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What changed in FRANKLIN WIRELESS CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FRANKLIN WIRELESS CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+104 added−109 removedSource: 10-K (2025-09-29) vs 10-K (2024-09-30)

Top changes in FRANKLIN WIRELESS CORP's 2025 10-K

104 paragraphs added · 109 removed · 82 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe following table contains certain financial information by geographic area: Fiscal Year Ended June 30, Net sales: 2024 2023 North America $ 30,699,727 $ 45,782,084 Asia 96,963 166,432 Totals $ 30,796,690 $ 45,948,516 Long-lived assets, net (property and equipment and intangible assets): June 30, 2024 June 30, 2023 North America $ 1,218,139 $ 2,083,902 Asia 206,426 198,070 Totals $ 1,424,565 $ 2,281,972 1 OUR PRODUCTS We offer a wide variety of innovative integrated wireless solutions utilizing the latest 5G and 4G LTE technologies including mobile hotspots, fixed wireless routers, and mobile device management (MDM) solutions. 5G/4G Wireless Broadband Products 5G/4G LTE Wi-Fi Mobile Hotspot o Portable Wi-Fi hotspot routers that provide wireless Internet access with 5G/4G support for multiple simultaneously connected devices including laptops, tablets, and smart phones.
Biggest changeFiscal Years Ended June 30, Net sales: 2025 2024 North America $ 46,081,244 $ 30,699,727 Asia 5,657 96,963 Totals $ 46,086,901 $ 30,796,690 Fiscal Years Ended June 30, Items: 2025 2024 Net sales $ 46,086,901 $ 30,796,690 Cost of goods sold (38,171,832 ) (27,288,340 ) Selling, general, and administrative expenses (6,676,078 ) (6,041,355 ) Research and development expenses (4,102,660 ) (3,406,750 ) Other segment items 2,723,240 1,773,084 Net loss $ (140,429 ) $ (4,166,671 ) Long-lived assets, net (property and equipment and intangible assets): June 30, 2025 June 30, 2024 North America $ 929,173 $ 1,218,139 Asia 157,821 206,426 Totals $ 1,086,994 $ 1,424,565 OUR PRODUCTS We offer a wide variety of innovative integrated wireless solutions utilizing the latest 5G and 4G LTE technologies including mobile hotspots, fixed wireless routers, and mobile device management (MDM) solutions. 5G/4G Wireless Broadband Products 5G/4G LTE Wi-Fi Mobile Hotspot o Portable Wi-Fi hotspot routers that provide wireless Internet access with 5G/4G support for multiple simultaneously connected devices including laptops, tablets, and smart phones.
CUSTOMERS Our global customer base is comprised of wireless operators, strategic partners and distributors located primarily in North America and Asia. SALES AND MARKETING We market and sell our products primarily to wireless operators located in North America and Asia regions mainly through our internal, direct sales organization and, to a lesser degree, indirectly through strategic partners and distributors.
CUSTOMERS Our global customer base is comprised of wireless operators, strategic partners and distributors located primarily in North America and Asia. SALES AND MARKETING We market and sell our products primarily to wireless operators located in the North America and Asia regions mainly through our internal, direct sales organization and, to a lesser degree, indirectly through strategic partners and distributors.
The sales process is supported with a range of marketing activities, including trade shows, product marketing and public relations. All of our wireless devices must pass Federal Communications Commission (FCC) testing in order to be sold in United States markets.
The sales process is supported with a range of marketing activities, including trade shows, product marketing and public relations. 3 All of our wireless devices must pass Federal Communications Commission (FCC) testing in order to be sold in United States markets.
ITEM 1. BUSINESS. BUSINESS OVERVIEW 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.
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.
Our employees are not represented by any collective bargaining organization, and we have never experienced a work stoppage. 3
Our employees are not represented by any collective bargaining organization, and we have never experienced a work stoppage. 4
PRODUCTION AND MANUFACTURING OPERATIONS For the fiscal year ended June 30, 2024, the manufacturing of the majority of our products was performed by two independent companies located in Asia. EMPLOYEES As of June 30, 2024, we had 69 total employees at Franklin and FTI combined. We also use the services of consultants and contract workers from time to time.
PRODUCTION AND MANUFACTURING OPERATIONS For the fiscal year ended June 30, 2025, the manufacturing of the majority of our products was performed by two independent companies located in Asia. EMPLOYEES As of June 30, 2025, we had 67 total employees at Franklin, FTI, and Sigbeat combined. We also use the services of consultants and contract workers from time to time.
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 have majority ownership of Franklin Technology Inc. (FTI), a research and development company based in Seoul, South Korea.
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.
Mobile Device Management (MDM) o Comprehensive management of mobile devices, ensuring security, compliance, and efficient operation across various mobile environments Network Management System (NMS) o Robust tools for monitoring, managing, and optimizing network performance, ensuring reliable connectivity and operational excellence.
Mobile Device Management (MDM) o Comprehensive mobile device management platform that ensures security, compliance, and efficient operation across various mobile environments Network Management System (NMS) o Robust tools for monitoring, managing, and optimizing network performance, ensuring reliable connectivity and operational excellence.
Our consolidated financial statements include accounts for the Company and its subsidiary, Franklin Technology Inc. (“FTI”). We have a majority voting interest of approximately 66.3% (approximately 33.7% is owned by non-controlling interests) in FTI as of June 30, 2024, and 2023.
(“Sigbeat”), with majority voting interests of 66.3% and 60.0%, respectively, (approximately 33.7% and 40.0% are owned by noncontrolling interests, respectively), and, as of June 30, 2024, our consolidated financial statements include the accounts of the Company and its subsidiary, Franklin Technology Inc. (“FTI”), with a majority voting interest of 66.3% (approximately 33.7% is owned by noncontrolling interests).
Quvo Family Guardian Solutions Parental Controls o Comprehensive parental control features, ensuring a safe and secure online environment for children by managing and monitoring their internet and application usage.
Quvo Family Guardian Solutions Parental Controls o Comprehensive parental control features, ensuring a safe and secure online environment for children by managing and monitoring their internet and application usage. Senior Care o Enhancing senior care solutions for the safety and well-being of elderly family members through monitoring and assistance features tailored to their needs.
Global Certification Forum (“GCF”) test certifications are required in order to launch any wireless data products with wireless operators in North America. PCS Type Certification Review Board (“PTCRB”) test certifications also are required for all LTE and HSPA/GSM wireless data products.
PCS Type Certification Review Board (“PTCRB”) test certifications are required for all LTE and HSPA/GSM wireless data products to launch with wireless operators in North America. Other LTE and 5G test certifications, as defined by the 3GPP governing body, are required for LTE and 5G wireless data products.
