FRANKLIN WIRELESS CORP. 10-K

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, DC 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For fiscal year ended June 30, 2024

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from
to.

 Commission file number: 001-14891

 (Exact name of Registrant as specified in its charter)

 Nevada

 (State or other jurisdiction of incorporation or organization)

 95-3733534

 (I.R.S. Employer Identification Number)

 3940 Ruffin Road

 Suite C

 San Diego, California

 (Address of principal executive offices)

 92123

 (Zip code)

 ( 858) 623-0000

 Registrant's telephone number,
including area code

 Indicate by check mark if the Registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the Registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

 If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large
accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company"
in Rule 12b-2 of the Exchange Act. (Check one)

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has
filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. Yes No

 Indicate by check mark whether the Registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the voting common
stock held by non-affiliates of the Registrant, based on the closing price of the Registrant's common stock on December 31,
2023, as reported by the NASDAQ, was approximately $ 27,520,000.
For the purpose of this calculation only, shares owned by officers, directors (and their affiliates) and 5% or greater stockholders
have been excluded. The Registrant does not have any non-voting stock issued or outstanding.

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of each class

 Trading symbol(s)

 Name of each exchange on which registered

 Common Stock, par value $.001 per share

 FKWL

 The Nasdaq Stock Market LLC

 The Registrant has 11,784,280 shares of common stock
outstanding as of September 30, 2024.

 INDEX TO ANNUAL REPORT ON FORM 10-K

 FOR THE FISCAL YEAR ENDED JUNE 30, 2024

 Page

 Item 1:

 Business

 Item 1A:

 Risk Factors

 Item 1B:

 Unresolved Staff Comments

 Item 1C:

 Cybersecurity

 Item 2:

 Properties

 Item 3:

 Legal Proceedings

 Item 4:

 Mine Safety Disclosures

 Item 5:

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6:

 Selected Financial Data

 Item 7:

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A:

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8:

 Financial Statements and Supplementary Data

 Item 9:

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A:

 Controls and Procedures

 Item 9B:

 Other Information

 Item 9C:

 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 Item 10:

 Directors, Executive Officers and Corporate Governance

 Item 11:

 Executive Compensation

 Item 12:

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13:

 Certain Relationships and Related Transactions, and Director Independence

 Item 14:

 Principal Accountant Fees and Services

 Item 15:

 Exhibits, Financial Statement Schedules

 Item 16:

 Form 10-K Summary

 Signatures

 Index to Financial Statements

 i

 NOTE ON FORWARD LOOKING STATEMENTS

 You should keep in mind the following points as you
read this Report on Form 10-K:

 o

 the terms "we," "us," "our," "Franklin," "Franklin Wireless," or the "Company" refer to Franklin Wireless Corp.

 o

 our fiscal year ends on June 30; references to fiscal 2024 and fiscal 2023 and similar constructions refer to the fiscal year ended on June 30 of the applicable year.

 This Annual Report on Form 10-K
contains statements which, to the extent they do not recite historical fact, constitute "forward looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward looking statements are used under the captions "Business," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and elsewhere in this Annual Report on Form 10-K. You can identify these statements by the use of words
like "may," "will," "could," "should," "project," "believe," "anticipate,"
"expect," "plan," "estimate," "forecast," "potential," "intend," "continue,"
and variations of these words or comparable words. Forward looking statements do not guarantee future performance and involve risks and
uncertainties. Actual results may differ substantially from the results that the forward looking statements suggest for various reasons,
including those discussed under the caption "Risk Factors." These forward looking statements are made only as of the date of
this Annual Report on Form 10-K. We do not undertake to update or revise the forward looking statements, whether as a result of new information,
future events or otherwise.

 ii

 ITEM 1. BUSINESS.

 BUSINESS OVERVIEW

 Doing business
as "FranklinAccess", we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation)
and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management
(MDM) solutions. We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things
(IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

 We have
majority ownership of Franklin Technology Inc. (FTI), a research and development company based in Seoul, South Korea. FTI primarily provides
design and development services for our wireless products.

 Our products are generally
marketed and sold directly to wireless operators and indirectly through strategic partners and distributors. Our primary markets are in
North America and Asia.

OUR STRUCTURE

 We incorporated in 1982 in California
and reincorporated in Nevada on January 2, 2008. The reincorporation had no effect on the nature of our business or our management. Our
headquarters are located in San Diego, California. This office provides marketing, sales, operations, finance and administrative support.
It is also responsible for all customer-related activities, such as marketing communications, product planning, product management and
customer support, along with sales and business development activities worldwide.

 Our consolidated financial statements
include accounts for the Company and its subsidiary, Franklin Technology Inc. ("FTI"). We have a majority voting interest
of approximately 66.3% (approximately 33.7% is owned by non-controlling interests) in FTI as of June 30, 2024, and 2023. 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. We identify our operating segments based on how our chief operating decision maker internally evaluates
separate financial information, business activities and management responsibility. We have one reportable segment, consisting
of the sale of wireless access products. We generate revenues from three geographic areas, consisting of North America and Asia. The following
enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements. The following
table contains certain financial information by geographic area:

 Fiscal Year Ended June 30,

 Net sales:

 2024

 2023

 North America

 $
 30,699,727

 $
 45,782,084

 Asia

 96,963

 166,432

 Totals

 $
 30,796,690

 $
 45,948,516

 Long-lived assets, net (property and equipment and intangible assets):

 North America

 $
 1,218,139

 $
 2,083,902

 Asia

 206,426

 198,070

 Totals

 $
 1,424,565

 $
 2,281,972

 OUR PRODUCTS

 We offer a wide variety of innovative
integrated wireless solutions utilizing the latest 5G and 4G LTE technologies including mobile hotspots, fixed wireless routers, and mobile
device management (MDM) solutions.

 5G/4G Wireless Broadband Products

 5G/4G LTE Wi-Fi Mobile Hotspot

 o

 Portable Wi-Fi hotspot routers that provide wireless Internet access with 5G/4G support for multiple simultaneously connected devices including laptops, tablets, and smart phones. Our Mobile Hotspot products help remote workers be productive while on the go and help students and educational institutions support remote learning activities.

 5G/4G Fixed Wireless Routers

 o

 Enhanced routing gateway that can provide support for both wired and wireless connectivity, offering solutions for consumers looking to replace Cable or DSL service ensuring a reliable and high-speed internet access.

 5G/4G Enterprise Gateway CPE

 o

 Enhanced routing gateway equipped with enterprise features offering solutions for enterprise customers looking to replace wired service, or wireless back-up for wired connections in a mission-critical environment or instant wireless connection in temporal locations.

 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.

 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)

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 Comprehensive management of mobile devices, ensuring security, compliance, and efficient operation across
various mobile environments

 Network Management
System (NMS)

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 Robust tools for monitoring, managing, and optimizing network performance, ensuring reliable connectivity
and operational excellence.

 CUSTOMERS

 Our global customer base is comprised
of wireless operators, strategic partners and distributors located primarily in North America and Asia.

 SALES AND MARKETING

 We market and sell our products
primarily to wireless operators located in North America and Asia regions mainly through our internal, direct sales organization and,
to a lesser degree, indirectly through strategic partners and distributors. The sales process is supported with a range of marketing activities,
including trade shows, product marketing and public relations.

 All of our wireless devices must
pass Federal Communications Commission (FCC) testing in order to be sold in United States markets. Global Certification Forum ("GCF")
test certifications are required in order to launch any wireless data products with wireless operators in North America. PCS Type Certification
Review Board ("PTCRB") test certifications also are required for all LTE and HSPA/GSM wireless data products. Other LTE and
5G test certifications, as defined by the 3GPP governing body, are required for LTE and 5G wireless data products. Certifications are
issued as being a qualifier of GCF, PTCRB, IEEE, CE, UL, Wi-Fi alliance certification and 3GPP standards.

 PRODUCTION AND MANUFACTURING OPERATIONS

 For the fiscal year ended June
30, 2024, the manufacturing of the majority of our products was performed by two independent companies located in Asia.

 EMPLOYEES

 As of June 30, 2024, we had 69
total employees at Franklin and FTI combined. We also use the services of consultants and contract workers from time to time. Our employees
are not represented by any collective bargaining organization, and we have never experienced a work stoppage.

 ITEM 1A: RISK FACTORS.

 The following risk factors do
not purport to be a complete explanation of the risks involved in our business.

 WE MAY NEED ADDITIONAL FINANCING
FOR PRODUCT DEVELOPMENT. Our financial resources are sufficient for our current operational needs; however, the amount of funding required
to develop and commercialize our products and technologies is highly uncertain. Adequate funds may not be available when needed or on
terms satisfactory to us. Lack of funds may cause us to delay, reduce and/or abandon certain or all aspects of our development and commercialization
programs. We may seek additional financing through the issuance of equity or convertible debt securities. In such event, the percentage
ownership of our stockholders would be reduced, stockholders may experience additional dilution, and such securities may have rights,
preferences, and privileges senior to those of our Common Stock. There can be no assurance that additional financing will be available
on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to
fund our expansion, take advantage of desirable acquisition opportunities, develop, or enhance services or products or respond to competitive
pressures. Such inability could have a materially adverse effect on our business, results of operations and financial conditions.

 WE MAY INFRINGE THE INTELLECTUAL
PROPERTY RIGHTS OF OTHERS. The industry in which we operate has many participants that own, or claim to own, proprietary intellectual
property. In the past we have received, and in the future may receive, claims from third parties alleging that we, and possibly our customers,
violate their intellectual property rights. Rights to intellectual property can be difficult to verify and litigation may be necessary
to establish whether or not we have infringed the intellectual property rights of others. In many cases, these third parties are companies
with substantially greater resources than us, and they may be able to, and may choose to, pursue complex litigation to a greater degree
than we could. Regardless of whether these infringement claims have merit or not, we may be subject to the following:

 o

 We may be liable for potentially substantial damages, liabilities, and litigation costs, including attorneys' fees;

 o

 We may be prohibited from further use of the intellectual property and may be required to cease selling our products that are subject to the claim;

 o

 We may have to license third-party intellectual property, incurring royalty fees that may or may not be on commercially reasonable terms. In addition, there is no assurance that we will be able to successfully negotiate and obtain such a license from the third party;

 o

 We may have to develop a non-infringing alternative, which could be costly and delay or result in the loss of sales. In addition, there is no assurance that we will be able to develop such a non-infringing alternative;

 o

 The diversion of management's attention and resources;

 o

 Our relationships with customers may be adversely affected; and

 o

 We may be required to indemnify our customers for certain costs and damages they incur in such a claim.

 In the event of an unfavorable
outcome in such a claim and our inability to either obtain a license from the third party or develop a non-infringing alternative, then
our business, operating results and financial condition may be materially adversely affected and we may have to restructure our business.

 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. There is no assurance that we will be able to maintain our third-party licenses or obtain new licenses when required
and this inability could materially adversely affect our business and operating results and the quality and functionality of our products.
In addition, there is no assurance that third party licenses we execute will be on commercially reasonable terms.

 Under purchase orders and contracts
for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement claims for
which we may have no corresponding recourse against our third-party licensors. This potential liability, if realized, could materially
adversely affect our business, operating results, and financial condition.

 WE OPERATE IN AN INTENSIVELY COMPETITIVE
MARKET. The wireless broadband data access market is highly competitive, and we may be unable to compete effectively. Many of our competitors
or potential competitors have significantly greater financial, technical, and marketing resources than we do. To survive and be competitive,
we will need to continuously invest in research and development, sales and marketing, and customer support. Increased competition could
result in price reductions, and smaller customer orders. Our failure to compete effectively could seriously impair our business.

 WE OPERATE IN THE HIGH-RISK TELECOM
SECTOR. We are in a volatile industry. In addition, our revenue model is evolving and relies substantially on the assumption that we will
be able to successfully complete the development and sales of our products and services in the marketplace. Our prospects must be considered
in the light of the risk, uncertainties, expenses, and difficulties frequently encountered by companies in the early stages of development
and marketing of new products. To be successful in the market we must, among other things:

 o

 Complete development and introduction of functional and attractive products and services;

 o

 Attract and maintain customer loyalty;

 o

 Establish and increase awareness of our brand and develop customer loyalty;

 o

 Provide desirable products and services to customers at attractive prices;

 o

 Establish and maintain strategic relationships with strategic partners and affiliates;

 o

 Rapidly respond to competitive and technological developments;

 o

 Build operations and customer service infrastructure to support our business; and

 o

 Attract, retain, and motivate qualified personnel.

 We cannot guarantee that we will
be able to achieve these goals, and our failure to achieve them could adversely affect our business, results of operations, and financial
condition. We expect that revenues and operating results will fluctuate in the future. There is no assurance that any or all our efforts
will produce a successful outcome.

 WE OPERATE IN THE HIGH-RISK HARDWARE
DESIGN INDUSTRY. We are in a volatile industry. In this industry it should be expected that:

 o

 Latent design flaws can be discovered, even after a device has been certified;

 o

 Latent component defects can be discovered in critical systems, including batteries, LCDs, chargers, and other systems;

 o

 Manufacturing defects and flaws will occur during device production.

 WE OPERATE IN THE HIGH-RISK SOFTWARE
INDUSTRY. This industry has numerous and significant known risks. In this industry it should be expected that:

 o

 Latent design flaws and security defects will be discovered, even after a device has been tested and approved;

 o

 Code within a program will fail to operate as intended due to updates or changes in other systems;

 o

 Hacking and malicious actions by outside parties can damage or alter coding and system integrity.

 POTENTIAL DESIGN AND MANUFACTURING
DEFECTS COULD OCCUR. Our product and service offerings may have quality issues from time to time, due to defects in software design, hardware
design or component manufacturing. As a result, our products and services may not perform as anticipated and may not meet customer expectations.
Component defects could make our products unsafe and create a risk of environmental or property damage and personal injury. There can
be no assurance we will be able to detect and address all issues and defects in the hardware, software, and services we offer. Failure
to do so could result in widespread technical and performance issues affecting our products and services. In addition, we may be exposed
to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment, and/or
intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines.

 WE OPERATE IN A FIELD WITH RAPIDLY
CHANGING TECHNOLOGY. We cannot be certain that our products and services will function as anticipated or be desirable to our intended
markets. Our current or future products and services may fail to function properly, and if our products and services do not achieve and
sustain market acceptance, our business, results of operations and profitability may suffer. If we are unable to predict and comply with
evolving wireless standards, our ability to introduce and sell new products will be adversely affected. If we fail to develop and introduce
products on time, we may lose customers and potential product orders.

 WE DEPEND ON THE DEMAND FOR WIRELESS
NETWORK CAPACITY. The demand for our products is completely dependent on the demand for broadband wireless access to networks. If wireless
operators do not deliver acceptable wireless service, our product sales may dramatically decline. Thus, if wireless operators experience
financial or network difficulties, it will likely reduce demand for our products. These are beyond our ability to control and can either
increase or decrease demand for our products.

 PANDEMIC OUTBREAKS CAN CAUSE VOLATILE
CHANGES IN THE MARKET. Demand for wireless access can rise and fall greatly during times of pandemic outbreaks, such as COVID-19, as more
people may be required to work remotely, and schools may be required to operate remote classrooms. When an outbreak ends, or becomes more
controlled, demand for wireless devices could decline rapidly, decreasing demand for our products. Pandemic outbreaks can also disrupt
supply chains, manufacturing operations, and shipping. These disruptions can make product fulfilment difficult, delayed, or impossible.
All these changes are beyond our ability to control and can cause revenue and income to change dramatically.

 WE DEPEND ON COLLABORATIVE ARRANGEMENTS.
The development and commercialization of our products and services depend in large part upon our ability to selectively enter and maintain
collaborative arrangements with developers, distributors, service providers, network systems providers, core wireless communications technology
providers and manufacturers, among others.

 THE LOSS OF ANY OF OUR
MATERIAL CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY, AND THEREFORE SHAREHOLDER VALUE. We depend on a small
number of customers for a significant portion of our revenues. For the year ended June 30, 2024, net revenues from our two largest
customers represented 68% and 23% of our consolidated net sales, respectively. We have a written agreement with each of these
customers that governs the sale of products to them, but the agreements do not obligate them to purchase any quantity of
products from us. If these customers were to reduce their business with us, our revenues and profitability could materially
decline.

