NASDAQ: SCKT

Our Internet home page is https://www.socketmobile.com;
however, the information on or that can be accessed through it is not part of this Annual Report. Our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and any amendments to such reports are available free of charge on or through our internet
home page as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange
Commission.

Products

Our primary products are cordless data capture devices
incorporating barcode scanning or RFID/Near Field Communications (NFC) technologies that connect over Bluetooth. All products work with
applications running on smartphones, mobile computers and tablets using operating systems from Apple® (iOS), Google™ (Android™)
and Microsoft® (Windows®). We offer an easy-to-use software developer kit (CaptureSDK) to app providers, which enables them to
provide their consumers with our advanced barcode scanning features. Our products are integrated by the app providers and are marketed
by the app providers or their resellers. The number of app providers supporting our data capture solutions continues to grow.

XtremeScan family. Our XtremeScan product
line consists of three configurations: XtremeScan Case, XtremeScan, and XtremeScan Grip, all designed for iPhone. This product
family marks a significant milestone in our commitment to delivering high-quality data capture solutions for customers in
industrial, manufacturing, warehousing, oil and gas, and airports. XtremeScan enables iPhones to withstand harsh industrial
conditions, offering robust scanning capabilities with military-grade durability. The product family expanded in 2024 with the
introduction of several XtremeScan Mag devices, catering for the growing number of workers using a single phone for both personal
and business needs. The Bring Your Own Device ( BYOD) market is a significant yet underserved segment where we see strong growth
potential. XtremeScan is fully compatible with iPhone 17e, a durable, cost-effective device designed for industrial environments.
With an extra-long battery life, enhanced drop resistance, and the trusted iOS platform, it is expected to become the go-to device
for demanding industrial sectors. XtremeScan, combined with iPhones 17e, will empower industrial businesses with durable, adaptable,
and future-ready data capture technology.

SocketCam family. Our camera-based barcode
scanning software includes SocketCam C820 and C860, compatible with both iOS and Android. The C820 is a free, easily integrated camera
scanning solution, while the C860 offers a significant upgrade for users with advanced scanning needs. The C860 stands out due to its
swift and accurate reading of damaged barcodes and exceptional performance in poor lighting conditions, setting it apart in the industry.
Both C820 and C860 enable App providers to serve a wide range of customers with diverse data capture requirements, from price-sensitive
to performance-sensitive. End-users needing more than a free camera-based scanners can upgrade to advanced C860 or opt for a Socket hardware
scanner.

DuraScan® Family. Our DuraScan® family
includes 700 Series companion scanners (D720, D730, D740, D745, D751, D755, D760, D762, D764, D765),
800 Series attachable scanners (D800, D820, D840, D860), and the Wearable 900 Series (DW930, DW940). Designed for rugged work environments,
DuraScan data readers offer exceptional durability, making them ideal for industries such as warehousing, manufacturing, and distribution.

SocketScan family. Our SocketScan family offers
a range of versatile solutions designed for seamless integration into various business applications. It includes the 300 Series countertop
readers (S320, S370), the 500 Series NFC Mobile Wallet Reader (S550), the 700 Series companion scanners (S720, S730, S740), and
the 800 Series attachable scanners (S800, S820, S840, S860). With an easy setup process and user-friendly design, SocketScan enhances
efficiency by delivering fast, high-performance 1D/2D scanning while reducing human errors. Whether scanning barcodes, reading NFC data,
or handling combo applications, SocketScan ensures accuracy and reliability across diverse industries.

DuraSled Family. Our DuraSled (DS800, DS820,
DS840, DS860) integrates a smartphone with a high-performance, protective barcode sled scanner, creating a one-handed solution. Designed
for efficiency, these sled scanners offer native support with select Apple and Samsung smartphones, enabling full application control
of a one-handed data collection experience.

