FRANKLIN WIRELESS CORP
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
FKWL$2.11-5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001683168-25-003630
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001683168-25-008378
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 48 previous paragraphs and 39 current paragraphs.
20 unchanged; 12 reworded; 5 added; 15 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
The increase in gross profit and in gross profit margin in terms of net sales was primarily driven by an increased proportion of high-margin sales and decreased production costs while overall sales decreased for the three months ended September 30, 2025 compared to the corresponding period of 2024.
Current report
Selling, general, and administrative expenses decreased by $50,335, or 3.5%, to $1,369,638 for the three months ended September 30, 2025, from $1,419,973 for the corresponding period of 2024. The decrease in selling, general, and administrative expenses was primarily due to the reduction in legal expense and stock option expense of approximately $115,000 and $87,000, respectively, which was offset by increased delivery charges of approximately $110,000.
Current report
Research and development expense decreased by $74,560, or 7.3%, to $949,752 for the three months ended September 30, 2025, from $1,024,312 for the corresponding period of 2024. The decrease in research and development expense was primarily due to the reduction of approximately $73,000 in direct R&D costs (such as expenses for materials and third-party services), which typically fluctuate from period to period.
Current report
TOTAL OTHER INCOME, NET - Other income, net decreased by $1,066,515, or 99.7%, to $2,804 for the three months ended September 30, 2025 from $1,069,319 for the corresponding period of 2024. The decrease was primarily due to the unfavorable changes in foreign currency and the loss from the appreciation on the currency exchange rates in FTI of approximately $740,000 and the absence of a one-time gain of approximately $230,000 recognized in the prior-year period related to the write-off of a forgiven accrued commission to a customer.
Current report
The $143,315 in net cash provided by investing activities for the three months ended September 30, 2025 was primarily due to the sale of short-term investments of $197,386, which was partially offset by purchases related to capitalized product development costs and intangible assets of $53,167.
Removed paragraphs (15)
Previous report
Selling, general, and administrative expenses increased by $1,265,073 to $2,526,220 for the three months ended March 31, 2025, from $1,261,147 for the corresponding period of 2024. The increase in operating expenses was primarily due to the accrued incentive bonus of $1,250,000 to OC Kim, the President. Research and development expense decreased by $17,257 to $794,213 for the three months ended March 31, 2025, from $811,470 for the corresponding period of 2024. The decrease in research and development expense was primarily due to the decreased research and development payroll expense of approximately $58,000, which was offset by an increase in other research and development costs of approximately $41,000.
Previous report
OTHER INCOME (LOSS), NET - Other income (loss), net increased by $1,399,355, or 2,060.4%, to $1,331,439 for the three months ended March 31, 2025 from ($67,916) for the corresponding period of 2024. The increase was primarily due to the gains from the legal settlement amount owed by OC Kim, the President, of $1,000,000 as well as the favorable changes in foreign currency exchange rates in FTI of approximately $400,000, respectively.
Previous report
NINE MONTHS ENDED MARCH 31, 2025 COMPARED TO NINE MONTHS ENDED MARCH 31, 2024
Previous report
Net sales in North America increased by $14,573,259, or 59.3%, to $39,156,583 for the nine months ended March 31, 2025 from $24,583,324 for the corresponding period of 2024. The increase in net sales was primarily due to increased demand from our major carrier customers. Net sales in Asia decreased by $93,454, or 96.8%, to $3,046 for the nine months ended March 31, 2025 from $96,500 for the corresponding period of 2024. The decrease in net sales was primarily due to the absence of revenue generated from Wi-Fi router sales by FTI, which typically vary from period to period.
Previous report
**GROSS PROFIT -**Gross profit increased by $3,799,760, or 132.5%, to $6,667,444 for the nine months ended March 31, 2025 from $2,867,684 for the corresponding period of 2024. The gross profit in terms of net sales percentage was 17.0% for the nine months ended March 31, 2025 compared to 11.6% for the corresponding period of 2024. The increase in gross profit and gross profit in terms of net sales percentage for the nine months ended March 31, 2025, was primarily due to the change in net sales and the sales of higher margin products as described above. .
Previous report
OPERATING EXPENSES - Operating expenses increased by $1,648,239, or 25.1%, to $8,211,549 for the nine months ended March 31, 2025 from $6,563,310 for the corresponding period of 2024.