 OUR PRODUCT DELIVERIES ARE
SUBJECT TO LONG LEAD TIMES. We often experience long lead times to ship products, often more than 45 days. This could cause us to
lose customers, who may be able to secure faster delivery times from our competitors and require us to maintain higher levels of
working capital.

 OUR PRODUCT-TO-MARKET CHALLENGE
IS CRITICAL. Our success depends on our ability to quickly enter the market and establish an early mover advantage. We must implement
an aggressive sales and marketing campaign to solicit customers and strategic partners. Any delay could seriously affect our ability to
establish and exploit effectively an early-to-market strategy.

 AS OUR BUSINESS EXPANDS INTERNATIONALLY,
WE WILL BE EXPOSED TO ADDITIONAL RISKS RELATING TO INTERNATIONAL OPERATIONS. Our expansion into international operations exposes us to
additional risks unique to such international markets, including the following:

 o

 Increased credit management risks and greater difficulties in collecting accounts receivable;

 o

 Unexpected changes in regulatory requirements, wireless communications standards, exchange rates, trading policies, tariffs, and other barriers;

 o

 Uncertainties of laws and enforcement relating to the protection of intellectual property;

 o

 Language barriers; and

 o

 Potential adverse tax consequences.

 Furthermore, if we are unable
to further develop distribution channels in countries in North America, the Caribbean and South America, EMEA (Europe, the Middle East
and Africa), and Asia, we may not be able to grow our international operations, and our ability to increase our revenue will be negatively
impacted.

 We believe that our products are
currently exempt from international tariffs. If this were to change at any point, a tariff of 10%-25% of the purchase price could be imposed.
If such tariffs are imposed, they could have a materially adverse effect on sales and operating results.

 GOVERNMENT REGULATION COULD RESULT
IN INCREASED COSTS AND INABILITY TO SELL OUR PRODUCTS. Our products are subject to certain mandatory regulatory approvals in the United
States and other regions in which we operate. In the United States, the Federal Communications Commission regulates many aspects of communications
devices. Although we have obtained all the necessary Federal Communications Commission and other required approvals for the products we
currently sell, we may not obtain approvals for future products on a timely basis, or at all. In addition, regulatory requirements may
change, or we may not be able to obtain regulatory approvals from countries other than the United States in which we may desire to sell
products in the future.

 EVENTS THAT COULD REDUCE OR IMPAIR
OUR ABILITY TO GENERATE REVENUES.

 o
 The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services.

 o
 If customers do not adopt our software, we may not be able to monetize these software assets and realize a key part of our growth
and profitability strategy.

 o
 The market for the products and services that we offer is rapidly evolving and highly competitive. 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.

 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.

 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.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY.

 Cybersecurity risk management
is an integral part of our overall enterprise risk management program. The Company manages cybersecurity and data protection through a
continuously evolving program. Our cybersecurity risk management program is designed to provide a framework for assessing, identifying
and managing cybersecurity threats and incidents, including threats and incidents associated with the use of services provided by third-party
service providers, and to facilitate coordination across different departments of our Company. Our processes include steps for assessing
the severity of a cybersecurity threat, identifying the source of a cybersecurity threat, including whether the cybersecurity threat is
associated with a third-party service provider, and implementing cybersecurity countermeasures and mitigation strategies and informing
management and the board of directors of material cybersecurity threats and incidents.

 The Board of Directors has oversight
for the most significant risks facing us and for our processes to identify, prioritize, assess, manage and mitigate those risks. The Audit
Committee of the Board of Directors (the "Audit Committee") has been designated to oversee cybersecurity risks. The Audit
Committee receives regular updates on cybersecurity and information technology matters and related risk exposures from our management.
The Board of Directors also receives periodic updates from management and the Audit Committee on cybersecurity risks. Management
is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes designed
to ensure that such potential cybersecurity risk exposures are monitored, putting in place mitigation measures and maintaining cybersecurity
programs. Our cybersecurity programs are under the direction of our Chief Executive Officer. Management regularly updates the Audit Committee
on our cybersecurity programs, which includes cybersecurity risks and mitigation strategies, vulnerability management, and on-going cybersecurity
projects.

 As of June 30, 2024, we did not
identify any cybersecurity incidents that materially affected or are reasonably likely to materially affect our business strategy, results
of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide
assurances that we have not experienced an undetected cybersecurity incident. It is possible that we may not implement appropriate controls
if we do not detect a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate and
not fully eliminate the risks. Even when a risk is detected, disruptive events may not always be immediately and thoroughly interpreted
and acted upon.

 ITEM 2. PROPERTIES.

 We leased approximately 12,775
square feet of office space in San Diego, California, at a monthly rent of $25,754, pursuant to a lease that expired in December 2023.
On October 19, 2023, we signed a lease for office space consisting of approximately 11,400 square feet, located in San Diego, California,
at a monthly rent of $23,370, which commenced on January 1, 2024. In addition to monthly rent, the lease includes payment for certain
common area costs. The term of the lease for the office space is 65 months from the lease commencement date. Our facility is covered by
an appropriate level of insurance, and we believe it to be suitable for our use and adequate for our present needs. Rent expense related
to this property was $321,259 and $309,053 for the years ended June 30, 2024 and 2023.

 On or about December 7,
2023, we received an invoice from our prior landlord, Hunsaker & Associates, requesting payment of additional rent on our completed
and expired lease of office space located at 9707 Waples Street, San Diego, CA as of December 31, 2023. This invoice of $142,978 purports
to represent charges for variable cost increases during the prior 7 years of the lease, which was discounted by $46,274 and adjusted down
to $96,704 for the three months ended June 30, 2024. We are currently reviewing these charges and will be requesting further validation
of these charges, in accordance with our rights granted under the lease. For the year ended June 30, 2024, we recorded an additional rent
expense of $96,704 and an accrued liability of $72,048 reflecting this pending invoice and a credit of $24,656 for our deposit on the
leasehold property.

 Our Korea-based subsidiary, FTI,
leases approximately 10,000 square feet of office space, at a monthly rent of approximately $8,000, and additional office space consisting
of approximately 2,682 square feet at a monthly rent of approximately $2,700, both located in Seoul, Korea. These leases expired on August
31, 2024, and were extended for an additional 24 months to August 31, 2026. In addition to monthly rent, the leases provide for periodic
cost of living increases in the base rent and payment for certain common area costs. These facilities are covered by an appropriate level
of insurance, and we believe them to be suitable for our use and adequate for our present needs. Rent expense related to these leases
was approximately $112,206 and $128,400 for each of the years ended June 30, 2024 and 2023, respectively.

 We lease one corporate housing
facility, located in Seoul, Korea, primarily for our employees who travel, under a non-cancelable operating lease that expired on September
4, 2024, and was extended for an additional twelve months to September 4, 2025. Rent expense related to this lease was $8,089 and $8,095
for the years ended June 30, 2024 and 2023, respectively.

 ITEM 3. LEGAL PROCEEDINGS.

 Refer to NOTE 6 - COMMITMENTS
AND CONTINGENCIES in the Consolidated Financial Statements.

 ITEM 4. MINE SAFETY DISCLOSURES.

 None.

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 MARKET PRICE OF OUR COMMON STOCK

 Shares of our Common Stock
are quoted and traded on the Nasdaq National Market System under the trading symbol "FKWL". We have one class of common
stock. As of June 30, 2024, we had 715 shareholders of record. Since many of the shares of our common stock are held by brokers and
other institutions on behalf of shareholders, the total number of beneficial holders represented by these record holders is not
practicably determinable.

 EQUITY COMPENSATION PLAN INFORMATION

 The following table summarizes
share and exercise price information about our equity compensation plans as of June 30, 2024:

 Plan Category

 Number of
 securities to be
 issued upon
 exercise of
 outstanding
 options, warrants
 and rights

 Weighted-average exercise price
 of outstanding
 options, warrants
 and rights

 Number of
 securities
 remaining
 available for
 future issuance
 under equity
 compensation
 plans

 Equity compensation plans approved by security holders

 627,001

 $
 4.22

 587,003

 Equity compensation plans not approved by security holders

 –

 N/A

 –

 Total

 647,001

 $
 4.22

 587,003

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

 The following discussion and analysis
of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included
elsewhere in this report. This report contains certain forward-looking statements relating to future events or our future financial performance.
These statements are subject to risks and uncertainties which could cause actual results to differ materially from those discussed in
this report. You are cautioned not to place undue reliance on this information which speaks only as of the date of this report. We are
not obligated to publicly update this information, whether as a result of new information, future events or otherwise, except to the extent
we are required to do so in connection with our obligation to file reports with the SEC. For a discussion of the important risks to our
business and future operating performance, see the discussion under the caption "Item 1A. Risk Factors" and under the caption
"Factors That May Influence Future Results of Operations" below. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this report might not occur.

 BUSINESS OVERVIEW

 Doing business
as "FranklinAccess", we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation)
and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management
(MDM) solutions. We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things
(IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

 We have
majority ownership of Franklin Technology Inc. (FTI), a research and development company based in Seoul, South Korea. FTI primarily provides
design and development services for our wireless products.

 Our products are generally
marketed and sold directly to wireless operators and indirectly through strategic partners and distributors. Our primary markets are in
North America and Asia.

 FACTORS THAT MAY INFLUENCE FUTURE RESULTS OF OPERATIONS

 We believe that our revenue
growth will be influenced largely by (1) the successful maintenance of our existing customers, (2) the rate of increase in demand for
wireless data products, (3) customer acceptance of our new products, (4) new customer relationships and contracts, (5) our ability to
meet customers' demands, (6) our ability to maintain good relationships with our manufacturing partners and suppliers, and (7) the
defect rates experienced by end users of our hardware and software products.

 We have entered into and
expect to continue to enter into new customer relationships and contracts for the supply of our products, and this may require significant
demands on our resources, resulting in increased operating, selling, and marketing expenses associated with such new customers.

 We continuously evaluate
the performance of our hardware and software products to discover defects that can adversely affect our revenue, income, and the price
of our stock. If defects occur that customers believe are either severe in nature or excessively frequent in occurrence, customers could
stop buying our products and services and the value of our stock may decrease.

 We are also seeing that
demand from end-users has been shifting in the post-pandemic economy as remote education and work from home trends are declining. Current
demand for mobile device management (MDM) services has been declining. We are working to improve and further enhance our software service
offerings to address this change in the market.

 CRITICAL ACCOUNTING POLICIES

 Revenue Recognition

 The Company accounts for its revenue
according to ASC 606, "Revenue from Contracts with Customers", pursuant to which, revenue is recognized when the control of
the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied,
in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.

 The Company determines revenue
recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations
in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the
contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

 Contracts with Customers

 Revenue from sales of products
and services is derived from contracts with customers. The products and services covered by contracts primarily consist of hot spot routers.
Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service.
Payment terms are stated in the contract, primarily in the form of a purchase order. Since the customer typically agrees to a stated rate
and price in the purchase order that does not vary over the life of the contract, the majority of our contracts do not contain variable
consideration. We establish a provision for estimated warranty and returns. Using historical averages, that provisions for the years ended
June 30, 2024, and 2023, were not material.

 Disaggregation of Revenue

 In accordance with Topic 606,
we disaggregate revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred.
We determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606, which is to depict how the
nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors.

 Contract Balances

 We perform our obligations under
a contract with a customer by transferring products in exchange for consideration from the customer. We typically invoice our customers
as soon as control of an asset is transferred, and a receivable is established. However, we recognize contract liability when a customer
prepays for goods and/or services, or when we have not delivered goods under the contract since we have not yet transferred control of
the goods and/or services.

 The balances of
our trade receivables are as follows:

 Accounts Receivable, net

 $
 1,155,060

 $
 8,949,802

 The balance of contract assets
was immaterial as we did not have a significant amount of un-invoiced receivables in the periods ended June 30, 2024, and June 30, 2023.

 Our contract liabilities and advance
from customers are as follows:

 Undelivered products

 $
 158,771

 $
 146,488

 Performance Obligations

 A performance obligation is a
promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606. At contract
inception, we assess the products and/or services promised in our contracts with customers. We then identify performance obligations to
transfer distinct products and/or services to the customer. To identify performance obligations, we consider all the products or services
promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

 Our performance obligations are
satisfied at a point in time. Revenue from products transferred to customers at a single point in time accounted for over 99% of net sales
for the year ended June 30, 2024 and 2023. Revenue for non-recurring engineering projects is based on the percentage completion of a project
and accounted for under 1% of net sales for the years ended June 30, 2024 and 2023. Most of our revenue that is recognized at a point
in time is for the sale of hot-spot router products. Revenue from these contracts is recognized when the customer can direct the use of
and obtain substantially all of the benefits from the product, which generally coincides with title transfer at completion of the shipping
process.

 As of June 30, 2024 and 2023,
our contracts do not contain any unsatisfied performance obligations, except for undelivered products.

 Capitalized Product Development
Costs

 Accounting Standards Codification
("ASC") Topic 350, "Intangibles - Goodwill and Other" includes software that is part of a product or process to
be sold to a customer and shall be accounted for under Subtopic 985-20. Our products contain embedded software internally developed by
FTI, which is an integral part of these products because it allows the various components of the products to communicate with each other
and the products are clearly unable to function without this coding.

 The costs of product development
that are capitalized once technological feasibility is determined (noted as Technology in progress in the Intangible Assets table, in
Note 2 to Notes to Consolidated Financial Statements) include certifications, licenses, payroll, employee benefits, and other headcount-related
expenses associated with product development. We determine that technological feasibility for our products is reached after all high-risk
development issues have been resolved. Once the products are available for general release to our customers, we cease capitalizing the
product development costs and any additional costs, if any, are expensed. The capitalized product development costs are amortized on a
product-by-product basis using the straight-line amortization. The amortization begins when the products are available for general release
to our customers.

 As of June 30, 2024, and June
30, 2023, capitalized product development costs in progress were $0 and $203,838, respectively, and these amounts are included in intangible
assets in our consolidated balance sheets. For the years ended June 30, 2024 and 2023, we incurred $123,359 and $1,631,376, respectively
in capitalized product development costs, and all costs incurred before technological feasibility is reached are expensed and included
in our consolidated statements of comprehensive income (loss).

 Income Taxes

 Deferred income tax assets and
liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result
in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected
to be realized. As of June 30, 2024, we have federal and state net operating loss carryforwards of approximately $5.8 million and $0.5
million, respectively. As of June 30, 2023, we have federal and state net operating loss carryforwards of approximately $2.5 million and
$0.5 million, respectively.

 Under the Tax Cuts and Jobs Act
(the "Act"), which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.5 million,
which was recognized on or after January 1, 2018, will carry forward indefinitely. The state net operating loss of approximately $0.5
million will begin to expire through 2043. The utilization of net operating loss carryforwards may be subject to limitations under provisions
of the Internal Revenue Code Section 382 and similar state provisions.

 Under the provision of ASC 740
"Application of the Uncertain Tax Position Provisions" related to accounting for uncertain tax positions, which prescribes
a recognition threshold and measurement process for recording in the financial statements, uncertain tax positions taken or expected to
be taken in a tax return, the impact of an uncertain income tax position on the income tax return must be recognized at the largest
amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. Tax benefits of an uncertain tax position
will not be recognized if it has less than a 50% likelihood of being sustained based on technical merits.

 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 Refer to NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES in the Consolidated Financial Statements.

 RESULTS OF OPERATIONS

 The following table sets forth,
for the years ended June 30, 2024, 2023, and 2022, our statements of operations including data expressed as a percentage of sales:

 2024

 2023

 2022

 (as a percentage of sales)

 Net sales

 100.0%

 100.0%

 100.0%

 Cost of goods sold

 88.6%

 84.7%

 84.1%

 Gross profit

 11.4%

 15.3%

 15.9%

 Operating expenses

 30.7%

 20.4%

 36.6%

 Loss from operations

 (19.3%
)

 (5.1%
)

 (20.7%
)

 Other income (expense), net

 2.7%

 (3.2%
)

 1.1%

 Net loss before income taxes

 (16.6%
)

 (8.3%
)

 (19.6%
)

 Income tax benefit

 (3.1%
)

 (1.9%
)

 (4.3%
)

 Net loss

 (13.5%
)

 (6.4%
)

 (15.3%
)

 Less: non-controlling interest in net (loss) income of subsidiary

 (0.6%
)

 (0.2%
)

 0.4%

 Net loss attributable to Parent Company stockholders

 (12.9%
)

 (6.2%
)

 (15.7%
)

 YEAR ENDED JUNE 30, 2024, COMPARED TO YEAR ENDED JUNE 30, 2023

 NET SALES - Net sales
decreased by $15,151,826, or 33.0%, to $30,796,690 for the year ended June 30, 2024 from $45,948,516 for the corresponding period of 2023.
For the year ended June 30, 2024, net sales by geographic regions, consisting of North America and Asia, were $30,699,727 (99.7% of net
sales) and $96,963 (0.3% of net sales), respectively. For the year ended June 30, 2023, net sales by geographic regions, consisting of
North America and Asia, were $45,782,084 (99.6% of net sales) and $166,432 (0.4% of net sales), respectively.

