Franklin has sold more than 29,000,000 eBooks through 45,000 retail outlets worldwide, as well as online through its web site, and through its direct marketing operation. Franklin maintains sales and distribution subsidiaries in the United Kingdom, France, Germany, the Benelux countries, Canada, Australia, and Mexico. The Company has production management offices in Tokyo and Hong Kong. In addition, Franklin's OEM/Vertical Market division serves the medical and educational communities and develops custom products for publishers and other information providers.

Franklin's wholly owned subsidiary, Proximity Technology, Inc., is a provider of high-quality linguistic products for OEM clients internationally for both embedded and web-based applications. Proximity spell correction and linguistic technologies are available for 20 languages and are used by industry leaders such as Adobe Systems, Ask Jeeves, Macromedia, Mattel, Merriam-Webster, and Unisys.

eBookMan is a multimedia content player that allows you to read books, listen to audio books and music, and record your voice, all on a device that fits in your pocket. eBookMan also incorporates organizer functions, natural handwriting recognition, and a MultiMedia Card slot that lets you expand device memory by up to 64 MB presently. eBookMan features a 200x240 display that shows 87% more information than today's most popular handheld devices, approximating the width of a newspaper column. Three models will be available with 8 to 16 MB of built-in RAM and a retail price starting at just $129.95.

Franklin also provides a Software Developer's Kit (SDK) for eBookMan to enable a wide range of content and applications to be written for this new platform. The Company will support and encourage outside developers in such efforts. Our digital rights management (DRM) and the world's first open but secure architecture assure both our content partners and application developers the highest level of security available today. The Company has also forged strategic partnerships to ensure that wide ranges of content and applications are available for eBookMan.

With the Franklin Reader, the Company is making eBook content and its technology available for any handheld device. Our eBook Reader application was released for Palm OS® devices in early 2000. Customers who purchase and download titles from our web site (www.franklin.com) and our affiliate partners can read those works on their handheld device using the Franklin Reader application.

In addition to producing handheld eBooks and downloadable eBook content, Franklin is also the exclusive worldwide producer and distributor of the ROLODEX® Electronics brand of personal organizers. We market personal information management products under the ROLODEX® Electronics brand name at a range of popular price points for wide distribution.

From the moment Franklin introduced the world's first handheld eBook in 1986, the Company has been exploiting the potential of eBooks to create a fundamentally new way of reading. Today, we aim to build upon our expertise as the worldwide leader in eBooks in several ways. First, we have created the next generation in eBook hardware with eBookman®, the world's first handheld eBook reader that has both an open but secure architecture, is affordable, can be carried in your pocket, and gives you an optimal reading experience. Second, we strive to bring Franklin's high-quality eBook content to a wide audience of users by making it available for any platform, including today's popular Palm®, Windows CE®, and Psion handheld devices. Third, we are transforming our web site into an eBookstore where readers can come to find a wide range of titles from the most respected content providers.