Socket Mobile, Inc. (NASDAQ:SCKT) Q1 2019 Earnings Conference Call April 24, 2019 5:00 PM ET Company Participants David Dunlap - Chief Financial Officer Kevin Mills - President & Chief Executive Officer Conference Call Participants Brian Swift - Sutter Securities Operator Welcome to the First Quarter 2019 Management Conference Call. My name is Adrian, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______. Commission file number 1-13810 SOCKET MOBILE, INC. (Exact name of registrant as specified in its charter) Delaware 94-3155066 (State or other jurisdiction ...

Financial Data and Key Metrics Changes - Revenue for 2018 was $16.5 million, a decrease of 23% from 2017's revenue of $21.3 million [5][24] - The company reported a loss of $571,000 or $0.09 per share in 2018, compared to a loss of $1.6 million or $0.23 per share in 2017 [5][25] - Operating expenses were held flat for the year, with a slight increase in R&D from $3.5 million to $3.6 million [33][25] Business Line Data and Key Metrics Changes - The transition from legacy products to the new SocketScan family significantly impacted sales revenue, causing confusion and loss of sales momentum [6][8] - Sales of cordless barcode scanning were down 21% in 2018, with overall sales down 23% [24] - The new Capture SDK transition went reasonably well, with many customers already transitioned [11] Market Data and Key Metrics Changes - The point-of-sale market is expected to grow due to government initiatives encouraging small merchants to switch to computerized systems [13] - In Japan, incentives and sales tax changes are anticipated to drive small merchants to adopt new point-of-sale systems [14] - In France, new anti-fraud laws will require small merchants to upgrade to compliant systems, which the company is well-positioned to benefit from [15] Company Strategy and Development Direction - The company aims to leverage new markets such as cannabis and government-driven initiatives to expand revenue [13][15] - The introduction of the iPhone DuraCase solution is expected to significantly contribute to revenue in 2019 [17] - The company is focused on maintaining a high level of R&D investment to stay current with mobile computing advancements [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2019, expecting stronger performance due to the completion of product transitions and new market opportunities [20][25] - The company anticipates benefiting from a more stable point-of-sale business and increased demand in specific regions [20] - Management noted that the transition challenges faced in 2018 are now behind them, allowing for a focus on growth [39] Other Important Information - The company has over 1,100 registered developer companies, indicating a healthy developer community [19] - Positive EBITDA results and free cash flow were achieved for the year, with a current balance sheet ratio of 1.42 [25] Q&A Session Summary Question: What are the plans to reduce R&D costs in 2019? - Management stated there is no plan to reduce R&D spending, as it is necessary to stay current with mobile technology [32][34] Question: Are there any new products in development for 2019? - Management confirmed ongoing development of the D600 token exchange product and other variations, with plans to ship new products by mid to late 2019 [36][37] Question: What strategies are being implemented to drive revenue growth in 2019? - The company has modified its organizational structure and increased outreach to smaller point-of-sale businesses to drive revenue [38][39]