Franklin Wireless Narrows Loss by 97% on Strong North American Sales

TL;DR

**FKWL's near break-even year on surging sales makes it a speculative buy, but watch out for intense competition and product development funding needs.**

AI Summary

FRANKLIN WIRELESS CORP. (FKWL) reported a significant improvement in its financial performance for the fiscal year ended June 30, 2025, narrowing its net loss to $140,429 from $4,166,671 in fiscal 2024. This substantial 96.6% reduction in net loss was driven by a robust 49.6% increase in net sales, reaching $46,086,901 in fiscal 2025 compared to $30,796,690 in fiscal 2024. The growth was primarily fueled by North American sales, which surged to $46,081,244 from $30,699,727. The company expanded its structure by forming Sigbeat Inc. on May 14, 2024, a joint venture for telecommunications modules, in which Franklin Wireless holds a 60% ownership. Key strategic initiatives include developing Smart Box Solutions with On-Device Artificial Intelligence and expanding its Quvo Family Guardian Solutions for parental controls and senior care, alongside its JEXtream MDM/NMS Solutions. Despite increased operating expenses, including a 4.9% rise in selling, general, and administrative expenses to $6,676,078 and a 20.4% increase in research and development expenses to $4,102,660, the significant revenue growth offset these costs, leading to a near break-even year.

Why It Matters

Franklin Wireless's dramatic reduction in net loss and substantial revenue growth, particularly in North America, signals a potential turnaround for the company, which operates in the highly competitive 5G/4G wireless broadband market. For investors, this indicates improved operational efficiency and market penetration, especially with its focus on the Digital Divide initiative and new AI-integrated products. Employees and customers could benefit from a more stable and innovative company, potentially leading to new job opportunities and advanced connectivity solutions. In the broader market, FKWL's success could intensify competition among wireless solution providers, particularly in the mobile hotspot and fixed wireless router segments, challenging larger players with its specialized offerings and strategic partnerships like Sigbeat Inc.

Risk Assessment

Risk Level: high — The company operates in the 'high-risk telecom sector' and 'high-risk hardware design industry,' as explicitly stated in Item 1A. It also highlights the 'intensively competitive market' and the need for 'additional financing for product development,' which could dilute existing stockholders. The filing also details significant risks associated with lithium batteries in its products, including 'thermal runaway' and 'fires and explosions,' posing substantial safety and liability concerns.

Analyst Insight

Investors should closely monitor FKWL's ability to secure additional financing for product development without excessive dilution and its execution on new AI and IoT solutions. Given the significant reduction in net loss and revenue growth, a speculative position might be considered, but only with a clear understanding of the high operational and product-related risks, especially regarding battery safety and intellectual property infringement claims.

Financial Highlights

debt To Equity

N/A

revenue

$46,086,901

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$140,429

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

+49.6%

Revenue Breakdown

Key Numbers

• $46,086,901 — Total Net Sales (Increased by 49.6% from $30,796,690 in fiscal 2024)
• $140,429 — Net Loss (Reduced by 96.6% from $4,166,671 in fiscal 2024)
• $46,081,244 — North America Net Sales (Increased from $30,699,727 in fiscal 2024, driving overall revenue growth)
• 66.3% — Ownership in Franklin Technology Inc. (Majority voting interest in R&D subsidiary)
• 60% — Ownership in Sigbeat Inc. (Majority voting interest in new joint venture formed May 14, 2024)
• $6,676,078 — Selling, General, and Administrative Expenses (Increased from $6,041,355 in fiscal 2024)
• $4,102,660 — Research and Development Expenses (Increased from $3,406,750 in fiscal 2024)
• 67 — Total Employees (As of June 30, 2025, across Franklin, FTI, and Sigbeat)
• $40,364,000 — Aggregate Market Value of Voting Common Stock Held by Non-Affiliates (As of December 31, 2024)
• 11,784,280 — Shares of Common Stock Outstanding (As of September 29, 2025)

Key Players & Entities

• FRANKLIN WIRELESS CORP. (company) — Registrant and parent company
• Franklin Technology Inc. (company) — 66.3% owned R&D subsidiary in Seoul, South Korea
• Sigbeat Inc. (company) — 60% owned joint venture for telecommunications modules sales, marketing, and operations
• NASDAQ (regulator) — Exchange where common stock is traded
• Federal Communications Commission (FCC) (regulator) — Requires product testing for US markets
• Electronic Manufacturing Services (EMS) (company) — Partner in Sigbeat Inc. joint venture
• North America (geographic_area) — Primary market for sales
• Asia (geographic_area) — Secondary market for sales and manufacturing location
• San Diego, California (geographic_area) — Company headquarters location
• Nevada (geographic_area) — State of reincorporation

FAQ

Risk Factors

• Need for Additional Financing [medium — financial]: The company may require additional financing for product development, and there is uncertainty regarding the availability and terms of such funding. Insufficient funds could lead to delays or abandonment of development programs, impacting expansion, acquisitions, and competitive response.
• Intellectual Property Infringement Claims [high — legal]: The company operates in an industry with many participants holding proprietary intellectual property. Franklin Wireless may face claims of infringing on third-party IP, potentially leading to substantial damages, litigation costs, injunctions against product sales, or costly licensing agreements. Developing non-infringing alternatives could also be expensive and time-consuming.

