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<SEC-DOCUMENT>0000944075-07-000030.txt : 20070618
<SEC-HEADER>0000944075-07-000030.hdr.sgml : 20070618
<ACCEPTANCE-DATETIME>20070615191746
ACCESSION NUMBER:		0000944075-07-000030
CONFORMED SUBMISSION TYPE:	11-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20061231
FILED AS OF DATE:		20070618
DATE AS OF CHANGE:		20070615

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:		11-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13810
		FILM NUMBER:		07924298

	BUSINESS ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808
		BUSINESS PHONE:		5109333000

	MAIL ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808
</SEC-HEADER>
<DOCUMENT>
<TYPE>11-K
<SEQUENCE>1
<FILENAME>form11-k.htm
<DESCRIPTION>FORM 11-K
<TEXT>
<html>
<head>
<title>Untitled Document</title>

</head>

<body bgcolor="#FFFFFF">
<p>&nbsp;</p>
<p align=center><font face="Times New Roman, Times, serif" size="3">UNITED STATES<br>
  SECURITIES AND EXCHANGE COMMISSION<br>
  Washington, D.C. 20549<br>
  </font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><strong>FORM
  11-K</strong></font></p>
<table cols=2 width="100%">
  <tr>
    <td valign=top width="2%">
      <center>
        <font size="3"><strong> (X) </strong></font>
      </center>
    </td>
    <td valign=top width="98%">
      <div align="center"><font size=3><strong>ANNUAL REPORT PURSUANT TO SECTION
        15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.</strong></font></div>
    </td>
  </tr>
</table>
<p align=center><font face="Times New Roman, Times, serif" size="3">For the fiscal
  year ended December 31, 2006</font></p>
<p align=center><font size="3" face="Times New Roman, Times, serif">OR</font></p>
<table cols=2 width="100%">
  <tr>
    <td valign=top width="2%" height="28">
      <center>
        <font size="3"><strong><font face="Times New Roman, Times, serif">(&nbsp;&nbsp;&nbsp;)
        </font> </strong></font>
      </center>
    </td>
    <td valign=top width="98%" height="28">
      <div align="center"><font face="Times New Roman, Times, serif"
      size=3><b>TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934.</b> </font></div>
    </td>
  </tr>
  <tr>
    <td valign=top width="2%" height="13">
      <center>
        <font size="3"><strong><font face="Times New Roman, Times, serif"> </font>
        </strong></font>
      </center>
    </td>
    <td valign=top width="98%" height="13">
      <div align="center"><font face="Times New Roman, Times, serif"
      size=3><br>
        For the transition period _____________________ to _____________________
        </font></div>
    </td>
  </tr>
</table>
<p align=center><br>
  Commission file number 1-13810</p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b><br>
  SOCKET COMMUNICATIONS, INC. 401(k) PLAN</b><br>
  (Full title of the plan)</font></p>
<p align=center><b><br>
  SOCKET COMMUNICATIONS, INC.<br>
  </b>(Name of the issuer of the securities held pursuant to the Plan)<br>
  <br>
  <b><br>
  39700 Eureka Drive, Newark, CA 94560</b><br>
  (Address of principal executive office of the issuer) </p>
<p align=center>&nbsp;</p>
<p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4>
<p></p>
<p></p>
<p></p>
<p align="center"><font face="Times New Roman, Times, serif" size="5"><br>
  </font></p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="5"><b>Socket
  Communications, Inc. 401(k) Plan</b></font><font face="Times New Roman, Times, serif" size="3"><b><font size="4"><i><br>
  <br>
  </i></font></b><font size="5">Financial Statements</font><b><font size="4"><i><br>
  </i></font></b><font size="4"><i><br>
  </i><font size="5">December 31, 2006 and 2005</font></font></font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p><font face="Times New Roman, Times, serif" size="3"><b>SOCKET COMMUNICATIONS,
  INC. 401(k) PLAN<br>
  </b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>Financial Statements<br>
  December 31, 2006 and 2005 </b></font></p>
<table border=0 cellspacing=0 cellpadding=0 width=100% align="left">
  <tr valign="bottom">
    <td colspan="2" height="29"><font face="Times New Roman, Times, serif" size="3"><br>
      </font><font face="Times New Roman"
      size=1><b><font size="3">Table of Contents</font></b></font><br>
      <hr color=#000000 noShade size=0>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="29">
      <p align="center">&nbsp;</p>
    </td>
    <td width="12%" height="29">
      <p align="center"><font face="Times New Roman, Times, serif" size="3"><b>Page</b></font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="30">
      <p align="left">Report of Independent Registered Public Accounting Firm
    </td>
    <td width="12%" height="30">
      <p align="center">1<font face="Times New Roman, Times, serif" size="3">
        </font>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="43">
      <p align="left">Financial Statements:
    </td>
    <td width="12%" height="43">
      <p align="center">&nbsp;
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="42">Statements of Net Assets Available for Benefits</td>
    <td width="12%" height="42">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">2</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="30">Statements of Changes in Net Assets Available
      for Benefits</td>
    <td width="12%" height="30">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">3</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="30">Notes to Financial Statements</td>
    <td width="12%" height="30">
      <div align="center">4</div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="29">Signature</td>
    <td width="12%" height="29">
      <div align="center">8</div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="29">Exhibit</td>
    <td width="12%" height="29">
