UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file number 1-13810
SOCKET COMMUNICATIONS, INC.
(Name of small business issuer as specified in its charter)
Delaware 94-3155066
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
37400 Central Court, Newark, CA 94560
(Address of principal executive offices including zip code)
(510) 744-2700
(Registrant's telephone number, including area code)
6500 Kaiser Drive, Fremont, CA 94555
(Former name or former address, if changed since last report.)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO__
Number of shares of Common Stock ($0.001 par value) outstanding as
of October 31, 1996 was 3,023,365 shares.
Page 1
INDEX
PAGE NO.
Part I. Financial information
Condensed Balance Sheets - September 30, 1996 and
December 31, 1995.......................................... 3
Condensed Statements of Operations - Three Months and Nine
Months Ended September 30, 1996 and 1995................... 4
Condensed Statements of Cash Flows - Nine Months Ended
September 30, 1996 and 1995................................ 5
Notes to Condensed Financial Statements...................... 6-8
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 9-12
Part II. Other information
Item 6. Exhibits and Reports on Form 8-K..................... 13
Signatures................................................... 14
Page 2
PART I. FINANCIAL INFORMATION
SOCKET COMMUNICATIONS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995*
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents..................... $ 382,039 $ 2,406,655
Accounts receivable, net...................... 720,389 900,717
Inventories................................... 721,313 510,331
Prepaid expenses.............................. 48,291 31,880
------------ ------------
Total current assets........................ 1,872,032 3,849,583
Property and equipment:
Machinery and office equipment................ 383,999 340,108
Computer equipment............................ 453,757 345,571
------------ ------------
837,756 685,679
Accumulated depreciation...................... (502,651) (332,300)
------------ ------------
335,105 353,379
Other assets................................... 54,398 72,436
------------ ------------
Total assets................................ $ 2,261,535 $ 4,275,398
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Bank line of credit.......................... $ 231,004 $ --
Accounts payable and accrued expenses........ 1,408,572 1,129,439
Accrued payroll and related expenses......... 292,204 357,771
Deferred revenue............................. 131,428 112,143
Current portion of capital leases and
equipment financing notes................... 126,913 106,629
------------ ------------
Total current liabilities.................. 2,190,121 1,705,982
Long-term portion of capital leases and
equipment financing notes.................... 117,990 141,121
Stockholders' equity (deficit):
Undesignated preferred stock, $0.001 par value:
Authorized shares - 3,000,000
Issued and outstanding shares - none........ -- --
Common stock, $0.001 par value:
Authorized shares - 15,000,000
Issued and outstanding shares - 3,023,365 in
1996, and 2,990,870 in 1995................ 3,023 2,991
Additional paid-in capital................... 11,411,858 11,393,663
Accumulated deficit.......................... (11,461,457) (8,968,359)
------------ ------------
Total stockholders' equity (deficit)....... (46,576) 2,428,295
------------ ------------
Total liabilities and stockholders'
equity (deficit).......................... $ 2,261,535 $ 4,275,398
=========== ============
- -------------
* Derived from audited financial statements.
See accompanying notes.
Page 3
SOCKET COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ----------- -----------
Revenue:
Product....................$1,117,218 $ 937,343 $3,242,668 $3,178,650
Royalty and other.......... 35,397 63,406 172,187 164,795
---------- ---------- ----------- -----------
Total revenue............. 1,152,615 1,000,749 3,414,855 3,343,445
Cost of revenue............. 598,805 549,785 1,886,854 2,065,447
---------- ---------- ----------- -----------
Gross profit................ 553,810 450,964 1,528,001 1,277,998
Operating expenses:
Research and development... 259,983 241,802 774,520 768,941
Sales and marketing........ 698,010 609,536 2,026,103 1,611,586
General and administrative. 436,225 362,764 1,211,410 1,114,552
---------- ---------- ----------- -----------
Total operating expenses.. 1,394,218 1,214,102 4,012,033 3,495,079
---------- ---------- ----------- -----------
Operating loss.............. (840,408) (763,138) (2,484,032) (2,217,081)
Interest income and other
(expense), net............. 2,644 47,277 26,776 53,954
Interest expense............ (15,173) (5,369) (35,842) (106,652)
---------- ---------- ----------- -----------
Net loss.................. $(852,937) $ (721,230) $(2,493,098) $(2,269,779)
========== ========== =========== ===========
Net loss per share........ $ (0.28) $ (0.24) $ (0.83) $ (1.32)
========== ========== =========== ===========
Weighted average shares
outstanding.............. 3,021,168 2,972,018 3,008,530 1,719,511
========== ========== =========== ===========
See accompanying notes.
