Financial Performance - Net sales for the three months ended March 31, 2025, were $8,009,619, representing a 29.6% increase from $6,176,499 in the same period of 2024[15] - Gross profit for the nine months ended March 31, 2025, was $6,667,444, compared to $2,867,684 for the same period in 2024, indicating a significant increase[15] - The company reported a net loss of $637,706 for the three months ended March 31, 2025, compared to a net loss of $1,310,320 for the same period in 2024, showing an improvement[15] - Total net sales for the nine months ended March 31, 2025, reached $39,159,629, up 58.8% from $24,679,824 in the same period of 2024[34] - The net loss attributable to the Parent Company for the nine months ended March 31, 2025, was $72,495, a significant improvement compared to a net loss of $2,297,180 for the same period in 2024[23] - Comprehensive loss for the three months ended March 31, 2025, was $641,515, compared to a comprehensive loss of $1,457,081 in the same period of 2024[15] Assets and Liabilities - Total current assets increased to $43,943,839 as of March 31, 2025, up from $40,220,460 as of June 30, 2024[13] - Total liabilities rose to $11,377,761 as of March 31, 2025, compared to $10,343,831 as of June 30, 2024[13] - The company’s cash and cash equivalents increased to $12,802,614 as of March 31, 2025, from $12,266,556 as of June 30, 2024[13] - As of March 31, 2025, the total stockholders' equity was $38,333,973, an increase from $36,375,998 as of June 30, 2024, reflecting a growth of approximately 5%[18] - Total current liabilities increased to $10.26 million as of March 31, 2025, compared to $9.09 million as of June 30, 2024, reflecting an increase of approximately 12.9%[13] Research and Development - Research and development expenses for the nine months ended March 31, 2025, were $2,745,763, up from $2,531,279 in the same period of 2024[15] - Research and development costs were $794,213 for the three months ended March 31, 2025, slightly down from $811,470 for the same period in 2024[15] Income and Expenses - The company recorded a litigation settlement income of $1,000,000 during the three months ended March 31, 2025[15] - The company recorded an income tax expense of $218,199 for the nine months ended March 31, 2025, compared to an income tax benefit of $577,981 for the same period in 2024[72] - The company recorded an income tax expense of $2,592 for the three months ended March 31, 2025, compared to an income tax benefit of $312,764 for the same period in 2024, indicating a shift in tax position[72] Cash Flow - The company reported a net cash used in operating activities of $490,230 for the nine months ended March 31, 2025, a significant reduction from $6,972,515 in the same period of the previous year[23] - The company reported a net cash increase of $536,058 for the nine months ended March 31, 2025, contrasting with a decrease of $5,236,792 in the previous year[24] Inventory and Receivables - The company’s accounts receivable increased to $3,004,809 as of March 31, 2025, from $1,155,060 as of June 30, 2024[50] - Contract liabilities totaled $765,316 as of March 31, 2025, compared to $158,771 as of June 30, 2024, indicating a significant increase in undelivered products and accrued marketing development funds[51] - As of March 31, 2025, the company recorded inventory reserves of $91,482 for obsolete or slow-moving inventory[64] Joint Ventures and Partnerships - The company formed a joint venture corporation, Sigbeat, with a total capital contribution of $5 million, where it owns 60%[122] - The company entered into a joint venture with Forge International Co., Ltd., forming Sigbeat, which is expected to enhance its market presence in telecommunications modules[28] Operational Efficiency - The company anticipates continued growth in net sales and improvements in operational efficiency in the upcoming quarters[11] - The company accrued a commission of $643,656 to a customer for marketing support during the nine months ended March 31, 2025, compared to $247,592 for the same period in 2024, representing an increase of approximately 159%[87] Legal Matters - FTI, a subsidiary, is involved in litigation with Partron Co., Ltd., claiming damages of $8,126,786 under the South Korean Unfair Competition Prevention Act[105] - The company agreed to a settlement of $2.4 million related to a shareholder litigation, which is reflected in liabilities under "accrued legal contingency expense"[107] Cybersecurity and Compliance - The company has a cybersecurity risk management program in place, with no identified incidents materially affecting operations as of March 31, 2025[132] - The company has no material unrecognized tax benefits as of March 31, 2025, suggesting a stable tax compliance environment[72]