      <div align="center">9</div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="88%" height="65">Supplemental schedules are omitted because they
      are not applicable. </td>
    <td width="12%" height="65">
      <div align="center"></div>
    </td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp; </p>
<p>&nbsp; </p>
<p><font face="Times New Roman, Times, serif" size="3"><br>
  </font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p>&nbsp; </p>
<p align="center"></p>
<p align="center"></p>
<p align="center"><font face="Times New Roman, Times, serif" size="3"><b>REPORT
  OF INDEPENDENT REGISTERED <br>
  PUBLIC ACCOUNTING FIRM</b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>To the Participants
  and<br>
  Plan Administrator of the<br>
  Socket Communications, Inc.<br>
  401(k) Plan </b></font></p>
<p>We have audited the financial statements of the Socket Communications, Inc.
  401(k) Plan (the Plan) as of December 31, 2006 and 2005, and for the years then
  ended, as listed in the accompanying table of contents. These financial statements
  are the responsibility of the Plan's management. Our responsibility is to express
  an opinion on these financial statements based on our audits. </p>
<p>We conducted our audits in accordance with standards of the Public Company
  Accounting Oversight Board (United States). Those standards require that we
  plan and perform the audits to obtain reasonable assurance about whether the
  financial statements are free of material misstatement. We were not engaged
  to perform an audit of the Plan's internal control over financial reporting.
  Our audit included consideration over financial reporting as a basis for designing
  audit procedures that are appropriate in the circumstances, but not for the
  purpose of expressing an opinion on the effectiveness of the Plan's internal
  control over financial reporting. Accordingly, we express no such opinion. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by the Plan's management,
  as well as evaluating the overall financial statement presentation. We believe
  that our audits provide a reasonable basis for our opinion.</p>
<p>In our opinion, the financial statements referred to above present fairly,
  in all material respects, the net assets available for benefits of the Plan
  as of December 31, 2006 and 2005, and the changes in net assets available for
  benefits for the years then ended, in conformity with accounting principles
  generally accepted in the United States of America.</p>
<blockquote>&nbsp;</blockquote>
<table width="44%" border="0">
  <tr>
    <td width="91%">MOHLER, NIXON & WILLIAMS</td>
  </tr>
  <tr>
    <td width="91%">Accountancy Corporation</td>
  </tr>
</table>
<br>
<br>
<table width="30%" border="0">
  <tr>
    <td>Campbell, California</td>
  </tr>
  <tr>
    <td>June 15, 2007</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">1</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4>
<p><font face="Times New Roman, Times, serif" size="3"><b>SOCKET COMMUNICATIONS,
  INC. 401(k) PLAN<br>
  <br>
  <br>
  </b></font></p>
<p align="left"><font face="Times New Roman, Times, serif" size="3"><b>STATEMENTS
  OF NET ASSETS AVAILABLE FOR BENEFITS</b></font> </p>
<hr color=#000000 noShade size=0>
<table width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr>
    <td align="left" nowrap width="72%" height="22"><font size="3"></font></td>
    <td width="2%" height="22"><font size="3"></font></td>
    <td align="left" colspan="7" height="16" valign="bottom">
      <div align="center"><font size="3"></font><font size="3"></font><font size="3"></font><font size="3"><b></b></font><font size="3"></font><font size="3"></font><font size="3">December
        31, </font></div>
    </td>
  </tr>
  <tr class="border">
    <td width="72%" height="18" valign="bottom"><font size="3"></font></td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2006</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2005</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#cceeff" width="72%"><font size="3" face="Times New Roman, Times, serif">Assets:</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments,
      at fair value</font></td>
    <td><font size="3"></font></td>
    <td align="left"><font size="3">$</font></td>
    <td align="right" nowrap><font size="3">3,403,806</font></td>
    <td><font size="3"></font></td>
    <td><font size="3"><b></b></font></td>
    <td align="left" valign="bottom"><font size="3">$</font></td>
    <td align="right" valign="bottom" nowrap><font size="3">2,712,501</font></td>
    <td align="left" valign="bottom" nowrap><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participant
      loans</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">34,658</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">24,610</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3">Assets held for investment
      purposes</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">3,438,464</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">2,737,111</font></td>
    <td align="left" valign="bottom" nowrap width="1%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr>
    <td valign="bottom" width="72%" height="16"><font size="3"></font></td>
    <td width="2%" height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" width="1%" height="16"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"  height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%" height="16"><font size="3"></font></td>
    <td width="2%" height="16"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"  height="16"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%" height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%" height="16"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3">Participants' contribution
