NASDAQ REFERENCE LINKS

Access to all Nasdaq listing information and forms can be accessed at the following:

https://listingcenter.nasdaqomx.com/Home.aspx

DIRECTORY OF NEWS SERVICES*

The use of any of these services will satisfy NASDAQ’s listing rules that require the disclosure of specific information in a press release or public announcement. The Company must ensure that the full text of the required announcement is disseminated publicly. The Company has not satisfied this requirement if the announcement is published as a headline only or if the news service determines not to publish the full text of the story.

* Nasdaq cannot render advice to the Company with respect to the format or content of the public announcement. The following is provided only as a guide that should be modified following consultation with securities counsel: the Company received a Nasdaq Staff Deficiency Letter on (DATE OF RECEIPT OF STAFF DEFICIENCY LETTER) indicating that the Company fails to comply with the (STOCKHOLDERS’ EQUITY, MINIMUM BID PRICE, MARKET VALUE OF PUBLICLY HELD SHARES, etc.) requirement(s) for continued listing set forth in Listing Rule(s)__________.

The Nasdaq Capital Market
Continued Listing Requirements

This table identifies the minimum standards for continued listing on The Nasdaq Capital Market.. Each incidence of non-compliance by the Company is denoted with an “X”.

COMPANY SYMBOL: SCKT

________________________

⁸ The term, “listed securities”, is defined as “securities listed on NASDAQ or another national securities exchange.”

⁹ Publicly held shares is defined as total shares outstanding, less any shares held directly or indirectly by officers,

directors or any person who is the beneficial owner of more than 10% of the total shares outstanding of the

company.

¹⁰ Total shareholders include both holders of beneficial interest and holders of record.

¹¹ An electronic communications network (ECN) is not considered a market maker for the purpose of these rules.

Factors to be considered when preparing your plan of compliance

• The submission should be definitive, concise and directly address the company's plan to regain compliance in the near term and maintain compliance over the long term.

• Our Listing Rules allow Staff to provide a company up to 180 calendar days from the date of the deficiency notice to regain compliance. The company should take this into consideration when drafting its plan of compliance. In addition, the plan should discuss the company's ability to sustain compliance for the next six to twelve months. Note that the 180 day extension is not automatic. Extensions of time may vary and are not granted in all cases.

• If the company's plan of compliance includes a private placement involving common stock, or any securities convertible or exercisable into common stock, a merger, a debt conversion, or other similar transactions, please ensure that the proposed action complies with NASDAQ's corporate governance requirements, particularly the shareholder approval rules, and other provisions of the Listing Rules. Please contact your Listing Analyst for further guidance on these matters.

• If a transaction is being contemplated to remedy the deficiency, please include a balance sheet and income statement evidencing the pro forma effect of the transaction. The financial statements should be based on historical financial information, not more than 45 days old. Please show three columns of data (historical, all adjustments, and the pro-forma totals).

• The submission should include projections, if available, for the next 12 months. Please include balance sheet and income projections. Clearly state all assumptions being made.

• Provide copies of all definitive or draft agreements or contractual arrangements for private placements, mergers, or other financial arrangements. Please include a list of investors for private placements. The company should file all applicable Notifications for Listing of Additional Shares (LAS).

• Plans relying on future projected revenues to comply with the equity requirement are generally not accepted unless the company has definitive contracts and the revenue will be received in the near term.

• Staff will consider the company's net losses when reviewing a proposed equity-raising transaction to determine whether the plan is sufficient to regain and sustain compliance with the equity requirement.

The following are some examples of plans of compliance that have been accepted by Staff:

A Capital Market-listed company provided a definitive agreement for an asset sale, which would raise $50 million in the near term. Based on a pro forma balance sheet, after accounting for projected net losses, the company would have equity of more than $15 million immediately after the transaction and more than $10 million at the end of the fiscal year, exceeding the minimum $2.5 million requirement.

A Global Market-listed company announced its intention to complete a public offering in the near term and provided a press release announcing the pricing of an underwritten firm commitment public offering. Net proceeds of the offering were expected to be approximately $40 million. Subsequently, the company filed a pro forma balance sheet, adjusted to reflect the public offering, showing stockholders equity of approximately $45 million, in excess of the minimum $10 million requirement.

A Global Market-listed company stated that certain holders of the company's warrants had exercised 500,000 warrants for proceeds of $12 million. Staff had concerns with the company's ability to sustain compliance based on the company's history of losses. In that regard, the company provided definitive agreements from the warrant holders relating to the exercise of additional warrants, which when exercised, would result in proceeds to the company of $5,000,000. Based on the exercise, the company stated that stockholders equity had increased to approximately $22 million, on a pro-forma basis, in excess of the minimum $10 million requirement.

A Global Market-listed company announced the acquisition of a target company shortly after receiving notice from Staff that it was not in compliance with the $10 million minimum equity requirement. Therefore, the company believed that it had already achieved compliance with the minimum equity standard and anticipated that it would be able to file audited financial statements and pro forma financial information to reflect compliance within two weeks.

The following is an example of a plan of compliance that was not accepted by Staff:

A Global Market-listed company stated that it was pursuing a potential convertible note offering of between $20 million and $30 million to be completed before the end of the year, followed by an equity offering of up to $30 million. The company was not able to complete the convertible note offering in the near term and did not provide definitive terms for either transaction.