Greetings and welcome to the Socket Mobile, third quarter 2012 management conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). It is now my pleasure to introduce your host, Jim Byers of MKR Group. Thank you sir, you may begin.

Thank you Operator. Good afternoon and welcome to Socket’s conference call today to review financial results for its 2012 third quarter ended September 30, 2012. On the call today from Socket are Kevin Mills, President and CEO; and Dave Dunlap, Chief Financial Officer. Socket Mobile distributed its earnings release over the wire service at the close of the market today. The release has also been posted on Socket’s website at www.socketmobile.com and in addition a replay of today’s call will be available at vcall.com shortly after the call’s completion and a transcript of this call will be posted on the Socket website within a few days. We’ve also posted replay numbers in today’s press release for those whishing to replay this call by phone. The phone replays will be available for one week. Before we begin, I would like to remind everyone that this conference call may contain forward-looking statements within the meaning of section 27-A of the Securities Act of 1933 as amended, and section 21-E of the Securities and Exchange Act of 1934 as amended. Such forward-looking statements include, but are not limited to statements regarding mobile computer data collection and OEM products, including details on timing, distribution and market acceptance of products, statements predicting trends of sales and market conditions and opportunities in the markets in which Socket sells its products. Such statements involve risks and uncertainties and actual results could differ materially from the results anticipated in such forward-looking statements, as a result of a number of factors including but not limited to the risk that manufacture of Socket’s products may be delayed or not rolled out as predicted due to technological market or financial factors, including the availability of product components and necessary working capital, the risk that market acceptance and sales opportunities may not happen as anticipated, the risk that Socket’s application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so, the risk that acceptance of Socket’s products and vertical application markets may not happen as anticipated, as well as other risks described in Socket’s most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. Socket does not undertake any obligation to update any such forward-looking statements. Now with that said, I would like to turn the call over to Socket’s President and CEO, Kevin Mills.

Thanks Jim. Good afternoon everyone and thank you for joining us today. In today’s call, I’ll begin with a brief review of our Q3 results and then discuss the business opportunities we see ahead and our outlook for the remainder of 2012. Our revenue for the third quarter was $2.8 million, consisting of $1.2 million of SoMo related sales, $1.3 million of cordless scanning related sales and about $300,000 from service and other legacy-related products. Total Q3 revenue was well below our expectation. The result of much lower sales in the month of September due to market transitions that delayed purchasing and deployment decision. This was very disappointing, given September is historically a strong sales month for Socket and also represents over 45% of our total sales in Q3. Let me explain in detail the factors as we see them, which impacted Q3 sales, as well as the return to a more healthier order pace we’ve seen taken place so far in Q4. Starting with our cordless scanning business. Over the past year our barcode scanning business has become increasingly dependant on Apple IOS devices. This has generally been a very good thing as sales of Apple products continue to increase and more businesses are looking for ways to incorporate the Apple platform into their daily working solutions. However in September we experienced the downside of working in the Apple world. On the 4th of September after weeks of rumors, Apply announced the intent to launch new products on September 12. On the 12th Apple announced the iPhone5 and iOS6, with availability beginning on the 19th, but in fact the 26th became a more realistic date for actual deliveries. The impact on Socket negatively affected sales targeted for Apple devices, since many of our customers simply did nothing in September.…

