Core Insights - Franklin Wireless has rebranded itself as Franklin Access to better reflect its mission of providing seamless global connectivity solutions [3][6] - The company emphasizes reliability, speed, and accessibility in its network solutions for both home and business environments [1][6] - The transition to Franklin Access will not impact ownership, management, or operations, and the stock will continue to be listed on NASDAQ under the symbol FKWL [3][6] Company Overview - Franklin Access specializes in integrated wireless solutions, utilizing 4G LTE and 5G technologies for mobile device and network management [4][6] - The launch of FranklinAccess.com consolidates all Franklin Access brands into a single online presence, enhancing user experience [2][4] - The company is committed to exceptional customer service and innovative network solutions, aiming for high customer satisfaction [3][6]

Financial Performance - Net sales for the three months ended March 31, 2024, were $6,176,499, a decrease of 47.9% compared to $11,851,971 for the same period in 2023[17] - Gross profit for the three months ended March 31, 2024, was $517,449, down 74.7% from $2,045,510 in the prior year[17] - The company reported a net loss of $1,310,320 for the three months ended March 31, 2024, compared to a net income of $211,639 for the same period in 2023[17] - Comprehensive loss for the three months ended March 31, 2024, was $1,457,081, compared to comprehensive income of $71,887 for the same period in 2023[17] - For the nine months ended March 31, 2024, the net loss was $2,297,180 compared to a net loss of $1,298,722 for the same period in 2023, representing an increase in loss of approximately 77%[25] - Net sales for North America decreased to $24,583,324 for the nine months ended March 31, 2024, down 14% from $28,778,479 in the same period of 2023[32] - Net sales decreased by $5,675,472, or 47.9%, to $6,176,499 for the three months ended March 31, 2024, compared to $11,851,971 for the same period in 2023[142] - Gross profit decreased by $1,528,061, or 74.7%, to $517,449 for the three months ended March 31, 2024, with a gross profit margin of 8.4% compared to 17.3% in 2023[144] - Net loss before income taxes for the three months ended March 31, 2024, was $(26.3%) compared to $(3.1%) for the same period in 2023[141] - Net sales for the nine months ended March 31, 2024, decreased by $4,264,730, or 14.7%, to $24,679,824 from $28,944,554 for the same period in 2023[148] - Gross profit for the nine months ended March 31, 2024, decreased by $1,717,730, or 37.5%, to $2,867,684, with a gross profit margin of 11.6% compared to 15.8% in 2023[150] Assets and Liabilities - Total current assets decreased to $43,547,756 as of March 31, 2024, from $51,857,095 as of June 30, 2023, representing a decline of 16.0%[14] - Total liabilities decreased to $11,773,429 as of March 31, 2024, from $16,512,250 as of June 30, 2023, a reduction of 28.5%[14] - The company’s retained earnings decreased to $26,903,234 as of March 31, 2024, down from $29,101,225 as of June 30, 2023, reflecting a decline of 7.5%[14] - The company’s total stockholders' equity decreased to $38,245,390 as of March 31, 2024, from $40,414,828 as of June 30, 2023, a decrease of 5.4%[14] - The total long-lived assets decreased from $2,281,972 as of June 30, 2023, to $1,711,247 as of March 31, 2024, indicating a decline of approximately 25%[33] - Cash and cash equivalents at the end of the period were $7,004,494, a decrease of 60% from $17,569,754 at the end of the same period in 2023[25] Expenses - Research and development expenses for the three months ended March 31, 2024, were $811,470, a decrease of 22.9% compared to $1,052,672 in the same period of 2023[17] - Operating expenses decreased by $443,488, or 17.6%, to $2,072,617 for the three months ended March 31, 2024, from $2,516,105 for the same period in 2023[145] - Research and development costs for the three months ended March 31, 2024, were $811,470, down from $1,052,672 for the same period in 2023, representing a decrease of approximately 22.9%[56] - The company incurred a depreciation expense of $28,059 for the nine months ended March 31, 2024, compared to $41,341 in the same period of 2023[25] - The company recorded an income tax benefit of $312,764 for the three months ended March 31, 2024, compared to $578,664 for the same period in 2023, reflecting a decrease of approximately 45.9%[70] - Shipping and handling costs for the three months ended March 31, 2024, were $28,441, down from $58,730 in the same period of 2023, indicating a reduction of about 51.6%[58] Cash Flow - The company reported a net cash used in operating activities of $6,972,515 for the nine months ended March 31, 2024, compared to $6,954,199 in the same period of 2023[25] - Net cash