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FRANKLIN WIRELESS CORP

FKWL
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Business Summary

Franklin Wireless Corp. operates as a leading global provider of integrated wireless solutions utilizing the latest 5G and 4G LTE technologies, including mobile hotspots, fixed wireless routers, and mobile device management solutions. The company is a leading enabler of the Digital Divide initiative, with expertise extending to innovation in Internet of Things and machine-to-machine applications. Its primary markets are in North America and Asia.

The company holds a 66.3% ownership in Franklin Technology Inc., a research and development company based in Seoul, South Korea, and a 60% ownership interest in Sigbeat Inc., based in San Diego, California. Products are marketed and sold directly to wireless operators and indirectly through strategic partners and distributors. For the year ended June 30, 2025, net revenues from the two largest customers represented 60.9% and 33.5% of consolidated net sales, respectively. The wireless broadband data access market is highly competitive, with many competitors having significantly greater financial, technical, and marketing resources.

The company generates revenue primarily from the sale of wireless access products, with revenue recognized when control of promised goods or services is transferred to customers. Revenue from products transferred at a single point in time accounted for 99.2% of net sales for the year ended June 30, 2025, and 98.8% for the year ended June 30, 2024. The company has one reportable segment, consisting of the sale of wireless access products, and the Chief Operating Decision Maker assesses performance based on consolidated net income.

The company offers a wide variety of innovative integrated wireless solutions utilizing the latest 5G and 4G LTE technologies. Product categories include 5G/4G LTE Wi-Fi Mobile Hotspots, which are portable Wi-Fi hotspot routers providing wireless internet access for multiple simultaneously connected devices; 5G/4G Fixed Wireless Routers, which are enhanced routing gateways supporting both wired and wireless connectivity; Smart Box Solutions in development, including a 4G/5G M2M Gateway for reliable machine-to-machine communication; On-Device Artificial Intelligence for real-time data processing at the edge; Quvo Family Guardian Solutions with parental controls and senior care features; and JEXtream MDM/NMS Solutions, a cloud-based telecom grade server platform for 5G devices and routers enabling remote management.

For the year ended June 30, 2025, net sales by geographic region were $46,081,244 in North America and $5,657 in Asia. For the year ended June 30, 2024, net sales were $30,699,727 in North America and $96,963 in Asia. The company's long-lived assets, net, as of June 30, 2025, were $929,173 in North America and $157,821 in Asia.

On May 14, 2024, the company entered into an Agreement for Formation of a Joint Venture Corporation, forming Sigbeat Inc., a Nevada corporation owned 60% by Franklin and 40% by its Electronic Manufacturing Services partner. As of June 30, 2025, the company had 67 total employees at Franklin, FTI, and Sigbeat combined. The company leases approximately 11,400 square feet of office space in San Diego, California, at a monthly rent of $27,789 , with a lease term of 65 months from the commencement date of January 1, 2024. The company also leases office space in Seoul, South Korea, totaling approximately 10,000 square feet at a monthly rent of approximately $6,600 and approximately 2,682 square feet at a monthly rent of approximately $2,200 , both extended to August 31, 2026.

For the fiscal year ended June 30, 2025, total net sales were $46,086,901 , compared to $30,796,690 for the fiscal year ended June 30, 2024, an increase of $15,290,211 , or 49.6% . Gross profit increased by $4,406,719 , or 125.6% , to $7,915,069 from $3,508,350 . Gross profit as a percentage of net sales was 17.2% for fiscal 2025 compared to 11.4% for fiscal 2024. Net loss attributable to Parent Company stockholders was $(140,429) for fiscal 2025 compared to $(4,166,671) for fiscal 2024.

Business Outlook

The company believes its revenue growth will be influenced largely by the successful maintenance of existing customers, the rate of increase in demand for wireless data products, customer acceptance of new products, new customer relationships and contracts, the ability to meet customer demands, the ability to maintain good relationships with manufacturing partners and suppliers, and the defect rates experienced by end users. The company is working to improve and further enhance its software service offerings to address a shift in demand as post-pandemic remote education and work-from-home trends decline, and current demand for mobile device management services has been declining.

The company is seeing that demand from end-users has been shifting in the post-pandemic economy as remote education and work from home trends are declining. Current demand for mobile device management services has been declining. The company is working to improve and further enhance its software service offerings to address this change in the market.

The filing does not contain specific margin or cost outlook targets or efficiency restructuring targets with exact figures.

The company relies on two independent companies located in Asia for the manufacturing of the majority of its products for the fiscal year ended June 30, 2025. The company also depends on sole source suppliers for some components used in its products. The company often experiences long-lead times to ship products, often more than 45 days .

For the years ended June 30, 2025 and 2024, the company incurred $520,202 and $123,359 , respectively, in capitalized product development costs. Research and development expenses were $4,102,660 for fiscal 2025 and $3,406,750 for fiscal 2024. The filing does not disclose specific capital expenditure plans, share repurchase authorization amounts, or dividend policy figures.

The company faces structural headwinds including the dependence on a small number of customers for a significant portion of revenues, with the two largest customers representing 60.9% and 33.5% of consolidated net sales for fiscal 2025. The company also faces risks from the potential imposition of international tariffs of 10%-80% of the purchase price, which could have a materially adverse effect on sales and operating results.