Industry Context

Franklin Wireless operates in the competitive global wireless solutions market, focusing on 5G and 4G LTE technologies. The company positions itself as an enabler of the Digital Divide initiative and is expanding into IoT and M2M applications. Key markets include North America and Asia, with strategic partnerships and distribution channels playing a role in its go-to-market strategy.

Regulatory Implications

While no specific regulatory risks are detailed in the provided text, companies in the wireless technology sector are subject to evolving regulations concerning spectrum allocation, data privacy (e.g., GDPR, CCPA), cybersecurity standards, and international trade policies. Compliance with these can impact product development, market access, and operational costs.

What Investors Should Do

1. Monitor R&D and new product pipeline, especially Smart Box Solutions and Quvo Family Guardian Solutions.
2. Evaluate the performance and integration of the Sigbeat Inc. joint venture.
3. Assess the company's ability to manage increased operating expenses (SG&A and R&D) while sustaining revenue growth.
4. Review future financing plans and potential dilution risks.

Key Dates

• 2024-05-14: Formation of Sigbeat Inc. Joint Venture — Established a new entity for telecommunications modules, with Franklin Wireless holding a 60% ownership, indicating strategic expansion into new product areas.
• 2025-06-30: Fiscal Year End — Reported a significant reduction in net loss and substantial revenue growth, highlighting improved financial performance.

Glossary

5G

Fifth generation mobile network technology, offering higher speeds, lower latency, and greater capacity than previous generations. (Franklin Wireless utilizes this technology in its integrated wireless solutions.)

4G LTE

Fourth generation Long-Term Evolution, a standard for wireless broadband communication, providing faster mobile internet access. (Franklin Wireless utilizes this technology in its integrated wireless solutions.)

MDM

Mobile Device Management, software solutions used to secure, monitor, and manage mobile devices and applications. (Franklin Wireless offers MDM solutions as part of its integrated wireless offerings.)

IoT

Internet of Things, a network of physical devices, vehicles, appliances, and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data. (Franklin Wireless's expertise extends to IoT applications.)

M2M

Machine-to-Machine, refers to technologies that allow devices to communicate with each other without the need for human intervention. (Franklin Wireless's expertise extends to M2M applications.)

FTI

Franklin Technology Inc., a research and development company based in Seoul, South Korea, in which Franklin Wireless holds a 66.3% ownership. (FTI provides design and development services for Franklin Wireless's products.)

Sigbeat Inc.

A joint venture formed on May 14, 2024, for worldwide sales, marketing, customer support, and operations for telecommunications modules, with Franklin Wireless holding a 60% ownership. (Represents a strategic expansion into new markets and product segments.)

Year-Over-Year Comparison

Franklin Wireless Corp. has demonstrated a significant turnaround in its financial performance compared to the previous fiscal year. Total net sales increased by a robust 49.6% to $46,086,901, primarily driven by strong performance in North America. This substantial revenue growth led to a dramatic 96.6% reduction in the net loss, narrowing it to $140,429 from $4,166,671. While operating expenses, including selling, general, and administrative (SG&A) and research and development (R&D), saw increases of 4.9% and 20.4% respectively, the revenue surge effectively offset these higher costs, moving the company closer to profitability.

Filing Documents

• franklin_i10k-063025.htm (10-K) — 1075KB
• franklin_ex1900.htm (EX-19) — 57KB
• franklin_ex3101.htm (EX-31.1) — 7KB
• franklin_ex3102.htm (EX-31.2) — 7KB
• franklin_ex3201.htm (EX-32.1) — 3KB
• franklin_ex3202.htm (EX-32.2) — 4KB
• 0001683168-25-007288.txt ( ) — 6397KB
• fkwl-20250630.xsd (EX-101.SCH) — 36KB
• fkwl-20250630_cal.xml (EX-101.CAL) — 73KB
• fkwl-20250630_def.xml (EX-101.DEF) — 163KB
• fkwl-20250630_lab.xml (EX-101.LAB) — 425KB
• fkwl-20250630_pre.xml (EX-101.PRE) — 353KB
• franklin_i10k-063025_htm.xml (XML) — 899KB

