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<SEC-DOCUMENT>0000944075-11-000004.txt : 20110113
<SEC-HEADER>0000944075-11-000004.hdr.sgml : 20110113
<ACCEPTANCE-DATETIME>20110112180746
ACCESSION NUMBER:		0000944075-11-000004
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20110113
DATE AS OF CHANGE:		20110112

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOCKET MOBILE, 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:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-171267
		FILM NUMBER:		11526206

	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

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOCKET COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19950418
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>socket_424b3.htm
<DESCRIPTION>FORM 424B3
<TEXT>
<HTML>
<HEAD></HEAD><BODY bgcolor=white>
<div align="right"><font face="Times New Roman, Times, serif" size="3"> </font></div>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif" size="3"><b>FILED
  PURSUANT TO RULE 424 (b)(3) <br>
  <br>
  PROSPECTUS<br>
  <font size="4"><br>
  </font>1,310,398 Shares<br>
  <br>
  <font size="5">Socket Mobile, Inc.</font><br>
  <br>
  <font size="4">Common Stock</font> </b></font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif" size="3">____________________</font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif" size="3">This prospectus
  relates to 1,310,398 shares of our Common Stock which may be sold from time
  to time by certain stockholders set forth in the &quot;Selling Stockholders&quot;
  section of this prospectus. Of the shares offered by this prospectus, such shares
  include 760,398 shares of Common Stock issuable upon the conversion of a senior
  secured note and 550,000 shares of Common Stock issuable upon exercise or conversion
  of warrants. <br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif" size="3">The prices
  at which the selling stockholders or their transferees may sell the shares may
  be determined by the prevailing market prices for the shares or in negotiated
  transactions. While we may receive proceeds upon the exercise of the warrants,
  we will not receive any proceeds from the sale of the shares offered by this
  prospectus.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif" size="3">Our Common
  Stock is quoted on the Nasdaq Capital Market under the symbol &quot;SCKT.&quot;
  On January 6, 2011 , the last reported sale price for our Common Stock
  on the Nasdaq Capital Market was $1.95 per share.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif" size="3"><b>Investment
  in the securities involves a high degree of risk. See &quot;Risk Factors&quot;
  beginning on page 4.</b></font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif" size="3"><b>____________________<br>
  <br>
  </b></font></P>
<p><b><font face="Times New Roman, Times, serif" size="3">NEITHER THE SECURITIES
  AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
  DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
  PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</font></b></p>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif" size="3"><b>The date
  of this prospectus is January 12, 2011.</b></font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<hr align="LEFT" size=4>
<p>&nbsp;</p>
<table width="879" border="0" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td colspan="3">
      <div align="center"></div>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><strong>TABLE
        OF CONTENTS </strong></font></p>
    </td>
  </tr>
  <tr>
    <td width="27" height="28"><font face="Times New Roman, Times, serif"></font></td>
    <td width="807" height="28"><font face="Times New Roman, Times, serif"></font></td>
    <td width="56" height="28">
      <div align="center"><font face="Times New Roman, Times, serif" size="3"><u>PAGE
        </u></font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif"></font></td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">PROSPECTUS
      SUMMARY</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">1</font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">RISK FACTORS</font></td>
    <td width="56">
      <div align="center">8</div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">INFORMATION
      CONTAINED IN THIS PROSPECTUS</font></td>
    <td width="56">
      <div align="center">21</div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">FORWARD-LOOKING
      STATEMENTS</font></td>
    <td width="56">
      <div align="center">21</div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">USE OF
      PROCEEDS</font></td>
    <td width="56">
      <div align="center">21</div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">SELLING
      STOCKHOLDERS</font></td>
    <td width="56">
      <div align="center">22</div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">PLAN OF
      DISTRIBUTION</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">25</font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">LEGAL
      MATTERS</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">27</font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">EXPERTS</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">27</font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">WHERE
      YOU CAN FIND MORE INFORMATION</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">28</font></div>
    </td>
  </tr>
  <tr>
    <td colspan="2">&nbsp;</td>
    <td width="56"><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="3">INFORMATION
      INCORPORATED BY REFERENCE</font></td>
    <td width="56">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">28</font></div>
    </td>
  </tr>
</table>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">- i -</P>
<hr align="LEFT" size=4>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b><br>
  <br>
  PROSPECTUS SUMMARY</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><i>This summary highlights
  important features of this offering and the information included or incorporated
  by reference in this prospectus. This summary does not contain all of the information
  that you should consider before investing in our Common Stock. You should read
  the entire prospectus carefully, especially the risks of investing in our Common
  Stock discussed under &quot;Risk Factors.&quot;</i></font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b><br>
  The Company</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  We are a producer of mobile computing hardware systems serving the business
  mobility markets. We offer a family of handheld computer products and a wide
  range of data collection products. We also offer embedded Bluetooth and wireless
  LAN products. Our data collection peripheral products also work with many third-party
  mobile handheld devices including smartphones, handheld computers, tablet computers,
  ultra-mobile personal computers, and notebooks, adding data collection and connectivity
  capabilities to these devices. Our products are designed to run or enhance mobile
  applications that enable the accessing, collection and processing of data by
  employees while mobile. Our mobile computing products utilize popular Bluetooth
  and wireless LAN connection technologies. Our plug-in and cordless data collection
  products offer a variety of data collection technologies including laser scanning,
  two dimensional and linear barcode scanning, plus we offer RFID (radio frequency
  identification) and magnetic stripe readers.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">More than 200 software
  integration companies are offering or developing vertical software applications
  for use with our handheld computers and data collection products. Healthcare
  and hospitality are two of the primary areas of focus for our software integration
  partners and more than half of our handheld computer sales now come from organizations
  within the healthcare and hospitality industries. Other vertical markets benefiting
  from our mobile solutions include retail merchandising, automotive, government
  and education. These mobile solutions are designed to improve the productivity
  of business enterprises and service providers by automating manual tasks, improving
  the quality of information collected, and enhancing mobile productivity by processing
  and transferring information from remote locations and mobile devices to the
  business or medical enterprise, and then if required, back to the remote locations
  and mobile devices.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We believe growth in
  the mobile workforce along with technical advances and cost reductions in mobile
  devices and networking technologies and the pervasive use of the Internet are
  driving broader adoption of mobile computing. Our products are designed to address
  the growing need for mobile computing by today's mobile workforce by enabling
  them to run or enhance mobile applications that allow access to business data
  files, or collect and process data while mobile, thereby enhancing their productivity
  and allowing them to exploit time sensitive opportunities and improve customer
  satisfaction. Overall, our hardware products enable mobile third-party applications
  to become complete mobile data collection and connectivity solutions. <br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We also make available
  to original equipment manufacturers (&quot;OEMs&quot;) our component Bluetooth
  and wireless LAN technologies. We develop these components for our own products
  and leverage that investment through the sale of modules and plug-in cards to
  OEM manufacturers to embed into their products, including driver and device
  management software that is designed to simplify the ability of mobile employees
  to get and stay connected with Wi-Fi as well as with Bluetooth. </font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<hr align="LEFT" size=4>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  Total employee headcount on November 30, 2010 was 66 people. We subcontract
  the manufacturing of all of our products to independent third-party contract
  manufacturers located in the U.S., China and Taiwan and who have the equipment,
  know-how and capacity to manufacture products to our specifications. Our handheld
  computers and peripheral products are sold through a worldwide network of distributors
  and resellers, vertical industry partners, and value added resellers. Our OEM
  products are sold directly to the original equipment manufacturers.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We have financed our
  operations since inception primarily from the sale of equity capital. In November
  2010, we issued a senior secured convertible note to an accredited investor
  in the principal amount of $1,000,000, the net proceeds of which were used to
  increase our working capital balances.</font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><br>
  </font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>Convertible Note
  Financing</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  <i>General</i><br>
  </font></P>
<P ALIGN="left">On November 19, 2010 (the &quot;Closing Date&quot;), we completed
  the sale of a senior secured convertible note (the &quot;Note&quot;) having
  a principal amount of $1,000,000 and issued warrants (the &quot;Warrants&quot;)
  to purchase up to 550,000 shares of our Common Stock (as exercised, the &quot;Exercise
  Shares&quot;) in a private placement offering. As discussed more fully below,
  the Note is convertible into shares of our Common Stock (as converted, the &quot;Conversion
  Shares&quot;). We issued the Note and the Warrants in reliance on an exemption
  from registration pursuant to Section 4(2) of the Securities Act of 1933, as
  amended, and Rule 506 of Regulation D promulgated thereunder.</P>
<P ALIGN="left"> <i>Registration Requirements</i><br>
</P>
<P ALIGN="left">In connection with the convertible note financing, we are required
  to file a Registration Statement on Form S-3 with the Securities and Exchange
  Commission (&quot;SEC&quot;) covering the resale of the Conversion Shares and
  the Exercise Shares. The Company agreed to file, no later than 30 days after
  the Closing Date, a registration statement for resale, by the investor and the
  placement agent or their permitted assigns (each, a &quot;Holder&quot;), at
  least the number of shares of Common Stock equal to the sum of (i) 152.0796%
  of the maximum number of shares of Common Stock issuable upon conversion of
  the Note and (ii) 100% of the maximum number of shares of Common Stock issuable
  upon exercise of the Warrants. We are now registering for resale under the registration
  statement of which this prospectus is a part the shares of Common Stock underlying
  the Note and the Warrants.</P>
<p align="center"><font face="Times New Roman, Times, serif">- 2-</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left"><br>
</P>
<P ALIGN="left">We have agreed to use our best efforts to have the registration
  statement declared effective within 60 calendar days after the Closing Date,
  or 90 calendar days after the Closing Date in the event the registration statement
  is subject to a full review by the SEC. We are obliged to amend the registration
  statement or file a new registration statement in the event the number of shares
  available under any registration statement is insufficient to cover the securities
  issuable or exercisable under the convertible note financing. <br>
</P>
<P ALIGN="left">In the event that Form S-3 is not available for the registration
  of the resale of the securities issuable or exercisable under the convertible