provided by investing activities for the nine months ended March 31, 2024, was $1,815,796, mainly from sales of short-term investments totaling $1,995,606[159] - The net cash provided by financing activities for the nine months ended March 31, 2024, was $1,045, attributed to an increase in loan to an employee[161] - For the nine months ended March 31, 2024, the net cash used in operating activities was $6,972,515, primarily due to a decrease in accounts payable of $6,668,572 and a net loss of $2,297,180[157] Inventory and Receivables - As of March 31, 2024, accounts receivable increased to $10,262,320 from $8,949,802 as of June 30, 2023, reflecting a growth of approximately 14.7%[46] - The balance of inventory reserves for obsolete or slow-moving inventories was $74,548 as of March 31, 2024, significantly lower than $585,274 as of June 30, 2023, showing a decrease of approximately 87.3%[61] - Contract liabilities for undelivered products rose to $195,599 as of March 31, 2024, compared to $146,488 as of June 30, 2023, indicating an increase of about 33.5%[47] Leases and Commitments - The company signed a new lease for office space in San Diego, California, at a monthly rent of $23,370, which commenced on January 1, 2024[91] - Future minimum payments under operating leases total $1,874,557, with a remaining lease term of 5.2 years[96] - The total lease expenses for the nine months ended March 31, 2024, were $483,305, an increase from $334,146 in the same period of 2023[96] - The company recorded an additional rent expense of $142,978 for pending charges from a prior landlord for variable cost increases over the last seven years[163] Stock and Equity - The company recorded stock-based compensation of $208,860 for the nine months ended March 31, 2024, down from $536,922 in the same period of 2023[25] - As of March 31, 2024, there were 627,001 stock options outstanding with a weighted average exercise price of $4.22[126] - The aggregate intrinsic value of stock options as of March 31, 2024, was based on a closing stock price of $2.99 per share[127] Legal and Regulatory - A settlement of $2.4 million has been agreed upon in the shareholder litigation, which is reflected in liabilities under "accrued legal contingency expense"[105] - The company believes its products are currently exempt from international tariffs, but potential tariffs of 10%-25% could adversely affect sales and operating results if imposed[121] Miscellaneous - The company has not entered into any related party transactions for the three and nine months ended March 31, 2024, and 2023[129] - No material recognizable subsequent events were identified that required disclosure in the financial statements as of March 31, 2024[130] - The company has not been able to recreate any device failures related to the Verizon recall and believes the Jetpack devices are performing within normal parameters[102]

Financial Position - Total assets decreased from $56,927,078 as of June 30, 2023, to $52,594,759 as of December 31, 2023, representing a decline of approximately 7.5%[84] - Cash and cash equivalents dropped significantly from $12,241,286 to $5,241,868, a decrease of about 57.1%[84] - Accounts receivable increased from $8,949,802 to $13,445,440, reflecting a growth of approximately 50.5%[84] - Total current liabilities decreased from $16,512,250 to $12,962,368, a reduction of about 21.0%[84] - Stockholders' equity decreased from $40,414,828 to $39,632,391, a decline of approximately 1.9%[84] - Retained earnings fell from $29,101,225 to $28,078,914, a decrease of about 3.5%[84] - Total liabilities remained unchanged at $12,962,368[84] - Total current assets decreased from $51,857,095 as of June 30, 2023, to $47,820,033 as of December 31, 2023, a decline of approximately 7.9%[84] - Total liabilities decreased from $16,512,250 as of June 30, 2023, to $12,962,368 as of December 31, 2023, a reduction of about 21.5%[84] - The total stockholders' equity decreased from $40,414,828 as of June 30, 2023, to $39,632,391 as of December 31, 2023, a decline of about 1.9%[84] Revenue and Profitability - Net sales for the three months ended December 31, 2023, were $8,847,779, a decrease from $8,983,643 in the same period of 2022, representing a decline of approximately 1.5%[85] - Gross profit for the six months ended December 31, 2023, was $2,350,235, down from $2,539,904 in the same period of 2022, indicating a decrease of about 7.5%[85] - Total operating expenses for the three months ended December 31, 2023, were $2,393,016, compared to $2,312,382 in the same period of 2022, reflecting an increase of approximately 3.5%[85] - Loss from operations for the three months ended December 31, 2023, was $(1,555,941), compared to $(1,366,340) in the same period of 2022, indicating a worsening of about 