Form SC TO-I - Tender offer statement by Issuer

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

SCHEDULE TO
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

__________________

SOCKET MOBILE, INC.

(Name of Subject Company (Issuer) and Filing Person (Offeror))

__________________

Options to Purchase Common Stock, $0.001 par value per share

(Title of Class of Securities)

__________________

83368E200

(CUSIP Number of Class of Securities’ Underlying Common Stock)

__________________

Lynn Zhao

Vice President of Finance and Administration and Chief Financial Officer

Socket Mobile, Inc.

40675 Encyclopedia Cir.

Fremont, California 94538

(510) 933-3000

(Name, address and telephone number of person authorized to receive notices and
communications on behalf of filing persons)

__________________

Copies to:

Erika M. Muhl

Michelle Wallin

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304

(650) 493-9300

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

third-party tender offer subject to Rule 14d-1.

issuer tender offer subject to Rule 13e-4.

going-private transaction subject to Rule 13e-3.

amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

	¨	Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
	¨	Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

INTRODUCTORY STATEMENT

This Tender Offer Statement on Schedule TO relates to an offer by Socket Mobile, Inc., a Delaware corporation (“Socket Mobile” or the “Company”), to exchange (the “Exchange Offer”) certain outstanding stock options to purchase shares of the Company’s common stock granted under the Company’s 2004 Equity Incentive Plan, whether vested or unvested, that are outstanding at the start of the Exchange Offer and remain outstanding and unexercised through the expiration of the Exchange Offer (the “Eligible Options”).

An “Eligible Service Provider” refers to each employee, executive officer, director and consultant of Socket Mobile who holds Eligible Options and remains a service provider of Socket Mobile through the date of grant for new stock options (“New Options”).

Eligible Options may be exchanged for New Options upon the terms and subject to the conditions set forth in (i) the Offer to Exchange Certain Outstanding Stock Options for New Stock Options dated May 28, 2024 (the “Offer to Exchange”), attached hereto as Exhibit (a)(1)(A), (ii) the Announcement Email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, attached hereto as Exhibit (a)(1)(B), and (iii) the Election Form, together with it associated instructions, attached hereto as Exhibit (a)(1)(C). The following disclosure materials were also made available to Eligible Service Providers: (i) the Form of Confirmation Email, attached hereto as Exhibit (a)(1)(D), (ii) the Form of Reminder Email, attached hereto as Exhibit (a)(1)(E), and (iii) the Form of Notice Email Regarding Expiration of the Offer to Exchange, attached hereto as Exhibit (a)(1)(F). These documents, including any and all schedules, exhibits and annexes thereto, as they may be amended or supplemented from time to time, together constitute the “Disclosure Documents.”

The information in the Disclosure Documents is incorporated herein by reference to answer the items required in this Schedule TO.

Item 1. Summary Term Sheet.

The information set forth under the caption “Summary Term Sheet and Questions and Answers” in the Offer to Exchange is incorporated herein by reference.

Item 2. Subject Company Information.

(a) Name and Address.

Socket Mobile, Inc. is the issuer of the securities subject to the Exchange Offer. The address of the Company’s principal executive office is 40675 Encyclopedia Cir., Fremont, California 94538, and the telephone number at that address is (510) 933-3000. The information set forth in the Offer to Exchange under the caption “The Offer” titled “10. Information concerning Socket Mobile” is incorporated herein by reference.

(b) Securities.

The subject class of securities consists of the Eligible Options. The actual number of shares of common stock subject to New Options to be issued in the Exchange Offer will depend on the number of shares of common stock subject to the Eligible Options tendered by Eligible Service Providers and accepted for exchange and cancelled. The information set forth in the Offer to Exchange under the captions “Summary Term Sheet and Questions and Answers,” “Risks of Participating in the Offer,” and the sections under the caption “The Offer” titled “2. Participation in exchange; number of shares subject to new options; expiration date,” “6. Acceptance of options for exchange and issuance of new options,” and “9. Source and amount of consideration; terms of new options” is incorporated herein by reference.

The information set forth in the Offer to Exchange under the caption “The Offer” titled “8. Price range of shares underlying the options” is incorporated herein by reference.

Item 3. Identity and Background of Filing Person.

(a) Name and Address.

The filing person is the issuer. The information set forth under Item 2(a) above is incorporated herein by reference.

Pursuant to General Instruction C to Schedule TO, the information set forth on Schedule A (Information Concerning the Executive Officers and Directors of Socket Mobile, Inc.) to the Offer to Exchange is incorporated herein by reference.

Item 4. Terms of the Transaction.

(a) Material Terms.

The information set forth in the section of the Offer to Exchange under the caption “Summary Term Sheet and Questions and Answers” and the sections under the caption “The Offer” titled “1. Eligibility,” “2. Participation in exchange; number of shares subject to new options; expiration date,” “3. Purpose of the Offer,” “4. Procedures for electing to exchange options,” “5. Withdrawal rights and change of election,” “6. Acceptance of options for exchange and issuance of new options,” “7. Conditions of the Offer,” “8. Price range of shares underlying the options,” “9. Source and amount of consideration; terms of new options,” “12. Status of options acquired by us in the Offer; accounting consequences of the Offer,” “13. Legal matters; regulatory approvals,” “14. Material income tax consequences,” “15. Extension of Offer; termination; amendment” and Schedule B (Summary Financial Information of Socket Mobile, Inc.) attached to the Offer to Exchange is incorporated herein by reference.

(b) Purchases.

Item 5. Past Contacts, Transactions, Negotiations and Arrangements.

(e) Agreements Involving the Subject Company’s Securities.

The information set forth in the section of the Offer to Exchange under the caption “The Offer” titled “11. Interests of executive officers and directors; transactions and arrangements concerning the options” is incorporated herein by reference. The Company’s 2004 Equity Incentive Plan and form of option agreement thereunder attached hereto as Exhibits (d)(1) and (d)(2), respectively, are incorporated herein by reference.

Item 6. Purposes of the Transaction and Plans or Proposals.

(a) Purposes.

The information set forth in the section of the Offer to Exchange under the caption “Summary Term Sheet and Questions and Answers” and the section under the caption “The Offer” titled “3. Purpose of the Offer” is incorporated herein by reference.

(b) Use of Securities Acquired.

The information set forth in the sections of the Offer to Exchange under the caption “The Offer” titled “6. Acceptance of options for exchange and issuance of new options” and “12. Status of options acquired by us in the Offer; accounting consequences of the Offer” is incorporated herein by reference.

The information set forth in the sections of the Offer to Exchange under the caption “The Offer” titled “3. Purpose of the Offer” and “9. Source and amount of consideration; terms of new options” is incorporated herein by reference.

Item 7. Source and Amount of Funds or Other Consideration.

(a) Source of Funds.

The information set forth in the section of the Offer to Exchange under the caption “The Offer” titled “9. Source and amount of consideration; terms of new options” is incorporated herein by reference.

(b) Conditions.

The information set forth in the section of the Offer to Exchange under the caption “The Offer” titled “7. Conditions of the Offer” is incorporated herein by reference.

(d) Borrowed Funds.

Not applicable.

Item 8. Interest in Securities of the Subject Company.

(a) Securities Ownership.

(b) Securities Transactions.

Item 9. Persons/Assets, Retained, Employed, Compensated or Used.

(a) Solicitations or Recommendations.

Not applicable.

Item 10. Financial Statements.

(a) Financial Information.

The information set forth in Schedule B (Summary Financial Information of Socket Mobile, Inc.) to the Offer to Exchange and in the sections of the Offer to Exchange under the caption “The Offer” titled “10. Information concerning Socket Mobile,” “17. Additional information” and “18. Financial statements” is incorporated herein by reference.

(b) Pro Forma Information.

Not applicable.

Item 11. Additional Information.

(a) Agreements, Regulatory Requirements and Legal Proceedings.

The information set forth in the sections of the Offer to Exchange under the caption “The Offer” titled “11. Interests of executive officers and directors; transactions and arrangements concerning the options” and “13. Legal matters; regulatory approvals” is incorporated herein by reference.

Not applicable.

Item 12. Exhibits.

Exhibit
Number		Description

(a)(1)(A)		Offer to Exchange Certain Outstanding Stock Options for New Stock Options, dated May 28, 2024

(a)(1)(B)		Announcement Email

(a)(1)(C)		Election Form

(a)(1)(D)		Form of Confirmation Emails

(a)(1)(E)		Form of Reminder Email

(a)(1)(F)		Form of Notice Email Regarding Expiration of the Offer to Exchange

(b)		Not applicable

(d)(1)		2004 Equity Incentive Plan, as amended

(d)(2)		Form of option agreement under the 2004 Equity Incentive Plan

(g)		Not applicable

(h)		Not applicable

107		Filing Fee Table

Item 13. Information Required by Schedule 13E-3.

(a) Not applicable.

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.

	SOCKET MOBILE, INC.

	/s/ Lynn Zhao
	Lynn Zhao
	Vice President of Finance and Administration and Chief Financial Officer

Date: May 28, 2024

Exhibit (a)(1)(A)

_________________________

SOCKET MOBILE, INC.

_________________________

OFFER TO EXCHANGE
CERTAIN OUTSTANDING STOCK OPTIONS
FOR NEW STOCK OPTIONS

_________________________

This document constitutes part of the prospectus relating to the securities that have been registered under the Securities Act of 1933, as amended.

The prospectus relates to the Socket Mobile, Inc. 2004 Equity Incentive Plan, as amended.

May 28, 2024

-i-

SOCKET MOBILE, INC.
OFFER TO EXCHANGE CERTAIN
OUTSTANDING STOCK OPTIONS FOR NEW STOCK OPTIONS

_________________________

This Offer and withdrawal rights will expire at 9:00 p.m., Pacific Daylight Time, on June 25, 2024,
unless we extend them.

_________________________

By this offer (the “Offer”), Socket Mobile, Inc. (“Socket Mobile,” “we,” “our” or “us”) is giving eligible service providers of Socket Mobile the opportunity to exchange some or all of their stock options granted under our 2004 Equity Incentive Plan, as amended (the “2004 Plan”), whether vested or unvested, that are outstanding at the start of this Offer and remain outstanding and unexercised through the expiration of this Offer (“eligible options”), for new options to purchase shares of our common stock (“new options”). New options will be granted under, and subject to, the terms and conditions of our 2004 Plan and option agreement thereunder. All employees, executive officers, directors and consultants of Socket Mobile who hold eligible options and remain service providers of Socket Mobile through the date of grant for new options may participate in this Offer (“eligible service providers”). Our stockholders approved the implementation of this stock option exchange program at our 2024 annual meeting of stockholders on May 15, 2024.

The Offer will expire at 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless we extend the date (such date of expiration, the “expiration date”). Eligible service providers must tender eligible options on or before the expiration date in order to receive new options. New options will cover the same number of shares of our common stock as the number of shares subject to the exchanged options. New options will have an exercise price per share equal to the closing sales price of a share of our common stock on the expiration date on the Nasdaq Capital Market (the “new option grant date”), except for new options granted to any employee who holds more than 10% of our voting power. We expect the new option grant date will be June 25, 2024. If the expiration date of the Offer is extended, then the new option grant date will be similarly extended.

Regardless of whether the corresponding eligible options cancelled in the Offer were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to our employees (as of the new option grant date) will be incentive stock options to the maximum extent permitted by law, and all new options granted to our non-employee directors and consultants (as of the new option grant date) will be nonstatutory stock options.

The new options will be unvested as of the new option grant date, regardless of the extent to which the exchanged eligible options were vested, and will be scheduled to vest as to 1/48^th of the total number of shares subject to the option each month following the new option grant date on the same day of the month as the new option grant date (and if there is no corresponding day, on the last day of the month), subject to continued service with us (or any Socket Mobile parent or subsidiary) through each applicable vesting date. Your participation in this Offer and receipt of any new options does not provide any guarantee or promise of continued service with us or any then-existing Socket Mobile parent or subsidiary.

Our common stock is traded on the Nasdaq Capital Market under the symbol “SCKT.” On May 22, 2024, the closing sales price of our common stock was $1.39 per share on the Nasdaq Capital Market. You should evaluate current market quotes for our common stock, among other factors, before deciding to participate in this Offer.

See “Risks of Participating in the Offer” beginning on page 12 for a discussion of risks that you should consider before participating in this Offer.

IMPORTANT

If you want to participate in the Offer, we encourage you to submit your election form via email to Lynn Zhao, our Chief Financial Officer, at lynn@socketmobile.com or by fax to (510) 933-3016. Your election form must be received on or before the expiration date of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024.

Your delivery of all documents regarding the Offer, including election forms, is at your own risk. Only election forms that are properly completed and actually received by us by the deadline via email or fax will be accepted. Election forms submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service) are not permitted.

-ii-

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state or other securities commission or regulator has approved or disapproved of these securities or passed judgment upon the accuracy or adequacy of this Offer. Any representation to the contrary is a criminal offense.

You should direct questions about this Offer or requests for additional copies of this Offer to Exchange (as defined below) and the other Offer documents to Lynn Zhao, our Chief Financial Officer, at:

Socket Mobile, Inc.
40675 Encyclopedia Cir.
Fremont, California 94538
(510) 933-3016 (Direct)
Email: lynn@socketmobile.com

We recommend that you discuss the personal tax consequences of this Offer with your financial, legal and/or tax advisers.

You should rely only on the information contained in this Offer to Exchange or documents to which we have referred you. We have not authorized anyone to provide you with different information. We are not making an offer of the new options in any jurisdiction where the Offer is not permitted. However, at our discretion, we may take actions necessary for us to make an offer to option holders in any of these jurisdictions. You should not assume that the information provided in this Offer to Exchange is accurate as of any date other than the date as of which it is shown on the first page of this Offer to Exchange. This Offer to Exchange summarizes various documents and other information. These summaries are qualified in their entirety by reference to the documents and information to which they relate.

-iii-

TABLE OF CONTENTS

Page

SUMMARY TERM SHEET AND QUESTIONS AND ANSWERS 1

RISKS OF PARTICIPATING IN THE OFFER 12

THE OFFER 14

Eligibility 14

Participation in exchange; number of shares subject to new options; expiration date 14

Purpose of the Offer 15

Procedures for electing to exchange options 17

Withdrawal rights and change of election 18

Acceptance of options for exchange and issuance of new options 19

Conditions of the Offer 20

Price range of shares underlying the options 22

Source and amount of consideration; terms of new options 22

10.

Information concerning Socket Mobile 26

11.

Interests of executive officers and directors; transactions and arrangements concerning the options 26

12.

Status of options acquired by us in the Offer; accounting consequences of the Offer 27

13.

Legal matters; regulatory approvals 27

14.

Material income tax consequences 27

15.

Extension of Offer; termination; amendment 29

16.

Fees and expenses 30

17.

Additional information 30

18.

Financial statements 31

19.

Miscellaneous 31

SCHEDULE A Information Concerning the Executive Officers and Directors of Socket Mobile, Inc. A-1

SCHEDULE B Summary Financial Information of Socket Mobile, Inc. B-1

-iv-

SUMMARY TERM SHEET AND QUESTIONS AND ANSWERS

The following are answers to some of the questions that you may have about this Offer. You should carefully read this entire Offer to Exchange, the accompanying email from Kevin J. Mills, President and Chief Executive Officer, announcing this Offer, and the election form, together with its associated instructions. This Offer is made subject to the terms and conditions of these documents as they may be amended or supplemented. The information in this summary is not complete. Additional important information is contained in the remainder of this Offer to Exchange and the other Offer documents. We have included in this summary references to other sections in this Offer to Exchange to help you find more complete information with respect to these topics.

Q1.

What is the Offer?

Q2.

Why are we making this Offer?

Q3.

Who may participate in this Offer?

Q4.

Which options are eligible for exchange?

Q5.

Are there circumstances under which I would not be granted new options?

Q6.

How do I participate in this Offer?

Q7.

Am I required to participate in this Offer?

Q8.

How many shares will the new options I receive be exercisable for?

Q9.

Do I have to pay for my new options?

Q10.

What will be the exercise price of my new options?

Q11.

When will my new options vest and be exercisable?

Q12.

If I participate in this Offer, do I have to exchange all of my eligible options?

Q13.

What happens if I have an eligible option grant that is subject to a domestic relations order or comparable legal document as the result of the end of a marriage?

Q14.

When will my exchanged options be cancelled?

Q15.

Once I surrender my exchanged options through a properly and timely submitted election form, is there anything I must do to receive the new options?

Q16.

When will I receive the new options?

Q17.

Can I exchange shares of Socket Mobile common stock that I acquired upon a previous exercise of Socket Mobile options?

Q18.

Will I be required to give up all of my rights under the cancelled options?

Q19.

Will the terms and conditions of my new options be the same as my exchanged options?

Q20.

What happens to my options if I choose not to participate or if my eligible options are not accepted for exchange?

Q21.

How will we determine whether an eligible option has been properly tendered?

Q22.

Will I have to pay taxes if I participate in the Offer?

Q23.

Will my new options be incentive stock options or nonstatutory stock options for U.S. tax purposes?

Q24.

Will I receive a new option agreement if I choose to participate in the Offer?

Q25.

Are there any conditions to this Offer?

Q26.

If you extend or change the Offer, how will you notify me?

Q27.

Can I change my mind and withdraw from this Offer?

Q28.

How do I change or withdraw my election?

Q29.

What if I withdraw my election and then decide again that I want to participate in this Offer?

Q30.

Are you making any recommendation as to whether I should exchange my eligible options?

Q31.

Will my decision to participate in the Offer have an impact on my ability to receive options or other equity awards in the future?

Q32.

Whom can I contact if I have questions about the Offer, or if I need additional copies of the Offer documents?

The following are some of the terms that are frequently used in this Offer to Exchange.

Terms used in this Offer

“2004 Plan” refers to our 2004 Equity Incentive Plan, as amended.

“cancellation date” refers to the calendar date when exchanged options will be cancelled. Exchanged options will be cancelled following the expiration of the Offer on the same calendar day as the expiration date and the new option grant date. This cancellation of exchanged options will occur after the expiration of the Offer and before the granting of new options. We expect that the cancellation date will be June 25, 2024. If the expiration date is extended, then the cancellation date similarly will be extended.

“eligible service provider” refers to an employee, executive officer, director or consultant of Socket Mobile as of the date the Offer commences who remains a service provider of Socket Mobile through the new option grant date.

“eligible option grant” refers collectively to all of the eligible options that are part of the same option grant and subject to the same option agreement. For example, if an individual has been granted eligible options to purchase a total of 1,000 shares of our common stock, the eligible option grant refers to the entire award of eligible options to purchase 1,000 shares of our common stock. If the individual has exercised 600 shares subject to that award, eligible option grant refers to the award of eligible options to purchase 400 shares of our common stock that remain subject to the award.

“eligible options” refers to stock options to purchase shares of our common stock granted under our 2004 Plan, whether vested or unvested, that are outstanding and unexercised as of the start of this Offer and remain outstanding and unexercised through the expiration date.

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

“exchanged options” refers to the options exchanged pursuant to this Offer.

“expiration date” refers to the time and date that this Offer expires. We expect that the expiration date will be June 25, 2024, at 9:00 p.m., Pacific Daylight Time. We may extend the expiration date at our discretion. If we extend the Offer, the term “expiration date” will refer to the time and date at which the extended Offer expires.

“Nasdaq” refers to the Nasdaq Capital Market.

“new option grant” refers collectively to all new options that are part of the same grant and subject to the same option agreement.

“new option grant date” refers to the date on which new options will be granted. The new option grant date will be the same calendar day as the expiration date. We expect that the new option grant date will be June 25, 2024. If the expiration date is extended, then the new option grant date will be similarly extended.

“new options” refers to the options to purchase shares of our common stock granted pursuant to this Offer that replace the exchanged options. The new options will be granted on the new option grant date under and subject to the terms of the 2004 Plan and a new option agreement between the new option recipient and Socket Mobile.

“Offer to Exchange” refers to this Offer to Exchange Certain Outstanding Stock Options for New Stock Options.

“offering period” refers to the period from the commencement of this Offer to the expiration date. This period commenced on May 28, 2024, and will end at 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless extended.

“Securities Act” refers to the U.S. Securities Act of 1933, as amended.