Previous report
Selling, general, and administrative expenses increased by $1,433,755 to $5,465,786 for the nine months ended March 31, 2025, from $4,032,031 for the corresponding period of 2024. The increase in operating expenses was primarily due to the accrued incentive bonus of $1,250,000 to OC Kim, the President and the increased shipping and handling charges of approximately $100,000.
Previous report
Research and development expense increased by $214,484 to $2,745,763 for the nine months ended March 31, 2025, from $2,531,279 for the corresponding period of 2024. The increase in research and development expense was primarily due to the increased research and development costs of approximately $260,000, which was offset by the decreased related payroll expense of approximately $42,000 from the mixed result of the timing of research and development activities and the number of active projects and typically vary from period to period.
Previous report
OTHER INCOME, NET - Other income, net increased by $869,344, or 106.0%, to $1,689,809 for the nine months ended March 31, 2025 from $820,465 for the corresponding period of 2024. The increase was primarily due to the gains from the legal settlement amount owed by OC Kim, the President, and the forgiven liability of $1,000,000 and $247,592, respectively, which was offset by the loss from the unfavorable changes in foreign currency exchange rates of approximately $300,000.
Previous report
FINANCING ACTIVITIES - Net cash provided by financing activities for the nine months ended March 31, 2025 and 2024 was $0 and $1,045, respectively.
Previous report
We leased approximately 12,775 square feet of office space in San Diego, California, at a monthly rent of $25,754, pursuant to a lease that expired in December 2023. On October 19, 2023, we signed a lease for office space consisting of approximately 11,400 square feet, located in San Diego, California, at a monthly rent of $27,789, which commenced on January 1, 2024. In addition to monthly rent, the lease includes payment for certain common area costs. The term of the lease for the office space is 65 months from the lease commencement date. Our facility is covered by an appropriate level of insurance, and we believe it to be suitable for our use and adequate for our present needs.
Previous report
On or about December 7, 2023, we received an invoice from our prior landlord, Hunsaker & Associates, requesting payment of additional rent on our completed and expired lease of office space located at 9707 Waples Street, San Diego, CA as of December 31, 2023. This invoice of $142,978 purports to represent charges for variable cost increases during the prior 7 years of the lease, which was discounted by $46,274 and adjusted down to $96,704 for the three months ended June 30, 2024. We are currently reviewing these charges and will be requesting further validation of these charges, in accordance with our rights granted under the lease. For the year ended June 30, 2024, we recorded an additional rent expense of $96,704 and an accrued liability of $72,048 reflecting this pending invoice and a credit of $24,656 for our deposit on the leasehold property.
Previous report
Our Korea-based subsidiary, FTI, leases approximately 10,000 square feet of office space, at a monthly rent of approximately $6,600, and additional office space consisting of approximately 2,682 square feet at a monthly rent of approximately $2,200, both located in Seoul, South Korea. These leases expired on August 31, 2024, and were extended for an additional 24 months to August 31, 2026. In addition to monthly rent, the leases provide for periodic cost of living increases in the base rent and payment for certain common area costs. These facilities are covered by an appropriate level of insurance, and we believe them to be suitable for our use and adequate for our present needs.
Previous report
We lease one corporate housing facility, located in Seoul, South Korea, primarily for our employees who travel, under a non-cancelable operating lease that expires on September 4, 2025. We lease one corporate vehicle on December 1, 2024, in San Diego, California, for our employees, under a non-cancelable lease that expires on November 30, 2027.
Previous report
Rent expenses for the three months ended March 31, 2025 and 2024 were $125,687 and $117,486, respectively. Rent expenses for the nine months ended March 31, 2025 and 2024 were $350,796 and $483,305, respectively.
Reworded paragraphs (12)
Previous wording
Doing business as “FranklinAccess”, 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.
Current wording
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.
Previous wording
We have several critical accounting policies, which were described in our Annual Report on Form 10-K for the year ended June 30, 2024, that are both important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, and complex judgments. Typically, the circumstances that make these judgments difficult, subjective, and complex have to do with making estimates about the effect of matters that are inherently uncertain. There were no material changes to our critical accounting policies for the three and nine months ended March 31, 2025.