Software Developer Kit (CaptureSDK). Our CaptureSDK
supports all Socket Mobile data capture devices through a single integration, simplifying the process for app developers to incorporate
our data capture capabilities into their applications. By installing our SDK, developers enable their customers to select the most suitable
Socket Mobile products for their needs. CaptureSDK allows developers to modify captured data, control the placement of barcode or RFID
data within their applications, and manage user feedback to confirm successful transactions and data transmissions. Additionally, CaptureSDK
includes SocketCam, a feature that enables the use of a device's built-in camera for occasional or lower-volume data collection requirements.
CaptureSDK is compatible with development tools such as Swift Package Manager, Maven, and NuGet, and supports high-level frameworks including
MAUI, React Native, Java, JavaScript, and Flutter, facilitating seamless integration of our data capture solutions into diverse applications.

We design our own products and are responsible for
all associated test equipment. We subcontract the manufacturing of all our product components to independent third-party contract manufacturers
located in the United States, Mexico, Taiwan, Singapore, Malaysia and China that have the equipment, know-how and capacity to manufacture
products to our specifications. We perform final product assembly, testing and packaging at, and distribute our products from, our Fremont,
California facility. We offer our products worldwide through two-tier distribution enabling customers to purchase from large numbers of
online resellers around the world including app providers who resell their own solutions along with our data capture products. Our products
are also available on our online stores.

We believe growth in mobile applications and the mobile
workforce resulting from technical advances in mobile technologies, cost reductions in mobile devices and the growing adoption by businesses
of mobile applications for smartphones and tablets, builds a growing demand for our products. Our data capture products address the need
for speed and accuracy by today’s mobile workers and by the systems supporting those workers, thereby enhancing their productivity
and allowing them to exploit time-sensitive opportunities and improve customer satisfaction.

Our Mission, Vision, and Core Values

Our mission is to supply innovative and cost-effective
data capture tools for businesses that use mobile platforms to conduct business in mobile environments.

Our vision is to manage the complexity of capturing
and delivering data across a spectrum of data sources, network technologies, and mobile systems so that our customers can concentrate
on applications of the data. Our customers are app providers and their consumers in need of data capture solutions.

We have embraced the following core values:

Accountability: We take ownership and
responsibility for our actions and performance. We learn from our mistakes and celebrate our successes.

Customer Focus: We live by and for our
customer’s success. We want to earn their top-of-mind choice, enhance their final customer experience, and create value through
our relationship.

Excellence: We take pride in what we make
and do and value the creativity, talent, ambition, and drive of each employee to be his or her best and to achieve superior results.

Integrity: We are honest and ethical in
all our dealings with each other, customers, business partners, suppliers, competitors, and other stakeholders. We say what we mean and
mean what we say.

Mutual Respect: We value people's differences
and diverse opinions, and we treat each other fairly.

Marketing Dynamics

Application provider relationships. We actively
support app providers to integrate our data capture solutions into their applications. We provide an easy-to-use software developer kit
(CaptureSDK) and training and technical support to app providers. We support the marketing activities of app providers in promoting the
applications that include our products. Once our data capture products are integrated by the app provider, our products become an ingredient
of the application solution and part of the app provider’s marketing program. We provide regular CaptureSDK updates including updates
that support the latest operating system updates provided by Apple, Google, and Microsoft. We spend extensive engineering time and resources
to ensure that our products are compatible with a wide variety of the most popular smartphones, tablets, and mobile computers running
a variety of operating systems. We comply with the standards set by the standard-setting bodies whose technologies are used in our products
such as Bluetooth SIG, NFC Forum, GS1, AIM Global, CIPURSE, and FeliCa.

Mobile Markets. Our revenues are primarily
driven by sales of barcode scanners integrated into mPOS (mobile Point of Sale) applications used with Apple tablets and other mobile
devices. Many mPOS application providers develop software for smaller retailers using tablets as cash registers. Other mobile markets
addressed by app providers include commercial services (field workers), asset tracking, manufacturing process and quality control, transportation
and logistics (goods tracking and movement), event management (ticketing, entry, access control, and identification), medical and education.
We expect these markets to increase the use of mobile applications and the demand for barcode scanners.