Page 4
SOCKET COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1996 1995
----------- -----------
Operating activities
Net loss.........................................$(2,493,098) $(2,269,779)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization.................. 170,351 195,174
Accrued interest on converted notes............ -- 110,232
Changes in operating assets and liabilities:
Accounts receivable............................ 180,328 259,020
Inventories.................................... (210,982) (307,006)
Prepaid expenses............................... (16,411) 1,871
Other assets................................... 18,038 (20,501)
Accounts payable and accrued expenses.......... 279,133 (240,336)
Accrued payroll and related expenses........... (65,567) 54,119
Deferred revenue............................... 19,285 8,250
----------- -----------
Net cash used in operating activities........ (2,118,923) (2,208,956)
Investing activities
Purchase of equipment............................ (152,077) (88,877)
----------- -----------
Net cash used in investing activities........ (152,077) (88,877)
Financing activities
Payments on capital leases and equipment
financing notes................................. (88,708) (52,488)
Proceeds from equipment financing................ 85,861 --
Proceeds from issuance of convertible notes...... -- 1,469,000
Repayment of convertible notes................... -- (955,000)
Stock options and warrants exercised............. 18,227 5,591
Net proceeds from the sale of common stock....... -- 4,836,772
Proceeds from borrowing under bank line of credit 231,004 --
----------- -----------
Net cash provided by financing activities..... 246,384 5,303,875
----------- -----------
Net increase (decrease) in cash and cash
equivalents...................................... (2,024,616) 3,006,042
Cash and cash equivalents at beginning of period.. 2,406,655 407,602
----------- -----------
Cash and cash equivalents at end of period........$ 382,039 $ 3,413,644
=========== ===========
Supplemental cash flow information
Cash paid for interest..........................$ 35,842 $ 20,816
Notes payable and accrued interest converted
to common stock................................ -- 2,389,232
See accompanying notes.
Page 5
SOCKET COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Basis of Presentation
The accompanying financial statements of Socket Communications, Inc.
(the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB item 310(b). Accordingly, they
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for fair presentation have been included.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
The financial statements have been prepared on a going concern
basis. The Report of Independent Auditors on the Company's financial
statements for the year ended December 31, 1995 included in Form
10-KSB contained an explanatory paragraph which indicated substantial
doubt about the Company's ability to continue as a going concern
because of the Company's recurring operating losses and the need for
additional financing. As of September 30, 1996 the Company had a net
working capital deficiency of $318,089, accumulated losses for the nine
months ended September 30, 1996 of $2,493,098, and an accumulated deficit
of $11,461,457. The Company will require additional financing during
1997 and ultimately will need to achieve profitable operations. The
Company believes that sufficient outside financing sources will be
available, however, there can be no assurance that the Company will be
able to obtain such financing on commercially reasonable terms, if at
all, and such terms may be dilutive to existing stockholders. If the
Company is unable to obtain the necessary funds, other more substantial
restructuring options may be necessary which may have adverse effects on
the Company's operations. The 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.
Operating results for the three months and nine months ended
September 30, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996.
NOTE 2 - Cash Equivalents
Cash equivalents consist mainly of money market funds which are
highly liquid financial instruments that are readily convertible to
cash. The Company has not incurred losses related to these
instruments. As of September 30, 1996 and December 31, 1995, the
Company had no material investments in debt or equity securities.
Page 6
SOCKET COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 - Inventories
Inventories consist principally of raw materials and sub-
assemblies, which are stated at the lower of cost (first-in, first-
out) or market.
September 30, December 31,
1996 1995
------------- ------------
Raw materials and sub-assemblies $ 686,910 $ 481,592
Finished goods 34,403 28,739
------------- ------------
$ 721,313 $ 510,331
============= ============
NOTE 4 - Income Taxes
Due to the Company's loss position, there was no provision for
income taxes for the three months and nine months ended September
30, 1996 and 1995.
NOTE 5 - Net Loss Per Share
Net loss per share is calculated using the weighted average
number of common shares outstanding during the period. Common
equivalent shares are excluded from the calculation as the effect is
antidilutive, however, pursuant to the Securities and Exchange
Commission Staff Accounting Bulletins, common stock and common
equivalent shares issued by the Company at prices below the initial
public offering price during the twelve-month period prior to the
offering have been included in the calculation as if they were
outstanding for all periods through March 31, 1995 (using the
treasury stock method for warrants and options and the initial
public offering ("IPO") price on an if-converted method). The
Company completed its IPO in June 1995.
