Stockholder Meeting Presentation May 10 2016 1€¦ · Stockholder Meeting Presentation May 10, 2016. During the course of this presentation, we may make forward-looking statements

Socket MobileStockholder Meeting Presentation May10,2016

During the course of this presentation, we may make forward-looking statements that involve risks and uncertainties,

including without limitation risks and uncertainties relating to the company's financial prospects and projections, the

company's ability to market its products and increase its business in the Mobile markets. These forward-looking statements

speak only as of the date hereof and are based upon the information currently available to the company. Such information

is subject to change, and the company will not necessarily inform you of such changes. Among the important factors that

could cause actual results to differ materially from those in the forward-looking statements are new and changing

technologies, customer acceptance of those technologies, fluctuations or cancellations in orders from distribution

customers, new and continuing adverse economic conditions, availability of working capital and the company's ability to

compete effectively with other products. These and other factors could cause actual results to differ materially from

those presented in any forward-looking statement and are discussed in the company's filings with the Securities and

Exchange Commission including its recent filings on Forms 10-K and10-Q.

Forward Looking Statements

We Deliver Barcode Scanning Solutions For Mobile Businesses

Socket Mobile Supports Apple, Android & Windows equally but to simplify the presentation we’ll focus on Apple

Our Primary Market is business using Apple/Android/Windows Devices

Product Line-Up

Cordless Hand Scanner (CHS) Series

CHS 7ColorfulSeries

DuraScan SeriesSocketScan Series

QX Stand

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The mPOS example• Historically; small shops used a “Casio Cash Register” and “Excel” to run their business• Today, an mPOS Application provides Cash Register, ePayment and Business Analytics• Cost is between $49-$99 per month depending on complexity• The VC community have invested close to $1 Billion in funding mPOS companies

Business Applications can be targeted at underserved marketsmPOS is a good example, provides analytics for small shops

Cost to distribute the Applications is very low or freeApp Store model is reliable, robust and understood

Customers can try the application prior to deployingApp Store model also supports updates and improvements

New Business Dynamics And New Business Opportunity

Mobile Applications have changed everything for SMB

New Business Opportunity Is Application Driven

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• mPOS Application Providers have their Own Sales Forces • Socket Mobile is a recommended “ingredient” in their solution• We are selected based on our superior SDK, and wide range of iOS certified hardware• Our sales happen AFTER the purchase of the mPOS Application

Customer selects mPOS Application• Choices include Shopkeep, Shopify, Vend, Lightspeed, Square, Bindo, NCR & more…

Customer purchases the Application recommended hardware• Payment swipe, cash draw, printer, barcode scanner

Apple requires Application to pre-select and register hardware• Today, Socket Mobile is the pre-selected barcode scanner in 100+ mPOS Applications• Android solutions do not have a pre-selection and registration mechanism, exact numbers

not known

The Primary purchase is the Application (mPOS example)

THE mPOS OPPORTUNITY – Leading The Charge

• The ability to reach and service an underserved market

• The opportunity to provide Business Analytics to SMB customers via mPOS Applications

• Availability of low cost mobile devices

• The opportunity to provide a great shopping experience including instant payment options (no cash) and support for e-coupons

• The willingness of happy shoppers to spend more

The mPOS Opportunity is being driven by:

mPOS Provider Recommends The Right Hardware Components

ShopKeep recommends Socket Mobile’s Barcode Scanners and Accessories

Example : ShopKeep

Markets Will Develop From Successful Applications

mPOS is a significant focus of our developers. We are designed into 100+ mPOS Applications.

Market is very large and App Providers are well funded

mPOS is a very leverageable Application

• Variations of the same problem

• Many companies can use the same software

mPOS drove more than 50% of Scanner sales in 2014 and 2015

• Has greater potential in 2016

• Other mobile markets developing

Socket Mobile has to Follow its Developers

mPOS is just the first part of the storyEnterprise driven mobility could be larger in a few years – More complex and slower moving market

Key Mobile Developer Markets

Today – Mobile Point of Sale (mPOS)

The new small business counter

On the way!

New DuraScans:– D750 (2D - May)– D730 (Laser -June)– D700 (1D - July)

• Designed for the non-POS markets but applicable to everyone needing a durable scanner

Coming Soon!

DuraCase for SocketScan 800 series!

Flexible “semi-captive” all-in-one data capture solutions for mobile devices

Up Next!

• Addresses current RFID scanning scenarios (asset tracking, event management, medical, etc. - similar to those covered by SoMo RFID solution)

• Adds alternate data capture capabilities to our hand-held portfolio

• Designed to “drop-in” to workflows supported by our current Capture SDK

DuraScan D600 RFID Handheld and TouchPoint

Sends UID over BLE

NFC (HCE)

NFC Loyalty card

Total Company Improved Operating Results ($ Millions)

$13.6$15.7

$17.0Operating Expense

2016 Q1 revenue of $5.0M (EPS $0.10) up 26% from 2015 Q1 revenue of $4.0M (EPS ($0.01))

Cordless Barcode Scanning Revenue Growth ($ Millions)

$5.7

$9.5

$13.4

% of Total Annual Revenue

2012 42%2013 +$3.8M 61%2014 +$3.9M 79% 2015 +$2.2M 85%

$15.6

Q1 y/y growth:Q1 2015 $3.46MQ1 2016 $4.00MY/Y growth: 16%

Socket is applying for Nasdaq as of March 31, 2016

Key Nasdaq Small Cap Market Listing Requirements

Equity Balance of $4.0 millionProfitable 2015 Operating Results

(more than $750K)Stock Price above $3.00

Actuals as of March 31, 2016:Equity Balance of $4.1 million2015 Profits of $1.8 millionStock price above $3.50/shareP/E ratio under 10 at $3.50/share

$4.2Stockholders Equity

Cordless Hand Scanner (CHS) Sales Are DrivingGrowth And Profits

• Our CHS business is driving profitable growth representing 85% of our revenue in 2015 up from 42% of our revenue in 2012. CHS revenue grew 274% in 3 years. Our margins increased from 37.2% in 2012 to 48.6% in 2015.

• Our App driven story starts with mPOS but will continue to grow driven by our 1,400+ registered developers.

• Socket Mobile is positioned to capture the mPOS opportunity. Mobile applications in manufacturing, transportation, hospitality and health care are following.

• Excellent Software Tools coupled with right products. New data collection products will expand Socket markets.

• Excellent and very efficient WW distribution.

• Low costs and highly leveraged business model.

• Expect continued growth and profitability in 2016.

The Cordless Scanning opportunity is both near term and real:

Why Socket Mobile ?

Developers determine which products are supported and we support them best• 500+ mobile Apps currently in the market (iOS)• Most leading mobile App developers are recommending Socket Mobile• Products are robust, ergonomically designed and easy to use• Product pricing is attractive, multiple scanner types and form factors

Our Products are Built for Mobile Applications• All products are fully compatible with Apple, Android, Windows• Our SDK was designed with mobile developers in mind – easy to use• Our SDK stays current with updated operating system releases• We support multiple scanners (linear imager, laser, 2D) with one SDK• We meet developer needs with new products and technologies, broadening

our focus from barcode scanning to data capture.

Positive Market Dynamics/Financial Leverage

Growth leverages well: • Worldwide distribution and component suppliers are in place

Thank You!