Franklin Wireless Corporation (FKWL)

[MikeDDKing]

There are two chunks of FKWL shares to be repurchased from C-Motech. The filings are appropriately adjusted for the first repurchase of shares. Below is the timeline and related info:

1. On 08/02/10 FKWL issued a PR to indicate the repurchase of 3,370,356 shares from C-Motech. The repurchase of shares was to be completed by December 31, 2010.

2. 0n 09/21/10 FKWL issued a PR to indicate that they had completed the repurchase of 1,803,684 shares. In the PR they indicated that following the repurchase of the 1,803,684 shares they had 11,977,807 shares outstanding. That left 1,566,672 shares to be repurchased by 12/31/10.

3. On 10/12/10 FKWL issued their 10-K. That filing indicated that there were 11,977,807 shares outstanding. That is exactly 1,803,684 shares less than they indicated in their fiscal Q3'10 10-Q issued on 05/17/10.

4. On 02/14/11 FKWL issued their fiscal Q2'11 10-Q. That filing indicated that the closing of the second chunk of shares was moved to March 31, 2010. To the best of my knowledge there has been no update to indicate whether or not there was a closing on this chunk of shares. Once this closing complete the FKWL share count will be further reduced by 1,566,672 shares.

I think what you are confused about with the two amendments is that originally, the first chunk of shares were to be paid in exchange for cancellation of C-Motech debt (no cash changed hands). Instead C-Motech separately paid their debt and FKWL purchased the shares for cash. Both cash amounts were $1,873,065 and each party has paid their respective amounts. Since they exchanged the same amount of money it is functionally the same as the original agreement. The change was probably for some legal or accounting reason. You can read more about this in Note 11 of the fiscal Q2'11 10-Q.