      receivable</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000"><font size="3">10,681</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000"><font size="3">---</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td align="left" valign="top" width="72%" bgcolor="#cceeff"><font size="3">Net
      assets available for benefits</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" valign="bottom" bgcolor="#CCEEFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" valign="bottom" nowrap bgcolor="#CCEEFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">3,449,145</font></td>
    <td align="left" valign="bottom" bgcolor="#CCEEFF" style="border-bottom: 3px double #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" valign="bottom" bgcolor="#CCEEFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" valign="bottom" nowrap bgcolor="#CCEEFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">2,737,111</font></td>
    <td align="left" valign="bottom" bgcolor="#CCEEFF" style="border-bottom: 3px double #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="left" width="1%" height="16"><font size="3"></font></td>
    <td align="right" nowrap width="9%"  height="16"><font size="3"></font></td>
    <td align="left" nowrap width="1%" height="16"><font size="3"></font></td>
    <td width="2%" height="16"><font size="3"><b></b></font></td>
    <td align="left" width="1%"  height="16"><font size="3"></font></td>
    <td align="right" nowrap width="9%" height="16"><font size="3"></font></td>
    <td align="left" nowrap width="1%" height="16"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3">See notes to financial statements.</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
</table>
<p align="center">&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">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">2</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p><font face="Times New Roman, Times, serif" size="3"><b>SOCKET COMMUNICATIONS,
  INC. 401(k) PLAN<br>
  <br>
  <br>
  </b></font></p>
<p align="left"><b>STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
  </b></p>
<hr color=#000000 noShade size=0>
<table width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr>
    <td align="left" nowrap width="72%" height="22"><font size="3"></font></td>
    <td width="2%" height="22"><font size="3"></font></td>
    <td align="left" colspan="7" height="16" valign="bottom">
      <div align="center"><font size="3"></font><font size="3"></font><font size="3"></font><font size="3"><b></b></font><font size="3"></font><font size="3"></font><font size="3">December
        31, </font></div>
    </td>
  </tr>
  <tr class="border">
    <td width="72%" height="18" valign="bottom"><font size="3"></font></td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2006</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2005</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#cceeff" width="72%"><font size="3">Additions to net assets attributed
      to:</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
      income:</font></td>
    <td><font size="3"></font></td>
    <td align="left">&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
    <td><font size="3"></font></td>
    <td><font size="3"><b></b></font></td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom" nowrap>&nbsp;</td>
    <td align="left" valign="bottom" nowrap><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
      and interest</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff"><font size="3">$</font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff"><font size="3">188,290</font></td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" width="1%" bgcolor="#cceeff"><font size="3">$</font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff"><font size="3">116,765</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      realized and unrealized appreciation in fair value of investments </font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000"><font size="3">192,481</font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000"><font size="3">(55,515</font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000"><font size="3">)</font></td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">380,771</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">61,250</font></td>
    <td align="left" valign="bottom" nowrap width="1%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr>
    <td valign="bottom" width="72%" height="16"><font size="3"></font></td>
    <td width="2%" height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" width="1%" height="16"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"  height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%" height="16"><font size="3"></font></td>
    <td width="2%" height="16"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"  height="16"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%" height="16"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%" height="16"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3">Participants'
      contributions</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">411,278</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">370,358</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td align="left" valign="top" width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3">Total
      additions</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">792,049</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff" valign="bottom"><font size="3"><b></b></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">431,608</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3">Deductions from net assets
      attributed to withdrawals and distributions </font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff" valign="bottom"><font size="3">80,015</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000" valign="bottom">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff" valign="bottom"><font size="3">123,017</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left">&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