“Socket Mobile” refers to Socket Mobile, Inc.

Questions and answers

Q1.

What is the Offer?

A1.

This Offer is a one-time, voluntary opportunity for eligible service providers to exchange, on the expiration date, eligible options for new options.

Q2.

Why are we making this Offer?

A2.

Equity awards have been, and continue to be, a key part of our incentive compensation and retention programs and are designed to motivate and reward our service providers’ efforts. We believe that to develop and market competitive products, we need to maintain competitive compensation and incentive programs.

As of May 22, 2024, except for one eligible option grant, all of the eligible options are “underwater” (meaning the exercise prices of such options are greater than the current trading price of our common stock). We believe the existing underwater stock options provide limited incentive for our service providers and limited retention benefits for Socket Mobile. The closing price of a share of our common stock on May 22, 2024, was $1.39. The per share exercise prices of the eligible options range from $1.08 to $5.92.

Additionally, some of the eligible options are approaching the expiration of their maximum term. If the optionees holding these options want to exercise before the options expire, whether because the options do have value before they expire (that is, they come back “in-the-money”) or otherwise, it raises a concern that the exercise of these options and subsequent sale of even a relatively small portion of the purchased shares could cause unnatural fluctuations in our stock price, due to the high volume of shares that likely would be sold into the market as a result.

Whether the eligible options are exercised or expire by their terms, they will no longer provide the strong retention and incentive benefits we need from our equity compensation program. As a result, to the extent that the eligible options expire before benefits can be realized, or that unusually high trading activity depresses returns on the exercise of these options and/or the sale of the shares purchased under the options, we believe there is high risk that the objectives of our equity program to retain and motivate service providers and align their interests with those of our stockholders will not be achieved. The Company needs to retain and motivate its service providers, and reinvigorating the retention and incentive value of eligible options through this Offer is a key step toward that objective.

(See Section 3 of “The Offer” below.)

Q3.

Who may participate in this Offer?

A3.

You may participate in this Offer if you are an eligible service provider. You are an “eligible service provider” if you are an employee, executive officer, director or consultant of Socket Mobile who holds eligible options as of the date the Offer commences and remains a service provider of Socket Mobile through the new option grant date. In order for you to receive a new option under the Offer, you must remain in the service of Socket Mobile or a successor entity through the new option grant date. (See Section 1 of “The Offer” below.)

Q4.

Which options are eligible for exchange?

A4.

All stock options, whether vested or unvested, to purchase shares of our common stock that were granted under our 2004 Plan and that are outstanding and unexercised as of the start of this Offer and remain outstanding and unexercised as of the expiration date are eligible for exchange in the Offer. If a particular option expires after the commencement of this Offer, but before the expiration date, that option is not eligible for exchange.

To help you recall your outstanding eligible options, we will provide you with a summary of your outstanding stock options granted under the 2004 Plan. (See Section 2 of “The Offer” below.)

Q5. Are there circumstances under which I would not be granted new options?

A5.

Yes. If, for any reason, you no longer continue to be an eligible service provider through the new option grant date, you will not be eligible to participate in the Offer. As a result, you will not receive any new options. Instead, you will keep your current options and those options will expire in accordance with their original terms. Except as provided by any applicable law, your service with Socket Mobile will remain “at-will” regardless of your participation in the Offer and can be terminated by you or Socket Mobile at any time with or without cause or notice. (See Section 1 of “The Offer” below.)

Moreover, even if we accept your exchanged options, we will not grant new options to you if we are prohibited from doing so by applicable laws. For example, we could become prohibited from granting new options as a result of changes in SEC or Nasdaq rules. However, we do not anticipate any such prohibitions at this time. (See Section 13 of “The Offer” below.)

In addition, if you hold an option that expires after the start of the Offer but on or before the cancellation date, that particular option is not eligible for exchange. As a result, if you hold options that expire on or before the currently scheduled cancellation date or, if we extend the Offer such that the cancellation date is a later date and you hold options that expire on or before the rescheduled cancellation date, those options will not be eligible for exchange and such options will continue to be governed by their original terms. (See Section 15 of “The Offer” below.)

For purposes of your eligibility to participate in this Offer, your employment with Socket Mobile will not be considered to have terminated while you are on a leave of absence that has been approved by Socket Mobile. (See Section 1 of “The Offer” below.)

Q6.

How do I participate in this Offer?

A6.

Participation in this Offer is voluntary. If you are an eligible service provider, at the start of the Offer you will have received an email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing this Offer. If you want to participate in the Offer, you must complete the election process via the method outlined below on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. If you do not want to participate, then no action is necessary.

Print and properly complete, sign and date the election form attached to the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer.

Email or fax the properly completed election form to:

Attn: Lynn Zhao

Socket Mobile, Inc.

40675 Encyclopedia Cir.
Fremont, California 94538

Email: lynn@socketmobile.com

Fax: (510) 933-3016

We must receive your properly completed and submitted election form by the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. To obtain an election form, please contact our Chief Financial Officer, Ms. Zhao, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

If you elect to exchange any eligible option grant in this Offer, you must elect to exchange all eligible options subject to that eligible option grant. If you hold more than one eligible option grant, however, you may choose to exchange one or more of such eligible option grants without having to exchange all of your eligible option grants.

This is a one-time offer, and we will strictly enforce the offering period. We reserve the right to reject any option tendered for exchange that we determine is not in the appropriate form or that we determine is unlawful to accept. Subject to the terms and conditions of this Offer, we will accept all properly tendered eligible option grants promptly after the expiration of this offer.

Your delivery of all documents regarding the Offer, including election forms, is at your risk. Only election forms that are properly completed and actually received by us by the deadline by email or fax will be accepted. Responses submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted. (See Section 4 of “The Offer” below.)

Q7.

Am I required to participate in this Offer?

A7.

No. Acceptance of this Offer and participation in the Offer is completely voluntary. (See Sections 2 and 4 of “The Offer” below.)

Q8.

How many shares will the new options I receive be exercisable for?

A8.

Subject to the terms of this Offer and our acceptance of your properly tendered options, each exchanged option to purchase one share of our common stock will be replaced with a new option to purchase one share of our common stock.

Example. For illustrative purposes only, assume that you are an eligible service provider and that you hold an eligible option grant covering 3,000 shares of our common stock. If you exchange this eligible option grant under the Offer, then on the new option grant date, you will receive a new option grant covering 3,000 shares of our common stock. (See Section 2 of “The Offer” below.)

Q9.

Do I have to pay for my new options?

A9.

You do not have to make any cash payment to us to receive your new options, but in order to exercise your new options and purchase any shares of our common stock subject to your new options, you will be required to pay the exercise price of your new options. Additionally, to the extent that we have a tax withholding obligation with respect to the new options, the tax withholding obligations will be satisfied in the manner specified in the 2004 Plan and the option agreement thereunder that will govern the terms of your new options. (See Section 9 of “The Offer” below.)

Q10.

What will be the exercise price of my new options?

A10.

The exercise price per share of new options will be equal to the “Fair Market Value” (as defined in the 2004 Plan) of a share of our common stock on the new option grant date, which will be the closing sales price of a share of our common stock as reported on Nasdaq on the new option grant date, which is expected to be June 25, 2024. We cannot predict the exercise price of the new options. (See Section 9 of “The Offer” below.)

Notwithstanding the foregoing, if, immediately before the new option is granted, an employee owns, or is treated for purposes of the incentive stock option rules as owning, more than 10% of the total combined voting power of all classes of Socket Mobile stock (or the stock of any Socket Mobile parent or subsidiary) (such employee, a “Greater than 10% Holder”), his or her new option will have an exercise price of 110% of the Fair Market Value of a share of our common stock on the new option grant date. If you are a Greater than 10% Holder, you will be notified separately.

Q11.

When will my new options vest and be exercisable?

A11.

All new options will be unvested as of the new option grant date and will be subject to a new vesting schedule. Each new option will be unexercisable while it remains unvested, regardless of whether the corresponding exchanged option was early exercisable. Each new option will be scheduled to vest as to 1/48th of the underlying shares each month after the new option grant date on the same day of the month as the new option grant date (and if there is no corresponding day, on the last day of the month), in each case subject to your remaining a “Service Provider” (as defined in the 2004 Plan, and generally meaning and referred to in this Offer to Exchange as continued service with us (and includes service with any Socket Mobile parent or subsidiary)) through the applicable vesting dates. This is the vesting schedule Socket Mobile typically applies to its annual refresh stock option grants.

If your exchanged option was subject to any accelerated vesting upon certain qualifying terminations of employment or other specified events, such as a change in control of Socket Mobile, pursuant to an option agreement or other written agreement between you and Socket Mobile, then the corresponding new option also will be subject to such accelerated vesting to the same extent that the eligible option grant was immediately before being cancelled in the Offer.

The maximum term of the new option grant will be 10 years from the new option grant date, except that new options granted to Greater than 10% Holders will have a 5 year maximum term. Once vested, the new options will remain exercisable for the full 10-year (or 5-year, as applicable) term of the option unless terminated earlier under the dissolution, liquidation or change in control provisions of the 2004 Plan.

In all cases described above, vesting is subject to your continued service to us (or any Socket Mobile parent or subsidiary) through each vesting date. Your participation in this Offer and the receipt of new options does not provide any guarantee or promise of continued service with us (or any Socket Mobile parent or subsidiary). (See Section 9 of “The Offer” below.)

Example

For illustrative purposes only, assume that you are an eligible service provider who is not a Greater than 10% Holder and that you exchange in the Offer an eligible option grant to purchase 4,800 shares of our common stock. There are no specific accelerated vesting terms that apply to your eligible option grant. Assume also that the Offer expires, and new options are granted on June 25, 2024, and that your eligible option grant was fully vested prior to the cancellation date. Under the terms of the Offer, the new option grant will cover 4,800 shares, be entirely unvested upon the new option grant date, have a new exercise price, and have a vesting commencement date of June 25, 2024.

The new option grant will be scheduled to vest as to 100 shares on each monthly anniversary of the new option grant date, subject to your continued service to us through each vesting date.

Scheduled Vesting Date	Number of Shares of our Common Stock Subject to New Option Grant
The 25^th day of each month thereafter over a total of 48 months	100 shares on each such scheduled vesting date

Q12.

If I participate in this Offer, do I have to exchange all of my eligible options?

A12.

No. You may pick and choose which of your outstanding eligible option grants you wish to exchange. If you hold more than one eligible option grant, you may choose to exchange one or more of such eligible option grants without having to exchange all of your eligible option grants. However, if you elect to participate in this Offer, you must exchange the entire outstanding and unexercised portion of any particular eligible option grant that you choose to exchange, including any eligible option grants which are legally, but not beneficially, owned by you. This means that you may not elect to exchange only a portion of any particular eligible option grant. However, you may elect to exchange the remaining portion of any eligible option grant that you have already partially exercised.

For example and except as otherwise described below, if you hold (i) an eligible option grant to purchase 1,000 shares of our common stock, 700 of which you have already exercised, (ii) an eligible option grant to purchase 1,000 shares of our common stock and (iii) an eligible option grant to purchase 2,000 shares of our common stock, you may elect to exchange:

The first eligible option grant, covering the entire remaining 300 shares of our common stock,

The second eligible option grant, covering 1,000 shares of our common stock,

The third eligible option grant, covering 2,000 shares of our common stock,

One, two or all three of your three eligible option grants, or

None of your eligible option grants.

These are your only choices in the above example. You may not elect, for example, to exchange your first eligible option grant with respect to only 150 shares of our common stock (or any other partial amount) under that eligible option grant or less than all of the shares of our common stock under the second or third eligible option grants. (See Section 2 of “The Offer” below.)

Q13.

What happens if I have an eligible option grant that is subject to a domestic relations order or comparable legal document as the result of the end of a marriage?

A13.

If you have an eligible option grant that is subject to a domestic relations order (or comparable legal document as a result of the end of a marriage) and a person who is not an eligible service provider beneficially owns a portion of that eligible option grant, then in order to participate in the Offer with respect to such eligible option grant, you may accept this Offer with respect to the entire remaining outstanding portion of the eligible option grant, including the portion beneficially owned by the other person, as long as you are the legal owner of the eligible option grant. As described in Q&A 12, we are not accepting partial tenders of an eligible option grant, so you may not accept this Offer with respect to a portion of an eligible option grant that is beneficially owned by you while rejecting it with respect to the portion beneficially owned by someone else. As you are the legal owner of the eligible option grant, we will respect an election properly made by you, but will not be responsible to you or the beneficial owner of the eligible option grant for any errors made by you with respect to such eligible option grant.

For example, if you are an eligible service provider and you hold an eligible option grant covering 3,000 shares of our common stock that is subject to a domestic relations order, one-third (1/3) of which is beneficially owned by your former spouse (that is, the portion covering 1,000 shares of our common stock), and you have exercised 600 of the remaining 2,000 shares of our common stock subject to the eligible option grant not beneficially owned by your former spouse, then you may elect to exchange the outstanding portion of your eligible option grant covering 2,400 shares of our common stock, including the portion covering the 1,000 shares of our common stock beneficially owned by your former spouse, or you may elect not to participate in the Offer at all with respect to this eligible option grant. These are your only choices with respect to this eligible option grant. (See Section 2 of “The Offer” below.)

Q14.

When will my exchanged options be cancelled?

A14.

Your exchanged options will be cancelled following the expiration of the Offer on the same calendar day as the expiration date. We refer to this date as the cancellation date. We expect that the cancellation date will be June 25, 2024, unless the offering period is extended. (See Section 6 of “The Offer” below.)

Q15.

Once I surrender my exchanged options through a properly and timely submitted election form, is there anything I must do to receive the new options?

A15.

Once your election form has been accepted and your exchanged options have been surrendered, the only thing you must do to receive a new option is remain in the service of Socket Mobile or a successor entity through the new option grant date. We expect that the new option grant date will be June 25, 2024. In order to vest in the shares of our common stock underlying the new option grant, you will need to remain a service provider of Socket Mobile (or any Socket Mobile parent or subsidiary) through the applicable vesting dates, as described in Q&A 11. (See Section 1 of “The Offer” below.)

Q16.

When will I receive the new options?

A16.

We will grant the new options on the new option grant date, following the expiration of the Offer. We expect the new option grant date will be June 25, 2024. If the expiration date is delayed, the new option grant date will be similarly delayed. If you are granted new options, we will provide you with your new option agreement under the 2004 Plan shortly after the new option grant date. You will then need to follow the same procedures that ordinarily apply to any Socket Mobile option granted in the normal course. (See Section 6 of “The Offer” below.)

Q17.

Can I exchange shares of Socket Mobile common stock that I acquired upon a previous exercise of Socket Mobile options?

A17.

No. This Offer relates only to outstanding Socket Mobile options to purchase shares of our common stock. You may not exchange in this Offer any shares of our common stock that you acquired upon a prior exercise of options or by any other acquisition. (See Section 2 of “The Offer” below.)

Q18.

Will I be required to give up all of my rights under the cancelled options?

A18.

Yes. Once we have accepted your exchanged options in the Offer, your exchanged options will be cancelled, and you no longer will have any rights under those options. We intend to cancel all exchanged options on the cancellation date. We expect that the cancellation date will be June 25, 2024. (See Section 6 of “The Offer” below.)

Q19.

Will the terms and conditions of my new options be the same as my exchanged options?

A19.

Your new options will be granted under and subject to the terms and conditions of the 2004 Plan and a new option agreement between you and Socket Mobile, and other than the differences described below, the terms and conditions of your new options will remain the same as your exchanged options. The 2004 Plan and current form of option agreement for stock option awards granted under the 2004 Plan are incorporated by reference as exhibits to the Tender Offer Statement on Schedule TO with which this Offer to Exchange has been filed with the SEC (the “Schedule TO”) and are available on the SEC website at www.sec.gov.

Your new options will have a different exercise price (as discussed in Q&A 10), maximum term (as discussed in Q&A 11), and vesting schedule (as discussed in Q&A 11). In addition, as discussed in Q&A 23, regardless of whether the corresponding eligible options cancelled in the Offer were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to you will be (i) incentive stock options to the maximum extent permitted by law if you are an employee as of the new option grant date, or (ii) nonstatutory stock options if you are a non-employee director or consultant as of the new option grant date.

The vesting of new options will differ significantly from the corresponding exchanged options. Among other differences, no portion of the new options will be scheduled to vest before the one-month anniversary of the new option grant date, even if the corresponding exchanged options are partially or fully vested (as discussed in Q&A 11).

The maximum term of the new option grant will be 10 years from the new option grant date (5 years for new options granted to Greater than 10% Holders). Once vested, the new options will remain exercisable for the full 10-year (or 5-year, as applicable) term of the option unless terminated earlier under the dissolution, liquidation or change in control provisions of the 2004 Plan.

Please see Section 9 of “The Offer” below for a fuller discussion of these differences.

Q20.

What happens to my options if I choose not to participate or if my eligible options are not accepted for exchange?

A20.

If you choose not to participate, we do not receive your election form by the deadline, or we do not accept your eligible options under this Offer, your eligible options will (i) remain outstanding until they are exercised or cancelled or expire by their terms, (ii) retain their current exercise price, (iii) retain their current vesting schedule, (iv) retain their current maximum term to expiration, and (v) retain all of the other terms and conditions as set forth in the relevant option agreement related to such eligible options. (See Section 6 of “The Offer” below.)

Q21. How will we determine whether an eligible option has been properly tendered?

A21.

We will determine, in our discretion, all questions about the validity, form, eligibility (including time of receipt) and acceptance of the documents you submit to accept the Offer for any of your eligible options. Our determination of these matters will be given the maximum deference permitted by law. However, you have all rights accorded to you under applicable law to challenge such determination in a court of competent jurisdiction. Only a court of competent jurisdiction can make a determination that will be final and binding upon the parties. We reserve the right to reject any election of any option tendered for exchange that we determine is not in an appropriate form or that we determine is unlawful to accept. We will accept all properly tendered eligible options that are not validly withdrawn, subject to the terms of this Offer. No tender of eligible options will be deemed to have been made properly until all defects or irregularities have been cured by you or waived by us. We have no obligation to give notice of any defects or irregularities in any election, and we will not incur any liability for failure to give any such notice. (See Section 4 of “The Offer” below.)

Q22.

Will I have to pay taxes if I participate in the Offer?

A22.

If you participate in the Offer, you generally will not be required under current U.S. law to recognize income for U.S. federal income tax purposes at the time of the exchange or on the new option grant date. However, you normally will have taxable income when you exercise your new options or when you sell the shares you receive upon exercise. (See Section 14 of “The Offer” below.)

For all eligible service providers, we recommend that you consult with your own tax adviser to determine the personal tax consequences to you of participating in this Offer.

Q23.

Will my new options be incentive stock options or nonstatutory stock options for U.S. tax purposes?

A23.

We recommend that you read the tax discussion in Section 14 of “The Offer” below and discuss the personal tax consequences of nonstatutory stock options with your financial, legal and/or tax advisers. (See Section 9 and Section 14 of “The Offer” below.)

Q24.

Will I receive a new option agreement if I choose to participate in the Offer?

A24.

Yes. All new options will be granted under, and subject to, the terms and conditions of the 2004 Plan and a new option agreement between you and Socket Mobile under the 2004 Plan. The 2004 Plan and form of new option agreement under the 2004 Plan are incorporated by reference as exhibits to the Schedule TO filed with the SEC for this Offer and are available on the SEC website at www.sec.gov. (See Section 9 of “The Offer” below.)

Q25.

Are there any conditions to this Offer?

A25.

Yes. The completion of this Offer is subject to a number of customary conditions that are described in Section 7 of “The Offer” below. If any of these conditions are not satisfied, we will not be obligated to accept and exchange properly tendered eligible options, though we may choose to do so at our discretion. (See Section 2 and Section 7 of “The Offer” below.)

Q26.

If you extend or change the Offer, how will you notify me?

A26.

If we extend or change this Offer, we will issue a press release, email or other form of communication disclosing the extension or change no later than 6:00 a.m., Pacific Daylight Time, on the next U.S. business day following the previously scheduled expiration date or the date on which we change the Offer, as applicable. (See Section 2 and Section 15 of “The Offer” below.)

