compared to Q4 2004 revenue: Bar code scanning sales
  declined across all products. Increases in Connectivity Product sales were primarily
  due to growth in Ethernet, Wireless LAN and Bluetooth Plug-in products. Embedded
  Products revenue growth in Bluetooth module sales were offset by lower sales
  of interface chips. Peripheral Connection Product revenue is a legacy product
  which followed its historical pattern of flat revenue to slight declines.</p>
<p>Q1 2005 revenue compared to Q1 2004 revenue: Bar code scanning sales declined
  across all products except the Cordless Hand Scanner with Bluetooth technology
  which began shipping in the second quarter of 2004. Declines in Connectivity
  Products revenue reflected declines in wireless LAN and Bluetooth Plug-in Products
  as new Pocket PCs have a higher percentage of these products built in, and a
  decline in GPS product sales. These declines were partially offset by increases
  in Ethernet, modems and accessory products, including the Mobile Power Pak introduced
  in the fourth quarter of 2004.</p>
<p>Gross profit for the first quarter of 2005 was $3.0 million, or 51 percent
  of revenue, compared to $3.3 million or 51 percent of revenue for the previous
  quarter and $3.4 million or 51 percent of revenue for the first quarter one
  year ago. The Company has maintained its margins by aligning cost reductions
  with the pricing of its products.</p>
<p>Research and development expense was $0.9 million in the first quarter of 2005
  compared to $0.9 million in the fourth quarter of 2004 and $0.9 million in the
  first quarter of 2004. The Company has maintained its level of engineering resources,
  which is the primary determinant of research and development expense.</p>
<p>Sales and marketing expense was $1.6 million in the first quarter of 2005 compared
  to $1.5 million in the fourth and first quarters of 2004. The increase in the
  first quarter of 2005 reflects higher compensation expense from an increase
  in sales and marketing headcount, increased travel expense and increased expense
  for trade show participation.</p>
<p>General and administrative expense was $0.8 million in the first quarter of
  2005 compared to $0.6 million in the fourth quarter of 2004 and $0.8 million
  in the first quarter of 2004. The increase over the fourth quarter of 2004 reflects
  the costs of the audits of the Company's financial statements and internal controls
  as mandated by Sarbanes-Oxley Section 404. The first quarter of 2005 compared
  to the same quarter a year ago included higher audit costs in the first quarter
  of 2005 due to the audit of internal accounting controls and the timing of the
  audit work on the financial statements. The first quarter of 2004 also included
  the costs of defending a patent infringement lawsuit which was dismissed in
  the third quarter of 2004. </p>
<p>Preferred stock dividends were $12,000 in the first quarter of 2005 compared
  to $12,000 in the fourth quarter of 2004 and $13,000 in the first quarter of
  2004 and reflect declining preferred stock balances outstanding resulting from
  conversion of preferred stock into common stock. The dividends relate to the
  issuance of $2.0 million in Series F convertible preferred stock in March 2003,
  of which 70 percent was converted to common stock at December 31, 2004 and March
  31, 2005.</p>
<p><font size="3" face="Times New Roman, Times, serif"><b>Conference Call and
  Webcast</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 on www.ccbn.com, or participants may join
  the call by telephone at (800) 257-1836 or (303) 262-2050. A replay will be
  available for one week at (800) 405-2236 or (303) 590-3000, passcode 11028829#
  and a transcript of the call will be posted on Socket's website at www.socketcom.com
  within a few days.</font></p>
<p><font size="3" face="Times New Roman, Times, serif"> <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 <i>Bluetooth</i>&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.</font></p>
<p><font size="3" face="Times New Roman, Times, serif"><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, 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, the integration of our
  products in third party hardware and software solutions; 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.</font></p>
<p><b><font size="2"><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. Wi-Fi</i></font><font size="3" face="Times New Roman, Times, serif">&reg;</font><font size="2"><i>
  is a registered trademark of the Wi-Fi Alliance. All other trademarks and trade
  names contained herein may be those of their respective owners. </i></font><font size="3" face="Times New Roman, Times, serif">&copy;</font><font size="2"><i>
  2005, Socket Communications, Inc. All rights reserved.</i></font></b></p>
<p align="center"><font size="3" face="Times New Roman, Times, serif"><br>
  - Financial Statements follow -</font></p>
<p> </p>
<hr>
<p align="center"><font size="3" face="Times New Roman, Times, serif"></font></p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=688 align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height=70>
      <p align=center><font size="3" face="Times New Roman, Times, serif"><b>Socket
        Communications, Inc.<br>
        Summary Consolidated Statements of Operations (Unaudited)<br>
        (Amounts in Thousands except per share amounts)</b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" 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>Three
        Months Ended March 31,</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>&nbsp;&nbsp; </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2005</u> </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3><u>2004</u> </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Revenue </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3> $ 5,982
        </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3> $ 6,743
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Cost of revenue </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3> 2,934 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center>3,311 </p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Gross profit</font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,048 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,432 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <blockquote>
        <p><font face="Times New Roman, Times, serif" size=3>Gross profit percent</font></p>