    <td><font size="3"></font></td>
    <td><font size="3"><b></b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
    <td align="left" nowrap><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3">Net increase in net assets</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">712,034</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff" valign="bottom"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff"><font size="3">308,591</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3">Net assets available for
      benefits:</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning
      of year&nbsp;</font><font size="3"></font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000"><font size="3">2,737,111</font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000"><font size="3">2,428,520</font></td>
    <td align="left" nowrap width="1%" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End
      of year&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">3,449,145</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000">&nbsp;</td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">2,737,111</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000">&nbsp;</td>
  </tr>
  <tr>
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%"><font size="3" face="Times New Roman, Times, serif">See notes
      to financial statements.&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3"></font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3"></font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
</table>
<p align="center">&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">&nbsp;</p>
<p align="center">3</p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4>
<p><font face="Times New Roman, Times, serif" size="3"><b>SOCKET COMMUNICATIONS,
  INC. 401(k) PLAN<br>
  <br>
  <br>
  NOTES TO FINANCIAL STATEMENTS </b></font></p>
<p align="left"><b>DECEMBER 31, 2006 and 2005 </b></p>
<hr color=#000000 noShade size=0>
<br>
<b>NOTE 1 - THE PLAN AND ITS SIGNIFICANT ACCOUNTING POLICIES </b>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>General</i></b> -
  The following description of the Socket Communications, Inc. 401(k) Plan (the
  Plan) provides only general information. Participants should refer to the Plan
  document for a more complete description of the Plan's provisions.</font></p>
<p>The Plan is a defined contribution plan that was established in 1996 by Socket
  Communications, Inc. (the Company) to provide benefits to eligible employees,
  as defined in the Plan document. The Plan administrator believes that the Plan
  is currently designed and operated in compliance with the applicable requirements
  of the Internal Revenue Code, as amended, and the provisions of the Employee
  Retirement Income Security Act of 1974 (ERISA), as amended.</p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Administration</i></b>
  - Under the terms of the Plan, a group of designated officers of the Company
  act as the trustee. The Company has appointed an Administrative Committee (the
  Committee) to manage the operation and administration of the Plan. The Company
  has contracted with a third-party administrator to process and maintain the
  records of participant data. Effective July 1, 2004, Reliance Trust Company
  (Reliance) was appointed as the custodian of the Plan. Substantially all expenses
  incurred for administering the Plan are paid by the Company. </font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Estimates</i></b>
  - The preparation of financial statements in conformity with accounting principles
  generally accepted in the United States of America requires management to make
  estimates and assumptions that affect the reported amounts of assets and liabilities,
  and changes therein, and disclosure of contingent assets and liabilities. Actual
  results could differ from those estimates.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Basis of accounting</i></b>
  - The financial statements of the Plan are prepared on the accrual method of
  accounting in accordance with accounting principles generally accepted in the
  United States of America.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Investments</i></b>
  - Investments of the Plan are held by the custodians and invested based solely
  upon instructions received from participants. The Company's common stock was
  an investment option prior to November 30, 2003. Effective November 30, 2003,
  new contributions are no longer allowed in the Socket Communications, Inc. Common
  Stock Fund, unless approved by the Plan trustee.<br>
  </font></p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif" size="3"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">4</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p><font face="Times New Roman, Times, serif" size="3">The Plan's investments
  in mutual funds and the Socket Communications, Inc. Common Stock Fund are valued
  at fair value as of the last day of the Plan year, as measured by quoted market
  prices. Participant loans are valued at cost, which approximates fair value.
  In 2005, the Plan entered into a benefit-responsive investment contract with
  MetLife Insurance Company. The assets are invested in a separate MetLife account.
  Interest is credited to the contract at interest rates that reflect the performance
  of the underlying portfolio. Such interest rates are reviewed on a quarterly
  basis for resetting. MetLife will guarantee principal and accrued interest,
  based on credited interest rates, for participant-initiated withdrawals as long
  as the contract remains active. The investment contract has no maturity date.