Q27.

Can I change my mind and withdraw from this Offer?

A27.

Yes. You may change your mind after you have submitted an election form and withdraw from the Offer at any time on or before the expiration date (which currently is expected to be June 25, 2024, at 9:00 p.m., Pacific Daylight Time) and retain your eligible options under their existing terms. If we extend the expiration date, you may withdraw your election at any time until the extended Offer expires. You may change your mind as many times as you wish, but you will be bound by the properly submitted election form we receive last on or before the expiration date. (See Section 5 of “The Offer” below.)

Q28.

How do I change or withdraw my election?

A28.

To change an election you previously made with respect to some or all of your eligible option grants, including an election to withdraw all of your eligible options from this Offer, you must deliver a valid new election form indicating only the eligible option grants you wish to exchange in the Offer or a valid new election form indicating that you reject the Offer with respect to all of your eligible options, by completing the election process via the method outlined below on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024:

Print and properly complete, sign and date the election form attached to the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer.

Email or fax the properly completed election form to:

Attn: Lynn Zhao

Socket Mobile, Inc.

40675 Encyclopedia Cir.
Fremont, California 94538

Email: lynn@socketmobile.com

Fax: (510) 933-3016

We must receive your properly completed and submitted election form by the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. An election form has been provided to you with this Offer to Exchange. To obtain another copy of the election form, please contact our Chief Financial Officer, Ms. Zhao, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

Q29.

What if I withdraw my election and then decide again that I want to participate in this Offer?

A29.

If you have withdrawn your election to participate with respect to some or all of your eligible option grants and then decide again that you would like to participate in this Offer, you may reelect to participate by submitting a new properly completed election form by email or fax on or before the expiration date, in accordance with the procedures described in Section 4 of “The Offer” below. (See also Q&A 6, Q&A 28, and Section 5 of “The Offer” below.)

Q30.

Are you making any recommendation as to whether I should exchange my eligible options?

A30.

No. Neither Socket Mobile, nor any officer, director, employee or other person associated with us, is making any recommendation as to whether or not you should accept this Offer. We understand that the decision whether or not to exchange your eligible options in this Offer may require consideration of various factors for many service providers. Exchanging your eligible options does carry risk (see “Risks of Participating in the Offer” for information regarding some of these risks), and there are no guarantees that you would ultimately receive greater value from your new options than from the eligible options you exchanged. As a result, you must make your own decision as to whether or not to participate in this Offer. For questions regarding personal tax implications or other investment-related questions, you should talk to your own legal counsel, accountant, and/or financial adviser. (See Section 3 of “The Offer” below.)

Q31.

Will my decision to participate in the Offer have an impact on my ability to receive options or other equity awards in the future?

A31.

No. Your election to participate or abstain from participating in the Offer will have no effect on our making future grants of options, other equity awards, or any other rights to you or anyone else. (See Section 1 of “The Offer” below.)

Q32.

Whom can I contact if I have questions about the Offer, or if I need additional copies of the Offer documents?

A32.

You should direct questions about this Offer and requests for printed copies of this Offer to Exchange and other offer documents to Lynn Zhao, our Chief Financial Officer, at:

Socket Mobile, Inc.
40675 Encyclopedia Cir.
Fremont, CA 94538
(510) 933-3016 (Direct)
Email: lynn@socketmobile.com

(See Section 10 of “The Offer” below.)

RISKS OF PARTICIPATING IN THE OFFER

Participating in the Offer involves a number of risks, including those described below. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results. The risks described below, as well as the risk factors in our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2024 and our Annual Report on Form 10-K for our fiscal year ended December 31, 2023, filed with the SEC, highlight some of the material risks of participating in this Offer. You should consider these risks carefully, and you are encouraged to speak with an investment and tax adviser as necessary before deciding whether to participate in the Offer. In addition, we urge you to read the sections in this Offer to Exchange discussing the tax consequences of participating in the exchange of options pursuant to the Offer, as well as the rest of this Offer to Exchange document, for a more in depth discussion of the risks that may apply to you before deciding to participate in the Offer.

In addition, this Offer and our SEC reports referred to above include “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to our management. These statements include statements forecasting our future financial condition and results, our future operating activities, market acceptance of our products, expectations for general market growth of mobile computing devices, growth in demand for our data capture products, expansion of the markets that we serve, expansion of the distribution channels for our products, and the timing of the introduction and availability of new products, as well as other forecasts discussed in reports we file with the SEC. Words such as “may,” “will,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management’s beliefs, and assumptions made by management. The documents we file with the SEC, including the reports referred to above, discuss some of the risks that could cause our actual results to differ from those contained or implied in the forward-looking statements.

The safe harbor afforded by the Private Securities Litigation Reform Act of 1995 to certain forward-looking statements does not extend to forward-looking statements made by us in connection with this Offer.

The following discussion should be read in conjunction with the summary financial statements attached as Schedule B, as well as our financial statements and notes to the financial statements included in our most recent Forms 10-K and 10-Q. We caution you not to place undue reliance on the forward-looking statements contained in this Offer, which speak only as of the date hereof.

Risks Related to Participating in the Offer

New options granted to you in the Offer to Exchange will be entirely unvested as of the new option grant date and will vest over a prescribed time period. You may not exercise these options until they vest, and such vesting requires that you remain in the service of Socket Mobile (or any Socket Mobile parent or subsidiary). If your service with us terminates for any or no reason, your unvested new options will expire automatically.

New options granted to you will be unvested as of the new option grant date and subject to a new vesting schedule. This is true even if your exchanged options are already 100% vested. Vesting requires the passage of time and that your services to us continue through each vesting date. If you do not remain an employee or other service provider with us through each date your new options vest, you will not have the right to purchase all of the shares subject to those new options. Instead, the unvested portion of your new options generally will expire immediately upon your termination. As a result, you may not receive any value from your new options. Nothing in the Offer should be construed to confer upon you the right to remain a service provider of Socket Mobile. The terms of your service with us remain unchanged. We cannot guarantee or provide you with any assurance that you will not be subject to involuntary termination or that you will otherwise remain employed until the new option grant date or thereafter.

Furthermore, although we currently are not anticipating a merger or acquisition, a transaction involving us, such as a merger or other acquisition, could result in a reduction in our workforce. If your employment or other service with us and any then-existing parent or subsidiary of ours terminates before part or all of your new options vest, you may not receive any value from the unvested portion of the new options.

The exercise price per share of the new options granted to you in the Offer to Exchange could be greater than the exercise price per share of the eligible options that you tender for exchange.

The exercise price per share of the new options granted to you, which will be equal to the closing sales price of our common stock as reported on the Nasdaq Capital Market on the new option grant date (110% of such closing sales price if you are a Greater than 10% Holder), will not be determined until such date. Accordingly, you will not be able to determine the exercise price of your new options at the time you tender your eligible options for exchange. The price of our common stock can be volatile. Please see Section 8 of this Offer to Exchange titled, “Price range of shares underlying the options” for the price range of our shares from January 1, 2022 to May 22, 2024. The exercise price per share of your new options may be higher than the exercise price per share of the eligible options that you tender for exchange.

The new options granted to you in the Offer to Exchange could become underwater after they are granted.

The new options will have an exercise price per share equal to the closing sales price of a share of our common stock as reported on the Nasdaq Capital Market on the new option grant date. If the trading price of our common stock decreases after the new option grant date, the exercise price of your new options will be greater than the trading price of our common stock, and you will not be able to realize any gain from the exercise of your new options. The trading price of our common stock can be volatile, and there can be no assurances regarding the future price of our common stock or that the trading price of our common stock will increase after the new option grant date.

Tax-Related Risks

If you elect to exchange an eligible option, the new option you receive in its place may not have the same characterization as an incentive stock option or a nonstatutory stock option and the eligible option it replaces.

Regardless of whether the corresponding eligible options cancelled in the Offer were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to you will be (i) incentive stock options to the maximum extent permitted by law if you are an employee as of the new option grant date, or (ii) nonstatutory stock options if you are a non-employee director or consultant as of the new option grant date. For more detailed information, please read the rest of the Offer to Exchange, and see the tax disclosure set forth under Section 14 of the Offer to Exchange.

Risks Related to Our Business, Industry, Securities Markets, and Ownership of our Common Stock

You should carefully review the sections entitled “Risk Factors” that are contained in our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2024 and in our Annual Report on Form 10-K for our fiscal year ended December 31, 2023, each of which are incorporated by reference into this Offer, before making a decision on whether or not to tender your eligible options.

THE OFFER

1. Eligibility.

You are an “eligible service provider” if you are an employee, executive officer, director or consultant of Socket Mobile as of the date that the Offer commences, who holds an eligible option and remains a service provider of Socket Mobile through the new option grant date. Our executive officers and directors are listed on Schedule A of this Offer to Exchange.

To receive a new option, you must remain in the service of Socket Mobile or a successor entity through the new option grant date. For purposes of your eligibility to participate in this Offer, your employment with Socket Mobile will not be considered to have terminated while you are on a leave of absence that has been approved by Socket Mobile. If you do not satisfy all of the requirements of an eligible service provider, you will keep your current eligible options, and they will be treated in accordance with their existing terms and conditions. If we do not extend the Offer, the new option grant date is expected to be June 25, 2024. Except as provided by any applicable law, your employment with us will remain “at-will” and can be terminated by you or your employer at any time, with or without cause or notice. In order to continue to vest in your new options, you must remain a service provider with us (or any Socket Mobile parent or subsidiary) through each relevant vesting date.

Your election to participate or abstain from participating in the Offer will have no effect on our making future grants of options, other equity awards, or any other rights to you or anyone else.

2. Participation in exchange; number of shares subject to new options; expiration date.

Subject to the terms and conditions of this Offer, we will accept for exchange eligible options that are outstanding as of the expiration of the Offer, held by eligible service providers, and properly elected to be exchanged (and have not been validly withdrawn) on or before the expiration date. In order to be eligible for exchange, options must be outstanding and unexercised as of the start of this Offer and remain outstanding and unexercised as of the expiration date. For example, if a particular option expires after the beginning of the offering period, but before the expiration date, that particular option grant is not eligible for exchange.

To help you recall your outstanding eligible options, we will provide you with a summary of your outstanding stock options.

Participation in this Offer is completely voluntary. You may pick and choose which of your eligible option grants you wish to exchange. If you hold more than one eligible option grant, you may choose to exchange one or more of such eligible option grants without having to exchange all of your eligible options. However, if you elect to participate in this Offer, you must exchange the entire outstanding and unexercised portion of any particular eligible option grant that you choose to exchange, including any eligible options which are legally, but not beneficially, owned by you. You may not elect to exchange only a portion of any particular eligible option grant. Instead, if you participate in the Offer, you must accept the Offer with respect to all of the shares of our common stock subject to each particular eligible option grant. We are not accepting partial tenders of any option grants. However, you may elect to exchange the remaining portion of any eligible option grant that you have already partially exercised.

The first eligible option grant, covering the entire remaining 300 shares of our common stock,

The second eligible option grant, covering 1,000 shares of our common stock,

The third eligible option grant, covering 2,000 shares of our common stock,

One, two or all three of your three eligible option grants, or

None of your eligible option grants.

If you have an eligible option grant that is subject to a domestic relations order (or comparable legal document as a result of the end of a marriage) and a person who is not an eligible service provider beneficially owns a portion of that eligible option grant, then in order to participate in the Offer with respect to such eligible option grant, you must accept this Offer with respect to the entire remaining outstanding portion of the eligible option grant, including the portion beneficially owned by the other person. As described in the prior paragraph, we are not accepting partial tenders of an eligible option grant, so you may not accept this Offer with respect to a portion of an eligible option grant that is beneficially owned by you while rejecting it with respect to the portion beneficially owned by someone else. As you are the legal owner of the eligible option grant, Socket Mobile will respect an election properly made by you, but will not be responsible to you or the beneficial owner of the eligible option grant for any errors made by you with respect to such eligible option grant.

New options

Subject to the terms of this Offer and upon our acceptance of your properly tendered options, each exchanged option to purchase one share of our common stock will be cancelled and you will be granted a new option to purchase one share of our common stock. As a technical matter, and purely for purposes of complying with applicable tax regulations in order to avoid incurring additional taxation to you, if your tendered eligible option that we have accepted for exchange is “in-the-money” (meaning our stock price is greater than the exercise price of the option) as of the cancellation date, then immediately prior to the cancellation and exchange of the option, it’s exercise price per share automatically will be increased to the fair market value of a share of our common stock on that date.

Example. For illustrative purposes only, assume that you are an eligible service provider who is not a Greater than 10% Holder and that you hold an eligible option grant covering 3,000 shares of our common stock. If you exchange this eligible option grant under the Offer, then on the new option grant date, you will receive a new option grant covering 3,000 shares of our common stock with a new exercise price per share equal to the Fair Market Value (as defined in the 2004 Plan) of a share of our common stock on the new option grant date, which will be the closing sales price of a share of our common stock on the new option grant date.

Any new options granted to you will be subject to the terms and conditions of our 2004 Plan and a new option agreement to be entered into between you and Socket Mobile. The 2004 Plan and form of new option agreement under the 2004 Plan are incorporated by reference as exhibits to the Schedule TO with which this Offer to Exchange has been filed and are available on the SEC website at www.sec.gov.

The expiration date for this Offer will be 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless we extend the Offer. We may, in our discretion, extend the Offer, in which event “expiration date” will refer to the latest time and date at which the extended Offer expires. See Section 15 of this Offer to Exchange for a description of our rights to extend, terminate, and amend the Offer.

3. Purpose of the Offer.

Additionally, some of the eligible options are approaching the expiration of their maximum term. If the optionees holding these options want to exercise before the options expire, whether because options do have value before they expire (that is, they come back “in-the-money”) or otherwise, it raises a concern that the exercise of these options and subsequent sale of even a relatively small portion of the purchased shares could cause unnatural fluctuations in our stock price, due to the high volume of shares that likely would be sold into the market as a result.

Whether the eligible options are exercised or expire by their terms, they will no longer provide the strong retention and incentive benefits we need from our equity compensation program. As a result, to the extent that the eligible options expire before benefits can be realized, or that unusually high trading activity depresses returns on the exercise of these options and/or the sale of the shares purchased under the options, we believe there is high risk that the objectives of our equity program to retain and motivate service providers and align their interests with those of our stockholders will not be achieved. The Company needs to retain and motivate its service providers, and reinvigorating the retention and incentive value of these options through this Offer is a key step toward that objective.

We believe that this Offer is in the best interests of our stockholders and our service providers. We believe this Offer is an important component in our strategy to align the interests of our service providers and stockholders because it will permit us to:

Provide effective incentives for the service providers who participate in this Offer. Issuing new stock options which may have lower exercise prices and that are subject to a new vesting period to eligible service providers encourages them to remain with us and work to increase stockholder value. Providing effective incentives to our service providers is a key purpose of this Offer, and we believe this Offer will enable us to enhance long-term stockholder value by aligning the interests of our service providers more fully with the interests of our stockholders.

Reduce the pressure to grant additional or alternative equity awards to achieve the goals that our equity incentive program is intended to accomplish. If we do not conduct this Offer in which the eligible options with low incentive values may be exchanged for new higher incentive value options, we could be compelled to grant alternative equity awards such as additional options or restricted stock awards to our service providers at current market prices in order to provide them with renewed incentive value. Any such additional grants would increase our overhang as well as our compensation expense. This Offer, on the other hand, is a one-for-one exchange that accomplishes the retention and alignment goals of our equity incentive program without increasing the number of stock option grants outstanding.

Minimize risk of destabilization of our stock price. If the eligible options that are approaching the expiration of their maximum terms become “in-the-money” (meaning our stock price is greater than the exercise price of the options) before they expire, then the eligible option holders likely would be put in the position of having to exercise their eligible options to avoid allowing those options to expire without any benefit to them. Given Socket Mobile’s historically low trading volume, the subsequent sale of even a relatively small portion of exercise options could cause destabilization and unnatural fluctuations in our stock price.

Except as otherwise disclosed in this Offer or in our SEC filings, we presently have no plans, proposals or active negotiations that relate to or would result in:

Any extraordinary transaction, such as a merger, reorganization or liquidation involving Socket Mobile;

Any purchase, sale or transfer of a material amount of our assets;

Any material change in our present dividend policy, or our indebtedness or capitalization;

Any change in our present board of directors or management, including without limitation any proposals or change in the number or term of directors or filling any existing board vacancies, except that we will be seeking to add one or two non-employee directors, or any change in any executive officer’s material terms of employment;

Any other material change in our corporate structure or business;

Our common stock being delisted from Nasdaq or not being authorized for quotation in an automated quotation system operated by a national securities association;

Our common stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

The suspension of our obligation to file reports pursuant to Section 15(d) of the Exchange Act;

The acquisition by any person of a material amount of our securities or the disposition of a material amount of any of our securities; or

Any change in our certificate of incorporation or bylaws, or any actions that may impede the acquisition of control of us by any person.

Neither we nor our board of directors nor executive officers makes any recommendation as to whether you should accept this Offer, nor have we authorized any person to make any such recommendation. You should evaluate carefully all of the information in this Offer and consult your own investment and tax advisers. You must make your own decision about whether to participate in this Offer.

4. Procedures for electing to exchange options.

Proper election to exchange options

Participation in the Offer is voluntary. If you are an eligible service provider, at the start of the Offer you will have received an email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer. If you want to participate in the Offer, you must complete the election process via the method outlined below on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. If you do not want to participate, then no action is necessary.

Print and properly complete, sign and date the election form attached to the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer.

Email or fax the properly completed election form to:

Attn: Lynn Zhao

Socket Mobile, Inc.

40675 Encyclopedia Cir.
Fremont, California 94538

Email: lynn@socketmobile.com

Fax: (510) 933-3016

We may extend this Offer. If we extend the offering period, we will issue a press release, email or other communication disclosing the extension no later than 6:00 a.m., Pacific Daylight Time, on the U.S. business day following the previously scheduled expiration date. Your election to participate becomes irrevocable after 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless the offering period is extended past that time, in which case your election will become irrevocable after the new expiration date. Due to certain requirements under U.S. securities laws, an exception to this rule is that if we have not accepted your properly tendered options by 9:00 p.m., Pacific Daylight Time, on July 24, 2024 (which is the 40th U.S. business day following the commencement of the Offer), you may withdraw your options at any time thereafter but prior to our acceptance.

You may change your mind after you have submitted an election form and withdraw from the Offer at any time on or before the expiration date, as described in Section 5 below. You may change your mind as many times as you wish, but you will be bound by the properly submitted election form we receive last on or before the expiration date. You also may change your mind about which of your eligible option grants you wish to have exchanged. If you wish to include more or fewer eligible option grants in your election, you must complete and submit a new election form on or before the expiration date by following the procedures described in Section 5 below. This new election form must be properly completed, signed and dated after any prior election forms you have submitted and must list all eligible option grants you wish to exchange. Any prior election form will be disregarded. If you wish to withdraw some or all of the eligible option grants you elected for exchange, you may do so at any time on or before the expiration date by following the procedures described in Section 5 below.

This is a one-time offer, and we will strictly enforce the offering period. We reserve the right to reject any option tendered for exchange that we determine is not in the appropriate form or that we determine it is unlawful to accept. Subject to the terms and conditions of this Offer, we will accept all properly tendered eligible option grants promptly after the expiration of this Offer.

Our receipt of your election form is not by itself an acceptance of your options for exchange. For purposes of this Offer, we will be deemed to have accepted eligible options for exchange that are validly elected to be exchanged and are not properly withdrawn as of the time when we give oral or written notice to the option holders generally of our acceptance of options for exchange. We may issue this notice of acceptance by press release, email or other form of communication. Options accepted for exchange will be cancelled on the cancellation date, which we presently expect will be June 25, 2024.

