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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000944075-05-000028.txt : 20050721
<SEC-HEADER>0000944075-05-000028.hdr.sgml : 20050721
<ACCEPTANCE-DATETIME>20050721162811
ACCESSION NUMBER:		0000944075-05-000028
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050721
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050721
DATE AS OF CHANGE:		20050721

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:		05966592

	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-8k0721.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>July 21</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 July 21, 2005, Socket
  Communications, Inc. issued a press release reporting its results for the three
  and six months ended June 30, 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>
      <hr color=#000000 noShade size=0>
    </td>
    <td width=29>&nbsp;</td>
    <td width=680>
      <div
      align=center>
        <hr color=#000000 noShade size=0>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="41">
      <div align=center><font
      face="Times New Roman, Times, serif">99.1</font></div>
    </td>
    <td width=29 height="41">&nbsp;</td>
    <td width=680 height="41"><font face="Times New Roman, Times, serif" size="3">Text
      of press release, dated July 21, 2005, titled "Socket Communications Reports
      Second Quarter Profit of $0.01 per share</font><font face="Times New Roman, Times, serif" size="3">".</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: July
          21, 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>
      <hr color=#000000 noShade size=0>
    </td>
    <td width=29>&nbsp;</td>
    <td width=680>
      <div
      align=center>
        <hr color=#000000 noShade size=0>
      </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 July 21, 2005, titled "Socket Communications Reports
      Second Quarter Profit of $0.01 per share".</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>pressreleaseq2.htm
<TEXT>
<html>
<head>


</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif"><b><font size="3">Exhibit
  99.1</font></b></font></p>
<p><font size="3" face="Times New Roman, Times, serif"><b><font size="5">For Immediate
  Release</font></b> </font> </p>
<p><font face="Times New Roman, Times, serif" size="3"><b><u>For further information,
  contact:</u></b><br>
  </font></p>
<table width="108%" border="0" cellspacing="0" cellpadding="0" align="left">
  <tr valign="bottom">
    <td width="488" height="25"><font face="Times New Roman, Times, serif" size="3">David
      Dunlap, CFO</font></td>
    <td width="564" height="25"><font face="Times New Roman, Times, serif" size="3">Stephen
      D. Axelrod, CFA</font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20"><font face="Times New Roman, Times, serif" size="3">Socket
      Communications, Inc.</font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3">Wolfe
      Axelrod Weinberger Associates, LLC</font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20"><font face="Times New Roman, Times, serif" size="3">(510)
      744-2735</font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3">(212)
      370-4500</font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20"><font face="Times New Roman, Times, serif" size="3">email:
      dave@socketcom.com </font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3">email:
      steve@wolfeaxelrod.com </font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="4"><b><font size="5">Socket
  Communications Reports Second Quarter Profit of $0.01 per share</font></b></font></p>
<p align="center"><font face="Times New Roman, Times, serif" size="3"><b><i>Second
  Quarter Revenue Grew 10 Percent over the Previous Sequential Quarter </i></b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>NEWARK, CA -- July 21,
  2005</b> -- Socket Communications, Inc. (NASDAQ: SCKT), the Mobile Connection&#153;
  Company, today reported net income applicable to common stockholders for the
  second quarter ended June 30, 2005 of $246,000 or $0.01 per share, compared
  to net income applicable to common stockholders of $43,000 or $0.00 per share
  for the same period a year ago, and compared to a net loss in the previous sequential
  quarter of ($404,000) or ($0.01) per share. The Company has been profitable
  for five of its last six quarters. Revenue for the quarter ended June 30, 2005
  was $6.6 million, declining 2 percent compared to revenue of $6.7 million in
  the same quarter a year ago, and increasing 10 percent compared to revenue of
  $6.0 million in the previous sequential quarter. </font></p>
<p>The Company reported net loss applicable to common stockholders of ($158,000)
  or ($0.01 per share) for the six months ended June 30, 2005 compared to net
  income applicable to common stockholders of $83,000 or $0.00 per share for the
  six months ended June 30, 2004. Revenue for the first six months of 2005 was
  $12.6 million compared to revenue of $13.5 million for the same period a year
  ago.</p>
<p>The Company's balance sheet at June 30, 2005 included a cash balance of $6.5
  million, reflecting a net increase of $0.6 million from the cash balance at
  December 31, 2004. Sources of cash for the six month period reflected positive
  cash flow from operations of $1.6 million, including working capital changes.