  The Plan's investment in the MetLife benefit-responsive investment contract
  is presented at fair value which approximates contract value. The average yields
  on the MetLife benefit-responsive contract are presented in the table below.</font><br>
  <br>
</p>
<table width="80%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr class="border">
    <td width="73%" class="border" style="border-bottom: 1px solid #000000" height="18" valign="bottom">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">Average
        yields</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3" face="Times New Roman, Times, serif"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">2006</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3" face="Times New Roman, Times, serif"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">2005</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#cceeff" width="73%"><font size="3" face="Times New Roman, Times, serif">Based
      on actual earnings</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff"><font face="Times New Roman, Times, serif" size="3"></font></td>
    <td align="right" nowrap width="6%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">5.27</font></td>
    <td width="4%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">%</font></td>
    <td width="2%" bgcolor="#cceeff"><font face="Times New Roman, Times, serif" size="3"></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff"><font face="Times New Roman, Times, serif" size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="6%" bgcolor="#cceeff">
      <p><font size="3" face="Times New Roman, Times, serif">4.35</font></p>
    </td>
    <td width="4%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">%</font></td>
  </tr>
  <tr valign="bottom">
    <td width="73%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">Based
      on interest rate credited to participants</font></td>
    <td bgcolor="#FFFFFF" width="2%"><font size="3" face="Times New Roman, Times, serif"></font></td>
    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="3"></font></td>
    <td align="right" nowrap width="6%"><font size="3" face="Times New Roman, Times, serif">4.80</font></td>
    <td width="4%"><font size="3" face="Times New Roman, Times, serif">%</font></td>
    <td width="2%"><font size="3" face="Times New Roman, Times, serif"><b></b></font></td>
    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="3"></font></td>
    <td align="right" nowrap width="6%"><font size="3" face="Times New Roman, Times, serif">4.35</font></td>
    <td width="4%"><font size="3" face="Times New Roman, Times, serif">%</font></td>
  </tr>
</table>
<br>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Income taxes </i></b>-
  The Plan has adopted a prototype plan that has been amended since receiving
  an opinion letter from the Internal Revenue Service. The Company believes that
  the Plan is operated in accordance with, and qualifies under, the applicable
  requirements of the Internal Revenue Code and related state statutes, and that
  the trust, which forms a part of the Plan, is exempt from federal income and
  state franchise taxes.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Risks and uncertainties</i></b>
  - The Plan provides for various investment options in any combination of investment
  securities offered by the Plan, including the Company's common stock, which
  was limited to existing investments commencing November 30, 2003, and any additional
  investments in the Company's common stock allowed only upon approval by the
  Plan trustee. Investment securities are exposed to various risks, such as interest
  rate, market fluctuations and credit risks. Due to the risk associated with
  certain investment securities, it is at least reasonably possible that changes
  in market values, interest rates or other factors in the near term would materially
  affect participants' account balances and the amounts reported in the statements
  of net assets available for benefits and the statements of changes in net assets
  available for benefits.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>NOTE 2 - PARTICIPATION
  AND BENEFITS</b></font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Participant contributions</i>
  </b>- Participants may elect to have the Company contribute up to 20% of their
  eligible pre-tax compensation not to exceed the amount allowable under current
  income tax regulations. Participants who elect to have the Company contribute
  a portion of their compensation to the Plan agree to accept an equivalent reduction
  in taxable compensation. Contributions withheld are invested in accordance with
  the participant's direction.</font></p>
<p>Participants are also allowed to make rollover contributions of amounts received
  from other tax-qualified employer-sponsored retirement plans. Such contributions
  are deposited in the appropriate investment funds in accordance with the participant's
  direction and the Plan's provisions.</p>
<p>&nbsp;</p>
<p> <br>
</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3">5</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Employer contributions</i>
  </b>- The Company is allowed to make qualified non-elective matching contributions
  as defined in the Plan. No qualified non-elective matching contribution has
  been made for the years ended December 31, 2006 and 2005.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Vesting </i></b>-
  Participants are fully vested in their account at all times. </font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Participant accounts</i></b><i>
  </i>- Each participant's account is credited with the participant's contribution,