Our Mobile Hotspot products help remote workers be productive while on the go and help students and educational institutions support remote learning activities. 5G/4G Fixed Wireless Routers o Enhanced routing gateway that can provide support for both wired and wireless connectivity, offering solutions for consumers looking to replace Cable or DSL service ensuring a reliable and high-speed internet access. 5G/4G Enterprise Gateway CPE o Enhanced routing gateway equipped with enterprise features offering solutions for enterprise customers looking to replace wired service, or wireless back-up for wired connections in a mission-critical environment or instant wireless connection in temporal locations.
Our Mobile Hotspot products help remote workers be productive while on the go and help students and educational institutions support remote learning activities. 5G/4G Fixed Wireless Routers o Enhanced routing gateway that can provide support for both wired and wireless connectivity, offering solutions for consumers looking to replace Cable or DSL service ensuring a reliable and high-speed internet access. 2 Smart Box Solutions (In Development) 4G/5G M2M Gateway o Enhanced gateway that supports both 4G and 5G networks, enabling reliable and secure machine-to-machine communication, essential for industrial applications and remote monitoring systems.
We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility. We have one reportable segment, consisting of the sale of wireless access products. We generate revenues from three geographic areas, consisting of North America and Asia.
We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility. We have one reportable segment, consisting of the sale of wireless access products. The Chief Operating Decision Maker (“CODM”) assesses performance for the segment and allocates resources based on the consolidated net income (loss) of the company.
Senior Care o Enhancing senior care solutions for the safety and well-being of elderly family members through monitoring and assistance features tailored to their needs. 2 JEXtream MDM/NMS Solutions “JEXtream” is Franklin’s Cloud based telecom grade server platform for 5G devices and routers, enables enhanced remote management of device functionality.
JEXtream MDM/NMS Solutions “JEXtream” is Franklin’s Cloud based telecom grade server platform for 5G devices and routers, which enables enhanced remote management of device functionality.
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.
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.
FTI primarily provides design and development services for our wireless products. 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.
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.
Other LTE and 5G test certifications, as defined by the 3GPP governing body, are required for LTE and 5G wireless data products. Certifications are issued as being a qualifier of GCF, PTCRB, IEEE, CE, UL, Wi-Fi alliance certification and 3GPP standards.
Certifications are issued as being a qualifier of GCF, PTCRB, IEEE, CE, UL, Wi-Fi alliance certification and 3GPP standards. Our devices also comply with the requirements of California's Proposition 65 (“Prop 65”), Safe Drinking Water and Toxic Enforcement Act of 1986.
In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings (loss) are reduced by the portion of the net earnings (loss) of the subsidiary applicable to non-controlling interests. Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments.
In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings (loss) are reduced by the portion of the net earnings (loss) of the subsidiary or subsidiaries applicable to noncontrolling interests. On May 14, 2024, the Company entered into an Agreement for Formation of a Joint Venture Corporation (the “Agreement”).
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The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements.
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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.
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Smart Box Solutions (In Development) 4G/5G M2M Gateway o Enhanced gateway supports both 4G and 5G networks, enabling reliable and secure machine-to-machine communication, essential for industrial applications and remote monitoring systems.
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Under the terms of the Agreement, the parties formed a Nevada corporation, Sigbeat, to be owned 60% by Franklin and 40% by its Electronic Manufacturing Services (“EMS”) partner (Refer to Note 6-Commitments and Contingencies, Joint Venture Agreement). Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments.
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The CODM uses the consolidated net income (loss) to evaluate the return on assets in deciding on resource allocation, monitor performance against budgets, and benchmark performance against competitors. 1 We generate revenues from two geographic areas, consisting of North America and Asia. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements.
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The following table contains certain financial information by geographic area and the reconciliation of total segment sales less disclosed significant expenses to the segment's measure of net income or loss.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe availability and sale of those services would be harmed if any of these suppliers is not able to meet our demand and alternative suitable products are not available on acceptable terms, or at all. o Natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend, and could impact consumer spending. o If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase. o We may be unable to adequately control the costs or maintain adequate supply of components and raw materials associated with our operations. o If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory or lose sales from having too few products. o Product liability, product replacement or recall costs could adversely affect our business and financial performance. o We rely on third-party software and other intellectual property to develop and provide our solutions and significant increases in licensing costs or defects in third-party software could harm our business. o Our solutions integrate with third-party technologies and if our solutions become incompatible with these technologies, our solutions would lose functionality, and our customer acquisition and retention could be adversely affected. 8 LEGAL AND REGULATORY CHANGES THAT COULD REDUCE OR IMPAIR OUR ABILITY TO OPERATE. o Evolving regulations and changes in applicable laws relating to data privacy may increase our expenditures related to compliance efforts or otherwise limit the solutions we can offer, which may harm our business and adversely affect our financial condition. o Enhanced United States fiscal, tax and trade restrictions and executive and legislative actions could adversely affect our business, financial condition, and results of operations. o The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results. o An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed. o If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed.
Biggest changeThe availability and sale of those services would be harmed if any of these suppliers is not able to meet our demand and alternative suitable products are not available on acceptable terms, or at all. o Natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend, and could impact consumer spending. o If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase. o We may be unable to adequately control the costs or maintain adequate supply of components and raw materials associated with our operations. o If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory or lose sales from having too few products. o Product liability, product replacement or recall costs could adversely affect our business and financial performance. o We rely on third-party software and other intellectual property to develop and provide our solutions and significant increases in licensing costs or defects in third-party software could harm our business. o Our solutions integrate with third-party technologies and if our solutions become incompatible with these technologies, our solutions would lose functionality, and our customer acquisition and retention could be adversely affected.
The development and commercialization of our products and services depend in large part upon our ability to selectively enter and maintain collaborative arrangements with developers, distributors, service providers, network systems providers, core wireless communications technology providers and manufacturers, among others. THE LOSS OF ANY OF OUR MATERIAL CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY, AND THEREFORE SHAREHOLDER VALUE.
The development and commercialization of our products and services depend in large part upon our ability to selectively enter and maintain collaborative arrangements with developers, distributors, service providers, network systems providers, core wireless communications technology providers and manufacturers, among others. 7 THE LOSS OF ANY OF OUR MATERIAL CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY, AND THEREFORE SHAREHOLDER VALUE.
We have a written agreement with each of these customers that governs the sale of products to them, but the agreements do not obligate them to purchase any quantity of products from us. If these customers were to reduce their business with us, our revenues and profitability could materially decline. 6 OUR PRODUCT DELIVERIES ARE SUBJECT TO LONG LEAD TIMES.
We have a written agreement with each of these customers that governs the sale of products to them, but the agreements do not obligate them to purchase any quantity of products from us. If these customers were to reduce their business with us, our revenues and profitability could materially decline. OUR PRODUCT DELIVERIES ARE SUBJECT TO LONG LEAD TIMES.
In addition, there is no assurance that third party licenses we execute will be on commercially reasonable terms. 4 Under purchase orders and contracts for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement claims for which we may have no corresponding recourse against our third-party licensors.