 Net sales in North America decreased
by $15,082,357, or 32.9%, to $30,699,727 for the year ended June 30, 2024, from $45,782,084 for the corresponding period of 2023. The
decrease in net sales in North America was primarily due to the reduced demand from two major carriers by approximately 50% and 26%, compared
to the corresponding period of 2023. Net sales in Asia decreased by $69,469, or 41.7%, to $96,963 for the year ended June 30, 2024, from
$166,432 for the corresponding period of 2023. The decrease in net sales was primarily due to the reduced demand (approximately 61%) for
a newly launched wireless product from a customer of FTI.

 GROSS PROFIT - Gross profit
decreased by $3,512,392, or 50.0%, to $3,508,350 for the year ended June 30, 2024, from $7,020,742 for the corresponding period of 2023.
The gross profit in terms of net sales percentage was 11.4% for the year ended June 30, 2024, compared to 15.3% for the corresponding
period of 2023. The decrease in gross profit was primarily due to the change in net sales as described above. The decrease in gross profit
in terms of net sales was the mixed results of competitive selling prices and the increase in production costs as well as the increased
amortization expenses associated with the completed capitalized product development costs that are included in the cost of goods sold
compared to the corresponding period of 2023.

 OPERATING EXPENSES - Operating
expenses increased by $77,788, or 0.8%, to $9,448,105 for the year ended June 30, 2024, from $9,370,317 for the corresponding period of
2023.

 Selling, general, and administrative
expenses increased by $589,702 to $6,041,355 for the year ended June 30, 2024, from $5,451,653 for the corresponding period of 2023. The
increase in selling, general, and administrative expenses was primarily due to the increased legal expenses of approximately $540,000.
Research and development expenses decreased by $511,914 to $3,406,750 for the year ended June 30, 2024, from $3,918,664 for the corresponding
period of 2023. The decrease in research and development expense was primarily due to the decreased research and development costs and
the related payroll expense of approximately $250,000 and $260,000, respectively, which is the mixed result of the timing of research
and development activities and the number of active projects and typically vary from period to period.

 OTHER INCOME (EXPENSE), NET
- Other income (expense), net increased by $2,305,527, or 155.6%, to $823,784 for the year ended June 30, 2024, from ($1,481,743) for
the corresponding period of 2023. The increase was primarily due to the decreased loss from the agreement in principle to settle a legal
action of $2,400,000, the increased loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $360,000,
which were offset by the increased interest income earned from the money market accounts and certificates of deposit of approximately
$344,000.

 YEAR ENDED JUNE 30, 2023, COMPARED TO YEAR ENDED JUNE 30, 2022

 NET SALES - Net sales
increased by $21,950,754, or 91.5%, to $45,948,516 for the year ended June 30, 2023 from $23,997,762 for the corresponding period of 2022.
For the year ended June 30, 2023, net sales by geographic regions, consisting of North America, the Caribbean and South America, and Asia
were $45,782,084 (99.6% of net sales), $0 (0.0% of net sales), and $166,432 (0.4% of net sales), respectively. For the year ended June
30, 2022, net sales by geographic regions, consisting of North America, the Caribbean and South America, and Asia were $23,305,366 (97.1%
of net sales), $2,375 (0.0% of net sales), and $690,021 (2.9% of net sales), respectively.

 Net sales in North America increased
by $22,476,718, or 96.4%, to $45,782,084 for the year ended June 30, 2023, from $23,305,366 for the corresponding period of 2022. The
increase in net sales in North America was primarily due to the new demand for two newly launched wireless products from a major carrier
customer (approximately $14M newly generated revenue) which did not purchase our products during the fiscal year 2022, and the increased
demand by approximately $11M, or 66%, for our wireless products from the existing major carrier customer compared to the fiscal year 2022,
which were offset by the decreased demands from other customers.

 Net sales in the Caribbean and
South America decreased by $2,375, or 100%, to $0 for the year ended June 30, 2023, from $2,375 for the corresponding period of 2022.
Net sales in Asia decreased by $523,589, or 75.9%, to $166,432 for the year ended June 30, 2023, from $690,021 for the corresponding period
of 2022. The decrease in net sales was primarily due to the one-time revenue generated from the material sales by FTI for the fiscal year
2022, which was partially offset by the revenue generated from the demand for one newly launched wireless product by FTI (approximately
$160,000) for the year ended June 30, 2023.

 GROSS PROFIT - Gross profit
increased by $3,204,159, or 84.0%, to $7,020,742 for the year ended June 30, 2023, from $3,816,583 for the corresponding period of 2022.
The gross profit in terms of net sales percentage was 15.3% for the year ended June 30, 2023, compared to 15.9% for the corresponding
period of 2022. The increase in gross profit was primarily due to the change in net sales as described above. The decrease in gross profit
in terms of net sales percentage was the mixed results of competitive selling prices and the increase in production costs of the launched
products.

 OPERATING EXPENSES - Operating
expenses increased by $578,842, or 6.6%, to $9,370,317 for the year ended June 30, 2023, from $8,791,475 for the corresponding period
of 2022.

 Selling, general, and administrative
expenses increased by $942,309 to $5,451,653 for the year ended June 30, 2023, from $4,509,344 for the corresponding period of 2022. The
increase in selling, general, and administrative expenses was primarily due to the increased payroll expenses (excluding payroll expense
for employees involved in research and development) and compensation expenses related to stock options granted for employees of approximately
$230,000 and $165,000, respectively, and the increased legal expenses of $195,000.

 Research and development expenses
decreased by $363,467 to $3,918,664 for the year ended June 30, 2023, from $4,282,131 for the corresponding period of 2022. The decrease
in research and development expense was primarily due to the mix of the timing of research and development activities and the number of
active projects, which typically vary from period to period. For the year ended June 30, 2023, the research and development expenses decreased
by approximately $450,000, which is partially offset by the increased payroll expenses for employees involved in research and development
of approximately $89,000.

 OTHER INCOME, NET - Other
income, net decreased by $1,747,162, or 658.3%, to $1,481,743 for the year ended June 30, 2023, from $265,419 for the corresponding period
of 2022. The decrease was primarily due to the loss from the agreement in principle to settle a legal action of $2,400,000 and the increased
loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $184,000, which were offset by the increased
interest income earned from the money market accounts and certificates of deposit of approximately $388,000, the increased unrealized
gain from an investment account of approximately $340,000, and the increased gain from forgiven liabilities of approximately $199,000.

 LIQUIDITY AND CAPITAL RESOURCES

 Our historical operating results,
capital resources and financial position, in combination with current projections and estimates, were considered in management's plan
and intentions to fund our operations over a reasonable period of time, which we define as the twelve-month period ending June 30, 2024.
For the purposes of liquidity disclosures, we assess the likelihood that we have sufficient available working capital and other principal
sources of liquidity to fund our operating activities and obligations as they become due.

 Our principal source of
liquidity as of June 30, 2024, consisted of cash and cash equivalents as well as short-term investments of $37,457,827. We believe
we have sufficient available capital to cover our existing operations and obligations through at least June 30, 2025. Our long-term
future cash requirements will depend on numerous factors, including our revenue base, profit margins, product development activities,
market acceptance of our products, future expansion plans and ability to control costs. If we are unable to achieve our current
business plan or secure additional funding that may be required, we would need to curtail our operations or take other similar actions
outside the ordinary course of business.

 OPERATING ACTIVITIES –
Net cash used in operating activities for the years ended June 30, 2024 and 2023 were $773,360 and $1,882,114, respectively.

 The $773,360 in net cash used
in operating activities for the year ended June 30, 2024 was primarily due to the decrease in accounts payable and accrued legal contingency
expense of $5,685,087 and $2,400,000, respectively, as well as our operating results (net loss adjusted for depreciation, amortization,
and other non-cash charges), which was offset by the decrease of accounts receivable and inventories of $7,722,229 and $2,290,211, respectively.
The $1,882,114 in net cash used in operating activities for the year ended June 30, 2023 was primarily due to the increase in accounts
receivable of $7,627,183 as well as our operating results (net loss adjusted for depreciation, amortization, and other non-cash charges),
which was offset by the increase of accounts payable and accrued legal contingency expense of $4,905,499 and $2,400,000, respectively.

 INVESTING ACTIVITIES –
Net cash provided by investing activities for the year ended June 30, 2024 was $723,858, and net cash used in investing activities for
the year ended June 30, 2023 was $12,109,183.

 The $723,858 in net cash provided
by investing activities for the year ended June 30, 2024 was primarily due to the proceeds of short-term investments of $910,034, which
was offset by the purchases of capitalized product development of $123,359. The $12,109,183 in net cash used in investing activities
for the year ended June 30, 2023 was primarily due to the purchases of short-term investments of $10,391,654 and capitalized product
development of $1,631,376.

 FINANCING ACTIVITIES –
Net cash provided by financing activities for the years ended June 30, 2024 and 2023 was $91,057 and $42,943, respectively.

 The $91,057 in net cash
provided by financing activities for the year ended June 30, 2024 was repayment received from the loan to an employee of $91,057. The
$42,943 in net cash provided by financing activities for the year ended June 30, 2023 was from the exercise of stock options of $45,000,
which was offset by loan to an employee of $2,057.

 OFF-BALANCE SHEET ARRANGEMENTS

 None.

 CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

 The following table summarizes
our contractual obligations and commitments as of June 30, 2024, and the effect such obligations could have on our liquidity and cash
flow in future periods:

 Operating Lease

 Fiscal 2025

 $
 336,972

 Fiscal 2026

 344,789

 Fiscal 2027

 352,840

 Fiscal 2028

 387,437

 Fiscal 2029

 363,310

 Total lease payments

 1,785,348

 Less imputed interest

 (287,629
)

 Total

 $
 1,497,719

 Remaining lease term-operating leases

 4.9 years

 Discount rate-operating lease

 7%

 LEASES

 Refer to ITEM 2. PROPERTIES.

 WARRANTY REPAIRS

 The following table sets forth the percentages
of return rates and warranty repairs for all products currently marketed, in the aggregate from the date each product was introduced through
June 30, 2024.

 Current Devices

 Device Type

 Return Rate

 Warranty Repairs

 4G Wireless Devices

 0.11%

 0.01%

 5G Wireless Devices

 0.57%

 0.10%

 FUTURE LIQUIDITY AND CAPITAL REQUIREMENTS

 For the next twelve months, we
may require in excess of $2 million for capital expenditures, software licenses and for testing and certifying new products.

 We believe we will be able
to fund our future cash requirements for operations from our cash available, operating cash flows, bank lines of credit and issuance
of equity securities. We believe these sources of funds will be sufficient to continue our operations and planned capital
expenditures. However, we will be required to raise additional debt or equity capital if we are unable to generate sufficient cash
flow from operations to fund the expansion of our sales and to satisfy the related working capital requirements for the next twelve
months. Our ability to satisfy such obligations also depends upon our future performance, which in turn is subject to general
economic conditions and regional risks, and to financial, business and other factors affecting our operations, including factors
beyond our control. See Item 1A, " Risk Factors " included in this report.

 If we are unable to generate sufficient
cash flow from operations to meet our obligations and commitments, we will be required to raise additional debt or equity capital. Additionally,
we may be required to sell material assets or operations or delay or forego expansion opportunities. We might not be able to effect these
alternative strategies to raise funds including credit lines and loans, on satisfactory terms, if at all.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.

 Not applicable.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.

 The financial statements and the
supplementary financial information required by this Item and included in this report are listed in the Index to Financial Statements
beginning on page F-1.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM 9A. CONTROLS AND PROCEDURES.

 EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 Our management has evaluated,
under the supervision and with the participation of OC Kim, our President, and Bill Bauer, our Acting Chief Financial Officer, the effectiveness
of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of
the end of the period covered by this report. Based upon that evaluation, our President and the Acting Chief Financial Officer have concluded
that, as of June 30, 2024, our disclosure controls and procedures were effective in ensuring that information required to be disclosed
by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized, and reported
within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to our management, including
our principal executive and principal accounting officers, or persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.

 CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

 There have been no changes in
our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act or in other factors
that materially affected or are reasonably likely to materially affect our internal controls and procedures over financial reporting during
the fourth quarter of the fiscal year ended June 30, 2024.

 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 Our management is responsible
for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 To evaluate the effectiveness
of internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management conducted an assessment,
using the criteria in Internal Control-Integrated Framework, (specifically the 2013 framework) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that we maintained effective
internal control over financial reporting as of June 30, 2024.

 ITEM 9B. OTHER INFORMATION.

 During the quarter ended
June 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement,
as each term is defined in Item 408(a) of Regulation S-K.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS.

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE.

 Set forth below are the names,
ages, titles and present and past positions of our directors and executive officers as of June 30, 2024.

 Name

 Age

 Position

 OC Kim

 President, Secretary and a Director

 Gary Nelson

 Chairman of the Board and a Director

 Johnathan Chee

 Heidy Chow

 Kristina Kim

 Yun J. (David) Lee

 Chief Operating Officer

 Bill Bauer

 Acting Chief Financial Officer (Principal Financial Officer)

 OC Kim has been our President,
Secretary and a director since September 2003. He also served as our Acting Chief Financial Officer from April 2018 until March 2021.
Prior to joining Franklin Wireless, Mr. Kim was the CEO and President of Accetio Inc., a company he founded in April 2001 that developed
cell phones and modules for the telecommunications industry. In September 2003, Accetio Inc. merged with Franklin Telecommunications Corp.
and was renamed Franklin Wireless Corp. Prior to this, Mr. Kim was the Chief Operating Officer of Axesstel Inc., a pioneering developer
of CDMA Wireless Local Loop Products. Before joining Axesstel, he was the president of the U.S. sales office for Kolon Data Communications
Co., Ltd., one of Korea's most prominent technology conglomerates. While at Kolon Data Communications, Mr. Kim helped introduce the first
generation of CDMA phones to the Korean market through his work with Qualcomm Personal Electronics (QPE), a joint venture between Qualcomm
Incorporated and Sony Electronics Inc. Mr. Kim began his career at Lucky Goldstar (LG) Electronics. He has more than 29 years of experience
in sales, marketing, and operations management in the telecommunications and information systems industries. He earned a B.A. from Sogang
University in Korea. We believe Mr. Kim's qualifications to serve as a director of the Company include his extensive business, operational
and management experience in the wireless industry, including his current position as the Company's President. In addition, his
knowledge of the Company's business, products, strategic relationships and future opportunities is of great value to the Company.

 Gary Nelson has been a director
since September 2003. Mr. Nelson was an early investor in Franklin Telecommunications Corp. in the 1980's and served as a director
from 2001 up until the Company's merger with Accetio Inc. in September 2003, at which time the Company was renamed Franklin Wireless
Corp. Following the merger, Mr. Nelson became a director and ultimately Chairman of the Board of Franklin Wireless Corp. He was co-founder
and President of Churchill Mortgage Corporation, an income property mortgage banking firm based in Los Angeles, California, which was
a loan correspondent for major life insurance companies and other financial institutions. In addition, Mr. Nelson was the Chief Operating
Officer of Churchill Mortgage Capital, which was the loan origination arm of Churchill Mortgage Corporation. Mr. Nelson's prior
experience includes various marketing positions with Control Data Corporation and design engineering positions with North American Aviation
where he worked on the Apollo Project. He holds a B.S. in Mechanical Engineering from Kansas State University and an MBA from the University
of Southern California. We believe that Mr. Nelson's qualifications to serve as a director of the Company include his many
years of business, operational and management experience including his previous position as President of Churchill Mortgage Corporation.
In addition, Mr. Nelson has served as a director of the Company for 14 years, and brings a valuable historical perspective on the development
of the Company's business and its leadership.