Expanded and improved product offerings. We
offer a wide range of products that enable app providers and their consumers to design their mobile systems to meet their specific requirements,
and we encourage our distributors to support the full range of our products. The goal is for customers to view Socket Mobile as a primary
source for their mobile data capture needs. Our products include stand-alone barcode scanners in both durable and standard cases, attachable
barcode scanners, RFID/NFC reader/writer and camera-based scanning software. We provide a software developer kit to app providers to enable
our advanced data capture software to be easily integrated into applications. See “Item 1 Business. The Company and its Products”
for a more detailed description of our products.

We design our products to comply with the regulations
of the many worldwide agencies that regulate the safety, performance, and use of electronic products.

Competitive pricing. We have designed our products
to be priced competitively although we are subject to changes in component pricing by our suppliers. We update our products from time
to time and work with our vendors to achieve reductions in component pricing.

Worldwide product availability. We distribute
our products through a worldwide distribution network that places products into geographic regions to shorten purchasing time and provides
a credit shield to us. Our largest distributors are Ingram Micro®, ScanSource® and Blue Star, and they support a worldwide network
of online resellers including Shopify®, Amazon.com, and CDW®. We also offer products in our own online stores.

Strong Brand Name. We believe that our products
make a difference in the daily work life of mobile workers and the people they serve. We are building a brand image focused on business
mobility. This image closely associates us with business mobility solutions and to reflect this image, we began doing business as Socket
Mobile, Inc. in January 2007 and changed our legal name to Socket Mobile, Inc. in April 2008. We stress to customers the design of our
products for the markets they serve, emphasizing quality and standards-based connectivity. Mobility requires products that are compact
and designed to be handled while mobile, with low power consumption to extend the time between charges and are easy to use. We strive
to offer high-performance products at a wide range of competitive prices. Through our developer support program, we work closely with
app providers who are developing productivity-enhancing applications for the mobile workforce. Our overall company brand identity and
positioning goal is to be a leading provider of easy-to-deploy business mobility data capture systems to the business mobility market.

Competition and Competitive Risks

The overall market for mobile handheld data capture
solutions is both complex and competitive. Our products compete with similar products in all our markets in the United States, Europe
and Asia, and we differentiate our products with our software developer kit and our underlying data capture software designed to work
with smartphones, tablets, and other mobile computers running the Apple, Android and Windows operating systems. Our longtime focus on
creating innovative mobile solutions for the mobile workforce has resulted in good brand name recognition and reputation. We believe that
our brand name identifies our products as durable, dependable, ergonomic, and easy to use, all features designed for a mobile worker while
mobile, and the breadth of our product offerings, including the extensively advanced features of our software and software developer kit,
will continue to differentiate us relative to our competitors.

Cordless Barcode Scanning. We offer a full
range of cordless barcode scanners designed to connect to smartphones, tablets, and other computing devices via Bluetooth. Our Software
Developer Kit (CaptureSDK) empowers app providers to integrate the capabilities of our Data Capture software into their applications,
setting our products apart. Our cordless barcode scanners face competition from similar products by Koamtec, Code Corporation and Opticon
(Japan). Users may choose a barcode scanner that connects directly to an Apple tablet, iPhone or a computer, as offered by Infinite Peripherals
and Honeywell. Alternatively, users may choose more rugged barcode scanners, with some integrated into computing devices from manufacturers
such as Datalogic, Honeywell®, and Zebra Technologies. Many of these devices lack Apple certification and connect to Apple devices
via Bluetooth in keyboard emulation mode. They may not offer extensive tools for app providers, such as our software developer kit (CaptureSDK),
to integrate the features of our sophisticated data collection scanning software and hardware. This could potentially limit their ability
to meet the consumer’s requirements fully.