  Cash was used to pay down a bank line of credit by $0.7 million and for investment
  in property and equipment of $0.3 million. The current ratio (current assets
  divided by current liabilities) at June 30, 2005 was 1.8 to 1.0. The Company
  has no long term debt.</p>
<p>"We are pleased to report a profitable quarter and a return to sequential quarterly
  growth," said Kevin Mills, president and chief executive officer of Socket Communications.
  "Pocket PC model transitions that slowed sales in the first and second quarters
  are now largely completed, and we expect to see stronger sales in the second
  half of the year. Our Strategic Vertical Partner program and our focus on developer
  support are increasing the number of third party software applications that
  work with our products. We continue to expand our family of data collection
  and connectivity products to enhance enterprise productivity. And we have broadened
  our markets in now supporting bar code scanning on Symbian Series 60 and Series
  80 smartphones. These actions are all designed to enhance and enable the productivity
  of the mobile worker in collecting data and staying connected while mobile."
</p>
<p><font face="Times New Roman, Times, serif" size="3">During the quarter ended
  June 30, 2005, the Company announced the expansion of its Strategic Vertical
  Integrator Program, the launch of a feature-rich Bluetooth Development Kit for
  its next generation KwikBlue&#153; Modules with Bluetooth&reg; 2.0 Wireless
  Technology, the release of Wi-Fi&reg; Companion Software for Pocket PCs, the
  expansion of its portfolio of data collection products, and support for Microsoft's
  Windows Mobile 5.0 software platform for smartphones and Pocket PCs. These and
  other announcements are posted on the Company's website at http://www.socketcom.com/about/press.asp.
  </font></p>
<p></p>
<p></p>
<p></p>
<p><u><b><font face="Times New Roman, Times, serif" size="3">Other Financial Information</font></b></u></p>
<p>Revenue by product family for the three and six month periods ended June 30,
  2005 compared to the corresponding periods in 2004 was as follows:</p>
<table cellspacing=1 cellpadding=1 width=708 align=center border=1>
  <tr valign=bottom>
    <td width="38%" height=20>
      <div align="center"><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>Q2
        2005<br>
        Revenue<br>
        (Millions) </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)<br>
        over Q2 2004</b></font></p>
    </td>
    <td width="18%" height=20>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>Six
        Months<br>
        2005 Revenue<br>
        (Millions) </b></font></div>
    </td>
    <td width="14%" height=20>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>%
        Growth<br>
        (Decline)<br>
        over 1H 2004</b></font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=31><font face="Times New Roman, Times, serif" size="3">Bar
      Code Scanning Products</font></td>
    <td width="16%" height=31>
      <p align="center"><font face="Times New Roman, Times, serif" size="3">$
        2.8</font></p>
    </td>
    <td width="14%" height=31>
      <p align=center><font face="Times New Roman, Times, serif" size="3">17%</font></p>
    </td>
    <td width="18%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">$
        5.0</font></div>
    </td>
    <td width="14%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">2%</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17><font face="Times New Roman, Times, serif" size="3">Connectivity
      Products</font></td>
    <td width="16%" height=17>
      <p align="center"><font face="Times New Roman, Times, serif" size="3"> 2.2
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(6%)</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">4.3
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(13%)
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17><font face="Times New Roman, Times, serif" size="3">Peripheral
      Connection Products</font></td>
    <td width="16%" height=17>
      <p align="center">0.8 </p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(15%)&nbsp;</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">&nbsp;1.7
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">&nbsp;(8%)
        </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"><font face="Times New Roman, Times, serif" size="3">0.8
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(31%)</font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1.6
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(15%)
        </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">$
        6.6 </font></div>
    </td>
    <td width="14%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">(2%)</font></div>
    </td>
    <td width="18%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        12.6 </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><font size="3" face="Times New Roman, Times, serif"><br>
  Revenue by product family for the quarter ended June 30, 2005 compared to the
  previous quarter ended March 31, 2005 was as follows:</font></p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=708 align=center border=1>
  <tr valign=bottom>
    <td width="38%" height=20>
      <div align="center"><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>Q2
        2005<br>
        Revenue<br>
        (Millions) </b></font></p>
    </td>
    <td width="18%" height=20>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>Q1
        2005<br>
        Revenue<br>
        (Millions)</b></font></div>
    </td>
    <td width="14%" height=20>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><b>%
        Growth<br>
        (Decline)<br>
        over Q1 2005</b></font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=31><font face="Times New Roman, Times, serif" size="3">Bar
      Code Scanning Products</font></td>
    <td width="16%" height=31>
