Franklin Wireless(FKWL) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended March 31, 2025, were $8,009,619, representing a 29.6$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$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$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$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]