Business

Business 1 Item 1A:

Risk Factors

Risk Factors 5 Item 1B: Unresolved Staff Comments 11 Item 1C: Cybersecurity 11 Item 2:

Properties

Properties 12 Item 3:

Legal Proceedings

Legal Proceedings 12 Item 4: Mine Safety Disclosures 12 PART II Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 13 Item 6:

Selected Financial Data

Selected Financial Data 13 Item 7:

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 7A:

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 20 Item 8:

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 20 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 20 Item 9A:

Controls and Procedures

Controls and Procedures 20 Item 9B: Other Information 21 Item 9C: Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 21 PART III Item 10: Directors, Executive Officers and Corporate Governance 22 Item 11:

Executive Compensation

Executive Compensation 24 Item 12:

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 26 Item 13: Certain Relationships and Related Transactions, and Director Independence 29 Item 14: Principal Accountant Fees and Services 29 PART IV Item 15: Exhibits, Financial Statement Schedules 30 Item 16: Form 10-K Summary 31

Signatures

Signatures 32 Index to Financial Statements F-1 i NOTE ON FORWARD LOOKING STATEMENTS You should keep in mind the following points as you read this Report on Form 10-K: o the terms "we," "us," "our," "Franklin," "Franklin Wireless," or the "Company" refer to Franklin Wireless Corp. o our fiscal year ends on June 30; references to fiscal 2025 and fiscal 2024 and similar constructions refer to the fiscal year ended on June 30 of the applicable year. This Annual Report on Form 10-K contains statements which, to the extent they do not recite historical fact, constitute "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements are used under the captions "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Annual Report on Form 10-K. You can identify these statements by the use of words like "may," "will," "could," "should," "project," "believe," "anticipate," "expect," "plan," "estimate," "forecast," "potential," "intend," "continue," "and variations of these words or comparable words. Forward looking statements do not guarantee future performance and involve risks and uncertainties. Actual results may differ substantially from the results that the forward looking statements suggest for various reasons, including those discussed under the caption "Risk Factors." These forward looking statements are made only as of the date of this Annual Report on Form 10-K. We do not undertake to update or revise the forward looking statements, whether as a result of new information, future events or otherwise. ii PART I

BUSINESS

ITEM 1. BUSINESS. BUSINESS OVERVIEW Doing business as "Franklin Access", we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation) and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management (MDM) solutions. We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things (IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises. We hold a 66.3% ownership in Franklin Technology Inc. ("FTI"), a research and development company based in Seoul, South Korea. FTI primarily provides design and development services for our wireless products. We hold a 60% ownership interest in Sigbeat Inc., based in San Diego, California ("Sigbeat"), which will engage in worldwide sales, marketing, customer support and operations for telecommunications modules. Our products are generally marketed and sold directly to wireless operators and indirectly through strategic partners and distributors. Our primary markets are in North America and Asia. OUR STRUCTURE We incorporated in 1982 in California and reincorporated in Nevada on January 2, 2008. The reincorporation had no effect on the nature of our business or our management. Our headquarters are located in San Diego, California. This office provides marketing, sales, operations, finance and administrative support. It is also responsible for all customer-related activities, such as marketing communications, product planning, product management and customer support, along with sales and business development activities worldwide. As of June 30, 2025, our consolidated financial statements include the accounts of the Company and its subsidiaries, FTI and Sigbeat Inc. ("Sigbeat"), with majority voting interests of 66.3% and 60.0%, respectively, (approximately 33.7% a

: RISK FACTORS

ITEM 1A: RISK FACTORS. The following risk factors do not purport to be a complete explanation of the risks involved in our business. WE MAY NEED ADDITIONAL FINANCING FOR PRODUCT DEVELOPMENT. Our financial resources are sufficient for our current operational needs; however, the amount of funding required to develop and commercialize our products and technologies is highly uncertain. Adequate funds may not be available when needed or on terms satisfactory to us. Lack of funds may cause us to delay, reduce and/or abandon certain or all aspects of our development and commercialization programs. We may seek additional financing through the issuance of equity or convertible debt securities. In such event, the percentage preferences, and privileges senior to those of our Common Stock. There can be no assurance that additional financing will be available on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund our expansion, take advantage of desirable acquisition opportunities, develop, or enhance services or products or respond to competitive pressures. Such inability could have a materially adverse effect on our business, results of operations and financial conditions. WE MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS. The industry in which we operate has many participants that own, or claim to own, proprietary intellectual property. In the past we have received, and in the future may receive, claims from third parties alleging that we, and possibly our customers, violate their intellectual property rights. Rights to intellectual property can be difficult to verify and litigation may be necessary to establish whether or not we have infringed the intellectual property rights of others. In many cases, these third parties are companies with substa

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