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<SEC-DOCUMENT>0000944075-06-000060.txt : 20061025
<SEC-HEADER>0000944075-06-000060.hdr.sgml : 20061025
<ACCEPTANCE-DATETIME>20061025164117
ACCESSION NUMBER:		0000944075-06-000060
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060930
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20061025
DATE AS OF CHANGE:		20061025

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:		061163261

	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>pressreleaseq3.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"><font face="Times New Roman, Times, serif" size="3"><b><u>Investor
      Relations Contact:</u></b></font></td>
    <td width="564" height="20"><font face="Times New Roman, Times, serif" size="3"><b></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">323/468-2300</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 Third Quarter Financial Results</font></b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><br>
  NEWARK, CA -- October 25, 2006</b> -- Socket Communications, Inc. (NASDAQ: SCKT),
  an innovative provider of mobile productivity products, today reported financial
  results for the third quarter ended September 30, 2006.</font></p>
<p>Total revenue for the third quarter was $6.0 million, compared to $6.5 million
  in the third quarter of 2005 and $6.9 million in the preceding quarter of 2006.
  Net loss applicable to common stockholders for the third quarter was $838,000,
  or a loss of $0.03 per share, compared to net income of $195,000, or $0.01 per
  share, for the third quarter of 2005 and a net loss of $448,000, or a loss of
  $0.01 per share, for the preceding quarter of 2006. </p>
<p>For the nine months ended September 30, 2006, total revenue was $19.6 million,
  up from $19.1 million for the same period in 2005. Net loss applicable to common
  stockholders was $1.7 million, or a loss of $0.05 per share, compared to a net
  income of $37,000, or $0.00 per share, for the same period in 2005. Included
  in the 2006 net loss were expenses of $298,000 ($0.01 per share) and $934,000
  ($0.03 per share), respectively, for the three and nine months ended September
  30, 2006 relating to the expensing of stock options as required by Financial
  Accounting Standard 123(R). </p>
<p>The balance sheet at September 30, 2006 included cash of $6.2 million and no
  long-term debt. Net cash used in operating activities was $455,000 for the nine
  months ended September 30, 2006 compared to cash provided by operating activities
  of $1.7 million for the nine months ended September 30, 2005.</p>
<p>"The level of corporate deployments of mobile handheld solutions completed
  during the traditionally slower third quarter summer period fell below our expectations,
  primarily due to a reduction in deployments by one of our North American channel
  partners," said Kevin Mills, president and chief executive officer of Socket
  Communications.</p>
<p>"We continue to see growing market acceptance for our cordless ring scanner,
  which enables simultaneous bar code scanning and hands-free handling of packages
  and merchandise. Since its introduction in March, more than 50 companies have
  purchased the cordless ring scanner for evaluation and field trials, and the
  feedback we have received is excellent. Sales of our data collection products
  that use Bluetooth wireless technology, including our cordless hand scanner
  and cordless ring scanner, experienced strong growth during the quarter and
  represented nearly 40 percent of our data collection product revenue, up from
  21 percent in the previous quarter. These data collection products with Bluetooth
  wireless technology continue to show increasing market traction and momentum
  and we have generated an increasing number of sales opportunities for the fourth
  quarter, with the bulk of these opportunities still very much ahead of us.</p>
<p>"Our recently introduced 802.11g Wireless LAN cards, five times faster than
  the 802.11b cards they replaced, are currently under evaluation by customers.
  These products come with the full suite of Socket driver software including
  our just-announced fast roaming features and our management software Wi-Fi Companion
  to help get and stay connected. We have also enabled several Real Time Operating
  System providers to build Linux and other drivers that will enable the use of
  our Wireless LAN cards with their solutions.</p>
<p>"In addition, our Strategic Vertical Integrator (SVI) Program continues to
  grow and mature. It now consists of over 100 third party application software
  developers and value added resellers that are enabling use of our products with
  the applications they offer to small and medium businesses in a number of vertical
  markets that require the use of handheld computers for data collection. Such
  vertical markets include health care, particularly in controlling the dispensing
  of medications to patients in a hospital environment, merchandising of products
  on retail shelves, and field force automation, enabling faster and more accurate
  taking of orders and supplying information to and from a remote field force.
</p>
<p>"Socket is an integral part of delivering mobile productivity solutions to
  enterprise vertical markets. Mobile computing devices, with and without mobile
  phone connections, have become open platforms with improved security, higher
  processing speeds, wireless connectivity, improved reliability and lower costs.
  The development of vertical market applications are enabling small and medium
  businesses to deploy these open platforms to collect, analyze, process and transmit
  data from and to remote locations over a variety of wireless and wired networks.
