<SEC-DOCUMENT>0000944075-11-000044.txt : 20110726
<SEC-HEADER>0000944075-11-000044.hdr.sgml : 20110726
<ACCEPTANCE-DATETIME>20110726161845
ACCESSION NUMBER:		0000944075-11-000044
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20110630
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110726
DATE AS OF CHANGE:		20110726

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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25904
		FILM NUMBER:		11987650

	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>8-K
<SEQUENCE>1
<FILENAME>form-8k0726.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<html>
<head>

</head>

<body bgcolor="#FFFFFF">
<div align=left>
  <hr width="100%">
  <div align=center>
    <hr width="100%">
    <p><font face="Times New Roman, Times, serif" size="3"><b><font size="5">UNITED
      STATES<br>
      </font></b><font size="5"><strong>SECURITIES AND EXCHANGE COMMISSION</strong></font></font></p>
  </div>
</div>
<p align=center><font face="Times New Roman, Times, serif" size="3">Washington,
  DC 20549</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" size="3"> <b><font size="5">FORM
  8-K</font></b><br>
  <br>
  <b>CURRENT REPORT</b><br>
  <br>
  Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934<br>
  <b><br>
  </b></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>July 26</b></font><font face="Times New Roman, Times, serif"><b><font size=3>,
  2011</font></b><font size=3> <br>
  <font size="2">(Date of earliest event reported)</font></font></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><br>
  </font></p>
<p align=center><font face="Times New Roman, Times, serif" size="6"><strong>SOCKET
  MOBILE, INC.</strong></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Exact name of registrant as specified in its charter) </font></font></p>
<p>&nbsp;
<table cols=3 width="100%">
  <tr>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>Delaware<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(State or
        other jurisdiction of incorporation)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b> </font>
      </center>
    </td>
    <td height=28 width="32%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>001-13810<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(Commission
        File Number)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b></font>
      </center>
    </td>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>94-3155066</b><br>
        </font><font face="Times New Roman, Times, serif" size=2>(IRS Employer
        Identification No.)</font><font face="Times New Roman, Times, serif" size=3>
        </font>
      </center>
    </td>
  </tr>
</table>
<font face="Times New Roman, Times, serif"><br>
</font>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>39700 Eureka
  Drive <br>
  Newark, CA 94560</b></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Address of principal executive offices, including zip code) </font></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>(510) 933-3000<br>
  </b></font> <font face="Times New Roman, Times, serif"><font size="2">(Registrant's
  telephone number, including area code)</font></font>
<div align="center">
  <p>&nbsp;</p>
  <p align="left"><font face="Times New Roman, Times, serif">Check the appropriate
    box below if the Form 8-K filing is intended to simultaneously satisfy the
    filing obligation of the registrant under any of the following provisions
    (see General Instruction A.2. below):</font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))<br>
    <br>
    </font></font></p>
</div>
<p style="PAGE-BREAK-BEFORE: always"> </p>
<div align=left></div>
<div align=left>
  <hr width="100%">
</div>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif"><b>Item 2.02 Results of Operations
  and Financial Condition.</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif" size="3">On July 26, 2011, Socket
  Mobile, Inc., issued a press release reporting its results for the three and
  six months ended June 30, 2011. A copy of the press release is furnished as
  Exhibit 99.1.</font><font face="Times New Roman, Times, serif"></font><font face="Times New Roman, Times, serif">
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>Item 9.01 Financial Statements
  and Exhibits.</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">(d) Exhibits.</font></p>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border"><font face="Times New Roman, Times, serif">Exhibit