      <p align="center"><font face="Times New Roman, Times, serif" size="3">$
        2.8</font></p>
    </td>
    <td width="18%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">$
        2.1</font></div>
    </td>
    <td width="14%" height=31>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">30%</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17><font face="Times New Roman, Times, serif" size="3">Connectivity
      Products</font></td>
    <td width="16%" height=17>
      <p align="center"><font face="Times New Roman, Times, serif" size="3"> 2.2
        </font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 2.1
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3% </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="38%" height=17><font face="Times New Roman, Times, serif" size="3">Peripheral
      Connection Products</font></td>
    <td width="16%" height=17>
      <p align="center">0.8 </p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">0.9
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">&nbsp;(5%)
        </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"><font face="Times New Roman, Times, serif" size="3">0.8
        </font></p>
    </td>
    <td width="18%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 0.9
        </font></p>
    </td>
    <td width="14%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(15%)
        </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">$
        6.6 </font></div>
    </td>
    <td width="18%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        6.0 </font></div>
    </td>
    <td width="14%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">10%
        </font></div>
    </td>
  </tr>
</table>
<p>&nbsp;</p>
<p>Growth during the second quarter of 2005 in bar code scanning product revenue
  was driven by increased sales of Cordless Hand Scanners with Bluetooth Wireless
  Technology. Embedded product revenue during the second quarter of 2005 was primarily
  from sale of KwikBlue modules. The sale of interface chips during the quarter
  was less than 10 percent of this revenue category. The decline in Embedded Products
  revenue was due to the phasing down of chip sales by customers for wide area
  network cards and the timing of Bluetooth modules orders which are expected
  to increase in the second half of the year.</p>
<p>The Company's revenue for the past four quarters has been affected by delays
  in the transition to new models of Pocket PCs by the two major Pocket PC manufacturers,
  including out of stock conditions for several months each due to higher than
  anticipated demand for the older models and bug fixes needed to the operating
  system software of the new Pocket PC models. The Pocket PC is the primary mobile
  device platform used with the Company's connection and data collection products,
  and the extended transition periods slowed down deployment of enterprise solutions
  that include the Company's products. The last major operating system software
  updates for the new models were posted by the two largest Pocket PC manufacturers
  during April and during the last week of June 2005, respectively, and the transition
  by the Pocket PC manufacturers has been successfully completed. The Company
  expects that customer purchasing delays caused by this transition will be largely
  corrected during the second half of this year as customers may now proceed to
  complete their product testing and field trials.</p>
<p><i>Gross profit</i> on sales was 50 percent for the quarter and 51 percent
  for the six month period ended June 30, 2005 compared to 51 percent for the
  corresponding periods a year ago. Product margins are affected by product mix
  and by price discounts on higher volume sales, and tend to fluctuate within
  narrow ranges.</p>
<p><i>Research and development</i> <i>expense</i> was $0.9 million for the quarters
  ended June 30, 2005 and 2004, and was $1.8 million for the six month periods
  ended June 30, 2005 and 2004. Engineering headcount and contract engineering
  services, the two largest research and development expenses, were at similar
  levels during all periods reported.</p>
<p><i>Sales and marketing expense</i> increased to $1.6 million for the quarter
  ended June 30, 2005 compared to $1.5 million for the same period a year ago,
  and increased to $3.2 million for the six month period ended June 30, 2005 compared
  to $3.0 million for the same period a year ago. The increases resulted from
  higher sales and marketing headcount in 2005 and related travel expenses, and
  increased advertising and promotion. </p>
<p><i>General and administrative expense</i> decreased to $0.6 million for the
  quarter ended June 30, 2005 compared to $0.9 million for the same period a year
  ago, and to $1.4 million for the six month period ended June 30, 2005 compared
  to $1.7 million for the same period a year ago. The decreases were primarily
  due to the costs in 2004 of defending a patent litigation lawsuit initiated
  by Khyber Technologies that was settled in July 2004, partially offset in the
  first quarter of 2005 by higher audit costs relating to a new requirement for
  the internal controls of the Company to be audited as mandated by Sarbanes-Oxley
  Section 404.</p>
<p>Preferred stock dividends are paid quarterly to the remaining holders of Series
  F Convertible Preferred Stock issued in March 2003 and were lower in 2005 due
  to the conversion of Preferred Stock into common stock at the option of the
  holder. Approximately 70% of the Preferred Stock has been converted into common
  stock. All remaining shares of Series F Convertible Preferred Stock convert
  into common stock in March 2006 unless sooner converted by the holder.</p>
<p><font face="Times New Roman, Times, serif" size="3"><b>Quarterly Management
  Conference Call</b><br>
  <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 <u>www.ccbn.com</u> or participants
  may join the call by telephone at (800) 366-7417 or hear a replay via telephone
