Franklin Wireless CEO Hit With $2M Judgment; Board Seeks Re-election

TL;DR

**FKWL's CEO just got dinged for $2M in 'short-swing' profits, making this proxy vote a referendum on corporate governance — I'm bearish on leadership.**

AI Summary

FRANKLIN WIRELESS CORP. (FKWL) is holding its Annual Meeting on December 22, 2025, to elect five directors and ratify Simon & Edward, LLP as its independent registered public accounting firm for fiscal year 2025. The company's President and CEO, OC Kim, faces a significant legal judgment of $2,000,000 from October 2023 for 'short-swing' profits, a violation of Section 16(b) of the Securities Exchange Act of 1934. As of September 30, 2025, OC Kim beneficially owns 1,096,695 shares, representing 9.3% of the company, while Joon Won Jyoung holds 8.5% with 1,004,948 shares. Paul Packer, through Globis Capital Partners, L.P. and related entities, holds 6.2% or 727,794 shares. The Board of Directors, consisting of five members, met four times in fiscal 2025, with all directors attending all meetings. The Audit Committee, chaired by Heidy Chow, CPA, also met four times in fiscal 2025 and determined Ms. Chow to be an 'audit committee financial expert'.

Why It Matters

This DEF 14A filing reveals a significant legal liability for FRANKLIN WIRELESS CORP.'s CEO, OC Kim, which could impact investor confidence and corporate governance perceptions. The $2,000,000 judgment for 'short-swing' profits raises questions about executive oversight and adherence to securities regulations, potentially affecting FKWL's stock valuation and its ability to attract new investment. For employees and customers, such governance issues can signal instability, while in the competitive wireless market, this could be exploited by rivals to question the company's integrity and leadership. The re-election of directors amidst this controversy will be a key indicator of shareholder sentiment.

Risk Assessment

Risk Level: high — The $2,000,000 civil jury verdict against CEO O.C. Kim for 'short-swing' profits in October 2023 represents a substantial financial and reputational risk. This violation of Section 16(b) of the Securities Exchange Act of 1934 indicates a serious governance issue, directly impacting the company's top executive and potentially its stock price and investor trust.

Analyst Insight

Investors should scrutinize the upcoming director elections and the ratification of the accounting firm, considering the $2,000,000 judgment against CEO OC Kim. Evaluate the board's response to this governance issue and consider if current leadership adequately addresses shareholder interests and regulatory compliance.

Executive Compensation

Key Numbers

• $2,000,000 — Civil jury verdict against CEO O.C. Kim (For violation of Section 16(b) of the Securities Exchange Act of 1934 in October 2023)
• 1,096,695 — Shares beneficially owned by OC Kim (Represents 9.3% of outstanding Common Stock as of September 30, 2025)
• 1,004,948 — Shares beneficially owned by Joon Won Jyoung (Represents 8.5% of outstanding Common Stock as of September 30, 2025)
• 727,794 — Shares beneficially owned by Paul Packer (Represents 6.2% of outstanding Common Stock as of September 30, 2025)
• 2025-12-22 — Date of Annual Meeting (To be held virtually online at 2:00 p.m. Pacific Time)
• 2025-10-17 — Record Date for voting (Stockholders of record at close of business on this date are entitled to vote)
• 4 — Number of Board meetings in fiscal 2025 (All directors attended all meetings)
• 5 — Number of directors nominated for election (Current and proposed size of the Board of Directors)
• 3 — Number of Compensation Committee meetings in fiscal 2025 (Committee responsible for executive compensation)
• 28.4% — Total shares owned by all directors and executive officers as a group (Represents 3,341,945 shares as of September 30, 2025)

Key Players & Entities

• FRANKLIN WIRELESS CORP. (company) — Registrant
• OC Kim (person) — President, CEO, and Director; subject of $2,000,000 judgment
• Joon Won Jyoung (person) — Beneficial owner of 8.5% of Common Stock
• Paul Packer (person) — Beneficial owner of 6.2% of Common Stock through Globis Capital Partners, L.P.
• Simon & Edward, LLP (company) — Independent registered public accounting firm for fiscal year 2025
• Heidy Chow (person) — Audit Committee Chair and 'audit committee financial expert'
• Johnathan Chee (person) — Chairman of the Board and Director
• SEC (regulator) — Enforces Section 16(b) of the Securities Exchange Act of 1934
• Mountain Share Transfer (company) — Transfer Agent
• Globis Capital Partners, L.P. (company) — Entity with shared voting power over FKWL shares