Determination of validity; rejection of options; waiver of defects; no obligation to give notice of defects

We will determine, in our discretion, all questions about the validity, form, eligibility (including time of receipt) and acceptance of the documents you submit to accept the Offer for any of your eligible options. Our determination of these matters will be given the maximum deference permitted by law. However, you have all rights accorded to you under applicable law to challenge such determination in a court of competent jurisdiction. Only a court of competent jurisdiction can make a determination that will be final and binding upon the parties. We reserve the right to reject any election of any option tendered for exchange that we determine is not in an appropriate form or that we determine is unlawful to accept. We will accept all properly tendered eligible options that are not validly withdrawn, subject to the terms of this Offer. We also reserve the right to waive any of the conditions of the Offer or any defect or irregularity in any tender of any particular option or for any particular option holder, provided that if we grant any such waiver, it will be granted with respect to all option holders and tendered options in a uniform and nondiscriminatory manner. No tender of options will be deemed to have been made properly until all defects or irregularities have been cured by you or waived by us. We have no obligation to give notice of any defects or irregularities in any election, and we will not incur any liability for failure to give any such notice. This is a one-time offer. We will strictly enforce the offering period, subject only to an extension that we may grant in our discretion.

Our acceptance constitutes an agreement

Your election to exchange options through the procedures described above constitutes your acceptance of the terms and conditions of this Offer. Our acceptance of your eligible options for exchange will constitute a binding agreement between Socket Mobile and you upon the terms and subject to the conditions of this Offer.

5. Withdrawal rights and change of election.

You may change an election you previously made with respect to some or all of your eligible options, including an election to withdraw all of your eligible options from this Offer, only in accordance with the provisions of this section. You may change your mind after you have submitted an election form and withdraw some or all of your elected eligible options from the Offer at any time before the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. If we extend the expiration date, you may change or withdraw your election of tendered options at any time until the extended Offer expires. In addition, although we intend to accept all validly tendered eligible options promptly after the expiration of this Offer, due to certain requirements under U.S. securities laws, if we have not accepted your options by 9:00 p.m., Pacific Daylight Time, on July 24, 2024 (which is the 40th U.S. business day following the commencement of the Offer), you may withdraw your options at any time thereafter up to such time as Socket Mobile does accept your properly tendered options.

To change an election you previously made with respect to some or all of your eligible option grants, including an election to withdraw all of your eligible option grants from this Offer, you must deliver a valid new election form indicating only the eligible option grants you wish to exchange in the Offer or a valid new election form indicating that you reject the Offer with respect to all of your eligible options, by completing the election process via the method outlined below on or before the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024.

Proper election changes and withdrawals

Print and properly complete, sign and date the election form attached to the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer.

Email or fax the properly completed election form to:

Attn: Lynn Zhao

Socket Mobile, Inc.

40675 Encyclopedia Cir.
Fremont, California 94538

Email: lynn@socketmobile.com

Fax: (510) 933-3016

You may change your mind as many times as you wish, but you will be bound by the properly submitted election form we receive last on or before the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. An election form has been provided to you with this Offer to Exchange. To obtain another copy of the election form, please contact our Chief Financial Officer, Ms. Zhao, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

If you change your election to withdraw some or all of your eligible option grants, you may elect later to exchange the withdrawn eligible option grants again at any time on or before the expiration of the Offer. All eligible option grants that you withdraw will be deemed not properly tendered for purposes of the Offer, unless you subsequently properly elect to exchange such eligible option grants on or before the expiration of the Offer. To reelect to exchange some or all of your eligible option grants, you must submit a new election form to Socket Mobile on or before the expiration of the Offer by following the procedures described in Section 4 of this Offer to Exchange. This new election form must be properly completed, signed and dated after your previously submitted election form and must list all eligible option grants you wish to exchange. Upon our receipt of your properly completed, signed and dated election form, any prior election form will be disregarded in its entirety and will be considered replaced in full by the new election form. Each time you make an election, please be sure to make an election with respect to each of your eligible option grants.

Neither we nor any other person is obligated to give you notice of any defects or irregularities in any election, nor will anyone incur any liability for failure to give any such notice. We will determine, in our discretion, all questions as to the form and validity, including time of receipt, of elections. Our determination of these matters will be given the maximum deference permitted by law. However, you have all rights accorded to you under applicable law to challenge such determination in a court of competent jurisdiction. Only a court of competent jurisdiction can make a determination that will be final and binding upon the parties.

6. Acceptance of options for exchange and issuance of new options.

Upon the terms and conditions of this Offer and promptly following the expiration of this Offer, we will accept for exchange and cancel all eligible options properly elected for exchange and not validly withdrawn before the expiration of this Offer. Once the eligible options are cancelled, you no longer will have any rights with respect to those eligible options. In addition, as discussed in Sections 9 and 14 of this Offer to Exchange, regardless of whether those eligible options were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to you will be (i) incentive stock options to the maximum extent permitted by law if you are an employee as of the new option grant date or (ii) nonstatutory stock options if you are a non-employee director or consultant as of the new option grant date. Subject to the terms and conditions of this Offer, if your eligible options are properly tendered by you for exchange and accepted by us, these eligible options will be cancelled on the cancellation date, which we anticipate will be June 25, 2024, following the expiration of the Offer.

For purposes of the Offer, we will be deemed to have accepted options for exchange that are validly tendered and are not properly withdrawn as of the expiration of the Offer and the cancellation date. Promptly following the expiration date and cancellation date, we will give oral or written notice to the option holders generally of our acceptance for exchange of the options. This notice may be made by press release, email or other method of communication. Subject to our rights to terminate the Offer, discussed in Section 15 of this Offer to Exchange, we currently expect that we will accept, promptly after the expiration of this Offer, all properly tendered options that are not validly withdrawn.

We will grant the new options on the new option grant date, which is the same calendar day as the cancellation date, following the expiration of the Offer. We expect the new option grant date will be June 25, 2024. All new options granted to you will be granted under our 2004 Plan and will be subject to a new option agreement between you and Socket Mobile. The number of new options you will receive in exchange for your eligible options will cover the same number of shares of our common stock as the number of shares subject to the exchanged options. Shortly after the new option grant date, you will receive your new option agreement in the same manner as Socket Mobile provides any Socket Mobile options in the normal course. You should follow the same procedures that ordinarily apply to any Socket Mobile options granted to you in the normal course. Your new options will become exercisable if and when your new options vest, in accordance with the vesting schedule described in Section 9 of this Offer to Exchange.

Options that we do not accept for exchange and options that have not been tendered for exchange or for which we have not received an election form by the deadline will remain outstanding until they are exercised or cancelled or expire by their terms and will retain their current exercise price, current vesting schedule, current term, and all of the other terms and conditions as set forth in the relevant option agreement related to such eligible options.

7. Conditions of the Offer.

Notwithstanding any other provision of this Offer, we will not be required to accept any options tendered for exchange, and we may terminate the Offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e 4(f)(5) under the Exchange Act, if at any time on or after the date this Offer begins, and before the expiration date, any of the following events has occurred, or has been determined by us, in our reasonable judgment, to have occurred:

There will have been threatened or instituted or be pending any action, proceeding or litigation seeking to enjoin, make illegal or delay completion of the Offer or otherwise relating in any manner, to the Offer;

Any order, stay, judgment or decree is issued by any court, government, governmental authority or other regulatory or administrative authority and is in effect, or any statute, rule, regulation, governmental order or injunction will have been proposed, enacted, enforced or deemed applicable to the Offer, any of which might restrain, prohibit or delay completion of the Offer or impair the contemplated benefits of the Offer to us (see Section 3 of this Offer to Exchange for a description of the contemplated benefits of the Offer to us);

There will have occurred:

any general suspension of trading in, or limitation on prices for, our securities on any national securities exchange or in an over the-counter market in the United States,

the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States,

any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, might affect the extension of credit to us by banks or other lending institutions in the United States,

in our reasonable judgment, any extraordinary or material adverse change in U.S. financial markets generally, including, a decline of at least 10% in either the Dow Jones Industrial Average or the Standard & Poor’s 500 Index from the date of commencement of this Offer,

the commencement, continuation or escalation of a war or other national or international calamity directly or indirectly involving the United States, which could reasonably be expected to affect materially or adversely, or to delay materially, the completion of this Offer, or

if any of the situations described above existed at the time of commencement of this Offer and that situation, in our reasonable judgment, deteriorates materially after commencement of this Offer;

A tender or exchange offer, other than this Offer by us, for some or all of our shares of outstanding common stock, or a merger, acquisition or other business combination proposal involving us, will have been proposed, announced or made by another person or entity or will have been publicly disclosed or we will have learned that:

any person, entity or “group” within the meaning of Section 13(d)(3) of the Exchange Act acquires more than 5% of our outstanding shares of common stock, other than a person, entity or group that had publicly disclosed such ownership with the SEC prior to the date of commencement of this Offer,

any such person, entity or group that had publicly disclosed such ownership prior to such date will acquire additional common stock constituting more than 1% of our outstanding shares, or

any new group will have been formed that beneficially owns more than 5% of our outstanding shares of common stock that in our judgment in any such case, and regardless of the circumstances, makes it inadvisable to proceed with this Offer or with such acceptance for exchange of eligible options;

There will have occurred any change, development, clarification or position taken in generally accepted accounting principles that could or would require us to record for financial reporting purposes compensation expense against our earnings in connection with the Offer, other than as contemplated as of the commencement date of this Offer (as described in Section 12 of this Offer to Exchange);

Any event or events occur that have resulted or is reasonably likely to result, in our reasonable judgment, in a material adverse change in our business or financial condition;

Any event or events occur that have resulted or may result, in our reasonable judgment, in a material impairment of the contemplated benefits of the Offer to us (see Section 3 of this Offer to Exchange for a description of the contemplated benefits of the Offer to us); or

Any rules or regulations by any governmental authority, the Financial Industry Regulatory Authority, Nasdaq, or other regulatory or administrative authority or any national securities exchange have been enacted, enforced, or deemed applicable to Socket Mobile that have resulted, or may result in our reasonable judgment, in a material impairment of the contemplated benefits of the Offer to us (see Section 3 of this Offer to Exchange for a description of the contemplated benefits of the Offer to us).

If any of the above events occur, we may:

Terminate this Offer and promptly return all tendered eligible options to tendering holders;

Complete and/or extend this Offer and, subject to your withdrawal rights, retain all tendered eligible options until the extended Offer expires;

Amend the terms of this Offer; or

Waive any unsatisfied condition and, subject to any requirement to extend the period of time during which this Offer is open, complete this Offer.

The conditions to this Offer are for our benefit. We may assert them in our discretion before the expiration date regardless of the circumstances giving rise to them. We may waive any condition, in whole or in part, at any time and from time to time before the expiration date, in our discretion, whether or not we waive any other condition to the Offer. Any such waiver will apply to all eligible service providers in a uniform and nondiscretionary manner. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights, but will be deemed a waiver of our ability to assert the condition that was triggered with respect to the particular circumstances under which we failed to exercise our rights. Any determination we make concerning the events described in this Section 7 will be given the maximum deference permitted by law. However, you have all rights accorded to you under applicable law to challenge such determination in a court of competent jurisdiction. Only a court of competent jurisdiction can make a determination that will be final and binding upon the parties.

8. Price range of shares underlying the options.

The Socket Mobile common stock that underlies the eligible options is traded on the Nasdaq Capital Market under the symbol “SCKT.” The following table shows, for the periods indicated, the high and low sales price per share of our common stock as reported by the Nasdaq Capital Market.

	High	Low
Fiscal Year Ending December 31, 2024
Second Quarter (through May 22, 2024)	$ 1.51	$ 0.99
First Quarter	$ 1.22	$ 0.98
Fiscal Year Ended December 31, 2023
Fourth Quarter	$ 1.47	$ 0.90
Third Quarter	$ 1.59	$ 1.03
Second Quarter	$ 1.97	$ 1.24
First Quarter	$ 2.48	$ 1.85
Fiscal Year Ended December 31, 2022
Fourth Quarter	$ 2.29	$ 1.75
Third Quarter	$ 3.23	$ 2.03
Second Quarter	$ 4.75	$ 2.64
First Quarter	$ 4.84	$ 3.28

On May 22, 2024, the last reported closing sales price of our common stock, as reported by the Nasdaq Capital Market, was $1.39 per share.

You should evaluate current market quotes for our common stock, among other factors, before deciding whether or not to accept this Offer.

9. Source and amount of consideration; terms of new options.

Consideration

We will issue new options in exchange for eligible options properly elected to be exchanged by you and accepted by us for such exchange. Subject to the terms and conditions of this Offer, upon our acceptance of your properly tendered eligible options, you will be entitled to receive new options covering the same number of shares of our common stock as the number of shares subject to the exchanged options. New options will be unvested as of the new option grant date and will be subject to a new vesting schedule as described below under “Vesting and Exercisability.”

If we receive and accept tenders from eligible service providers of all options eligible to be tendered, subject to the terms and conditions of this Offer, options to purchase 716,204 shares would be surrendered and cancelled, while new options covering 716,204 shares of our common stock, or approximately 9.5% of the total shares of our common stock outstanding as of May 22, 2024, would be issued.

General terms of new options

All new options to be granted to you will be granted under, and subject to, the terms and conditions of our 2004 Plan and an option agreement between you and Socket Mobile thereunder. The new options will have a different exercise price, maximum term, and vesting schedule. Except as provided by the following sentence, all new options will have an exercise price per share equal to the Fair Market Value (as defined in the 2004 Plan) of a share of our common stock on the new option grant date, which will be the closing sales price of a share of our common stock on Nasdaq on the new option grant date, which is expected to be June 25, 2024. If, immediately before the new option is granted, you are an employee who owns, or is treated for purposes of the incentive stock option rules as owning, more than 10% of the total combined voting power of all classes of Socket Mobile stock (or the stock of any Socket Mobile parent or subsidiary) (a “Greater than 10% Holder”), your new option will have an exercise price of 110% of the Fair Market Value of a share of our common stock on the new option grant date. If you are a Greater than 10% Holder, you will be notified separately. New options will be entirely unvested as of the new option grant date and will be subject to a new vesting schedule, even though your exchanged options were fully vested, as described below under “Vesting and exercisability.”

Regardless of whether the corresponding eligible options cancelled in the Offer were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to participants who are our employees as of the new option grant date will be incentive stock options to the maximum extent permitted by law, and all new options granted to participants who are our non-employee directors or consultants as of the new option grant date will be nonstatutory stock options.

All other terms and conditions of the new options will be the same as the terms and conditions of the eligible options that you tendered for exchange.

The following description summarizes the material terms of our 2004 Plan. Our statements in this Offer to Exchange concerning the 2004 Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, the 2004 Plan, and the form of option agreement for grants made under the 2004 Plan. The 2004 Plan and form of option agreement thereunder are incorporated by reference as exhibits to the Schedule TO with which this Offer has been filed and are available on the SEC website at www.sec.gov. Please contact us at Socket Mobile, Inc., 40675 Encyclopedia Cir., Fremont, California 94538, Attention: Lynn Zhao (telephone: (510) 933-3016), to receive a copy of the 2004 Plan, and the relevant form of option agreement thereunder. We will promptly furnish you copies of these documents upon request at our expense.

2004 Plan

Our 2004 Plan permits the grant of incentive stock options, nonstatutory stock options, restricted stock, stock appreciation rights, performance units and performance shares to our employees (including executive officers), directors and consultants. As of May 20, 2024, the maximum number of shares of our common stock (i) subject to options currently outstanding under the 2004 Plan was approximately 1,102,114 shares, (ii) subject to restricted stock units outstanding under the 2004 Plan was approximately 1,185,207 shares, and (iii) available for future issuance under the 2004 Plan was approximately 395,570 shares. The 2004 Plan is administered by the compensation committee of our board of directors, which we refer to as the administrator. Subject to the other provisions of the 2004 Plan, the administrator has the power to determine the terms, conditions, and restrictions of the options granted, including the number of options and the vesting schedule. The exercise price of an option granted under the 2004 Plan generally is determined by the administrator; provided, however, that the exercise price of an option shall in no event be less than 100% of the fair market value of a share of our common stock on the date of grant. The vesting applicable to an option granted under the 2004 Plan generally is determined by the administrator in accordance with the terms of the 2004 Plan. Options granted under the 2004 Plan generally have a maximum term of 10 years after the date of grant. For purposes of this Offer, new options granted pursuant to the terms and conditions of the Offer will have a maximum term of 10 years after the date of grant, except that new options granted to Greater than 10% Holders will have a 5 year maximum term.

Exercise price

The exercise price of an option granted under the 2004 Plan generally is determined by the administrator; provided, however, that the exercise price of an option generally may not be less than 100% of the fair market value of a share of our common stock on the date of grant. For purposes of this Offer, new options will have a per share exercise price equal to 100% of the fair market value of a share of our common stock on the date of grant, which will be the closing sales price of a share of our common stock on Nasdaq on the new option grant date. The new option grant date is expected to be June 25, 2024.

Vesting and Exercisability

The vesting applicable to an option granted under the 2004 Plan generally is determined by the administrator in accordance with the terms of the 2004 Plan. The new options will be unvested as of the new option grant date and will be subject to a new vesting schedule. Each new option will be unexercisable while it remains unvested, regardless of whether the exchanged option was early exercisable. Each new option will be scheduled to vest as to 1/48th of the underlying shares each month after the new option grant date on the same day of the month as the new option grant date (and if there is no corresponding day, on the last day of the month), in each case subject to your remaining a “Service Provider” (as defined in the 2004 Plan, and generally meaning and referred to in this Offer to Exchange as continued service with us (and includes service with any Socket Mobile parent or subsidiary)) through the applicable vesting dates. This is the vesting schedule Socket Mobile typically applies to its annual refresh stock option grants.

In all cases described above, vesting is subject to your continued service to us through each vesting date. Your participation in this Offer and the receipt of new options does not provide any guarantee or promise of continued service with us.

Example

For illustrative purposes only, assume that you are an eligible service provider who is not a Greater than 10% Holder and that you exchange in the Offer an eligible option grant to purchase 4,800 shares of our common stock. There are no specific accelerated vesting terms that apply to your eligible option grant. Assume also that the Offer expires and new options are granted on June 25, 2024, and that your eligible option grant was fully vested prior to the cancellation date. Under the terms of the Offer, the new option grant will cover 4,800 shares, be entirely unvested upon the new option grant date, have a new exercise price, and have a vesting commencement date of June 25, 2024.

The new option grant will be scheduled to vest as to 100 shares on each monthly anniversary of the new option grant date, subject to your continued service to us (or any Socket Mobile parent or subsidiary) through each vesting date.

Scheduled Vesting Date	Number of Shares of our Common Stock Subject to New Option Grant
The 25^th day of each month thereafter over a total of 48 months	100 shares on each such scheduled vesting date

Adjustments upon certain events

Events occurring before the new option grant date

Although we are not anticipating any merger or acquisition of Socket Mobile, if prior to the expiration of the Offer, we merge or consolidate with or are acquired by another entity, you may choose to change your election or withdraw any options which you tendered for exchange, and your options will be treated in accordance with the 2004 Plan and your option agreement. Further, if we are acquired prior to the expiration of the Offer, we reserve the right to withdraw the Offer, in which case your options and your rights under them will remain intact and exercisable for the time period set forth in your option agreement and the 2004 Plan, and you will receive no new options in exchange for them. If we are acquired prior to the expiration of the Offer but we (or the successor entity) do not withdraw the Offer, then we (or the successor entity) will notify you of any material changes to the terms of the Offer or the new options, including any adjustments to the exercise price and number and type of shares that will be subject to the new options.

Under such circumstances, the type of security and the number of shares covered by your new options and the new options’ exercise price would be adjusted based on the consideration per share given to holders of our common stock in connection with the acquisition. As a result of this adjustment, you may receive new options covering more or fewer shares of the acquirer’s common stock than the number of shares of our common stock subject to the eligible options that you tendered for exchange or than the number of shares of our common stock that would have been subject to the new options and greater or lesser per share exercise price of your new options, had no acquisition occurred.

If another company acquires us, that company, as part of the transaction or otherwise, may decide to terminate some or all of our employees before the completion of this Offer. Termination of your employment for this or any other reason before the new option grant date (which is the same calendar day as the expiration date) means that the tender of your options will not be accepted, you will keep your tendered options in accordance with their original terms, and you will not receive any new options or other benefit for your tendered options.