In addition, there is no assurance that third party licenses we execute will be on commercially reasonable terms. 5 Under purchase orders and contracts for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement claims for which we may have no corresponding recourse against our third-party licensors.
The completion of acquisition or divestiture transactions could have an adverse effect on our financial condition. o If our goodwill and acquired intangible assets become impaired, we may be required to record a significant charge to earnings. 9 POTENTIAL EVENTS THAT COULD NEGATIVELY IMPACT THE VALUE OF OUR SECURITIES. o Our share price has been highly volatile in the past and could be highly volatile in the future. o Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited o The price of our stock may be vulnerable to manipulation, including through short sales. o Ownership of our common stock is concentrated, and as a result, certain stockholders may exercise significant influence over the Company. o We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock. o If financial or industry analysts do not publish research or reports about our business, or if they issue negative or misleading evaluations of our stock, our stock price and trading volume could decline. o If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to report our financial results timely and accurately, which could adversely affect investor confidence in us, and in turn, our results of operations and our stock price. o If the accounting estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may be adversely affected. o Changes to the accounting systems or new accounting system implementations may be ineffective or cause delays in our ability to record transactions and/or provide timely financial results. o Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business. o Our quarterly operating results have fluctuated in the past and may fluctuate in the future, which could cause declines or volatility in the price of our common stock.
POTENTIAL EVENTS THAT COULD NEGATIVELY IMPACT THE VALUE OF OUR SECURITIES. o Our share price has been highly volatile in the past and could be highly volatile in the future. o Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited o The price of our stock may be vulnerable to manipulation, including through short sales. o Ownership of our common stock is concentrated, and as a result, certain stockholders may exercise significant influence over the Company. o We do not currently pay recurring dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock. o If financial or industry analysts do not publish research or reports about our business, or if they issue negative or misleading evaluations of our stock, our stock price and trading volume could decline. o If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to report our financial results timely and accurately, which could adversely affect investor confidence in us, and in turn, our results of operations and our stock price. 10 o If the accounting estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may be adversely affected. o Changes to the accounting systems or new accounting system implementations may be ineffective or cause delays in our ability to record transactions and/or provide timely financial results. o Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business. o Our quarterly operating results have fluctuated in the past and may fluctuate in the future, which could cause declines or volatility in the price of our common stock.
We depend on a small number of customers for a significant portion of our revenues. For the year ended June 30, 2024, net revenues from our two largest customers represented 68% and 23% of our consolidated net sales, respectively.
We depend on a small number of customers for a significant portion of our revenues. For the year ended June 30, 2025, net revenues from our two largest customers represented 60.9% and 33.5% of our consolidated net sales, respectively.
Our products are subject to certain mandatory regulatory approvals in the United States and other regions in which we operate. In the United States, the Federal Communications Commission regulates many aspects of communications devices.
GOVERNMENT REGULATION COULD RESULT IN INCREASED COSTS AND INABILITY TO SELL OUR PRODUCTS. Our products are subject to certain mandatory regulatory approvals in the United States and other regions in which we operate. In the United States, the Federal Communications Commission regulates many aspects of communications devices.
In this industry it should be expected that: o Latent design flaws can be discovered, even after a device has been certified; o Latent component defects can be discovered in critical systems, including batteries, LCDs, chargers, and other systems; o Manufacturing defects and flaws will occur during device production. 5 WE OPERATE IN THE HIGH-RISK SOFTWARE INDUSTRY.
In this industry it should be expected that: o Latent design flaws can be discovered, even after a device has been certified; o Latent component defects can be discovered in critical systems, including batteries, LCDs, chargers, and other systems; o Manufacturing defects and flaws will occur during device production. SOME OF OUR PRODUCTS INCLUDE BATTERIES.
In addition, regulatory requirements may change, or we may not be able to obtain regulatory approvals from countries other than the United States in which we may desire to sell products in the future. 7 EVENTS THAT COULD REDUCE OR IMPAIR OUR ABILITY TO GENERATE REVENUES. o The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services. o If customers do not adopt our software, we may not be able to monetize these software assets and realize a key part of our growth and profitability strategy. o The market for the products and services that we offer is rapidly evolving and highly competitive.
EVENTS THAT COULD REDUCE OR IMPAIR OUR ABILITY TO GENERATE REVENUES. o The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services. o If customers do not adopt our software, we may not be able to monetize these software assets and realize a key part of our growth and profitability strategy. o The market for the products and services that we offer is rapidly evolving and highly competitive.
We believe that our products are currently exempt from international tariffs. If this were to change at any point, a tariff of 10%-25% of the purchase price could be imposed. If such tariffs are imposed, they could have a materially adverse effect on sales and operating results. GOVERNMENT REGULATION COULD RESULT IN INCREASED COSTS AND INABILITY TO SELL OUR PRODUCTS.
We believe that our products are currently exempt from international tariffs. If this were to change at any point, a tariff of 10%-80% of the purchase price could be imposed. If such tariffs are imposed, they could have a materially adverse effect on sales and operating results. The financial impact of this could make our business unprofitable.
POTENTIAL NEGATIVE IMPACTS RELATED TO INTERNATIONAL OPERATIONS. o Due to the global nature of our operations, we are subject to political and economic risks of doing business internationally. o Weakness or deterioration in global economic conditions or jurisdictions where we have significant foreign operations could have a material adverse effect on our results of operations and financial condition. o Weakness or deterioration in global political conditions where we have significant business interests could have a material adverse effect on our business, results of operations and financial condition. o Fluctuations in foreign currency exchange rates could adversely affect our results of operations. o Unionization efforts in certain countries in which we operate could materially increase our costs or limit our flexibility. o Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax and other laws and regulations. o A governmental challenge to our transfer pricing policies or practices could impose significant costs on us.
LEGAL AND REGULATORY CHANGES THAT COULD REDUCE OR IMPAIR OUR ABILITY TO OPERATE. o Evolving regulations and changes in applicable laws relating to data privacy may increase our expenditures related to compliance efforts or otherwise limit the solutions we can offer, which may harm our business and adversely affect our financial condition. o Enhanced United States fiscal, tax and trade restrictions and executive and legislative actions could adversely affect our business, financial condition, and results of operations. o The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results. o An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed. o If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed. 9 POTENTIAL NEGATIVE IMPACTS RELATED TO INTERNATIONAL OPERATIONS. o Due to the global nature of our operations, we are subject to political and economic risks of doing business internationally. o Weakness or deterioration in global economic conditions or jurisdictions where we have significant foreign operations could have a material adverse effect on our results of operations and financial condition. o Weakness or deterioration in global political conditions where we have significant business interests could have a material adverse effect on our business, results of operations and financial condition. o Fluctuations in foreign currency exchange rates could adversely affect our results of operations. o Unionization efforts in certain countries in which we operate could materially increase our costs or limit our flexibility. o Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax and other laws and regulations. o A governmental challenge to our transfer pricing policies or practices could impose significant costs on us.