  note financing, we have agreed to register such securities on another appropriate
  form reasonably acceptable to the investor and to register such securities on
  Form S-3 as soon as the form is available. At all times, however, we will maintain
  the effectiveness of all registration statements then in effect until the time
  as a registration statement on Form S-3 covering the resale of all the securities
  issuable or exercisable under the convertible note financing has been declared
  effective by the SEC. <br>
</P>
<P ALIGN="left"><i>Description of the Note</i><br>
</P>
<P ALIGN="left">The Note matures eighteen months from the date of issuance (subject
  to extension to the extent an event of default or other fundamental transaction
  has occurred), and has an interest rate of 10% per annum, which is payable in
  cash quarterly in arrears. The Note is secured by all of our assets and is initially
  convertible into 500,000 shares of Common Stock, at an initial conversion price
  of $2.00 per share. The terms of the convertible note financing require us to
  maintain collateralization of the Note with an amount equivalent to the unconverted
  principal plus accrued interest at all times. <br>
</P>
<P ALIGN="left"><i>Conversion of the Note and Conversion Price Adjustment</i><br>
</P>
<P ALIGN="left">The conversion price is subject to adjustment (the &quot;First
  Price Adjustment&quot;) following the close of business on the sixth consecutive
  trading day immediately following the earlier of:<br>
</P>
<blockquote>
  <p>(i) the effective date of the registration statement of which this prospectus
    is a part; and <br>
  </p>
  <p>(ii) May 19, 2011. <br>
  </p>
</blockquote>
<P ALIGN="left">Additionally, if we are not in compliance as of May 19, 2011 with
  the public information requirements required by the registration rights agreement
  entered into in connection with the convertible note financing, the conversion
  price is subject to adjustment (the &quot;Compliance Conversion Price Adjustment&quot;)
  following the close of business on the sixth consecutive trading day immediately
  following such date when such failure to comply with the public information
  requirements is cured.<br>
</P>
<P ALIGN="left">If the conversion price is subject to adjustment as set forth
  above, it will be reset to the lower of: <br>
</P>
<blockquote>
  <p>(i) the then existing conversion price; and <br>
  </p>
  <p>(ii) 85% of the average of the closing bid price of our Common Stock during
    the five immediately preceding trading days. <br>
  </p>
</blockquote>
<P ALIGN="left">The conversion price shall not be reset below $1.50 per share
  as a result of the First Conversion Price Adjustment or the Compliance Conversion
  Price Adjustment.</P>
<p align="center"><font face="Times New Roman, Times, serif">- 3-</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left"><br>
</P>
<P ALIGN="left">The conversion price is also subject to adjustment (the &quot;Second
  Conversion Price Adjustment&quot;) on November 19, 2011 to the lower of:<br>
</P>
<blockquote>
  <p>(i) the then existing conversion price; and <br>
  </p>
  <p>(ii) 85% of the average of the closing bid price of our Common Stock during
    the five immediately preceding trading days. <br>
  </p>
</blockquote>
<P ALIGN="left">The conversion price shall not be reset below $1.31 per share
  as a result of the Second Conversion Price Adjustment.<br>
</P>
<P ALIGN="left">The resets due to the First Conversion Price Adjustment, Compliance
  Conversion Price Adjustment and the Second Conversion Price Adjustment can result
  in an increase in the number of Conversion Shares up to an additional 260,398
  shares in aggregate. <br>
</P>
<P ALIGN="left">If we issue shares of Common Stock or options exercisable for
  or securities convertible into Common Stock at an effective price per share
  less than the conversion price then in effect, the conversion price will be
  reduced to the effective price per share of the new issuance.<br>
</P>
<P ALIGN="left">Additionally, if we issue any options or convertible securities
  that are convertible into or exchangeable or exercisable for shares of our Common
  Stock at a price per share which varies with the market price of our Common
  Stock, including by any reset to a fixed price, but excluding by adjustment
  due to customary anti-dilution provisions, the Holder of the Note will have
  the right to substitute the variable price for the conversion price for conversion
  of all or part of the Note.<br>
</P>
<P ALIGN="left"><i>Redemption of the Note</i><br>
</P>
<P ALIGN="left">At its option, the Holder of the Note is entitled to redemption
  rights on all or any portion of the Note upon the occurrence of (i) a change
  of control of the Company, or (ii) certain triggering events constituting an
  event of default, such as:<br>
</P>
<ul>
  <li>failure of the Company to file or maintain a registration statement under
    which the Holders may sell any securities issuable or exercisable under the
    convertible note financing; <br>
  </li>
  <li>suspension from trading of the Company's Common Stock; <br>
  </li>
  <li>failure by the Company to convert the Note into Conversion Shares within
    five trading days of the conversion date; <br>
  </li>
  <li>failure by the Company to pay interest or other amounts due on the Note;
    <br>
  </li>
  <li>failure to remove any restrictive legend on the certificates of the Conversion
    Shares; and <br>
  </li>
  <li>suspension from trading or failure of our Common Stock to be listed on a
    national securities exchange for a period of five consecutive trading days
    or for more than an aggregate of ten trading days in any 365-day period.<br>
  </li>
</ul>
<p align="center"><font face="Times New Roman, Times, serif">- 4 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left">If there is an event of default, upon the request of the Holder
  of the Note, we are obligated to redeem all or any portion of the Note (including
  all accrued and unpaid interest), in cash, at a price equal to the greater of:
  <br>
</P>
<blockquote>
  <p>(i) up to 125% of the amount being redeemed, depending on the nature of the
    default; and <br>
  </p>
  <p>(ii) the product of (a) the number of Conversion Shares, times (b) 125% of
    the highest closing sale price of our Common Stock during the period beginning
    on the date immediately preceding such event of default and ending on the
    trading day immediately prior to the trading day that the redemption price
    is paid by us. <br>
  </p>
</blockquote>
<P ALIGN="left">The Note prohibits us from entering into certain transactions
  involving a change of control, unless the successor entity is a publicly traded
  corporation, and the successor assumes in writing all of our obligations under
  the Note and the other documents related to the convertible note financing.
  In the event of such a transaction, the Holder of the Note has the right to
  force redemption of the Note, at a price equal to the greater of: <br>
</P>
<blockquote>
  <p>(i) 125% of the amount being redeemed; <br>
  </p>
  <p>(ii) the product of (x) 125% of the amount being redeemed multiplied by (y)
    the quotient of (A) the highest closing sale price of our Common Stock during
    the period beginning on the date immediately preceding the earlier to occur
    of (1) the consummation of the change of control and (2) the public announcement
    of the change of control and ending on the day the Holder of the Note delivers
    a redemption notice divided by (B) the conversion price then in effect; and
    <br>
  </p>
  <p>(iii) the product of (x) 125% of the amount being redeemed multiplied by
    (y) the quotient of (A) the aggregate cash consideration and the aggregate
    cash value of any non-cash consideration per share of Common Stock to be paid
    to the holders of the shares of our Common Stock upon consummation of such
    change of control divided by (B) the conversion price then in effect.<br>
  </p>
</blockquote>
<P ALIGN="left"><i>Description of Warrants</i><br>
</P>
<P ALIGN="left">In conjunction with the issuance of the Note, we issued to the
  investor a five-year warrant to purchase 500,000 shares of Common Stock at an
  initial exercise price of $2.44 per share. In connection with the financing,
  we also issued to the private placement agent a five-year warrant to purchase
  50,000 of Common Stock with terms that are substantially the same as the warrant
  issued to the investor. The Warrants are not exercisable until May 20, 2011.
  <br>
</P>
<p align="center"><font face="Times New Roman, Times, serif">- 5 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left"><i>Exercise Price Adjustment</i><br>
</P>
<P ALIGN="left">If we issue shares of Common Stock or options exercisable for
  or securities convertible into Common Stock at an effective price per share
  less than the exercise price then in effect, the exercise price will be reduced
  to the effective price per share of the new issuance.<br>
</P>
<P ALIGN="left">Additionally, if we issue any options or convertible securities
  that are convertible into or exchangeable or exercisable for shares of our Common
  Stock at a price per share which varies with the market price of our Common
  Stock, including by any reset to a fixed price, but excluding by adjustment
  due to customary anti-dilution provisions, each Holder of a Warrants will have
  the right to substitute the variable price for the exercise price for exercise
  of all or part of the Warrant.<br>
</P>
<P ALIGN="left">The exercise price of the Warrants shall not be adjusted below
  $2.44 per share as a result of the adjustments described above, unless the Company
  obtains stockholder approval for the convertible note financing. At this time,
  we have no plans to seek such approval.<br>
</P>
<P ALIGN="left">The Warrants prohibit us from entering into certain transactions
  involving a change of control, unless the successor entity is a publicly traded
  corporation, and the successor assumes in writing all of our obligations under
  the Warrants. Upon the occurrence of a transaction involving a permitted change
  of control, the Holders of the Warrants will have the right, among others, to
  have such Warrants repurchased for a purchase price in cash equal to the Black-Scholes
  value (as calculated pursuant to the Warrants) of the then unexercised portion
  of the Warrants. <br>
</P>
<P ALIGN="left">If we issue shares of Common Stock or options exercisable for
  or securities convertible into Common Stock at an effective price per share
  less than the conversion price of the Note then in effect, the Holders of the
  Warrants will have the right to have such Warrants repurchased for a purchase
  price in cash equal to the Black-Scholes value (as calculated pursuant to the
  Warrants) of the then unexercised portion of the Warrants.<br>
</P>
<P ALIGN="left"><i>Limitations on Conversion of the Note and Exercise of Warrants</i><br>
</P>
<P ALIGN="left">Under the terms of the Note and the Warrants, a Holder may not
  convert the Note or exercise the Warrants to the extent (but only to the extent)
  such holder or any of its affiliates would beneficially own more than 4.99%
  of our Common Stock. Each Holder may lower this limitation percentage at any
  time or increase this limitation percentage to any other percentage not in excess
  of 9.99% upon 61 days' prior written notice to the Company. </P>
<p align="center"><font face="Times New Roman, Times, serif">- 6-</font></p>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<table cellspacing=1 cellpadding=1 width=60% align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height="22">
      <p align="center"><font face="Times New Roman, Times, serif" size="3"><b>The
        Offering</b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=19 colspan="2" valign="top">Common Stock offered by selling stockholders</td>
    <td height=19 width="58%" valign="top">1,310,398 shares of our Common Stock,
      including 760,398 shares issuable upon the conversion of a senior secured
      convertible note and 550,000 shares issuable upon the exercise of warrants.</td>
  </tr>
  <tr valign=bottom>
    <td colspan="2" valign="top">
      <p><font face="Times New Roman, Times, serif" size="3">Use of proceeds</font></p>
    </td>
    <td width="58%" valign="top">
      <p align=left>We will not receive any proceeds from the sale of shares in
        this offering.</p>
    </td>
  </tr>
  <tr valign=bottom>
    <td colspan="2" height="25" valign="top">
      <p><font face="Times New Roman, Times, serif" size="3">Nasdaq Capital Market
        symbol</font></p>
    </td>
    <td width="58%" height="25" valign="top">
      <p align=left><font face="Times New Roman, Times, serif" size="3">SCKT </font></p>
    </td>
  </tr>
</table>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>Corporate Information</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  We were founded in March 1992 as Socket Communications, Inc. and reincorporated
  in Delaware in 1995 prior to our initial public offering in June 1995. We began
  doing business as Socket Mobile, Inc. in January 2007 to better reflect our
  market focus on the mobile business market and changed our legal name to Socket
  Mobile, Inc. in April 2008. Our principal executive offices are located at 39700
  Eureka Drive, Newark, CA 94560, and our phone number is (510) 933-3000. Our
  Internet home page is located at http://www.socketmobile.com; however, the information
  on, or that can be accessed through, our home page, is not part of this Prospectus.