Events occurring after the new option grant date

If we are acquired after your exchanged options have been accepted, cancelled, and exchanged for new options, your new options will be treated in the acquisition transaction in accordance with the terms of the transaction agreement or the terms and conditions of our 2004 Plan, the option agreement between you and Socket Mobile thereunder, and any applicable agreement between you and Socket Mobile. If we merge or consolidate with or are acquired by another entity, the transaction could result in a reduction in our workforce. If such termination of employment or other service occurs shortly after the expiration date, then you may hold new options that are entirely unvested, and all unvested new options will expire on such termination date, assuming they have not otherwise accelerated in connection with the acquisition pursuant to the terms of the 2004 Plan or an agreement between you and Socket Mobile. If your employment or other service with us or any then-existing parent or subsidiary of ours terminates before part or all of your new options vest, you will not receive any value from the unvested part of your new options. If this termination of your employment or other service occurs shortly after the new option grant date and before you vest in any of your new options, you will forfeit your rights to your unvested new options as of the date of your termination of employment or other service and you will not receive any value from those new options.

In the event that any dividend or other distribution (whether in the form of cash, shares of our common stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of our common stock or other securities of Socket Mobile, or other change in our corporate structure affecting the shares of our common stock occurs, the administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2004 Plan, may (in its sole discretion) adjust the number and class of shares that may be delivered under the 2004 Plan and/or the number, class, and price of shares covered by each outstanding award, and the numerical share limits of the 2004 Plan.

If we liquidate or dissolve, to the extent not previously exercised or settled, your outstanding options will terminate immediately before the consummation of the dissolution or liquidation. The administrator will notify award holders as soon as practicable prior to the effective date of such proposed liquidation or dissolution.

Our 2004 Plan provides that in the event of a merger or change in control of Socket Mobile as described in the 2004 Plan, each outstanding award will be assumed or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation does not assume or substitute for an award, the holder of such award will fully vest in and have the right to exercise such outstanding options or stock appreciation rights, including shares as to which such award otherwise would not be vested or exercisable, or with respect to restricted stock, all restrictions will lapse, and, with respect to performance units and performance shares, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an option or stock appreciation right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change in control of Socket Mobile, the administrator will notify the holder of such option or stock appreciation right in writing or electronically that the option or stock appreciation right will be fully vested and exercisable for a period of time determined by the administrator in its sole discretion, and the option or stock appreciation right will terminate upon the expiration of such period. Awards granted under the 2004 Plan may be subject to other terms set forth in a written agreement between the award holder and Socket Mobile governing the terms of such awards in the event of a merger or other corporate transaction of Socket Mobile, as described in such agreement.

Transferability of options

Unless determined otherwise by the 2004 Plan’s administrator, an option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the holder of such option, only by such holder. If the administrator makes an option transferable, such option will contain such additional terms and conditions as the administrator deems appropriate.

Registration of shares underlying new options

All of the shares of Socket Mobile common stock issuable upon exercise of new options have been registered under the Securities Act on a registration statement on Form S-8 filed with the SEC. Unless you are an employee who is considered an affiliate of Socket Mobile for purposes of the Securities Act, you will be able to sell the shares issuable upon exercise of your new options free of any transfer restrictions under applicable U.S. securities laws.

Tax consequences

You should refer to Section 14 of this Offer to Exchange for a discussion of the U.S. federal income tax consequences of the new options and exchanged options, as well as the consequences of accepting or rejecting this Offer.

We strongly recommend that you consult with your own advisers to discuss the consequences to you of this transaction.

10. Information concerning Socket Mobile.

Our principal executive offices are located at 40675 Encyclopedia Cir., Fremont, CA 94538, and our telephone number is (510) 933-3000. Questions regarding this Offer should be directed to Lynn Zhao, Chief Financial Officer, at (510) 933-3016.

Socket Mobile is a leading provider of data capture and delivery solutions for enhanced productivity in workforce mobilization. Socket Mobile’s revenue is primarily driven by the deployment of third party barcode enabled mobile applications that integrate Socket Mobile’s cordless barcode scanners and contactless reader/writers. Mobile applications servicing the specialty retailer, field service, transportation, and manufacturing markets are the primary revenue drivers. Socket Mobile has a network of thousands of developers who use its software developer tools to add sophisticated data capture to their mobile applications.

11. Interests of executive officers and directors; transactions and arrangements concerning the options.

A list of our executive officers and members of our board of directors as of May 22, 2024, is attached to this Offer to Exchange as Schedule A. Our executive officers and directors may participate in this Offer. As of May 22, 2024, our executive officers (4 persons) as a group held options unexercised and outstanding under our 2004 Plan to purchase a total of 413,410 shares of our common stock, which represented approximately 37.5% of the shares subject to all options outstanding under our 2004 Plan as of that date. As of May 22, 2024, non-employee members of our board of directors (3 persons) as a group held options unexercised and outstanding under our 2004 Plan to purchase a total of 160,000 shares of our common stock, which represented approximately 14.5% of the shares subject to all options outstanding under our 2004 Plan as of that date.

The following table sets forth the beneficial ownership of each of our executive officers and directors of options granted under our 2004 Plan that are outstanding as of May 22, 2024. The percentages in the tables below are based on the total number of outstanding options (i.e., whether or not eligible for exchange) to purchase shares of our common stock under our 2004 Plan, which was 1,102,114 shares as of May 22, 2024.

Name	Position	Number of shares covered by outstanding options granted under our equity plans	Percentage of total outstanding options under our equity plans
Kevin Mills	President, Chief Executive Officer and Director	157,200	14.3%
David A. Holmes	Chief Business Officer	100,000	9.1%
Leonard L. Ott	Vice President of Engineering and Chief Technical Officer	88,950	8.1%
Lynn Zhao	Vice President of Finance and Administration, Chief Financial Officer and Director	67,260	6.1%
Charlie Bass	Director and Chairman of the Board	93,000	8.4%
Bill Parnell	Director	46,000	4.2%
Ivan Lazarev	Director	21,000	1.9%

Except as described below, neither we nor, to the best of our knowledge, any of our directors or executive officers, nor any affiliates of ours, were engaged in transactions involving options to purchase our common stock, or in transactions involving our common stock during the 60 days before and including May 28, 2024:

Name	Date of Transaction	Amount of Common Stock Involved	Price Per Share	Where and How the Transaction was Effected
Charlie Bass	May 3, 2024	5,000	$1.0915	Open market purchase
Charlie Bass	May 6, 2024	5,000	$1.1179	Open market purchase
Charlie Bass	May 7, 2024	5,000	$1.2301	Open market purchase
Charlie Bass	May 8, 2024	5,000	$1.2412	Open market purchase
Charlie Bass	May 9, 2024	5,000	$1.2553	Open market purchase
Charlie Bass	May 10, 2024	5,000	$1.2735	Open market purchase
Charlie Bass	May 13, 2024	5,000	$1.3022	Open market purchase
Charlie Bass	May 14, 2024	5,000	$1.3676	Open market purchase
Charlie Bass	May 15, 2024	5,000	$1.4407	Open market purchase
Charlie Bass	May 16, 2024	5,000	$1.4432	Open market purchase
Charlie Bass	May 17, 2024	5,000	$1.4642	Open market purchase
Charlie Bass	May 20, 2024	5,000	$1.5115	Open market purchase
Charlie Bass	May 21, 2024	5,000	$1.5115	Open market purchase
Charlie Bass	May 22, 2024	5,000	$1.4605	Open market purchase
Charlie Bass	May 23, 2024	5,000	$1.3262	Open market purchase
Charlie Bass	May 24, 2024	5,000	$1.3692	Open market purchase

Except as otherwise described in this Offer or in our filings with the SEC, other than outstanding options to purchase common stock and restricted stock units granted from time to time pursuant to our 2004 Plan, neither we nor, to our knowledge, any of our directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person with respect to any of our securities (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations).

12. Status of options acquired by us in the Offer; accounting consequences of the Offer.

Exchanged options that we acquire through the Offer will be cancelled and, to the extent they were granted under the 2004 Plan, the shares of our common stock subject to those options will be returned to the pool of shares of our common stock available for grants of awards under the 2004 Plan, including any new options granted under the Offer. To the extent shares returning to the 2004 Plan are not fully reserved for issuance upon receipt of the new options to be granted in connection with the Offer, the shares will be available for issuance pursuant to future equity awards to employees and other eligible 2004 Plan participants without further stockholder action, except as required by applicable law or the rules of Nasdaq or any other securities quotation system or any stock exchange on which our shares are then quoted or listed.

We have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation (“Topic 718”). Under Topic 718, the Offer with respect to all eligible options is considered a modification of those options exchanged and as a result we may be required to recognize incremental compensation expense, if any, resulting from the new options granted in the Offer. The incremental compensation will be measured as the excess, if any, of the fair value of each new option granted to eligible service providers in exchange for the exchanged eligible options, measured as of the date the new options are granted, over the fair value of the eligible options exchanged for the new options, measured immediately prior to the exchange. This incremental compensation expense will be recognized over the remaining requisite service period of the new options. In the event that any of the new options are forfeited prior to their vesting due to termination of employment or other service, any incremental compensation expense of the forfeited new options will not be recognized.

13. Legal matters; regulatory approvals.

We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of eligible options and issuance of new options as contemplated by the Offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency or any Nasdaq listing requirements that would be required for the acquisition or ownership of our options as contemplated herein. Should any additional approvals or notice filings or other actions be required, we presently contemplate that we will seek such approvals, make such filings or take such other actions. However, we cannot assure you that we will seek such approvals, make such filings or take such other actions or that any such approvals, filings or other actions, if needed, could be obtained or made or what the conditions imposed in connection with such approvals or filings would entail or whether the failure to obtain any such approvals, to make such filings or take any other actions would result in adverse consequences to our business. Our obligation under the Offer to accept tendered options for exchange and to issue new options for tendered options is subject to the conditions described in Section 7 of this Offer to Exchange.

If we are prohibited by applicable laws or regulations from granting new options or required to obtain a license or regulatory permit or make any other filing before granting new options on the new option grant date, we will not grant any new options, unless we obtain the necessary license or make the requisite filing. We are unaware of any such prohibition at this time which cannot be satisfied by obtaining a license or permit or making a filing, and we will use reasonable efforts to effect the grant, but if the grant is prohibited or seems not feasible to be made on the new option grant date, we will not grant any new options, and you will not receive any other benefit for the options you tendered.

14. Material income tax consequences.

Material U.S. federal income tax consequences

The following is a general summary of the material U.S. federal income tax consequences of participating in the exchange of options pursuant to the Offer for those eligible service providers subject to U.S. federal income tax. This discussion is based on the Internal Revenue Code (the “Code”), its legislative history, treasury regulations thereunder, and administrative and judicial interpretations as of the date of this Offer to Exchange, all of which are subject to change, possibly on a retroactive basis. The federal tax laws may change and the federal, state, and local tax consequences for each eligible service provider will depend upon his or her individual circumstances. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders.

We recommend that you consult your own tax adviser with respect to the U.S. federal, state, and local tax consequences of participating in the Offer, as the tax consequences to you are dependent on your individual tax situation.

New options

Eligible service providers whose outstanding eligible options are exchanged for new options under the Offer should not be required to recognize income for U.S. federal income tax purposes at the time of the exchange. We believe that the exchange will be treated as a non-taxable event.

Regardless of whether the corresponding eligible options cancelled in the Offer were incentive stock options or nonstatutory stock options for tax purposes, all new options granted to participants who are our employees as of the new option grant date will be incentive stock options to the maximum extent permitted by law, and all new options granted to participants who are our non-employee directors or consultants as of the new option grant date will be nonstatutory stock options.

If you are an employee, please note that the Code limits the annual benefit a single person may receive from incentive stock options, preventing more than $100,000 worth of incentive stock options from becoming exercisable for the first time in any one calendar year. For purposes of this $100,000 limit, the fair market value of the shares subject to each such option is determined as of the grant date of the option. To the extent more than $100,000 of options granted to a single individual as incentive stock options first become exercisable in any calendar year, the portions of these options in excess of $100,000 are treated as nonstatutory stock options for U.S. tax purposes.

The Internal Revenue Service treats the new options as new option grants, so any portions of the new options that first become exercisable in that year counts toward the limit, based on the fair market value of a share of our common stock on the new option grant date. Therefore, the portion of your incentive stock options that you currently possess that is exercisable for the first time in 2024 plus any new options that are first exercisable in 2024 both will be counted in determining the portions of your incentive stock options that exceed the $100,000 limit. As a result, if these facts apply to you, your new options will be incentive stock options only to the extent you do not exceed the $100,000 limit; any excess portions of your new options will be treated as nonstatutory stock options.

Eligible service providers who do not participate in the Offer

Under the U.S. tax rules governing incentive stock options, if an offer to modify an incentive stock option remains outstanding for 30 or more calendar days, then the incentive stock option is deemed modified regardless of whether you participate in the offer. If this Offer is extended and remains open for at least 30 calendar days, eligible options that are incentive stock options held by U.S. employees who do not participate in this Offer will be considered to have been modified. In such event, the commencement date of the Offer (May 28, 2024) will be considered the modification date for purposes of determining whether the employee will receive favorable tax treatment with respect to the eligible options that are incentive stock options. Accordingly, in order to receive favorable tax treatment with respect to any such incentive stock option that is, as of the modification date, “underwater” (meaning the exercise price of such option is greater than our then-current stock price) or “at-the-money” (meaning the exercise price of such option is equal to our then-current stock price), you would be required not to dispose of any shares of our common stock acquired with respect to the incentive stock option until the passage of more than two years from the date this Offer commenced (May 28, 2024) (i.e., the date of the deemed modification) and more than one year after the exercise of the option. If these holding periods (and all other incentive stock option requirements) are met, the excess of the sale price of the option shares over the exercise price of the option will be treated as long-term capital gain. Further, if, as of the modification date, you are no longer an employee or your eligible option is “in-the-money” (meaning our stock price is greater than the exercise price of the options) as of the modification date, such eligible option will immediately cease to be an incentive stock option and instead be deemed a nonstatutory stock option. For more detailed information, please see the information below.

Incentive stock options

Under current U.S. tax law, an option holder generally will not realize taxable income upon the grant of an incentive stock option. In addition, an option holder generally will not realize taxable income upon the exercise of an incentive stock option. However, the exercise of an incentive stock option may affect an option holder’s alternative minimum taxable income. Upon exercise of an incentive stock option, the option holder will be required to include the amount equal to the excess of the fair market value of the exercised shares on the date of exercise over the exercise price as an adjustment item in the determination of any alternative minimum tax. However, if the option holder disposes of the exercised shares in the same calendar year as the date of exercise of the incentive stock option, then no adjustment will be made in determining such alternative minimum tax. Except in the case of an option holder’s death or disability, if an option is exercised more than three months after the option holder’s termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to nonstatutory stock options.

If an option holder sells the option shares acquired upon exercise of an incentive stock option, the tax consequences of the disposition depend upon whether the disposition is qualifying or disqualifying. The disposition of the option shares is qualifying if it is made:

more than two years after the date the incentive stock option was granted; and

more than one year after the date the incentive stock option was exercised.

If the disposition of the option shares is qualifying, any excess of the sale price of the option shares over the exercise price of the option will be treated as long-term capital gain taxable to the option holder at the time of the sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale.

If the disposition is not qualifying, which we refer to as a “disqualifying disposition,” the excess of the fair market value of the option shares on the date the option was exercised (or, if less, the amount realized on the disposition of the shares) over the exercise price will be treated as ordinary income to the option holder at the time of the disposition. Any additional gain generally will be taxable at long-term or short-term capital gain rates, depending on whether the option holder has held the shares for more than one year.

Unless an option holder engages in a disqualifying disposition, we will not be entitled to a deduction with respect to an incentive stock option. If an option holder engages in a disqualifying disposition, we generally will be entitled to a deduction equal to the amount of ordinary income taxable to the option holder.

Nonstatutory stock options

Under current U.S. tax law, an option holder generally will not realize taxable income upon the grant of a nonstatutory stock option. However, when an option holder exercises the nonstatutory stock option, the difference between the exercise price of the option and the fair market value of the shares subject to the option on the date of exercise generally will be compensation income taxable to the option holder.

We generally will be entitled to a deduction equal to the amount of compensation income taxable to the option holder if we comply with eligible reporting requirements.

Upon disposition of the exercised shares, any gain or loss is treated as capital gain or loss. The capital gain or loss will be long-term or short-term depending on whether the shares were held for more than 12 months. The holding period for the shares generally will begin just after the time the option holder recognized income. The amount of such gain or loss will be the difference between: (i) the amount realized upon the sale or exchange of the shares, and (ii) the value of the shares at the time the ordinary income was recognized.

If the option holder was an employee at the time of the grant of the option, any income recognized upon exercise of a nonstatutory stock option generally will constitute wages for which withholding will be required.

We recommend that you consult your tax adviser with respect to the U.S. federal, state, and local tax consequences of participating in the Offer.

15. Extension of Offer; termination; amendment.

We reserve the right, in our discretion, at any time and regardless of whether or not any event listed in Section 7 of this Offer to Exchange has occurred or is deemed by us to have occurred, to extend the period of time during which the Offer is open and delay the acceptance for exchange of any options. If we elect to extend the period of time during which this Offer is open, we will give you oral or written notice of the extension and delay, as described below. If we extend the expiration date, we also will extend your right to withdraw tenders of eligible options until such extended expiration date. In the case of an extension, we will issue a press release, email or other form of communication no later than 6:00 a.m., Pacific Daylight Time, on the next U.S. business day after the previously scheduled expiration date.

We also reserve the right, in our reasonable judgment, before the expiration date to terminate or amend the Offer and to postpone our acceptance and cancellation of any options elected to be exchanged if any of the events listed in Section 7 of this Offer to Exchange occurs, by giving oral or written notice of the termination or postponement to you or by making a public announcement of the termination. Our reservation of the right to delay our acceptance and cancellation of options elected to be exchanged is limited by Rule 13e 4(f)(5) under the Exchange Act which requires that we must pay the consideration offered or return the options promptly after termination or withdrawal of a tender offer.

Subject to compliance with applicable law, we further reserve the right, before the expiration date, in our discretion, and regardless of whether any event listed in Section 7 of this Offer to Exchange has occurred or is deemed by us to have occurred, to amend the Offer in any respect, including by decreasing or increasing the consideration offered in this Offer to option holders or by decreasing or increasing the number of options being sought in this Offer. As a reminder, if a particular option grant expires after the beginning of the offering period, but before the cancellation date, that particular option grant is not eligible for exchange. Therefore, if we extend the Offer for any reason and if a particular option that was tendered before the originally scheduled expiration of the Offer expires after such originally scheduled expiration date, but before the actual expiration date under the extended Offer, that option would not be eligible for exchange.

The minimum period during which the Offer will remain open following material changes in the terms of the Offer or in the information concerning the Offer, other than a change in the consideration being offered by us or a change in the amount of existing options sought, will depend on the facts and circumstances of such change, including the relative materiality of the terms or information changes. If we modify the number of eligible options being sought in this Offer or the consideration being offered by us for the eligible options in this Offer, the Offer will remain open for at least 10 U.S. business days from the date of notice of such modification. If any term of the Offer is amended in a manner that we determine constitutes a material change adversely affecting any holder of eligible options, we will promptly disclose the amendments in a manner reasonably calculated to inform holders of eligible options of such amendment, and we will extend the offering period so that at least five U.S. business days, or such longer period as may be required by the tender offer rules, remain after such change.

For purposes of the Offer, a “business day” means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Time.

16. Fees and expenses.

We will not pay any fees or commissions to any broker, dealer or other person for soliciting options to be exchanged through this Offer.

17. Additional information.

This Offer to Exchange is part of a Tender Offer Statement on Schedule TO that we have filed with the SEC. This Offer to Exchange does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits, and the following materials that we have filed with the SEC before making a decision on whether to elect to exchange your options:

Our Annual Report on Form 10-K for our fiscal year ended December 31, 2023, filed with the SEC on March 25, 2024;

Our definitive Proxy Statement on Schedule 14A for our 2024 annual meeting of stockholders, filed with the SEC on March 28, 2024;

Our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2024, filed with the SEC on May 14, 2024;

The description of our common stock contained in our registration statement on Form 8-A filed with the SEC on July 11, 2000, including any amendment or report filed for the purpose of updating such description;

The information contained in our Current Reports on Form 8-K filed with the SEC on April 4, 2024, and May 1, 2024, except to the extent that information therein is furnished and not filed with the SEC.

