<SEC-DOCUMENT>0001019687-11-001604.txt : 20110719
<SEC-HEADER>0001019687-11-001604.hdr.sgml : 20110719
<ACCEPTANCE-DATETIME>20110512164934
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001019687-11-001604
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20110512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FRANKLIN WIRELESS CORP
		CENTRAL INDEX KEY:			0000722572
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE & TELEGRAPH APPARATUS [3661]
		IRS NUMBER:				953733534
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		5440 MOREHOUSE DR. #1000
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92121
		BUSINESS PHONE:		858-623-0000

	MAIL ADDRESS:	
		STREET 1:		5440 MOREHOUSE DR. #1000
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92121

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FRANKLIN TELECOMMUNICATIONS CORP
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ABM COMPUTER SYSTEMS
		DATE OF NAME CHANGE:	19870317

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AUTOMATED BUSINESS MACHINES INC
		DATE OF NAME CHANGE:	19830802
</SEC-HEADER>
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<TYPE>CORRESP
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Franklin Wireless Corp.</font></font></div>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Form 10-K for the fiscal year ended June 30, 2010</font></div>
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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear Sirs:</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>This is in response to your letter of April 28, 2011 concerning Amendment No. 1 to the Annual Report on Form 10-K for the year ended June 30, 2010 of Franklin Wireless Corp. (the &#8220;Company&#8221;). We are today filing Amendment No.2 to the 10-K, responsive to your comments.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>For ease of reference, the numbers of the following paragraphs correspond to the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">numbers of the paragraphs of the staff's letter, and we have included the text of each staff comment with our response following and indented.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Item 9A. Controls and Procedures, page 11</font></font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>1. We have considered your response to comment 4 of our letter dated March 29, 2011 and the revisions made to your disclosure pursuant to Item 307 of Regulation S-K in the final paragraph of page 11 of your Form 10-K/A# 1 filed on April 20, 2011. We note that management continues to maintain that disclosure controls and procedures were effective. We note also that your revised disclosure recognizes one instance of in which your disclosure controls and procedures, as defined by Rule 13a-15(e) of Regulation 13A, failed. Your identification of an instance of such failure in and of itself does not address our concerns about how you determined that your disclosure controls and procedures were or were not effective in light of such a failure. We reiterate comment 4. Please tell us the factors you consider in determining whether management's failure to provide its report on internal control over financial reporting, as noted in comment 3 of our letter dated March 29, 2011, </font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">impacts your conclusion regarding the effectiveness of your disclosure controls and procedures as of the end of the fiscal year. In particular, please explain how you considered the definition of disclosure controls and procedures provided in Rule 13a-15(e), which indicates that effective controls and procedures would ensure that information required to be disclosed by the issuer is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. In addition, as discussed in Compliance and Disclosure Interpretation 115.02, which you can find at <font style="DISPLAY: inline; TEXT-DECORATION: underline">http://www. sec. go</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">v/divisions/corpfin/guidance/regs-k interp.htm,</font> failure to file management's report on Internal Control over Financial Reporting rendered your annual report materially deficient and also rendered the company not timely or current in its Exchange Act Reporting. In light of these facts, please explain how you could conclude that disclosure controls and procedures were effective. Alternatively, please further amend the 10-K to disclose management's revised conclusion on the effectiveness of your disclosure controls and procedures, i.e., that DC&amp;P were not effective as of the end of the fiscal year.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 40pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In light of the staff&#8217;s comments, management has concluded that its disclosure controls and procedures were not effective as of the end of the fiscal year, and has revised Item 9A to reflect that conclusion. Item 9A has been further revised to reflect that this conclusion results from the fact that the Annual Report on Form 10-K, when initially filed, did not include management&#8217;s report on internal control over financial reporting and related items.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Item 11. Executive Compensation, page 14.</font></font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>2. We note your response to comment six from our letter dated March 29, 2011 and your revised disclosure. However, the Summary Compensation and Outstanding Equity Awards at Fiscal Year-End tables still do not appear to be prepared in accordance with Regulation S-K Items 402(n) and 402(p), respectively. For example, in your Summary Compensation table you report cash performance awards under "Bonus" rather than "Nonequity incentive plan compensation." See Regulation S-K Item 402(n)(vii). As another example, the Outstanding Equity Awards at Fiscal Year-End table appears to combine the columns applicable to option awards and stock awards. Confirm that you will adhere to the item <font style="DISPLAY: inline; FONT-SIZE: 12pt">requirements </font>of Regulation S-K Items 402(n) and 402(p) in future filings.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 40pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>&#160;This is to confirm, on behalf of the Company, that it will adhere to the Item requirements of Regulation S-K, Items 402(n) and 402(p) in future filings.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Item 13. Certain Relationships and Related Transactions, page 24</font></font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 40pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;We note your response to comment seven from our letter dated March 29, 2011 and your revised disclosure. Tell us why you have not yet repurchased the remaining 1,566,672 shares held by C-Motech which were supposed to be repurchased on March 31, 2011 and whether this has resulted in any negative repercussions. If there have been any negative repercussions, disclose them.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 40pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>We advise you supplementally that C-Motech was contractually obligated to sell the remaining 1,566,672 shares back to Franklin by March 31, 2011.&#160; Despite C-Motech&#8217;s obligation to do so, it did not complete the transaction by this date.&#160; On April 29, 2011 Franklin provided formal notification to C-Motech that it is in breach of its obligations.&#160;Franklin has not received a response from C-Motech, but intends to pursue its legal remedies against C-Motech.</font></div>

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<div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities and Exchange Commission</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>On behalf of the Company, we understand that the Company is responsible for the adequacy and accuracy of the disclosure in our filings with the SEC, and that staff comments or changes to disclosure in response to staff comments in the filings reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing. Further, we understand that the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</font></div>

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<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>We appreciate the staff's comments and request that the staff contact the undersigned with any questions regarding this letter.</font></div>

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<td width="50%">Very truly yours,</td>
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<td width="50%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline">/s/ Robert J. Zepfel&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></td>
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<td width="50%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert J. Zepfel</font></td>
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