  Plan earnings or losses and an allocation of the Company's contribution, if
  any. Allocation of the Company's contribution is based on eligible employee
  compensation, as defined in the Plan.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><i><b>Payment of benefits</b></i>
  - Upon termination, the participants or beneficiaries may elect to leave their
  account balance in the Plan, or receive their total benefits in a lump sum amount,
  installments, employer securities or other marketable securities equal to the
  value of the participant's account. The Plan allows for the automatic lump sum
  distribution of participant account balances that do not exceed $1,000 ($5,000
  prior to March 28, 2005).</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b><i>Loans to participants</i></b>
  - The Plan allows participants to borrow up to the lesser of $50,000 or 50%
  of their account balance. The loans are secured by the participant's account
  balance. Such loans bear interest at the available market financing rates and
  must be repaid to the Plan within a five-year period, unless the loan is used
  for the purchase of a principal residence in which case the maximum repayment
  period may be longer. The specific terms and conditions of such loans are established
  by the Plan administrator. Outstanding loans at December 31, 2006 carry interest
  rates ranging from 7.25% to 8.25%.</font></p>
<p><font face="Times New Roman, Times, serif" size="3"><b>NOTE 3 - INVESTMENTS</b></font></p>
<p>The following table presents the fair values of investments and investment
  funds that include 5% or more of the Plan's net assets at December 31, 2006
  and 2005:</p>
<table width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr class="border">
    <td width="72%" height="18" valign="bottom"><font size="3"></font></td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2006</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2005</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#cceeff" width="72%">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Lord
      Abbett Mid Cap Value Fund A</font></td>
    <td bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3">$</font></td>
    <td align="right" nowrap width="9%"><font size="3">677,224</font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" width="1%"><font size="3">$</font></td>
    <td align="right" nowrap width="9%"><font size="3">547,989</font></td>
    <td align="left" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;MFS
      Total Return Fund A</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff"><font size="3">222,310</font></td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" bgcolor="#cceeff" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff"><font size="3">195,609</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Vanguard
      500 Index Fund</font></td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">797,791</font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">614,622</font></td>
    <td align="left" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" valign="bottom" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;First
      American Prime Obligations Fund</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">208,331</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff" valign="bottom"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="right" nowrap width="9%" valign="bottom" bgcolor="#cceeff"><font size="3">220,881</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" valign="bottom" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Lord
      Abbett Affiliated A</font></td>
    <td width="2%" height="16" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" width="1%" valign="bottom"><font size="3"></font></td>
    <td align="right" nowrap width="9%" valign="bottom"><font size="3">164,957</font></td>
    <td width="1%" valign="bottom"><font size="3"></font></td>
    <td width="2%" valign="bottom"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%"><font size="3"></font></td>
    <td align="right" valign="bottom" nowrap width="9%"><font size="3">124,241</font></td>
    <td align="left" valign="bottom" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Columbia
      Acorn Fund A</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff"><font size="3">364,433</font></td>
    <td width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" bgcolor="#cceeff" width="1%"><font size="3"></font></td>
    <td align="right" bgcolor="#cceeff" nowrap width="9%"><font size="3">289,984</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;American
      Funds Growth Fund of America R4</font></td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">325,309</font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">281,838</font></td>
    <td align="left" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr>
    <td width="72%" valign="bottom" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;American
      Funds EuroPacific Growth Fund R4</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff" valign="bottom"><font size="3">316,637</font></td>
    <td width="1%" bgcolor="#cceeff" valign="bottom"><font size="3"></font></td>
    <td width="2%" bgcolor="#cceeff" valign="bottom"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="right" nowrap width="9%" valign="bottom" bgcolor="#cceeff"><font size="3">182,786</font></td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Socket
      Communications Common Stock Fund</font></td>
    <td width="2%" bgcolor="#FFFFFF">&nbsp;</td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">188,464</font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" width="1%"><font size="3"></font></td>