EVENTS THAT COULD IMPAIR OUR ABILITY TO DEVELOP, MANUFACTURE AND DELIVER OUR SOLUTIONS. o We rely on third parties to manufacture and warehouse many of our products, which exposes us to a number of risks and uncertainties outside our control. o We depend on sole source suppliers for some components used in our products.
We may be unable to compete effectively. o If we fail to develop and maintain strategic relationships, we may not be able to penetrate new markets. o If we fail to develop and timely introduce new products and services or enter new markets for our products and services successfully, we may not achieve our revenue targets, or we may lose key customers or sales, and our business could be harmed. 8 EVENTS THAT COULD IMPAIR OUR ABILITY TO DEVELOP, MANUFACTURE AND DELIVER OUR SOLUTIONS. o We rely on third parties to manufacture and warehouse many of our products, which exposes us to a number of risks and uncertainties outside our control. o We depend on sole source suppliers for some components used in our products.
This industry has numerous and significant known risks.
WE OPERATE IN THE HIGH-RISK SOFTWARE INDUSTRY. This industry has numerous and significant known risks.
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We may be unable to compete effectively. o If we fail to develop and maintain strategic relationships, we may not be able to penetrate new markets. o If we fail to develop and timely introduce new products and services or enter new markets for our products and services successfully, we may not achieve our revenue targets, or we may lose key customers or sales, and our business could be harmed.
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The following are common dangers of lithium batteries. o Thermal Runaway: An uncontrollable chemical reaction that causes the cells to heat up rapidly, leading to intense fires, potential explosions, and the ejection of cells. o Fires and Explosions: The batteries contain volatile electrolytes that, when exposed to damage or high temperatures, can ignite, causing fires that reach extreme temperatures. o Toxic and Flammable Gases: When a battery malfunctions, it can release flammable and toxic gases, which can ignite and create a fire. 6 o Hydrofluoric Acid Exposure: During combustion, fluorine can separate from lithium salts, forming hydrofluoric acid when mixed with water vapor, posing a severe health risk. o Burns: The extreme temperatures of lithium battery fires, reaching up to 1000°F or more, can cause severe third-degree burns. o Chemical Exposure: The chemicals inside the batteries, including toxic and flammable electrolytes, pose chemical hazards if released. o Choking Hazard: Small lithium-ion button batteries can cause severe chemical burns to the esophagus if ingested.
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In addition, regulatory requirements may change, or we may not be able to obtain regulatory approvals from countries other than the United States in which we may desire to sell products in the future.
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The completion of acquisition or divestiture transactions could have an adverse effect on our financial condition. o If our goodwill and acquired intangible assets become impaired, we may be required to record a significant charge to earnings.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement regularly updates the Audit Committee on our cybersecurity programs, which includes cybersecurity risks and mitigation strategies, vulnerability management, and on-going cybersecurity projects. As of June 30, 2024, we did not identify any cybersecurity incidents that materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Biggest changeAs of June 30, 2025, we did not identify any cybersecurity incidents that materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced an undetected cybersecurity incident.
The Board of Directors has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage and mitigate those risks. The Audit Committee of the Board of Directors (the “Audit Committee”) has been designated to oversee cybersecurity risks.
Governance The Board of Directors has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage and mitigate those risks. The Audit Committee of the Board of Directors (the “Audit Committee”) has been designated to oversee cybersecurity risks.
ITEM 1C. CYBERSECURITY. Cybersecurity risk management is an integral part of our overall enterprise risk management program. The Company manages cybersecurity and data protection through a continuously evolving program.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy Cybersecurity risk management is an integral part of our overall enterprise risk management program. The Company manages cybersecurity and data protection through a continuously evolving program.
In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate the risks. Even when a risk is detected, disruptive events may not always be immediately and thoroughly interpreted and acted upon.
It is possible that we may not implement appropriate controls if we do not detect a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate the risks. Even when a risk is detected, disruptive events may not always be immediately and thoroughly interpreted and acted upon.
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However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident. It is possible that we may not implement appropriate controls if we do not detect a particular risk.
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Management regularly updates the Audit Committee on our cybersecurity programs, which includes cybersecurity risks and mitigation strategies, vulnerability management, and on-going cybersecurity projects. While none of our directors has formal professional certifications in cybersecurity, several members of the Board have experience overseeing information technology and enterprise risk management in prior executive or board roles.
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The Board receives periodic updates on cybersecurity matters as part of its overall risk oversight responsibilities. Day-to-day responsibility for identifying and managing cybersecurity risks rests with our Director of IT Security & Future Solutions and his information security team.
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The team is responsible for monitoring our networks, systems, and data, implementing technical safeguards , conducting employee training, and coordinating incident response procedures.
Added
Management provides regular reports to the Audit Committee, generally on an annual basis, or more frequently as needed covering: · the Company’s cybersecurity strategy and policies, · results of system monitoring and testing, · recent threat environment developments, and · any cybersecurity incidents and responses. 11 In addition, in the event of a significant cybersecurity incident, the Chief Operating Officer will promptly inform the Chief Executive Officer and General Counsel, who in turn will notify the Chair of the Audit Committee and the Board as appropriate.
Added
Management regularly updates the Audit Committee on our cybersecurity programs, which includes cybersecurity risks and mitigation strategies, vulnerability management, and on-going cybersecurity projects. We ordinarily do not engage assessors, consultants, auditors or other third parties in connection with such oversight.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFor 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. 11 Our Korea-based subsidiary, FTI, leases approximately 10,000 square feet of office space, at a monthly rent of approximately $8,000, and additional office space consisting of approximately 2,682 square feet at a monthly rent of approximately $2,700, both located in Seoul, Korea.
Biggest changeFor 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.
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.
On or about December 7 th , 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.
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 $23,370, which commenced on January 1, 2024. In addition to monthly rent, the lease includes payment for certain common area costs.
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.
We lease one corporate housing facility, located in Seoul, Korea, primarily for our employees who travel, under a non-cancelable operating lease that expired on September 4, 2024, and was extended for an additional twelve months to September 4, 2025. Rent expense related to this lease was $8,089 and $8,095 for the years ended June 30, 2024 and 2023, respectively.
We lease one corporate housing facility, located in Seoul, Korea, primarily for our employees who travel, under a non-cancelable operating lease that expired on September 4, 2025, and were extended for an additional 12 months to September 4, 2026. Rent expense related to this lease was $8,077 and $8,089 for the years ended June 30, 2025 and 2024, respectively.
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. Rent expense related to these leases was approximately $112,206 and $128,400 for each of the years ended June 30, 2024 and 2023, respectively.
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. Rent expense related to these leases was $105,889 and $112,206 for the years ended June 30, 2025 and 2024, respectively.