      </blockquote>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>51% </font> </p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>51% </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Research and development
        </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>889 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>924 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Sales and marketing
        </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>1,635 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>1,519 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>General and administrative
        </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>833 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>847 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17><font face="Times New Roman, Times, serif"
      size=3>Amortization of intangibles</font></td>
    <td width="25%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>95 </font></div>
    </td>
    <td width="24%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>92 </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <blockquote>
        <p><font face="Times New Roman, Times, serif" size=3>Total operating oxpenses</font></p>
      </blockquote>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,452 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>3,382 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17><font face="Times New Roman, Times, serif"
      size=3>Interest (income) expense, net</font></td>
    <td width="25%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(12) </font></div>
    </td>
    <td width="24%" height=17>
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(3) </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Net (loss) income</font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>(392)
        </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>53 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=29>
      <p>Preferred stock dividends</p>
    </td>
    <td width="25%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(12) </font></p>
    </td>
    <td width="24%" height=29>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>(13) </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=14>
      <p><font face="Times New Roman, Times, serif" size=3>Net (loss) income applicable
        to common stockholders</font> </p>
    </td>
    <td width="25%" height=14>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (404)
        </font></p>
    </td>
    <td width="24%" height=14>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 40 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td valign=top width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Net income (loss) applicable
        to common stockholders per share:<br>
        Basic<br>
        Diluted </font></p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ (0.01)
        <br>
        $ (0.01) </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 0.00
        <br>
        $ 0.00 </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="51%" height=17>
      <p><font face="Times New Roman, Times, serif" size=3>Weighted average shares
        outstanding</font>: <br>
        Basic<br>
        Diluted </p>
    </td>
    <td width="25%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>30,155 <br>
        30,155 </font></p>
    </td>
    <td width="24%" height=17>
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>29,934 <br>
        34,479 </font></p>
    </td>
  </tr>
</table>
<br>
<br>
<br>
<br>
<hr>
<br>
<br>
<br>
<br>
<br>
<table cellspacing=1 cellpadding=1 width=674 align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height="67">
      <p align="center"><b><font size="3" face="Times New Roman, Times, serif">Socket
        Communications, Inc.<br>
        Condensed Consolidated Summary Balance Sheets<br>
        (Amounts in Thousands)</font></b></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=26 width="44%">&nbsp;</td>
    <td height=26>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">March
        31, 2005<br>
        (Unaudited) </font></div>
    </td>
    <td height=26>
      <div align="center">December 31, 2004*<br>
      </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>$ 7,181
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 5,932
        </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>4,028
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>4,009
        </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>2,527
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif"
      size=3>2,941 </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>172 </p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>160 </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>478 </div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>479 </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="27%">
      <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>857 </p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>952 </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>128 </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>129 </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>$ 25,169
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 24,400
        </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>$ 3,741
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>$ 3,350
        </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>3,213
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>2,949
        </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>1,569
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>1,056
        </font></p>
    </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>82 </font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>93 </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>50,642
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size=3>50,626
        </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>(34,078) </font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif"
      size=3>(33,674) </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>$ 25,169
        </font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif" size=3>$ 24,400
        </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>&nbsp;</p>
<p></p>
<p></p>
<p></p>
<p></p>
<p></p>
<p align="center"><font size="3" face="Times New Roman, Times, serif"># # #</font></p>
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