$FKWL

FRANKLIN WIRELESS CORP

CIK:0000722572|SEC Filings

Consolidated Statements of Comprehensive Loss - USD ($)	12 Months Ended
Consolidated Statements of Comprehensive Loss - USD ($)	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Net sales	$ 36,514,405	$ 46,086,901
Cost of goods sold	(30,259,274)	(38,171,832)
Gross profit	6,255,131	7,915,069
Operating expenses:
Selling, general and administrative	5,698,950	6,676,078
Research and development	3,233,791	4,102,660
Total operating expenses	8,932,741	10,778,738
Loss from operations	(2,677,610)	(2,863,669)
Other (expense) income, net:
Interest income	487,151	695,127
Gain from the forgiveness of accounts payable and accrued liabilities	412,814	247,592
Gain from the disposal of property and equipment and intangible assets	0	3,563
Litigation settlement income	0	1,000,000
Litigation contingency expense	(4,620,410)	0
(Loss) gain from foreign currency transactions	(1,105,405)	196,635
Other income, net	445,456	535,156
Total other (expense) income, net	(4,380,394)	2,678,073
Loss before benefit for income taxes	(7,058,004)	(185,596)
Income tax benefit	(138,732)	(45,167)
Net loss	(6,919,272)	(140,429)
Less: non-controlling interests in net (loss) income of subsidiary at 33.7%	(2,119,656)	79,070
Less: non-controlling interests in net (loss) income of subsidiary at 40.0%	(55,808)	23,602
Net loss attributable to Parent Company	$ (4,743,808)	$ (243,101)
Loss per share attributable to Parent Company stockholders - basic	$ (0.40)	$ (0.02)
Loss per share attributable to Parent Company stockholders - diluted	$ (0.40)	$ (0.02)
Weighted average common shares outstanding - basic	11,784,280	11,784,280
Weighted average common shares outstanding - diluted	11,784,280	11,784,280
Comprehensive loss
Net loss	$ (6,919,272)	$ (140,429)
Translation adjustments	(22,948)	54,208
Comprehensive loss	(6,942,220)	(86,221)
Less: comprehensive (loss) income attributable to non-controlling interest	(2,175,464)	102,672
Less: Foreign exchange translation attributable to non-controlling interest	(8,374)	18,245
Comprehensive loss attributable to controlling interest	$ (4,758,382)	$ (207,138)

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Jun. 30, 2026	Jun. 30, 2025
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$ (6,919,272)	$ (140,429)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	36,787	33,125
Amortization of intangible assets	573,439	827,091
Loss (gain) from foreign currency transactions	1,276,860	(233,720)
Stock based compensation	0	350,593
Bad debt expense	555,600	158,400
Reserve for allowance slow moving inventories	18,968	63,846
(Gain) from trading vehicle and loss from the disposal of property and equipment and intangible assets	0	(3,563)
Recovery of litigation settlement with an officer	0	(1,000,000)
Loss contingency associated with a subsidiary’s legal proceeding	4,620,410	(0)
Forgiveness of debts	(412,814)	(247,592)
Net change of right use assets and lease liabilities	956	349
Deferred tax benefit	(197,192)	(79,703)
Increase (decrease) in cash due to change in working capital:
Accounts receivable	(1,751,615)	(311,767)
Inventories	(2,998,397)	(993,069)
Other current assets	10,751	(13,265)
Prepaid income taxes	(103,039)	(2,963)
Accounts payable	(1,102,139)	855,382
Contract liabilities and advance from customers	(52,407)	(33,471)
Income tax payable	42,762	0
Accrued liabilities	103,436	2,615,116
Net cash (used in) provided by operating activities	(6,296,906)	1,844,360
CASH FLOW FROM INVESTING ACTIVITIES:
Contribution to a subsidiary by an EMS partner	0	2,000,000
Sales (purchases) of short-term investments	6,041,785	(437,774)
Purchases of property and equipment	(28,863)	(32,765)
Cash proceeds from sales of a vehicle	0	10,500
Payments for capitalized product development costs and intangible assets	(502,239)	(533,563)
Net cash provided by investing activities	5,510,683	1,006,398
CASH FLOW FROM FINANCING ACTIVITIES:
Payment to repurchase stock option from an officer	0	(408,663)
Dividend declared and paid	(471,371)	0
Net cash used in financing activities	(471,371)	(408,663)
Effect of foreign currency translation	(82,367)	32,522
Net (decrease) increase in cash and cash equivalents	(1,339,961)	2,474,617
Cash and cash equivalents, beginning of year	14,741,173	12,266,556
Cash and cash equivalents, end of year	13,401,212	14,741,173
Cash paid during the periods for:
Income taxes paid, net of (refunds)	128,400	40,800
Noncash supplemental disclosure of cash flow information:
Accrued liabilities offset with other receivable from an officer:	$ 0	$ (337,404)

Consolidated Balance Sheets - USD ($)

Jun. 30, 2026

Jun. 30, 2025

Current assets:

Cash and cash equivalents

$ 13,401,212

$ 14,741,173

Short-term investments

18,553,184

25,887,028

Accounts receivable, net

2,301,445

1,330,504

Other receivable due from officer

662,596

Inventories, net

5,297,148

2,358,335

Other current assets

148,136

167,659

Prepaid income taxes

133,260

32,995

Total current assets

40,496,981

45,180,290

Property and equipment, net

59,812

72,882

Intangible assets, net

928,373

1,014,112

Deferred tax assets, non-current

3,448,477

3,273,622

Goodwill

273,285

Right of use assets, net

1,025,710

1,382,294

Other assets

121,849

133,545

TOTAL ASSETS

46,354,487

51,330,030

Current liabilities:

Accounts payable

6,888,828

8,119,055

Income tax payable

42,762

Contract liabilities and advance from customers

72,893

125,300

Accrued liabilities, litigation contingency

^[1]

4,345,104

Accrued bonus payable to an officer

^[2]

3,125,000

2,625,000

Accrued liabilities, others

360,487

1,172,044

Lease liabilities, current

321,140

375,343

Total current liabilities

15,156,214

12,416,742

Lease liabilities, non-current

717,561

1,018,985

Total liabilities

15,873,775

13,435,727

Commitments and contingencies (Note 6)

Parent Company stockholders’ equity

Preferred stock, par value $0.001 per share, authorized 10,000,000 shares; none issued and outstanding

Common stock, par value $0.001 per share, authorized 50,000,000 shares; 11,784,280 shares issued and outstanding

14,263

Additional paid-in capital

14,337,826

Retained earnings

19,678,929

24,894,108

Treasury stock, 2,549,208 shares

(3,554,893)

Accumulated other comprehensive loss

(1,161,436)

(1,146,862)

Total Parent Company stockholders’ equity

29,314,689

34,544,442

Non-controlling interests

1,166,023

3,349,861

Total stockholders’ equity

30,480,712

37,894,303

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 46,354,487

$ 51,330,030

[1]	In January of 2025, the Company’s South Korea-based subsidiary, FTI was sued by Partron Co., Ltd., a South Korean manufacturer of electronic parts for mobile and telecommunication devices (“Partron”). (Refer to Note 6 – Commitments and Contingencies, Litigation).
[2]	The balance of Accrued Bonus to an officer consists of two components: the Quarterly Bonus and the Joint Venture Incentive. As of June 30, 2026, no cash payment has been made by the Company for either accrued amount.