Rent expense related to this property was $321,259 and $309,053 for the years ended June 30, 2024 and 2023.
Rent expense related to this property was $337,322 and $321,259 for the years ended June 30, 2025 and 2024, respectively.
Added
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.
Added
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. Rent expense related to this lease was $6,473 and $0 for the years ended June 30, 2025 and 2024, respectively.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEQUITY COMPENSATION PLAN INFORMATION The following table summarizes share and exercise price information about our equity compensation plans as of June 30, 2024: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders 627,001 $ 4.22 587,003 Equity compensation plans not approved by security holders – N/A – Total 647,001 $ 4.22 587,003 ITEM 6. [RESERVED]
Biggest changeEQUITY COMPENSATION PLAN INFORMATION The following table summarizes share and exercise price information about our equity compensation plans as of June 30, 2025: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders 392,001 $ 4.64 604,000 Equity compensation plans not approved by security holders – N/A – Total 392,001 $ 4.64 604,000 ITEM 6. [RESERVED]
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET PRICE OF OUR COMMON STOCK Shares of our Common Stock are quoted and traded on the Nasdaq National Market System under the trading symbol “FKWL”. We have one class of common stock. As of June 30, 2024, we had 715 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET PRICE OF OUR COMMON STOCK Shares of our Common Stock are quoted and traded on the Nasdaq National Market System under the trading symbol “FKWL.” We have one class of common stock. As of June 30, 2025, we had 629 shareholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRESULTS OF OPERATIONS The following table sets forth, for the years ended June 30, 2024, 2023, and 2022, our statements of operations including data expressed as a percentage of sales: 2024 2023 2022 (as a percentage of sales) Net sales 100.0% 100.0% 100.0% Cost of goods sold 88.6% 84.7% 84.1% Gross profit 11.4% 15.3% 15.9% Operating expenses 30.7% 20.4% 36.6% Loss from operations (19.3% ) (5.1% ) (20.7% ) Other income (expense), net 2.7% (3.2% ) 1.1% Net loss before income taxes (16.6% ) (8.3% ) (19.6% ) Income tax benefit (3.1% ) (1.9% ) (4.3% ) Net loss (13.5% ) (6.4% ) (15.3% ) Less: non-controlling interest in net (loss) income of subsidiary (0.6% ) (0.2% ) 0.4% Net loss attributable to Parent Company stockholders (12.9% ) (6.2% ) (15.7% ) YEAR ENDED JUNE 30, 2024, COMPARED TO YEAR ENDED JUNE 30, 2023 NET SALES - Net sales decreased by $15,151,826, or 33.0%, to $30,796,690 for the year ended June 30, 2024 from $45,948,516 for the corresponding period of 2023.
Biggest changeRESULTS OF OPERATIONS The following table sets forth, for the years ended June 30, 2025, and 2024, our statements of operations including data expressed as a percentage of sales: 2025 2024 (as a percentage of sales) Net sales 100.00% 100.00% Cost of goods sold (82.80% ) (88.60% ) Gross profit 17.20% 11.40% Operating expenses 23.40% 30.70% Loss from operations (6.20% ) (19.30% ) Other income (expense), net 5.80% 2.70% Net loss before income taxes (0.40% ) (16.60% ) Income tax benefit (0.10% ) (3.10% ) Net loss (0.30% ) (13.50% ) Less: non-controlling interest in net (loss) income of subsidiary 0.20% (0.60% ) Net loss attributable to Parent Company stockholders (0.50% ) (12.90% ) YEAR ENDED JUNE 30, 2025, COMPARED TO YEAR ENDED JUNE 30, 2024 NET SALES - Net sales increased by $15,290,211, or 49.6%, to $46,086,901 for the year ended June 30, 2025 from $30,796,690 for the corresponding period of 2024.
We believe we have sufficient available capital to cover our existing operations and obligations through at least June 30, 2025. 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.
We believe we have sufficient available capital to cover our existing operations and obligations through at least June 30, 2026. 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.
LIQUIDITY AND CAPITAL RESOURCES Our historical operating results, capital resources and financial position, in combination with current projections and estimates, were considered in management’s plan and intentions to fund our operations over a reasonable period of time, which we define as the twelve-month period ending June 30, 2024.
LIQUIDITY AND CAPITAL RESOURCES Our historical operating results, capital resources and financial position, in combination with current projections and estimates, were considered in management's plan and intentions to fund our operations over a reasonable period of time, which we define as the twelve-month period ending June 30, 2025.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. 13 BUSINESS OVERVIEW 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.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. 13 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.
PROPERTIES. WARRANTY REPAIRS The following table sets forth the percentages of return rates and warranty repairs for all products currently marketed, in the aggregate from the date each product was introduced through June 30, 2024.
PROPERTIES. WARRANTY REPAIRS The following table sets forth the percentages of return rates and warranty repairs for all products currently marketed, in the aggregate, from the date each product was introduced through June 30, 2025.
The Company determines revenue recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. 14 Contracts with Customers Revenue from sales of products and services is derived from contracts with customers.
We determine revenue recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. 14 Contracts with Customers Revenue from sales of products and services is derived from contracts with customers.
Under the Tax Cuts and Jobs Act (the “Act”), which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.5 million, which was recognized on or after January 1, 2018, will carry forward indefinitely. The state net operating loss of approximately $0.5 million will begin to expire through 2043.
Under the Tax Cuts and Jobs Act (the “Act”), which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.7 million, which was recognized on or after January 1, 2018, will carry forward indefinitely. The state net operating loss of approximately $0.7 million will begin to expire in 2043.
The $723,858 in net cash provided by investing activities for the year ended June 30, 2024 was primarily due to the proceeds of short-term investments of $910,034, which was offset by the purchases of capitalized product development of $123,359.
The $723,858 in net cash provided by investing activities for the year ended June 30, 2024 was primarily due to the proceeds from the sale of short-term investments of $910,034, which was offset by purchases related to capitalized product development costs of $123,359.
Current Devices Device Type Return Rate Warranty Repairs 4G Wireless Devices 0.11% 0.01% 5G Wireless Devices 0.57% 0.10% 20 FUTURE LIQUIDITY AND CAPITAL REQUIREMENTS For the next twelve months, we may require in excess of $2 million for capital expenditures, software licenses and for testing and certifying new products.
Current Devices Device Type Return Rate Warranty Repairs 4G Wireless Devices 0.10% 0.01% 5G Wireless Devices 0.55% 0.13% FUTURE LIQUIDITY AND CAPITAL REQUIREMENTS For the next twelve months, we may require in excess of $2 million for capital expenditures, software licenses and for testing and certifying new products.
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 have majority ownership of Franklin Technology Inc. (FTI), a research and development company based in Seoul, South Korea.
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.
