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<SEC-DOCUMENT>0000944075-06-000056.txt : 20060726
<SEC-HEADER>0000944075-06-000056.hdr.sgml : 20060726
<ACCEPTANCE-DATETIME>20060726160634
ACCESSION NUMBER:		0000944075-06-000056
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060630
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060726
DATE AS OF CHANGE:		20060726

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:		06981743

	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>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"><br>
  </font></p>
<table width="100%" 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"><b><u>Socket
      Communications Contacts:</u></b></font></td>
    <td width="564" height="25"><font face="Times New Roman, Times, serif" size="3"><b><u>US
      Editorial Contact:</u></b></font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="25"><font face="Times New Roman, Times, serif" size="3">David
      Dunlap</font></td>
    <td width="564" height="25"><font face="Times New Roman, Times, serif" size="3">Cara
      Sloman </font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">Chief Financial Officer</td>
    <td width="564" height="20">Nadel Phelan</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">510/744-2735</td>
    <td width="564" height="20">831/440-2411</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20"><font face="Times New Roman, Times, serif" size="3">dave@socketcom.com
      </font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3">cara@nadelphelan.com
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">&nbsp;</td>
    <td width="564" height="20">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">&nbsp;</td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3"><b><u>Investor
      Relations Contact:</u></b></font></td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">Carol Montalvo</td>
    <td width="564" height="20">Todd Kehrli or Jim Byers</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">Sr. Marketing Communications Manager</td>
    <td width="564" height="20">MKR Group, LLC</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20">510/744-2751</td>
    <td width="564" height="20">818/556-3700</td>
  </tr>
  <tr valign="bottom">
    <td width="488" height="20"><font face="Times New Roman, Times, serif" size="3">carol@socketcom.com
      </font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3">ir@mkr-group.com
      </font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">&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 2006 Second Quarter Record Revenue of $6.9 Million</font></b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><br>
  NEWARK, CA -- July 26, 2006</b> -- Socket Communications, Inc. (NASDAQ: SCKT),
  an innovative provider of mobile productivity products, today reported record
  revenue of $6.9 million for its second quarter ended June 30, 2006, a 4 percent
  increase over the same quarter one year ago and 1 percent over the preceding
  quarter's record revenue. </font></p>
<p>Net loss applicable to common stockholders for the second quarter ended June
  30, 2006 was $448,000, or a loss of $0.01 per share, compared to net income
  of $246,000 or $0.01 per share for the same quarter one year ago and a net loss
  of $380,000 or a loss of $0.01 per share for the preceding quarter. </p>
<p>For the six months ended June 30, 2006, revenue was $13.6 million, an 8 percent
  increase over the same period one year ago. Net loss applicable to common stockholders
  was $828,000 or a loss of $0.03 per share, compared to a net loss of $158,000,
  or a loss of $0.01 for the same period one year ago. Included in the 2006 net
  loss were expenses of $311,000 ($0.01 per share) and $614,000 ($0.02 per share),
  respectively, for the three and six months ended June 30, 2006 relating to the
  expensing of stock options as required by Financial Accounting Standard 123(R).
</p>
<p>The balance sheet at June 30, 2006 included cash of $7.3 million and no long
  term debt. Cash provided by operating activities was $357,000 and $1.6 million
  for the six month periods ended June 30, 2006 and 2005, respectively. </p>
<p>"During the quarter, we made progress on a number of fronts," said Kevin Mills,
  president and chief executive officer of Socket Communications. "Our newest
  bar code scanner, the Cordless Ring Scanner, is receiving a positive response
  from the marketplace and we are beginning to receive orders for shipments in
  the second half of this year. Our base of strategic vertical integrators continues
  to grow and now includes more than 90 companies that are developing vertical
  market application software for small and medium businesses using our data collection
  products." </p>
<p>"We also began shipping new CompactFlash Wi-Fi cards using 802.11g technology
  and are readying Secure Digital Wi-Fi cards for shipment in a few weeks. These
  cards are designed for faster transmission speeds over our former cards with
  802.11b technology, and along with our award winning Wi-Fi Companion software,
  provide fast, easy to use connections to wireless LAN networks and hotspots.
