What changed in FRANKLIN WIRELESS CORP's 10-K — 2023 vs 2024

In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings (loss) are reduced by the portion of the net earnings (loss) of the subsidiary applicable to non-controlling interests. Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments.

Smart Box Solutions (In Development) 4G/5G M2M Gateway o Enhanced gateway supports both 4G and 5G networks, enabling reliable and secure machine-to-machine communication, essential for industrial applications and remote monitoring systems.

On-Device Artificial Intelligence (AI) o Integrating advanced AI capabilities directly into the devices, we provide real-time data processing and decision-making at the edge, enhancing efficiency and reducing latency for critical IoT applications.

Quvo Family Guardian Solutions Parental Controls o Comprehensive parental control features, ensuring a safe and secure online environment for children by managing and monitoring their internet and application usage.

Senior Care o Enhancing senior care solutions for the safety and well-being of elderly family members through monitoring and assistance features tailored to their needs. 2 JEXtream MDM/NMS Solutions “JEXtream” is Franklin’s Cloud based telecom grade server platform for 5G devices and routers, enables enhanced remote management of device functionality.

Mobile Device Management (MDM) o Comprehensive management of mobile devices, ensuring security, compliance, and efficient operation across various mobile environments Network Management System (NMS) o Robust tools for monitoring, managing, and optimizing network performance, ensuring reliable connectivity and operational excellence.

Absent a specific claim for infringement of intellectual property, from time to time we have and expect to continue to license technology, intellectual property, and software from third parties.

We may be unable to compete effectively. o If we fail to develop and maintain strategic relationships, we may not be able to penetrate new markets. o If we fail to develop and timely introduce new products and services or enter new markets for our products and services successfully, we may not achieve our revenue targets, or we may lose key customers or sales, and our business could be harmed.

EVENTS THAT COULD IMPAIR OUR ABILITY TO DEVELOP, MANUFACTURE AND DELIVER OUR SOLUTIONS. o We rely on third parties to manufacture and warehouse many of our products, which exposes us to a number of risks and uncertainties outside our control. o We depend on sole source suppliers for some components used in our products.

The availability and sale of those services would be harmed if any of these suppliers is not able to meet our demand and alternative suitable products are not available on acceptable terms, or at all. o Natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend, and could impact consumer spending. o If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase. o We may be unable to adequately control the costs or maintain adequate supply of components and raw materials associated with our operations. o If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory or lose sales from having too few products. o Product liability, product replacement or recall costs could adversely affect our business and financial performance. o We rely on third-party software and other intellectual property to develop and provide our solutions and significant increases in licensing costs or defects in third-party software could harm our business. o Our solutions integrate with third-party technologies and if our solutions become incompatible with these technologies, our solutions would lose functionality, and our customer acquisition and retention could be adversely affected. 8 LEGAL AND REGULATORY CHANGES THAT COULD REDUCE OR IMPAIR OUR ABILITY TO OPERATE. o Evolving regulations and changes in applicable laws relating to data privacy may increase our expenditures related to compliance efforts or otherwise limit the solutions we can offer, which may harm our business and adversely affect our financial condition. o Enhanced United States fiscal, tax and trade restrictions and executive and legislative actions could adversely affect our business, financial condition, and results of operations. o The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results. o An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed. o If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed.

POTENTIAL NEGATIVE IMPACTS RELATED TO INTERNATIONAL OPERATIONS. o Due to the global nature of our operations, we are subject to political and economic risks of doing business internationally. o Weakness or deterioration in global economic conditions or jurisdictions where we have significant foreign operations could have a material adverse effect on our results of operations and financial condition. o Weakness or deterioration in global political conditions where we have significant business interests could have a material adverse effect on our business, results of operations and financial condition. o Fluctuations in foreign currency exchange rates could adversely affect our results of operations. o Unionization efforts in certain countries in which we operate could materially increase our costs or limit our flexibility. o Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax and other laws and regulations. o A governmental challenge to our transfer pricing policies or practices could impose significant costs on us.

EVENTS THAT COULD HARM BUSINESS DEVELOPMENT ACTIVITIES AND IMPAIR OR REDUCE REVENUE. o We may acquire companies and businesses, and/or divest assets or businesses.

The completion of acquisition or divestiture transactions could have an adverse effect on our financial condition. o If our goodwill and acquired intangible assets become impaired, we may be required to record a significant charge to earnings. 9 POTENTIAL EVENTS THAT COULD NEGATIVELY IMPACT THE VALUE OF OUR SECURITIES. o Our share price has been highly volatile in the past and could be highly volatile in the future. o Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited o The price of our stock may be vulnerable to manipulation, including through short sales. o Ownership of our common stock is concentrated, and as a result, certain stockholders may exercise significant influence over the Company. o We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock. o If financial or industry analysts do not publish research or reports about our business, or if they issue negative or misleading evaluations of our stock, our stock price and trading volume could decline. o If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to report our financial results timely and accurately, which could adversely affect investor confidence in us, and in turn, our results of operations and our stock price. o If the accounting estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may be adversely affected. o Changes to the accounting systems or new accounting system implementations may be ineffective or cause delays in our ability to record transactions and/or provide timely financial results. o Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business. o Our quarterly operating results have fluctuated in the past and may fluctuate in the future, which could cause declines or volatility in the price of our common stock.