 Johnathan Chee has been a
director since September 2009. He is an attorney and has owned the Law Offices of Johnathan Chee, in Niles, Illinois, since August
2007. Mr. Chee has represented clients in various business dealings and negotiations with Ameritech, SBC, Sprint and several wireless
carriers in Latin America. Between 1998 and 2007, he served as an attorney with the C&S Law Group, P.C., in Glenview, Illinois. He
holds a B.A. from the University of Illinois-Chicago and a J.D. from IIT Chicago-Kent College of Law. He is a member of the Illinois Bar
Association. We believe Mr. Chee's qualifications to serve as a director of the Company include his experience as a business attorney
that allow him to provide the Company's Board of Directors with valuable knowledge of legal matters that may affect the Company.

 Heidy Chow is a Certified Public
Accountant and an experienced finance and accounting executive whose client base includes several IT companies. Ms. Chow is an Assurance
Partner of The Pun Group, LLP and has over fifteen (15) years of combined experience in auditing, consulting and finance. Ms. Chow's
career in public accounting was spent primarily with the National firms of RSM US and Ernst & Young, and regional firms where she
has specialized in corporate accounting and auditing services. She supervises engagement teams in areas of designing and planning audits
in accordance with the AICPA Generally Accepted Auditing Standards and Public Company Accounting Oversight Board (PCAOB) standards. In
addition, she often serves as Contract Chief Financial Officer for privately held small and middle market companies. She holds a B.S.
in Accounting from California State Polytechnic University, Pomona.

 Kristina Kim is a licensed attorney
with extensive knowledge of global import/export, international trade, and regulatory issues. Ms. Kim also served as General Counsel and
Vice President with Samsung International Inc. for over 14 years. Ms. Kim holds a B.A. in Biochemistry and Molecular Biology from the
University of California at Santa Barbara, and a Juris Doctorate from the University of San Diego.

 Yun J. (David) Lee has served
as our Chief Operating Officer since September 2008. Mr. Lee has 23 years of upper level management experience in telecommunications,
including experience in the cellular telephone business in the U.S. and South America. Prior to joining the Company, he was President
of Ace Electronics, and served as Chief Financial Officer and Director of Sales and Marketing for RMG Wireless. Prior to that, he served
as Controller and Director of International Sales for Focus Wireless in Chicago.

 Bill Bauer has served as our Acting
Chief Financial Officer since October 2022. Prior to joining Franklin, he served as in-house legal counsel and senior finance executive
across various industries in California and Texas. He has over 15 years of experience in Finance and executive management. He holds a
Master's degree in Business Administration from San Diego State University and a Juris Doctorate from California Western School
of Law and is also a member of both the California and Texas State Bars.

 CODE OF ETHICS

 The Board of Directors has adopted
a Code of Ethics, which is applicable to all of our employees, including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions. The Code of Ethics covers all areas of professional
conduct, including honest and ethical conduct, conflicts of interest, compliance with laws, disclosure obligation, and accountability
for adherence to this Code.

 CORPORATE GOVERNANCE

 During fiscal 2024, the Board
of Directors held four meetings. Each director attended 100% of the meetings of the Board. The Board of Directors has an Audit Committee
made up of Heidy Chow (committee chair), Gary Nelson, and Kristina Kim, and a Compensation Committee made up of Gary Nelson (committee
chair) and Johnathan Chee, and a Nominating Committee made up of Gary Nelson (committee chair) and Johnathan Chee. The Board of Directors
has no other committees.

 ITEM 11. EXECUTIVE COMPENSATION.

 The following table sets forth
all compensation paid or accrued by us for the years ended June 30, 2024 and 2023 to our President, Chief Operating Officer, and Acting
Chief Financial Officer (The "Named Executive Officers").

 The Board of Directors has adopted
a Policy on Recoupment of Executive Incentive Compensation, effective as of October 13, 2023, pursuant to the requirements of Nasdaq Listing
Rule 5608 and Securities Exchange Act Rule 10D-1. The Policy sets forth the circumstances under which the Company will recover certain
incentive compensation paid to the Executive Officers of the Company in connection with certain financial restatements. Each Executive
Officer shall be required to sign and return a form pursuant to which such Executive Officer will agree to be bound by the terms of this
Policy (see "Exhibit 97").

 Summary Compensation Table

 Name and Principal Position

 Fiscal

Year

 Salary

($)

 Bonus

($)

 Option Awards

($)

 Total

($)

 OC Kim,

 2023

 $

 $

 375,000

 $

 –

 $

 675,000

 President

 2024

 $

 $

 500,000

 $

 –

 $

 800,000 (1)

 Yun J. (David) Lee (2),

 2023

 $

 $

 –

 $

 –

 $

 Senior Vice President of Sales

 2024

 $

 $

 120,000

 $

 –

 $

 420,000

 David Brown (3),

 2023

 $

 25,649

 $

 –

 $

 –

 $

 25,649

 Acting Chief Financial Officer

 2024

 $

 –

 $

 –

 $

 –

 $

 –

 Bill Bauer,

 2023

 $

 106,298

 $

 1,500

 $

 –

 $

 107,798

 Acting Chief Financial Officer

 2024

 $

 145,000

 $

 75,000

 $

 –

 $

 220,000

 (1)
 On September 23, 2024, the Board acknowledged that Mr. Kim had earned an incentive bonus of $1,250,000
for negotiating and securing a joint venture agreement with MeiG Smart Technology Co., Ltd. However, the Company and Mr. Kim entered into
a Forbearance Agreement, dated September 23, 2024, under which Mr. Kim agreed to defer payment of the bonus, in exchange for the Company's
agreement to allow Mr. Kim to defer payment of the $1,000,000 settlement amount owed by Mr. Kim to the Company under a Settlement Agreement,
dated June 12, 2024. The forbearance is to allow Mr. Kim time to pursue remedies with the State of Nevada (See "Business—Shareholder
Litigation—Short Swing Profits Litigation").

 (2)
 On July 14, 2023, the Board of Directors appointed David Lee as Senior Vice President of Sales. Mr. Lee had previously served as Chief
Operating Officer. The change in title does not affect Mr. Lee's compensation.

 (3)
 David Brown resigned his position on September 30, 2022.

 Outstanding Equity Awards at Fiscal Year-End

 The following table presents
the outstanding equity awards held by each of the Named Executive Officer as of June 30, 2024. The options vest over periods of
three years and are subject to early termination on the occurrence of certain events related to termination of employment. In
addition, the full vesting of options is accelerated if there is a change in control of the Company.

 Outstanding Equity Awards at Fiscal Year-End

 Options Awards

 Name

 Number of
 Securities
 Underlying
 Unexercised
 Options (#)

 Number of
 Securities
 Underlying
 Unexercised
 Options (#)
 nonexercisable

 Option
 Exercise
 Price
 ($)

 Option
 Expiration
 Date

 OC Kim

 200,000 (1)

 33,029

 $
 3.38

 12/27/2026

 Yun J. (David) Lee

 100,000 (1)

 –

 $
 5.40

 07/13/2025

 15,000 (1)

 2,477

 $
 3.38

 12/27/2026

 Bill Bauer

 20,000 (1)

 –

 $
 5.40

 07/13/2025

 15,000 (1)

 2,477

 $
 3.38

 12/27/2026

 (1)

 The option vests and is exercisable over three years as follows and has a five-year term:

 i.

 33.3% of the shares underlying the option vest on the first anniversary of the date of the grant.

 ii.

 33.3% of the shares underlying the option vest on the second anniversary of the date of the grant.

 ii.

 33.3% of the shares underlying the option vest on the third anniversary of the date of the grant.

 Director Compensation

 Our directors are reimbursed for
reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors. Employee directors do not receive any cash
compensation for service as directors and do not receive any equity compensation designated for such services. Members of the Board of
Directors who are not employees may receive stock option grants as consideration for their board service from time to time, although there
is no established policy for such stock option grants.

 Fiscal 2024 Director Compensation

 Name

 Fee Earned or
 Paid in Cash
 ($)(1)

 Option
 Awards
 ($)(2)

 All Other
 Compensation
 ($)

 Total
 ($)

 Gary Nelson

 –

 –

 Johnathan Chee

 –

 –

 Heidy Chow

 –

 –

 Kristina Kim

 –

 –

 (1)

 Directors are compensated at a base rate of $20,000 annually for the year ended June 30, 2024. Bonuses may be awarded when the business has performed exceptionally well as determined by the Board of Directors. For the year ended June 30, 2024, there has been no approved bonus for the Directors.

 There was no outstanding equity awards held by any
 of the non-officer directors as of June 30, 2024.

 EMPLOYMENT CONTRACTS

 On October 1, 2020, we entered
into Change of Control Agreements with OC Kim, our President, and Yun J. (David) Lee, our Senior Vice President of Sales and previously
served as Chief Operating Officer. Each Change of Control Agreement provides for a lump sum payment to the officer in case of a change
of control of the Company. The term includes the acquisition of Common Stock of the Company resulting in one person or company owning
more than 50% of the outstanding shares, a significant change in the composition of the Board of Directors of the Company during any 12-month
period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent
(50%) of the Company's outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's
assets.

 The Change of Control Agreement
with Mr. Kim calls for a payment of $5 million upon a change of control, and the agreement with Mr. Lee calls for a payment of $2 million
upon a change of control. These agreements were for an initial term of three years but have now been extended through October 2027.

 On November 10, 2022, the
Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021. The amendment
provides for a severance payment of $3 million if Mr. Kim voluntarily terminates his employment by the Company or if he voluntarily terminates
his employment due to a "change in circumstances," generally defined as a material breach by the Company of its salary and
benefit obligations or a significant reduction in Mr. Kim's title or responsibilities. In the case of a termination of employment
by the Company for cause (generally defined as conviction of a felony, or a misdemeanor where imprisonment is imposed, commission of any
act of theft, fraud, dishonesty, or material falsification of any employment or Company records, or improper disclosure of the Company's
confidential or proprietary information), the Company is to make a severance payment of $1,500,000. In either case, any unvested options
become immediately vested.

 In the amendment, Mr. Kim
also agrees that, for a period of two years after termination, he will not disparage the Company or its officers, solicit any of its employees
to terminate their employment, or disclose any of the Company's proprietary information. In addition, the amendment provides
for the payment of an incentive bonus to Mr. Kim of $125,000 for each calendar quarter during the remaining four-year term of the employment
letter, with the first such bonus due on December 31, 2022. For the year ended June 30, 2024 and 2023, $500,000 and $375,000 bonus had
been accrued, respectively, with $875,000 and $375,000 accrual bonus balances as of June 30, 2024 and 2023, respectively.

 The employment agreement with
OC Kim was renewed and extended by the Board in September 2024 and will continue through October 2027.

 COMPENSATION DISCUSSION AND ANALYSIS

 GENERAL PHILOSOPHY - We
compensate our executive officers through a mix of base salary, incentive compensation and stock options. Our compensation policies are
designed to be competitive with comparable employers and to align management's incentives with both near-term and long-term interests
of our stockholders. We use informal methods of benchmarking our executive compensation, based on the experience of our directors or,
in some cases, studies of industry standards. Our compensation is negotiated on a case by case basis, with attention being given to the
amount of compensation necessary to make a competitive offer and the relative compensation among our executive officers.

 BASE SALARIES – We
want to provide our senior management with a level of cash compensation in the form of base salary that facilitates an appropriate lifestyle
given their professional status and accomplishments.

 INCENTIVE COMPENSATION
– Our practice is to award cash bonuses based upon performance objectives set by the Board of Directors. We maintain a bonus plan
which provides our executive officers with the opportunity to earn cash bonuses based on the achievement of performance targets. The performance
targets are set by the Board of Directors, and our executive officers are eligible to receive bonuses on a quarterly basis. The actual
amount of incentive compensation paid to our executive officers is in the sole discretion of the Board of Directors.

 SEVERANCE BENEFITS –
We are generally an "at-will" employer and have no employment agreements with severance benefits; however, we have entered
into Change of Control Agreements with OC Kim & David Lee, and a severance agreement with OC Kim that provides him with a lump
sum payment in the event he leaves the Company.

 RETIREMENT PLANS –
In January 2022, we implemented the CalSavers retirement program, an automatic enrollment individual retirement account (IRA). The program
is a voluntary participation program, and all employees have the option to participate in this program if they choose to do so.

 MANDATORY RECOUPMENT POLICY
– The Company maintains a Mandatory Recoupment Policy to enable the Company to recover erroneously awarded compensation in the event
that the Company is required to prepare an accounting restatement.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 The following table sets forth
certain information regarding the beneficial ownership of our Common Stock as of September 30, 2024, by each director and executive officer
of the Company, each person known to us to be the beneficial owner of more than 5% of the outstanding Common Stock, and all directors
and executive officers of the Company as a group. Except as otherwise indicated below, each person has sole voting and investment power
with respect to the shares owned, subject to applicable community property laws.

 Shares Beneficially Owned

 Name and Address

 Number

 Percent

 Joon Won Jyoung

 1,004,948

 8.5%

 OC Kim

 1,096,695

 9.3%

 Gary Nelson

 314,008

 2.7%

 Yun J. (David) Lee

 185,000

 1.6%

 Johnathan Chee

 13,500

 0.1%

 Paul Packer

805 Third Ave., 15 th Floor, New York, NY 10022

 1,052,170

 (1)

 8.9%

 All directors and executive officers as a group

 3,666,321

 31.1%

 (1)

 Based solely on a Schedule 13G dated December 31, 2023, which indicates that Mr. Packer may be deemed to beneficially own 1,052,170 shares. With respect to these shares, Mr. Packer has shared voting power and shared dispositive power with Globis Capital Partners, L.P., Globis Capital Advisors, L.L.C., Globis Overseas Fund, Ltd., Globis Capital Management, L.P. and Globis Capital, L.L.C.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.

 None.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 The aggregate fees billed for
the most recently completed fiscal period for the audit of our annual financial statements and services normally provided by the independent
registered public accounting firm for this fiscal period were as follows:

 FY 2024

 FY 2023

 Audit Fees

 $

 126,350

 $

 84,250

 Total Fees

 $

 126,350

 $

 84,250

 In the above table, "audit
fees" are fees billed by our external auditor for services provided in auditing our company's annual financial statements for the
subject year. The fees set forth on the foregoing table relate to the audit as of and for the years ended June 30, 2024, and 2023, which
was performed by Simon & Edward, LLP and Kreit and Chiu CPA LLP (formerly as "Paris, Kreit, and Chiu CPA LLP"), respectively.
All of the services described above were approved in advance by the Board of Directors or the Company's Audit Committee.

 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 (a)

 Index to financial statements

 (b)

 Exhibits

 The following Exhibits
are files as part of, or incorporated by reference into, this Report on Form 10-K:

 Exhibit No.

 Description

 2.1

 Articles of Merger and Agreement and Plan of Reorganization, filed January 2, 2008 with the Nevada Secretary of State (1)

 3.1

 Articles
 of Incorporation of Franklin Wireless Corp. (1)

 3.2

 Amended
 and Restated Bylaws of Franklin Wireless Corp. (3)

 4.1

 Description
 of Securities (6)

 10.1

 Employment Agreement, dated September 7, 2021, between Franklin Wireless Corp. and OC Kim

 10.2

 Amendment No. 1 to Employment Agreement, dated November 10, 2022, between Franklin Wireless Corp. and OC KIM (8)

 10.3

 Change
 of Control Agreement, dated October 1, 2021, between Franklin Wireless Corp. and OC Kim (4)

 10.4

 Change of Control Agreement, dated October 1, 2021, between Franklin Wireless Corp. and Yun J. ("David") Lee (4)

 10.5

 Lease,
 dated September 9, 2015, between the Company and Hunsaker & Associates San Diego, Inc., a California corporation (5)

 10.6

 Loan
 Agreement between Franklin Technology Incorporation and Franklin Wireless Corp., dated March 31, 2022 (7)

 10.7

 Amendment No. 1 to Change of Control Agreement, dated September 25, 2023, between Franklin Wireless Corp. and OC Kim (9)

 10.8

 Amendment No. 1 to Change of Control Agreement, dated September 25, 2023, between Franklin Wireless Corp. and Yun J. ("David") Lee (9)

 10.9

 "Short-Swing" Profits Litigation" Settlement Agreement, dated June 12, 2024, Nosirrah Management LLC v. OC Kim, Franklin Wireless

 10.10

 Amendment No. 2 to Change of Control Agreement, dated September 11, 2024, between Franklin Wireless Corp. and OC Kim

 10.11

 Amendment No. 2 to Change of Control Agreement, dated September 11, 2024, between Franklin Wireless Corp. and Yun J. ("David") Lee

 10.12

 Amendment No. 2 to Employment Agreement, dated September 11, 2024, between Franklin Wireless Corp. and OC Kim

 10.13

 Forbearance Agreement, dated September 23, 2024, between Franklin Wireless Corp. and OC Kim

 14.1

 Code
 of Ethics (2)

 23.1

 Consent of Kreit and Chiu CPA LLP

 23.2

 Consent of Simon & Edward LLP

 31.1

 Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2

 Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.1

 Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.2

 Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 Mandatory Recoupment Policy

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 (1) Incorporated by reference from Report
on Form 10-QSB for the quarterly period ended March 31, 2008, filed on May 14, 2008.