Product Launch - Franklin Access has launched the Seiona – RT410S, a new product designed for secure and reliable connectivity in edge applications, targeting the multi-billion-dollar IoT market [1][2] - The Seiona – RT410S is aimed at various industries including digital signage, healthcare, ATMs, kiosks, vending machines, and EV charging stations, enhancing operational efficiency through seamless data exchange [1] Competitive Advantage - The Seiona series integrates full access to the Pintrac Mobile Device Management (MDM) platform, allowing for comprehensive remote management of devices, which reduces on-site servicing time and costs [2] - The Seiona – RT410S is the first in a series of upcoming devices that will utilize LTE technology and will be available in various physical configurations [2] Technical Features - The Seiona – RT410S incorporates cellular, Wi-Fi, and GPS technologies to ensure robust performance, with a compact and portable design suitable for diverse deployment scenarios [3] - The product is currently undergoing technical evaluation with leading national retailers for kiosk applications and is in the process of U.S. wireless carrier certification [3]

Group 1 - Franklin Wireless Corp. has appointed Ira Greenstein to its Board of Directors effective February 17, 2025, enhancing the board's expertise in strategic decision-making and governance [1][2] - Ira Greenstein is a Founding Partner of Pierson Ferdinand LLP and has held significant positions including Deputy Assistant and Strategist to the President during the first Trump Administration, and President of IDT Corporation and Genie Energy Ltd [1][2] - Greenstein will replace Gary Nelson on the Board, who is resigning to spend more time with his family [2] Group 2 - Franklin Wireless specializes in integrated connectivity solutions utilizing 4G LTE and 5G technologies, offering mobile device management and network management solutions [3]

Financial Performance - Net sales for the three months ended December 31, 2024, reached $17,827,098, a significant increase of 100.5% compared to $8,847,779 in the same period of 2023[16] - Gross profit for the six months ended December 31, 2024, was $5,313,564, up from $2,350,235 in 2023, reflecting a growth of 126.5%[16] - The company reported a net income attributable to Parent Company of $228,740 for the three months ended December 31, 2024, compared to a net loss of $764,615 in the same period of 2023[16] - For the six months ended December 31, 2024, the net income was $565,211 compared to a net loss of $986,860 for the same period in 2023[23] - Earnings per share attributable to Parent Company stockholders for the three months ended December 31, 2024, was $0.02, compared to a loss of $0.06 in the same period of 2023[16] - Net sales increased by $8,979,319, or 101.5%, to $17,827,098 for the three months ended December 31, 2024, compared to $8,847,779 for the same period in 2023[156] - Gross profit increased by $2,404,987, or 287.3%, to $3,242,062 for the three months ended December 31, 2024, with a gross profit margin of 18.2% compared to 9.5% in 2023[158] - For the six months ended December 31, 2024, net sales increased by $12,646,685, or 68.3%, to $31,150,010 from $18,503,325 in 2023[162] - Gross profit for the six months ended December 31, 2024, increased by $2,963,329, or 126.1%, to $5,313,564, with a gross profit margin of 17.1% compared to 12.7% in 2023[164] Assets and Liabilities - Total current assets increased to $48,586,348 as of December 31, 2024, compared to $40,220,460 on June 30, 2024, representing a rise of 20.5%[14] - Total liabilities increased to $17,474,880 as of December 31, 2024, compared to $10,343,831 on June 30, 2024, marking a rise of 68.5%[14] - Cash and cash equivalents rose to $20,262,886 as of December 31, 2024, compared to $12,266,556 on June 30, 2024, indicating a growth of 65.5%[14] - Total stockholders' equity increased to $36,975,488 as of December 31, 2024, from $36,375,998 on June 30, 2024, reflecting a growth of 1.6%[14] - The company reported accounts receivable of $1,912,369 as of December 31, 2024, compared to $1,155,060 as of June 30, 2024, indicating a significant increase in receivables[51] - Total accrued liabilities as of December 31, 2024, amounted to $2,002,924, an increase from $1,425,146 as of June 30, 2024[89] Cash Flow - Operating cash flow for the six months ended December 31, 2024, was $5,412,542, a significant improvement from a cash outflow of $6,193,534 in the prior year[23] - For the six months ended December 31, 2024, net cash provided by operating activities was $5,412,542, primarily due to an increase in accounts payable and accrued liabilities of $6,501,820 and $838,564, respectively[173] - For the six months ended December 31, 2023, net cash used in operating activities was $6,193,534, mainly due to an increase in accounts receivable of $4,495,638 and a decrease in accounts payable of $3,869,191[174] - Net cash provided by investing activities for the six months ended December 31, 2024, was $2,631,817, primarily from sales of short-term investments totaling $2,685,688[175] - Net cash used in investing activities for the six months ended December 31, 2023, was $869,481, mainly due to the purchase of short-term investments of $779,571[177] - Net cash used in financing activities for the six months ended December 31, 2024, was $0, compared to $2,046 in 2023, which was related to increased loan interest to an employee[178] Expenses - Research and development expenses for the six months ended December 31, 2024, totaled $1,951,550, an increase of 13.5% from $1,719,809 in 2023[16] - Operating expenses increased by $53,815, or 2.2%, to $2,446,831 for the three months ended December 31, 2024[159] - Operating expenses for the six months ended December 31, 2024, increased by $400,423, or 8.9%, to $4,891,116 from $4,490,693 in 2023[166] - The company reported stock-based compensation of $170,583 for the six months ended December 31, 2024, compared to $138,780 in the prior year[23] - Shipping and handling costs for the three months ended December 31, 2024, were $94,742, up from $51,498 in the same period of 2023, representing an increase of approximately 83.7%[63] - The company incurred amortization expenses of approximately $208,917 for the three months ended December 31, 2024, compared to $239,688 for the same period in 2023, showing a decrease of approximately 12.8%[56] - Amortization expense for definite lived intangible assets was $217,591 for the three months ended December 31, 2024, compared to $245,326 for the same period in 2023[87] Subsidiaries and Investments - The company formed a new subsidiary, Sigbeat, with a 60% ownership stake, contributing $5,000,000 in capital for its establishment[27] - The company holds a 66.3% ownership in Franklin Technology Inc., which provides design and development services for wireless products[85] - The company holds a 66.3% ownership in Franklin Technology Inc. and a 60% ownership in Sigbeat Inc., expanding its market presence in North America and Asia[147] Legal and Compliance - The company is involved in litigation related to a recall affecting approximately 2.5 million devices, with no current estimate of the financial impact[104] - A legal action against the company resulted in a settlement payment of $2.4 million related to shareholder litigation[110] - The company has no material unrecognized tax benefits as of December 31, 2024[74] - The company recorded a decrease in deferred tax asset of $166,927 for the three months ended December 31, 2024, compared to an increase of $215,332 for the same period in 2023[74] - The company has not reported any changes in internal controls over financial reporting that materially affect its operations during the six months ended December 31, 2024[188] Lease and Rent - The company leased approximately 12,775 square feet of office space in San Diego, California, at a monthly rent of $25,754, which will increase to $27,789 for a new lease of 11,400 square feet starting January 1, 2024[93] - Rent expense for the San Diego office space was $83,367 for the three months ended December 31, 2024, compared to $77,263 for the same period in 2023, reflecting an increase of 13.6%[93] - Rent expenses for the three months ended December 31, 2024, were $112,352, a decrease from $254,402 in the same period of 2023[183] - Rent expenses for the six months ended December 31, 2024, were $225,109, down from $365,829 in 2023[183] - Rent expenses for the Korea-based subsidiary's leases were approximately $26,475 for the three months ended December 31, 2024, down from approximately $32,100 in 2023, a decrease of 17.5%[95] - Total lease expense for the six months ended December 31, 2024, was $225,109, a decrease of 38.5% from $365,829 in 2023[99] Market and Strategy - The company is a leading global provider of integrated wireless solutions, focusing on 5G and 4G LTE technologies[84] - The company is focusing on enhancing its software service offerings to adapt to the declining demand for mobile device management services in the post-pandemic economy[151] - The company plans to replace one model this year and another next year that are reaching end of life with new models, which may impact future growth prospects[192] Miscellaneous - The return rate for 5G wireless devices is 0.57%, with warranty repairs at 0.10%[102] - The company is currently exempt from international tariffs on products manufactured in Vietnam, but potential future tariffs could significantly impact costs and profits[127] - As of December 31, 2024, no material cybersecurity incidents were identified that could affect the Company's business strategy or financial condition[132]