  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
  on Form 8-K, and any amendments to such reports are available free of charge
  on or through our Internet home page, as soon as reasonably practical after
  we electronically file such material with, or furnish it to, the Securities
  and Exchange Commission.</font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 7 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>RISK FACTORS</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><i><br>
  An investment in the Common Stock offered by this prospectus involves a high
  degree of risk. You should carefully consider the risks described below, as
  well as the risks described in our annual and quarterly reports filed with the
  Securities and Exchange Commission, before deciding to purchase shares of our
  Common Stock. The risks described below are not the only ones that we face.
  Additional risks that generally apply to publicly traded companies, that are
  not yet identified or that we currently think are immaterial, may also adversely
  affect our company.<br>
  </i></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><i>If any of the events,
  contingencies, circumstances or conditions described in the following risks
  actually occur, our business, financial condition or results of operations could
  be seriously harmed. The trading price of our Common Stock could, in turn, decline
  and you could lose all or part of your investment.<br>
  </i></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>Our ability to continue
  as a going concern is dependent upon our ability to establish profitable operations
  and to raise additional capital.</b></font><font face="Times New Roman, Times, serif"><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">The financial statements
  in our Annual Report on Form 10-K were prepared on a going concern basis. Our
  continued operating losses, declines in our working capital balances and our
  failure to achieve the revenue levels required to maintain compliance with our
  bank line covenants are conditions that raise doubt about the Company's ability
  to continue as a going concern. We terminated our bank line on November 2, 2010
  in conjunction with the issuance of a $1.0 million senior secured convertible
  note in the convertible note financing that closed in November 2010. Our ability
  to continue as a going concern is dependent upon our ability to establish profitable
  operations and to raise additional financing. We have been taking steps intended
  to reduce operating losses and achieve profitability including the introduction
  of new products, continued close support of our distributors and of our application
  partners as they establish their mobile applications in key vertical markets,
  and management of our costs. We believe that we will be able to improve our
  liquidity and secure additional sources of financing by managing our working
  capital balances, and raising additional capital as needed, including development
  funding from development partners and the issuance of additional equity securities.
  Nonetheless, there can be no assurance that we will be successful in achieving
  any of these steps, and there can be no assurance that additional financing
  will be available on acceptable terms, if at all, and any such terms may be
  dilutive to existing stockholders. Our inability to secure and maintain the
  necessary liquidity would have a material adverse effect on our financial condition
  and results of operations. Our financial statements do not include any adjustments
  to reflect the possible future effects on the recoverability and classification
  of assets or the amounts and classification of assets and liabilities that may
  result from the outcome of this uncertainty.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>The global economic
  financial crisis may continue to have an impact on our business and financial
  condition in ways that we currently cannot predict, and may further limit our
  ability to raise additional funds.</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> The continued credit
  crisis and related turmoil in the global financial system may continue to have
  an impact on our business and our financial condition. We may face significant
  challenges if economic conditions and conditions in the financial markets do
  not improve or continue to worsen. In particular, should these conditions cause
  our revenues to be materially less than forecast, we may find it necessary to
  initiate further reductions in our expenses and defer additional product development
  programs. In addition, our ability to access the capital markets and raise funds
  required for our operations may be severely restricted at a time when we would
  like, or need, to do so, which could have an adverse effect on our ability to
  meet our current and future funding requirements and on our flexibility to react
  to changing economic and business conditions.</font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 8 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>We have a history
  of operating losses and may not achieve ongoing profitability.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We were unprofitable
  in the first nine months of 2010. We were profitable in the third quarter of
  2009 due to the one time gain on the sale of our serial product line assets.
  We were unprofitable in each of other three quarters of 2009, unprofitable for
  fiscal year 2009 as a whole, and unprofitable in each of the quarters in fiscal
  years 2008, 2007, and 2006. We were profitable in two quarters in 2005, but
  unprofitable for fiscal year 2005 as a whole. Fiscal year 2004 was the only
  profitable year in our history, and only to the extent of $288,000. Prior to
  2004, we incurred significant operating losses in each financial period since
  our inception. To achieve ongoing profitability, we must accomplish numerous
  objectives, including growth in our business and the development of successful
  new products. We cannot foresee with any certainty whether we will be able to
  achieve these objectives in the future. Accordingly, we may not generate sufficient
  net revenue or manage our expenses sufficiently to achieve ongoing profitability.
  If we cannot achieve ongoing profitability, we will not be able to support our
  operations from positive cash flows, and we would use our existing cash to support
  operating losses. If we are unable to secure the necessary capital to replace
  that cash, we may need to suspend some or all of our current operations.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>We may require additional
  capital in the future, but that capital may not be available on reasonable terms,
  if at all, or on terms that would not cause substantial dilution to your stock
  holdings.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We may incur operating
  losses in future quarters and would need to raise capital to fund such losses.
  Our forecasts are highly dependent on factors beyond our control, including
  market acceptance of our products and deployments by businesses of applications
  that use our handheld computers and our data collection products. If capital
  requirements vary materially from those currently planned, we may require additional
  capital sooner than expected. There can be no assurance that such capital will
  be available in sufficient amounts or on terms acceptable to us, if at all.
  <br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>We may require additional
  capital in the future to repay our outstanding convertible note, but that capital
  may not be available on reasonable terms, if at all, or available only on terms
  that result in substantial dilution to your stock holdings.<br>
  </b> </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Although the convertible
  note that we issued in our November 2010 financing is priced to facilitate its
  conversion into equity over the eighteen-month term of the convertible note,
  such conversion is at the option of the noteholder and the note, if outstanding
  at the end of the eighteen-month period, would require repayment by the Company.
  Our failure to repay the convertible note, if outstanding at the end of its
  term, would be an event of default. In addition, the convertible note contains
  other events of default, including in the event the Company is unable to maintain
  the minimum cash and accounts receivables balance and the minimum current ratio
  required by the convertible note. There can be no assurance that capital to
  refinance the convertible note at the end of its eighteen-month term or upon
  an event of default would be available on terms acceptable to the Company, if
  at all. The terms of our November 2010 convertible note financing contain also
  certain anti-dilution provisions. Should we need to raise additional capital
  in the future at prices below the conversion price of the convertible note,
  if outstanding at such future time, substantial dilution could result from such
  a financing. </font></P>
<P ALIGN="left">&nbsp;</P>
<p align="center"><font face="Times New Roman, Times, serif">- 9 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  </font></P>
<p><b><font face="Times New Roman, Times, serif">Our quarterly operating results
  may fluctuate in future periods, which could cause our stock price to decline.</font></b></p>
<p><font face="Times New Roman, Times, serif">We expect to experience quarterly
  fluctuations in operating results in the future. We generally ship orders as
  received, and as a result we may have little backlog. Quarterly revenues and
  operating results therefore depend on the volume and timing of orders received
  during the quarter, which are difficult to forecast. Historically, we have often
  recognized a substantial portion of our revenue in the last month of the quarter.
  This subjects us to the risk that even modest delays in orders may adversely
  affect our quarterly operating results. Our operating results may also fluctuate
  due to factors such as: </font></p>
<ul>
  <li><font face="Times New Roman, Times, serif">the demand for our products;</font></li>
  <li><font face="Times New Roman, Times, serif">the size and timing of customer
    orders;</font></li>
  <li><font face="Times New Roman, Times, serif">unanticipated delays or problems
    in our introduction of new products and product enhancements;</font></li>
  <li><font face="Times New Roman, Times, serif">the introduction of new products
    and product enhancements by our competitors;</font></li>
  <li><font face="Times New Roman, Times, serif">the timing of the introduction
    and deployments of new applications that work with our products;</font></li>
  <li><font face="Times New Roman, Times, serif">changes in the revenues attributable
    to royalties and engineering development services;</font></li>
  <li><font face="Times New Roman, Times, serif">product mix;</font></li>
  <li><font face="Times New Roman, Times, serif">timing of software enhancements;</font></li>
  <li><font face="Times New Roman, Times, serif">changes in the level of operating
    expenses;</font></li>
  <li><font face="Times New Roman, Times, serif">competitive conditions in the
    industry including competitive pressures resulting in lower average selling
    prices;</font></li>
  <li><font face="Times New Roman, Times, serif">timing of distributors' shipments
    to their customers; and</font></li>
  <li><font face="Times New Roman, Times, serif">general economic conditions and
    conditions specific to our customers' industries.<br>
    </font></li>
</ul>
<p>Because we base our staffing and other operating expenses on anticipated revenues,
  unanticipated declines or delays in the receipt of orders can cause significant
  variations in operating results from quarter to quarter. As a result of any
  of the foregoing factors, or a combination, our results of operations in any
  given quarter may be below the expectations of public market analysts or investors,
  in which case the market price of our Common Stock would be adversely affected.</p>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 10 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<p><font face="Times New Roman, Times, serif"><b>If third-parties do not produce
  and sell innovative products with which our products are compatible, or if our
  own line of mobile handheld computers is not successful, we may not achieve
  our sales projections.</b><br>
  <br>
  Our success has been dependent upon the ability of third-parties in the mobile
  computer industry to successfully develop products that include or are compatible
  with our technology and then to sell these products into the marketplace. Even
  if we are successful in marketing and selling our new line of mobile handheld
  computers, our ability to generate increased revenue depends significantly on
  the commercial success of other parties' Windows mobile products, particularly
  vertical market software applications for use with our handheld computer and
  peripheral products, and standard Pocket PC handhelds, phone-integrated devices,
  tablet computers, and other phone-integrated devices, including those from Palm,
  Nokia, Blackberry, and Apple, with which our plug-in and wireless peripherals
  can be used, and the adoption of these mobile computer devices for business
  use. A number of manufacturers of handheld computers have reduced the number
  of handheld products they offer, or curtailed development of future handheld
  computer products. If manufacturers are unable or choose not to ship new products
  such as Pocket PC and other Windows mobile devices, or experience difficulties
  with new product transitions that cause delays in the market as we have experienced
  in the past three years, or if these products fail to achieve or maintain market
  acceptance, the number of our potential new customers could be reduced and we
  may not be able to meet our sales expectations. <br>
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>If we fail to develop and introduce
  new products rapidly and successfully, we will not be able to compete effectively,
  and our ability to generate sufficient revenues will be negatively affected.</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">The market for our products is prone
  to rapidly changing technology, evolving industry standards and short product
  life cycles. If we are unsuccessful at developing and introducing new products
  and services on a timely basis that include the latest technologies conforming
  to the newest standards and that are appealing to end users, we will not be
  able to compete effectively, and our ability to generate significant revenues
  will be seriously harmed.<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">The development of new products
  and services can be very difficult and requires high levels of innovation. The
  development process is also lengthy and costly. Short product life cycles expose
  our products to the risk of obsolescence and require frequent new product introductions.
