CLAYTON,
Mo., Dec. 28, 2023 /PRNewswire/ -- Sinnet
Capital Partners, along with Managing Partner Timothy Hasara,
collectively own 380,000 shares or 3.2% of the outstanding shares
of Franklin Wireless (NASDAQ: FKWL), and today issued the following
public letter to the Company's Board of Directors:
***
December 28, 2023
Franklin Wireless Board of Directors
Gary Nelson, O.C. Kim, Kristina Kim, Heidy
Chow, Jonathan Chase
Dear Members of the Board,
Franklin Wireless has generated cash over time, and specifically
since the beginning of Covid. The cash has grown from $12.9 million in March
2020, at the beginning of the pandemic, to $33.6 million at the end of the most recent
quarter, ending September 2023.
However, the stock performance is basically unchanged since this
period of time!
Franklin Wireless has no debt and approximately $2.86 per share in cash.
Shareholders should be rewarded with this cash generation
– returned in the form of a special dividend and
stock buyback.
Sinnet Capital Partners recommends the Board of Directors take
the following actions:
- The company pays a special dividend of $1.00 per share.
- The company executes a $10
million Dutch tender buyback of the stock.
- The company hires an IR firm to issue
Press Releases for significant events and earnings
filings.
Franklin Wireless has had a number of great accomplishments over
the last 12 months. However, investors have to reach far and wide
to find out about these achievements. The company has been awarded
four (4) contracts since last December that Sinnet Capital believes
were significant, but they did not issue a Press Release in any of
the national news services utilized by most investors.
The four contracts that were released only on their website are
as follows:
- December 6, 2022 – Franklin Brings the First 5G Mobile Hotspot to
Metro by T-Mobile
- December 12, 2022 – Franklin
Wireless Launches Its First AT&T Mobile 4G Hotspot
- February 8, 2023 – Franklin
Wireless Introduces New 5G Hotspot with AT&T
- March 20, 2023 – Franklin 5G
Mobile Hotspot Now Available Nationwide at T-Mobile
Following the company for many years, I would note that AT&T
and Metro by T-Mobile are new customers to Franklin Wireless.
As evidenced from their most recent 10-Qs and 10-K, the business
associated with these four contracts appears to be significant,
warranting a widely distributed Press Release.
The 4th quarter ending June
2023 was a great quarter, with revenue up 40% to $17
million and cash from operations up $5.16
million. Yet, the 10-K recently filed on September 28, 2023, does not break down the
4th quarter results and forces the investor to back into the
numbers by reviewing the prior 10-Q filings. In addition, no Press
Releases were issued breaking down the results for the 4th quarter
and the fiscal year end. The fiscal year 2023 revenue increased 91%
from $23,997,762 to $45,948,516.
Franklin Wireless did issue Press Releases on a national news
service in the past, GlobeNewswire, but stopped doing so in 2021.
The stock closed the end of 2022 at $4.46 per share and the stock closed at
$3.03 on December 22, 2023. Sinnet Capital believes the
stock has not performed well over the last year, down primarily as
the result of the company not issuing Press Releases regarding
their contract announcements and earnings.
Sinnet Capital urges the board to pay a $1 special dividend, execute a $10 million dollar Dutch tender buyback
and hire an IR firm to issue Press Releases.
Sincerely,
Timothy Hasara
Managing Partner
Sinnet Capital Partners
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SOURCE Sinnet Capital