The amortization begins when the products are available for general release to our customers. As of June 30, 2024, and June 30, 2023, capitalized product development costs in progress were $0 and $203,838, respectively, and these amounts are included in intangible assets in our consolidated balance sheets.
The amortization begins when the products are available for general release to our customers. As of June 30, 2025, and June 30, 2024, capitalized product development costs in progress were $452,676 and $0, respectively, and these amounts are included in intangible assets in our consolidated balance sheets.
Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of June 30, 2024, we have federal and state net operating loss carryforwards of approximately $5.8 million and $0.5 million, respectively.
Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of June 30, 2025, we have federal and state net operating loss carryforwards of approximately $2.7 million and $0.7 million, respectively.
CRITICAL ACCOUNTING POLICIES Revenue Recognition The Company accounts for its revenue according to ASC 606, “Revenue from Contracts with Customers”, pursuant to which, revenue is recognized when the control of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.
CRITICAL ACCOUNTING POLICIES Revenue Recognition We account for our revenue according to ASC 606, “Revenue from Contracts with Customers”, pursuant to which, revenue is recognized when the control of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
For the purposes of liquidity disclosures, we assess the likelihood that we have sufficient available working capital and other principal sources of liquidity to fund our operating activities and obligations as they become due. Our principal source of liquidity as of June 30, 2024, consisted of cash and cash equivalents as well as short-term investments of $37,457,827.
For the purposes of liquidity disclosures, we assess the likelihood that we have sufficient available working capital and other principal sources of liquidity to fund our operating activities and obligations as they become due. Our principal source of liquidity as of June 30, 2025, consisted of cash and cash equivalents as well as short-term investments of $40,628,201.
For the years ended June 30, 2024 and 2023, we incurred $123,359 and $1,631,376, respectively in capitalized product development costs, and all costs incurred before technological feasibility is reached are expensed and included in our consolidated statements of comprehensive income (loss).
For the years ended June 30, 2025 and 2024, we incurred $520,202 and $123,359, respectively in capitalized product development costs, and all costs incurred before technological feasibility is reached are expensed and included in our consolidated statements of comprehensive income (loss).
As of June 30, 2023, we have federal and state net operating loss carryforwards of approximately $2.5 million and $0.5 million, respectively.
As of June 30, 2024, we have federal and state net operating loss carryforwards of approximately $5.8 million and $0.5 million, respectively.
Since the customer typically agrees to a stated rate and price in the purchase order that does not vary over the life of the contract, the majority of our contracts do not contain variable consideration. We establish a provision for estimated warranty and returns.
Since the customer typically agrees to a stated rate and price in the purchase order that does not vary over the life of the contract, the majority of our contracts do not contain variable consideration. We establish a provision for estimated warranty and returns. Using historical averages, provisions for the years ended June 30, 2025 and 2024, were not material.
The $91,057 in net cash provided by financing activities for the year ended June 30, 2024 was repayment received from the loan to an employee of $91,057.
The $91,057 in net cash provided by financing activities for the year ended June 30, 2024 was a repayment received for a loan made to an employee of $91,057. 18 OFF-BALANCE SHEET ARRANGEMENTS None.
As of June 30, 2024 and 2023, our contracts do not contain any unsatisfied performance obligations, except for undelivered products. Capitalized Product Development Costs Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other” includes software that is part of a product or process to be sold to a customer and shall be accounted for under Subtopic 985-20.
Capitalized Product Development Costs Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other” includes software that is part of a product or process to be sold to a customer and shall be accounted for under Subtopic 985-20.
Our contract liabilities and advance from customers are as follows: June 30, 2024 June 30, 2023 Undelivered products $ 158,771 $ 146,488 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606.
Our contract liabilities are as follows: June 30, 2025 June 30, 2024 Undelivered products $ 125,300 $ 158,771 Accrued marketing development funds 673,205 – Totals $ 798,505 $ 158,771 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606.
The balances of our trade receivables are as follows: June 30, 2024 June 30, 2023 Accounts Receivable, net $ 1,155,060 $ 8,949,802 The balance of contract assets was immaterial as we did not have a significant amount of un-invoiced receivables in the periods ended June 30, 2024, and June 30, 2023.
The balances of our trade receivables are as follows: June 30, 2025 June 30, 2024 Accounts Receivable, net $ 1,330,504 $ 1,155,060 We did not have any un-invoiced receivables in the periods ended June 30, 2025 and 2024.
For the year ended June 30, 2024, net sales by geographic regions, consisting of North America and Asia, were $30,699,727 (99.7% of net sales) and $96,963 (0.3% of net sales), respectively.
For the year ended June 30, 2024, net sales by geographic regions, consisting of North America and Asia, were $30,699,727 (99.7% of net sales) and $96,963 (0.3% of net sales), respectively. Net sales in North America increased by $15,381,517, or 50.1%, to $46,081,244 for the year ended June 30, 2025, from $30,699,727 for the corresponding period of 2024.
The gross profit in terms of net sales percentage was 11.4% for the year ended June 30, 2024, compared to 15.3% for the corresponding period of 2023. The decrease in gross profit was primarily due to the change in net sales as described above.
The gross profit in terms of net sales percentage was 17.2% for the year ended June 30, 2025, compared to 11.4% for the corresponding period of 2024.
Using historical averages, that provisions for the years ended June 30, 2024, and 2023, were not material. Disaggregation of Revenue In accordance with Topic 606, we disaggregate revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred.
Disaggregation of Revenue In accordance with Topic 606, we disaggregate revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred.
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS The following table summarizes our contractual obligations and commitments as of June 30, 2024, and the effect such obligations could have on our liquidity and cash flow in future periods: Operating Lease Fiscal 2025 $ 336,972 Fiscal 2026 344,789 Fiscal 2027 352,840 Fiscal 2028 387,437 Fiscal 2029 363,310 Total lease payments 1,785,348 Less imputed interest (287,629 ) Total $ 1,497,719 Remaining lease term-operating leases 4.9 years Discount rate-operating lease 7% LEASES Refer to ITEM 2.
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS The following table summarizes our contractual obligations and commitments as of June 30, 2025, and the effect such obligations could have on our liquidity and cash flow in future periods: Operating Lease Fiscal 2026 $ 460,293 Fiscal 2027 377,047 Fiscal 2028 389,915 Fiscal 2029 363,310 Total lease payments 1,590,565 Less imputed interest (196,237 ) Total $ 1,394,328 Remaining lease term-operating lease in San Diego, California 3.9 years Discount rate-operating lease in San Diego, California 7% Remaining lease term-operating lease in South Korea 1.2 years Discount rate-operating lease in South Korea 6% Remaining lease term-vehicle lease in San Diego, California 2.4 years Discount rate-vehicle lease in San Diego, California 7% LEASES Refer to ITEM 2.
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. OPERATING ACTIVITIES – Net cash used in operating activities for the years ended June 30, 2024 and 2023 were $773,360 and $1,882,114, respectively.
