NASDAQ: FKWL

OUR STRUCTURE

We incorporated in 1982 in California
and reincorporated in Nevada on October 25, 2007. 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.

As of June 30, 2026 and 2025,
the consolidated financial statements include the accounts of Franklin Wireless Corp. and its subsidiaries, Franklin Technology Inc. (“FTI”)
and Sigbeat Inc. (“Sigbeat”), with majority voting interests of 66.3% and 60.0%, respectively, (approximately 33.7% and 40.0%
are owned by noncontrolling interests, respectively). In the preparation of consolidated financial statements, intercompany transactions
and balances are eliminated and net (loss) earnings are reduced by the portion of the net (loss) earnings of the subsidiary or subsidiaries
applicable to noncontrolling interests.

On May 14, 2024, we entered into
an Agreement for Formation of a Joint Venture Corporation (the “Agreement”). Under the terms of the Agreement, the parties
formed a Nevada corporation, Sigbeat, to be owned 60% by Franklin and 40% by its Electronic Manufacturing Services (“EMS”)
partner, Forge International Co., Ltd. (“Forge”). The parties contributed a total of $5,000,000 in capital, in accordance
with their respective ownership interest percentages. Under the terms of the Agreement, Sigbeat has a Board of Directors consisting of
three members, of whom two are to be appointed by us and one appointed by Forge. Sigbeat will engage in worldwide sales, marketing, customer
support and operations for telecommunications modules under such brands or designations as the Board of Directors of Sigbeat determines.

Pursuant to the Agreement, in
July 2024, Sigbeat entered into a stock subscription agreement with Forge to purchase 400,000 shares of Common Stock, representing 40%
of the total outstanding Common Stock of Sigbeat. On December 23, 2024, and January 9, 2025, we contributed $600,000 and $2,400,000 for
Common Stock, respectively, and, on January 16, 2025, Forge contributed $2,000,000 for Common Stock.

1

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. The Chief Operating Decision Maker (“CODM”) assesses performance for the
segment and allocates resources based on the consolidated net income (loss) of the company. The CODM uses the consolidated net (loss)
income to evaluate the return on assets in deciding on resource allocation, monitor performance against budgets, and benchmark performance
against competitors.

We generate revenues from
two 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 and the reconciliation of total segment sales less disclosed significant expenses to the segment’s measure of net (loss) income.

Fiscal Years Ended June 30,

2026
2025

Net sales:

North America
$ 36,478,002
$ 46,081,244

Asia
36,403
5,657

Totals
$ 36,514,405
$ 46,086,901

Fiscal Years Ended June 30,

2026
2025

Items:

Net sales
$ 36,514,405
$ 46,086,901

Cost of goods sold
(30,259,274 )
(38,171,832 )

Selling, general, and administrative expenses
(5,698,950 )
(6,676,078 )

Research and development expenses
(3,233,791 )
(4,102,660 )

Other segment items
(4,241,662 )
2,723,240

Net loss
$ (6,919,272 )
$ (140,429 )

June 30, 2026
June 30, 2025

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

North America
$ 837,722
$ 929,173

Asia
150,463
157,821

Totals
$ 988,185
$ 1,086,994

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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.

Smart Box Solutions

4G/5G M2M Gateway

o Enhanced gateway that supports both 4G and 5G networks, enabling reliable and secure machine-to-machine
communication, essential for industrial applications and remote monitoring systems.

Seiona 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
(In Development)

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 Cloud Solutions

“JEXtream” is Franklin’s
Cloud based telecom grade server platform for 5G devices and routers, which enables enhanced remote management of device functionality.

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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 the 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. PCS Type Certification Review Board
(“PTCRB”) test certifications are required for all LTE and HSPA/GSM wireless data products to launch with wireless operators
in North America. 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.
Our devices also comply with the requirements of California’s Proposition 65 (“Prop 65”), Safe Drinking Water and Toxic Enforcement
Act of 1986.

PRODUCTION AND MANUFACTURING OPERATIONS

For the fiscal year ended June
30, 2026, the manufacturing of the majority of our products was performed by a single independent company located in Asia.

EMPLOYEES

As of June 30, 2026, we had 69
total employees at Franklin, FTI, and Sigbeat 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.

4

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.

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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 system;

o
Manufacturing defects and flaws may occur during device production.

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SOME OF OUR PRODUCTS INCLUDE BATTERIES. The following are common dangers of lithium batteries.

o
Thermal Runaway: An uncontrollable chemical reaction that causes the cells to heat up rapidly, leading to intense fires, potential
explosions, and the ejection of cells.

o
Fires and Explosions: The batteries contain volatile electrolytes that, when exposed to damage or high temperatures, can ignite,
causing fires that reach extreme temperatures.

o
Toxic and Flammable Gases: When a battery malfunctions, it can release flammable and toxic gases, which can ignite and create a
fire.

o
Hydrofluoric Acid Exposure: During combustion, fluorine can separate from lithium salts, forming hydrofluoric acid when mixed with
water vapor, posing a severe health risk.

o
Burns: The extreme temperatures of lithium battery fires, reaching up to 1000°F or more, can cause severe third-degree burns.

o
Chemical Exposure: The chemicals inside the batteries, including toxic and flammable electrolytes, pose chemical hazards if released.

o
Choking Hazard: Small lithium-ion button batteries can cause severe chemical burns to the esophagus if ingeste.

