SC 13D

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)

(Amendment No. __ )¹

Franklin Wireless Corp.

(Name of Issuer)

Common Stock, par value $0.001

(Title of Class of Securities)

355184102

(CUSIP Number)

ANDREWS KURTH LLP
450 Lexington Avenue, 15th Floor
New York, New York 10017
Attn: David Hoyt
(212) 850-2872
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

August 4, 2011
(Date of Event Which Requires Filing of This Statement)

     If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box o.

     Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

     ¹ The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

     The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 355181402

1	NAME OF REPORTING PERSONS SHERMAN CAPITAL GROUP LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
	(a)   þ
	(b)   o
3	SEC USE ONLY
4	SOURCE OF FUNDS
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	UNITED STATES OF AMERICA
		7	SOLE VOTING POWER
NUMBER OF			300,000
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			-0-
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			300,000
WITH		10	SHARED DISPOSITIVE POWER
			-0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	300,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.6%
14	TYPE OF REPORTING PERSON
	OO

CUSIP No. 355184102

1	NAME OF REPORTING PERSONS STEVEN SHERMAN
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
	(a)   þ
	(b)   o
3	SEC USE ONLY
4	SOURCE OF FUNDS
	PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	UNITED STATES OF AMERICA
		7	SOLE VOTING POWER
NUMBER OF			300,0001
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			-0-1
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			300,0001
WITH		10	SHARED DISPOSITIVE POWER
			-0-1
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	300,0001
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.6%1
14	TYPE OF REPORTING PERSON
	IN

¹ The shares reported herein are held as of record by Sherman Capital Group LLC. Mr. Sherman, in his role as managing member of Sherman Capital Group LLC, exercises sole voting and dispositive power over the shares held in Sherman Capital Group LLC, and may be deemed to have beneficial ownership of such shares.

CUSIP No. 355184102

1	NAME OF REPORTING PERSONS KAREN SINGER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
	(a)   þ
	(b)   o
3	SEC USE ONLY
4	SOURCE OF FUNDS
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	UNITED STATES OF AMERICA
		7	SOLE VOTING POWER
NUMBER OF			291,317
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			-0-
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			291,317
WITH		10	SHARED DISPOSITIVE POWER
			-0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	291,317
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.5%
14	TYPE OF REPORTING PERSON
	IN

CUSIP No. 355184102

1	NAME OF REPORTING PERSONS DAVID S. OROS
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
	(a)   þ
	(b)   o
3	SEC USE ONLY
4	SOURCE OF FUNDS
	PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	UNITED STATES OF AMERICA
		7	SOLE VOTING POWER
NUMBER OF			343,505
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			-0-
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			343,505
WITH		10	SHARED DISPOSITIVE POWER
			-0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	343,505
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.9%
14	TYPE OF REPORTING PERSON
	IN

SCHEDULE 13D

          The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).

Item 1. Security and Issuer.

          This Schedule 13D relates to shares of the Common Stock, par value $0.001 (the “Shares”), of Franklin Wireless Corp. (the “Issuer”). The address of the principal executive offices of the Issuer is 5440 Morehouse Drive, Suite 1000, San Diego, California, 92121.

Item 2. Identity and Background.

          (a) This statement is filed by Sherman Capital Group (“SCG”), Steven Sherman as managing member of SCG, Karen Singer as trustee of Singer Children’s Management Trust (the “Trust”), and David S. Oros (“Mr. Oros”). Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.”

          SCG is a limited liability company organized under the laws of the State of Arizona. SCG’s principal business is making investments in publicly traded and privately-held companies. SCG’s principal place of business and principal office is located at 3820 W. Happy Valley Road, Suite 141-601, Glendale, AZ 85310. During the last five years, SCG has not been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

          Mr. Steven Sherman’s principal place of business is 3820 W. Happy Valley Road, Suite 141-601, Glendale, AZ 85310. Mr. Sherman’s principal business is acting as managing member of SCG. During the last five years, Mr. Sherman has not been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Mr. Sherman is a citizen of the United States of America.

          Ms. Karen Singer’s principal place of business is 212 Vaccaro Drive, Cresskill, New Jersey 07626. Ms Singer’s principal occupation is investing assets held in the Trust. During the last five years, Ms. Singer has not been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Ms. Singer is a citizen of the United States of America.