Our SEC filings also are available to the public on the SEC’s website at http://www.sec.gov.

Each person to whom a copy of this Offer to Exchange is delivered may obtain a copy of any or all of the documents to which we have referred you, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents, at no cost, by writing to Lynn Zhao, Chief Financial Officer, Socket Mobile, Inc., 40675 Encyclopedia Cir., Fremont, CA 94538 or telephoning Ms. Zhao at (510) 933-3016.

As you read the documents listed above, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this Offer to Exchange, you should rely on the statements made in the most recent document.

The information contained in this Offer to Exchange about us should be read together with the information contained in the documents to which we have referred you, in making your decision as to whether or not to participate in this Offer.

18. Financial statements.

The financial information, including financial statements and the notes thereto, included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2023, and our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2024, are incorporated herein by reference. Attached as Schedule B to this Offer to Exchange is a summary of our financial information from our Annual Report on Form 10-K for our fiscal year ended December 31, 2023, and from our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2024. More complete financial information may be obtained by accessing our public filings with the SEC by following the instructions in Section 17 of this Offer to Exchange.

We had a book value per share of $2.57 on March 31, 2024 (book value is calculated as total stockholders’ equity as of March 31, 2024, divided by the number of outstanding shares of our common stock on that date).

19. Miscellaneous.

We are not aware of any jurisdiction in which the Offer is made where the making of the Offer is not in compliance with applicable law. We may become aware of one or more jurisdictions where the making of the Offer is not in compliance with valid applicable law. If we cannot or choose not to comply with such law, the Offer will not be made to, nor will options be accepted from, the option holders residing in such jurisdiction.

We have not authorized any person to make any recommendation on our behalf as to whether you should elect to exchange your options through the Offer. You should rely only on the information in this document or documents to which we have referred you. We have not authorized anyone to give you any information or to make any representations in connection with the Offer other than the information and representations contained in this Offer to Exchange and in the related Offer documents. If anyone makes any recommendation or representation to you or gives you any information, you must not rely upon that recommendation, representation, or information as having been authorized by us.

Socket Mobile, Inc.

May 28, 2024

SCHEDULE A

INFORMATION CONCERNING THE EXECUTIVE OFFICERS

AND DIRECTORS OF SOCKET MOBILE, INC.

The executive officers and directors of Socket Mobile, Inc. as of May 22, 2024, are set forth in the following table:

Name	Position
Kevin Mills	President, Chief Executive Officer and Director
Lynn Zhao	Vice President of Finance and Administration, Chief Financial Officer and Director
Leonard L. Ott	Executive Vice President of Engineering and Chief Technical Officer
David A. Holmes	Chief Business Officer
Charlie Bass	Director and Chairman of the Board
Bill Parnell	Director
Ivan Lazarev	Director

The address of each executive officer and director is: Socket Mobile, Inc., 40675 Encyclopedia Cir., Fremont, CA 94538. Our executive officers and directors are eligible to participate in this Offer.

A-1

SCHEDULE B

SUMMARY FINANCIAL INFORMATION

OF SOCKET MOBILE, INC.

The following selected financial data should be read in conjunction with our audited financial statements and the related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and our unaudited financial statements and the related notes thereto included in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, all of which are incorporated herein by reference. Our summary statements of operations data for the fiscal years ended December 31, 2023, and 2022, and the selected balance sheet data as of December 31, 2023, are derived from our audited financial statements incorporated by reference in this document. The summary statements of operations data for the three months ended March 31, 2024, and 2023, and the selected balance sheet data as of March 31, 2024, are derived from our unaudited interim condensed financial statements incorporated by reference in this document.

	Three Months Ended March 31,		Years Ended December 31,
	2024	2023	2023	2022
(in thousands except for share data)
Statements of Operations Data:
Product sales, net	$ 4,978	$ 4,312	$ 17,034	$ 21,238

Costs and operating expenses:
Cost of product sales	2,473	2,239	8,571	10,871
Research and development	1,208	1,247	4,832	4,362
Selling, general and administrative	1,782	1,781	6,752	6,451
Total costs and operating expenses	5,463	5,267	20,155	21,684
Gain (loss) from operations	(485)	(955)	(3,121)	(446)

Interest expense, net	(72)	(38)	(242)	(175)
Income tax benefit (expense)	—	—	1,444	708

Net income (loss)	$ (557)	$ (993)	$ (1,919)	$ 87

Net income (loss) per share:
Basic	$ (0.07)	$ (0.12)	$ (0.09)	$ 0.01
Diluted	$ (0.07)	$ (0.12)	$ (0.09)	$ 0.01

Weighted average shares outstanding:
Basic	7,441,745	7,106,746	6,094,709	7,184,847
Diluted	7,441,745	7,106,746	6,094,709	7,532,924

B-1

(in thousands)	March 31, 2024 (Unaudited)	December 31, 2023
Balance Sheet Data:
Cash and cash equivalents	$ 2,772	$ 1,085
Total assets	28,662	28,741
Total liabilities	9,503	9,321
Accumulated deficit	(48,490)	(47,933)
Total stockholders’ equity	67,649	67,353

C-1

Exhibit (a)(1)(B)

ANNOUNCEMENT EMAIL TO ALL ELIGIBLE SERVICE PROVIDERS

From:

Kevin J. Mills, President and Chief Executive Officer, Socket Mobile, Inc.

To:

All Eligible Service Providers

Date:

May 28, 2024

Subject:

LAUNCH OF SOCKET MOBILE’S STOCK OPTION EXCHANGE PROGRAM

Dear Socket Mobile Eligible Service Providers:

You are receiving this email because you are eligible to participate in a voluntary, one-time stock option exchange offer from Socket Mobile, Inc. (“Socket Mobile”) that will allow you to exchange certain outstanding stock options for new stock options, as described in more detail below, and also in the attached documents including the “Offer to Exchange Certain Outstanding Stock Options for New Stock Options,” or the Offer to Exchange. New options will have a new exercise price and be subject to a new vesting schedule and such other terms and conditions described in the Offer to Exchange.

There are a number of terms used in this email that, if they aren’t defined in the email, are defined and discussed in further detail in the Offer to Exchange. If, after you’ve read this message and the accompanying materials, you still have questions, please contact Lynn Zhao, Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016. We also recommend that you consult with your personal financial, legal and/or tax advisers to weigh the benefits and risks involved in participating in the Offer.

Options eligible to be exchanged in the Offer include only those options that are outstanding and unexercised as the start of the Offer and remain outstanding and unexercised through the time and date that the Offer expires. You are an eligible service provider if you are an employee, executive officer, director or consultant of Socket Mobile as of the date the Offer commences who remains a service provider of Socket Mobile through the new option grant date.

This Offer currently is scheduled to expire on June 25, 2024, at 9:00 p.m., Pacific Daylight Time, and new options are scheduled to be granted on the same calendar day (but after the Offer expires).

We have prepared a number of resources to help you understand the terms and conditions of the Offer. These resources include the Offer to Exchange and an election form (together with its associated instructions), both of which are attached to this email. In addition, to help you recall your outstanding eligible options, we will provide you with a summary of your outstanding stock options granted under the 2004 Equity Incentive Plan.

Participation in the Offer is completely voluntary. Participating in the Offer involves risks that are discussed in the Offer to Exchange. We know that the materials describing the Offer may seem voluminous, but it is important that you carefully review these materials so that you can make an informed decision on whether or not to participate in the Offer. We believe this Offer is potentially very important to you and recommend that you take the time to study the materials, ask questions if needed, and make an informed decision about whether or not to participate.

If you do nothing, you will be making a decision not to participate in the Offer and you will not receive any new options pursuant to the Offer. Instead, your existing options will remain outstanding until they are exercised or cancelled or expire by their terms and will retain their current exercise price, vesting schedule, and other terms.

If you want to participate in the Offer, we must receive your election form via email to Lynn Zhao, our Chief Financial Officer, at lynn@socketmobile.com or by fax at (510) 933-3016, no later than 9:00 p.m., Pacific Daylight Time, on June 25, 2024 (unless we extend the Offer).

If you do not continue to provide service to Socket Mobile through the date that the new options are granted, then upon the termination of your service, you will cease to be an eligible service provider under the terms of the Offer, and any election that you have made to exchange any of your eligible options pursuant to the Offer will be ineffective. As a result, none of your eligible options will be exchanged under the Offer, and you will not receive new options.

If we have not received your properly completed and submitted election form by the expiration of the Offer, you will have rejected this Offer and you will keep your current eligible options. A copy of the election form is included in the Offer documents as well as attached to this email.

Sincerely,

Kevin J. Mills

President and Chief Executive Officer

Socket Mobile, Inc.

Attachments:

Offer to Exchange Certain Outstanding Stock Options for New Stock Options

Election Form

Exhibit (a)(1)(C)

SOCKET MOBILE, INC.
OFFER TO EXCHANGE CERTAIN OUTSTANDING STOCK OPTIONS
FOR NEW STOCK OPTIONS

ELECTION FORM

THE OFFER EXPIRES AT 9:00 P.M., PACIFIC DAYLIGHT TIME, ON JUNE 25, 2024,

UNLESS THE OFFER IS EXTENDED

Terms used in this Election Form, including the Election Instructions attached hereto, that are defined in the Offer to Exchange have the same meaning as those defined terms in the Offer to Exchange

Before completing and signing this election form, please make sure you received, read and understand the documents that comprise this offer to exchange certain outstanding stock options for new stock options (the “Offer”), including (1) the Offer to Exchange Certain Outstanding Stock Options for New Stock Options, dated May 28, 2024 (referred to as the “Offer to Exchange”); (2) the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer (the “Announcement Email”); and (3) this election form, together with its instructions (together, the “Offer documents”). The Offer is subject to the terms of these Offer documents, as they may be amended. The Offer provides eligible service providers the opportunity to exchange their eligible options for new options covering the same number of shares of our common stock as the number of shares of our common stock subject to the exchanged options immediately before they were cancelled in the Offer, at an exercise price per share equal to the closing sales price of a share of our common stock on the new option grant date, with certain exceptions as described in the Offer documents. All eligible service providers who participate in the Offer will receive new options, subject to the terms and conditions of the Offer.

The Offer expires at 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless extended. PLEASE FOLLOW THE ACCOMPANYING INSTRUCTIONS ATTACHED TO THIS FORM.

BY PARTICIPATING, YOU AGREE TO ALL TERMS OF THE OFFER AS SET FORTH IN THE OFFER DOCUMENTS. Please be sure to follow the instructions, which are attached.

Your decision to accept or reject the Offer with respect to some or all of your eligible options is entirely voluntary. To participate in the Offer with respect to some or all of your eligible option grants, we must receive your election form via email to Lynn Zhao, our Chief Financial Officer, at lynn@socketmobile.com or by fax at (510) 933-3016, no later than 9:00 p.m., Pacific Daylight Time, on June 25, 2024 (unless we extend the Offer).

Only election forms that are properly completed and submitted and actually received by Socket Mobile on or before the expiration date via email or fax will be accepted. Election forms submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted. We will not accept delivery of any election form after expiration of the Offer.

If your service with Socket Mobile terminates on or before the date the Offer expires, you will cease to be an eligible service provider under the terms of the Offer and any election form that you have made to exchange any of your eligible options pursuant to the Offer will be ineffective.

You may change your mind after you have submitted an election form and withdraw some or all of your elected eligible options from the Offer at any time on or before the expiration date by timely submitting a new, properly completed election form indicating the change to your election. You may elect to exchange additional eligible option grants, fewer eligible option grants, all of your eligible option grants or none of your eligible option grants. You may change your mind as many times as you wish, but you will be bound by the properly submitted election form that we receive last on or before the expiration date.

Please check the appropriate box below:



Yes, I wish to participate in the Offer as to ALL of my eligible option grants.

All of my eligible options will be cancelled irrevocably on the cancellation date, currently expected to be June 25, 2024.



Yes, I wish to participate in the Offer as to my eligible option grants indicated below (please check the box next to each eligible option you elect to exchange):

	Option Grant Date	Outstanding Shares Subject to the Grant








My eligible options that are specifically elected for exchange above will be cancelled irrevocably on the cancellation date, currently expected to be June 25, 2024.



No, I wish to REJECT the Offer with respect to all of my eligible option grants.

If I previously have accepted the Offer with respect to some or all of my eligible options, this will act as a withdrawal of that acceptance and I will not participate in the Offer.

I understand that this election form will replace in its entirety any election form that Socket Mobile previously received from me.

SUBMIT THIS ELECTION FORM NO LATER THAN 9:00 P.M., PACIFIC DAYLIGHT TIME,

ON JUNE 25, 2024 (UNLESS THE OFFERING PERIOD IS EXTENDED).

By signing below, I acknowledge I have received the Offer documents comprising the Offer and agree to the terms and conditions set forth in the Offer documents.


Eligible Service Provider Signature		Date

Eligible Service Provider Name (Please Print)		Employee Email Address

SUBMIT THIS ELECTION FORM NO LATER THAN 9:00 P.M., PACIFIC DAYLIGHT TIME, ON JUNE 25, 2024 (UNLESS THE OFFERING PERIOD IS EXTENDED).

SOCKET MOBILE, INC.

ELECTION INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

To participate in the Offer, you must complete and deliver an election form.

If you want to participate in the Offer, you must make an election via the process described in Section 4 of the Offer to Exchange and outlined below on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. If you do not want to participate, then no action is necessary.

1. Print the election form.

2. Deliver the properly completed election form by email or fax to:

Attn: Lynn Zhao

Email: lynn@socketmobile.com

Fax: (510) 933-3016

We must receive your properly completed and submitted election form by the expiration of the Offer, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024. To obtain a paper election form, please contact our Chief Financial Officer, Ms. Zhao by email at lynn@socketmobile.com or by phone at (510) 933-3016.

Your delivery of all documents regarding the Offer, including election forms, is at your risk. Only responses that are properly completed and actually received by us by the deadline by email or fax will be accepted. Responses submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted.

Our receipt of your election form is not by itself an acceptance of your eligible options for exchange. For purposes of the Offer, we will be deemed to have accepted eligible options for exchange that are validly elected to be exchanged and are not properly withdrawn as of the time when we give oral or written notice to the eligible service providers generally of our acceptance of eligible options for exchange. We may issue this notice of acceptance by press release, email or other form of communication. Eligible options accepted for exchange will be cancelled on the cancellation date, which we presently expect will be June 25, 2024.

Socket Mobile will not accept any alternative, conditional or contingent tenders. By completing and submitting an election form, you waive any right to receive any notice of the receipt of the tender of your eligible options, except as provided for in the Offer to Exchange. Any confirmation of receipt provided to you (if any) merely will be a notification that we have received your election form and does not mean that your eligible options have been cancelled. Your eligible options that are accepted for exchange will be cancelled on the same calendar day as the expiration of the Offer (but following the expiration of the Offer), which cancellation is scheduled to be June 25, 2024 (unless the Offer is extended).

To change or withdraw prior elections of your eligible options, you must complete and deliver a new election form.

You may change an election you previously made with respect to some or all of your eligible option grants, including an election to withdraw all of your eligible option grants from the Offer, only in accordance with the provisions of Section 5 of the Offer to Exchange. You may change your mind after you have submitted an election form and withdraw some or all of your elected eligible options from the Offer at any time on or before the expiration date (the expiration date currently is expected to be June 25, 2024, at 9:00 p.m., Pacific Daylight Time). If we extend the expiration date, you may change or withdraw your election of your tendered eligible options at any time until the extended Offer expires. In addition, although we intend to accept all validly tendered eligible options promptly after the expiration of the Offer, due to certain requirements under U.S. securities laws, if we have not accepted your eligible options by 9:00 p.m., Pacific Daylight Time, on July 24, 2024 (which is the 40^th U.S. business day following the commencement of the Offer), you may withdraw your eligible options at any time thereafter up to such time as Socket Mobile does accept your properly tendered eligible options.

You may change your election and elect to exchange all of your eligible option grants, some of your eligible option grants, or none of your eligible option grants pursuant to the terms and conditions of the Offer. To change an election you previously made with respect to some or all of your eligible option grants, including an election to withdraw all of your eligible option grants from the Offer, you must deliver a valid new election form indicating only the eligible option grants you wish to exchange in the Offer or a valid new election form indicating that you reject the Offer with respect to all of your eligible options, by completing the election process set forth in Section 5 of the Offer to Exchange and described below on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024.

1. Print the election form.

2. Deliver the properly completed election form by email or fax to:

Attn: Lynn Zhao

Email: lynn@socketmobile.com

Fax: (510) 933-3016

You may change your mind as many times as you wish, but you will be bound by the properly submitted election form we receive last on or before the expiration date. If you change your election to withdraw some or all of your eligible option grants, you may elect later to exchange the withdrawn eligible option grants again at any time on or before the expiration date. All eligible option grants that you withdraw will be deemed not properly tendered for purposes of the Offer, unless you subsequently properly elect to exchange such eligible option grants on or before the expiration date. To reelect to exchange some or all of your eligible option grants, you must submit a new election form to Socket Mobile on or before the expiration date by following the procedures described in Section 4 of the Offer to Exchange. This new election form must be properly completed, signed, and dated after your previously-submitted election form, and must list all eligible option grants you wish to exchange. Upon our receipt of your properly completed, signed and dated election form, any prior election form will be disregarded in its entirety and will be considered replaced in full by the new election form.

No partial tenders.

If you intend to tender an eligible option grant through the Offer, you must tender all of your shares of Socket Mobile’s common stock subject to that eligible option grant.

You may pick and choose which of your outstanding eligible option grants you wish to exchange if you hold more than one eligible option grant and you may choose to exchange in the Offer one or more of your eligible option grants without having to exchange all of your eligible option grants. However, if you decide to participate in the Offer to exchange an eligible option grant, you must elect to exchange that entire eligible option grant (that is, all eligible options subject to that eligible option grant).

However, if you have an eligible option grant that is subject to a domestic relations order (or comparable legal document as a result of the end of a marriage) and a person who is not an eligible service provider beneficially owns a portion of that eligible option grant, then in order to participate in the Offer with respect to such eligible option grant, you may accept the Offer with respect to the entire remaining outstanding portion of the eligible option grant, including the portion beneficially owned by the other person, as long as you are the legal owner of the eligible option grant. We will not accept partial tenders of eligible option grants, so you may not accept the Offer with respect to a portion of an eligible option grant that is beneficially owned by you while rejecting it with respect to the portion beneficially owned by someone else. As you are the legal owner of the eligible option grant, we will respect an election properly made by you, but will not be responsible to you or the beneficial owner of the eligible option grant for any errors made by you with respect to such eligible option grant.

Signatures on election forms.

A paper election form must be signed by the holder of the eligible options and the signature must correspond with the name as written on the face of the option agreement or agreements to which the eligible options are subject without alteration, enlargement or any change whatsoever. Your signature must be provided on the paper election form after it is printed. Socket Mobile will not accept any other method of signature, such as electronic signatures contained in the PDF of the election form or a printout of an electronic version of your signature on the election form. If the election form is signed by a trustee, executor, administrator, guardian, attorney in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and proper evidence satisfactory to Socket Mobile of the authority of that person to act in that capacity must be submitted with the election form.

Other information on election forms.

In addition to signing the election form, you must indicate your name and the date and time (Pacific Daylight Time) at which you signed. You also must include your current email address.

Requests for assistance or additional copies.

Any questions and any requests for additional copies of the election form or other Offer documents may be directed to Lynn Zhao, our Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016. Copies will be furnished promptly at Socket Mobile’s expense.

Irregularities.