FAQ

Risk Factors

• CEO Legal Judgment [high — legal]: The CEO, OC Kim, faces a significant $2,000,000 civil jury verdict from October 2023 for 'short-swing' profits, a violation of Section 16(b) of the Securities Exchange Act of 1934. This legal issue could impact leadership stability and investor confidence.
• Section 16(b) Violations [medium — regulatory]: The company's CEO has been found in violation of Section 16(b) of the Securities Exchange Act of 1934, which governs short-swing profits. This indicates potential weaknesses in internal controls or compliance regarding insider trading regulations.
• Concentrated Ownership [medium — market]: Key executives and directors hold a substantial portion of the company's stock, with OC Kim owning 9.3%, Joon Won Jyoung 8.5%, and Paul Packer (via related entities) 6.2%. The total ownership by directors and officers is 28.4%. This concentration could influence corporate governance and decision-making.

Industry Context

Franklin Wireless Corp. operates in the telecommunications equipment sector, which is characterized by rapid technological advancements, intense competition, and evolving regulatory landscapes. Companies in this industry often face challenges related to product development cycles, supply chain management, and the need for continuous innovation to meet market demands for wireless connectivity solutions.

Regulatory Implications

The company faces regulatory scrutiny, particularly highlighted by the CEO's violation of Section 16(b) of the Securities Exchange Act of 1934. This underscores the importance of strict adherence to insider trading rules and corporate governance standards to avoid penalties and maintain investor trust.

What Investors Should Do

1. Review the nominees for the Board of Directors and vote accordingly, considering the recent legal judgment against the CEO.
2. Vote to ratify the appointment of Simon & Edward, LLP as the independent registered public accounting firm for fiscal year 2025.
3. Monitor the impact of the $2,000,000 legal judgment against CEO OC Kim on company operations and future performance.
4. Consider the concentrated ownership structure and its potential influence on corporate decision-making.

Key Dates

• 2025-12-22: Annual Meeting of Stockholders — Key date for electing directors, ratifying auditors, and transacting other business. Investors can participate virtually.
• 2025-10-17: Record Date for Voting — Establishes which stockholders are entitled to vote at the Annual Meeting.
• 2025-11-05: Furnishing of Proxy Materials — Date by which stockholders will receive proxy materials, allowing time for review before the meeting.
• 2023-10-01: Civil Jury Verdict Against CEO — A $2,000,000 judgment against OC Kim for Section 16(b) violations, representing a significant legal and reputational risk.
• 2025-09-30: Share Ownership Snapshot — Provides current beneficial ownership percentages for key insiders like OC Kim (9.3%), Joon Won Jyoung (8.5%), and Paul Packer (6.2%).

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information to shareholders about matters to be voted on at an annual meeting. (This document is the primary source of information for the annual meeting, including director nominations and auditor ratification.)

Section 16(b)

A section of the Securities Exchange Act of 1934 that deals with the recovery of 'short-swing' profits made by corporate insiders (directors, officers, and major shareholders) from buying and selling the company's stock within a six-month period. (The CEO's $2,000,000 judgment stems from a violation of this section, highlighting potential compliance issues.)

Beneficial Ownership

The ultimate right to use or enjoy the benefits of a security, even if the security is registered in someone else's name. This includes shares owned directly or indirectly through family members or entities. (This filing details beneficial ownership percentages for key individuals, indicating their influence and stake in the company.)

Audit Committee Financial Expert

A member of the audit committee who possesses specific financial knowledge and experience, as defined by SEC rules, to oversee the company's financial reporting and internal controls. (Heidy Chow is identified as an audit committee financial expert, suggesting a commitment to robust financial oversight.)

Short-Swing Profits

Profits made by corporate insiders from the purchase and sale of company stock within a six-month period, which are generally recoverable by the company under Section 16(b). (The CEO's legal judgment is based on alleged short-swing profits, a critical legal issue for the company.)

