DEF: Franklin Wireless Sets 2025 Annual Meeting, Details Executive Pay

Franklin Wireless Corp. announced its 2025 Annual Meeting of Stockholders to be held virtually on December 22, 2025, outlining director elections, auditor ratification, and executive compensation details.

Summary

• The 2025 Annual Meeting of Stockholders for Franklin Wireless Corp. will be held virtually on Monday, December 22, 2025, at 2:00 p.m. Pacific Time.
• The agenda includes the election of five directors and the ratification of Simon & Edward, LLP as the independent registered public accounting firm for fiscal year 2026.
• The record date for stockholders entitled to vote at the Annual Meeting is October 17, 2025.
• OC Kim, President, CEO, and a Director, had a total Summary Compensation Table (SCT) compensation of $2,821,068 for fiscal year 2025, including a $1,750,000 accrued bonus and a $746,067 option repurchase payment.
• The company reported a net loss attributable to the parent company of $(243,101) for fiscal year 2025, an improvement from $(3,964,016) in fiscal year 2024 and $(2,863,021) in fiscal year 2023.
• Total Shareholder Return (TSR) for a $100 investment, valued as of June 30, 2022, was $31.86 as of June 30, 2025, up from $14.51 as of June 30, 2024.
• In October 2023, a civil jury returned a verdict for $2,000,000 against CEO O.C. Kim for violation of Section 16(b) of the Securities Exchange Act of 1934 for short-swing profits.
• OC Kim has a remaining settlement balance of $662,596 owed to the company as of June 30, 2025, after a partial offset from an option repurchase transaction.
• Reid Granados was appointed Acting Chief Financial Officer on January 1, 2025, replacing William Bauer who resigned from the role.
• The Board of Directors consists of five members, all of whom are nominated for re-election: OC Kim, Johnathan Chee, Heidy Chow, Kristina Kim, and Ira Greenstein.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly cautious. While the company showed significant improvement in reducing its net loss and increasing TSR in FY2025, it still operates at a loss. Concerns remain regarding the CEO's legal judgment and the substantial related-party transactions involving his compensation and outstanding settlement balance.

Positives

• The company significantly reduced its net loss from $(3,964,016) in fiscal year 2024 to $(243,101) in fiscal year 2025, indicating an improving financial trend.
• Total Shareholder Return (TSR) for a $100 investment increased substantially from $14.51 in FY2024 to $31.86 in FY2025.
• The Board of Directors and its committees (Audit, Compensation, Nominating) met regularly, with all directors attending all Board meetings in fiscal 2025, indicating active oversight.
• Heidy Chow, a Certified Public Accountant, has been determined to be an audit committee financial expert, enhancing financial oversight.
• The company has adopted a Code of Ethics, an Insider Trading Policy, and a Mandatory Recoupment Policy, demonstrating commitment to corporate governance and compliance.
• The implementation of the CalSavers retirement program offers a voluntary retirement savings option for employees.

Negatives

• The company has reported persistent net losses for three consecutive fiscal years: $(2,863,021) in FY2023, $(3,964,016) in FY2024, and $(243,101) in FY2025.
• A civil jury returned a $2,000,000 verdict against CEO O.C. Kim in October 2023 for short-swing profits, raising concerns about executive conduct and potential reputational damage.
• OC Kim has a remaining settlement balance of $662,596 owed to the company as of June 30, 2025, stemming from a prior settlement agreement.
• OC Kim's accrued bonuses totaled $1,750,000 for fiscal year 2025, including a $1,250,000 incentive bonus for a joint venture, which was deferred under a forbearance agreement.
• No payment for accrued bonuses has been made to OC Kim by the company as of June 30, 2025, despite significant accruals.

Risks

• The company faces financial risk due to persistent net losses, despite a reduction in the loss for fiscal year 2025.
• The civil jury verdict against CEO O.C. Kim for short-swing profits poses a reputational risk and indicates potential governance weaknesses.
• The outstanding settlement balance owed by the CEO to the company, and the deferral of a large incentive bonus for the CEO, highlight related-party transaction risks and potential conflicts of interest.
• The significant compensation packages and severance agreements for key executives, particularly the CEO, could be a financial burden if performance does not improve substantially.