    <td align="right" nowrap width="9%"><font size="3">137,085</font></td>
    <td align="left" nowrap width="1%"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Other
      funds individually less than 5% of net assets</font></td>
    <td width="2%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">173,008</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">142,076</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Total</font></td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">3,438,464</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000">&nbsp;</td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">2,737,111</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000">&nbsp;</td>
  </tr>
</table>
<p>&nbsp;</p>
<p><br>
  <br>
</p>
<p align="center"><font face="Times New Roman, Times, serif">6</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p align="left"><br>
  The Plan's investments (including gains and losses on investments bought and
  sold, as well as held during the year) appreciated (depreciated) in value as
  follows for the years ended December 31, 2006 and 2005:<br>
</p>
<table width="80%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr class="border">
    <td width="72%" height="18" valign="bottom"><font size="3"></font></td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2006</font></div>
    </td>
    <td width="2%" class="border" height="18"><font size="3"><b></b></font></td>
    <td align="left" valign="bottom" colspan="3" class="border" style="border-bottom: 1px solid #000000" height="18">
      <div align="center"><font size="3">2005</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#cceeff" width="72%">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" width="1%" bgcolor="#cceeff">&nbsp;</td>
    <td align="right" valign="bottom" nowrap width="9%" bgcolor="#cceeff">&nbsp;</td>
    <td align="left" valign="bottom" nowrap width="1%" bgcolor="#cceeff"><font size="3"></font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Common
      stock</font></td>
    <td bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" width="1%"><font size="3">$</font></td>
    <td align="right" nowrap width="9%"><font size="3">12,973</font></td>
    <td width="1%"><font size="3"></font></td>
    <td width="2%"><font size="3"><b></b></font></td>
    <td align="left" width="1%"><font size="3">$</font></td>
    <td align="right" nowrap width="9%"><font size="3">(116,182</font></td>
    <td align="left" nowrap width="1%"><font size="3">)</font></td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#cceeff"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Mutual
      funds</font></td>
    <td width="2%" bgcolor="#cceeff"><font size="3"></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">179,508</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td width="2%" bgcolor="#cceeff"><font size="3"><b></b></font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
    <td align="right" nowrap width="9%" style="border-bottom: 1px solid #000000" bgcolor="#cceeff"><font size="3">60,667</font></td>
    <td align="left" nowrap width="1%" bgcolor="#cceeff" style="border-bottom: 1px solid #000000">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="72%" bgcolor="#FFFFFF"><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Total</font></td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">192,481</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000">&nbsp;</td>
    <td width="2%" bgcolor="#FFFFFF"><font size="3"></font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">$</font></td>
    <td align="right" bgcolor="#FFFFFF" nowrap style="border-bottom: 3px double #000000"><font face="Times New Roman, Times, serif" size="3">(55,515</font></td>
    <td align="left" bgcolor="#FFFFFF" style="border-bottom: 3px double #000000"><font size="3">)</font></td>
  </tr>
</table>
<p align="left"><br>
  <font face="Times New Roman, Times, serif" size="3"><b>NOTE 4 - PARTY-IN-INTEREST
  TRANSACTIONS</b></font></p>
<p>Prior to November 30, 2003 the Plan allowed participants to elect to invest
  a portion of their account in the common stock of the Company. Commencing November
  30, 2003, existing investments in the common stock of the Company by participants
  can be retained, but additional investments are not allowed unless approved
  by the Plan trustee. Aggregate investment in the Socket Communications, Inc.
  Common Stock Fund at December 31, 2006 and 2005 was as follows:<br>
</p>
<table width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">
  <tr>
    <td colspan="2" style="border-bottom: 1px solid #000000">
      <div align="center"><font size="3">Date</font></div>
    </td>
    <td width="4%"><b><font size="3">&nbsp</font></b></td>
    <td colspan="2" align="center" nowrap class="border" style="border-bottom: 1px solid #000000"><font size="3">Number
      of shares</font></td>
    <td colspan="2" class="border"><b><font color="#FF0000" size="3"></font></b><b><font color="#FF0000" size="3"></font></b></td>
    <td colspan="2" align="center" nowrap class="border" style="border-bottom: 1px solid #000000"><font size="3">Cost</font></td>
    <td colspan="2" class="border"><b><font color="#FF0000" size="3"></font></b><b><font color="#FF0000" size="3"></font></b></td>
    <td colspan="2" align="center" nowrap class="border" style="border-bottom: 1px solid #000000"><font size="3">Fair
      value </font></td>
  </tr>
  <tr valign="bottom">
    <td colspan="2" align="left" bgcolor="#cceeff">
      <div style="margin-left: 10px; text-indent: -10px" align="center"><font size="3">