  We will be unable to introduce new products and services into the market on
  a timely basis and compete successfully, if we fail to:</font></p>
<ul>
  <li><font face="Times New Roman, Times, serif">invest significant resources
    in research and development, sales and marketing, and customer support;</font></li>
  <li><font face="Times New Roman, Times, serif">identify emerging trends, demands
    and standards in the field of mobile computing products;</font></li>
  <li><font face="Times New Roman, Times, serif">enhance our products by adding
    additional features; </font></li>
  <li><font face="Times New Roman, Times, serif">maintain superior or competitive
    performance in our products; and</font></li>
  <li>
    <p><font face="Times New Roman, Times, serif">anticipate our end users' needs
      and technological trends accurately.</font></p>
  </li>
</ul>
<P ALIGN="left">We cannot be sure that we will have sufficient resources to make
  adequate investments in research and development or that we will be able to
  identify trends or make the technological advances necessary to be competitive.</P>
<p align="left">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">- 11 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> <b>A significant portion
  of our revenue currently comes from two distributors, and any decrease in revenue
  from these distributors could harm our business.</b><br>
  <br>
  A significant portion of our revenue comes from two distributors, Tech Data
  Corporation and Ingram Micro Inc., which together represented approximately
  25% and 35% of our worldwide revenues in the first nine months of 2010 and fiscal
  year 2009, respectively. We expect that a significant portion of our revenue
  will continue to depend on sales to Tech Data Corporation and Ingram Micro Inc.
  Additionally, 10% of our revenue in the third quarter 2010 came from Epocal
  Inc., an OEM customer, and 12% of our revenues in the first nine months of 2010
  came from our distributor BlueStar Inc. We do not have long-term commitments
  from Tech Data Corporation or Ingram Micro Inc. to carry our products. Each
  could choose to stop selling some or all of our products at any time, and each
  of these companies also carries our competitors' products. If we lose our relationship
  with Tech Data Corporation or Ingram Micro Inc., we would experience disruption
  and delays in marketing our products.<br>
  <br>
  <b>If the market for mobile computers experiences delays, or fails to grow,
  we may not achieve our sales projections.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Substantially all of
  our peripheral products are designed for use with mobile computers, including
  handhelds, notebooks, tablets, and handhelds with integrated phones. If the
  mobile computer industry does not grow, if its growth slows, or if product or
  operating system changeovers by mobile computer manufacturers and partners cause
  delays in the market, or if the markets for our mobile handheld computers do
  not grow, or if the impact of the global economic financial crisis continues,
  we may not achieve our sales projections.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>Our sales will be
  hurt if the new technologies used in our products do not become widely adopted,
  or are adopted slower than expected.<br>
  </b> </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Many of our products
  use new technologies, such as two dimensional bar code scanning and radio frequency
  identification, which are not yet widely adopted in the market. If these technologies
  fail to become widespread, or are adopted slower than expected, our sales will
  suffer.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>We could face increased
  competition in the future, which would adversely affect our financial performance.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">The market for mobile
  handheld computers in which we operate is very competitive. Our future financial
  performance is contingent on a number of unpredictable factors, including that:</font></P>
<ul>
  <li><font face="Times New Roman, Times, serif">some of our competitors have
    greater financial, marketing, and technical resources than we do; </font></li>
  <li><font face="Times New Roman, Times, serif">we periodically face intense
    price competition, particularly when our competitors have excess inventories
    and discount their prices to clear their inventories; and</font></li>
  <li><font face="Times New Roman, Times, serif">certain manufacturers of personal
    computers, mobile phones and handheld computers offer products with built-in
    functions, such as Bluetooth wireless technology, Wi-Fi, or bar code scanning,
    that compete with our products.</font></li>
</ul>
<P ALIGN="left">Increased competition could result in price reductions, fewer
  customer orders, reduced margins, and loss of market share. Our failure to compete
  successfully against current or future competitors could harm our business,
  operating results and financial condition.</P>
<P ALIGN="left"><br>
  <br>
</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 12 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> <b>If we do not correctly
  anticipate demand for our products, our operating results will suffer.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">The demand for our
  products depends on many factors and is difficult to forecast. We expect that
  it will become more difficult to forecast demand given current economic conditions,
  as we introduce and support more products, and as competition in the market
  for our products intensifies. If demand is lower than forecasted levels, we
  could have excess production resulting in higher inventories of finished products
  and components, which could lead to write-downs or write-offs of some or all
  of the excess inventories, and reductions in our cash balances. Lower than forecasted
  demand could also result in excess manufacturing capacity at our third-party
  manufacturers and in our failure to meet minimum purchase commitments, each
  of which may lower our operating results.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">If demand increases
  beyond forecasted levels, we would have to rapidly increase production at our
  third-party manufacturers. We depend on suppliers to provide additional volumes
  of components, and suppliers might not be able to increase production rapidly
  enough to meet unexpected demand. Even if we were able to procure enough components,
  our third-party manufacturers might not be able to produce enough of our devices
  to meet our customer demand. In addition, rapid increases in production levels
  to meet unanticipated demand could result in higher costs for manufacturing
  and supply of components and other expenses. These higher costs could lower
  our profit margins. Further, if production is increased rapidly, manufacturing
  yields could decline, which may also lower operating results.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>We rely primarily
  on distributors, resellers, vertical industry partners, and OEMs to sell our
  products, and our sales would suffer if any of these third-parties stops selling
  our products effectively.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Because we sell our
  products primarily through distributors, resellers, vertical industry partners,
  and OEMs, we are subject to risks associated with channel distribution, such
  as risks related to their inventory levels and support for our products. Our
  distribution channels may build up inventories in anticipation of growth in
  their sales. If such growth in their sales does not occur as anticipated, the
  inventory build up could contribute to higher levels of product returns. The
  lack of sales by any one significant participant in our distribution channels
  could result in excess inventories and adversely affect our operating results
  and working capital liquidity.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Our agreements with
  distributors, resellers, vertical industry partners, and OEMs are generally
  nonexclusive and may be terminated on short notice by them without cause. Our
  distributors, resellers, vertical industry partners, and OEMs are not within
  our control, are not obligated to purchase products from us, and may offer competitive
  lines of products simultaneously. Sales growth is contingent in part on our
  ability to enter into additional distribution relationships and expand our sales
  channels. We cannot predict whether we will be successful in establishing new
  distribution relationships, expanding our sales channels or maintaining our
  existing relationships. A failure to enter into new distribution relationships
  or to expand our sales channels could adversely impact our ability to grow our
  sales.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We allow our distribution
  channels to return a portion of their inventory to us for full credit against
  other purchases. In addition, in the event we reduce our prices, we credit our
  distributors for the difference between the purchase price of products remaining
  in their inventory and our reduced price for such products. Actual returns and
  price protection may adversely affect future operating results and working capital
  liquidity by reducing our accounts receivable and increasing our inventory balances,
  particularly since we seek to continually introduce new and enhanced products
  and are likely to face increasing price competition.</font></P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 13 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> <b>We depend on alliances
  and other business relationships with a small number of third-parties, and a
  disruption in any one of these relationships would hinder our ability to develop
  and sell our products.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We depend on strategic
  alliances and business relationships with leading participants in various segments
  of the communications and mobile handheld computer markets to help us develop
  and market our products. Our strategic partners may revoke their commitment
  to our products or services at any time in the future or may develop their own
  competitive products or services. Accordingly, our strategic relationships may
  not result in sustained business alliances, successful product or service offerings,
  or the generation of significant revenues. Failure of one or more of such alliances
  could result in delay or termination of product development projects, failure
  to win new customers, or loss of confidence by current or potential customers.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We have devoted significant
  research and development resources to design activities for Windows Mobile,
  Windows CE, Windows 7/Vista/XP, RIM Blackberry, and Nokia Symbian for E Series
  operating systems, and more recently, to develop our own family of mobile handheld
  computers. Such design activities have diverted financial and personnel resources
  from other development projects. These design activities are not undertaken
  pursuant to any agreement under which Microsoft, Research In Motion, or Symbian
  is obligated to continue the collaboration or to support the products produced
  from the collaboration. Consequently, these organizations may terminate their
  collaborations with us for a variety of reasons, including our failure to meet
  agreed-upon standards or for reasons beyond our control, such as changing market
  conditions, increased competition, discontinued product lines, and product obsolescence.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><b>Our intellectual
  property and proprietary rights may be insufficient to protect our competitive
  position.<br>
  </b> </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Our business depends
  on our ability to protect our intellectual property. We rely primarily on patent,
  copyright, trademark, trade secret laws, and other restrictions on disclosure
  to protect our proprietary technologies. We cannot be sure that these measures
  will provide meaningful protection for our proprietary technologies and processes.