 (2) Incorporated by reference from Annual
Report on Form 10-K for the year ended June 30, 2008, filed on September 26. 2008.

 (3) Incorporated by reference from Annual
Report on Form 10-K for the year ended June 30, 2009, filed on October 13, 2009.

 (4) Incorporated by reference from
Report on Form 8-K dated October 1, 2021.

 (5) Incorporated by reference from Quarterly
Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 16, 2015.

 (6) Incorporated by reference from Report
on Form 10-K/A for the year ended June 30, 2020, filed on September 18, 2020.

 (7) Incorporated by reference from Quarterly
Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 10, 2022.

 (8) Incorporated by reference from Quarterly
Report on Form 10-Q for the quarter ended December 31, 2022, filed on February 14, 2023.

 (9) Incorporated by reference from Annual Report
on Form 10-K for the year ended June 30, 2023, filed on September 28, 2023.

 (c) Supplementary Information

 None.

 ITEM 16. FORM 10-K SUMMARY.

 Not applicable.

 SIGNATURES

 In accordance with Section 13 of 15(d) of the Exchange
Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Franklin Wireless Corp.

 By:

 /s/ OC Kim

 OC Kim, President

 Dated: September 30, 2024

 Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.

 Signature

 Title

 Date

 Principal Executive Officer

 /s/ OC KIM

 President and a Director

 OC Kim

 Principal Financial Officer

 /s/ BILL BAUER

 Acting Chief Financial Officer

 Bill Bauer

 /s/ GARY NELSON

 Chairman of the Board of Directors

 Gary Nelson

 /s/ JOHNATHAN CHEE

 Johnathan Chee

 /s/ HEIDY CHOW

 Heidy Chow

 /s/ KRISTINA KIM

 Kristina Kim

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

 Page No.

 Index to Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm (PCAOB ID 2485)

 Report of Independent Registered Public Accounting Firm (PCAOB ID 6651)

 Consolidated Balance Sheets as of June 30, 2024 and 2023

 Consolidated Statements of Comprehensive Loss for the Years ended June 30, 2024 and 2023

 Consolidated Statements of Changes in Stockholders' Equity for the Years ended June 30, 2024 and 2023

 Consolidated Statements of Cash Flows for the Years ended June 30, 2024 and 2023

 Notes to Consolidated Financial Statements

 F- 1

 Report of Independent Registered Public Accounting
Firm

 Shareholders and Board of Directors

 Franklin Wireless Corp.

 San Diego, CA

 Opinion on the Consolidated
Financial Statements

 We have audited the accompanying
consolidated balance sheet of Franklin Wireless Corp. and its subsidiary (the "Company") as of June 30, 2024, the related
consolidated statements of operations and comprehensive income, changes in stockholders' equity, and cash flows for the year then ended,
and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024, and the results
of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United
States of America.

 Basis for Opinion

 These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures to
assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.

 Critical Audit Matter

 Critical audit matters are matters arising
from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit
committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved
our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 F- 2

 Legal Proceedings

 As described in Note 6, the Company has been
involved in multiple legal proceedings and claims arising in the ordinary course of business, including shareholder litigation and short-swing
profit litigation. Management records liabilities for legal proceedings in instances where it can reasonably estimate the amount of the
loss and when loss is probable.

 We identified the legal proceedings as a critical
audit matter because auditing these elements involved a high degree of auditor judgment and an increased extent of effort when performing
audit procedures to evaluate the reasonableness of management's assessment of the liabilities and disclosures associated with multiple
legal proceedings.

 The primary procedures we performed to address
this critical audit matter included:

 Reviewed all ongoing legal claims and supporting
documents, including assessing the status of each case, the likely outcome, and potential financial exposure.

 Obtained the legal confirmations per our audit
inquiries with external legal counsels, evaluating the reasonableness of management's assessment regarding whether an unfavorable
outcome is remote, reasonably possible or probable and reasonably estimable.

 Reviewed the Company's recorded provisions for
legal contingencies to determine if they accurately reflect potential liabilities.

 Ensured that the Company's disclosures
related to legal proceedings in the consolidated financial statements comply with applicable accounting and disclosure standards.

 /s/ Simon & Edward, LLP

 We have served as the Company's auditor since 2024.

 Rowland Heights, CA

 F- 3

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and Shareholders of Franklin Wireless Corp.

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated balance
sheets of Franklin Wireless Corp. and its subsidiary (the "Company") as of June 30, 2023, and 2022, and the related consolidated
statements of comprehensive (loss) income, changes in stockholders' equity, and cash flows for each of the two years in the period
ended June 30, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

 In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and 2022 and the results of its operations
and its cash flows for each of the two years in the period ended June 30, 2023, in conformity with accounting principles generally accepted
in the United States of America.

 Basis for Opinion

 These consolidated financial statements are the responsibility
of the entity's management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is a
matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated
to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and
(2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in
any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 F- 4

 Description of the Matter

 Legal Proceedings

 As described in Note 6 to the consolidated financial
 statements, management records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the
 loss and when loss is probable. Where the reasonable estimate of the probable loss is a range, management records as an accrual in its
 consolidated financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate.
 Management either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that
 such an estimate cannot be made. Management discloses significant legal proceedings even where liability is not probable or the amount
 of the liability is not estimable, or both, if management believes there is at least a reasonable possibility that a loss may be incurred.

 How We Addressed the Matter in Our Audit

 The principal considerations for our determination
 that performing procedures relating to legal proceedings is a critical audit matter are the significant judgment by management when assessing
 the likelihood of a loss being incurred and when estimating the loss or range of loss for each claim, which in turn led to significant
 auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the liabilities and
 disclosures associated with legal proceedings.

 Addressing the matter involved performing procedures
 and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
 included determining the likelihood of a loss and whether the amount of loss can be reasonably estimated, as well as evaluating disclosures
 citing the compliance with the financial reporting framework. These procedures also included, among others, obtaining and evaluating the
 letters of audit inquiry with internal and external legal counsel, evaluating the reasonableness of management's assessment regarding
 whether an unfavorable outcome is reasonably possible or probable and reasonably estimable, and evaluating the sufficiency of the Company's
 disclosures related to legal proceedings and accounting in the consolidated financial statements.

 We have served as the Company's auditors since
2020.

 /s/ Kreit and Chiu CPA LLP (formerly as " Paris,
Kreit and Chiu CPA LLP ").

 New York, NY

 September 28, 2023

 F- 5

 Consolidated Balance Sheets

 As of June 30,

 2024

 2023

 ASSETS

 Current assets:

 Cash and cash equivalents

 $
 12,266,556

 $
 12,241,286

 Short-term investments

 25,191,271

 26,728,313

 Accounts receivable, net

 1,155,060

 8,949,802

 Inventories, net

 1,425,685

 3,741,637

 Other current assets

 107,976

 51,125

 Loan to an employee

 –

 91,057

 Advance payments to vendors

 73,912

 53,875

 Total current assets

 40,220,460

 51,857,095

 Property and equipment, net

 114,939

 101,088

 Intangible assets, net

 1,309,626

 2,180,884

 Deferred tax assets, non-current

 3,184,240

 2,235,515

 Goodwill

 273,285

 273,285

 Right of use assets, net

 1,486,034

 152,665

 Other assets

 131,245

 126,546

 TOTAL ASSETS

 $
 46,719,829

 $
 56,927,078

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $
 7,262,195

 $
 12,950,497

 Contract liabilities and advance from customers

 158,771

 146,488

 Accrued legal contingency expense

 –

 2,400,000

 Accrued liabilities

 1,425,146

 856,161

 Lease liabilities, current

 239,727

 159,104

 Total current liabilities

 9,085,839

 16,512,250

 Lease liabilities, non-current

 1,257,992

 –

 Total liabilities

 10,343,831

 16,512,250

 Commitments and contingencies (Note 6)

 –

 –

 Stockholders' equity:

 Parent Company stockholders' equity

 Preferred stock, par value $ 0.001 per share, authorized 10,000,000 shares; none issued and outstanding

 –

 –

 Common stock, par value $ 0.001 per share, authorized 50,000,000 shares; 11,784,280 shares issued and outstanding

 14,263

 14,263

 Additional paid-in capital

 14,733,300

 14,438,196

 Retained earnings

 25,137,209

 29,101,225

 Treasury stock, 2,549,208 shares

)

)

 Accumulated other comprehensive loss

 ( 1,182,825
)

 ( 1,071,930
)

 Total Parent Company stockholders' equity

 35,147,054

 38,926,861

 Non-controlling interests

 1,228,944

 1,487,967

 Total stockholders' equity

 36,375,998

 40,414,828

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 46,719,829

 $
 56,927,078

 The accompanying notes are an integral part of these
audited consolidated financial statements.

 F- 6

 Consolidated Statements of Comprehensive Loss

 Fiscal Years Ended June 30,

 2024

 2023

 Net sales

 $
 30,796,690

 $
 45,948,516

 Cost of goods sold

 ( 27,288,340
)

 ( 38,927,774
)

 Gross profit

 3,508,350

 7,020,742

 Operating expenses:

 Selling, general and administrative

 6,041,355

 5,451,653

 Research and development

 3,406,750

 3,918,664

 Total operating expenses

 9,448,105

 9,370,317

 Loss from operations

 ( 5,939,755
)

 ( 2,349,575
)

 Other income (expense), net:

 Interest income

 804,148

 459,869

 Income from governmental subsidy

 16,350

 43,784

 Gain from the forgiveness of accounts payable and accrued liabilities

 –

 238,307

 Loss from the disposal of property and equipment and intangible assets

 ( 10,436
)

 –

 Loss from a legal contingency

 –

 ( 2,400,000
)

 Loss from foreign currency transactions

 ( 486,497
)

 ( 126,042
)

 Other income, net

 500,219

 302,339

 Total other income (expense), net

 823,784

 ( 1,481,743
)

 Loss before benefit for income taxes

 ( 5,115,971
)

 ( 3,831,318
)

 Income tax benefit

 ( 949,300
)

 ( 886,659
)

 Net loss

 ( 4,166,671
)

 ( 2,944,659
)

 Less: non-controlling interests in net loss of subsidiary at 33.7%

 ( 202,655
)

 ( 81,638
)

 Net loss attributable to Parent Company

 $
 ( 3,964,016
)

 $
 ( 2,863,021
)

 Loss per share attributable to Parent Company stockholders – basic and diluted

 $
 ( 0.34
)

 $
 ( 0.24
)

 Weighted average common shares outstanding – basic and diluted

 11,736,609

 Comprehensive loss

 Net loss

 $
 ( 4,166,671
)

 $
 ( 2,944,659
)

 Translation adjustments

 ( 167,263
)

 ( 87,778
)

 Comprehensive loss

 ( 4,333,934
)

 ( 3,032,437
)

 Less: comprehensive loss attributable to non-controlling interest

 ( 202,655
)

 ( 81,638
)

 Less: Foreign exchange translation attributable to non-controlling interest

 ( 56,368
)

 –

 Comprehensive loss attributable to controlling interest

 $
 ( 4,074,911
)

 $
 ( 2,950,799
)

 The accompanying notes are an integral part of these
audited consolidated financial statements.

 F- 7

 Consolidated Statements of Changes in Stockholders'
Equity

 Common
 Stock

 Additional
 Paid-in

 Retained

 Treasury

 Accumulated
 Other Comprehensive

 Non-

 controlling

 Total
 Stockholders

 Shares

 Amount

 Capital

 Earnings

 Stock

 Loss

 Interest

 Equity

 Balance - June 30, 2022

 11,684,280

 $
 14,163

 $
 13,593,426

 $
 31,964,246

 $
)

 $
 ( 984,152
)

 $
 1,569,605

 $
 42,602,395

 Net loss attributable to Parent Company

 –

 –

 –

 ( 2,863,021
)

 –

 –

 –

 ( 2,863,021
)

 Foreign exchange translation attributable to Parent Company

 –

 –

 –

 –

 –

 ( 87,778
)

 –

 ( 87,778
)

 Issuance of stock related to stock option exercised

 100,000

 133,900

 –

 –

 –

 –

 134,000

 Comprehensive loss attributable to non-controlling interest

 –

 –

 –

 –

 –

 –

 ( 81,638
)

 ( 81,638
)

 Stock based compensation

 –

 –

 710,870

 –

 –

 –

 –

 710,870

 Balance - June 30, 2023

 $
 14,263

 $
 14,438,196

 $
 29,101,225

 $
)

 $
 ( 1,071,930
)

 $
 1,487,967

 $
 40,414,828

 Net loss attributable to Parent Company

 –

 –

 –

 ( 3,964,016
)

 –

 –

 –

 ( 3,964,016
)

 Foreign exchange translation attributable to Parent Company

 –

 –

 –

 –

 –

 ( 110,895
)

 –

 ( 110,895
)

 Foreign exchange translation attributable to non-controlling interest

 –

 –

 –

 –

 –

 –

 ( 56,368
)

 ( 56,368
)

 Comprehensive loss attributable to non-controlling interest

 –

 –

 –

 –

 –

 –

 ( 202,655
)

 ( 202,655
)

 Stock based compensation

 –

 –

 295,104

 –

 –

 –

 –

 295,104

 Balance - June 30, 2024

 $
 14,263

 $
 14,733,300

 $
 25,137,209

 $
)

 $
 ( 1,182,825
)

 $
 1,228,944

 $
 36,375,998

 The accompanying notes are an integral part of these
audited consolidated financial statements.

 F- 8

 Consolidated Statements of Cash Flows

 Fiscal Years Ended June 30,

 2024

 2023

 CASH FLOW FROM OPERATING ACTIVITIES:

 Net loss

 $
 ( 4,166,671
)

 $
 ( 2,944,659
)

 Adjustments to reconcile net loss to net cash provided by operating activities:

 Depreciation

 33,958

 51,970

 Amortization of intangible assets

 993,214

 839,595

 Loss from foreign currency transactions

 572,426

 –

 Stock based compensation

 295,104

 710,870

 Write-down of inventories

 16,934

 –

 Loss from the disposal of property and equipment and intangible assets

 10,417

 –

 Forgiveness of debts

 –

 ( 238,307
)

 Amortization of right of use assets

 ( 1,333,369
)

 295,956

 Deferred tax benefit

 ( 958,759
)

 ( 888,079
)

 Increase (decrease) in cash due to change in working capital:

 Accounts receivable

 7,722,229

 ( 7,627,183
)

 Inventories

 2,290,211

 456,226

 Other current assets

 ( 64,311
)

 29,946

 Advance payments to vendors

 ( 23,792
)

 120,921

 Other assets

 ( 4,699
)

 ( 451
)

 Accounts payable

 ( 5,685,087
)

 4,905,499

 Contract liabilities and advance from customers

 8,248

 ( 85,136
)

 Accrued legal contingency expense

 ( 2,400,000
)

 2,400,000

 Accrued liabilities

 581,972

 399,552

 Lease liabilities

 1,338,615

 ( 308,834
)

 Net cash used in operating activities

 ( 773,360
)

 ( 1,882,114
)

 CASH FLOW FROM INVESTING ACTIVITIES:

 Proceeds (purchases) of short-term investments

 910,034

 ( 10,391,654
)

 Purchases of property and equipment

 ( 55,025
)

 ( 47,106
)

 Payments for capitalized product development costs

 ( 123,359
)

 ( 1,631,376
)

 Purchases of intangible assets

 ( 7,792
)

 ( 39,047
)

 Net cash provided by (used in) investing activities

 723,858

 ( 12,109,183
)

 CASH FLOW FROM FINANCING ACTIVITIES:

 Loan to an employee

 –

 ( 2,057
)

 Repayment received from the employee loan

 91,057

 –

 Cash received from exercise of stock options

 –

 45,000

 Net cash provided by financing activities

 91,057

 42,943

 Effect of foreign currency translation

 ( 16,285
)

 ( 87,778
)

 Net increase (decrease) in cash and cash equivalents

 25,270

 ( 14,036,132
)

 Cash and cash equivalents, beginning of year

 12,241,286

 26,277,418

 Cash and cash equivalents, end of year

 $
 12,266,556

 $
 12,241,286

 Supplemental disclosure of cash flow information:

 Cash paid during the periods for:

 Income taxes

 $
 ( 46,000
)

 $
 ( 800
)

 The accompanying notes are an integral part of these
audited consolidated financial statements.