Independent Registered Public Accounting Firm

An external audit firm that is independent of the company and is responsible for auditing the company's financial statements. (The ratification of Simon & Edward, LLP as the auditor for fiscal year 2025 is a key agenda item at the annual meeting.)

Year-Over-Year Comparison

This filing pertains to the 2025 Annual Meeting, and specific comparative financial data from a prior year's DEF 14A is not directly available within this document. However, the presence of a significant legal judgment against the CEO ($2,000,000 for Section 16(b) violations) represents a new and material risk factor compared to previous filings where such an event was not disclosed.

Key Financial Figures

• $2,000,000 — erivative action returned a verdict for $2,000,000 in favor of the Company against the Com

Filing Documents

• franklin_idef14a.htm (DEF 14A) — 339KB
• 0001683168-25-008267.txt ( ) — 855KB
• fkwl-20250630.xsd (EX-101.SCH) — 6KB
• fkwl-20250630_def.xml (EX-101.DEF) — 9KB
• fkwl-20250630_lab.xml (EX-101.LAB) — 59KB
• fkwl-20250630_pre.xml (EX-101.PRE) — 43KB
• franklin_idef14a_htm.xml (XML) — 111KB

From the Filing

FRANKLIN WIRELESS CORP. DEF 14A SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant x Filed by a Party other than the Registrant o Check the appropriate box: o Preliminary Proxy Statement o Confidential, for the use of the Commission only (as permitted by Rule 14a-6(e)(2)) x Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to 240.14a-12 FRANKLIN WIRELESS CORP. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): x No fee required. o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: o Fee paid previously with preliminary materials. o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-1l (a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule, or Registration Statement No.: (3) Filing Party: (4) Date Filed: FRANKLIN WIRELESS CORP. 2025 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT _____________________ DECEMBER 22, 2025 at 2:00 p.m. Pacific Time Franklin Wireless Corp. 3940 Ruffin Rd, Ste C San Diego, CA 92123 FRANKLIN WIRELESS CORP. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 22, 2025 The 2025 Annual Meeting of Stockholders (the "Annual Meeting") of Franklin Wireless Corp. ("Franklin" or the "Company") will be held virtually online on Monday, DECEMBER 22, 2025, at 2:00 p.m. Pacific Time. At this year's Annual Meeting, the agenda will include: (i) the election of directors; (ii) the ratification of the selection of our independent registered public accounting firm for fiscal 2026; and (iii) the transaction of such other business as may properly come before the meeting or any adjournment thereof. Please refer to the enclosed proxy statement for detailed information on each of these proposals and other important information about the Company. To attend the annual meeting, vote, and submit your questions during the annual meeting, please visit http://mountainsharetransfer.com/fkwl/. You will log into the annual meeting by entering your name, a valid email address and unique control number found on your Notice of Internet Availability, proxy card or voting instruction form. We hope you will be able to attend the annual meeting online, but we know that not every stockholder will be able to do so. Whether or not you plan to attend, please complete, sign and return your proxy, or vote by telephone, facsimile or via the Internet according to the instructions on the proxy card, so that your shares will be voted at the annual meeting. In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under applicable Nevada corporate law, or that otherwise makes it advisable to adjourn the Annual Meeting, the chair or secretary of the Annual Meeting will convene the meeting at 12:00 p.m. Pacific Time on the date specified above and at our address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on our investor relations website at http://mountainsharetransfer.com/fkwl/ . The Company intends to furnish the Annual Report, Proxy Statement and Proxy card on or about November 12, 2025 to all stockholders entitled to vote at the Annual Meeting. Only stockholders of record at the close of business on October 17, 2025 will be entitled to attend and vote at the meeting. A list of all stockholders entitled to vote at the Annual Meeting will be available at the principal office of the Company, during usual business hours, for examination by any stockholder for any purpose germane to the Annual Meeting for 10 days prior to the date thereof. By Order of the Board of Directors /s/ OC Kim OC Kim President WHETHER OR NOT YOU PLAN ON ATTENDING THE MEETING, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO

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