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.
Revenue from products transferred to customers at a single point in time accounted for over 99% of net sales for the year ended June 30, 2024 and 2023. Revenue for non-recurring engineering projects is based on the percentage completion of a project and accounted for under 1% of net sales for the years ended June 30, 2024 and 2023.
Revenue from products transferred to customers at a single point in time accounted for 99.2% and 98.8% of net sales for the years ended June 30, 2025 and 2024.
The $1,882,114 in net cash used in operating activities for the year ended June 30, 2023 was primarily due to the increase in accounts receivable of $7,627,183 as well as our operating results (net loss adjusted for depreciation, amortization, and other non-cash charges), which was offset by the increase of accounts payable and accrued legal contingency expense of $4,905,499 and $2,400,000, respectively.
The $1,844,360 in net cash provided by operating activities for the year ended June 30, 2025 was primarily due to the increase in accrued liabilities and accounts payable of $2,615,116 and $855,382, respectively, which was offset by our operating results (net loss adjusted for depreciation, amortization, and other non-cash charges) and the increase in inventories and accounts receivable of $993,069 and $311,767.
Most of our revenue that is recognized at a point in time is for the sale of hot-spot router products. Revenue from these contracts is recognized when the customer can direct the use of and obtain substantially all of the benefits from the product, which generally coincides with title transfer at completion of the shipping process.
Revenue from these contracts is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product, which generally coincides with title transfer at completion of the shipping process. As of June 30, 2025 and 2024, our contracts do not contain any unsatisfied performance obligations, except for undelivered products.
The increase in selling, general, and administrative expenses was primarily due to the increased payroll expenses (excluding payroll expense for employees involved in research and development) and compensation expenses related to stock options granted for employees of approximately $230,000 and $165,000, respectively, and the increased legal expenses of $195,000. 18 Research and development expenses decreased by $363,467 to $3,918,664 for the year ended June 30, 2023, from $4,282,131 for the corresponding period of 2022.
The increase in selling, general, and administrative expenses was primarily due to the increased payroll and related expense of approximately $1.1 million, which was offset by the decreased legal expense of approximately $500,000. Research and development expenses increased by $695,910 to $4,102,660 for the year ended June 30, 2025, from $3,406,750 for the corresponding period of 2024.
The decrease in net sales in North America was primarily due to the reduced demand from two major carriers by approximately 50% and 26%, compared to the corresponding period of 2023. Net sales in Asia decreased by $69,469, or 41.7%, to $96,963 for the year ended June 30, 2024, from $166,432 for the corresponding period of 2023.
The increase in net sales in North America was primarily due to increased demand from our major carrier customers. Net sales in Asia decreased by $91,306, or 94.2%, to $5,657 for the year ended June 30, 2025, from $96,963 for the corresponding period of 2024.
INVESTING ACTIVITIES – Net cash provided by investing activities for the year ended June 30, 2024 was $723,858, and net cash used in investing activities for the year ended June 30, 2023 was $12,109,183.
INVESTING ACTIVITIES – Net cash provided by investing activities for the years ended June 30, 2025 and 2024 were $1,006,398 and $723,858, respectively.
The decrease in net sales was primarily due to the reduced demand (approximately 61%) for a newly launched wireless product from a customer of FTI. GROSS PROFIT - Gross profit decreased by $3,512,392, or 50.0%, to $3,508,350 for the year ended June 30, 2024, from $7,020,742 for the corresponding period of 2023.
The decrease in net sales was primarily due to the absence of revenue generated by FTI, which typically varies from period to period. GROSS PROFIT - Gross profit increased by $4,406,719, or 125.6%, to $7,915,069 for the year ended June 30, 2025, from $3,508,350 for the corresponding period of 2024.
FTI primarily provides design and development services for our wireless products. 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.
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.
OTHER INCOME (EXPENSE), NET - Other income (expense), net increased by $2,305,527, or 155.6%, to $823,784 for the year ended June 30, 2024, from ($1,481,743) for the corresponding period of 2023.
This fluctuation is a natural result of the varying timing and number of active R&D projects from one period to the next. 17 OTHER INCOME (EXPENSE), NET - Other income (expense), net increased by $1,854,289, or 225.1%, to $2,678,073 for the year ended June 30, 2025, from $823,784 for the corresponding period of 2024.
The $12,109,183 in net cash used in investing activities for the year ended June 30, 2023 was primarily due to the purchases of short-term investments of $10,391,654 and capitalized product development of $1,631,376. 19 FINANCING ACTIVITIES – Net cash provided by financing activities for the years ended June 30, 2024 and 2023 was $91,057 and $42,943, respectively.
FINANCING ACTIVITIES – Net cash (used in) provided by financing activities for the years ended June 30, 2025 and 2024 was ($408,663) and $91,057, respectively.
Selling, general, and administrative expenses increased by $589,702 to $6,041,355 for the year ended June 30, 2024, from $5,451,653 for the corresponding period of 2023. The increase in selling, general, and administrative expenses was primarily due to the increased legal expenses of approximately $540,000.
OPERATING EXPENSES - Operating expenses increased by $1,330,633, or 14.1%, to $10,778,738 for the year ended June 30, 2025, from $9,448,105 for the corresponding period of 2024. Selling, general, and administrative expenses increased by $634,723 to $6,676,078 for the year ended June 30, 2025, from $6,041,355 for the corresponding period of 2024.
For the year ended June 30, 2023, net sales by geographic regions, consisting of North America, the Caribbean and South America, and Asia were $45,782,084 (99.6% of net sales), $0 (0.0% of net sales), and $166,432 (0.4% of net sales), respectively.
The increase in net sales was primarily due to increased demand from our major carrier customers. For the year ended June 30, 2025, net sales by geographic regions, consisting of North America and Asia, were $46,081,244 (100.0% of net sales) and $5,657 (0.0% of net sales), respectively.
The increase in gross profit was primarily due to the change in net sales as described above. The decrease in gross profit in terms of net sales percentage was the mixed results of competitive selling prices and the increase in production costs of the launched products.
The increase in gross profit and gross profit in terms of net sales percentage for the year ended June 30, 2025, was primarily due to the increase in net sales, a greater proportion of higher margin products sold, and lower per-unit costs.
Removed
For the year ended June 30, 2023, net sales by geographic regions, consisting of North America and Asia, were $45,782,084 (99.6% of net sales) and $166,432 (0.4% of net sales), respectively. Net sales in North America decreased by $15,082,357, or 32.9%, to $30,699,727 for the year ended June 30, 2024, from $45,782,084 for the corresponding period of 2023.
Added
Our primary markets are in North America and Asia.