The company's expansion into international operations exposes it to additional risks including increased credit management risks, unexpected changes in regulatory requirements, exchange rates, trading policies, tariffs, and other barriers. The company believes its products are currently exempt from international tariffs, but if this changes, a tariff of 10%-80% of the purchase price could be imposed, potentially making the business unprofitable.

Risk Factors

The company is highly dependent on a small number of customers, with net revenues from the two largest customers representing 60.9% and 33.5% of consolidated net sales for fiscal 2025, and written agreements do not obligate them to purchase any quantity of products. The company relies on two independent manufacturers in Asia for the majority of its products and depends on sole source suppliers for some components, exposing it to supply chain disruptions. The company faces potential imposition of international tariffs of 10%-80% of the purchase price, which could make the business unprofitable. The company operates in a highly competitive market with many competitors possessing significantly greater financial, technical, and marketing resources. The company's products include lithium batteries, which carry risks of thermal runaway, fires, explosions, and toxic gas release, and latent design or manufacturing defects could result in product liability claims, recalls, and significant expenses.

Management Priorities

Management's discussion emphasizes that the company is a leading global provider of integrated wireless solutions utilizing the latest 5G and 4G LTE technologies. The tone is cautiously optimistic, highlighting a 49.6% increase in net sales to $46,086,901 for fiscal 2025, driven by increased demand from major carrier customers, and a significant improvement in gross profit margin to 17.2% from 11.4% . Management identifies seven key factors that will influence future revenue growth, including maintaining existing customers, increasing demand for wireless data products, customer acceptance of new products, new customer relationships, meeting customer demands, maintaining relationships with manufacturing partners and suppliers, and managing defect rates. Management also acknowledges a shift in post-pandemic demand as remote education and work-from-home trends decline, and notes that current demand for mobile device management services has been declining, with efforts underway to improve software service offerings.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1A, Risk Factors
  2. [2] Item 1A, Risk Factors
  3. [3] Item 7, MD&A — Performance Obligations
  4. [4] Item 7, MD&A — Performance Obligations
  5. [5] Item 1, Business — Geographic Areas
  6. [6] Item 1, Business — Geographic Areas
  7. [7] Item 1, Business — Geographic Areas
  8. [8] Item 1, Business — Geographic Areas
  9. [9] Item 1, Business — Geographic Areas
  10. [10] Item 1, Business — Geographic Areas
  11. [11] Item 1, Business — Employees
  12. [12] Item 2, Properties
  13. [13] Item 2, Properties
  14. [14] Item 2, Properties
  15. [15] Item 2, Properties
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Results of Operations
  19. [19] Item 7, MD&A — Results of Operations
  20. [20] Item 7, MD&A — Results of Operations
  21. [21] Item 7, MD&A — Results of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Results of Operations
  26. [26] Item 7, MD&A — Results of Operations
  27. [27] Item 7, MD&A — Results of Operations
  28. [28] Item 1A, Risk Factors
  29. [29] Item 7, MD&A — Capitalized Product Development Costs
  30. [30] Item 7, MD&A — Capitalized Product Development Costs
  31. [31] Item 1, Business — Segment Information
  32. [32] Item 1, Business — Segment Information
  33. [33] Item 1A, Risk Factors
  34. [34] Item 1A, Risk Factors
  35. [35] Item 1A, Risk Factors
  36. [36] Item 1A, Risk Factors
  37. [37] Item 1A, Risk Factors
  38. [38] Item 1A, Risk Factors
  39. [39] Item 1A, Risk Factors
  40. [40] Item 7, MD&A — Results of Operations
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 7, MD&A — Results of Operations
  43. [43] Item 7, MD&A — Results of Operations
  44. [44] Item 8, Consolidated Statements of Operations
  45. [45] Item 8, Consolidated Statements of Operations
  46. [46] Item 8, Consolidated Statements of Operations
  47. [47] Item 8, Consolidated Statements of Operations
  48. [48] Item 8, Consolidated Statements of Operations
  49. [49] Item 8, Consolidated Statements of Operations
  50. [50] Item 8, Consolidated Statements of Operations
  51. [51] Item 8, Consolidated Statements of Operations
  52. [52] Item 7, MD&A — Results of Operations
  53. [53] Item 7, MD&A — Results of Operations
  54. [54] Item 8, Consolidated Statements of Operations
  55. [55] Item 8, Consolidated Statements of Operations
  56. [56] Item 8, Consolidated Statements of Cash Flows
  57. [57] Item 8, Consolidated Statements of Cash Flows
  58. [58] Item 8, Consolidated Balance Sheets
  59. [59] Item 8, Consolidated Balance Sheets
  60. [60] Item 8, Consolidated Balance Sheets
  61. [61] Item 8, Consolidated Balance Sheets
  62. [62] Item 8, Consolidated Balance Sheets
  63. [63] Item 8, Consolidated Balance Sheets
  64. [64] Item 7, MD&A — Results of Operations
  65. [65] Item 7, MD&A — Results of Operations
  66. [66] Item 7, MD&A — Results of Operations
  67. [67] Item 7, MD&A — Results of Operations
  68. [68] Item 7, MD&A — Results of Operations
  69. [69] Item 7, MD&A — Results of Operations

Analysis on 6/21/2026