Thank you Kevin. Our third quarter 2012 revenue was $2.8 million, a decrease of 31% from the previous quarter and down 40% from the third quarter a year ago. Net loss for the third quarter was $983,000 or a loss of $0.20 per share compared to a net loss of $755,000 or a loss of $0.16 per share in the immediately preceding quarter and compared to a net loss of $727,00 or $0.16 per share in the third quarter a year ago. Much of the slow down occurred in the month of September, which historically yield a highest third month percentage of any of our quarters as customers return to work from vacations around the globe. For our cordless barcode scanning products, Apple’s announcement of the iPhone5 which stand most of September from their initial product launch, caused customers to slow down their quarter’s barcode scanning purchases in September until the new product could be evaluated. Our Socket scale of software has been submitted to Apple for certification on the iPhone5 and many developers have already successfully upgraded their barcode scanning applications for our products to work on the iPhone5, but the delay’s were sufficient to drop our quarter’s barcode scanning revenues from $1.527 million in the second quarter to $1.243 million in the third. Sales of our low cost model 7ci continued to grow up 28% over the previous quarter and represented 29% of our quarter’s barcode scanning revenue for the third quarter. Product transitions also impacted our handheld computer product revenues. We successfully staled out the remaining supplies of our analysis continued in SoMo650 handheld computer earlier in the quarter as supplies in the channel were nearing zero by mid-September. We also commenced shipping our new SoMo655 at the end of the second quarter, so that customers could…

Thank you. (Operator Instructions). Our first question comes from the line of Brian Swift with Security Research Associates. Please proceed with your question.

Yes, I just want to go quickly first to the financial side. You filed an 8-K after the last quarter that you had raised about 400,000 in these notes from the insiders and I’m looking at your press release today and you have notes payable of like some 760,000. So are those part of that or is there some other notes that I don’t remember being in that.

Actually those are not notes they are grouped I think, but we did obtain an addition cash advance basically from a merchant account structure. It’s a cash-in; it’s not a formal note and its just repaid on a weekly basis over a period of about five months. So that’s systematically paying down in small weekly increments, but that’s the rest of the total.

Okay, so in that $764,000, that includes the $400,000 that.

Yes, it does Brian. $400,000 is the amount that’s outstanding with the officers and directors.

And how much additional do you have authorized?

The board has authorized up to $350,000, but I think the intent is that it will happen over again an extended period of time, probably measured in months and it will only be drawn as needed. So it provides comfort and security that we will be able to meet our obligations, but particularly if we are looking to finance growth. But that’s the purpose of it, and it will only happen as the company requires it.

Okay. So what was the cash loss for the quarter?

Well, overall we had a $700,000 loss from operations, but that consisted of almost $800,000 when you add back the non-cash items to your net loss, which was $983,000. Our working capital changes were slightly positive, so your total is $700,000 loss from operations.

Okay. So your receivables were like $1.3 million. So when you collect those and your operating expenses are just under $2 million, you have the balance of the – I’m just trying to figure out where the cash is going to come from to get you though this latest debacle here.

Well, in addition we have some additional expenses reductions and on top of that we are seeing a pickup in orders and shipments. So your operating results we expect will improve.

And then we also have our bank line in place. The bank line basically allows us to generate cash on shipments and as long as it’s reasonably linier in Q4, with the reductions and expenses coupled with and prove shipments. Basically we need to be cash flow on a positive, on near weekly basis. The bridge money thus for getting will allows us sufficient time to get positive on a weekly basis, but our main concern today is cash and cash management.

But the bank line as you know varies with the level of receivables. So as our shipments go up, our bank line drawing capability goes up. We did drop from $900,000 to about $650,000 from end of June to end of September. We would expect as we increase our shipments in the fourth quarter that our ability to draw will grow possibility as much as double with what we have today. It really is a function of timing and how quickly we are able to get shipments out the door.

Okay. So anyway, you don’t think you need to do anything else in order to get you from here to the next quarter, unless something hiccups during this last quarter. So lets turn to the business side of it. You did mention the NCR business. Could you give us a little more color on how that is ramping and where the end markets are going and what your typical contribution is on an installation with that.