13.9%[85] - Total other income for the three months ended December 31, 2023, was $691,125, a significant decrease from $1,401,415 in the same period of 2022, representing a decline of approximately 50.7%[85] - Net loss attributable to Parent Company for the three months ended December 31, 2023, was $(764,615), compared to $(378,324) in the same period of 2022, indicating an increase in loss of about 102%[85] - Loss per share attributable to Parent Company stockholders for the three months ended December 31, 2023, was $(0.06), compared to $(0.03) in the same period of 2022, reflecting a deterioration of 100%[85] - The company reported a comprehensive loss attributable to controlling interest of $(625,503) for the three months ended December 31, 2023, compared to a comprehensive income of $9,933 in the same period of 2022[85] Cash Flow and Investments - Cash used in investing activities for the six months ended December 31, 2023, was $(869,481), compared to $(1,393,764) in the same period of 2022, indicating a decrease in cash outflow of about 37.7%[88] - The company reported a significant increase in short-term investments, rising from $26,728,313 to $27,507,884, an increase of approximately 2.9%[84] Research and Development - Research and development expenses for the three months ended December 31, 2023, were $852,854, down from $976,415 in the same period of 2022, a decrease of approximately 12.7%[85] Accounting and Methodology - On July 1, 2023, Franklin Wireless adopted the CECL methodology for measuring expected credit losses on financial instruments[94] - As of December 31, 2023, Franklin Wireless did not record any reserve for unfunded commitments and doubtful accounts[94] - The company measures transactions in foreign currencies in its functional currency, with changes in expected cash flows due to exchange rate fluctuations included in net income[96] Other Information - The company has no preferred stock issued and outstanding as of December 31, 2023[84] - The company continues to focus on maintaining a strong balance sheet despite the fluctuations in cash and equity[83] - The weighted average common shares outstanding for the three months ended December 31, 2023, were 11,784,280, compared to 11,695,150 in the same period of 2022, showing an increase of approximately 0.76%[85]

Financial Performance - Net sales for North America reached $9,655,546 for the three months ended September 30, 2023, a 19.1% increase from $8,107,451 in the same period of 2022[39] - Total net sales for the company were $9,655,546 for the three months ended September 30, 2023, compared to $8,108,940 for the same period in 2022, reflecting an increase of 19.1%[39] - Gross profit decreased to $1,513,160, down 5.0% from $1,593,862 in the prior year[119] - Operating expenses totaled $2,097,677, a decrease of 5.1% from $2,209,755 in the same quarter last year[119] - Net loss attributable to Parent Company was $257,696, significantly improved from a net loss of $1,126,991 in the prior year, representing a reduction of 77.1%[119] - Loss per share attributable to Parent Company stockholders improved to $(0.02) from $(0.10) year-over-year[119] - Interest income increased to $254,015, compared to $60,062 in the same quarter of the previous year, reflecting a significant rise[119] - Total other income (expense), net, was $197,256, a substantial improvement from a loss of $(914,060) in the prior year[119] Accounts and Liabilities - Accounts receivable increased to $9,921,362 as of September 30, 2023, up from $8,949,802 as of June 30, 2023[54] - Contract liabilities for undelivered products rose to $227,455 as of September 30, 2023, compared to $146,488 as of June 30, 2023[54] - Total accrued liabilities as of September 30, 2023, amounted to $989,697, an increase of 16.5% from $849,605 as of June 30, 2023[92] - Accrued salaries and bonuses increased to $500,000 from $375,000, reflecting a 33.3% rise[92] - Inventory reserves for obsolete or slow-moving inventories were recorded at $585,274[67] Research and Development - Research and development costs for the three months ended September 30, 2023, were $866,955, down 10.7% from $970,120 in the same period of 2022[64] - For the three months ended September 30, 2023, capitalized product development costs incurred were $22,500, a decrease of 95.4% compared to $493,250 for the same period in 2022[60] - Capitalized product development costs in progress were $131,588 as of September 30, 2023, down from $203,838 as of June 30, 2023, a decrease of 35.4%[60] Legal Matters - The company is involved in ongoing legal proceedings, including a shareholder action with a potential settlement amount of $2.4 million[111] - The company has not recorded any liability for the litigation as it believes that any such liability is not probable and