  We cannot be sure that any patent issued to us will be sufficient to protect
  our technology. The failure of any patents to provide protection to our technology
  would make it easier for our competitors to offer similar products. In connection
  with our participation in the development of various industry standards, we
  may be required to license certain of our patents to other parties, including
  our competitors, that develop products based upon the adopted standards.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We also generally enter
  into confidentiality agreements with our employees, distributors, and strategic
  partners, and generally control access to our documentation and other proprietary
  information. Despite these precautions, it may be possible for a third-party
  to copy or otherwise obtain and use our products, services, or technology without
  authorization, develop similar technology independently, or design around our
  patents.</font></P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 14 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> Effective copyright,
  trademark, and trade secret protection may be unavailable or limited in certain
  foreign countries. Furthermore, certain of our customers have entered into agreements
  with us which provide that the customers have the right to use our proprietary
  technology in the event we default in our contractual obligations, including
  product supply obligations, and fail to cure the default within a specified
  period of time.</font></P>
<p><b>We may become subject to claims of intellectual property rights infringement,
  which could result in substantial liability.<br>
  </b> </p>
<p>In the course of operating our business, we may receive claims of intellectual
  property infringement or otherwise become aware of potentially relevant patents
  or other intellectual property rights held by other parties. Many of our competitors
  have large intellectual property portfolios, including patents that may cover
  technologies that are relevant to our business. In addition, many smaller companies,
  universities, and individuals have obtained or applied for patents in areas
  of technology that may relate to our business. The industry is moving towards
  aggressive assertion, licensing, and litigation of patents and other intellectual
  property rights. In June 2007, we received a letter from Wi-LAN, Inc., claiming
  that certain of our wireless LAN products infringe on two U.S. and one Canadian
  patent held by Wi-LAN, Inc. In October 2007, Wi-LAN, Inc. filed patent infringement
  lawsuits against a number of companies alleging that those companies infringe
  the two U.S. patents by manufacturing, using, or offering for sale products
  with wireless capability compliant with the IEEE 802.11 standards. Wi-LAN, Inc.
  is asking for money damages and a court order barring the sale of products that
  use the patented technology. We have not been named in the lawsuit, and we do
  not plan to make any changes to our current business at this time. Nonetheless,
  we may be added to the lawsuit in the future, and even if we are not, the outcome
  of this lawsuit may result in future changes to our business, including potential
  increased costs for those of our products that make use of the related technology.<br>
</p>
<p>If we are unable to obtain and maintain licenses on favorable terms for intellectual
  property rights required for the manufacture, sale, and use of our products,
  particularly those products which must comply with industry standard protocols
  and specifications to be commercially viable, our results of operations or financial
  condition could be adversely impacted.<br>
</p>
<p>In addition to disputes relating to the validity or alleged infringement of
  other parties' rights, we may become involved in disputes relating to our assertion
  of our own intellectual property rights. Whether we are defending the assertion
  of intellectual property rights against us or asserting our intellectual property
  rights against others, intellectual property litigation can be complex, costly,
  protracted, and highly disruptive to business operations by diverting the attention
  and energies of management and key technical personnel. Plaintiffs in intellectual
  property cases often seek injunctive relief, and the measures of damages in
  intellectual property litigation are complex and often subjective or uncertain.
  Thus, any adverse determinations in this type of litigation could subject us
  to significant liabilities and costs.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 15 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><b>New industry standards may require us to redesign our products,
  which could substantially increase our operating expenses.</b><br>
</P>
<P ALIGN="left">Standards for the form and functionality of our products are established
  by standards committees. These independent committees establish standards, which
  evolve and change over time, for different categories of our products. We must
  continue to identify and ensure compliance with evolving industry standards
  so that our products are interoperable and we remain competitive. Unanticipated
  changes in industry standards could render our products incompatible with products
  developed by major hardware manufacturers and software developers. Should any
  major changes, even if anticipated, occur, we would be required to invest significant
  time and resources to redesign our products to ensure compliance with relevant
  standards. If our products are not in compliance with prevailing industry standards
  for a significant period of time, we would miss opportunities to sell our products
  for use with new hardware components from mobile computer manufacturers and
  OEMs, thus affecting our business.<br>
</P>
<P ALIGN="left"><b>Undetected flaws and defects in our products may disrupt product
  sales and result in expensive and time-consuming remedial action.</b><br>
</P>
<P ALIGN="left">Our hardware and software products may contain undetected flaws,
  which may not be discovered until customers have used the products. From time
  to time, we may temporarily suspend or delay shipments or divert development
  resources from other projects to correct a particular product deficiency. Efforts
  to identify and correct errors and make design changes may be expensive and
  time consuming. Failure to discover product deficiencies in the future could
  delay product introductions or shipments, require us to recall previously shipped
  products to make design modifications, or cause unfavorable publicity, any of
  which could adversely affect our business and operating results.</P>
<p><b>The loss of one or more of our senior personnel could harm our existing
  business.<br>
  </b> </p>
<p>A number of our officers and senior managers have been employed for fifteen
  to eighteen years by us, including our President, Executive Vice President,
  Chief Financial Officer, and Chief Technical Officer. Our future success will
  depend upon the continued service of key officers and senior managers. Competition
  for officers and senior managers is intense, and there can be no assurance that
  we will be able to retain our existing senior personnel. The loss of one or
  more of our officers or key senior managers could adversely affect our ability
  to compete. <br>
</p>
<p><b>The expensing of options will continue to reduce our operating results and
  may continue to cause us to incur net losses such that we may find it necessary
  to change our business practices to attract and retain employees.</b><br>
</p>
<p>Historically, we have used stock options as a key component of our employee
  compensation packages. We believe that stock options provide an incentive to
  our employees to maximize long-term stockholder value and, through the use of
  vesting, encourage valued employees to remain with us. Furthermore, on July
  1, 2010, we completed an exchange offer for certain of our outstanding options.
  As a result, the total remaining unrecognized compensation costs related to
  unvested stock options increased by $0.74 million, which is being amortized
  over the weighted average remaining requisite period of 2.4 years. The expensing
  of employee stock options adversely affected our net income and earnings per
  share in the first nine months of 2010 and in each of the quarters in fiscal
  2009, will continue to adversely affect future quarters, and will make profitability
  harder to achieve. In addition, we may decide in response to the effects of
  expensing stock options on our operating results to reduce the number of stock
  options granted to employees or to grant options to fewer employees. This could
  adversely affect our ability to retain existing employees and attract qualified
  candidates, and also could increase the cash compensation we would have to pay
  to them.</p>
<p>&nbsp;</p><P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 16 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><b>If we are unable to attract and retain highly skilled sales
  and marketing and product development personnel, our ability to develop and
  market new products and product enhancements will be adversely affected.<br>
  </b> </P>
<P ALIGN="left">We believe our ability to achieve increased revenues and to develop
  successful new products and product enhancements will depend in part upon our
  ability to attract and retain highly skilled sales and marketing and product
  development personnel. Our products involve a number of new and evolving technologies,
  and we frequently need to apply these technologies to the unique requirements
  of mobile products. Our personnel must be familiar with both the technologies
  we support and the unique requirements of the products to which our products
  connect. Competition for such personnel is intense, and we may not be able to
  attract and retain such key personnel. In addition, our ability to hire and
  retain such key personnel will depend upon our ability to raise capital or achieve
  increased revenue levels to fund the costs associated with such key personnel.
  Failure to attract and retain such key personnel will adversely affect our ability
  to develop and market new products and product enhancements. <br>
</P>
<P ALIGN="left"><b>We may not be able to collect revenues from customers who experience
  financial difficulties.<br>
  </b> </P>
<P ALIGN="left">Our accounts receivable are derived primarily from distributors
  and OEMs. We perform ongoing credit evaluations of our customers' financial
  conditions but generally require no collateral from our customers. Reserves
  are maintained for potential credit losses, and such losses have historically
  been within such reserves. However, many of our customers may be thinly capitalized
  and may be prone to failure in adverse market conditions. Although our collection
  history has been good, from time to time a customer may not pay us because of
  financial difficulty, bankruptcy or liquidation. The current global financial
  crisis may have an impact on our customers' ability to pay us in a timely manner,
  and consequently, we may experience increased difficulty in collecting our accounts
  receivable, and we may have to increase our reserves in anticipation of increased
  uncollectible accounts.<br>
</P>
<P ALIGN="left"><b>We may be unable to manufacture our products, because we are
  dependent on a limited number of qualified suppliers for our components.</b><br>
</P>
<P ALIGN="left">Several of our component parts, including our serial interface
  chip, our Ethernet chip, our bar code scanning modules, and our new line of
  mobile handheld computers, are produced by one or a limited number of suppliers.
  Shortages could occur in these essential components due to an interruption of
  supply or increased demand in the industry. If we are unable to procure certain
  component parts, we could be required to reduce our operations while we seek
  alternative sources for these components, which could have a material adverse
  effect on our financial results. To the extent that we acquire extra inventory
  stocks to protect against possible shortages, we would be exposed to additional
  risks associated with holding inventory, such as obsolescence, excess quantities,
  or loss.</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 17 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> <b>Our operating results
  could be harmed by economic, political, regulatory and other risks associated
  with export sales.</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Export sales (sales
  to customers outside the United States) accounted for approximately 25% and
  42% of our revenue in the first nine months of 2010 and fiscal 2009, respectively.
  Accordingly, our operating results are subject to the risks inherent in export
  sales, including:</font></P>
<ul>
  <li><font face="Times New Roman, Times, serif">longer payment cycles;</font></li>
  <li><font face="Times New Roman, Times, serif">unexpected changes in regulatory
    requirements, import and export restrictions and tariffs;</font></li>
  <li><font face="Times New Roman, Times, serif">difficulties in managing foreign
    operations;</font></li>
  <li><font face="Times New Roman, Times, serif">the burdens of complying with
    a variety of foreign laws;</font></li>
  <li><font face="Times New Roman, Times, serif">greater difficulty or delay in
    accounts receivable collection;</font></li>
  <li><font face="Times New Roman, Times, serif">potentially adverse tax consequences;
    and</font></li>
  <li><font face="Times New Roman, Times, serif">political and economic instability.</font></li>
</ul>
<p>Our export sales are primarily denominated in United States dollars and in
  Euros for our sales to European distributors. Accordingly, an increase in the
  value of the United States dollar relative to foreign currencies could make
  our products more expensive and therefore potentially less competitive in foreign
  markets. Declines in the value of the Euro relative to the United States dollar
  may result in foreign currency losses relating to collection of Euro denominated
  receivables if left unhedged.</p>
<P ALIGN="left"><b>Our operations are vulnerable to interruption by fire, earthquake,
  power loss, telecommunications failure, and other events beyond our control.</b><br>
</P>
<P ALIGN="left">Our corporate headquarters is located near an earthquake fault.
