Franklin Wireless(FKWL) - 2024 Q2 - Quarterly Report

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]