 F- 9

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – BUSINESS OVERVIEW

 Doing business
as "FranklinAccess", we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation)
and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management
(MDM) solutions. We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things
(IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

 We hold 66.3% ownership
of Franklin Technology Inc. (FTI) since the date of acquisition, October 1, 2009, a research and development company based in Seoul, South
Korea. FTI primarily provides design and development services for our wireless products. Our products are generally marketed and sold
directly to wireless operators and indirectly through strategic partners and distributors. Our primary markets are in North America and
Asia.

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 This summary
of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements.
The consolidated financial statements and notes are representations of the Company's management, which is responsible for their
integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the consolidated
financial statements.

 Principles of Consolidation

 The consolidated financial statements
include the accounts of the Company and its subsidiary with a majority voting interest of approximately 66.3 % (approximately 33.7 % is
owned by non-controlling interests) as of June 30, 2024, and 2023. In the preparation of consolidated financial statements of the Company,
intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary
applicable to non-controlling interests.

 Reclassifications

 Certain amounts on the prior
period's consolidated financial statements were regrouped and reclassified to conform to current-year presentation, with no effect
on total stockholders' equity.

 Non-controlling Interest in a Consolidated Subsidiary

 Noncontrolling interests
represent approximately 33.7 % equity interests in FTI held by minority shareholders as of the reporting dates. As of June 30, 2024, the
non-controlling interest was $ 1,228,944, which represents a $ 259,023 decrease from $ 1,487,967 as of June 30, 2023. The decrease
of $ 259,023 in the non-controlling interest consists of $ 202,655 from loss in the subsidiary of $ 602,110 and $ 56,368 from foreign exchange
translation incurred for the year ended June 30, 2024.

 F- 10

 Segment Reporting

 Accounting Standards Codification
("ASC") 280, "Segment Reporting," requires public companies to report financial and descriptive information about
their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates
separate financial information, business activities and management responsibility. We have one reportable segment, consisting of the sale
of wireless access products.

 We shall generate revenues from
three geographic areas, consisting of North America and Asia. The following enterprise-wide disclosure is prepared on a basis consistent
with the preparation of the consolidated financial statements. The following table contains certain financial information by geographic
area:

 Schedule of financial information by geographic
area

 Fiscal Years Ended June 30,

 Net sales:

 2024

 2023

 North America

 $
 30,699,727

 $
 45,782,084

 Asia

 96,963

 166,432

 Totals

 $
 30,796,690

 $
 45,948,516

 Schedule of long-lived assets, net

 Long-lived assets, net (property and equipment and intangible assets):

 North America

 $
 1,218,139

 $
 2,083,902

 Asia

 206,426

 198,070

 Totals

 $
 1,424,565

 $
 2,281,972

 Fair Value of Financial Instruments

 Fair value accounting is applied
for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the
consolidated financial statements on a recurring basis (at least annually). Assets and liabilities recorded at fair value in the financial
statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical
levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities
are as follows:

 Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical
assets or liabilities accessible to the reporting entity at the measurement date.

 Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar
assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.

 Level 3 – Unobservable inputs that cannot be directly corroborated by observable market data
and that typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

 The carrying amounts of financial
instruments such as cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable, and accrued
liabilities approximate the related fair values due to the short-term nature of these instruments. We invest our excess cash into financial
instruments which are readily convertible into cash, such as money market funds and certificates of deposit

 F- 11

 Use of Estimates

 The preparation of the consolidated
financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could materially differ from those estimates.

 Allowance for Doubtful Accounts

 On July 1, 2023, we adopted ASU
2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred
loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology.
The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including
loan receivables and held to maturity debt securities. It also applies to Off-Balance Sheet ("OBS") credit exposures not accounted
for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments
and leases recognized by a lessor in accordance with Topic 842 on leases. Upon adoption of ASC 326 and based upon our review of our collection
history as well as the current balances associated with all significant customers and associated invoices, as of June 30, 2024, and 2023,
we did no t record any reserve for unfunded commitments and doubtful accounts.

 Cash Flows Reporting

 We follow ASC 230, Statements
of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing,
or financing activities and provides definitions of each category. We use the indirect or reconciliation method ("Indirect method")
as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile
it to net cash flow from operating activities by removing the effects of all deferrals of past operating cash receipts and payments and
all accruals of expected future operating cash receipts and payments and all items that are included in net (loss) income that do not
affect operating cash receipts and payments.

 Related Parties

 We follow ASC 850, "Related
Party Disclosures," for the identification of related parties and disclosure of related party transactions. Related parties are
any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of
our management and policies of the Company. (Refer to NOTE 11–RELATED PARTY TRANSACTIONS)

 Foreign Currency Translations

 We have a majority-owned
subsidiary in foreign country, South Korea. Fluctuations in foreign currency impact the amount of total assets, liabilities, earnings
and cash flows that we report for our foreign subsidiary upon the translation of these amounts into U.S. Dollars for, and as of the end
of, each reporting period. In particular, the strengthening of the U.S. Dollar generally will reduce the reported amount of our foreign-denominated
cash, cash equivalents, total revenues and total expense that we translate into U.S. Dollars and report in our consolidated financial
statements for, and as of the end of, each reporting period. However, a majority of our consolidated revenue is denominated in U.S. Dollars,
and therefore, our revenue is not directly subject to foreign currency risk.

 In
accordance with ASC 830, when an operation has transactions denominated in a currency other than its functional currency, they are measured
in the functional currency. Changes in the expected functional currency cash flows caused by changes in exchange rates are included in
net income (loss) for the period.

 F- 12

 Leases

 In accordance with ASC 842,
we determine whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified
asset for a period of time in exchange for consideration. For identified leases, we determine whether it should be classified as an operating
or finance lease. Operating leases are recorded in the balance sheet as right-of-use assets ("ROU assets") and operating lease
obligation. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payment arising from the lease ROU assets and operating lease liabilities are recognized at the commencement
date of the lease and measure based on the present value of lease payment over the lease term. The ROU assets also includes deferred rent
liabilities. Our lease arrangement generally does not provide an implicit interest rate. As a result, in such situations, we use its incremental
borrowing rate based on the information available at commencement date in determining the present value of lease payments. We include
options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU
assets and liabilities.

 Lease expense for operating
lease is recognized on a straight-line basis over the lease term. We are also electing not to apply the recognition requirements to short-term
leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term.

 Revenue Recognition

 The Company accounts for its revenue
according to ASC 606, "Revenue from Contracts with Customers", pursuant to which, revenue is recognized when the control of
the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied,
in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.

 The Company determines revenue
recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations
in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the
contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

 Contracts with Customers

 Revenue from sales of products
and services is derived from contracts with customers. The products and services covered by contracts primarily consist of hot spot routers.
Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service.
Payment terms are stated in the contract, primarily in the form of a purchase order. Since the customer typically agrees to a stated rate
and price in the purchase order that does not vary over the life of the contract, the majority of our contracts do not contain variable
consideration. We establish a provision for estimated warranty and returns. Using historical averages, that provisions for the years ended
June 30, 2024, and 2023, were not material.

 Disaggregation of Revenue

 In accordance with Topic 606,
we disaggregate revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred.
We determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606, which is to depict how the
nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors.

 Contract Balances

 We perform our obligations under
a contract with a customer by transferring products in exchange for consideration from the customer. We typically invoice our customers
as soon as control of an asset is transferred, and a receivable is established. We, however, recognize contract liability when a customer
prepays for goods and/or services, or we have not delivered goods under the contract since we have not yet transferred control of the
goods and/or services.

 F- 13

 The balances of our trade receivables are as follows:

 Schedule of trade receivables

 Accounts Receivable, net

 $
 1,155,060

 $
 8,949,802

 The balance of contract assets
was immaterial as we did not have a significant amount of un-invoiced receivables in the periods ended June 30, 2024, and June 30, 2023.

 Our contract liabilities and
advance from customers are as follows:

 Schedule of contract liabilities and advance
from customers

 Undelivered products

 $
 158,771

 $
 146,488

 Performance Obligations

 A performance obligation is a
promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606. At contract
inception, we assess the products and/or services promised in our contracts with customers. We then identify performance obligations to
transfer distinct products and/or services to the customer. To identify performance obligations, we consider all the products or services
promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

 Our performance obligations are
satisfied at a point in time. Revenue from products transferred to customers at a single point in time accounted for over 99 % of net sales
for the year ended June 30, 2024 and 2023. Revenue for non-recurring engineering projects is based on the percentage completion of a project
and accounted for under 1 % of net sales for the years ended June 30, 2024 and 2023. Most of our revenue that is recognized at a point
in time is for the sale of hot-spot router products. Revenue from these contracts is recognized when the customer can direct the use of
and obtain substantially all of the benefits from the product, which generally coincides with title transfer at completion of the shipping
process.

 As of June 30, 2024 and 2023,
our contracts do not contain any unsatisfied performance obligations, except for undelivered products.

 Cost of Goods Sold

 All costs associated with our
contract manufacturers, as well as distribution, fulfillment and repair services, are included in our cost of goods sold. Cost of goods
sold also includes amortization expenses of approximately $ 970,000 and $ 800,000 associated with capitalized product development costs
associated with complete technology for the years ended June 30, 2024, and 2023, respectively.

 Capitalized Product Development Costs

 Accounting Standards Codification
("ASC") Topic 350, "Intangibles - Goodwill and Other" includes software that is part of a product or process to
be sold to a customer and shall be accounted for under Subtopic 985-20. Our products contain embedded software internally developed by
FTI, which is an integral part of these products because it allows the various components of the products to communicate with each other
and the products are clearly unable to function without this coding.

 F- 14

 The costs of product development
that are capitalized once technological feasibility is determined (noted as Technology in progress in the Intangible Assets table, in
Note 2 to Notes to Consolidated Financial Statements) include certifications, licenses, payroll, employee benefits, and other headcount-related
expenses associated with product development. We determine that technological feasibility for our products is reached after all high-risk
development issues have been resolved. Once the products are available for general release to our customers, we cease capitalizing the
product development costs and any additional costs, if any, are expensed. The capitalized product development costs are amortized on a
product-by-product basis using the straight-line amortization. The amortization begins when the products are available for general release
to our customers.

 As of June 30, 2024, and 2023,
capitalized product development costs in progress were $ 0 and $ 203,838, respectively, and these amounts are included in intangible assets
in our consolidated balance sheets. For the years ended June 30, 2024 and 2023, we incurred $ 123,359 and $ 1,631,376, respectively in capitalized
product development costs, and all costs incurred before technological feasibility is reached are expensed and included in our consolidated
statements of comprehensive income (loss).

 Research and Development Costs

 Costs associated with research and development
are expensed as incurred. Research and development costs were $ 3,406,750 and $ 3,918,664 for the years ended June 30, 2024, and 2023, respectively.

 Warranties

 We provide a warranty for one
year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors. As a result, we
believe we do not have any net warranty exposure and do not accrue any warranty expenses. Historically, the Company has not experienced
any material net warranty expenditures.

 Shipping and Handling Costs

 Costs associated with product
shipping and handling are expensed as incurred. Shipping and handling costs, which are included in selling, general and administrative
expenses on the statements of comprehensive income, were $ 163,138 and $ 234,681 for the years ended June 30, 2024, and 2023, respectively.

 Cash and Cash Equivalents

 For the purposes of the consolidated
statements of cash flow, we consider all highly liquid investments purchased with original maturities of three months or less to be cash
equivalents. We invest our excess cash into financial instruments which management believes are readily convertible into cash, such as
money market funds that are readily convertible to cash and have a $1.00 net asset value.

 Short Term Investments

 We have invested excess funds
in short-term liquid assets, such as certificates of deposit or money market funds.

 Inventories, Net

 Our inventories consist of finished
goods and are stated at the lower of cost or net realizable value, cost being determined on a first-in, first-out basis. We assess the
inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand
forecasts using management's best estimates given information currently available. Our customer demand is highly unpredictable and
can fluctuate significantly caused by factors beyond our control. We may write down our inventory value for potential obsolescence and
excess inventory. As of June 30, 2024, and 2023, we have recorded inventory reserves in the amount of $ 91,482 and $ 585,274, respectively,
for inventories that we have identified as obsolete or slow-moving.

 F- 15

 Property and Equipment, Net

 Property and equipment are recorded
at cost. Significant additions or improvements extending the useful lives of assets are capitalized. Maintenance and repairs of expense
nature are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as
follows:

 Schedule of estimated useful lives

 Machinery

 6 years

 Office equipment

 Molds

 3~6 years

 Vehicles

 Computers and software

 Furniture and fixtures

 7 years

 Facilities improvements

 5 years or life of the lease, whichever is shorter

 Goodwill and Intangible Assets

 Goodwill and certain intangible
assets were recorded in connection with the FTI acquisition in October 2009, and were accounted for in accordance with ASC 805, "Business
Combinations." Goodwill represents the excess of the purchase price over the fair value of the tangible and intangible net assets
acquired. Intangible assets are recorded at their fair value at the date of acquisition. Goodwill and other intangible assets are accounted
for in accordance with ASC 350, "Goodwill and Other Intangible Assets." Goodwill and other intangible assets are tested for
impairment at least annually and any related impairment losses are recognized in earnings when identified. No impairment was recognized
during the years ended June 30, 2024, and 2023.

 Intangible Assets, Net

 The definite lived intangible
assets consisted of the following as of June 30, 2024:

 Schedule of definite lived intangible
assets

 Definite lived intangible assets:

 Expected Life

 Average

 Remaining

 life

 Gross

 Intangible

 Assets

 Less Accumulated

 Amortization

 Net Intangible

 Assets

 Complete technology

 3 years

 –

 18,397

 18,397

 –

 Technology in progress

 Not Applicable

 –

 –

 –

 –

 Software

 1.6 years

 489,992

 365,526

 124,466

 Patents

 10 years

 6.7 years

 67,373

 27,345

 40,028

 Certifications & licenses

 3 years

 1.4 years

 3,924,007

 2,778,875

 1,145,132

 Total as of June 30, 2024

 $

 4,499,769

 3,190,143

 1,309,626

 F- 16

 The definite lived intangible
assets consisted of the following as of June 30, 2023:

 Definite lived intangible assets:

 Expected Life

 Average

 Remaining

 life

 Gross

 Intangible

 Assets

 Less Accumulated

 Amortization

 Net Intangible

 Assets

 Complete technology

 3 years

 –

 18,397

 18,397

 –

 Technology in progress

 Not Applicable

 –

 203,838

 –

 203,838

 Software

 1.6 years

 423,762

 347,228

 76,534

 Patents

 10 years

 7.0 years

 59,975

 21,108

 38,867

 Certifications & licenses

 3 years

 2.0 years

 3,759,240

 1,897,595

 1,861,645

 Total as of June 30, 2023

 $

 4,465,212

 2,284,328

 2,180,884

 Amortization expense recognized
during the years ended June 30, 2024, and 2023 were $ 992,699 and $ 839,595, respectively. For the year ended June 30, 2024, we disposed
of fully amortized intangible assets in the amounts of $ 86,884 and expensed technology in progress of $ 9,404. For the year ended June
30, 2023, we did no t dispose of intangible assets.