  The potential impact of a major earthquake on our facilities, infrastructure,
  and overall business is unknown. Additionally, we may experience electrical
  power blackouts or natural disasters that could interrupt our business. Should
  a disaster be widespread, such as a major earthquake, or result in the loss
  of key personnel, we may not be able to implement our disaster recovery plan
  in a timely manner. Any losses or damages incurred by us as a result of these
  events could have a material adverse effect on our business.</P>
<p><b>Failure to maintain effective internal controls could have a material adverse
  effect on our business, operating results and stock price.</b><br>
</p>
<p>We have evaluated and will continue to evaluate our internal control procedures
  in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act,
  which requires an annual management assessment of the design and effectiveness
  of our internal control over financial reporting. If we fail to maintain the
  adequacy of our internal controls, as such standards are modified, supplemented
  or amended from time to time, we may not be able to ensure that we can conclude
  on an ongoing basis that we have effective internal control over financial reporting
  in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective
  internal controls, particularly those related to revenue recognition, are necessary
  for us to produce reliable financial reports and are important to helping prevent
  financial fraud. If we cannot provide reliable financial reports or prevent
  fraud, our business and operating results could be harmed, investors could lose
  confidence in our reported financial information, and the trading price of our
  stock could drop significantly.</p>
<p>&nbsp;</p>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 18 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> <b>The sale of a substantial
  number of shares of our Common Stock could cause the market price of our Common
  Stock to decline.<br>
  </b> </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Sales of a substantial
  number of shares of our Common Stock in the public market could adversely affect
  the market price for our Common Stock. The market price of our Common Stock
  could also decline if one or more of our significant stockholders decided for
  any reason to sell substantial amounts of our Common Stock in the public market.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">As of November 30,
  2010, we had 3,801,991 shares of Common Stock outstanding. Substantially all
  of these shares are freely tradable in the public market, either without restriction
  or subject, in some cases, only to S-3 prospectus delivery requirements and,
  in other cases, only to manner of sale, volume, and notice requirements of Rule
  144 under the Securities Act.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">As of November 30,
  2010, we had 1,245,797 shares of Common Stock subject to outstanding options
  under our stock option plans, and 117,236 shares of Common Stock were available
  for future issuance under the plans. We have registered the shares of Common
  Stock subject to outstanding options and reserved for issuance under our stock
  option plans. Accordingly, the shares of Common Stock underlying vested options
  will be eligible for resale in the public market as soon as the options are
  exercised.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">As of November 30,
  2010, we had 86,585 shares of Common Stock subject to outstanding warrants issued
  in our 2009 private placement. We have registered the resale of all shares of
  Common Stock subject to the warrants. Accordingly, the shares of Common Stock
  underlying these warrants will be eligible for resale in the public market as
  soon as the warrants are exercised, subject to S-3 prospectus delivery requirements.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">As of November 30,
  2010, we had 500,000 shares of Common Stock subject to the conversion a senior
  secured convertible note issued in the November 2010 convertible note financing.
  The conversion price of this note is subject to resets on certain dates within
  the first year of the issuance of the note, which, depending upon the market
  price of our Common Stock at the time of such resets, can result in an increase
  in the number of shares we are obligated to issue upon conversion of the note
  up to an additional 260,398 shares in aggregate. </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">As of November 30,
  2010, 550,000 shares of Common Stock subject to outstanding warrants issued
  in connection with the convertible note financing. The warrants are not exercisable
  until May 20, 2011. All of the Common Stock subject to the conversion of the
  senior secured convertible note and the warrants issued in connection with the
  convertible note financing are being registered for resale under the registration
  statement of which this prospectus is a part. With the effectiveness of the
  registration statement, the shares of Common Stock underlying the senior secured
  convertible note and these warrants will be eligible for resale in the public
  market as soon as the note is converted or the warrants are exercised.<br>
  <br>
  </font></P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 19 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left"><b>Volatility in the trading price of our Common Stock could negatively
  impact the price of our Common Stock.</b><br>
</P>
<P ALIGN="left">During the period from January 1, 2009 through November 30, 2010,
  our Common Stock price fluctuated between a high of $5.44 and a low of $1.32.
  Following a one-for-ten reverse stock split effected on October 23, 2008, which
  significantly decreased the Company's share float, we have experienced low trading
  volumes in our stock, and thus relatively small purchases and sales can have
  a significant effect on our stock price. The trading price of our Common Stock
  could be subject to wide fluctuations in response to many factors, some of which
  are beyond our control, including general economic conditions and the outlook
  of securities analysts and investors on our industry. In addition, the stock
  markets in general, and the markets for high technology stocks in particular,
  have experienced high volatility that has often been unrelated to the operating
  performance of particular companies. These broad market fluctuations may adversely
  affect the trading price of our Common Stock.</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<p align="center"><font face="Times New Roman, Times, serif">- 20 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"> <font face="Times New Roman, Times, serif"><b><br>
  INFORMATION CONTAINED IN THIS PROSPECTUS</b></font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  You should rely only on the information contained in this prospectus. We have
  not authorized anyone to provide you with information different from that contained
  in this prospectus. The selling stockholders listed in this prospectus are offering
  to sell, and seeking offers to buy, shares of our Common Stock only in jurisdictions
  where offers and sales are permitted. The information contained in this prospectus
  is accurate only as of the date of this prospectus, regardless of the time of
  delivery of this prospectus or of any sale of our Common Stock.</font></P>
<P ALIGN="center"> <font face="Times New Roman, Times, serif"><b> FORWARD-LOOKING
  STATEMENTS</b><br>
  </font></P>
<P ALIGN="left">This prospectus contains forward-looking statements within the
  meaning of the securities laws. These forward-looking statements are subject
  to a number of risks and uncertainties, many of which are beyond our control.
  All statements other than statements of historical facts included in this prospectus,
  including the statements under &quot;Prospectus Summary&quot; and elsewhere
  in this prospectus regarding our strategy, future operations, financial position,
  estimated revenues, projected costs, prospects, plans and objectives of management
  are forward-looking statements. When used in this prospectus, the words &quot;will,&quot;
  &quot;believe,&quot; &quot;anticipate,&quot; &quot;intend,&quot; &quot;estimate,&quot;
  &quot;expect,&quot; &quot;project&quot; and similar expressions are intended
  to identify forward-looking statements, although not all forward-looking statements
  contain such identifying words. All forward-looking statements speak only as
  of the date of this prospectus. Neither we nor any of the selling stockholders
  undertake any obligation to update or revise publicly any forward-looking statements,
  whether as a result of new information, future events or otherwise. Although
  we believe that our plans, intentions and expectations reflected in or suggested
  by the forward-looking statements we make in this prospectus are reasonable,
  ultimately we may not achieve such plans, intentions or expectations.<br>
</P>
<P ALIGN="left">We disclose important factors that could cause our actual results
  to differ materially from our expectations under &quot;Risk Factors&quot; and
  elsewhere in this prospectus. Such factors include, among others, the following:
  our ability to raise sufficient capital to fund our operations, our ability
  to achieve profitability, developments in the market for our products, including
  the market for mobile computers that use the Windows Pocket PC operating system,
  developments in our relationships with our strategic partners, and world economic
  and financial conditions. These cautionary statements qualify all forward-looking
  statements attributable to us or persons acting on our behalf.</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b><br>
  <br>
  USE OF PROCEEDS</b><br>
  </font></P>
<p align="left">We will not receive any of the proceeds from the sale of the shares
  sold under this prospectus, although we may receive up to approximately $1,342,000
  upon full exercise of the Warrants. Any proceeds received from the exercise
  of warrants will be used to increase the Company's working capital balances.
  All proceeds from the sale of the shares will be for the account of the selling
  stockholders. See &quot;Selling Stockholders&quot; and &quot;Plan of Distribution.&quot;<br>
  <br>
</p>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 21 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>SELLING STOCKHOLDERS</b><br>
  </font></P>
<P ALIGN="left">The shares of Common Stock being offered by the selling stockholders
  are those issuable to the selling stockholders upon conversion of the Note and
  exercise of the Warrants. For additional information regarding the issuance
  of the Note and the Warrants, see &quot;Convertible Note Financing&quot; above.