</p>
<p>"Socket's data collection and connectivity products and management software,
  in combination with a mobile computing device and applications software, enable
  enterprises to collect, process and transmit data to and from field locations
  with resulting major improvements in enterprise productivity. We've posted on
  our website at http://www.socketcom.com/success/ a number of success stories
  about enterprises that have deployed such solutions. With the assistance of
  our SVI partners, we believe that such success stories in a number of vertical
  application markets and across a wide range of enterprises are a growing trend
  that will fuel Socket's growth," 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
  US, or (201) 612-7415 from international locations. Access code for the replay
  is 286# followed by conference ID 216643#.</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 third party software developers and OEMs,
  Socket Mobility Friendly&reg; products 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, and statements predicting trends and
  sales 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 sales opportunities
  may not materialize in the fourth quarter of 2006 and beyond as anticipated,
  the risk that our Strategic Vertical Integrator program may not be as successful
  as we anticipate, the risk that acceptance of our products in vertical application
  markets may not continue as anticipated and that anecdotal evidence of success
  in those markets may not be indicative of a trend, 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 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 September 30,</font></p>
    </td>
    <td colspan=2 height=17 valign="bottom">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">Nine
        months ended September 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">$ 5,974</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 6,548</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 19,588</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 19,110</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"> 3,151</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 3,266</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 9,990</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 9,468</font></p>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Gross margin</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,823</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,282</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">9,598</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">9,642</font></p>
    </td>
  </tr>
  <tr>
    <td width="17%" height=2 valign="bottom">
      <blockquote>
        <div align="left"><font face="Times New Roman, Times, serif" size="3">Gross
          margin percent</font></div>
      </blockquote>
    </td>
    <td width="17%" height=2 valign="top">
      <div align="center"><font size="3">47%</font></div>
    </td>
    <td width="17%" height=2 valign="top">
      <div align="center"><font size="3">50%</font></div>
    </td>
    <td width="16%" height=2 valign="top">
      <div align="center"><font size="3">49%</font></div>
    </td>
    <td width="16%" height=2 valign="top">
      <div align="center"><font size="3">50%</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">1,239</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">848</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center>3,754</p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,635</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">1,839</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,654</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">5,442</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">4,847</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">594</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">563</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,078</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,975</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">35</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">107</font></div>
    </td>
    <td width="16%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">167</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">3,707</font></div>
    </td>
    <td width="17%" height=13 valign="top">
      <div align="center"><font size="3">3,101</font></div>
    </td>
    <td width="16%" height=17 valign="top">
      <div align="center"><font size="3">11,381</font></div>
    </td>
    <td width="16%" height=17% valign="top">
      <div align="center"><font size="3">9,624</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>(46)</div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center>(26)</div>
    </td>
    <td width="16%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(128)</font></div>
    </td>
    <td width="16%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(55)</font></div>
    </td>
  </tr>
  <tr>
    <td width="36%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Net income (loss)
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(838)
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">207
        </font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">(1,655)</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">73</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">(36)</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">$ (838)</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 195</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (1,666)</font></p>
    </td>
    <td width="16%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 37</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="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.03)
        </font></p>
    </td>
    <td width="17%" height=45 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.01
        </font></p>
    </td>
    <td width="16%" height=45 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.05)
        </font></p>
    </td>
    <td width="16%" height=45 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 0.00
        </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">31,846
        <br>
        31,846 </font></p>
    </td>
    <td rowspan="2" height=51 width="17%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,198
        <br>
        32,376 </font></p>
    </td>
    <td rowspan="2" height=51 width="16%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">31,313
        <br>
        31,313 </font></p>
    </td>
    <td rowspan="2" height=51 width="16%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">30,171
        <br>
        32,543 </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">September
        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">$ 6,229</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>3,334</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">2,562
        </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">187</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">774</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">642</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">175</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">$ 23,701
        </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">$ 3,528</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">2,219</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">1,207</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">19</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">52,283</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">(35,555)</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">$
        23,701</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-8k1025.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>October 25</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<br>
  </font><font face="Times New Roman, Times, serif"> <font size=2>(Registrant's
  telephone number, including area code)<br>
  <br>
  <br>
  </font></font>
<font face="Times New Roman, Times, serif"><font size=2>
<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 October 25, 2006, Socket
  Communications, Inc. issued a press release reporting its results for the three
  and nine months ended September 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 October 25, 2006, titled "</font><font face="Times New Roman, Times, serif" size="3">Socket
      Communications Reports 2006 Third Quarter Financial Results".</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: October
          25, 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 October 25, 2006, titled "</font><font face="Times New Roman, Times, serif" size="3">Socket
      Communications Reports 2006 Third Quarter Financial Results".</font></td>
  </tr>
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