  at 800-405-2236, access code 11034714# for a week following the call.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>About Socket Communications</b><br>
  <br>
  Socket Communications, Inc., the Mobile Connection&#153; Company, provides a
  broad range of connectivity and data collection products for mobile devices
  that enhance enterprise productivity 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 <u>www.socketcom.com</u>. </font></p>
<p></p>
<p></p>
<p></p>
<p><b><font face="Times New Roman, Times, serif" size="3">Forward Looking Statements</font></b><font face="Times New Roman, Times, serif" size="3"><br>
  <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.<br>
  </font></p>
<p><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="2" 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. <b><font face="Times New Roman, Times, serif">&copy;</font></b>
  2005, Socket Communications, Inc. All rights reserved.</i></font> </p>
<p align="center"><font size="2" face="Times New Roman, Times, serif"></font><font size="3" face="Times New Roman, Times, serif"><br>
  --Financial tables to follow--</font></p>
<p> </p>
<hr>
<p align="center">&nbsp;</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=723 align=center border=1>
  <tr valign=bottom>
    <td colspan=5 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="36%" 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 June 30,</font></p>
    </td>
    <td colspan=2 height=17>
      <div align="center"><font face="Times New Roman, Times, serif" size="3">Six
        months ended June 30,</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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>2005</u>
        </font></p>
    </td>
    <td width="16%" height=17>
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><u>2004</u>
        </font></div>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2005</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>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">$ 6,580</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,732</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 12,562</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 13,475</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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"> 3,268</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 3,317</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 6,202</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 6,628</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">Gross margin</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,312</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,415</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,360</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,847</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" height=17>
      <blockquote>
        <p><font face="Times New Roman, Times, serif" size="3">Gross margin percent</font></p>
      </blockquote>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">50%</font>
      </p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">51%</font>
      </p>
    </td>
    <td width="16%" 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">51%</font>
      </p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">898</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">910</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,787</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,834</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">1,558</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,470</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,193</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,989</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">579</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">896</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,412</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,743</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" height=17><font face="Times New Roman, Times, serif" size="3">Amortization
      of intangibles</font></td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">36</font></div>
    </td>
    <td width="16%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">92</font></div>
    </td>
    <td width="16%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">131</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">184</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">3,071</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,368</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,523</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,750</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" height=17><font face="Times New Roman, Times, serif" size="3">Interest
      income, net</font></td>
    <td width="17%" height=17>
      <div align=center>17</div>
    </td>
    <td width="16%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">9</font></div>
    </td>
    <td width="16%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">29</font></div>
    </td>
    <td width="15%" height=17>
      <div align=center>12</div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">258
        </font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">56 </font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(134)</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">109
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" height=29>
      <p><font face="Times New Roman, Times, serif" size="3">Preferred stock dividends</font></p>
    </td>
    <td width="17%" height=29>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(12)</font></p>
    </td>
    <td width="16%" height=29>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(13)</font></p>
    </td>
    <td width="16%" height=29>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(24)</font></p>
    </td>
    <td width="15%" height=29>