  And we are pleased to report that we are observing increases in the number of
  Windows 5.0 applications now available, which should allow our partners and
  customers to resume deployments of mobile applications with Windows Mobile 5.0
  devices as transitions are completed." </p>
<p>"On the operations front, we have nearly completed the substantial task of
  converting our products to meet the lead-free standards required in Europe under
  the Reduction of Hazardous Substances Act (RoHS), and have done so without disrupting
  supply availability to our European customers. These activities, coupled with
  substantial work on new product development and the requirement to expense stock
  options are the principal reasons for an increase in our operating expenses
  in 2006." </p>
<p>"We believe we are better positioned to serve our customers and generate additional
  growth in the second half of this year," Mills concluded.</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 through a link on our website at www.socketcom.com,
  or participants may join the call by telephone at (877) 407-8033 from within
  the U.S. or (201) 689-8033 from international locations. A replay will be available
  via telephone for a week following the call at (877) 660-6853 from within the
  U.S., or (201) 612-7415 from international locations. Access code for the replay
  is 286# followed by conference ID 207682#.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>About Socket Communications</b><br>
  <br>
  Socket Communications develops and distributes a broad range of data collection
  and network connectivity products for mobile devices such as PDAs, Smartphones
  and tablet PCs. Working collaboratively with mobile solutions from leading Strategic
  Vertical Integrators, world-class 3rd party software developers and OEMs, Socket
  Mobility Friendly&reg; products are proven to drive operational efficiencies,
  increase mobile workforce productivity, boost corporate performance and improve
  customer satisfaction. Socket is headquartered in Newark, California and can
  be reached at 510-744-2700 or http://www.socketcom.com/.</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. Such forward looking statements
  include, but are not limited to, statements indicating a positive outlook for
  our business and demand for our products, statements regarding our progress
  toward completion of certain initiatives and product transitions, and statements
  predicting trends and opportunities in the markets in which we sell our 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 that
  market trends and opportunities, such as the anticipated completion of the market
  transition to the Windows Mobile 5.0 operating system, may not materialize as
  quickly or as robustly as we anticipate, if at all, the risk that we may not
  complete the task of converting our products to comply with the Reduction of
  Hazardous Substances Act in Europe as quickly as we anticipate, if at all, the
  risk that our Strategic Vertical Integrator program may not be as successful
  as we anticipate, the risk of delays in our ability to design, manufacture,
  market and sell new products due to technological, market, or financial factors,
  including the availability of necessary working capital, risks related to our
  ability to effectively manage and contain our operating costs, risks related
  to the availability of announced handheld computer hardware and software, as
  well as 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, and other risks described in our most recent Form
  10-K and 10-Q reports filed with the Securities and Exchange Commission.<br>
  </font></p>
<p><i><font color="#000000" size="2">Socket and Battery Friendly are registered
  trademarks of Socket Communications, Inc. The Mobile Connection Company, Mobility
  Friendly, 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&reg; is a registered
  trademark of the Wi-Fi Alliance. All other trademarks and trade names contained
  herein may be those of their respective owners. &copy; 2006, Socket Communications,
  Inc. All rights reserved. </font></i> </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 width="100%">
<p align="center">&nbsp;</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=80% align=center border=1>
  <tr>
    <td colspan=5 height=70 valign="bottom">
      <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>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td colspan=2 height=17 valign="bottom">
      <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 valign="bottom">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">Six
        months ended June 30,</font></div>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2006</u>
        </font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><u>2005</u>
        </font></div>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2006</u>
        </font></p>
    </td>
    <td width="15%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2005</u>
        </font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Revenue </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,855</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,580</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 13,614</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 12,562</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Cost of revenue </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 3,454</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 3,268</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 6,839</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 6,202</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Gross profit</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,401</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,312</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,775</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">6,360</font></p>
    </td>
  </tr>
  <tr>
    <td width="17%" height=13 valign="bottom">
      <blockquote>
        <div align="left"><font face="Times New Roman, Times, serif" size="3">Gross
          profit percent</font></div>
      </blockquote>
    </td>
    <td width="17%" height=13 valign="top">
      <div align="center"><font size="3">50%</font></div>
    </td>
    <td width="17%" height=13 valign="top">
      <div align="center"><font size="3">50%</font></div>
    </td>
    <td width="16%" height=13 valign="top">
      <div align="center"><font size="3">50%</font></div>
    </td>
    <td width="16%" height=13 valign="top">
      <div align="center"><font size="3">51%</font></div>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Research and development
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,379</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">898</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,515</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,787</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Sales and marketing
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,841</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,558</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,603</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,193</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">General and administrative
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">641</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">579</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,484</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,412</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom"><font face="Times New Roman, Times, serif" size="3">Amortization
      of intangibles</font></td>
    <td width="17%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">36</font></div>
    </td>
    <td width="17%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">36</font></div>
    </td>
    <td width="17%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">72</font></div>
    </td>
    <td width="16%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">131</font></div>
    </td>
  </tr>
  <tr>
    <td width="17%" height=17 valign="bottom">
      <blockquote> <font face="Times New Roman, Times, serif" size="3">Total operating
        expenses</font></blockquote>
    </td>
    <td width="17%" height=17 valign="top">
      <div align="center"><font size="3">3,897</font></div>
    </td>
    <td width="17%" height=13 valign="top">