Core Insights - Franklin Access has successfully funded a joint venture named Sigbeat to develop 4G/5G modules and AI-powered solutions [1] - Sigbeat will focus on designing, marketing, and certifying advanced 4G/5G modules with on-device AI capabilities [2] - The joint venture aims to enhance security, image processing, and video streaming functionalities while reducing reliance on cloud computing [2][3] Company Overview - Franklin Access specializes in integrated connectivity solutions utilizing 4G LTE and 5G technologies [5] - The company provides mobile device management (MDM), network management solutions (NMS), and innovative wireless products [5] Joint Venture Details - Sigbeat will leverage technological expertise from its partners and Franklin Access's leadership in wireless solutions [3] - The modules will combine edge computing with multi-network capabilities to enhance customization and efficiency for various industries [3][4] - Sigbeat aims to deliver reliable and future-ready connectivity through scalable and customizable designs [4]

Core Viewpoint - Franklin Wireless achieved a significant legal victory in a shareholder litigation case, resulting in only nominal damages awarded to the company, allowing management to refocus on its business objectives [2][3][6]. Group 1: Legal Outcome - The U.S. District Court for the Southern District of California ruled that the actions of Franklin Wireless officers and directors led to only nominal damage to the company [2]. - Plaintiffs initially sought over $110 million in damages, but the jury awarded only $0.99 in nominal damages after less than a day of deliberation [6]. Group 2: Management Implications - The resolution of the litigation provides certainty and clarity for the company's officers and directors, enabling them to concentrate on delivering innovative connectivity solutions [3]. - Management can now focus on its mission without the distraction of ongoing legal issues [3]. Group 3: Company Profile - Franklin Wireless specializes in integrated solutions utilizing 4G LTE and 5G technologies, offering mobile device management and network management solutions [4].

Financial Performance - Net sales for the three months ended September 30, 2024, were $13,322,912, representing a 38.3% increase from $9,655,546 in the same period of 2023[11] - Gross profit for the quarter was $2,071,502, up from $1,513,160, indicating a gross margin improvement[11] - The company reported a net income of $648,656 for the quarter, compared to a net loss of $337,201 in the prior year[11] - Earnings per share attributable to Parent Company stockholders were $0.04, compared to a loss of $0.02 in the prior year[11] - The company reported a comprehensive income of $600,187 for the quarter, compared to a comprehensive loss of $331,165 in the same quarter of 2023[11] - The net income for the three months ended September 30, 2024, was $648,656, compared to a net loss of $(337,201) for the same period in 2023, indicating a turnaround in profitability[16] - Cash flow from operating activities showed a positive net cash of $2,670,900, a significant improvement from a cash outflow of $5,223,316 in the previous year[16] - The company recognized a gain from the forgiveness of accrued liabilities amounting to $247,592, contributing positively to the net income[11] Assets and Liabilities - Total current assets increased to $45,268,864 as of September 30, 2024, from $40,220,460 at June 30, 2024, reflecting a growth of 12.8%[7] - Cash and cash equivalents rose to $14,618,062, up from $12,266,556, marking a 19.2% increase[7] - Total liabilities increased to $14,392,297 from $10,343,831, representing a 39.5% rise[8] - The company’s retained earnings increased to $25,652,396 from $25,137,209, showing a growth of 2%[9] - Total stockholders' equity as of September 30, 2024, was $37,240,162, up from $36,375,998 at June 30, 2024[9] - Total accrued liabilities as of September 30, 2024, amounted to $1,765,370, an increase from $1,425,146 as of June 30, 2024[79] Research and Development - Research and development expenses for the quarter were $1,024,312, compared to $866,955 in the same period last year, reflecting a 18.1% increase[11] - Capitalized product development costs in progress were $14,000 as of September 30, 2024, compared to $0 as of June 30, 2024[48] - Research and development costs increased to $1,024,312 for the three months ended September 30, 2024, compared to $866,955 in 2023[50] Customer Concentration - A significant portion of revenue is derived from a small number of customers, with the two largest customers accounting for 93.6% of consolidated net sales for the three months ended September 30, 2024[69] - Sales to the two largest customers accounted for 93.6% of consolidated net sales for the three months ended September 30, 2024, compared to 90.6% for the same period in 2023[69] Inventory and Cost of Goods Sold - The company reported a significant decrease in accounts receivable, which was $(634,081) for the three months ended September 30, 2024, compared to $(978,093) in the same period of 2023[16] - Cost of goods sold included amortization expenses of approximately $245,233 for the three months ended September 30, 2024, compared to $239,624 for the same period in 2023[45] - The company recorded inventory reserves of $91,482 for obsolete or slow-moving inventory as of September 30, 2024[54] Operating Expenses - Total operating expenses increased to $2,444,285, up from $2,097,677, primarily driven by higher selling, general, and administrative expenses and research and development costs[11] - Shipping and handling costs increased to $78,113 for the three months ended September 30, 2024, compared to $52,450 for the same period in 2023[52] Tax and Legal Matters - The company recorded income tax provisions of $47,880 for the three months ended September 30, 2024, compared to benefits of $50,060 for the same period in 2023, reflecting a shift from tax benefits to tax expenses[64] - A settlement of $2.4 million was agreed upon in a shareholder lawsuit, which is reflected in liabilities under "accrued legal contingency expense"[94] Corporate Developments - The company entered into a loan agreement with its South Korean subsidiary for $10 million to support operations and facility acquisition[102] - The loan agreement includes a 2% annual interest rate and a five-year term, with a default interest rate of 7% per annum[103] - The company is forming a new corporation with MeiG Smart Technology Co., Ltd., contributing $3 million for a 60% ownership stake[109] - The company has accrued a bonus of $1,000,000 for the CEO for the quarter ended September 30, 2024, with a total bonus balance of $1,000,000[107] Compliance and Risk Management - The company has not identified any cybersecurity incidents that materially affected its business strategy or financial condition as of September 30, 2024[116] - The company anticipates no losses on cash deposits exceeding the FDIC insured limit of $250,000 per financial institution[71] - The company has recently adopted new accounting standards that will require additional disclosures in future financial statements[72][73]

Financial Performance - For the fiscal year ended June 30, 2024, total net sales were $30,796,690, a decrease of approximately 33% from $45,948,516 in fiscal 2023[10] - Net sales in North America were $30,699,727, down from $45,782,084, representing a decline of about 33%[10] - For the fiscal year ended June 30, 2024, net revenues from the two largest customers represented 68% and 23% of consolidated net sales, indicating a significant dependency on a small number of customers[33] - Net sales for the fiscal year ended June 30, 2024, totaled $30,796,690, a decrease of approximately 33% from $45,948,516 in 2023[10] - North America generated $30,699,727 in net sales, down from $45,782,084 in the previous year, reflecting a decline of about 33%[10] Asset Management - Long-lived assets decreased to $1,424,565 from $2,281,972, a reduction of approximately 37.5%[10] - Long-lived assets decreased from $2,281,972 in June 30, 2023, to $1,424,565 in June 30, 2024, representing a reduction of approximately 37.5%[10] Product Development and Innovation - The company is focused on developing 5G and 4G LTE wireless solutions, including mobile hotspots and fixed wireless routers[11] - New product developments include a 4G/5G M2M Gateway and on-device AI capabilities for enhanced IoT applications[13] - Future product development includes a 4G/5G M2M Gateway and on-device AI capabilities for enhanced IoT applications[13] Market and Competition - The wireless broadband data access market is highly competitive, requiring continuous investment in R&D and marketing[25] - The market for the company's products is rapidly evolving and highly competitive, posing challenges in maintaining market acceptance and customer relationships[29] Operational Risks - The company experiences long lead times for product deliveries, often exceeding 45 days, which may lead to customer loss to competitors with faster delivery times[35] - The company operates in a volatile hardware and software design industry, with risks