Franklin Wireless Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Franklin Wireless Corp. has filed its quarterly report (10-Q) for the period ending March 31, 2024, providing financial updates and comparative data.</b>

AI Summary

FRANKLIN WIRELESS CORP (FKWL) filed a Quarterly Report (10-Q) with the SEC on May 15, 2024. Franklin Wireless Corp. filed a 10-Q report for the period ending March 31, 2024. The filing covers the quarterly period from January 1, 2024, to March 31, 2024. It also includes comparative data for previous periods, such as the quarter ended March 31, 2023, and the fiscal year to date. The company's fiscal year ends on June 30. Franklin Wireless Corp. is incorporated in Nevada.

Why It Matters

For investors and stakeholders tracking FRANKLIN WIRELESS CORP, this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance and position of Franklin Wireless Corp. for the first quarter of 2024. The detailed financial statements and disclosures within the report are crucial for understanding the company's operational results, balance sheet, and cash flows during the specified period.

Risk Assessment

Risk Level: low — FRANKLIN WIRELESS CORP shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not contain significant new information that would alter the company's risk profile.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to assess Franklin Wireless Corp.'s current financial health and operational performance.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-05-15 — Filing Date (Filed as of date)
• 06-30 — Fiscal Year End (Fiscal year end)

Key Players & Entities

• FRANKLIN WIRELESS CORP (company) — Filer name
• 0001683168-24-003524 (filing_id) — Accession number
• 20240331 (date) — Conformed period of report
• 20240515 (date) — Filed as of date
• 0000722572 (company_id) — Central Index Key
• 3661 (industry_code) — Standard Industrial Classification
• NV (state) — State of incorporation
• 9707 WAPLES STREET, SUITE 150 (address) — Business address

FAQ

Industry Context

Franklin Wireless Corp. operates in the Telephone & Telegraph Apparatus industry.

Regulatory Implications

The filing is a standard 10-Q, a quarterly report required by the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and cash flow for the quarter ended March 31, 2024.
2. Review the Management's Discussion and Analysis of Financial Condition and Results of Operations for insights into performance drivers and trends.
3. Check for any new risk factors or updates to existing ones disclosed in the report.

Year-Over-Year Comparison

This is the 10-Q filing for the quarter ending March 31, 2024. Specific comparative financial data from previous filings would be needed to assess year-over-year changes.

Filing Documents

• franklin_i10q-033124.htm (10-Q) — 753KB
• franklin_ex3101.htm (EX-31.1) — 10KB
• franklin_ex3102.htm (EX-31.2) — 10KB
• franklin_ex3201.htm (EX-32.1) — 4KB
• franklin_ex3202.htm (EX-32.2) — 4KB
• 0001683168-24-003524.txt (&nbsp;) — 4647KB
• fkwl-20240331.xsd (EX-101.SCH) — 29KB
• fkwl-20240331_cal.xml (EX-101.CAL) — 53KB
• fkwl-20240331_def.xml (EX-101.DEF) — 108KB
• fkwl-20240331_lab.xml (EX-101.LAB) — 329KB
• fkwl-20240331_pre.xml (EX-101.PRE) — 256KB
• franklin_i10q-033124_htm.xml (XML) — 698KB

– Financial Information

PART I – Financial Information Item 1: Consolidated Financial Statements (unaudited) Consolidated Balance Sheets as of March 31, 2024 (unaudited) and June 30, 2023 4 Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (unaudited) for the three and nine months ended March 31, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended March 31, 2024 and 2023 6-7 Consolidated Statements of Cash Flows (unaudited) for the nine months ended March 31, 2024 and 2023 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 9 Item 2:

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3:

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 30 Item 4:

Controls and Procedures

Controls and Procedures 30

– Other Information

PART II – Other Information Item 1:

Legal Proceedings

Legal Proceedings 31 Item 1A:

Risk Factors

Risk Factors 31 Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 31 Item 3: Defaults Upon Senior Securities 31 Item 4: Mine Safety Disclosures 31 Item 5: Other Information 31 Item 6: Exhibits 31

Signatures

Signatures 32 2 NOTE ON FORWARD LOOKING STATEMENTS You should keep in mind the following points as you read this Report on Form 10-Q: The terms "we," "us," "our," "Franklin," "Franklin Wireless," or the "Company" refer to Franklin Wireless Corp. This Report on Form 10-Q 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 caption "Management's Discussion and Analysis of Financial Condition and Results of Operation," and elsewhere in this Quarterly Report on Form 10-Q. 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" in Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2023. These forward looking statements are made only as of the date of this Report on Form 10-Q. We do not undertake to update or revise the forward looking statements, whether as a result of new information, future events or otherwise. 3

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Consolidated Financial Statements