          Number</font></div>
      </div>
    </td>
    <td width=29 height=54>&nbsp;</td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div class="border">
          <div align="center"><font face="Times New Roman, Times, serif">Description</font></div>
        </div>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">&nbsp;</td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">&nbsp;</td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">99.1</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22"><font face="Times New Roman, Times, serif">Text
      of press release, dated July 26, 2011, titled &quot;Socket Mobile Reports
      Positive EBITDA and Revenue of $4.4 Million for Q211&quot;.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr>
<p style="PAGE-BREAK-BEFORE: always">
<p style="PAGE-BREAK-BEFORE: always">
<p>&nbsp;</p>
<hr width="100%">
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><b>SIGNATURES</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">Pursuant to the requirements of
  the Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned hereunto duly authorized.</font></p>
<p>&nbsp;</p>
<dir>
  <dir>
    <dir>
      <dir>
        <dir>
          <blockquote>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <p align=left> </p>
            <tr valign="bottom"
align="left"></tr>
          </blockquote>
        </dir>
      </dir>
    </dir>
  </dir>
</dir>
<div align=left>
  <table height=135 cellspacing=0 cellpadding=0 width=96% align=left border=0>
    <tr>
      <td width=300>&nbsp;</td>
      <td width=21>&nbsp;</td>
      <td colspan="2"><font face="Times New Roman, Times, serif"><b>SOCKET MOBILE,
        INC.</b></font></td>
    </tr>
    <tr>
      <td width=300>&nbsp;</td>
      <td width=21>&nbsp;</td>
      <td colspan="2">&nbsp;</td>
    </tr>
    <tr>
      <td width=300>
        <div align=left></div>
      </td>
      <td width=21>&nbsp;</td>
      <td colspan="2">&nbsp;</td>
    </tr>
    <tr>
      <td width=300 height=19>
        <div align=left><font face="Times New Roman, Times, serif">Date: July
          26, 2011</font></div>
      </td>
      <td width=21 height=19>&nbsp;</td>
      <td width=30 height=19><font face="Times New Roman, Times, serif">By: <u>/s/
        </u></font></td>
      <td width=379 height=19><font face="Times New Roman, Times, serif"><u>David
        W. Dunlap</u></font></td>
    </tr>
    <tr>
      <td width=300 height=40>
        <div align=left></div>
      </td>
      <td width=21 height=40>&nbsp;</td>
      <td width=30 height=40>
        <blockquote>
          <div align="left"></div>
        </blockquote>
      </td>
      <td width=379 height=40><font face="Times New Roman, Times, serif">Name:
        David W. Dunlap<br>
        Vice President, Finance and Administration <br>
        and Chief Financial Officer</font></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr>
<p align=center>&nbsp;</p>
<p align=center><font face="Times New Roman, Times, serif"><b>EXHIBIT INDEX</b></font></p>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border"><font face="Times New Roman, Times, serif">Exhibit
          Number</font></div>
      </div>
    </td>
    <td width=29 height=54>&nbsp;</td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div class="border">
          <div align="center"><font face="Times New Roman, Times, serif">Description</font></div>
        </div>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">&nbsp;</td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">&nbsp;</td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">99.1</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22"><font face="Times New Roman, Times, serif">Text
      of press release, dated July 26, 2011, titled &quot;Socket Mobile Reports
      Positive EBITDA and Revenue of $4.4 Million for Q211&quot;.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align=center>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>pressrelease.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<html>
<head>
<title>Untitled Document</title>

</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif" size="3"><b>Exhibit
  99.1</b></font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="3"><b><font size="5"><br>
  </font></b><font size="4"><b><font size="5">Socket Mobile Reports Positive EBITDA