Current wording
We have several critical accounting policies, which were described in our Annual Report on Form 10-K for the year ended June 30, 2025, that are both important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, and complex judgments. Typically, the circumstances that make these judgments difficult, subjective, and complex have to do with making estimates about the effect of matters that are inherently uncertain. There were no material changes to our critical accounting policies for the three months ended September 30, 2025.
Previous wording
The following table sets forth, for the three and nine months ended March 31, 2025 and 2024, our statements of comprehensive (loss) income (unaudited) including data expressed as a percentage of sales:
Current wording
The following table sets forth, for the three months ended September 30, 2025 and 2024, our statements of comprehensive income including data expressed as a percentage of sales:
Previous wording
NET SALES - Net sales increased by $14,479,805, or 58.7%, to $39,159,629 for the nine months ended March 31, 2025 from $24,679,824 for the corresponding period of 2024. For the nine months ended March 31, 2025, net sales by geographic regions, consisting of North America and Asia, were $39,156,583 (100.0% of net sales) and $3,046 (0.0% of net sales), respectively. For the nine months ended March 31, 2024, net sales by geographic regions, consisting of North America and Asia, were $24,583,324 (99.6% of net sales) and $96,500 (0.4% of net sales), respectively.
Current wording
NET SALES - Net sales decreased by $577,952, or 4.3%, to $12,744,960 for the three months ended September 30, 2025 from $13,322,912 for the corresponding period of 2024. For the three months ended September 30, 2025, net sales by geographic regions, consisting of North America and Asia, were $12,733,051 (99.9% of net sales) and $11,909 (0.1% of net sales), respectively. For the three months ended September 30, 2024, net sales by geographic regions, consisting of North America and Asia, were $13,322,448 (100.0% of net sales) and $464 (0.0% of net sales), respectively.
Previous wording
Net sales in North America increased by $1,832,710, or 29.7%, to $8,007,037 for the three months ended March 31, 2025 from $6,174,327 for the corresponding period of 2024. The increase in net sales was primarily due to increased demand from our major carrier customers. Net sales in Asia increased by $410, or 18.9%, to $2,582 for the three months ended March 31, 2025 from $2,172 for the corresponding period of 2024.
Current wording
Net sales in North America decreased by $589,397, or 4.4%, to $12,733,051 for the three months ended September 30, 2025 from $13,322,448 for the corresponding period of 2024. The decrease in net sales in North America was primarily due to decreased demand from our major carrier customers, which typically varies from period to period. Net sales in Asia increased by $11,445, or 2,466.6%, to $11,909 for the three months ended September 30, 2025 from $464 for the corresponding period of 2024.
Previous wording
**GROSS PROFIT -**Gross profit increased by $836,431, or 161.6%, to $1,353,880 for the three months ended March 31, 2025 from $517,449 for the corresponding period of 2024. The gross profit in terms of net sales percentage was 16.9% for the three months ended March 31, 2025 compared to 8.4% for the corresponding period of 2024. The increase in gross profit and gross profit in terms of net sales percentage for the three months ended March 31, 2025, was due to the increase in net sales as described above and the fact that the increased sales were of higher margin products.
Current wording
**GROSS PROFIT -**Gross profit increased by $838,268, or 40.5%, to $2,909,770 for the three months ended September 30, 2025 from $2,071,502 for the corresponding period of 2024. The gross profit in terms of net sales percentage was 22.8% for the three months ended September 30, 2025 compared to 15.5% for the corresponding period of 2024.
Previous wording
OPERATING EXPENSES - Operating expenses increased by $1,247,816, or 60.2%, to $3,320,433 for the three months ended March 31, 2025 from $2,072,617 for the corresponding period of 2024.
Current wording
OPERATING EXPENSES - Operating expenses decreased by $124,895, or 5.1%, to $2,319,390 for the three months ended September 30, 2025 from $2,444,285 for the corresponding period of 2024.
Previous wording
Our principal source of liquidity as of March 31, 2025 consisted of cash and cash equivalents, as well as short-term investments, of $38,139,337. We believe we have sufficient available capital to cover our existing operations and obligations through at least one year from the date of the filing of this Form 10-Q. Our long-term future cash requirements will depend on numerous factors, including our revenue base, profit margins, product development activities, market acceptance of our products, future expansion plans and ability to control costs. If we are unable to achieve our current business plan or secure additional funding that may be required, we would need to curtail our operations or take other similar actions outside the ordinary course of business in order to continue to operate as a going concern.