      <p align=center><font face="Times New Roman, Times, serif" size="3">(26)</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="36%" 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">$ 246</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 43</font></p>
    </td>
    <td width="16%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (158)</font></p>
    </td>
    <td width="15%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 83</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td valign=top width="36%" height=45>
      <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=45>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.01<br>
        </font></p>
    </td>
    <td width="16%" height=45>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.00<br>
        </font></p>
    </td>
    <td width="16%" height=45>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.01)<br>
        </font></p>
    </td>
    <td width="15%" height=45>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.00<br>
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td rowspan="2" height=51 width="36%">
      <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&nbsp&nbsp&nbsp&nbspBasic<br>
        &nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbspDiluted </font></p>
      </td>
    <td rowspan="2" height=51 width="17%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,161
        <br>
        32,301 </font></p>
    </td>
    <td rowspan="2" height=51 width="16%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,013
        <br>
        34,045 </font></p>
    </td>
    <td rowspan="2" height=51 width="16%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,158
        <br>
        30,158 </font></p>
    </td>
    <td rowspan="2" height=51 width="15%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">29,974
        <br>
        34,195 </font></p>
    </td>
  </tr>
  <tr valign=bottom> </tr>
</table>
<font face="Times New Roman, Times, serif"><br>
<br>
<br>
<br>
</font>
<hr>
<font face="Times New Roman, Times, serif"><br>
<br>
<br>
<br>
<br>
</font>
<table cellspacing=1 cellpadding=1 width=674 align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height="67">
      <p align="center"><font face="Times New Roman, Times, serif" size="3"><b>Socket
        Communications, Inc.<br>
        Condensed Consolidated Summary Balance Sheets<br>
        (Amounts in Thousands)</b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=26 width="45%"><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp;
      </font></td>
    <td height=26 width="28%">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">June
        30, 2005<br>
        (Unaudited) </font></div>
    </td>
    <td height=26 width="27%">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">
        December 31, 2004*<br>
        </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Cash</font> </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,547</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Accounts receivable
        </font></p>
    </td>
    <td width="28%">
      <p align=center>3,301</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Inventories </font></p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,549
        </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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Other current assets</font>
      </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">149</font></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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Property and equipment,
        net </font></p>
    </td>
    <td width="28%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">523</font></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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Goodwill </font></p>
    </td>
    <td width="28%">
      <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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Intangible technology</font>
      </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">821</font></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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Other assets</font>
      </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">164</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Total assets </font></p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 23,852
        </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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Accounts payable
        and accrued liabilities</font> </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 3,490</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Bank line of credit</font>
      </p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,296</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Deferred income on
        shipments to distributors</font></p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,177</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="45%"><font face="Times New Roman, Times, serif" size="3">Capital
      leases/other non-current liabilities</font></td>
    <td width="28%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">72</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Common and convertible
        preferred stock </font></p>
    </td>
    <td width="28%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">50,649</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="45%">
      <p><font face="Times New Roman, Times, serif" size="3">Accumulated deficit</font>
      </p>
    </td>
    <td width="28%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(33,832)</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="45%"><font face="Times New Roman, Times, serif" size="3">Total
      Liabilities and Equity</font></td>
    <td width="28%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        23,852</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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