  We are registering the shares of Common Stock in order to permit the selling
  stockholders to offer the shares for resale from time to time. Except for the
  ownership of the Note and the Warrants issued in connection with the convertible
  note financing, the selling stockholders have not had any material relationship
  with us within the past three years. <br>
</P>
<P ALIGN="left">The table below lists the selling stockholders and other information
  regarding the beneficial ownership (as determined under Section 13(d) of the
  Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder)
  of the shares of Common Stock held by each of the selling stockholders. The
  second column lists the number of shares of Common Stock beneficially owned
  by the selling stockholders, based on their respective ownership of shares of
  Common Stock, the Note and Warrants, as of November 30, 2010, assuming conversion
  of the Note and exercise of the Warrants held by each such selling stockholder
  on that date but taking account of any limitations on conversion and exercise
  set forth therein.<br>
</P>
<P ALIGN="left">The third column lists the shares of Common Stock being offered
  by this prospectus by the selling stockholders and does not take in account
  any limitations on (i) conversion of the Note set forth therein or (ii) exercise
  of the Warrants set forth therein. <br>
</P>
<P ALIGN="left">In accordance with the terms of a registration rights agreement
  with the Holders of the Note and the Warrants issued in the convertible note
  financing, this prospectus generally covers the resale of the sum of (i) 152.0796%
  of the maximum number of shares of Common Stock issuable upon conversion of
  the Note and (ii) 100% of the maximum number of shares of Common Stock issuable
  upon exercise of the Warrants, in each case, determined as if the Note and Warrants
  were converted or exercised (as the case may be) in full (without regard to
  any limitations on conversion or exercise contained therein) as of the trading
  day immediately preceding the date this registration statement was initially
  filed with the SEC. Because the conversion price of the Note and the exercise
  price of the Warrants may be adjusted, the number of shares that will actually
  be issued may be more or less than the number of shares being offered by this
  prospectus. The fourth column assumes the sale of all of the shares offered
  by the selling stockholders pursuant to this prospectus.<br>
</P>
<P ALIGN="left">Under the terms of the Note and the Warrants, a selling stockholder
  may not convert the Note or exercise the Warrants to the extent (but only to
  the extent) such selling stockholder or any of its affiliates would beneficially
  own more than 4.99% of our Common Stock. The number of shares in the second
  column reflects these limitations. The selling stockholders may sell all, some
  or none of their shares in this offering. See &quot;Plan of Distribution.&quot;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 22-</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<table width="87%" border=0 cellspacing=0 cellpadding=0 align="center">
  <tr valign="bottom">
    <td align="LEFT" height="19" width="35%">
      <div align="left"><font size="3" face="Times New Roman, Times, serif"><b>Name
        of Selling Stockholder<br>
        </b></font> </div>
      <hr NOSHADE>
    </td>
    <td align="CENTER" height="19" width="12%"><font face="Times New Roman, Times, serif"><b><font size="3">Number
      of Shares of Common Stock Owned Prior to Offering </font> </b> </font>
      <hr NOSHADE>
    </td>
    <td align="CENTER" height="19" width="15%"><font face="Times New Roman, Times, serif"><b>Maximum
      Number of <br>
      Shares of Common Stock <br>
      to be Sold Pursuant to<br>
      this Prospectus </b> </font>
      <hr NOSHADE>
    </td>
    <td align="CENTER" height="19" width="18%"><font face="Times New Roman, Times, serif"><b>Number
      of Shares of <br>
      Common Stock<br>
      Owned After Offering </b> </font>
      <hr NOSHADE>
    </td>
    <td align="CENTER" height="19" width="20%"><font face="Times New Roman, Times, serif"><b><font size="3">Percent
      of Common Stock Owned After Offering (1) </font> </b> </font>
      <hr NOSHADE>
    </td>
  </tr>
  <tr bgcolor="#FFFFFF" valign="top">
    <td width="35%" height="9">Hudson Bay Master Fund Ltd.(2)</td>
    <td align="RIGHT" height="9" width="12%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">199,683
        (3) </font></div>
    </td>
    <td align="RIGHT" height="9" width="15%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">1,260,398
        </font></div>
    </td>
    <td align="RIGHT" height="9" width="18%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (4) </font></div>
    </td>
    <td align="RIGHT" height="9" width="20%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0%
        (4)</font></div>
    </td>
  </tr>
  <tr bgcolor="#FFFFFF" valign="top">
    <td width="35%" height="18">Jonathan Blum (12)</td>
    <td height="18" width="12%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (5) </font></div>
    </td>
    <td height="18" width="15%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">15,000
        </font></div>
    </td>
    <td height="18" width="18%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (6) </font></div>
    </td>
    <td height="18" width="20%">
      <div align="center">0% (6)</div>
    </td>
  </tr>
  <tr bgcolor="#FFFFFF" valign="top">
    <td width="35%" height="19">Brandon Ross (12)</td>
    <td align="RIGHT" height="19" width="12%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (7) </font></div>
    </td>
    <td align="RIGHT" height="19" width="15%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">15,000
        </font></div>
    </td>
    <td align="RIGHT" height="19" width="18%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (8) </font></div>
    </td>
    <td align="RIGHT" height="19" width="20%">
      <div align="center">0% (8)</div>
    </td>
  </tr>
  <tr bgcolor="#FFFFFF" valign="top">
    <td width="35%" height="17">Dawson James Securities, Inc.(9)(12)</td>
    <td align="RIGHT" height="17" width="12%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (10) </font></div>
    </td>
    <td align="RIGHT" height="17" width="15%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">20,000
        </font></div>
    </td>
    <td align="RIGHT" height="17" width="18%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0
        (11) </font></div>
    </td>
    <td align="RIGHT" height="17" width="20%">
      <div align="center"><font size="3" face="Times New Roman, Times, serif">0%
        (11) </font></div>
    </td>
  </tr>
  <tr bgcolor="#FFFFFF" valign="top">
    <td colspan="6" height="265">
      <hr NOSHADE align="LEFT" width="120">
      <font size="2" face="Times New Roman, Times, serif"> (1) Based upon 3,801,991
      shares of Common Stock outstanding as of the close of business on November
      30, 2010.<br>
      (2) Hudson Bay Capital Management LP, the investment manager of Hudson Bay
      Master Fund Ltd., has voting and investment power over these securities.
      Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which
      is the general partner of Hudson Bay Capital Management LP. Sander Gerber
      disclaims beneficial ownership over these securities.<br>
      (3) The number of shares shown in this column reflects 199,683 of the 760,398
      shares of Common Stock issuable upon conversion of the secured convertible
      note issued to Hudson Bay Master Fund Ltd. in the convertible note financing,
      as a result of the 4.99% beneficial ownership limitation. In connection
      with the convertible note financing, Hudson Bay Master Fund Ltd. was issued
      a warrant to purchase 500,000 shares of Common Stock which, pursuant to
      its terms, is not exercisable within 60 days of November 30, 2010. While
      the shares of Common Stock issuable upon exercise of the warrant are registered
      for resale pursuant to this registration statement, they are not shown as
      beneficially owned as of November 30, 2010 for purposes of this table. In
      the event that the beneficial ownership limitation percentage is increased
      by Hudson Bay Master Fund Ltd. to 9.99% upon 61 days notice to the Company,
      Hudson Bay Master Fund Ltd. could beneficially own up to an aggregate of
      421,974 shares of Common Stock as a result of the conversion of the secured
      convertible note and the exercise of the warrant. As of November 30, 2010,
      the Company has not received notice of the intention to increase the beneficial
      ownership limitation percentage.<br>
      (4) This column assumes that all of the shares of Common Stock issuable
      upon conversion of the secured convertible promissory note issued in the
      convertible note financing (760,398) and all of the shares of Common Stock
      issuable upon exercise of the warrant issued in connection with the convertible
      note financing (500,000), are sold in this offering.<br>
      (5) The number of shares does not include 15,000 shares of Common Stock
      subject to a warrant issued in connection with the convertible note financing
      which, pursuant to the warrant's terms, is not exercisable within 60 days
      of November 30, 2010. While the shares of Common Stock issuable upon exercise
      of the warrant are registered for resale pursuant to this registration statement,
      they are not shown as beneficially owned as of November 30, 2010 for purposes
      of this table.<br>
      (6) This column assumes that all of the shares of Common Stock issuable
      upon exercise of a warrant issued in connection with the convertible note
      financing (15,000) are sold in this offering.<br>
      (7) The number of shares does not include 15,000 shares of Common Stock
      subject to a warrant issued in connection with the convertible note financing
      which, pursuant to the warrant's terms, is not exercisable within 60 days
      of November 30, 2010. While the shares of Common Stock issuable upon exercise
      of the warrant are registered for resale pursuant to this registration statement,
      they are not shown as beneficially owned as of November 30, 2010 for purposes
      of this table.<br>
      (8) The number of shares shown in this column assumes that all of the shares
      of Common Stock issuable upon exercise of a warrant issued in connection
      with the convertible note financing (15,000) are sold in this offering.
      <br>
      (9) Albert Poliak, Chief Executive Officer of Dawson James Securities, Inc.,
      has voting and investment control in respect of these securities.<br>
      (10) The number of shares does not include 20,000 shares of Common Stock
      subject to a warrant issued in connection with the convertible note financing
      which, pursuant to the warrant's terms, is not exercisable within 60 days
      of November 30, 2010. While the shares of Common Stock issuable upon exercise
      of the warrant are registered for resale pursuant to this registration statement,
      they are not shown as beneficially owned as of November 30, 2010 for purposes
      of this table.<br>
      (11) This column assumes that all of the shares of Common Stock issuable
      upon exercise of a warrant issued in connection with the convertible note
      financing (20,000) are sold in this offering.<br>
      </font></td>
  </tr>
</table>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 23 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<table width="87%" border=0 cellspacing=0 cellpadding=0 align="center">
  <tr bgcolor="#FFFFFF" valign="top">
    <td colspan="6" height="45"> <font size="2" face="Times New Roman, Times, serif">(12)
      The selling stockholders identified have indicated that they are, or are
      affiliates of, registered broker-dealers. These selling stockholders have
      represented that at the time of the acquisition of the securities, they
      had no agreements or understandings, directly or indirectly, with any person
      to distribute the securities. To the extent that we become aware that any
      such selling stockholders did have such an agreement or understanding, we
      will file a post-effective amendment to registration statement of which
      this prospectus is a part to designate such person as an &quot;underwriter&quot;
      within the meaning of the Securities Act of 1933.</font><font size="2">
      </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"><font face="Times New Roman, Times, serif">- 24 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>PLAN OF DISTRIBUTION</b></font></P>
<p><br>
  We are registering the shares of Common Stock issuable upon conversion of the
  Note and exercise of the Warrants to permit the resale of these shares of Common
  Stock by the holders of the Note and Warrants from time to time after the date
  of this prospectus. We will not receive any of the proceeds from the sale by
  the selling stockholders of the shares of Common Stock. We will bear all fees
  and expenses incident to our obligation to register the shares of Common Stock.<br>
</p>
<p>The selling stockholders may sell all or a portion of the shares of Common
  Stock held by them and offered hereby from time to time directly or through
  one or more underwriters, broker-dealers or agents. If the shares of Common
  Stock are sold through underwriters or broker-dealers, the selling stockholders
  will be responsible for underwriting discounts or commissions or agent's commissions.
  The shares of Common Stock may be sold in one or more transactions at fixed
  prices, at prevailing market prices at the time of the sale, at varying prices
  determined at the time of sale or at negotiated prices. These sales may be effected
  in transactions, which may involve crosses or block transactions, pursuant to
  one or more of the following methods:</p>
<ul>
  <li><font face="Times New Roman, Times, serif">on any national securities exchange
    or quotation service on which the securities may be listed or quoted at the
    time of sale;<br>
    <br>
    </font></li>
  <li>in the over-the-counter market;<font face="Times New Roman, Times, serif"><br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">in transactions otherwise than
    on these exchanges or systems or in the over-the-counter market;<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">through the writing or settlement
    of options, whether such options are listed on an options exchange or otherwise;<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">ordinary brokerage transactions
    and transactions in which the broker-dealer solicits purchasers;<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">block trades in which the broker-dealer
    will attempt to sell the shares as agent but may position and resell a portion
    of the block as principal to facilitate the transaction;<br>
    <br>
    </font></li>
  <li>purchases by a broker-dealer as principal and resale by the broker-dealer
    for its account;<font face="Times New Roman, Times, serif"><br>
    <br>
    </font></li>
  <li>an exchange distribution in accordance with the rules of the applicable
    exchange;<font face="Times New Roman, Times, serif">. <br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">privately negotiated transactions;<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">short sales made after the date
    the Registration Statement is declared effective by the SEC;<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">broker-dealers may agree with
    a selling securityholder to sell a specified number of such shares at a stipulated
    price per share;<br>
    <br>
    <br>
    </font>
    <p align="center"><font face="Times New Roman, Times, serif"><br>
      - 25 -</font></p>
  </li>
</ul>
<hr align="LEFT" size=4>
<font face="Times New Roman, Times, serif"><br>
<br>
</font>
<ul>
  <li><font face="Times New Roman, Times, serif">a combination of any such methods
    of sale; and<br>
    <br>
    </font></li>
  <li><font face="Times New Roman, Times, serif">any other method permitted pursuant
    to applicable law.<br>
    </font></li>
</ul>
<P ALIGN="left">The selling stockholders may also sell shares of Common Stock
  under Rule 144 promulgated under the Securities Act of 1933, as amended, if
  available, rather than under this prospectus. In addition, the selling stockholders
  may transfer the shares of Common Stock by other means not described in this
  prospectus. If the selling stockholders effect such transactions by selling
  shares of Common Stock to or through underwriters, broker-dealers or agents,
  such underwriters, broker-dealers or agents may receive commissions in the form
  of discounts, concessions or commissions from the selling stockholders or commissions
  from purchasers of the shares of Common Stock for whom they may act as agent
  or to whom they may sell as principal (which discounts, concessions or commissions
  as to particular underwriters, broker-dealers or agents may be in excess of
  those customary in the types of transactions involved). In connection with sales
  of the shares of Common Stock or otherwise, the selling stockholders may enter
  into hedging transactions with broker-dealers, which may in turn engage in short
  sales of the shares of Common Stock in the course of hedging in positions they
  assume. The selling stockholders may also sell shares of Common Stock short
  and deliver shares of Common Stock covered by this prospectus to close out short
  positions and to return borrowed shares in connection with such short sales.