 The amortization expenses of the
definite lived intangible assets for the next five years and thereafter are as follows:

 Schedule of amortization expenses of the
definite lived intangible assets

 FY2025

 FY2026

 FY2027

 FY2028

 FY2029

 Thereafter

 Total

 $

 853,077

 $

 385,150

 $

 45,234

 $

 17,913

 $

 7,688

 $

 Impairment
of Long-lived Assets

 In accordance with ASC 360, "Property,
Plant, and Equipment," we review for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances
indicate that the carrying amount of assets may not be recoverable. We consider the carrying value of assets may not be recoverable based
upon our review of the following events or changes in circumstances: the asset's ability to continue to generate income from operations
and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business
objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when
estimated future cash flows expected to result from the use of the asset are less than its carrying amount.

 We are not aware of any events
or changes in circumstances during the year ended June 30, 2024, that would indicate that the long-lived assets are impaired.

 Stock-based Compensation

 The Company accounts for stock
options and other equity-based compensation issued in accordance with ASC 718 "Stock Compensation", which requires the measurement
and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to
vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to
employees and non-employees, net of estimated forfeitures, over the employees' requisite service period or the non-employees'
performance period based on the grant date fair value estimated in accordance with the provision of ASC 718. ASC 718 is also applied to
awards modified, repurchased, or cancelled during the periods reported.

 F- 17

 Income Taxes

 The Company uses the asset and
liability method of accounting for income taxes. Accordingly, deferred tax assets and liabilities are determined based on the difference
between the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which
the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless
it is more likely than not such assets will be realized. Current income taxes are based on the year's taxable income for federal
and state income tax reporting purposes and the annual change in deferred taxes.

 The Company assesses its income
tax positions and records tax benefits based upon management's evaluation of the facts, circumstances, and information available
at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records
the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority
having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit
will be sustained, no tax benefit is recognized in the financial statements. The Company classifies interest and penalties associated
with such uncertain tax positions as a component of income tax expense.

 (Loss) Earnings per Share Attributable to Common
Stockholders

 In accordance with ASC 260. Basic
(loss) earnings per share are calculated by dividing the net (loss) income by the weighted-average number of common shares that were outstanding
for the period, without consideration for potential common shares. Diluted (loss) earnings per share is calculated by dividing the net
(loss) income by the sum of the weighted-average number of dilutive potential common shares outstanding for the period determined using
the treasury-stock method or the as-converted method. Potentially dilutive shares are comprised of common stock options outstanding under
our stock plan. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
Antidilutive shares are not taken into account while computation of weighted average number of shares for dilutive EPS calculation.

 Concentrations of Credit Risk

 We extend credit to our customers
and perform ongoing credit evaluations of such customers. We evaluate our accounts receivable on a regular basis for collectability and
provide an allowance for potential credit losses as deemed necessary. No reserve was required or recorded for any of the periods presented.

 Substantially all of our revenues
are derived from sales of wireless data products. Any significant decline in market acceptance of our products or in the financial condition
of our existing customers could impair our ability to operate effectively.

 A significant portion of our revenue
is derived from a small number of customers. For the year ended June 30, 2024, net sales to our two largest customers represented approximately
 68 % and 22 % of our consolidated net sales, respectively, and 0 % and 85 % of our accounts receivable balance as of June 30, 2024. For the
year ended June 30, 2023, net sales to our two largest customers represented approximately 61 % and 31 % of our consolidated net sales,
respectively, and 27 % and 69 % of our accounts receivable balance as of June 30, 2023.

 For the year ended June 30, 2024,
we purchased the majority of our wireless data products from two manufacturing companies located in Asia. If they were to experience delays,
capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could consequently
elect to cancel the underlying product purchase order, which would negatively impact our revenue. For the year ended June 30, 2024, we
purchased wireless data products from two suppliers in the amount of $ 23,581,572, or 98.9 % of total purchases, and had related accounts
payable of $ 6,263,385 as of June 30, 2024. For the year ended June 30, 2023, we purchased wireless data products from these suppliers
in the amount of $ 37,505,858, or 99.6 % of total purchases, and had related accounts payable of $ 12,598,741 as of June 30, 2023.

 We maintain our cash accounts
with established commercial banks. Such cash deposits exceed the Federal Deposit Insurance Corporation insured limit of $250,000 for each
financial institution. However, we do not anticipate any losses on excess deposits.

 F- 18

 Recently Issued Accounting Pronouncements

 In September 2022, the
FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50). The ASU requires disclosure of the
key terms of outstanding supplier finance programs and a rollforward of the related obligations. The ASU does not affect the recognition,
measurement or financial statement presentation of supplier finance program obligations. The ASU is effective for annual and interim periods
beginning after December 15, 2022, except for the rollforward requirement, which is effective for annual periods beginning after December
15, 2023. There was no impact to our consolidated financial statements.

 In November
2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07,
Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures
of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and
included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the
individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in
assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December
15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively
to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in the required
additional disclosures being included in our consolidated financial statements, once adopted.

 In December 2023, the
FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting
entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective
basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have
not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included
in our consolidated financial statements, once adopted.

 NOTE 3 – ACCRUED LIABILITIES

 Accrued liabilities consist of
the following as of:

 Schedule of accrued liabilities

 Accrued payroll deductions owed to government entities

 $
 49,452

 $
 52,923

 Accrued salaries and bonuses

 875,000

 375,000

 Accrued vacation

 164,884

 141,590

 Accrued commission for service providers

 15,000

 32,500

 Accrued commission to a customer

 247,592

 247,592

 Other accrued liabilities

 73,218

 6,556

 Total

 $
 1,425,146

 $
 856,161

 On November 10, 2022, the
Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021. The amendment
provides for the payment of an incentive bonus to Mr. Kim of $125,000 for each calendar quarter during the remaining four-year term of
the employment letter, which will be total amount of $2M, with the first such bonus accrued on December 31, 2022. For the year ended June
30, 2024 and 2023, $ 500,000 and $ 375,000 bonus had been accrued, respectively, with $ 875,000 and $ 375,000 accrual bonus balances as of
June 30, 2024 and 2023, respectively.

 The Company accrued a commission
of approximately $ 650,000 to a customer to provide a financial support for its sales program during the 2021 fiscal year. The accrued
commission has been paid approximately $ 400,000 in the form of credit with the remaining balance of approximately $ 250,000 as of June
30, 2024.

 F- 19

 NOTE 4 – INCOME TAXES

 Income tax benefit for the years
ended June 30, 2024, and 2023 consists of the following:

 Schedule of income tax benefit

 Year Ended June 30,

 2024

 2023

 Current income tax (benefit) expense:

 Federal

 $
 8,659

 $
 5,211

 State

 Foreign

 –

 ( 4,766
)

 Total Current income tax expense (benefit)

 9,459

 1,420

 Deferred income tax benefit:

 Federal

 ( 891,455
)

 ( 752,843
)

 State

 3,101

 ( 6,155
)

 Foreign

 ( 70,405
)

 ( 129,081
)

 Total deferred income tax expense (benefit)

 ( 958,759
)

 ( 888,079
)

 Benefit for income taxes

 $
 ( 949,300
)

 $
 ( 886,659
)

 The benefit for income taxes reconciles
to the amount computed by applying the effective federal statutory income tax rate to the income before provision for income taxes as
follows:

 Schedule of effective federal statutory income tax rate to the income before provision for income taxes

 Year Ended June 30,

 2024

 2023

 Federal income tax, at statutory rate of 21% applied to (loss) earnings before income taxes and extraordinary items

 $
 ( 1,074,307
)

 $
 ( 810,281
)

 State tax, net of federal tax benefit

 2,535

 15,082
)

 Nondeductible expenses

 63,393

 5,850

 R&D credits

 ( 46,945
)

 ( 51,415
)

 Foreign rate difference

 ( 13,450
)

 4,743
)

 Others

 119,474

 ( 50,638
)

 Change in valuation allowance

 –

 –

 Benefit for income taxes

 $
 ( 949,300
)

 $
 ( 886,659
)

 F- 20

 Deferred income taxes reflect
the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Significant components of our deferred tax assets are as follows:

 Schedule of deferred tax assets

 Deferred tax asset:

 Net operating losses

 $
 1,445,271

 $
 697,431

 State tax

 Lease accounting, net

 2,457

 1,359

 Intangibles

 1,330,679

 735,680

 Tax credits

 227,706

 191,544

 Legal contingency expense reserve

 –

 504,000

 Inventory reserve

 19,236

 123,488

 Other, net

 306,415

 104,044

 Total deferred tax assets

 3,331,932

 2,357,751

 Deferred tax liabilities:

 Deferred state taxes

 ( 47,193
)

 ( 49,787
)

 Property and equipment, net

 ( 80
)

 ( 1,652
)

 Unrealized gain (loss)

 ( 100,419
)

 ( 70,797
)

 Total deferred tax liabilities

 ( 147,692
)

 ( 122,236
)

 Less valuation allowance

 –

 –

 Net deferred tax asset

 $
 3,184,240

 $
 2,235,515

 Deferred income tax assets and
liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result
in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected
to be realized. We have evaluated the available evidence supporting the realization of our gross deferred tax assets, including the amount
and timing of forecasted future taxable income. Management determined it is more likely than not that the federal deferred tax assets
will be fully realized, and no valuation allowance is necessary to record as of June 30, 2024, or 2023.

 As of June 30, 2024, we have federal
and state net operating loss carryforwards of approximately $ 5.8 million and $ 0.5 million, respectively. Under the Tax Cuts and Jobs Act,
the federal net operating loss of approximately $ 5.8 million, which will carry forward indefinitely. The state net operating loss of approximately
$ 0.5 million will begin to expire through 2043. The utilization of net operating loss carryforwards may be subject to limitations under
provisions of the Internal Revenue Code Section 382 and similar state provisions.

 We apply the provisions of ASC
740 related to accounting for uncertain tax positions, which prescribes a recognition threshold and measurement process for recording
in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Under this provision, the impact of
an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be
sustained upon audit by the relevant taxing authority. Tax benefits of an uncertain tax position will not be recognized if it has less
than a 50% likelihood of being sustained based on technical merits.

 F- 21

 A reconciliation of the beginning
and ending balance of unrecognized tax benefits, which have been considered in the Company's computation of its deferred tax assets, is
as follows:

 Schedule of deferred tax assets

 Balance as of June 30, 2022

 $
 365,048

 Gross increase

 23,968

 Balance as of June 30, 2023

 389,016

 Gross increase

 25,310

 Balance as of June 30, 2024

 $
 414,326

 We do not anticipate any material
change in the total amount of unrecognized tax benefits to occur within the next twelve months. ASC 740 requires us to accrue interest
and penalties where there is an underpayment of taxes based on our best estimate of the amount ultimately to be paid. Our policy is to
recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have not recorded any interest
or penalties as the liability associated with the unrecognized tax benefits is immaterial. We are subject to taxation in the U.S., and
various state and foreign jurisdictions.

 NOTE 5 – (LOSS) EARNINGS PER SHARE

 We report (loss) earnings per
share in accordance with ASC 260, "Earnings Per Share." Basic (loss) earnings per share are computed using the weighted average
number of shares outstanding during the period. Diluted (loss) earnings per share represent basic earnings per share adjusted to include
the potentially dilutive effect of outstanding stock options by using the treasury stock method that the proceeds we receive from an in-the-money
option exercise are used towards repurchasing common shares in the market.

 For the years ended June 30, 2024,
and 2023, we were in a net loss position and have excluded 627,001 and 647,001 stock options from the calculation of diluted net loss
per share because these securities are anti-dilutive.

 The weighted average number of
shares outstanding used to compute loss per share is as follows:

 Schedule of weighted average number of
shares outstanding used to compute loss per share

 Year Ended June 30,

 2024

 2023

 Net loss attributable to Parent Company

 $
 ( 3,964,016
)

 $
 ( 2,863,021
)

 Weighted-average shares of common stock outstanding:

 Basic

 11,736,609

 Dilutive effect of common stock equivalents arising from stock options

 –

 –

 Diluted Outstanding shares

 11,736,609

 Basic loss per share attributable to Parent Company stockholders

 $
 ( 0.34
)

 $
 ( 0.24
)

 Diluted loss per share attributable to Parent Company stockholders

 $
 ( 0.34
)

 $
 ( 0.24
)

 F- 22

 NOTE 6 – COMMITMENTS AND CONTINGENCIES

 Leases

 We adopted ASC 842 new lease accounting
on July 1, 2019. We had an operating lease principally for both Franklin Wireless Corp. and Franklin Technologies Inc., in accordance
with ASC 842.

 We determine whether an arrangement
contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange
for consideration. Operating leases are recorded in the balance sheet as right-of-use assets ("ROU assets") and operating lease
obligation. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payment arising from the lease ROU assets and operating lease liabilities are recognized at the commencement
date of the lease and measure based on the present value of lease payment over the lease term. The ROU assets also includes deferred rent
liabilities. Our lease arrangement generally does not provide an implicit interest rate. As a result, in such situations, we use its incremental
borrowing rate based on the information available at commencement date in determining the present value of lease payments. We include
options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU
assets and liabilities. Lease expense for operating lease is recognized on a straight-line basis over the lease term. We are also electing
not to apply the recognition requirements to short-term leases of twelve months or less and instead will recognize lease payments as expense
on a straight-line basis over the lease term.

 We leased approximately 12,775
square feet of office space in San Diego, California, at a monthly rent of $25,754, pursuant to a lease that expired in December 2023.
On October 19, 2023, we signed a lease for office space consisting of approximately 11,400 square feet, located in San Diego, California,
at a monthly rent of $23,370, which commenced on January 1, 2024. In addition to monthly rent, the lease includes payment for certain
common area costs. The term of the lease for the office space is 65 months from the lease commencement date. Our facility is covered by
an appropriate level of insurance, and we believe it to be suitable for our use and adequate for our present needs. Rent expense related
to this property was $ 321,259 and $ 309,053 for the years ended June 30, 2024 and 2023.

 On or about December 7,
2023, we received an invoice from our prior landlord, Hunsaker & Associates, requesting payment of additional rent on our completed
and expired lease of office space located at 9707 Waples Street, San Diego, CA, as of December 31, 2023. This invoice of $ 142,978 purports
to represent charges for variable cost increases during the prior 7 years of the lease, which was discounted by $ 46,274 and adjusted down
to $ 96,704 for the three months ended June 30, 2024. We are currently reviewing these charges and will be requesting further validation
of these charges, in accordance with our rights granted under the lease. For the year ended June 30, 2024, we recorded an additional rent
expense of $ 96,704 and an accrued liability of $ 72,048 reflecting this pending invoice and a credit of $ 24,656 for our deposit on the
leasehold property.

 Our Korea-based subsidiary, FTI,
leases approximately 10,000 square feet of office space, at a monthly rent of approximately $8,000, and additional office space consisting
of approximately 2,682 square feet at a monthly rent of approximately $2,700, both located in Seoul, Korea. These leases expired on August
31, 2024, and were extended for an additional 24 months to August 31, 2026. In addition to monthly rent, the leases provide for periodic
cost of living increases in the base rent and payment for certain common area costs. These facilities are covered by an appropriate level
of insurance, and we believe them to be suitable for our use and adequate for our present needs. Rent expense related to these leases
was approximately $ 112,206 and $ 128,400 for each of the years ended June 30, 2024 and 2023, respectively. Short-term leases with initial
terms of twelve months or less are not capitalized, and our leases of the South Korean offices and corporate housing facility have been
considered as short-term lease.

 We lease one corporate housing
facility, located in Seoul, Korea, primarily for our employees who travel, under a non-cancelable operating lease that expired on September
4, 2024, and was extended for an additional twelve months to September 4, 2025. Rent expense related to this lease was $ 8,089 and $ 8,095
 for the years ended June 30, 2024 and 2023, respectively.

 F- 23

 We used a discount rate of 4.0 %
in determining our operating lease liabilities for the office space that expired on December 31, 2023, and used a discount rate of 7.0 %
for the office space that commenced on January 1, 2024, in San Diego, California, respectively. These rates represented our incremental
borrowing rates at that time. Short-term leases with initial terms of twelve months or less are not capitalized, and our leases of the
South Korean offices and corporate housing facility have been considered as short-term leases.