We will determine, in our discretion, all questions about the validity, form, eligibility (including time of receipt) and acceptance of any eligible options. Our determination of these matters will be given the maximum deference permitted by law. However, you have all rights accorded to you under applicable law to challenge such determination in a court of competent jurisdiction. Only a court of competent jurisdiction can make a determination that will be final and binding upon the parties. We reserve the right to reject any election of any eligible option tendered for exchange that we determine is not in an appropriate form or that we determine is unlawful to accept. We will accept all properly tendered eligible options that are not validly withdrawn, subject to the terms of the Offer. We also reserve the right to waive any of the conditions of the Offer or any defect or irregularity in any tender of any particular eligible options or for any particular eligible service provider, provided that if we grant any such waiver, it will be granted with respect to all eligible service providers and tendered eligible options in a uniform and nondiscriminatory manner. No tender of eligible options will be deemed to have been made properly until all defects or irregularities have been cured by you or waived by us. We have no obligation to give notice of any defects or irregularities in any election and we will not incur any liability for failure to give any such notice. This is a one-time offer. We will strictly enforce the offering period, subject only to an extension that we may grant in our discretion.

Important: Election forms must be received via email to Lynn Zhao, our Chief Financial Officer, at lynn@socketmobile.com or by fax at (510) 933-3016 on or before 9:00 p.m., Pacific Daylight Time, on June 25, 2024 (unless the Offer is extended).

Additional documents to read.

You should be sure to read the Offer to Exchange, all documents referenced therein, the election form and its associated instructions, and the Announcement Email, before deciding to participate in the Offer.

Important tax information.

Please refer to Section 14 of the Offer to Exchange which contains important tax information. We also recommend that you consult with your personal advisers before deciding whether or not to participate in the Offer.

Exhibit (a)(1)(D)

Form of Confirmation Email Regarding Receipt of Election Form

Socket Mobile, Inc. (alternatively referred to as “Socket Mobile,” the “Company,” “we,” “our” or “us”) has received your election form dated [DATE], 2024, by which you accepted Socket Mobile’s offer (the “Offer”) to exchange certain outstanding stock options for the same number of new options with a new exercise price, subject to a new vesting schedule, and subject to the terms and conditions of the Offer.

If you change your mind, you may change your election as to some or all of your eligible option grants, including to make an election to withdraw some or all of your eligible option grants from the Offer, by timely submitting a new, properly completed election form indicating the change to your election, pursuant to the election process set forth in the Offer to Exchange Certain Outstanding Stock Options for New Stock Options, dated May 28, 2024 (referred to as the “Offer to Exchange”) and described below. Any new election form must be submitted on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024.

1. Print the election form.

2. Deliver the properly completed election form by email or fax to:

Attn: Lynn Zhao

Email: lynn@socketmobile.com

Fax: (510) 933-3016

You may change your mind after you have submitted an election form and withdraw some or all of your elected eligible options from the Offer at any time on or before the expiration date. You may elect to exchange additional eligible option grants, fewer eligible option grants, all of your eligible option grants or none of your eligible option grants. You may change your mind as many times as you wish, but you will be bound by the properly submitted election form that we receive last on or before the expiration date.

Any new election form must be properly completed, signed, and dated after your previously-submitted election form, and must designate all eligible option grants you wish to exchange or indicate that you reject the Offer with respect to all of your eligible options. Upon our receipt of your properly completed, signed and dated election form, any prior election form will be disregarded in its entirety and will be considered replaced in full by the new election form.

Only election forms that are properly completed and submitted and actually received by Socket Mobile on or before the expiration date via email or fax will be accepted. Election forms submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted. We will not accept delivery of any election form after expiration of the Offer. Your delivery of election forms is at your risk.

If you have questions, please direct them to Lynn Zhao, our Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

Please note that our receipt of your election form is not by itself an acceptance of the eligible option grants for exchange. For purposes of the Offer, Socket Mobile will be deemed to have accepted eligible option grants for exchange that are validly elected for exchange and not properly withdrawn as of when Socket Mobile gives oral or written notice to the eligible service providers generally of its acceptance for exchange of such eligible option grants. The notice may be made by press release, email or other method of communication. Socket Mobile’s formal acceptance of the properly tendered eligible options is expected to take place shortly after the end of the Offer period.

This confirmation email does not constitute the terms of the Offer. The full terms and conditions of the Offer are described in the following materials previously provided to you: (1) the Offer to Exchange; (2) the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer; and (3) the election form, together with its associated instructions.

Form of Confirmation Email Regarding Receipt of Withdrawal Form

Socket Mobile, Inc. (alternatively referred to as “Socket Mobile,” the “Company,” “we,” “our” or “us”) has received your election form dated [DATE], 2024, by which you rejected Socket Mobile’s offer (the “Offer”) to exchange any of your outstanding eligible options for the same number of new options with a new exercise price, subject to a new vesting schedule, and subject to the terms and conditions of the Offer.

If you change your mind and decide that you would like to participate in the Offer with respect to some or all of your withdrawn eligible option grants, you must timely submit a new, properly completed election form indicating the change to your election, pursuant to the election process set forth in the Offer to Exchange Certain Outstanding Stock Options for New Stock Options, dated May 28, 2024 (referred to as the “Offer to Exchange”) and described below. Any new election form must be submitted on or before the expiration date, currently expected to be 9:00 p.m., Pacific Daylight Time, on June 25, 2024.

1. Print the election form.

2. Deliver the properly completed election form by email or fax to:

Attn: Lynn Zhao

Email: lynn@socketmobile.com

Fax: (510) 933-3016

If you submit a new election form, any previously submitted election forms will be disregarded, so your new election form must designate all eligible option grants you wish to exchange.

Only election forms that are properly completed and submitted and actually received by Socket Mobile on or before the expiration date via email will be accepted. Election forms submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted. We will not accept delivery of any election form after expiration of the Offer. Your delivery of election forms is at your risk.

If you have questions, please direct them to Lynn Zhao, our Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

Exhibit (a)(1)(E)

Form of Reminder Email

Socket Mobile’s offer to exchange certain outstanding stock options for new stock options (referred to as the “Offer”) currently is still open. Please note that the Offer will expire at 9:00 p.m., Pacific Daylight Time, on June 25, 2024, unless we extend the Offer. The Offer deadline will be strictly enforced, so we encourage you to give yourself adequate time to make your election if you wish to participate.

According to our records, you have not submitted an election form for your eligible options. Participation in the Offer is completely voluntary; however, if you would like to participate in the Offer, we must receive your election form by email to lynn@socketmobile.com or via fax to Lynn Zhao, our Chief Financial Officer, at (510) 933-3016, no later than 9:00 p.m., Pacific Daylight Time, on June 25, 2024 (unless we extend the Offer).

Only election forms that are properly completed and submitted and actually received by Socket Mobile on or before the expiration date via email or fax will be accepted. Election forms submitted by any other means, including interoffice, U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted. If you have any questions, please direct them to Lynn Zhao, Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

This notice does not constitute the Offer. The full terms of the Offer are described in (1) the Offer to Exchange Certain Outstanding Stock Options for New Stock Options, dated May 28, 2024; (2) the email from Kevin J. Mills, President and Chief Executive Officer, dated May 28, 2024, announcing the Offer; and (3) the election form, together with its associated instructions. You may access these documents through the U.S. Securities and Exchange Commission’s website at www.sec.gov or by contacting Lynn Zhao, our Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

Exhibit (a)(1)(F)

Notice to Eligible Service Providers Regarding Expiration of Offering Period

To:

Eligible Service Providers

From:

Kevin J. Mills, President and Chief Executive Officer, Socket Mobile, Inc.

Date:

[_____], 2024

Subject:

Expiration of Socket Mobile’s Stock Option Exchange Program

As of 9:00 p.m., Pacific Daylight Time, on June 25, 2024, we closed the Socket Mobile, Inc. (“Socket Mobile”) Offer to Exchange Certain Outstanding Stock Options for New Stock Options (the “Offer”). If you were an eligible service provider who properly elected to participate in the Offer by tendering some or all of your eligible option grants and did so on or before the expiration of the Offer, your tendered eligible option grants have been accepted for exchange pursuant to the Offer. Such eligible options have been cancelled, and you no longer have any rights with respect to those eligible options. You have been granted new stock options in exchange for those cancelled eligible options, in accordance with the terms and conditions of the Offer.

As described in the Offer documents, you will receive option agreement(s) for your new options that have been granted to you in the Offer in exchange for your properly tendered and cancelled eligible options.

If you have any questions, please contact Lynn Zhao, Chief Financial Officer, by email at lynn@socketmobile.com or by phone at (510) 933-3016.

SOCKET MOBILE, INC.

2004 EQUITY INCENTIVE PLAN

(As Amended April 29, 2010, June 5, 2013, June 4, 2015, March 20, 2019, June 15, 2022, and January 31, 2024)

1. Purposes of the Plan. The purposes of this Plan are:

to attract and retain the best available personnel for positions of substantial responsibility,

to provide additional incentive to Employees, Directors and Consultants, and

to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares.

2. Definitions. As used herein, the following definitions will apply:

(a) “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

(c) “Award” means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Performance Units or Performance Shares.

(d) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

(e) “Board” means the Board of Directors of the Company.

(f) “Cash Position” means as to any Performance Period, the Company’ s level of cash and cash equivalents, including, without limitation, amounts classified for financial reporting purposes as short-term investments and restricted investments.

(g) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

(iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

(h) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.

(i) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(j) “Common Stock” means the common stock of the Company.

(k) “Company” means Socket Mobile, Inc., a Delaware corporation, or any successor thereto.

(l) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.

(m) “Determination Date” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.

(n) “Director” means a member of the Board.

(o) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

(p) “Earnings Per Share” means as to any Performance Period, the Company’s or a business unit’s Net Income, divided by a weighted average number of common shares outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with U.S. GAAP; provided, however, that if Net Income as to any such Performance Period is a negative amount, then Earnings Per Share means the Company’s or business unit’s Net Income, divided by a weighted average number of common shares outstanding, determined in accordance with U.S. GAAP.

(q) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s) “Excluded Items” includes, without limitation, (i) incentive compensation, (ii) in-process research and development expenses, (iii) acquisition costs, (iv) compensation expense from equity compensation, (v) operating expenses from acquired businesses, (vi) amortization of acquired intangible assets, and (vii) such other unusual or one-time items as may be identified by the Administrator.

(t) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

(u) “Fiscal Year” means the fiscal year of the Company.

(v) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(w) “Inside Director” means a Director who is an Employee.

(x) “Net Income” means as to any Performance Period, the Company’s or a business unit’s income after taxes determined in accordance with U.S. GAAP, adjusted for any Excluded Items approved for exclusion by the Administrator.

(y) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

(z) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(aa) “Operating Cash Flow” means as to any Performance Period, the Company's or a business unit's cash flow generated from operating activities, as reported in the Company’s cash flow statements and calculated in accordance with U.S. GAAP, adjusted for any Excluded Items approved for exclusion by the Administrator.

(bb) “Operating Income” means as to any Performance Period, the Company’s or a business unit’s income from operations determined in accordance with U.S. GAAP, adjusted for any Excluded Items approved for exclusion by the Administrator.

(cc) “Option” means a stock option granted pursuant to the Plan.

(dd) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(ee) “Participant” means the holder of an outstanding Award.

(ff) “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award granted under the Plan. As determined by the Administrator, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the following measures: (a) Cash Position, (b) Earnings Per Share, (c) Net Income, (d) Operating Cash Flow, (e) Operating Income, (f) Return on Assets, (g) Return on Equity, (h) Return on Sales, (i) Revenue and (j) Total Shareholder Return. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant.

(gg) “Performance Period” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion.

(hh) “Performance Share” means an Award granted to a Participant pursuant to Section 9.

(ii) “Performance Unit” means an Award granted to a Participant pursuant to Section 9.

(jj) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

(kk) “Plan” means this 2004 Equity Incentive Plan, as may be amended from time to time.

(ll) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

(mm) “Return on Assets” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s Operating Income divided by average net Company or business unit, as applicable, assets, determined in accordance with U.S. GAAP.

(nn) “Return on Equity” means as to any Performance Period, the percentage equal to the Company’s Net Income divided by average stockholder’s equity, determined in accordance with U.S. GAAP.

(oo) “Return on Sales” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s Operating Income divided by the Company’s or the business unit’s, as applicable, Revenue.

(pp) “Revenue” means as to any Performance Period, the Company’s or business unit’s net sales, determined in accordance with U.S. GAAP.

(qq) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(rr) “Section 16(b)” means Section 16(b) of the Exchange Act.

(ss) “Service Provider” means an Employee, Director or Consultant.

(tt) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan.

(uu) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with an Option, that pursuant to Section 8 is designated as a SAR.

(vv) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

(ww) “Total Shareholder Return” means as to any Performance Period, the total return (change in share price plus reinvestment of any dividends) of a Share.

(xx) “U.S. GAAP” means generally accepted accounting principles in the United States.

3. Stock Subject to the Plan.

(a) Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is (i) the number of Shares which have been reserved but not issued under the Company’s 1995 Stock Plan, as amended and restated (the “1995 Plan”) as of the date of stockholder approval of this Plan, (ii) any Shares returned to the 1995 Plan as a result of termination of options or repurchase of Shares issued under such plan, with the maximum available pursuant to clauses (i) and (ii) equal to 599,774 shares, and (iii) an annual increase to be added on the first day of the Company’s fiscal year beginning in 2005, equal to the least of (A) 400,000 Shares, (B) 4% of the outstanding Shares on such date or (C) an amount determined by the Board. The Shares may be authorized, but unissued, or reacquired Common Stock. Shares will not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. Upon payment in Shares pursuant to the exercise of an SAR, the number of Shares available for issuance under the Plan will be reduced only by the number of Shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of Shares owned by the Participant, the number of Shares available for issuance under the Plan will be reduced by the gross number of Shares for which the Option is exercised.

(b) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full (including, for the avoidance of doubt, any shares that are surrendered pursuant to the 2019 Exchange Program or any other exchange program), the unpurchased Shares which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan, whether upon exercise of an Award, will not be returned to the Plan and will not become available for future distribution under the Plan, except that if unvested Shares are forfeited or repurchased by the Company, such Shares will become available for future grant under the Plan.

(c) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.

4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

(ii) Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine the number of Shares to be covered by each Award granted hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;

(vi) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

(viii) to modify or amend each Award (subject to Section 17(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Awards longer than is otherwise provided for in the Plan. Notwithstanding the foregoing, the Administrator may not modify or amend an Option or SAR to reduce the exercise price of such Option or SAR after it has been granted (except for adjustments made pursuant to Section 12), unless approved by the Company’s stockholders and neither may the Committee, without the approval of the Company’s stockholders, cancel any outstanding Option or SAR and immediately replace it with a new Option or SAR with a lower exercise price;

(ix) to allow Participants to satisfy withholding tax obligations in such manner as prescribed in Section 13;

(x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

(xi) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award

(xii) to make all other determinations deemed necessary or advisable for administering the Plan.

(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

6. Stock Options.

(a) Limitations.

(i) Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

(ii) The following limitations will apply to grants of Options:

(1) No Service Provider will be granted, in any Fiscal Year, Options and/or Stock Appreciation Rights to purchase more than 750,000 Shares.

(2) In connection with his or her initial service, a Service Provider may be granted Options and/or Stock Appreciation Rights to purchase up to an additional 1,250,000 Shares, which will not count against the limit set forth in Section 6(a)(2)(ii)(1) above.

(3) The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 12.

(4) If an Option and/or Stock Appreciation Right is cancelled in the same Fiscal Year in which it was granted (other than in connection with a transaction described in Section 12), the cancelled Option and/or Stock Appreciation Right, as applicable, will be counted against the limits set forth in subsections (1) and (2) above. For this purpose, if the exercise price of an Option and/or Stock Appreciation Right is reduced, the transaction will be treated as a cancellation of the Option and/or Stock Appreciation Right and the grant of a new Option and/or Stock Appreciation Right, as applicable.

(b) Term of Option. The Administrator will determine the term of each Option in its sole discretion. In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

(i) Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, subject to the following:

(1) In the case of an Incentive Stock Option

a) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant.

b) granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.

(2) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator, but shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

(iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note; (4) other Shares, provided Shares acquired directly or indirectly from the Company, (A) have been owned by the Participant and not subject to substantial risk of forfeiture for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised; (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; (6) a reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s participation in any Company-sponsored deferred compensation program or arrangement; (7) any combination of the foregoing methods of payment; or (8) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

(d) Exercise of Option.

(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with an applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Award, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iii) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

7. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Notwithstanding the foregoing, during any Fiscal Year no Participant will receive more than an aggregate of 250,000 Shares of Restricted Stock; provided, however, that in connection with a Participant's initial service as an Employee, an Employee may be granted an aggregate of up to an additional 500,000 Shares of Restricted Stock. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

(c) Transferability. Except as provided in this Section 7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

(i) Section 162(m) Performance Restrictions. For purposes of qualifying a Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals, which will be set by the Administrator on or before the Determination Date. In this connection, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals).

8. Stock Appreciation Rights.

(a) Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

(b) Number of Shares. The Administrator will have complete discretion to determine the number of SARs granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Options and/or SARs covering more than 750,000 Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an Employee, an Employee may be granted Options and/or SARs covering up to an additional 1,250,000 Shares.

(c) Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of SARs granted under the Plan. In the case of a freestanding SAR, the exercise price will be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant. The exercise price of a tandem or affiliated SARs will equal the exercise price of the related Option.

(d) SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(e) Expiration of SARs. An SAR granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) also will apply to SARs.

(f) Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

(ii) The number of Shares with respect to which the SAR is exercised.

At the discretion of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

9. Performance Units and Performance Shares.

(a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant provided that during any Fiscal Year, (a) no Participant will receive Performance Units having an initial value greater than $1,000,000, and (b) no Participant will receive more than 250,000 Performance Shares. Notwithstanding the foregoing limitation, in connection with a Participant's initial service as an Employee, an Employee may be granted up to an additional 500,000 Performance Shares.

(b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c) Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Provider. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(i) General Performance Objectives. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, or any other basis determined by the Administrator in its discretion.

(ii) Section 162(m) Performance Objectives. For purposes of qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may determine that the performance objectives applicable to Performance Units/Shares will be based on the achievement of Performance Goals. The Administrator will set the Performance Goals on or before the Determination Date. In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Performance Units/Shares under Section 162(m) of the Code (e.g., in determining the Performance Goals).

(d) Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.

(e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

(f) Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

10. Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

11. Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.

12. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits set forth in Sections 3, 6, 7, 8 and 9.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

(c) Change in Control. In the event of a Change in Control, each outstanding Award will be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Performance Shares and Performance Units, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

With respect to Awards granted to a non-employee Directors that are assumed or substituted for, if on the date of or following such assumption or substitution the Participant’s status as a Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares subject thereto, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Performance Shares and Performance Units, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met.

For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Performance Units, the number of implied shares determined by dividing the value of the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

Notwithstanding anything in this Section 12(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

13. Tax Withholding

(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, or (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

14. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

15. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

16. Term of Plan. Subject to Section 20 of the Plan, the Plan will become effective upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 17 of the Plan. The Plan was approved by the Board on April 23, 2004, and by the stockholders on June 16, 2004. On June 5, 2013, the stockholders approved extension of the term to April 23, 2024. On June 15, 2022, the stockholders approved extension of the term to April 23, 2034.

17. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

(b) Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

18. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

19. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

20. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

21. Underwater Stock Option Exchange Program. Notwithstanding any contrary provision of the Plan, the Company’s stockholders on April 29, 2010 approved a one-time-only option exchange program described in the proxy statement with respect to the Company’s 2010 Annual Meeting of Stockholders under which certain outstanding Options may be surrendered or cancelled at the election of the person holding such Option (and therefore made available for future grant under Section 3(c) to the extent such Option was granted under the Plan or the 1995 Plan) in exchange for new Options with a lower exercise price (the “Exchange Program”). The Administrator may provide for, and the Company may implement, the Exchange Program within one hundred and twenty (120) days after the date of such Annual Meeting.

22. 2019 Stock Option Exchange Program. Notwithstanding any contrary provision of the Plan, the Company’s stockholders on May 22, 2019 approved a one-time-only option exchange program on substantially the terms described in the proxy statement with respect to the Company’s 2019 Annual Meeting of Stockholders (including with respect to the described potential modifications to the terms of the exchange program) and pursuant to which certain outstanding Options may be surrendered or cancelled at the election of the person holding such Option (and therefore made available for future grant under Section 3 of the Plan) in exchange for new Options (the “2019 Exchange Program”). The Administrator may provide for, and the Company may implement, the 2019 Exchange Program within one hundred and twenty (120) days after the date of such Annual Meeting.