ITEM 1. Consolidated Financial Statements FRANKLIN WIRELESS CORP. Consolidated Balance Sheets M arch 31, 2024 (Unaudited) June 30, 2023 ASSETS Current assets: Cash and cash equivalents $ 7,004,494 $ 12,241,286 Short-term investments 24,732,707 26,728,313 Accounts receivable 10,262,320 8,949,802 Advance to vendors 57,043 53,875 Other receivables, prepaid expenses, and other current assets 128,504 51,125 Inventories, net 1,136,035 3,741,637 Prepaid income taxes 136,641 – Loan to an employee 90,012 91,057 Total current assets 43,547,756 51,857,095 Property and equipment, net 126,046 101,088 Intangible assets, net 1,585,201 2,180,884 Deferred tax assets, non-current 2,809,830 2,235,515 Goodwill 273,285 273,285 Right of use assets 1,542,462 152,665 Other assets 134,239 126,546 TOTAL ASSETS $ 50,018,819 $ 56,927,078 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,281,925 $ 12,950,497 Income tax payable – 6,556 Contract liabilities and advance from customers 195,599 146,488 Accrued legal contingency expense 2,400,000 2,400,000 Accrued liabilities 1,335,915 849,605 Lease liabilities, current 233,501 159,104 Total current liabilities 10,446,940 16,512,250 Lease liabilities, non-current 1,326,489 – Total liabilities 11,773,429 16,512,250 Commitments and contingencies (Note 6) – – Stockholders' equity: Parent Company stockholders' equity Preferred stock, par value $ 0.001 per share, authorized 10,000,000 shares; none issued and outstanding – – Common stock, par value $ 0.001 per share, authorized 50,000,000 shares; 11,784,280 shares issued and outstanding 14,263 14,263 Additional paid-in capital 14,647,056 14,438,196 Retained earnings 26,903,234 29,101,225 Treasury stock, 2,549,208 shares ( 3,554,893 ) ( 3,554,893 ) Accumulated other comprehensive loss ( 1,153,048 ) ( 1,071,930 ) Total Parent Compa

financial statements

financial statements. 6 FRANKLIN WIRELESS CORP. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Three and Nine Months Ended March 31, 2023 (unaudited) Common Stock Additional Paid-in Retained Treasury Accumulated Other Comprehensive Income Non-controlling Total Stockholders Shares Amount Capital Earnings Stock (Loss) Interest Equity Balance - June 30, 2022 11,684,280 $ 14,163 $ 13,593,426 $ 31,964,246 $ ( 3,554,893 ) $ ( 984,152 ) $ 1,569,605 $ 42,602,395 Net loss attributable to Parent Company – – – ( 1,505,315 ) – – – ( 1,505,315 ) Foreign exchange translation – – – – – 74,039 – 74,039 Issuance of stock related to stock option exercised 100,000 100 133,900 – – – – 134,000 Compensation expense related to stock option granted – – 360,525 – – – – 360,525 Comprehensive loss attributable to non-controlling interest – – – – – – ( 5,046 ) ( 5,046 ) Balance - December 31, 2022 (unaudited) 11,784,280 $ 14,263 $ 14,087,851 $ 30,458,931 $ ( 3,554,893 ) $ ( 910,113 ) $ 1,564,559 $ 41,660,598 Net income attributable to Parent Company – – – 247,629 – – – 247,629 Foreign exchange translation – – – – – ( 139,752 ) – ( 139,752 ) Compensation expense related to stock option granted – – 176,397 – – – – 176,397 Comprehensive loss attributable to non-controlling interest – – – – – – ( 35,990 ) ( 35,990 ) Balance - March 31, 2023 (unaudited) 11,784,280 $ 14,263 $ 14,264,248 $ 30,706,560 $ ( 3,554,893 ) $ ( 1,049,865 ) $ 1,528,569 $ 41,908,882 See accompanying notes to consolidated financial statements. 7 FRANKLIN WIRELESS CORP. Consolidated Statements of Cash Flows (unaudited) Nine Months Ended March 31, 2024 2023 CASH FLOW FROM OPERATING ACTIVITIES: Net loss $ ( 2,297,180 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial interest of 66.3 % (approximately 33.7 % is owned by noncontrolling interests) as of March 31, 2024, and 2023. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary applicable to noncontrolling interests. As consolidated financial retained earnings or deficit of the subsidiary at the date of acquisition, October 1, 2009, by the parent are excluded from consolidated retained earnings. When a subsidiary is consolidated, the consolidated financial statements include the subsidiary's revenues, expenses, gains, and losses only from the date the subsidiary is initially consolidated, and the noncontrolling interest is reported in the consolidated subsidiaries as of March 31, 2024, or June 30, 2023. Reclassifications Certain amounts on the prior period's consolidated balance sheets were reclassified to conform to current-year presentation, with no effect on total stockholders' equity. Noncontrolling Interest in a Consolidated Subsidiary As of March 31, 2024, the noncontrolling interest was $ 1,388,778 , which represents a $ 99,189 decrease from $ 1,487,967 as of June 30, 2023. The decrease in the noncontrolling interest of $ 99,189 was from loss in the subsidiary of $ 294,700 incurred for the nine months ended March 31, 2024. Segment Reporting Accounting Standar

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