Current wording
Our principal source of liquidity as of September 30, 2025 consisted of cash and cash equivalents, as well as short-term investments, of $38,714,635. We believe we have sufficient available capital to cover our existing operations and obligations through at least one year from the date of the filing of this Form 10-Q. Our long-term future cash requirements will depend on numerous factors, including our revenue base, profit margins, product development activities, market acceptance of our products, future expansion plans and ability to control costs. If we are unable to achieve our current business plan or secure additional funding that may be required, we would need to curtail our operations or take other similar actions outside the ordinary course of business in order to continue to operate as a going concern.
Previous wording
OPERATING ACTIVITIES - Net cash used in operating activities for the nine months ended March 31, 2025 and 2024 was $490,230 and $6,972,515, respectively.
Current wording
OPERATING ACTIVITIES - Net cash used in operating activities for the three months ended September 30, 2025 was $1,488,908, and net cash provided by operating activities for the three months ended September 30, 2024 was $2,670,900.
Previous wording
The $490,230 in net cash used in operating activities for the nine months ended March 31, 2025 was primarily due to the increases in accounts receivable of $1,957,056 as well as the decrease in accounts payable of $1,025,639, which was offset by the increase in accrued liabilities of $2,376,154. The $6,972,515 in net cash used in operating activities for the nine months ended March 31, 2024 was primarily due to the decrease in accounts payable of $6,668,572 as well as our operating results (net loss of $2,297,180 adjusted for depreciation, amortization, and other non-cash charges), which was partially offset by a decrease in inventories of $2,605,602.
Current wording
The $1,488,908 in net cash used in operating activities for the three months ended September 30, 2025, was primarily due to the increase of accounts receivable of $5,487,322, which was partially offset by the increase in accounts payable of $1,521,184 and the decrease in inventories of $1,358,115 as well as our operating results (net income adjusted for depreciation, amortization, and other non-cash charges of $1,065,379).
Previous wording
INVESTING ACTIVITIES - Net cash provided by investing activities for the nine months ended March 31, 2025 and 2024 was $1,030,351 and $1,815,796.
Current wording
INVESTING ACTIVITIES – Net cash provided by investing activities for the three months ended September 30, 2025 was $143,315, and net cash used in investing activities for the three months ended September 30, 2024 was $334,785.
Previous wording
The $1,030,351 in net cash provided by investing activities for nine months ended March 31, 2025 was primarily due to the contribution in noncontrolling interest by a partner of $2,000,000, which was offset by the purchase of short-term investments of $730,024 and payments for purchase of capitalized product development and intangible assets of $224,442. The $1,815,796 in net cash provided by investing activities for nine months ended March 31, 2024 was primarily due to the sales of short-term investments of $1,995,606, which was partially offset by payments for purchase of capitalized product development and intangible assets of $126,793 and purchase of property and equipment of $53,017.
Current wording
The $334,785 in net cash used in financial activities for the three months ended September 30, 2024 was primarily due to the purchase of short-term investments of $291,869, the purchase of property and equipment of $21,544, and the purchase of capitalized product development costs and intangible assets of $21,372, respectively.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The $2,670,900 in net cash provided by operating activities for the three months ended September 30, 2024 was primarily due to the increase in accounts payable of $3,550,907 as well as our operating results (net income adjusted for depreciation, amortization, and other non-cash charges), which was partially offset by the increase of inventories of $1,127,477.
Current report — wording carried from elsewhere
Refer to NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES in the Consolidated Financial Statements.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
NET SALES - Net sales increased by $1,833,120, or 29.7%, to $8,009,619 for the three months ended March 31, 2025 from $6,176,499 for the corresponding period of 2024. For the three months ended March 31, 2025, net sales by geographic regions, consisting of North America and Asia, were $8,007,037 (100.0% of net sales) and $2,582 (0.0%), respectively. For the three months ended March 31, 2024, net sales by geographic regions, consisting of North America and Asia, were $6,174,327 (100.0% of net sales) and $2,172 (0.0%), respectively.