NOTE 6 - Bank Financing Arrangements
In June 1996, the Company's credit agreement (the "Agreement")
with a bank was amended to extend the maturity date to June 15,
1997. The Agreement is secured by the Company's current and future
assets. The credit facility under the Agreement allows the Company
to borrow up to $500,000 based on the level of qualified
receivables. An additional $500,000 in credit secures a letter of
credit with a supplier. The Agreement contains covenants that
require the Company to maintain certain financial ratios. The
Company was not in compliance with the covenants at September 30,
1996 and has obtained a temporary waiver. As of September 30, 1996
there were $231,004 outstanding in borrowings under the Agreement.
NOTE 7 - Subsequent Event
On November 1, 1996 (the "Closing"), the Company, sold 15,500
shares of its Series A Convertible Preferred Stock, $0.001 par
value, at $100 per share pursuant to Regulation D of the Securities
Act of 1933, as amended (the "Transaction"). The Transaction was
effected pursuant to a Confidential Private Offering Memorandum
dated as of May 31, 1996, as supplemented on August 22, 1996,
September 10, 1996, October 9, 1996 and October 30, 1996 and
Subscription Agreements effective as of the Closing by and between
the Company and the purchasers. Each share of Series A Convertible
Preferred Stock will be convertible at the option of the holder, in
Page 7
SOCKET COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
whole or in part, at any time on or after the 60th day following the
Closing, into shares of Common Stock of the Registrant equal to $100
divided by the lower of: (i) the closing bid price of the
Registrant's Common Stock, as reported by the Nasdaq SmallCap
Market, on the date of the Closing ; and (ii) 65% of the
average bid price of the Company's Common Stock, as reported by the
Nasdaq SmallCap Market, for the five business days prior to the
business day on which notice of conversion is transmitted by the
holder of such share of Series A Convertible Preferred Stock,
subject to adjustment in certain events. Each share of Series A
Convertible Preferred Stock shall be converted automatically into
shares of Common Stock on the earliest of (i) immediately preceding
a merger or consolidation of the Company if as a result of such
transaction the holders of Common Stock would receive publicly
traded securities with a market value greater than the initial
liquidation preference of the Series A Convertible Preferred Stock
or (ii) the first anniversary of the Closing.
As of September 30, 1996, the Company had a total stockholders'
deficit of $46,576. Estimated net proceeds from the Transaction are
$1,200,000 ($1,550,000 less estimated costs and expenses of
$350,000). The pro forma effect of the Transaction on total
stockholders' equity as of September 30, 1996 is as follows:
SOCKET COMMUNICATIONS, INC.
PRO FORMA SUMMARY FINANCIAL INFORMATION
(Unaudited)
Actual As of Pro forma
September 30, Pro forma September 30,
Balance Sheet Data: 1996 Adjustments 1996
------------- ------------ -------------
Cash........................$ 382,039 $1,200,000 * $1,582,039
Other working capital....... (700,128) - (700,128)
------------- ------------ -------------
Total working capital..... (318,089) 1,200,000 881,911
Property and other
non-current assets......... 389,503 - 389,503
------------- ------------ -------------
Long-term portion of
capital leases and
equipment financing notes.. (117,990) - (117,990)
------------- ------------ -------------
Net Assets................ $ (46,576) $1,200,000 $1,153,424
============= ============ =============
Capital stock...............$ 11,414,881 $1,200,000 * $12,614,881
Accumulated deficit......... (11,461,457) - (11,461,457)
------------- ------------ -------------
Total stockholders'
equity (deficit)......... $ (46,576) $1,200,000 $ 1,153,424
============= ============ =============
_________________
* Estimated net proceeds from private placement offering of
Series A Convertible Preferred Stock ($1,550,000), after deducting
commissions and estimated offering expenses ($350,000).
Page 8
SOCKET COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations section contains forward-looking statements
(identified with an asterisk "*") that involve risks and uncertainties.
The Company's actual results may differ significantly from the results
discussed in the forward-looking statements. For a more complete
discussion of the factors that might cause such a difference, see
"Business" including "Additional Risk Factors Affecting Future
Performance" in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995 (collectively, the "Form 10-KSB Sections").
Overview
The Company's serial and Ethernet card products for PC Card mobile
computers, introduced in 1993, are its principal sources of revenues.
The Company also sells two wireless products, a PageCard PC Card
wireless messaging system introduced in January 1995 and a GPS card. In
addition, the Company earns sales royalties from sale of certain of the
Company's products by the third party manufacturers of those products.