  The selling stockholders may also loan or pledge shares of Common Stock to broker-dealers
  that in turn may sell such shares.</P>
<p>The selling stockholders may pledge or grant a security interest in the Note,
  Warrants or shares of Common Stock owned by them and, if they default in the
  performance of their secured obligations, the pledgees or secured parties may
  offer and sell the shares of Common Stock from time to time pursuant to this
  prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
  applicable provision of the Securities Act amending, if necessary, the list
  of selling stockholders to include the pledgee, transferee or other successors
  in interest as selling stockholders under this prospectus. The selling stockholders
  also may transfer and donate the shares of Common Stock in other circumstances
  in which case the transferees, donees, pledgees or other successors in interest
  will be the selling beneficial owners for purposes of this prospectus.</p>
<p>To the extent required by the Securities Act and the rules and regulations
  thereunder, the selling stockholders and any broker-dealer participating in
  the distribution of the shares of Common Stock may be deemed to be &quot;underwriters&quot;
  within the meaning of the Securities Act, and any commission paid, or any discounts
  or concessions allowed to, any such broker-dealer may be deemed to be underwriting
  commissions or discounts under the Securities Act. At the time a particular
  offering of the shares of Common Stock is made, a prospectus supplement, if
  required, will be distributed, which will set forth the aggregate amount of
  shares of Common Stock being offered and the terms of the offering, including
  the name or names of any broker-dealers or agents, any discounts, commissions
  and other terms constituting compensation from the selling stockholders and
  any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.</p>
<p>Under the securities laws of some states, the shares of Common Stock may be
  sold in such states only through registered or licensed brokers or dealers.
  In addition, in some states the shares of Common Stock may not be sold unless
  such shares have been registered or qualified for sale in such state or an exemption
  from registration or qualification is available and is complied with.</p>
<p>&nbsp;</p>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif">- 26 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="left"><br>
  There can be no assurance that any selling stockholder will sell any or all
  of the shares of Common Stock registered pursuant to the registration statement,
  of which this prospectus forms a part.<br>
</P>
<P ALIGN="left">The selling stockholders and any other person participating in
  such distribution will be subject to applicable provisions of the Securities
  Exchange Act of 1934, as amended, and the rules and regulations thereunder,
  including, without limitation, to the extent applicable, Regulation M of the
  Exchange Act, which may limit the timing of purchases and sales of any of the
  shares of Common Stock by the selling stockholders and any other participating
  person. To the extent applicable, Regulation M may also restrict the ability
  of any person engaged in the distribution of the shares of Common Stock to engage
  in market-making activities with respect to the shares of Common Stock. All
  of the foregoing may affect the marketability of the shares of Common Stock
  and the ability of any person or entity to engage in market-making activities
  with respect to the shares of Common Stock.</P>
<p>We will pay all expenses of the registration of the shares of Common Stock
  pursuant to the registration rights agreement, estimated to be $30,000.00 in
  total, including, without limitation, Securities and Exchange Commission filing
  fees and expenses of compliance with state securities or &quot;blue sky&quot;
  laws; provided, however, a selling stockholder will pay all underwriting discounts
  and selling commissions, if any. We will indemnify the selling stockholders
  against liabilities, including some liabilities under the Securities Act in
  accordance with the registration rights agreements or the selling stockholders
  will be entitled to contribution. We may be indemnified by the selling stockholders
  against civil liabilities, including liabilities under the Securities Act that
  may arise from any written information furnished to us by the selling stockholder
  specifically for use in this prospectus, in accordance with the related registration
  rights agreements or we may be entitled to contribution.<br>
</p>
<p>Once sold under the registration statement, of which this prospectus forms
  a part, the shares of Common Stock will be freely tradable in the hands of persons
  other than our affiliates.</p>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>LEGAL MATTERS</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Wilson Sonsini Goodrich
  &amp; Rosati, Professional Corporation, Palo Alto, California will pass upon
  certain legal matters relating to the validity of the securities offered hereby.<br>
  </font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>EXPERTS</b><br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">Moss Adams LLP, independent
  registered public accounting firm, have audited our financial statements included
  in our Annual Report on Form 10-K for the year ended December 31, 2009, as set
  forth in their report, which is incorporated by reference in this prospectus
  and elsewhere in the registration statement. Our financial statements are incorporated
  by reference in reliance on Moss Adams LLP's report, given on their authority
  as experts in accounting and auditing.</font></P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<p align="center"><font face="Times New Roman, Times, serif">- 27 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left"><font face="Times New Roman, Times, serif"><br>
  </font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>WHERE YOU CAN
  FIND MORE INFORMATION</b><br>
  </font></P>
<P ALIGN="left">We have filed with the Securities and Exchange Commission a registration
  statement on Form S 3, of which this prospectus is a part, under the Securities
  Act with respect to the shares of Common Stock offered hereby. This prospectus
  does not contain all of the information included in the registration statement.
  Statements in this prospectus concerning the provisions of any document filed
  as an exhibit to the registration statement or otherwise filed by us with the
  SEC are not necessarily complete. You should refer to the copies of these documents
  for a more complete understanding of the matters involved. Each statement concerning
  these documents is qualified in its entirety by such reference.<br>
</P>
<P ALIGN="left">We are subject to the informational requirements of the Securities
  Exchange Act of 1934 and, accordingly, file reports, proxy statements and other
  information with the SEC. Copies of our reports, proxy statements and other
  information also may be inspected and copied at the SEC's public reference room
  located at 100 F Street, N.E., Washington, D.C. 20549. You can call the SEC
  at 1-800-SEC-0330 for further information about the operation of the public
  reference room. The SEC maintains a web site at http://www.sec.gov that contains
  reports, proxy and information statements and other information regarding registrants
  that file electronically with the Commission. You can also find these documents
  through our own web site which is located at http://www.socketmobile.com. Information
  included on our web site is not a part of this prospectus or any prospectus
  supplement.<br>
  <br>
  <font face="Times New Roman, Times, serif"> </font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>INFORMATION INCORPORATED
  BY REFERENCE</b><br>
  </font></P>
<P ALIGN="left">The SEC allows us to &quot;incorporate by reference&quot; the
  information we file with them, which means that we can disclose important information
  to you in this document by referring you to other filings we have made with
  the SEC. The information incorporated by reference is considered to be part
  of this prospectus, and later information filed with the SEC will update and
  supersede this information. In this instance, we are incorporating by reference
  the documents and information listed below and any future filings made by us
  with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities and Exchange
  Act (1) after the date of this prospectus and prior to the time that we sell
  all of the securities offered by this prospectus or the earlier termination
  of the offering, and (2) after the date of the initial registration statement
  of which this prospectus forms a part and prior to the effectiveness of the
  registration statement: </P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">(1) Our Annual Report
  on Form 10 K for the year ended December 31, 2009, filed with the SEC on April
  1, 2010.</font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> (2) Our Quarterly
  Report on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and
  September 30, 2010, filed with the SEC on November 15, 2010. </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> (3) Our current reports
  on Form 8-K filed with the SEC on February 4, 2010, March 8, 2010, May 5, 2010,
  May 6, 2010, May 11, 2010, August 3, 2010, September 3, 2010, October 28, 2010,
  November 8, 2010, November 22, 2010 and December 14, 2010.</font></P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left">&nbsp;</P>
<p align="center"><font face="Times New Roman, Times, serif">- 28 -</font></p>
<hr align="LEFT" size=4>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="left"><font face="Times New Roman, Times, serif"> (4) The description
  of our Common Stock contained in our Registration Statement on Form 8 A filed
  with the SEC on April 11, 1995, as amended by our Registration Statement on
  Form 8 A/A filed with the SEC on June 15, 1995.<br>
  </font></P>
<P ALIGN="left"><font face="Times New Roman, Times, serif">We will provide to
  any person, including any beneficial owner, to whom a prospectus is delivered,
  a copy of any of the information which has been incorporated by reference into
  this prospectus at no cost upon an oral or written request to:<br>
  <br>
  </font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><br>
  Socket Mobile, Inc.<br>
  39700 Eureka Drive<br>
  Newark, CA 94560<br>
  Attention: David W. Dunlap<br>
  Phone: (510) 933-3035</font></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">- 29 -</font></P>
<hr align="LEFT" size=4>
<P ALIGN="center">&nbsp;</P>
<hr NOSHADE>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">1,310,398 Shares</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b><font size="5">SOCKET
  MOBILE, INC.</font></b></font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif" size="3">____________________</font></P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>COMMON STOCK<br>
  </b><font size="3">____________________</font></font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center"><font face="Times New Roman, Times, serif"><b>PROSPECTUS</b></font></P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="center">&nbsp;</P>
<P ALIGN="left">No dealer, salesperson or other person is authorized to give any
  information or to represent anything not contained in this prospectus. You must
  not rely on any unauthorized information or representations. This prospectus
  is an offer to sell only the shares offered hereby, and only under circumstances
  and in jurisdictions where it is lawful to do so. The information contained
  in this prospectus is current only as of its date.</P>
<P ALIGN="left">&nbsp;</P>
<P ALIGN="center"> January 12, 2011 </P>
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