Okay, so I think there is a number of questions. So I would say that we saw a good ramp in August and September and basically we saw things slow down subsequently. We’ve had discussions with NCR of where they are. But before I get to that, let me just example the opportunity. NCR recently had an Investor Day and during that Investor Day they explained to their investors, they believe there is a market size opportunity of 8 million worldwide, iPad centric, point to sale systems will be sold over the coming years, okay, and they explained that they believe they can capture 20% plus of that. What they are offering people is a solution that for $70 per sales associate they will do your financial transactions and the person may or may not be equipped with equipment that is purchased directly from NCR. The solution includes an iPad, a cash draw, a printer, a barcode reader are the elements and a mag stripe reader. So there is five elements in the solution and depending on your situation you might use as little as two of them, the minimum said being the iPad and the mag stripe reader and then depending on whether you are going to email people the receipts, you may or may not need a printer, whether you are taking cash, you may not need a cash draw and depending on what you are selling you may or may not need a barcode scanner. The market acceptance seems to be there. I think one of the dilemmas that NCR faced is that the mag stripe readers they were using was an iDynamo, which was a 30-pin connector. Now Apple have come out with an iPad that has a lightning connector and there is no mag stripe…

The mag stripe reader, the new version is three months away or three months from what?

Yes, three months. Apple has to approve the mag stripe reader. We don’t make a mag stripe reader, so we don’t know exactly where they are away. But anyone using an iPad3 has no issue. Anyone who wants to use the iPad4, the iPad3 with retinal display has to have a different mag stripe reader. So there is some uncertainly still on that topic.

And so what potion of the NCR business uses the impacted…

I would actually say probably 80% of people have to have a mag stripe reader at the cash registers. So if the customers want to wait for the iPad 4 or the mini-iPad, then it delays the business by another 90-days. If customers are happy with the iPad3 as many of them were before the iPad4 was announced, it doesn’t delay us at all and that’s a customer-by-customer decision, I can’t do anything about that. But that’s the dilemma of actually those working with Apple, is that for the consumers they want to surprise everyone with new and exciting stuff and they are pretty good at it. On the business side we don’t do so well with surprises, because we like to plan and so now fortunately we also support androids, so we are seeing good demand in the android side, on the BlackBerry side and actually we are expecting good things in the Windows side with Windows Ace, the tables, etcetera, we will sport those, but today we are overly dependent on Apple and these changes have put a spanner in the works in the short term.

So how is Windows 8 impacting your 655 opportunity?

It’s actually not impacting us at all. I mean we end up servicing groups of people who want a small handheld device and again with Windows 8 the spec is for 10-inch tablets. We only have customers who need a pocketable, highly portable device and those are in the healthcare hospitality markets and I think that over the years we honed who can use it and someone who can’t and there still is a good demand for people who can’t. We’ve completed trials during the summer, large organizations like Kaiser Permanente and their solutions will roll out to staff there and there SoMo is the ideal device and they’ve looked at other devices, but it’s a portability issue. So I don’t think it impacts the SoMo at all and I did mentioned we did put out the SDK. Historically we didn’t haven an SDK for the SoMo, which meant that we were still running the older non-upgraded, non-improved versions of software that people originally develop for the iPAQ. I think it was essential to get the SDK in the market, so people could improve the user experience with the newer and better-improved hardware and we now have that done. The SoMo has been slower, but we still believe there is lot of road ahead for us. In fact even today, HP, we’re at the largest health conference in the U.K. and they were demonstrating the SoMo as their handheld solution to customers in the U.K. at that health conference, HP was.

So where are you seeing the biggest momentum as far as – you said October was pretty good relative to July.

Discounting stuff is defiantly where the short-term business is coming back. Android driven, Apple Drive, mobile phone centric driven, now that some of the dust has settled as regards what Apple is doing, a lot of people were able to verify during late September and early October that the application that they had written still ran on the iPhone5 if they got one and iOS6. Again, I don’t know if it’s generally known, but many applications stopped working and many applications that were written for iOS4 simply stopped working on iOS6. So everyone has to check. I think that checking has taken place and generally speaking we don’t have many technical issues. It’s just that everyone gets in this deer in the headlight mode while they don’t have the hardware and for all of September no one had the hardware.

Okay. All right, I’ll let somebody else ask a question.

All right, thank you very much Brian.

Thank you. There are no further questions as this time. I will turn the floor back over to Mr. Mills for closing comments.

Okay, I would like just to thank everyone for participating today and we look forward to our next conference call with hopefully with much improved results. Thank you very much.

This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.