          Mr. Oros’s principal place of business is 621 E. Pratt Street, Baltimore, Maryland, 21202. Mr. Oros’s principal occupation is investing in and managing public and privately-held corporations. During the last five years, Mr. Oros has not been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or

state securities laws or finding any violation with respect to such laws. Mr. Oros is a citizen of the United States of America.

Item 3. Source and Amount of Funds or Other Consideration.

          The aggregate purchase price of the Shares owned by SCG is approximately $788,400.00. The Shares owned by SCG were purchased with funds from Mr. Steven Sherman, the managing member of SCG.

          Ms. Karen Singer is the trustee of the Trust, which was created pursuant to the Trust Agreement, dated May 29, 1998 (the “Trust Agreement”). All of the Shares held by the Trust were purchased by funds generated and held by the Trust. The aggregate amount of funds used for the purchase of the Shares was approximately $754,511.03.

          The aggregate purchase price of the Shares held by Mr. Oros is approximately $1,006,813.16. The Shares held by Mr. Oros were purchased with personal funds generated and held by Mr. Oros.

Item 4. Purpose of Transaction.

          In accordance with that certain Joint Filing and Action Agreement, dated as of August 4, 2011, among the Trust, Mr. Oros and SCG, as set forth as Exhibit 99.1 hereto, the Reporting Persons have formed a “group” (the “Group”) for the purposes of (i) delivering a letter to the Issuer’s Board of Directors seeking improved corporate governance and public disclosure and regular communications with stockholders, including forward looking information and (ii) if the Issuer fails to respond to the Group’s satisfaction, taking certain steps as the Group deems necessary and appropriate, including, without limitation, nominating, and voting in favor of, two persons designated by the Group for election to the Issuer’s Board of Directors at a meeting of stockholders of the Issuer, (iii) engaging in discussions with the Board of Directors and management of the Issuer, and (iv) taking other actions for the purpose of influencing the corporate governance of the Issuer.

          No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) — (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon completion of any of the actions discussed above. The Reporting Persons intend to review their investments in the Issuer on a continuing basis and engage in discussions with management and the Board of Directors of the Issuer concerning the business, operations and future plans of the Issuer. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investments in the Issuer as they deem appropriate including, without limitation, seeking Board representation, making proposals to the Issuer concerning changes to the capitalization, ownership structure or operations of the Issuer, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares or changing their intention with respect to any and all matters referred to in Item 4.

Item 5. Interest in Securities of the Issuer.

          (a) 

          SCG beneficially owns 300,000 Shares of the Issuer comprising approximately 2.6% of the outstanding Shares of the Issuer (based on 11,727,808 Shares outstanding as reported in the Issuer’s Form 10-Q filed on May 13, 2011). Mr. Sherman, as the managing member of SCG, may be deemed to beneficially own the 300,00 Shares of the Issuer which are owned as of record by SCG, comprising approximately 2.6% of the outstanding Shares of the Issuer.

          Ms. Singer, as trustee of the Trust, is the beneficial owner of 291,317 Shares of the Issuer, comprising approximately 2.5% of the outstanding Shares of the Issuer (based on 11,727,808 Shares outstanding as reported in the Issuer’s Form 10-Q filed on May 13, 2011).

          Mr. Oros is the beneficial owner of 343,505 Shares of the Issuer, comprising approximately 2.9% of the outstanding Shares of the Issuer (based on 11,727,808 Shares outstanding as reported in the Issuer’s Form 10-Q filed on May 13, 2011).

          Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the Shares owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any Shares he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the Shares reported herein that he or it does not directly own.

          (b) 

          Mr. Sherman has sole dispositive and voting power over the Shares of the Issuer owned by SCG as reported on this Schedule 13D.

          Ms. Singer has sole dispositive and voting power over the Shares of the Issuer owned by the Trust as reported on this Schedule 13D.

          Mr. Oros has sole dispositive and voting power over the Shares of the Issuer owned by Mr. Oros as reported on this Schedule 13D.