  and Revenue of $4.4 Million for Q211<br>
  </font></b><font size="5"><i>Q2 revenue up 8 percent sequentially and up 19
  percent year-over-year </i></font><b><font size="5"><br>
  <br>
  </font></b></font></font></p>
<p align="left"><font face="Times New Roman, Times, serif" size="3"><b> NEWARK,
  Calif., - July 26, 2011 - </b>Socket Mobile, Inc. (NASDAQ: SCKT), an innovative
  provider of mobile productivity products, today reported financial results for
  the 2011 second quarter ended June 30, 2011.</font></p>
<p>Revenue for the second quarter of 2011 was $4.4 million, up 19 percent compared
  to revenue of $3.7 million for the same quarter a year ago and up 8 percent
  compared to $4.0 million in the immediately preceding quarter. Net loss for
  the second quarter of 2011 improved to $392,000, or a loss of $0.09 per share,
  compared to a net loss of $575,000, or a loss of $0.15 per share, in the second
  quarter of 2010 and a net loss of $928,000, or $0.24 per share, in the immediately
  preceding quarter.</p>
<p>Earnings before interest, taxes, depreciation and amortization (EBITDA) for
  the second quarter of 2011 was $73,000, or $0.02 per share, compared to an EBITDA
  net loss of $234,000, or $0.06 per share, in the second quarter of 2010 and
  an EBITDA net loss of $295,000, or $0.07 per share, in the immediately preceding
  quarter.</p>
<p>Operating expenses for the second quarter of 2011 were $2.0 million, flat compared
  to operating expenses of $2.0 million for the same quarter a year ago, and a
  decrease of 3 percent compared to operating expenses of $2.1 million in the
  immediately preceding quarter. </p>
<p>Unrestricted cash and cash equivalents were approximately $1.0 million at June
  30, 2011, compared to $0.8 million at March 31, 2011 and $0.5 million at December
  31, 2010.</p>
<p>Kevin Mills, president and chief executive officer, commented, &quot;We achieved
  positive earnings before interest, taxes, depreciation and amortization, or
  EBITDA, and continued sequential revenue growth in the second quarter, reflecting
  our continued progress in growing sales and reducing operating expenses. Shipments
  of our handheld computers increased by more than 1,000 units from the first
  quarter, benefiting from increased supply, and we are also seeing overall demand
  begin to increase from Hewlett-Packard's decision to discontinue its model 200
  series iPAQs around the world. </p>
<p>&quot;Total orders received in the second quarter for our handheld computers
  and bar code scanning products grew to $5.3 million and we ended the quarter
  with an order backlog of $3.4 million, of which $2.6 million in orders were
  for handheld computers. While shipments of our handheld computers continued
  to be constrained by a shortage of LCD computer screens, we saw significant
  improvement in the second quarter and expect these shortages to be mostly resolved
  in the third quarter, significantly increasing our product availability.</p>
<p>&nbsp;</p>
<hr>
<p>&nbsp;</p>
<p>&quot;We recently released our software developers kit for Apple products,
  which we expect to contribute to sales of our cordless barcode scanners in the
  second half of the year. This highly versatile barcode scanning tool enables
  Apple developers to easily add commercial-grade rapid and robust barcode scanning
  capabilities to their applications for Apple devices. Our SocketScan10 software
  also supports applications running on operating systems from Google (Android),
  Research in Motion (Blackberry) and Windows/Windows Mobile. We expect to release
  an Apple version of our cordless hand scanner during the third quarter. We are
  focused on continued positive momentum and remain committed to reaching sustainable
  profitable operating levels,&quot; Mills concluded.</p>
<p>For the six months ended June 30, 2011, revenue was $8.4 million, an increase
  of 12 percent compared to $7.5 million in the six month period a year ago. Net
  loss was $1.3 million, or a loss of $0.32 per share, compared to a net loss
  of $1.6 million, or a loss of $0.43 per share for the same period one year ago.
  Operating expenses for the six months ended June 30, 2011 were $4.1 million,
  compared to operating expenses of $4.6 million for the same period a year ago.</p>
<p><b>Conference Call</b><br>
  Management of Socket will hold a conference call and web cast today at 2 P.M.