The Company completed its initial public offering ("IPO") in June
1995, with net proceeds of approximately $4.8 million. Prior to the
IPO, the Company's working capital requirements were met primarily
through the private sale of equity and debt securities. The Company
has sustained significant quarterly operating losses in every fiscal
period since its inception. The Company expects to incur substantial
quarterly operating losses at least through the first half or 1997 and
possibly longer.* Achieving revenue growth from the Company's existing
and future products will be highly dependent upon the market acceptance
of the PageCard receiver, the market acceptance and timely release of
enhanced PageSoft software products, the development of page-enabled
applications by independent software vendors in selected vertical
markets, continued increases in the market acceptance of the Company's
serial and Ethernet cards and the ability of the Company to develop
successful new products for new and existing markets.* There can be no
assurances that any of these events will occur or that the Company's
revenues will grow. The Company's ability to continue its operations is
also dependent upon the availability of additional capital.* In November
1996, the Company sold $1,550,000 of its convertible preferred stock
through a private placement offering. See Note 7 to Notes to Condensed
Financial Statements. See also "Liquidity and Capital Resources."
The Company believes that its operating results will be subject to
substantial quarterly fluctuations due to several factors, some of
which are outside the control of the Company, including fluctuating
market demand for, and declines in the average selling price of, the
Company's products, the timing of significant orders from distributors
and OEM customers, delays in the introduction of enhancements to
existing and new products, market acceptance of existing and new
______________
* This statement is a forward-looking statement reflecting current
expectations. There can be no assurance that the Company's actual
future performance will meet the Company's current expectations due to
factors described in this Management's Discussion and Analysis Of
Financial Condition and Results Of Operations and in the Form 10-KSB
Sections.
Page 9
SOCKET COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
products, competitive product introductions, the mix of products sold,
changes in the Company's distribution network, changes in customer
product requirements, changes in the regulatory environment, the cost and
availability of components, the level of royalties from and to third
parties and general economic conditions. The Company generally does not
operate with a significant order backlog, and a substantial portion of the
Company's revenue in any quarter is derived from orders booked in that
quarter. Accordingly, the Company's sales expectations are based
almost entirely on its internal estimates of future demand and not on
firm customer orders. The Company is making significant investments in
sales and marketing and in research and development, and if orders and
sales do not meet expectations, the Company's operating results could
be materially adversely affected.
Results of Operations
Revenue
Revenue for the quarter and nine months ended September 30, 1996 of
$1,152,615 and $3,414,855, respectively, increased 15% and 2% versus
the corresponding periods a year ago. The increase for the quarter
ended September 30, 1996 was primarily due to higher volumes of serial
card and Ethernet card shipments, partially offset by unit price
reductions for the Company's Ethernet card. The slight increase for the
nine months ended September 30, 1996 was primarily due to increased
serial card shipments, offset by unit price reductions and lower sales
volumes for the Company's Ethernet card.
Product Gross Profit
The Company's product gross margin (excluding royalties and other
revenue) for the third quarter of 1996 was 46% of product
revenues compared to 41% for the same quarter a year ago. The Company's
product gross margin for the nine month period in 1996 was 42% of
product revenues compared to 35% for the same period a year ago. The
increase resulted primarily from volume price discounts from certain
suppliers and engineered unit cost decreases in certain products,
offset in part by a selling price reduction for Ethernet cards.
Research and Development
Research and development expenses for the quarter and nine months
ended September 30, 1996 were $259,983 and $774,520, respectively, an 8%
and 1% increase versus the corresponding periods a year ago, primarily
reflecting increased staffing and related costs. To date, the Company
has not capitalized any software development costs. The Company expects
its research and development expenses for the fourth quarter of 1996 to be
similar to third quarter expense.*
______________
* This statement is a forward-looking statement reflecting current
expectations. There can be no assurance that the Company's actual
future performance will meet the Company's current expectations due to
factors described in this Management's Discussion and Analysis Of
Financial Condition and Results Of Operations and in the Form 10-KSB
Sections.
Page 10
SOCKET COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sales and Marketing
Sales and marketing expenses for the quarter and nine months ended
September 30, 1996 were $698,010 and $2,026,103, respectively, a 15%
and 26% increase over the corresponding periods a year ago. The
increase primarily reflected higher staffing levels, increased
advertising activity and increased levels of travel. The Company expects
its sales and marketing expenses for the fourth quarter of 1996 to be
similar the third quarter expenses.*
General and Administrative
General and administrative expenses for the quarter and nine months
ended September 30, 1996 were $436,225 and $1,211,410, respectively, a
20% and 9% increase over the corresponding periods a year ago. The
increase primarily reflected higher recruiting fees, relocation costs,
and professional fees, partially offset by lower compensation costs in
the first quarter associated with a vacancy in the C.E.O. position,
which was filled March 1, 1996. The Company expects its general and
administrative expenses to decline moderately due to a move in October
1996 into less expensive facilities, offset partially in the fourth
quarter of 1996 by the cost of the move.*
Interest and Other Income / Expense
Interest income primarily reflects interest earned on cash balances
invested in money market funds. Interest expense for the quarter and
nine months ended September 30, 1996 was $15,173 and $35,842,
respectively, and related primarily to equipment lease financing
obligations and bank credit line obligations. Interest expense for the
quarter and nine months ended September 30, 1995 was $5,369 and
$106,652, respectively, and related primarily to interest expense on
convertible notes issued to provide interim bridge financing prior to
the IPO and interest expense related to equipment lease financing
obligations.