          (c) 

          Sherman Capital Group and Steven Sherman

Date of Transaction	Number of Shares Purchased		Price Per Share
June 2, 2011		26,803	$	2.3595512
June 3, 2011		10,000	$	2.3906000
June 3, 2011		9,000	$	2.3500000
June 6, 2011		5,000	$	2.3912000
June 8, 2011		4,000	$	2.3715000
June 9, 2011		1,250	$	2.3748000
June 9, 2011		1,250	$	2.3750000
June 14, 2011		800	$	2.3775000
June 22, 2011		3,950	$	2.3700000
June 22, 2011		8,750	$	2.3756857
July 12, 2011		27,443	$	2.5052188
July 13, 2011		14,900	$	2.5054027
July 13, 2011		2,600	$	2.5062731
July 14, 2011		37,254	$	2.5064339

          Singer Children’s Management Trust

Date of Transaction	Number of Shares Purchased		Price Per Share
June 1, 2011		30,000	$	2.30
June 2, 2011		4,460	$	2.30
June 3, 2011		1,750	$	2.35
June 6, 2011		500	$	2.35
June 8, 2011		2,500	$	2.35
June 9, 2011		625	$	2.35
June 9, 2011		5,600	$	2.37
June 20, 2011		10,000	$	2.465
June 22, 2011		15,000	$	2.33
June 27, 2011		10,000	$	2.40

          David S. Oros has not effected any transactions with respect to the Shares within the past sixty days.

          (d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.

          (e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

          On August 4, 2011, Sherman Capital Group LLC, Singer Children’s Management Trust and David S. Oros entered into a Joint Filing and Action Agreement pursuant to which such parties formed a “group” principally for the purposes described in the first paragraph of Item 4 hereof. A copy of the Joint Filing & Action Agreement is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 7. Material to be Filed as Exhibits.

99.1	Joint Filing & Action Agreement, dated August 4, 2011, by and among Sherman Capital Group LLC, Singer Children’s Management Trust and David S. Oros.
99.2	Letter, dated August 4, 2011, by Sherman Capital Group LLC, Singer Children’s Management Trust and David S. Oros to the Board of Directors of the Issuer.

SIGNATURES

          After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated August 4, 2011

SHERMAN CAPITAL GROUP LLC
By:	/s/ Steven Sherman
Name:	Steven Sherman
Title:	Managing Member
STEVEN SHERMAN
By:	/s/ Steven Sherman
KAREN SINGER
By:	/s/ Karen Singer
DAVID S. OROS
By:	/s/ David S. Oros

EX-99.1

     Exhibit 99.1

JOINT FILING AND ACTION AGREEMENT

     WHEREAS, the undersigned are beneficial stockholders of Franklin Wireless Corp., a Nevada corporation (the “Company”);

     WHEREAS, Singer Children’s Management Trust (“SCMT”), David S. Oros (“Mr. Oros”) and Sherman Capital Group LLC, a limited liability company organized under the laws of the State of Arizona (“SCG, and, together with SCMT and Mr. Oros, the “Group” and each, individually, sometimes hereinafter called a “member” of the Group) wish to form a group for the purposes of (i) delivering a letter to the Company’s Board of Directors seeking improved corporate governance and public disclosure and regular communications with stockholders, including forward looking information and (ii) if the Company fails to respond to the Group’s satisfaction, taking certain steps as the Group deems necessary and appropriate, including, without limitation, nominating, and voting in favor of, two persons designated by the Group for election to the Company’s Board of Directors at a meeting of stockholders of the Company, (iii) engaging in discussions with the Board of Directors and management of the Company, and (iv) taking other actions for the purpose of influencing the corporate governance of the Company, (all of the matters referred to above in this recital, including changing the Group’s intentions from time to time with respect to any and all such matters, being hereinafter called, collectively, the “Actions”).

     NOW, IT IS AGREED, this 4th day of August, 2011 by the parties hereto:

     1. In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each of SCMT, Mr. Oros and SCG agrees to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Company to the extent required under applicable securities laws. Each of the undersigned agrees to the joint filing of any necessary amendments to the Schedule 13D. Each member of the Group shall be responsible for the accuracy and completeness of his/its own disclosure therein, and is not responsible for the accuracy and completeness of the information concerning the other members, unless such member knows or has reason to know that such information is inaccurate.

     2. Each member of the Group, including its respective affiliates, agrees not to directly or indirectly, sell, transfer, make any short sale of, loan, grant any option for the purchase of or otherwise acquire or dispose of any securities of the Company without the prior written consent of each of the undersigned.