  PT to discuss the quarterly results and outlook for the future. The dial-in
  number to access the call is (877) 407-9210 from within the U.S. or (201) 689-8049
  from international locations. A replay will be available via telephone for a
  week following the call at (877) 660-6853 from within the U.S., or (201) 612-7415
  from international locations. Access code for the replay is 286# followed by
  conference ID 375518#. The call will also be carried live and available via
  replay through a link on Socket's website at www.socketmobile.com. From the
  home page, choose &quot;About Socket&quot;/&quot;Investor Relations&quot;/&quot;Conference
  Calls and Events.&quot; A transcript will be posted within a few days of the
  call. </p>
<p><b>About Socket Mobile, Inc.</b><br>
  With more than 18 years of experience in the Automatic Identification and Data
  Capture market, Socket makes mobile computing and productivity work. The company
  offers a family of handheld computers and an extensive portfolio of AIDC peripherals
  designed specifically for business mobility deployments and to enable productivity
  increases and drive operational efficiencies in healthcare, hospitality and
  other vertical markets. The company also offers OEM solutions for the mobile
  device market. Socket is headquartered in Newark, Calif. and can be reached
  at 510-933-3000 or www.socketmobile.com.</p>
<p><i>Socket is a registered trademark of Socket Mobile, Inc. All other trademarks
  and trade names contained herein may be those of their respective owners. &copy;2011,
  Socket Mobile, Inc. All rights reserved.</i></p>
<p>&nbsp;</p>
<hr>
<p>&nbsp;</p>
<p><b>Forward-Looking Statements </b><br>
  This press release contains forward-looking statements within the meaning of
  Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
  Securities Exchange Act of 1934, as amended. Such forward-looking statements
  include, but are not limited to, statements regarding new mobile computer, data
  collection and OEM products, including details on the timing, distribution and
  market acceptance of the products, and statements predicting trends, sales and
  market conditions and opportunities in the markets in which we sell our products.
  Such statements involve risks and uncertainties, and actual results could differ
  materially from the results anticipated in such forward-looking statements as
  a result of a number of factors, including, but not limited to, the risk that
  our new products may be delayed or not rollout as predicted, if ever, due to
  technological, market, or financial factors, including the availability of necessary
  working capital, the risk that market acceptance and sales opportunities may
  not happen as anticipated, the risk that our application partners and current
  distribution channels may choose not to distribute our products or may not be
  successful in doing so, the risk that acceptance of our products in vertical
  application markets may not happen as anticipated, and other risks described
  in our most recent Form 10-K and 10-Q reports filed with the Securities and
  Exchange Commission.</p>
<p>&nbsp;</p>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td width=488 height=20><font face="Times New Roman, Times, serif" size="3"><b><u>Socket
      Mobile Media Contact:</u></b></font></td>
    <td width=488 height=25><font face="Times New Roman, Times, serif" size="3"><b><u>Socket
      Mobile Investor Contact:</u></b></font></td>
    <td width=488 height=20><font face="Times New Roman, Times, serif" size="3"><b><u>Investor
      Relations Contact:</u></b></font></td>
  </tr>
  <tr valign=bottom>
    <td width=488 height=25><font face="Times New Roman, Times, serif" size="3">Krista
      Rogers</font></td>
    <td width=488 height=25><font face="Times New Roman, Times, serif">David Dunlap</font></td>
    <td width=564 height=20><font face="Times New Roman, Times, serif">Todd Kehrli
      or Jim Byers</font></td>
  </tr>
  <tr valign=bottom>
    <td width=488 height=20><font face="Times New Roman, Times, serif">Marketing
      Communications Specialist</font></td>
    <td width=488 height=20><font face="Times New Roman, Times, serif">Chief Financial
      Officer </font></td>
    <td width=564 height=20><font face="Times New Roman, Times, serif">MKR Group,
      Inc.</font></td>
  </tr>
  <tr valign=bottom>
    <td width=488 height=20><font face="Times New Roman, Times, serif">(510) 933-3055</font></td>
    <td width=488 height=20><font face="Times New Roman, Times, serif">(510) 933-3035</font></td>
    <td width=564 height=20><font face="Times New Roman, Times, serif">(323) 468-2300</font></td>
  </tr>
  <tr valign=bottom>
    <td width=488 height=20><font face="Times New Roman, Times, serif" size="3">krista@socketmobile.com
      </font></td>
    <td width=488 height=20><font face="Times New Roman, Times, serif">dave@socketmobile.com</font></td>
    <td width=564 height=20><font face="Times New Roman, Times, serif">sckt@mkr-group.com</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif" size="3"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif" size="3">--Financial
  tables to follow--</font></p>
<p align="center">&nbsp;</p>
<hr>
<p align="center">&nbsp;</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=90% align=center border=1>
  <tr>
    <td colspan=5 height=70 valign="bottom">
      <p align=center><font size="3" face="Times New Roman, Times, serif"><b>Socket
        Mobile, Inc.<br>
        Summary Statements of Operations (Unaudited)<br>
        (Amounts in Thousands except per share amounts)</b></font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td colspan=2 height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">Three
        months ended June 30,</font></p>
    </td>
    <td colspan=2 height=17 valign="bottom">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">Six
        months ended June 30,</font></div>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2011</u>
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2010</u>
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2011</u>
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2010</u>
        </font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Revenue </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 4,353</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 3,654</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 8,392</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 7,461</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Cost of revenue </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 2,526</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 2,149</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 5,051</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 4,351</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Gross profit</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,827</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,505</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,341</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,110</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="30%" height=17> <font face="Times New Roman, Times, serif" size="3">&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbspGross
      profit percent</font> </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">42%</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">41%</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">40%</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">42%</font></div>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Research and development
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">633</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">559</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,288</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,240</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Sales and marketing
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">858</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">960</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,686</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">2,199</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">General and administrative
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">532</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">492</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,127</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,153</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom"><font face="Times New Roman, Times, serif" size="3">Amortization
      of intangibles</font></td>
    <td width="17%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">15</font></div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">15</font></div>
    </td>
    <td width="17%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">30</font></div>
    </td>
    <td width="17%" height=17 valign="top">
      <div align=center><font face="Times New Roman, Times, serif" size="3">30</font></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="30%" height=17> <font face="Times New Roman, Times, serif" size="3">&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbspTotal
      operating expenses</font> </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">2,038</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">2,026</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">4,131</font></div>
    </td>
    <td width="17%" height=17>
      <div align="center"><font size="3">4,622</font></div>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom"><font face="Times New Roman, Times, serif" size="3">Interest
      expense, net</font></td>
    <td width="17%" height=17 valign="bottom">
      <div align=center>20</div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center>54</div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">45</font></div>
    </td>
    <td width="17%" height=17 valign="bottom">
      <div align=center><font face="Times New Roman, Times, serif" size="3">102</font></div>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p>Debt discount amortization</p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">153</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">469</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Deferred tax provision</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">8</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">16</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
  </tr>
  <tr>
    <td width="30%" height=17 valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Net loss </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (392)
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (575)
        </font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (1,320)</font></p>
    </td>
    <td width="17%" height=17 valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (1,614)</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="30%" height=16>
      <p><font face="Times New Roman, Times, serif" size="3">Basic and diluted
        net loss per share</font></p>
    </td>
    <td width="17%" height=16>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.09)</font></p>
    </td>
    <td width="17%" height=16>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.15)</font></p>
    </td>
    <td width="17%" height=16>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.32)
        </font></p>
    </td>
    <td width="17%" height=16>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (0.43)
        </font></p>
    </td>
  </tr>
  <tr>
    <td rowspan="2" height=17 width="30%" valign="bottom">
      <p><font face="Times New Roman, Times, serif" size="3">Weighted average
        shares outstanding:<br>
        </font><font face="Times New Roman, Times, serif" size="3">&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbsp&nbspBasic
        and diluted</font></p>
    </td>
    <td rowspan="2" height=17 width="17%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">4,234</font></p>
    </td>
    <td rowspan="2" height=17 width="17%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,794</font></p>
    </td>
    <td rowspan="2" height=17 width="17%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">4,084
        </font></p>
    </td>
    <td rowspan="2" height=17 width="17%" valign="bottom">
      <p align=center><font face="Times New Roman, Times, serif" size="3">3,791
        </font></p>
    </td>
  </tr>
  <tr valign=bottom> </tr>
</table>
<p>&nbsp;</p>
<p align="center">Reconciliation of GAAP Net Loss to Earnings Before Interest,
  Taxes, Depreciation and Amortization<br>
  (EBITDA) (Unaudited)</p>
<p>&nbsp;</p>
<table cellspacing=1 cellpadding=1 width=80% align=center border=1>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td colspan=2 height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">Three
        months ended June 30,</font></p>
    </td>
    <td colspan=2 height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">Six
        months ended June 30,</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp; </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2011</u>
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2010</u>
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2011</u>
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"><u>2010</u>
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p>Net loss GAAP</p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> $ (392)</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> $ (575)
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> $ (1,320)</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> $ (1,614)
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p>Interest expense, net</p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 20</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 54</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 45</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3"> 102</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p>Income tax expense</p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">8</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">16</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">---</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">Depreciation </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">87</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">117</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">177</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">241</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">Amortization of intangibles