Future Outlook

The filing primarily focuses on corporate governance matters for the upcoming Annual Meeting and historical executive compensation and financial performance. It does not provide explicit forward-looking statements or guidance regarding future operational or financial performance beyond the scheduled meeting agenda.

Management Comments

• The Board of Directors believes Mr. Kim's qualifications to serve as a director of the Company include his extensive business, operational and management experience in the wireless industry, including his current position as the Company's President. In addition, his knowledge of the Company's business, products, strategic relationships and future opportunities is of great value to the Company.
• Our compensation policies are designed to be competitive with comparable employers and to align management's incentives with both near-term and long-term interests of our stockholders.
• We want to provide our senior management with a level of cash compensation in the form of base salary that facilitates an appropriate lifestyle given their professional status and accomplishments.
• Our practice is to award cash bonuses based upon performance objectives set by the Board of Directors, with the actual amount of incentive compensation paid being in the sole discretion of the Board of Directors.

Industry Context

This filing is a definitive proxy statement primarily detailing corporate governance, executive compensation, and director elections. It does not contain information that allows for a detailed analysis of broader industry trends or the company's competitive position within the wireless telecommunication industry.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• In October 2023, a civil jury in a private derivative action returned a verdict for $2,000,000 in favor of the Company against its Chief Executive Officer, O.C. Kim, for violation of Section 16(b) of the Securities Exchange Act of 1934, for receiving short-swing profits from a sale and purchase of Franklin shares.

Related Party Transactions

• OC Kim's accrued bonuses for fiscal year 2025 totaled $1,750,000, including a $1,250,000 incentive bonus for negotiating a joint venture agreement, which was deferred under a Forbearance Agreement.
• OC Kim owed the company a $1,000,000 settlement amount under a Settlement Agreement dated June 12, 2024. This receivable was partially settled by $337,404 from an option repurchase transaction on May 8, 2025, leaving a remaining balance of $662,596.
• The Forbearance Agreement on September 23, 2024, allowed OC Kim to defer payment of the $1,000,000 settlement amount in exchange for deferring his $1,250,000 incentive bonus.

Stakeholder Impact

• Shareholders: Will vote on director elections and auditor ratification, and are impacted by the company's financial performance (persistent losses, improving TSR) and executive compensation practices, including the CEO's legal issues and related-party transactions.
• Employees: Benefit from the CalSavers retirement program and are subject to the company's Code of Ethics and Insider Trading Policy.
• Management/Executives: Subject to compensation policies, severance agreements, and the Mandatory Recoupment Policy. The CEO faces a significant legal judgment and has ongoing financial dealings with the company.
• Creditors: May be impacted by the company's ongoing net losses, although the reduction in loss for FY2025 is a positive sign.

Next Steps

• Stockholders to vote on the election of five directors at the Annual Meeting on December 22, 2025.
• Stockholders to vote on the ratification of Simon & Edward, LLP as the independent registered public accounting firm for fiscal year 2026.
• Stockholders wishing to present proposals for the 2026 Annual Meeting must submit them by August 2, 2026.
• Stockholders intending to solicit proxies for director nominees for the 2026 Annual Meeting must provide notice by October 6, 2026.

Key Dates

Recommendation

The company shows a positive trend in reducing its net loss and improving Total Shareholder Return in FY2025, which could signal a potential turnaround. However, the persistent net losses, coupled with the significant legal judgment against the CEO for short-swing profits and the complex related-party transactions involving his compensation and outstanding settlement balance, introduce considerable governance and financial risks. For existing investors, holding the stock to monitor if the positive financial trends continue and if governance issues are effectively addressed is a reasonable approach. New investors should exercise caution and conduct further due diligence given the mixed signals and inherent risks.

Keywords

Franklin Wireless, FKWL, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Auditor Ratification, SEC Filing, Stockholder Meeting, Net Loss, Total Shareholder Return