     3. Each of the undersigned agrees to form the Group for the purpose of all steps as are necessary or appropriate to cause the Actions to be taken.

     4. Each member of the Group shall have the right to pre-approve all expenses incurred in connection with the Group’s activities and agrees to pay directly all such expenses on a pro rata basis among the members of the Group based on the number of shares of Common Stock of the Company held by the members of the Group on the date hereof. In addition to the other expenses to be shared by each member of the Group pursuant to this Section 4, the reasonable legal fees and expenses of each member of the Group shall be considered a Group expense.

     5. Each of the undersigned agrees that any SEC filing, press release or stockholder communication proposed to be made or issued by the Group in connection with the Group’s activities set forth in Section 3 shall be first approved by each member of the Group, or their respective representatives, which approval shall not be unreasonably withheld.

     6. If any disagreement should arise among the members of the Group concerning decisions to be made or actions to be taken in connection with the Actions, including, but not limited to the activities identified in Section 5, such agreement shall be resolved by a majority determination of the members of the Group (based on the number of shares of Common Stock of the Company held by the members of the Group on the date hereof) as stated in a writing executed by such majority members.

     7. The relationship of the parties hereto shall be limited to carrying on the activities of the Group and taking the Actions in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such activities as described herein. Nothing herein shall be construed to authorize any party to act as an agent for any other party, or to create a joint venture or partnership, or to constitute an indemnification. Subject to Section 2, nothing herein shall restrict any party’s right to purchase securities of the Company, as he/it deems appropriate, in his/its sole discretion.

     8. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.

     9. In the event of any dispute arising out of the provisions of this Agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the Federal and State Courts in the State of New York.

     10. Any party hereto may terminate his/its obligations under this Agreement only after the earlier of (a) the first business day following the conclusion of the Actions, or (b) on 24 hours’ prior written notice to all other parties, with a copy by electronic mail to David Hoyt, Esq., Andrews Kurth LLP, 450 Lexington Avenue, 15th Floor, New York, NY 10017, email: david.hoyt@andrewskurth.com.

     11. Each party acknowledges that Andrews Kurth shall act as counsel for both the Group and their respective reporting persons relating to the Actions.

     12. Each of the undersigned parties hereby agrees that this Agreement shall be filed as an exhibit to the Schedule 13D pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

     13. All notices, requests, demands and other communications to any party under this Agreement will be in writing and delivered personally, by overnight delivery or courier or by registered mail to the parties at the address specified for such parties on Schedule I hereto (or at such other address as may be specified by a party in writing given at least five business days prior thereto). All notices, requests, demands and other communications will be deemed delivered when actually received. For purposes of this Section 13, the term “business day” means any day of the week other than Saturday, Sunday or any day on which commercial banks in the State of New York are required or authorized to close.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

SINGER CHILDREN’S MANAGEMENT TRUST
By:	/s/ Karen Singer
	Karen Singer,
	Trustee

By:	/s/ David S. Oros
	David S. Oros

SHERMAN CAPITAL GROUP
By:	/s/ Steven Sherman
	Steven Sherman

3

Schedule I

Addresses of Parties

Singer Children’s Management Trust
212 Vaccaro Drive
Cresskill, New Jersey 07626

David S. Oros
621 E. Pratt Street
Baltimore, Maryland 21202

Sherman Capital Group
3820 W. Happy Valley Road, Suite 141-601
Glendale, AZ 85310

4

EX-99.2

Exhibit 99.2

Sherman Capital Group LLC
3820 W. Happy Valley Road, Suite 141-601
Glendale, AZ 85310

Singer Children’s Management Trust
212 Vaccaro Drive
Cresskill, New Jersey 07626

David S. Oros
621 E. Pratt Street
Baltimore, Maryland, 21202

August 4, 2011

VIA FEDERAL EXPRESS

Board of Directors
Franklin Wireless Corp.
5440 Morehouse Drive — Suite 1000
San Diego, CA 92121

Attention: Mr. Gary Nelson, Chairman of the Board

FOR IMMEDIATE DISTRIBUTION TO THE BOARD OF DIRECTORS

     The undersigned, Sherman Capital Group LLC (“SCG”), Singer Children’s Management Trust (“SCMT”) and David S. Oros (“Mr. Oros” and, together with SCG and SCMT, the “Investors”), own, as of the date of this letter, an aggregate of approximately 934,822 shares, or 8%, of the outstanding common stock of Franklin Wireless Corp. (the “Company”). For the reasons set forth below, the Investors hereby provide written notice of their dissatisfaction with the performance of the Company’s stock, the Company’s corporate governance and compliance with applicable laws and the Company’s public disclosures and communications with shareholders.