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

o
Latent design flaws, coding errors, vulnerabilities and security defects may be discovered, including after software or a device has been tested, approved, or commercially deployed;

o
Code within a program may fail to operate as intended as a result of updates, modifications or changes to other software, hardware, networks,
or systems;

o
Software may contain security vulnerabilities arising from coding errors, design flaws, third-party or open-source components,
development tools or other dependencies, and such vulnerabilities may not be identified or remediated before they are exploited; and

o
Hacking, malware, unauthorized access and other malicious actions by third
parties may exploit software vulnerabilities or otherwise compromise, damage or alter software, data, or system integrity. Product security
vulnerabilities, system security risks, data breaches, cyber-attacks, improper use of AI tools, and other threats and risks, could disrupt
or otherwise compromise our products, services, internal operations or information technology systems, or those of third parties with
whom we work. Actual or perceived non-compliance with our privacy and security obligations could lead to regulatory investigations or
actions, litigation, fines and penalties, business operation disruption, reputational harm, loss of revenue or profits, loss of customers
or sales, and other adverse business consequences.

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.

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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, OR A REDUCTION IN THEIR PURCHASES OF OUR PRODUCTS, 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, 2026, net revenues
from our two largest customers represented 60.9% and 27.5% 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.

During fiscal 2026, one of our
major customers discontinued a hotspot product that we expected to generate significant revenues for us, resulting in a significant reduction
in revenues from that customer. We do not expect material future sales of that product to this customer. Although we continue to maintain
a relationship with this customer, there can be no assurance that it will purchase other products from us in quantities sufficient to
replace the revenues associated with the discontinued product.

Our customers may discontinue
products, reduce or delay purchases, transition to competing products, or otherwise reduce their business with us at any time. Because
of our customer concentration, the loss of a material customer or a significant reduction in purchases of one or more of our products
by a material customer could materially adversely affect our revenues, profitability and financial condition.

OUR PRODUCT DELIVERIES ARE SUBJECT
TO LONG LEAD TIMES. We often experience long-lead times to ship products, often more than 160 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.

8

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%-80% of the purchase price could be imposed.
If such tariffs are imposed, they could have a materially adverse effect on sales and operating results. The financial impact of this
could make our business unprofitable.

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.

9

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 Disruptions in global transportation networks, including those resulting from geopolitical conflicts,
could increase our shipping costs, delay deliveries and adversely affect demand for our products. Our business depends on international
transportation and logistics networks to transport components and finished products. Geopolitical conflicts, including the ongoing conflict
involving Iran and related instability in the Middle East, may disrupt shipping routes, increase freight, fuel, insurance and other transportation
costs, or cause delays in the movement of goods. To the extent we are unable to absorb these increased costs, we may seek to pass some
or all of them on to our customers through higher prices, which could reduce demand for our products or adversely affect our competitive
position. Geopolitical conflicts may also have broader macroeconomic effects, including increased energy, transportation and other consumer
costs, inflationary pressures and reduced consumer spending. These effects could reduce demand for wireless products and services generally
and, consequently, reduce demand for our products.

o We may be unable to adequately control the costs or maintain adequate supply of components and raw materials
associated with our operations. We have experienced increases in the costs of certain components used in our products, and such increases
may continue. Component costs and availability may be affected by a variety of factors outside our control, including inflation, shortages
of raw materials, changes in supplier pricing, and changes in global demand and manufacturing capacity. In particular, increased demand
for components used in artificial intelligence and data center applications has caused certain component manufacturers to allocate production
capacity toward higher-margin products, which may reduce the availability or increase the cost of components used in our products. We
have also experienced increased costs for certain chipsets and constraints in the availability of raw materials used in printed circuit
boards. If component costs continue to increase, we may be unable to fully offset those increases through reductions in other costs or
increases in the prices charged to our customers. Any resulting reduction in our gross margins could adversely affect our results of operations.
In addition, increases in the prices of our products could reduce customer or end-user demand, result in lower order volumes, or adversely
affect our competitive position.

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.

10

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.

o Restrictions on foreign-manufactured telecommunications and networking equipment could adversely affect
our ability to develop, manufacture or commercialize certain future products. Recent regulatory developments in the United States have
imposed or contemplated additional restrictions on certain foreign-manufactured telecommunications and networking equipment and on the
entities involved in the manufacture of such equipment. These restrictions, and any future expansion or interpretation of them, could
affect the manufacturers, suppliers or other parties that we are permitted to use in connection with certain products and could affect
our ability to obtain required regulatory approvals for, import or commercialize such products. Compliance with these requirements may
require us to use alternative manufacturers or suppliers, modify our supply chain or product designs, or incur additional manufacturing,
development, certification or compliance costs. Such changes could increase our costs, delay the introduction of new products or, in certain
circumstances, prevent us from commercializing a product as planned. These risks are particularly relevant to certain consumer and enterprise
networking products included in our future product roadmap. Based on currently available information, we believe our currently approved
mobile hotspot products are not materially affected by these developments.

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.

11

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 our decisions.

o We do not currently pay recurring 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.

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