Financial Performance - For the fiscal year ended June 30, 2024, total net sales were 45,948,516 in fiscal 2023[10] - Net sales in North America were 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 45,948,516 in 2023[10] - North America generated 45,782,084 in the previous year, reflecting a decline of about 33%[10] Asset Management - Long-lived assets decreased to 2,281,972, a reduction of approximately 37.5%[10] - Long-lived assets decreased from 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]
Franklin Wireless(FKWL) - 2024 Q4 - Annual Report