NFC & RFID Contactless Reader/Writer. We
offer products that are certified by Apple Pay® Value Added Service (VAS), Google Wallet Smart Tap, NFC Forum, FeliCa®, and Bluetooth
SIG. Additionally, we provide a combo NFC & QR code mobile wallet reader, which combines NFC contactless technology with Bluetooth
barcode scanning data capture. These devices are compatible with Android, Apple iOS and Windows. They support all NFC Forum tag types
and devices compliant with the ISO 18092 standard, as well as ISO 14443 Type A and B smart cards, ISO 15693 tags, MIFARE®, FeliCa®,
NXP, and STMicro tags. They can also read Digital ID / mDL (Mobile Driver’s License). We face
challenges with the limitations on NFC usage in iPhones, although Apple has opened up some NFC capabilities to developers. We are exploring
new markets while working with current App developers to adopt our NFC reader/writer, giving us an advantage against competitors.

Camera Barcode Scanning. We offer two camera-based
barcode scanning products: the C820, a free and easily integrated camera scanning solution, and the C860, an upgraded and advanced scanning
solution. The C860's standout feature is its ability to read damaged barcodes swiftly and accurately, even in poor lighting conditions,
setting it apart from others in the industry. Our camera-scanning solutions face competition from applications provided by Scandit or
Manatee Works. However, our business model ensures affordability and flexibility, making our camera-scanning solutions accessible to a
wide range of businesses. Our App partners receive camera scanning solutions at no charge, which encourages them to adopt our solutions.
Users of their apps pay for the solutions only if the C860 is selected. For end users, most of their needs can be met with our free camera
scanning solution, except for a small percentage of needs requiring the advanced solution, C860. This makes our camera scanning solution
ideal for end users as well.

Proprietary Technology and Intellectual Property

We have been granted U.S. patents and design patents
and have other patent applications under review. We have registered trademarks with the U.S. Patent and Trademark Office for the mark
“Socket”, our logo, DuraScan, SocketScan, SocketCam, and XtremeScan.

We have developed technological building blocks that
enhance our ability to design new hardware and software products, offer products that run on multiple software and hardware platforms,
and manufacture and package products efficiently.

We own and control the design of our products, enabling
us to modify its features or software to meet specific customer requirements.

We have developed software programs that provide unique
functions and features for our data collection products. For example, our data collection software enables our barcode scanning products
to scan a variety of barcodes and to route the data to many different types of data files on operating systems used in Apple, Android,
and Windows mobile devices. We use Bluetooth technology to provide a completely functional Bluetooth solution enabling connections and
data transfers between Bluetooth-enabled devices. Our companion applications assist Apple iOS, Android and Windows users with the proper
setup and use of our data capture products.

We rely on a combination of patent, copyright, trademark
and trade secret laws, and confidentiality procedures to protect our proprietary rights. As part of our confidentiality procedures, we
generally enter into non-disclosure agreements with our employees, distributors and strategic partners, and limit access to our software,
documentation and other proprietary information. Despite these precautions, it may be possible for a third-party to copy or otherwise
obtain and use our products or technology without authorization, or to develop similar technology independently. In addition, we may not
be able to effectively protect our intellectual property rights in certain foreign countries. From time to time, we receive communications
from third parties asserting that our products infringe, or may infringe, their proprietary rights. Litigation could be brought against
us that could result in significant additional expense or compel us to discontinue or redesign some of our products.

Personnel

Our future success will depend in significant part
upon the continued service of certain of our key technical and senior management personnel, and our continuing ability to attract, assimilate
and retain highly qualified technical, managerial, and sales and marketing personnel. Our total employee headcount was 53 and 59 as of
December 31, 2025 and 2024, respectively. Our employees are not represented by a union, and we consider our employee relationships to
be good. As of December 31, 2025, we had 17 persons in sales, marketing, and customer service, 13 persons in development engineering,
7 persons in finance and administration, and 16 persons in operations.