        2005</font></div>
    </td>
    <td bgcolor="#cceeff" width="4%"><font size="3"><b></b></font></td>
    <td align="left" bgcolor="#cceeff" colspan="2">
      <div align="center"><font size="3">121,317</font></div>
    </td>
    <td bgcolor="#cceeff" colspan="2"><font size="3"><b><font color="#000000"></font></b></font><font size="3"><b><font color="#000000"></font></b></font></td>
    <td align="left" colspan="2" bgcolor="#cceeff">
      <div align="center"><font size="3"><font color="#000000">$</font></font><font size="3">230,634</font></div>
    </td>
    <td bgcolor="#cceeff" colspan="2"><font size="3"><b><font color="#000000"></font></b></font><font size="3"><b><font color="#000000"></font></b></font></td>
    <td align="left" colspan="2" bgcolor="#cceeff">
      <div align="center"><font size="3"><font color="#000000">$</font></font><font size="3">137,085</font></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="2" align="left">
      <div style="margin-left: 10px; text-indent: -10px" align="center"><font size="3">
        2006</font></div>
    </td>
    <td width="4%"><font size="3"><b></b></font></td>
    <td align="left" colspan="2">
      <div align="center"><font size="3">168,271</font></div>
    </td>
    <td colspan="2"><font size="3"><b><font color="#000000"></font></b></font><font size="3"><b><font color="#000000"></font></b></font></td>
    <td align="left" colspan="2">
      <div align="center"><font size="3"><font color="#000000">$</font></font><font size="3">268,600</font></div>
    </td>
    <td colspan="2"><font size="3"><b><font color="#000000"></font></b></font><font size="3"><b><font color="#000000"></font></b></font></td>
    <td align="left" colspan="2">
      <div align="center"><font size="3"><font color="#000000">$</font></font><font size="3">188,464</font></div>
    </td>
  </tr>
</table>
<p><br>
  <font face="Times New Roman, Times, serif" size="3"><b>NOTE 5 - PLAN TERMINATION
  OR MODIFICATION</b></font></p>
<p>The Company intends to continue the Plan indefinitely for the benefit of its
  participants; however, it reserves the right to terminate or modify the Plan
  at any time by resolution of its Board of Directors and subject to the provisions
  of ERISA. </p>
<p><b><font face="Times New Roman, Times, serif" size="3">NOTE 6 - SUBSEQUENT
  EVENT </font></b></p>
<p><font face="Times New Roman, Times, serif" size="3">As of June 15, 2007, the
  price of Socket Communications Inc. common stock has decreased by approximately
  20% from its December 31, 2006 level. The Plan's investment in Company common
  stock may have significantly decreased in value. </font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p></p>
<p></p>
<p></p>
<p></p>
<p></p>
<p></p>
<p></p>
<p align="center"><font face="Times New Roman, Times, serif">7</font></p>
<p style="PAGE-BREAK-BEFORE: always">
<hr align="LEFT" size=4 width="100%">
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3"><b>SIGNATURES</b></font></p>
<p><i>The Plan</i>. Pursuant to the requirements of the Securities and Exchange
  Act of 1934, the Plan Administrator has duly caused this annual report to be
  signed on its behalf by the undersigned hereunto duly authorized.</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3">SOCKET COMMUNICATIONS,
  INC. 401(k) PLAN<br>
  (Name of Plan)</font></p>
<table width="80%" border="0" cellspacing="0" cellpadding="0" align="left">
  <tr>
    <td width="498"><font face="Times New Roman, Times, serif" size="3">Date:
      June 15, 2007</font></td>
    <td width="370"><font face="Times New Roman, Times, serif" size="3"><u>/s/
      David W. Dunlap</u></font></td>
  </tr>
  <tr>
    <td width="498">&nbsp;</td>
    <td width="370">David W. Dunlap<br>
      Vice President of Finance<br>
      and Administration and Chief Financial<br>
      Officer (Duly Authorized Officer and Principal Financial and Accounting
      Officer) </td>
  </tr>
  <tr>
    <td width="498">&nbsp;</td>
    <td width="370">&nbsp;</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="right">&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">8</p>
<p style="PAGE-BREAK-BEFORE: always">
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<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>2
<FILENAME>form11-k_ex23.htm
<DESCRIPTION>EXHIBIT 23
<TEXT>
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<title>Untitled Document</title>

</head>

<body bgcolor="#FFFFFF">
<p align="right"><b><font face="Times New Roman, Times, serif" size="3">Exhibit
  23</font></b></p>
<p align="center"><b>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</b></p>
<p>We consent to the incorporation by reference in the Registration Statement
  on Form S-8 (No. 333-106502) of Socket Communications, Inc. of our report dated
  June 15, 2007, with respect to the statements of net assets available for benefits
  of Socket Communications, Inc. 401(k) Plan as of December 31, 2006 and 2005,
  the related statements of changes in net assets available for benefits for the
  years then ended, which report appears in the December 31, 2006 annual report
  on Form 11-K of the Socket Communications, Inc. 401(k) Plan.<br>
  <br>
</p>
<p></p>
<table width="44%" border="0">
  <tr>
    <td width="91%"><u>/s/ MOHLER, NIXON & WILLIAMS</u></td>
  </tr>
  <tr>
    <td width="91%">MOHLER, NIXON & WILLIAMS</td>
  </tr>
  <tr>
    <td width="91%">Accountancy Corporation</td>
  </tr>
</table>
<br>
<table width="30%" border="0">
  <tr>
    <td>Campbell, California</td>
  </tr>
  <tr>
    <td>June 15, 2007</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">9</p>
<p align="center">&nbsp;</p>
<p>&nbsp;</p>
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