23. 2024 Stock Option Exchange Program. Notwithstanding any contrary provision of the Plan, the Company’s stockholders on May 15, 2024 approved a one-time-only option exchange program on substantially the terms described in the proxy statement with respect to the Company’s 2024 Annual Meeting of Stockholders (including with respect to the described potential modifications to the terms of the exchange program) and pursuant to which certain outstanding Options may be surrendered or cancelled at the election of the person holding such Option (and therefore made available for future grant under Section 3 of the Plan) in exchange for new Options (the “2024 Exchange Program”). The Administrator may provide for, and the Company may implement, the 2024 Exchange Program within one hundred and twenty (120) days after the date of such Annual Meeting.

Exhibit (d)(2)

SOCKET MOBILE, INC.

2004 EQUITY INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

This Award Agreement ("Agreement") is between ________________________ ("Optionee") and Socket Mobile Inc. ("Company").

I. NOTICE OF STOCK OPTION GRANT

Pursuant to the Socket Mobile, Inc. 2004 Equity Incentive Plan, as amended April 29, 2010, June 5, 2013, June 4, 2015, March 20, 2019, June 15, 2022, and January 31, 2024 ("Plan"), Socket Mobile, Inc., (“Company”), has granted Optionee an option (the "Option") to purchase shares of Common Stock of Company ("Shares") subject to the terms and conditions of the Plan and this Stock Option Award Agreement ("Agreement").

The Plan also includes any action or decision by the Administrator of the Plan. A copy of the Plan is attached as Exhibit A. The Plan can also be accessed on line through the Company's intranet, as follows:

http://intranet.socketcomm.com/hr/stock_option_plan.asp All capitalized terms used in this Agreement and not otherwise defined shall have the respective meanings set forth in this Agreement and the Plan.

Name of Optionee (the “Optionee”)
Date of Grant
Type of Option (Incentive or Nonstatutory)
Shares Granted
Vesting Start Date	[E.g., date of grant]
Expiration Date (“Expiration Date”)	[E.g., 10 years from the date of grant]
Exercise Price/Share (“Option Exercise Price”)
Number of Months to Vest

Vesting Schedule: [Insert Vesting Schedule, e.g.: Subject to any accelerated vesting provisions contained in the Plan[, in the option agreement related to the stock option that was cancelled in exchange for this Option pursuant to the 2024 Exchange Program,] or in a written agreement between Optionee and the Company, (1/48^th of the Shares subject to the Option shall vest and become exercisable on each monthly anniversary of the Vesting Start Date (and if there is no corresponding day, on the last day of the month), provided that Optionee continues to be a Service Provider through each applicable vesting date.]

II. AGREEMENT

1. Grant of Option. Company hereby grants to Optionee on the Date of the Grant the Option to purchase on or prior to the Expiration Date, or such earlier date as is specified herein, all or any part of the total number of Shares at the Exercise Price per share set forth in this Notice of Grant and subject to the terms and conditions of the Plan and this Agreement. In the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

2. Term/Expiration Date. For each Option granted, unless otherwise provided in the Plan, the term of the Option ("Term") shall be ^[1]ten (10) years from the Date of the Grant. The Expiration Date shall be the date of the expiration of the Term.

3. Vesting. The Option shall initially be unvested and unexercisable. The Option shall start to vest from the Vesting Start Date and vest and become exercisable in accordance with the vesting schedule set forth in Notice of Grant section of this Agreement and in accordance with the applicable provisions of the Plan and this Agreement.

Notwithstanding the terms and conditions in any employment agreement between Company and Optionee, vesting of Optionee's Options ceases on the date Optionee ceases being a Service Provider (“Termination Date”). “Service Provider” is as defined in the Plan. Unless otherwise required by law, stated in the Plan or in an employment agreement between Company and Optionee, vesting is suspended during any unpaid leave of absence.

4. Exercise.

a. Right to Exercise. No portion of any Option may be exercised until such portion has vested and become exercisable. No portion of this Stock Option shall be exercisable after the Expiration Date.

_____________________________

[1] Note: If the Option is an incentive stock option granted to an employee who, as of immediately prior to the grant, owns, or is treated for purposes of the incentive stock option rules as owning, more than 10% of the total combined voting power of all classes of Socket Mobile stock (or the stock of any Socket Mobile parent or subsidiary), this will be changed to a “five (5) years”.

Award Agreement [Optionee’s Name]

Date (Year)

Page 2

b. Exercise Period While Optionee is a Service Provider. While Optionee is a Service Provider, vested portions of any Option shall be exercisable, in whole or in part, during the Term of the Option.

c. Post Termination Exercise Period. If Optionee ceases to be a Service Provider on a date ("Termination Date"), except as otherwise provided by the Administrator of the Plan, the period within which Optionee has to exercise the Options granted in this Agreement will be subjected to the post-termination exercise period as set forth below. Any portion of this Option that is not vested and exercisable on the Termination Date shall terminate immediately and be forfeited and cancelled for no consideration. Any option not exercised within the post termination exercise period shall thereafter be terminated.

[INSERT APPLICABLE POST-TERMINATION EXRCISE PERIOD, E.G.:

This Option, to the extent vested, shall be exercisable until the Expiration Date; provided however, this Option may terminate earlier than provided in this paragraph or earlier than the expiration of the post-termination exercise period indicated below pursuant to Section 12 (“Adjustments; Dissolution or Liquidation; Merger or Change in Control”) of the Plan. In no event may Optionee exercise the Option after the Expiration Date.]

[Unless otherwise required by law, or stated in an employment agreement approved by the Administrator between Company and Optionee, or stated in the Plan, this Agreement, to the extent that the Option is exercisable on the Termination Date, the Option granted in this Agreement shall be exercisable for three (3) months following the Termination Date or until the Expiration Date, if earlier. In no event may Optionee exercise the Option after the Expiration Date. In all cases, this Option may terminate earlier than provided in this paragraph or earlier than the expiration of the post-termination exercise period indicated below pursuant to Section 12 (“Adjustments; Dissolution or Liquidation; Merger or Change in Control”) of the Plan.

For purposes hereof, the Administrator's determination of the reason for termination of Optionee as a Service Provider shall be conclusive and binding on Optionee and his or her representatives or legatees.

(i) Post-Termination Exercise Period for Executives. In accordance with the Plan, post-termination exercise periods for executives of Company are established under an executive employment agreement between Company and the executive.

(ii) Post-Termination for Long Time Service Providers. In accordance with the Plan, Service Providers with at least ten (10) years of continuous service to Company and who voluntarily terminate his or her service to Company may exercise the Option until the Expiration Date.

Award Agreement [Optionee’s Name]

Date (Year)

Page 3

(iii) Post-Termination Exercise Period for Termination due to Death or Disability. In accordance with the Plan, upon the termination of Optionee as a Service Provider due to Optionee's death or Disability (as defined in the Plan), to the extent that the Option is exercisable on the Termination Date, the Option shall be exercisable for twelve (12) months following Optionee's Termination Date or until the Expiration Date, if earlier. In no event may Optionee exercise Options after the Term.]

[ALTERNATE POST-TERMINATION EXERCISE PERIOD]

d. Method of Exercise. Subject to the terms of this Agreement, Optionee may exercise any portion of the Option that is exercisable under the Plan by the delivery of a written exercise notice to Company prior to the Expiration Date. The exercise notice shall specify the following: Optionee's election to exercise all or portions of the Option, the Date of Grant of the Option, the number of Shares Optionee elects to purchase, the Exercise Price per Share of the Option, the aggregate Exercise Price as to all exercised shares, and such other representations and agreements as may be required by Company. A sample form of the Exercise Notice is attached as Attachment C. The exercise notice shall be accompanied by payment of the aggregate Exercise Price as to all exercised Shares. Each option shall be deemed to be exercised upon receipt by Company of a fully executed exercise notice accompanied by the aggregate Exercise Price. Exercises may also be made through a brokerage firm that has in place a same day exercise and/or sell program with Company. In the event when exercises are made through such a brokerage firm, pursuant to the procedure agreed upon between Company and said brokerage firm, an exercise notice may be delivered to Company via electronic mail.

No Shares shall be issued pursuant to the exercise of an Option granted in this Agreement unless such issuances and such exercise comply with applicable laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

e. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of Optionee: (i) cash; (ii) check; or (iii) payment on behalf of Optionee from a brokerage firm that has in place a same day exercise and sell program with Company.

f. Tax Obligations. Optionee is responsible for reporting gains or losses on stock option transactions for state and federal income tax purposes. Optionee agrees to make appropriate arrangement with Company for the satisfaction of all federal, state, local or foreign income and employment tax withholding requirements applicable to the Option Exercise. Optionee acknowledges and agrees that Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

Award Agreement [Optionee’s Name]

Date (Year)

Page 4

5. Incentive Stock Options. The Option in this Agreement is designated as either an Incentive Stock Option or a Nonstatutory Stock Option. If the Option has been designated as an Incentive Stock, it is intended to qualify as an "incentive stock option" as defined in Section 422 of the Internal Revenue Code of 1986 and the resultant regulations promulgated thereunder, as amended from time to time and to the extent permitted under applicable law. To the extent that any portion of the Stock Option does not so qualify, it shall be deemed as a Nonstatutory Stock Option.

Optionee understands and agrees that even if an option is designated as an Incentive Stock Option, there are requirements under Section 422 of the Internal Revenue Code which have to be met in order to qualify such option as an Incentive Stock Option and receive the special tax treatment afforded to Incentive Stock Options. Accordingly, notwithstanding a designation of the Option as an Incentive Stock Option, Optionee understands that, in order to qualify the Option as an Incentive Stock Option under Section 422 of the Internal Revenue Code,

(a) Optionee may not sell, gift, transfers, or otherwise dispose of any of the Shares acquired pursuant to the Option on or before the later of the date (1) two years after the Date of the Grant, or (2) one year after Company has transferred the Shares to Optionee pursuant to his or her exercise of the Option. In the event that Optionee disposes of the Shares, Optionee may be subjected to income tax withholding by Company on the compensation income recognized by Optionee. Optionee agrees that if he or she disposes (whether by sale, gift, transfer or otherwise) of any Shares within either of those periods, he or she will notify Company within 30 days after such disposition. Optionee also agrees to provide Company with any information concerning any such disposition required by Company for tax purposes.

(b) the Option must be exercised within three (3) months after termination of Optionee's employment as an employee of Company(or 12 months in the case of death or disability) in order to qualify as an incentive stock option.

(d) Optionee cannot take an unpaid leave of absence that exceeds three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract.

(e) the Fair Market Value of the Shares of the Option, together with any other Incentive Stock Options granted by Company to Optionee that are exercisable for the first time by Optionee during a calendar year has an aggregate Fair Market Value does not exceed $100,000. To the extent that said aggregate Fair Market Value exceeds $100,000, such Option will not qualify as an Incentive Stock Option and is treated as a Nonstatutory Stock Option. The Fair Market Value of the Shares will be determined as of the time of the Option grant with respect to such Shares.

6. Administration. At the time of the signing of this Agreement, the Compensation Committee of the board of directors of Company has been designated as the Administrator of the Plan. The powers of the Administrator are stated in the Plan, including but not limited to Section 4 (b) and (c) of the Plan. The Administrator of the Plan shall construe and determine all questions of interpretation concerning this Option Agreement and the terms of the Plan. In accordance with the Plan, the Administrator's decisions, determinations and interpretations of the Plan and this Option Agreement will be final and binding on Optionee.

Award Agreement [Optionee’s Name]

Date (Year)

Page 5

7. No Effect on Employment or Service. Neither the Plan nor this Agreement confer upon Optionee any right with respect to continuing Optionee's relationship as a Service Provider with Company, nor will they interfere in any way with Optionee’s right or Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

8. Miscellaneous Provisions.

a. Incorporation of the Plan. Notwithstanding anything herein to the contrary, this Option shall be subject to and governed by all the terms and conditions of the Plan.

b. Non-Transferability of Option. The Option is personal to Optionee. Optionee may not transfer the Option in any manner otherwise than by will or by the laws of descent or distribution. The Option may be exercised during Optionee's lifetime only by Optionee (or by Optionee's guardian or legal representative in the event of Optionee's incapacity.) Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to Company, and may revoke or change such designation at any time by filing written notice of revocation or change with Company. Such beneficiary may exercise Optionee's Option in the event of Optionee's death to the extent provided herein. If Optionee does not designate a beneficiary, or if the designated beneficiary predeceases Optionee, the legal representative of Optionee may exercise the Options to the extent provided herein in the event of Optionee's death.

b. Successors and Assigns. Company has the right to assign this Agreement. The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Company.

c. Binding Effect. The terms of the Plan and this Agreement shall be binding upon Company and its successors, assigns, and legal representatives. The terms of the Plan and this Agreement shall be binding upon the Optionee and his/her executors, administrators, legal representative, designated beneficiary, heirs, and successors.

d. Entire Agreement and Conflicts. The Plan, this Agreement, and any employment agreement between Optionee and Company constitute the entire agreement between the parties with respect to the subject matter hereof and supersede and replaces in their entirety all prior understanding, undertakings, discussions, and agreements, written or oral, between Company and Optionee hereto pertaining to the subject matter hereof. If a conflict arises between this Agreement and the Plan, the terms and conditions of the Plan shall govern. If a conflict arises between this Agreement and any employment agreement between Company and Optionee, the terms and conditions of the employment agreement between Company and Optionee shall govern.

Award Agreement [Optionee’s Name]

Date (Year)

Page 6

e. Severability. All provisions contained herein are severable. In the event any provisions of this Agreement shall be determined illegal, invalid, or unenforceable, such determination shall in no manner affect the legality, validity, or enforceability of any other provision thereof and this Agreement shall be interpreted as if such invalid provision was not contained herein.

f. Amendments and Modifications. This Agreement may not be orally changed, modified or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may be amended, changed, modified, or terminated in any respect whatsoever only by a writing duly executed by Optionee and Company.

g. Governing Law. This Agreement shall be interpreted, construed, governed and enforced in accordance with the laws of the State of California, without regard to conflict of law principles that would result in the application of any law other than the law of the State of California.

h. Equitable Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

i. Notices. All notices, request, consent and other communications shall be in writing and be deemed given when delivered personally or when received if mailed by first class registered or certified mail, postage prepaid. Notices to Company or Optionee shall be addressed as set forth underneath their signatures below, or to such other address or addresses as may have been furnished by such party in writing to the other.

j. Counterparts. For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each of which shall be deed an original, but all of which shall constitute one and the same document.

Optionee acknowledges receipt of a copy of the Plan. Optionee expressly warrants and agrees that he/she has reviewed the Plan and this Agreement in their entirety and fully understands all the provisions of the Plan and Agreement, and hereby accepts the Option subject to all the terms and provisions Plan and the Agreement.

Optionee acknowledges that he/she has been advised by Company, if he/she so desires, to discuss the terms of this Agreement with his/her own legal counsel, tax advisor, financial advisor, or anyone else he or she chooses; and had an opportunity to obtain the advice of counsel or advisor prior to executing this Agreement.

Award Agreement [Optionee’s Name]

Date (Year)

Page 7

Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administer upon any questions arising under the Plan or this Agreement.

Optionee agrees that the Company may, in its discretion, send Optionee a report of the status of this Option (a) in electronic version to Optionee's email address at Company, (b) as a printed copy to Optionee's residence indicated below; or (c) as a printed copy to Optionee's office at Company.

Optionee further agrees to notify Company upon any change in the residence address indicated below.

This Agreement is hereby accepted, and the terms and conditions of the Plan, the Grant Notice and this Agreement, are hereby agreed to, by the undersigned as of the date first above written.

OPTIONEE

__________________________________________

Name

___________________________________________

Address

___________________________________________

Address

OPTIONEE’S ACKNOWLEDGEMENT

I acknowledge that I have read the foregoing Incentive Stock Option Agreement and understand the contents thereof.

___________________________________________________________________________

Signature of Optionee

Name of Optionee :____________________________________________________________

Award Agreement [Optionee’s Name]

Date (Year)

Page 8

SOCKET MOBILE, INC.

___________________________________________

By: Name:

___________________________________________

Title:

Address: 40675 Encyclopedia Cir.,

Fremont, CA 94538

DESIGNATED BENEFICIARY: __________________________________________

Beneficiary’s Address: ___________________________________________________

Award Agreement [Optionee’s Name]

Date (Year)

Page 9

EXHIBIT A

STOCK OPTION EXERCISE NOTICE (Use is Optional)

Socket Mobile, Inc.,

40675 Encyclopedia Cir.,

Fremont, CA 94538

Attention: Chief Financial Officer

1. Exercise of Option. Effective as of today, _______________, _________________, the undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase _________ shares of the Common Stock ("Shares") of Socket Mobile, Inc. ("Company") under and pursuant to the terms of the Socket Mobile, Inc 2004 Equity Incentive Plan, as amended April 29, 2010, June 5, 2013, June 4, 2015, March 20, 2019, June 15, 2022, and January 31, 2024 ("Plan") and the Stock Option Agreement ("Agreement") between Optionee and Company dated _______________ for the option granted to Optionee on ________________ ("Option").

2. Delivery of Payment. Optionee herewith delivers to Company the full purchase price of the Shares, as set forth in the Agreement, and any and all withholding taxes due in connection with the exercise of said Option by including herein payment in the amount of $ __________( $____________ representing the purchase price and $ ________ representing the tax withholdings.) Optionee has chosen the following form(s) of payment:

[ ] 1. Cash

[ ] 2. Check payable to Socket Mobile, Inc.

[ ] 3. Payment on behalf Optionee from a brokerage firm that has in place a same day exercise and/or sell program with Company

3. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understand the Plan and the Agreement and agree to abide by and be bound by the terms and conditions.

Optionee represents and warrants that Optionee understands that Optionee may suffer adverse tax or other consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax, legal, or other advisors Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on Company for any tax, legal, or other advice.

Award Agreement [Optionee’s Name]

Date (Year)

Page 10

4. Successors and Assigns. Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of Company. This Exercise Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

5. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be timely submitted by Optionee or by Company to the Administrator of the Plan. The resolution of such a dispute by the Administrator shall be final and binding on all parties.

6. Governing Law; Severability. This Exercise Notice is governed by the substantive laws but not the choice of law rules of the State of California. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the Agreement will continue in full force and effect.

7. Entire Agreement. The Plan and Agreement are incorporated herein by reference This Exercise Notice, the Plan, the Option Agreement, and any employment agreement between Optionee and Company constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to Optionee's interest except by means of a writing signed by Company and Optionee.

Submitted by:		Accepted by
		Socket Mobile, Inc.


Name:		By


		Title
Address:		Address:
		40675 Encyclopedia Circle
		Fremont, CA 94538


		Date Received

Award Agreement [Optionee’s Name]

Date (Year)

Page 11

Exhibit 107

Calculation of Filling Fee Tables

Schedule TO

(Form Type)

Socket Mobile, Inc.

(Exact Name of Registrant as Specified in its Charter)

Table 1: Transaction Valuation

	Transaction Valuation(1)	Fee Rate	Amount of Filing Fee(2)
Fees to Be Paid	$679,033.00	0.00014760	$100.23
Fees Previously Paid	—		—
Total Transaction Value	$679,033.00
Total Fees Due For Filing			$100.23
Total Fees Previously Paid			$202.05
Total Fee Offsets			—
Net Fees Due			$0.00

(1)

Estimated solely for purposes of calculating the amount of the filing fee. The calculation of the Transaction Valuation assumes that all stock options to purchase shares of the issuer’s common stock that may be eligible for exchange in the offer will be exchanged pursuant to this offer. This calculation assumes stock options to purchase an aggregate of 716,204 shares of the issuer’s common stock, having an aggregate value of $679,033.00 as of May 22, 2024, calculated based on a Black-Scholes option pricing model, will be exchanged or cancelled pursuant to this offer.

(2)

The amount of the filing fee, calculated in accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended, equals $147.60 per $1,000,000 of the aggregate amount of the Transaction Valuation (or 0.01476% of the aggregate Transaction Valuation). The Transaction Valuation set forth above was calculated for the sole purpose of determining the filing fee and should not be used for any other purpose.

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