 Rent expenses for the years ended
June 30, 2024, and 2023 were $ 554,052
and $ 445,548 respectively. In accordance
with ASC 842, the components of the lease expense and supplemental cash flow information related to leases for the years ended June 30,
2024, and 2023 are as follows:

 Schedule of components of the lease expense and supplemental
cash flow information related to leases

 Years ended June 30,

 2024

 2023

 Operating lease expense

 $
 321,259

 $
 309,053

 Additional charges for the prior operating lease subject to dispute

 96,704

 –

 Short term lease cost

 120,295

 136,495

 Total lease expense

 $
 538,258

 $
 445,548

 In accordance with ASC 842, future
minimum payments under operating leases are as follows:

 Schedule of future
minimum payments under operating leases

 Operating Lease

 Fiscal 2025

 $
 336,972

 Fiscal 2026

 344,789

 Fiscal 2027

 352,840

 Fiscal 2028

 387,437

 Fiscal 2029

 363,310

 Total lease payments

 1,785,348

 Less imputed interest

 ( 287,629
)

 Total

 $
 1,497,719

 Remaining lease term-operating leases

 4.9 years

 Discount rate-operating lease

 7 %

 Litigation

 We are from time to time involved
in certain legal proceedings and claims arising in the ordinary course of business.

 Verizon Jetpack Recall

 On April 8, 2021, Verizon issued
a press release announcing that it was working with the U.S. Consumer Product Safety Commission (CPSC) to conduct a voluntary recall of
certain Verizon Ellipsis Jetpack mobile hotspot devices, indicating that the lithium-ion battery in the devices can overheat, posing a
fire and burn hazard. According to the CPSC release, the recall affects approximately 2.5 million devices. We imported the devices and
supplied them to Verizon.

 F- 24

 Verizon first advised us of one
alleged Jetpack device failure at the end of February 2021. We immediately began meeting with Verizon and requested access to the device.
We also began internal testing to evaluate device performance. We did not receive any further incident information until the last week
of March 2021. On April 1, 2021 we issued a press release announcing that we had received reports from Verizon about potential issues
with the batteries in the devices. On April 9, 2021 we issued a press release announcing the voluntary recall by Verizon.

 As of the date of this report,
we have been unable to recreate any device failures of the type identified by Verizon. All internal testing conducted to date has confirmed
that the Jetpack devices are performing within normal parameters. We are not currently aware of any aspect of the Jetpack design that
could cause the devices to fail in the way described in Verizon's recall notice.

 Future Impact on Financial
Performance

 We are striving to avoid any litigation
with Verizon arising from the recall and have not been served with any legal action by Verizon relating to the products covered by the
recall. We are not currently able to estimate the financial impact of the recall on our future operations. At this time, we do not have
information that identifies the cause of the alleged incidents. We also do not have any specific legal claims or theories of causation
for device failure incidents that would help us estimate the cost of potential future litigation. No liability has been recorded for this
litigation because the Company believes that any such liability is not probable and reasonably estimable at this time.

 Shareholder Litigation

 Ali

 A shareholder action, Ali vs.
Franklin Wireless Corp. et al. Case #3:21-cv-00687-AJB-MSB, was filed in the U.S. District Court, Southern District of California (San
Diego) on April 16, 2021, alleging, among other things, that we had prior knowledge that the Verizon recall was likely and that we did
not disclose that information to investors in a timely manner. The Class and Defendants have executed a Stipulation and Agreement of Settlement
under which the Class releases all claims against Defendants in exchange for a payment by Defendants of $ 2.4 million (the "Settlement
Amount"), which is reflected in liabilities under "accrued legal contingency expense" with a corresponding charge to
"loss from a legal contingency". The Class has submitted a motion for preliminary approval of the settlement, which the Court
denied on January 24, 2024. On April 22, 2024, after resubmission of the application, the court granted preliminary approval of the
settlement. On May 6, 2024, per the terms of the settlement agreement, we sent by wire transfer $ 2,400,000 to an account specified by
the Ali class action claim administrator, Epiq (the appointed Settlement Administrator by the Court).

 Harwood / Martin

 A legal action was filed in the
U.S. District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, by Stephen Harwood, derivatively
on behalf of nominal defendant Franklin Wireless Corp. v. O.C. Kim, et al., Case #21cv01837-AJB-MSB, on or about October 29, 2021, claiming
among other things, that we had prior knowledge that the recall was likely and that we did not disclose that information to investors
in a timely manner. We believe these allegations are not supported by the facts and we will vigorously defend against such claims.

 A legal action was filed in the
U.S. District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, by Debra Martin, derivatively
on behalf of nominal defendant Franklin Wireless Corp. v. O.C. Kim, et al., Case #21cv2091-AJB-MSB, on or about December 15, 2021, claiming
among other things, that we had prior knowledge that the recall was likely and that we did not disclose that information to investors
in a timely manner. We believe these allegations are not supported by the facts and we will vigorously defend against such claims.

 The Harwood and Martin actions
have been consolidated into a single action in the U.S. District Court, Southern District of California (San Diego) titled "In
re Franklin Wireless Corp. Derivative Litigation", Case No.: 21cv1837-AJB (MSB). Discovery has been completed and trial has been
scheduled to begin on December 9, 2024.

 F- 25

 Pape

 A legal action was filed in the
Second Judicial District Court of Nevada in the County of Washoe against Franklin, as a nominal defendant, Barbara Pape, derivatively
on behalf of nominal defendant Franklin Wireless Corp. v. O.C. Kim, et al., Case # CV22-00471, on or about March 21, 2022, claiming among
other things, that we had prior knowledge that the recall was likely and that we did not disclose that information to investors in a timely
manner. We believe these allegations are not supported by the facts and we will vigorously defend against such claims.

 The Company will vigorously defend
such shareholder litigation and proceedings. No liability has been recorded for these litigations because the Company believes that any
such liability is not probable and reasonably estimable as of the reporting date.

 "Short-Swing" Profits
Litigation

 A legal action was filed in the
U.S. District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, Nosirrah Management LLC v.
Franklin Wireless et al., Case # 3:21-cv-01316-RSH-JLB, on or about July 22, 2021, claiming that our Chief Executive Officer, O.C. Kim,
violated Section 16(b) of the Securities Exchange Act of 1934 for receiving "short-swing" profits from a sale and purchase
of Franklin shares, in violation of that Act. On October 19, 2023, the jury returned a verdict of $2,000,000 in favor of the Company against
the Company's Chief Executive Officer, O.C. Kim. Mr. Kim. Subsequently, the parties entered into a settlement agreement on June
12, 2024, for Mr. Kim to pay $1,000,000, and the appeal by OC Kim was dismissed (see "Exhibit 10.9"). On September 23, 2024
the Company and Mr. Kim entered into a Forbearance Agreement to defer payment of the settlement in exchange for deferment of a $1,250,000
bonus for securing a joint venture agreement with MeiG Smart Technology Co., Ltd. To allow Mr. Kim time to pursue remedies with the State
of Nevada. (see "Exhibit 10.13")

 Loan Agreement with Subsidiary

 On March 21, 2022, Franklin Wireless
Corp. (the "Company") entered into a Loan Agreement with Franklin Technology Incorporation, a Republic of Korea corporation
("FTI"), under which the Company agreed to loan US$ 10,000,000 to FTI. The Company owns a majority of the outstanding equity
of FTI. FTI's primary business is providing design and development services to the Company for our wireless products. As part of
the loan transaction, FTI delivered a $10 million Promissory Note to the Company (the "Note"). In the preparation of consolidated
financial statements of the Company, the transactions and balances related to the loan of $10 million, including the accrued interest
for the year ended June 30, 2024, were eliminated as intercompany transactions.

 The purpose of the loan is to allow FTI to purchase
a facility in South Korea to house its operations, and to provide it with additional working capital. The purchase of such a facility
with the loan proceeds is subject to the Company's reasonable approval. Upon acquisition of the facility, FTI is required to grant
the Company a mortgage on it to secure payment of the Note. The Note is for a term of five years, provides for annual payments of interest
at 2% per annum, and is due and payable upon maturity. The Note and Loan Agreement include customary provisions for default and acceleration
upon default, and a default interest rate of 7% per annum. As of June 30, 2024, there's no new information regarding the status of the
facility's acquisition.

 F- 26

 Employment Contracts

 On October 1, 2020, we entered
into Change of Control Agreements with OC Kim, our President, and Yun J. (David) Lee, our Senior Vice President of Sales and previously
served as Chief Operating Officer. Each Change of Control Agreement provides for a lump sum payment to the officer in case of a change
of control of the Company. The term includes the acquisition of Common Stock of the Company resulting in one person or company owning
more than 50% of the outstanding shares, a significant change in the composition of the Board of Directors of the Company during any 12-month
period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent
(50%) of the Company's outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's
assets.

 The Change of Control Agreement
with Mr. Kim calls for a payment of $5 million upon a change of control, and the agreement with Mr. Lee calls for a payment of $2 million
upon a change of control. These agreements were for an initial term of three years but have now been extended through October 2027.

 On November 10, 2022, the
Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021. The amendment
provides for a severance payment of $3 million if Mr. Kim voluntarily terminates his employment by the Company or if he voluntarily terminates
his employment due to a "change in circumstances," generally defined as a material breach by the Company of its salary and
benefit obligations or a significant reduction in Mr. Kim's title or responsibilities. In the case of a termination of employment
by the Company for cause (generally defined as conviction of a felony, or a misdemeanor where imprisonment is imposed, commission of any
act of theft, fraud, dishonesty, or material falsification of any employment or Company records, or improper disclosure of the Company's
confidential or proprietary information), the Company is to make a severance payment of $1,500,000. In either case, any unvested options
become immediately vested.

 In the amendment, Mr. Kim
also agrees that, for a period of two years after termination, he will not disparage the Company or its officers, solicit any of its employees
to terminate their employment, or disclose any of the Company's proprietary information. In addition, the amendment provides
for the payment of an incentive bonus to Mr. Kim of $125,000 for each calendar quarter during the remaining four-year term of the employment
letter, with the first such bonus due on December 31, 2022. For the year ended June 30, 2024 and 2023, $ 500,000 and $ 375,000 bonus had
been accrued, respectively, with $ 875,000 and $ 375,000 accrual bonus balances as of June 30, 2024 and 2023, respectively.

 The employment agreement with
OC Kim was renewed and extended by the Board in September 2024 and will continue through October 2027.

 International Tariffs

 We believe that our products
are currently exempt from international tariffs upon import from our manufacturers to the United States. If this were to change at any
point, a tariff of 10%-25% of the purchase price would be imposed. If such tariffs are imposed, they could have a materially adverse effect
on sales and operating results.

 Customer Indemnification

 Under purchase orders and
contracts for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement
claims for which we may have no corresponding recourse against our third-party licensors. This potential liability, if realized, could
materially adversely affect our business, operating results and financial condition.

 F- 27

 NOTE 7 – LONG-TERM INCENTIVE PLAN AWARDS

 We apply the provisions of ASC
718, "Compensation - Stock Compensation," to all of our stock-based compensation awards and use the Black-Scholes option pricing
model to value stock options. The fair value of each share option award on the date of grant was estimated using the Black-Scholes method
based on the following weighted average assumptions: The risk-free interest rate is based on the U.S. treasury yield curve in effect at
the time of grant for periods corresponding with the expected term of options award; the expected term represents awards granted are expected
to be outstanding giving considerations vesting schedules and historical participant exercise behavior; the expected volatility is based
upon historical volatility of the dividend yield is based upon the company's dividend rate at the time fair value is measure and
future expectations. Under this application, we record compensation expense for all awards granted.

 In July of 2020, the Board
of Directors adopted the 2020 Franklin Wireless Corp. Stock Option Plan (the "2020 Plan"), which covers 800,000 shares of
Common Stock. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options and restricted stock to our
employees, directors, and independent contractors. These options will have such vesting or other provisions as may be established by the
Board of Directors at the time of each grant.

 The estimated forfeiture
rate considers historical turnover rates stratified into employee pools in comparison with an overall employee turnover rate, as well
as expectations about the future. We periodically revise the estimated forfeiture rate in subsequent periods if actual forfeitures differ
from those estimates. There were $ 295,104 and $ 710,870 compensation expenses recorded under this method for the years ended June 30, 2024,
and 2023, respectively.

 A summary of the status of our
stock options is presented below:

 Schedule of stock options

 Weighted-

 Average

 Weighted-

 Remaining

 Average

 Contractual

 Aggregate

 Exercise

 Life

 Intrinsic

 Options

 Shares

 Price

 (In Years)

 Value

 Outstanding as of June 30, 2022

 766,001

 $

 3.85

 3.37

 $

 183,270

 Granted

 –

 –

 –

 –

 Exercised

 ( 100,000)

 1.34

 –

 –

 Forfeited or expired

 ( 19,000)

 5.40

 –

 –

 Outstanding as of June 30, 2023

 647,001

 $

 4.24

 2.88

 $

 130,200

 Granted

 –

 –

 –

 –

 Exercised

 –

 –

 –

 –

 Forfeited or expired

 ( 20,000)

 4.90

 –

 –

 Outstanding as of June 30, 2024

 627,001

 $

 4.22

 1.89

 $

 91,750

 Exercisable as of June 30, 2024

 570,392

 $

 4.31

 1.82

 $

 76,598

 The aggregate intrinsic value
in the preceding table represents the total pretax intrinsic value, based upon the Company's closing stock price of $3.63 as of
June 30, 2024, which would have been received by the option holders had all option holders exercised their options as of that date. The
weighted-average grant-date fair value of stock options outstanding as of June 30, 2024, in the amount of 627,001 shares was $ 3.3 per
share.

 As of June 30, 2024, there was
unrecognized compensation cost of $ 172,939 related to non-vested stock options granted.

 F- 28

 NOTE 8 – STOCKHOLDERS'
EQUITY

 Common Stock

 We
have been authorized to issue 50,000,000 shares of common stock, $ 0.001 par value. Each share of issued and outstanding common stock shall
entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders
have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock,
as well as in the net assets of the corporation upon liquidation or dissolution.

 On
December 22, 2022, we issued 100,000 common shares in conjunction with stock-based compensation awards. There were 11,784,280
shares issued and outstanding as of June 30, 2024, and 2023, respectively.

 Preferred
Stock

 We
have been authorized to issue 10,000,000 shares of preferred stock. $0.01 par value, but no preferred stock is issued and outstanding
as of June 30, 2024 and 2023.

 Treasury
Stock

 We
had 2,549,208 shares of treasury stock, valued at $ 3,554,893 (based on the costs that we agreed to repurchase) as of June 30, 2024 and
2023.

 NOTE 9 – RELATED PARTY TRANSACTIONS

 For the years ended June
30, 2024, and 2023, there have not been any transactions entered into or been a participant in which a related person had or will have
a direct or indirect material interest.

 NOTE 10 – SUBSEQUENT EVENTS

 The FASB issued ASC 855, "Subsequent Events."
ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued. The Company has evaluated all events or transactions that occurred after June 30,
2024, up through the date the financial statements were available to be issued.

 On
May 14, 2024, the Company entered into an Agreement for Formation of Corporation (the "Agreement") with MeiG Smart Technology
Co., Ltd. ("MeiG"), a leading supplier of cellular modules, IoT terminals and wireless data solutions. Under the terms of
the Agreement, the Company and MeiG will form a Nevada corporation to be owned 60% by Franklin and 40% by MeiG. The Company will contribute
$3,000,000 to the new corporation and MeiG will contribute $2,000,000. Under the terms of the Agreement, the new corporation will have
a Board of Directors consisting of three members, with two to be appointed by the Company and one to be appointed by MeiG. The new company
will engage in worldwide sales, marketing, customer support and operations for telecommunications modules to be provided by MeiG, under
such brands or designations as the Board of Directors of the new company will determine. As of September 30, 2024, no contribution was
committed by the Company and MeiG.

 F- 29

 On September 23, 2024, the Board
acknowledged that Mr. Kim had earned an incentive bonus of $1,250,000 for negotiating and securing a joint venture agreement with MeiG
Smart Technology Co., Ltd. However, the Company and Mr. Kim entered into a Forbearance Agreement, dated September 23, 2024, under which
Mr. Kim agreed to defer payment of the bonus, in exchange for the Company's agreement to allow Mr. Kim to defer payment of the
$1,000,000 settlement amount owed by Mr. Kim to the Company under a Settlement Agreement, dated June 12, 2024. The forbearance is to
allow Mr. Kim time to pursue remedies with the State of Nevada (See "Business—Shareholder Litigation—Short Swing Profits
Litigation").

 Other than what was described
above, the Company did not have any material recognizable subsequent events required to be disclosed to the financial statements as of
September 30, 2024.

 F- 30