      <div align="center"><font size="3">3,071</font></div>
    </td>
    <td width="16%" height=17 valign="top">
      <div align="center"><font size="3">7,674</font></div>
    </td>
    <td width="16%" height=17% valign="top">
      <div align="center"><font size="3">6,523</font></div>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom"><font face="Times New Roman, Times, serif" size="3">Interest
      income, net</font></td>
    <td width="17%" height=17 valign="bottom">
      <div align=center>48</div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center>17</div>
    </td>
    <td width="16%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">82</font></div>
    </td>
    <td width="16%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">29</font></div>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Net operating income
        (loss) </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(448)
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">258
        </font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(817)</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(134)</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=29 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Preferred stock dividends</font></p>
    </td>
    <td width="17%" height=29 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">--</font></p>
    </td>
    <td width="17%" height=29 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(12)</font></p>
    </td>
    <td width="16%" height=29 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(11)</font></p>
    </td>
    <td width="16%" height=29 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(24)</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <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 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (448)</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 246</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (828)</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (158)</font></p>
    </td>
  </tr>
  <tr>
    <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 valign="middle">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.01)
        </font></p>
    </td>
    <td width="17%" height=45 valign="middle">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.01
        </font></p>
    </td>
    <td width="16%" height=45 valign="middle">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.03)
        </font></p>
    </td>
    <td width="16%" height=45 valign="middle">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.01)
        </font></p>
    </td>
  </tr>
  <tr>
    <td rowspan="2" height=51 width="36%" valign="bottom">
      <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%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">31,696
        <br>
        31,696 </font></p>
    </td>
    <td rowspan="2" height=51 width="17%" valign="bottom">
      <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%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">31,046
        <br>
        31,046 </font></p>
    </td>
    <td rowspan="2" height=51 width="16%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,158
        <br>
        30,158 </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=80% 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, 2006<br>
        (Unaudited) </font></div>
    </td>
    <td height=26 width="27%">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">
        December 31, 2005*<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">$ 7,254</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,833
        </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>3,064</p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 2,953
        </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">2,486
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,195</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">269</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">315</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">910</font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">628</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">677</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">749
        </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">171</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">164</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">$ 24,629
        </font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 23,635
        </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">$ 3,991</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 3,346
        </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">2,226</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,309
        </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">1,127</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,114</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">30</font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">51</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">51,972</font></p>
    </td>
    <td width="27%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">50,704
        </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">(34,717)</font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(33,889)</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">$
        24,629</font></div>
    </td>
    <td width="27%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        23,635 </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>
  <tr valign=bottom>
    <td colspan=3>
      <p><font face="Times New Roman, Times, serif" size="3">**Remaining Series
        F Preferred stock converted to common stock on March 21, 2006</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>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1 CHARTER
<SEQUENCE>2
<FILENAME>form-8k0726.htm
<TEXT>
<html>
<head>

</head>

<body bgcolor="#FFFFFF">
<div align=left>
  <hr width="100%">
  <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 26</b></font><b><font face="Times New Roman, Times, serif" size=3>,
  2006</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 width="35%">
      <center>
        <font face="Times New Roman, Times, serif" size=3>Delaware </font>
      </center>
    </td>
    <td height=30 width="30%">
      <center>
        <font face="Times New Roman, Times, serif" size=3>001-13810 </font>
      </center>
    </td>
    <td height=30 width="35%">
      <center>
        <font face="Times New Roman, Times, serif" size=3>94-3155066 </font>
      </center>
    </td>
  </tr>
  <tr>
    <td width="35%">
      <center>
        <font face="Times New Roman, Times, serif" size=2>(State or other jurisdiction
        of incorporation) </font>
      </center>
    </td>
    <td width="30%">
      <center>
        <font face="Times New Roman, Times, serif" size=2>(Commission File Number)
        </font>
      </center>
    </td>
    <td width="35%">
      <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>
<p style="PAGE-BREAK-BEFORE: always">
  </p></font></font>
<div align=left></div>
<div align=left>
  <hr width="100%">
</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 26, 2006, Socket
  Communications, Inc. issued a press release reporting its results for the three
  and six months ended June 30, 2006. 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 26, 2006, titled "</font><font face="Times New Roman, Times, serif" size="3">Socket
      Communications Reports 2006 Second Quarter Record Revenue of $6.9 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><p style="PAGE-BREAK-BEFORE: always">
<p style="PAGE-BREAK-BEFORE: always">
<hr width="100%">
<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=80% 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
          26, 2006</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><p style="PAGE-BREAK-BEFORE: always">
<hr width="100%">
<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 26, 2006, titled "</font><font face="Times New Roman, Times, serif" size="3">Socket
      Communications Reports 2006 Second Quarter Record Revenue of $6.9 Million".</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align=center>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<div align=left>
  <div align=left></div>
</div>
</body>
</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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