        </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">15</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">15</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">30</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">30</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>Debt discount amortization</td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">153</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">---</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">469</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">---</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>Stock compensation expense</td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">182</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">155</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">360</font></div>
    </td>
    <td width="17%" height=17>
      <div align=center><font face="Times New Roman, Times, serif" size="3">320</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="30%" height=17>
      <p><font face="Times New Roman, Times, serif" size="3">Net profit (loss)
        EBITDA </font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 73</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (234)</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (223)</font></p>
    </td>
    <td width="17%" height=17>
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ (921)</font></p>
    </td>
  </tr>
</table>
<p><font face="Times New Roman, Times, serif"> </font> <font face="Times New Roman, Times, serif"><br>
  <br>
  <br>
  <br>
  <br>
  </font> </p>
<hr>
<font face="Times New Roman, Times, serif"><br>
<br>
<br>
<br>
<br>
</font>
<table cellspacing=1 cellpadding=1 width=674 align=center border=1>
  <tr valign=bottom>
    <td colspan=3 height="67">
      <p align="center"><font face="Times New Roman, Times, serif" size="3"><b>Socket
        Mobile, Inc.<br>
        Condensed Summary Balance Sheets<br>
        (Amounts in Thousands)</b></font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td height=26 width="50%"><font face="Times New Roman, Times, serif" size="3">
      </font> <font face="Times New Roman, Times, serif" size="3"> </font> <font face="Times New Roman, Times, serif" size="3">
      </font> <font face="Times New Roman, Times, serif" size="3"> </font> <font face="Times New Roman, Times, serif" size="3"></font><font face="Times New Roman, Times, serif" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font> <font face="Times New Roman, Times, serif" size="3"></font></td>
    <td height=26 width="20%">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">June
        30, 2011<br>
        (Unaudited) </font></div>
    </td>
    <td height=26 width="20%" valign="top">
      <div align="center"><font face="Times New Roman, Times, serif" size="3">December
        31, 2010*<br>
        </font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Cash</font> </p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 1,015</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 461
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Restricted cash </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">---
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">711
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Accounts receivable
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,525
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">814
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Inventories </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,197
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">1,699</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Other current assets</font>
      </p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">194</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">128</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Property and equipment,
        net </font></p>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">335</font></div>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">471</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Goodwill </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">4,427
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">4,427
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Intangible technology</font>
      </p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">180</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">210</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Other assets</font>
      </p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">98</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">146</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Total assets </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 8,971</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 9,067</font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td colspan=3><font face="Times New Roman, Times, serif" size="3">&nbsp;</font></td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Accounts payable
        and accrued liabilities</font> </p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 4,227
        </font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">$ 4,404
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p>Notes payable net of debt discount </p>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">300</font></div>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">330
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Deferred income on
        shipments to distributors</font></p>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">792</font></div>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">674
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">Deferred service revenue</td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">453</font></div>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">521</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%"><font face="Times New Roman, Times, serif" size="3">Other
      liabilities</font></td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">249</font></div>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">245</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Common stock</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">59,052</font></p>
    </td>
    <td width="20%">
      <p align=center><font face="Times New Roman, Times, serif" size="3">57,675
        </font></p>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%">
      <p><font face="Times New Roman, Times, serif" size="3">Accumulated deficit</font>
      </p>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(56,102)</font></div>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">(54,782)</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td width="50%"><font face="Times New Roman, Times, serif" size="3">Total
      liabilities and equity</font></td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        8,971</font></div>
    </td>
    <td width="20%">
      <div align=center><font face="Times New Roman, Times, serif" size="3">$
        9,067</font></div>
    </td>
  </tr>
  <tr valign=bottom>
    <td colspan=3><font face="Times New Roman, Times, serif" size="3">*Derived
      from audited financial statements.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p></p>
<p></p>
<p></p>
<p></p>
<p></p>
<p align="center"><font size="3" face="Times New Roman, Times, serif"># # #</font></p>
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