     On August 2, 2011, the Company’s stock closed at a price of $2.31 per share. This price represents a precipitous decline of approximately 25% from $3.09 per share on April 20, 2011. This stock price performance implies that the market lacks confidence in the Company’s management, Board of Directors and corporate governance and leads the Investors to believe that the Company’s Board of Directors must take immediate steps to provide strategy and oversight to improve the Company’s financial and stock price performance.

     The Investors question the transparency of the Company’s corporate governance. In the Form 10-K/A filed by the Company in May 2011, the Company acknowledges that its disclosure controls and procedures were not effective for the most recent fiscal year. In addition, based on the Company’s public filings, it appears that the Company has not held an annual shareholders

meeting in recent years. A failure to hold an annual shareholders meeting evidences chronic failures of the Company’s Board of Directors to observe good corporate governance and to solicit votes of public shareholders in the election of directors.

     Furthermore, the Company states in the Information Statement filed on Schedule 14C with the Securities and Exchange Commission on February 15, 2011 that action was taken by the written consent of shareholders holding 55.49% of the Company’s outstanding shares of common stock to approve the adoption and amendment of the Company’s 2009 stock option plan. It appears that the management and directors of the Company together hold less than 20% of the Company’s outstanding shares of common stock. The 14C filing does not identify other large holders who would account for this vote, and accordingly the Investors question how this majority vote was obtained without a solicitation of shareholder votes in violation of applicable securities laws and regulations.

     What is more, based on governing documents listed in the Company’s Form 10-K filed in 2010 with the Commission, the Company’s Bylaws appear to prohibit outright the any action by shareholders taken by written consent and specifically provide: All actions required or permitted to be taken by the shareholders shall be taken at a duly convened meeting of shareholders. The Investors question, therefore, whether the Company’s 2009 stock option plan was duly and properly approved by shareholders and whether any equity awards under that plan are legally and validly issued.

     The Investors further note that the Commission has previously questioned the Company’s use of written shareholder consents. The 2011 written consent and 14C appear to be inconsistent with the Company’s prior correspondence with the Commission filed on January 11, 2007 regarding solicitations and the use of written consents.

     The Investors have concluded that the Company’s stock price performance reflects poor governance by the Board of Directors, as well as disregard of sound principles of corporate governance. The investors have also concluded that the Company’s Board of Directors and the Company have failed to provide adequate public disclosures and regular communications with shareholders, including forward-looking information, about matters material to the Company’s business and operations.

     Accordingly, the Investors are writing to inform the Board of Directors of the Company, formally and in writing, that the Investors seek a written plan and other assurances acceptable to the Investors for immediately

• improving the performance of the Company’s stock,

• scheduling an annual shareholders meeting for election of directors and duly filing an annual proxy statement with the Securities and Exchange Commission,

• investigating any irregularities in soliciting shareholder approval of the Company’s 2009 stock option plan, and any related accounting questions and

• improving the Company’s public disclosures and communications with shareholders, and improving the effectiveness of the Company’s disclosure controls and procedures.

     If the Company does not provide the Investors with such a plan and assurances of the Board’s immediate action on these matters, the Investors, acting together, will take such steps as are necessary and appropriate for the Company to hold an annual meeting of shareholders and to nominate, and vote in favor of, two persons for election to the Board of Directors of the Company.

Copies (via Federal Express) to: Mr. Gary Nelson
Mr. OC Kim

Very truly yours, SHERMAN CAPITAL GROUP LLC
By:	/s/ Steven Sherman
	Name:	Steven Sherman
	Title:	Managing Member

SINGER CHILDREN’S MANAGEMENT TRUST
By:	/s/ Karen Singer
	Name:	Karen Singer
	Title:	Trustee
By:	/s/ David S. Oros
	David S. Oros