About Socket

Financial History

Socket's financial history since its inception in 1992 and its public status since June 6, 1995 reflect the company's focus on both the development of a broad and comprehensive line of connectivity and data collection products and the significant market changes that have occurred over the last several years enabling Socket to develop its own handheld computer in 2007 to become a mobile products systems company focused on the business mobility market. Revenue grew rapidly to $4.3 million in the first several years after the company introduced peripheral products primarily for the notebook market (1993-1995) and then slowed as the market shifted toward the emergence of Windows-based handheld computers including the Pocket PC, and as the company shifted its emphasis to capitalize on the opportunity presented by the emerging handheld computer market.

Socket's revenue grew from $6.9 million in 1999 to $26.1 million in 2004 reflecting the introduction in April 2000 by Microsoft of the Pocket PC and by Socket of an expanded family of CompactFlash data collection products that were introduced commencing in the second half of 1999 to serve this market including the In-Hand Scan Card bar code scanner which inserts a scanning engine into the CompactFlash slot of a handheld computer and an SDIO scanner for insertion into the SDIO slot of a handheld computer to create a highly portable mobile scanning device, and a Cordless Hand Scanner using Bluetooth connection technology. Each of these scanners comes in various scanning distances and price ranges to meet a variety of customer needs.

Commencing with the fourth quarter of 2000, operating expenses were increased through the acquisition of an engineering design and services company, augmenting Socket's ability to address wireless and other opportunities in the handheld computing markets. The acquisition increased engineering resources by 11 persons and expanded product development programs. Sales and marketing resources were increased to support an expanding line of data collection and connectivity products.

Revenues declined moderately during 2005 through 2007, reaching a low of $24.1 million in 2007 before achieving record 2008 revenue of $26.6 million. That period was one of transition as computer manufacturers such as Dell decided to deemphasize mobile handheld computers and others such as Acer, Siemens and Hewlett-Packard changed their focus to consumer based handheld computers with integrated phones, leaving fewer choices for businesses needing a mobile handheld computer with good wireless technologies but no phone. In 2006, Socket elected to design its own mobile handheld computer which was introduced in 2007 as the SoMo 650. Handheld computer sales reached $4.7 million in 2008, returning the Company to overall revenue growth. However, economic slowdowns affecting the economy have reduced quarterly revenues since the fourth quarter of 2008 primarily in data collection and with the phase out in 2008 of older Bluetooth technology products sold to OEM customers. Socket has responded by reducing headcount, salaries and other costs and expenses.

Socket has financed its operations primarily through equity financings. The Company raised $1.0 million in October 2002 by issuing Series E Preferred stock and $2.0 million in March 2003 by issuing Series F Preferred stock, both of which converted to common stock by their terms. Socket also raised $4.2 million in August 2003 by issuing common stock. More recently in May 2009, the Company raised $1 million through the sale of common stock to improve its working capital during the economic downturn. Socket also has a working capital line of credit with a bank with borrowing capacity based on the level of receivables. The Company’s stock trades on the Nasdaq Capital Market under the trading symbol SCKT.