Removed
The decrease in gross profit in terms of net sales was the mixed results of competitive selling prices and the increase in production costs as well as the increased amortization expenses associated with the completed capitalized product development costs that are included in the cost of goods sold compared to the corresponding period of 2023. 17 OPERATING EXPENSES - Operating expenses increased by $77,788, or 0.8%, to $9,448,105 for the year ended June 30, 2024, from $9,370,317 for the corresponding period of 2023.
Added
Revenue recognized over a period of time is based on the percent completion of a project and accounted for under 1.0% and 1.2% of net sales for the years ended June 30, 2025 and 2024, respectively. The majority of our revenue recognized at a point in time is for the sale of hotspot router products.
Removed
Research and development expenses decreased by $511,914 to $3,406,750 for the year ended June 30, 2024, from $3,918,664 for the corresponding period of 2023.
Added
The increase in research and development expense was primarily driven by two factors: an approximate $370,000 increase in direct R&D costs (such as for materials and third-party services) and a $320,000 increase in related payroll expense.
Removed
The decrease in research and development expense was primarily due to the decreased research and development costs and the related payroll expense of approximately $250,000 and $260,000, respectively, which is the mixed result of the timing of research and development activities and the number of active projects and typically vary from period to period.
Added
The increase was primarily due to the gain from the legal settlement owed by OC Kim, the President, the forgiven accrued marketing development fund liability, and favorable foreign currency exchange rate changes in FTI of $1,000,000, $247,592, and $683,132, respectively.
Removed
The increase was primarily due to the decreased loss from the agreement in principle to settle a legal action of $2,400,000, the increased loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $360,000, which were offset by the increased interest income earned from the money market accounts and certificates of deposit of approximately $344,000.
Added
OPERATING ACTIVITIES – Net cash provided by (used in) operating activities for the years ended June 30, 2025 and 2024 were $1,844,360 and ($773,360), respectively.
Removed
YEAR ENDED JUNE 30, 2023, COMPARED TO YEAR ENDED JUNE 30, 2022 NET SALES - Net sales increased by $21,950,754, or 91.5%, to $45,948,516 for the year ended June 30, 2023 from $23,997,762 for the corresponding period of 2022.
Added
The $1,006,398 in net cash provided by investing activities for the year ended June 30, 2025 was primarily due to the contribution in noncontrolling interest by a partner of $2,000,000, which was offset by the payments for the purchase of capitalized product development and intangible assets of $533,563 and the purchase of short-term investments of $437,774.
Removed
For the year ended June 30, 2022, net sales by geographic regions, consisting of North America, the Caribbean and South America, and Asia were $23,305,366 (97.1% of net sales), $2,375 (0.0% of net sales), and $690,021 (2.9% of net sales), respectively.
Added
The ($408,663) in net cash used in financing activities for the year ended June 30, 2025 was the repurchase of 200,000 vested stock options from OC Kim, our President, which had been previously granted under the 2020 employee stock option plan.
Removed
Net sales in North America increased by $22,476,718, or 96.4%, to $45,782,084 for the year ended June 30, 2023, from $23,305,366 for the corresponding period of 2022.
Added
The Company believes its balances of cash, cash equivalents, and short-term investments, which totaled $40.6 million as of June 30, 2025, along with cash generated by ongoing operations will be sufficient to satisfy its cash requirements over the next 12 months. 19 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.
Removed
The increase in net sales in North America was primarily due to the new demand for two newly launched wireless products from a major carrier customer (approximately $14M newly generated revenue) which did not purchase our products during the fiscal year 2022, and the increased demand by approximately $11M, or 66%, for our wireless products from the existing major carrier customer compared to the fiscal year 2022, which were offset by the decreased demands from other customers.
Removed
Net sales in the Caribbean and South America decreased by $2,375, or 100%, to $0 for the year ended June 30, 2023, from $2,375 for the corresponding period of 2022. Net sales in Asia decreased by $523,589, or 75.9%, to $166,432 for the year ended June 30, 2023, from $690,021 for the corresponding period of 2022.
Removed
The decrease in net sales was primarily due to the one-time revenue generated from the material sales by FTI for the fiscal year 2022, which was partially offset by the revenue generated from the demand for one newly launched wireless product by FTI (approximately $160,000) for the year ended June 30, 2023.
Removed
GROSS PROFIT - Gross profit increased by $3,204,159, or 84.0%, to $7,020,742 for the year ended June 30, 2023, from $3,816,583 for the corresponding period of 2022. The gross profit in terms of net sales percentage was 15.3% for the year ended June 30, 2023, compared to 15.9% for the corresponding period of 2022.
Removed
OPERATING EXPENSES - Operating expenses increased by $578,842, or 6.6%, to $9,370,317 for the year ended June 30, 2023, from $8,791,475 for the corresponding period of 2022. Selling, general, and administrative expenses increased by $942,309 to $5,451,653 for the year ended June 30, 2023, from $4,509,344 for the corresponding period of 2022.
Removed
The decrease in research and development expense was primarily due to the mix of the timing of research and development activities and the number of active projects, which typically vary from period to period.
Removed
For the year ended June 30, 2023, the research and development expenses decreased by approximately $450,000, which is partially offset by the increased payroll expenses for employees involved in research and development of approximately $89,000.
Removed
OTHER INCOME, NET - Other income, net decreased by $1,747,162, or 658.3%, to $1,481,743 for the year ended June 30, 2023, from $265,419 for the corresponding period of 2022.
Removed
The decrease was primarily due to the loss from the agreement in principle to settle a legal action of $2,400,000 and the increased loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $184,000, which were offset by the increased interest income earned from the money market accounts and certificates of deposit of approximately $388,000, the increased unrealized gain from an investment account of approximately $340,000, and the increased gain from forgiven liabilities of approximately $199,000.
Removed
The $42,943 in net cash provided by financing activities for the year ended June 30, 2023 was from the exercise of stock options of $45,000, which was offset by loan to an employee of $2,057. OFF-BALANCE SHEET ARRANGEMENTS None.
Removed
We believe we will be able to fund our future cash requirements for operations from our cash available, operating cash flows, bank lines of credit and issuance of equity securities. We believe these sources of funds will be sufficient to continue our operations and planned capital expenditures.
Removed
However, we will be required to raise additional debt or equity capital if we are unable to generate sufficient cash flow from operations to fund the expansion of our sales and to satisfy the related working capital requirements for the next twelve months.
Removed
Our ability to satisfy such obligations also depends upon our future performance, which in turn is subject to general economic conditions and regional risks, and to financial, business and other factors affecting our operations, including factors beyond our control. See Item 1A, “ Risk Factors ” included in this report.
Removed
If we are unable to generate sufficient cash flow from operations to meet our obligations and commitments, we will be required to raise additional debt or equity capital. Additionally, we may be required to sell material assets or operations or delay or forego expansion opportunities.
Removed
We might not be able to effect these alternative strategies to raise funds including credit lines and loans, on satisfactory terms, if at all. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.

Other FKWL 10-K year-over-year comparisons