Liquidity and Capital Resources
Net cash used for operating activities in the nine months ended
September 30, 1996 was $2,118,923, resulting primarily from the net
loss, an increase in inventories and decreases in accrued payroll and
related expenses, partially offset by increases in accounts payables
and decreases in accounts receivable. Net cash used for operating
activities in the nine months ended September 30, 1995 was $2,208,956,
resulting primarily from the net loss and an increase in inventories
and decrease in accounts payable and accrued expenses, partially offset
by decreases in accounts receivable and an increase in accrued payroll
and related expenses.
_______________
* This statement is a forward-looking statement reflecting current
expectations. There can be no assurance that the Company's actual
future performance will meet the Company's current expectations due to
factors described in this Management's Discussion and Analysis Of
Financial Condition and Results Of Operations and in the Form 10-KSB
Sections.
Page 11
SOCKET COMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net cash provided by financing activities in the nine months ended
September 30, 1996 primarily reflected borrowings under a revolving
credit line with a bank (see Note 6 of Notes to Condensed Financial
Statements) and equipment financing notes. Cash provided by financing
activities during the nine months ended September 30, 1995 primarily
reflected proceeds from the Company's IPO and convertible notes issued
to provide interim bridge financing prior to the IPO.
As of September 30, 1996, the Company had cash and cash equivalents
of $382,039. Subsequently, on November 1, 1996, the Company completed
the private sale of Series A Convertible Preferred Stock with estimated
net proceeds of $1,200,000 (see Note 7 of Notes to Condensed Financial
Statements). The Company believes its existing capital resources at
September 30, 1996, combined with proceeds from the private sale of
Series A Convertible Preferred Stock and revenue from operations will
be inadequate to satisfy its working capital requirements through the
end of 1997. The Company will need to raise additional capital to fund
operations in 1997, which the Company intends to seek through the
private sale of equity securities.* The Report of Independent
Auditors on the Company's financial statements for the year ended
December 31, 1995 included in Form 10-KSB contains an explanatory
paragraph regarding the Company's need for additional financing and
indicated substantial doubt about the Company's ability to continue as a
going concern absent such financing. There can be no assurances that
such capital will be available on acceptable terms, if at all, and such
terms may be dilutive to existing stockholders. If the necessary
funding is not obtained, there could be a material adverse affect on
the Company's financial condition and results of operations. The Company's
actual working capital needs will depend upon numerous factors, however,
including the extent and timing of acceptance of the Company's products in
the market, the Company's operating results, the progress of the Company's
research and development activities, the cost of increasing the Company's
sales and marketing activities and the status of competitive products, none
of which can be predicted with certainty. The Company must have capital and
surplus of at least $1,000,000 to maintain continued quotation on the
Nasdaq SmallCap Market and Pacific Stock Exchange. Until the closing of the
private placement on November 1, 1996, the Company was temporarily not in
compliance with this requirement (see Note 7 of Notes to Condensed
Financial Statements).
______________
* This statement is a forward-looking statement reflecting current
expectations. There can be no assurance that the Company's actual
future performance will meet the Company's current expectations due to
factors described in this Management's Discussion and Analysis Of
Financial Condition and Results Of Operations and in the Form 10-KSB
Sections.
Page 12
PART II. OTHER INFORMATION
Items 1-5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a. The following exhibits are filed herewith:
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- ----------------
4.1 Amended Certificate of Designation of Rights
and Preferences of Series A Convertible Preferred Stock.
11.1 Statement regarding computation of per share loss
27.1 Financial data schedule for the period ended
September 30, 1996
b. Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended September 30, 1996.
Page 13
SIGNATURES
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 thereunto duly authorized.
SOCKET COMMUNICATIONS, INC.
Registrant
Date: November 11, 1996 /s/ David W. Dunlap
----------------- --------------------------
David W. Dunlap
Vice President of Finance
and Administration and
Chief Financial Officer
Page 14