reasonably estimable at this time[116] Assets and Intangibles - Long-lived assets decreased to $2,050,591 as of September 30, 2023, from $2,281,972 as of June 30, 2023[39] - Total definite lived intangible assets as of September 30, 2023, amounted to $4,487,712, with net intangible assets of $1,958,466 after accumulated amortization[89] - As of September 30, 2023, total net intangible assets amounted to $1,958,466, an increase from $2,180,884 as of June 30, 2023, reflecting a decrease of approximately 10.1%[89] Sales Concentration - Sales to the two largest customers accounted for 91% of consolidated net sales for the three months ended September 30, 2023[81] - The company purchased wireless data products from one manufacturing company in Asia for $6,361,553, representing 99.8% of total purchases for the three months ended September 30, 2023[82] Lease and Rent Expenses - Rent expense for the office space in San Diego was $77,263 for the three months ended September 30, 2023, unchanged from the same period in 2022[95] - Total lease expense for the three months ended September 30, 2023, was $111,417, a slight increase from $111,293 in 2022[100] - The company has a total lease payment of $80,483 for fiscal 2024, with imputed interest of $534, resulting in a total of $79,949[100] - The company’s Korea-based subsidiary has extended its office leases by an additional twelve months to August 31, 2024[96] Accounting Changes - The company adopted the current expected credit loss (CECL) methodology on July 1, 2023, and did not record any reserve for unfunded commitments and doubtful accounts as of September 30, 2023[43] - The company has adopted ASC 842 for lease accounting, impacting the recognition of operating leases on the balance sheet[93] - The Company adopted ASU 2016-13 on July 1, 2023, which changes the methodology for measuring credit losses to the current expected credit loss (CECL) methodology[43] Other Information - The company is currently unable to estimate the financial impact of the Verizon Jetpack recall on future operations[110] - The company believes its products are currently exempt from international tariffs, which could otherwise impose a 10%-25% tariff on sales[131] - The Company did not have any material recognizable subsequent events required to be disclosed to the financial statements as of November 14, 2023[142] - The carrying amounts of financial instruments such as cash equivalents and accounts receivable approximate their fair values due to short-term maturities[40]

Company Overview - Franklin Wireless Corp. has majority ownership of Franklin Technology Inc. (FTI), a research and development company based in Seoul, South Korea, focusing on wireless product design and development [19]. - The company operates primarily in North America, the Caribbean, South America, and Asia, generating revenues from the sale of wireless access products [21]. - For the fiscal year ended June 30, 2023, the majority of product manufacturing was performed by two independent companies located in Asia [27]. Product and Technology - The company is a global leader in mobile technologies, including 5G/4G mobile hotspots and fixed wireless routers, contributing to the Digital Divide initiative [22]. Financial Information - Franklin Wireless Corp. may require additional financing for product development, with uncertainty regarding the availability of adequate funds [29]. - The company has 11,784,280 shares of common stock outstanding as of September 28, 2023 [34]. - The fiscal year ends on June 30, with references to fiscal 2023 and fiscal 2022 indicating the respective fiscal years [38].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 OR Commission file number: 001-14891 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Large accelerated filer ☐ Accelerated filer ☐ Non ...

FORM 10-Q For the quarterly period ended December 31, 2022 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-14891 FRANKLIN WIRELESS CORP. (Exact name of Registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation or organization) 95-3733534 (I.R.S. Employer Identification Number) 9707 Waples Street Suite 150 San Diego, California (Address of principal executive offices) ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-14891 FRANKLIN WIRELESS CORP. (Exact name of Registrant as specified in its charter) | --- | --- | |---------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended June 30, 2022 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-14891 FRANKLIN WIRELESS CORP. (Exact name of Registrant as specified in its charter) Nevada (State or other jurisdiction of incorporati ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-14891 FRANKLIN WIRELESS CORP. (Exact name of Registrant as specified in its charter) Nevada (State or other jurisdict ...