including latent design flaws and manufacturing defects that could impact product performance[28] - The company relies on collaborative arrangements for product development and commercialization, which are critical for maintaining market presence[32] - The company relies on independent manufacturers in Asia for the majority of its product production[20] - The company relies on third-party manufacturers and sole source suppliers, exposing it to risks related to supply chain disruptions and component availability[39] Financial Strategy and Risks - The company may seek additional financing for product development, which could dilute existing stockholder ownership[22] - The company is exposed to potential tariffs of 10%-25% on the purchase price if international tariff exemptions change, which could adversely affect sales and operating results[36] - The company faces risks related to international operations, including credit management, regulatory changes, and potential adverse tax consequences[35] - International operations expose the company to political, economic, and currency exchange risks that could materially affect financial results[43] - The company may engage in acquisitions or divestitures, which could adversely impact financial condition and require significant charges to earnings if goodwill becomes impaired[44] Shareholder Considerations - The company's share price has been highly volatile and may continue to be influenced by various factors, including financial reporting and market conditions[46] - The share price has been highly volatile and may continue to be influenced by market manipulation and concentrated ownership[46] - The company does not intend to pay dividends, making stock price appreciation the primary return on investment for shareholders[46] - Fluctuations in quarterly operating results may lead to volatility in stock price, affecting investor confidence and market perception[47] Regulatory Environment - The company has obtained necessary regulatory approvals for current products but may face challenges in obtaining timely approvals for future products[37] - Regulatory approvals are mandatory for products, and delays in obtaining these approvals could hinder future product sales[37]

Core Insights - Franklin Access has committed to invest $3 million in a joint venture focused on developing and marketing 4G/5G mobile broadband modules, aiming to innovate in the module space with on-device AI capabilities [1][4]. Company Overview - Franklin Access specializes in integrated wireless solutions, utilizing 4G LTE and 5G technologies to provide mobile device management and network management solutions [3]. - The company is transitioning its branding from Franklin Wireless to Franklin Access, indicating a broader focus on integrated solutions [3]. Product Development - The new on-device AI modules are anticipated to launch soon, addressing the increasing demand for smarter wireless products [3]. - These modules will feature advanced functionalities in security, image processing, and video streaming, enhancing user experience across 4G and 5G networks [4][5]. - The modules will be certified with wireless operators before becoming available to the market [4]. Industry Trends - On-device AI technology offers benefits such as improved privacy, faster response times, reduced reliance on internet connectivity, and enhanced customization for users [2]. - Applications for on-device AI include voice assistants, video quality improvements, augmented reality, and security enhancements, indicating a growing trend towards localized processing [2].

Core Perspective - Franklin Wireless has rebranded itself as Franklin Access to better reflect its mission of providing global connectivity solutions [2][4] Company Overview - Franklin Access focuses on delivering integrated wireless solutions that emphasize reliability, speed, and accessibility for both home and business networks [4] - The company specializes in leveraging 4G LTE and 5G technologies to design connectivity solutions suitable for the digital age [6] Strategic Move - The rebranding is seen as a strategic move to enhance customer satisfaction through innovative network solutions and user-friendly products [2][4] - The transition to Franklin Access will not impact ownership, management, or operations, and the company will continue to be listed on NASDAQ under the symbol FKWL [2] Online Presence - The launch of FranklinAccess.com consolidates all Franklin Access brands into a single online platform, enhancing the company's digital presence [5] Commitment to Service - The company remains dedicated to exceptional service and aims to empower users with seamless network integration across multiple devices [4][6]