Foxx Development Holdings Inc.
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
FOXX$1.60-12.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001213900-25-014221
Item 2. – Management’s Discussion and Analysis of Financial Condition And Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-043597
Item 2. – Management’s Discussion and Analysis of Financial Condition And Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 157 current paragraphs.
103 unchanged; 46 reworded; 8 added; 7 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Other expense, net
Current report
Foreign Currency Translation Adjustment
Current report
Changes in foreign currency translation adjustment of approximately $400 are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of our subsidiary) and the USD dollar (reporting currency) for the three months ended March 31, 2025.
Current report
Comparison for the nine months ended March 31, 2025 and 2024
Current report
Gross profit percentage of tablets decreased from 26.6% to 20.4% from the nine months ended March 31, 2024 to the same period in 2025. This was primarily due the decrease of sales of those with higher unit selling prices and lower unit purchase prices.
Current report
Net Loss
Current report
Foreign Currency Translation Adjustment
Current report
Changes in foreign currency translation adjustment are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of our subsidiary) and the USD dollar (reporting currency).
Removed paragraphs (7)
Previous report
Stock-based compensation expenses
Previous report
Net Income (Loss)
Previous report
Comparison for the six months ended December 31, 2024 and 2023
Previous report
Gross profit percentage for mobile phones decreased from 11.0% to 3.7% from the six months ended December 31, 2023, to the same period in 2024. This decline was primarily due to the increasing sales of new model of mobile phones with lower gross profit percentage during the six months ended December 30, 2024.
Previous report
Stock-based compensation expenses
Previous report
Stock-based compensation expenses increased by approximately $0.2 million, or 100.0%, from $0 for the six months ended December 31, 2023 to $0.2 million for the same period in 2024. The increase is due to restricted stock units granted to our employees, consultants and independent directors under employee incentive plan during the six months ended December 31, 2024.
Previous report
Other income (expense), net
Reworded paragraphs (46)
Previous wording
For the three months ended December 31, 2024, our sales went back to our historical level, as we have added three new customers during the period.
Current wording
For the three months ended March 31, 2025, our sales went back to our historical level, as we have added three new major customers and launched new products and services during the period.
Previous wording
For the six months ended December 31, 2024, our sales went back to our historical level, as we have added three new customers during the period.
Current wording
For the nine months ended March 31, 2025, our sales went back to our historical level, as we have added three new major customers and launched new products and services during the period.
Previous wording
Our revenue primarily derived from sales of electronic products. The total revenues increased by approximately $16.6 million, or 1,998.9%, to approximately $17.5 million for the three months ended December 31, 2024 as compared to $0.8 million for the three months ended December 31, 2023. The increase of the total revenue was mainly attributable to the sales from three new wholesale customers who aggregately accounted for 94% of our sales and to launching a new line of products, which is the wearable electronic products.
Current wording
Our revenue primarily derived from sales of electronic products. The total revenues increased by approximately $10.9 million, or 2,117.1%, to approximately $11.4 million for the three months ended March 31, 2025 as compared to $0.5 million for the three months ended March 31, 2024. The increase of the total revenue was mainly attributable to the sales from three new major wholesale customers who aggregately accounted for 65% of our sales and to launching a new line of products, which is the wearable electronic products, and new service.
Previous wording
Tablet product sales were insignificant in our operations for the three months ended December 31, 2024. Revenue from the sales of tablets decreased by approximately $0.4 million, or 69.5%, to approximately $0.2 million for the three months ended December 31, 2024 from $0.6 million for the same period in 2023. Revenue from sales of phones, which accounts for 85% of total revenue, increased by approximately $14.5 million, or 5,172.6%, to approximately $14.8 million for the three months ended December 31, 2024 from $0.3 million for the same period in 2023 as we rolled out some new phone products beginning in January 2024 and the sales from two new wholesale customers who aggregately accounted for 84% of our sales. Revenue from sales of wearable products, which was new for the three months ended December 31, 2024, increased by approximately $1.8 million, or 100.0%, to approximately $1.8 million for the three months ended December 31, 2024 from $0 for the same period in 2023 as we rolled out some new wearable products beginning in October 2024 and the sales from one new wholesale customers who aggregately accounted for 10% of our sales. Revenue from App service commission increased by approximately $0.7 million, or 100.0%, to approximately $0.7 million for the three months ended December 31, 2024 from $0 for the same period in 2023 as we started to generate income by providing installation of App service to our partners on our mobile devices and procure the distribution of these devices to the end users beginning in July 2024.
Current wording
Revenue from the sales of tablets increased by approximately $0.2 million, or 100.0%, to approximately $0.2 million for the three months ended March 31, 2025 from $0 for the same period in 2024. Revenue from sales of phones, which accounts for 78% of total revenue, increased by approximately $8.4 million, or 1,626.0%, to approximately $8.9 million for the three months ended March 31, 2025 from $0.5 million for the same period in 2024 as we rolled out some new phone products beginning in January 2024 and the sales from two new major wholesale customers who aggregately accounted for 52% of our sales. Revenue from sales of wearable products and others, which was new for the three months ended March 31, 2025, increased by approximately $1.6 million, or 100.0%, to approximately $1.6 million for the three months ended March 31, 2025 from $0 for the same period in 2024 as we rolled out some new wearable products beginning in October 2024 and the sales from one new wholesale customer who aggregately accounted for 13% of our sales. Revenue from App service commission and others increased by approximately $0.7 million, or 100.0%, to approximately $0.7 million for the three months ended March 31, 2025 from $0 for the same period in 2024 as we started to generate income by providing installation of App service to our partners on our mobile devices and procure the distribution of these devices to the end users beginning in July 2024.
Previous wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold increased by approximately $14.6 million, or 1,985.2%, to approximately $15.3 million for the three months ended December 31, 2024 as compared to $0.7 million for the three months ended December 31, 2023. The increase in cost of goods sold is a direct result of an increase in our revenue, consistent with the acquisition of our two new wholesale customers and new product line as discussed above for the three months ended December 31, 2024 as compared to the same period in 2023.
Current wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold increased by approximately $10.1 million, or 1,838.3%, to approximately $10.7 million for the three months ended March 31, 2025 as compared to $0.6 million for the three months ended March 31, 2024. The increase in cost of goods sold is a direct result of an increase in our revenue, consistent with the acquisition of our three new major wholesale customers and new product line as discussed above for the three months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
Our cost of goods sold for tables decreased by approximately $0.4 million, or 71.5%, to approximately $0.1 million for the six months ended December 31, 2024 from $0.5 million for the same period in 2023. Cost of goods sold for mobile phone products increased by approximately $36.1 million, or 14,396.2%, to approximately $36.3 million for the six months ended December 31, 2024 from $0.3 million for the same period in 2023, which is consistent with the direct result of an increase in our revenue. Cost of goods sold for wearable products increased by approximately $1.5 million, or 100.0%, to approximately $1.5 million for the six months ended December 31, 2024 from $0 for the same period in 2023.
Current wording
Our cost of goods sold for tables increased by approximately $0.2 million, or 100.0%, to approximately $0.2 million for the three months ended March 31, 2025 from $0 for the same period in 2024. Cost of goods sold for mobile phone products increased by approximately $8.5 million, or 1,547.2%, to approximately $9.1 million for the three months ended March 31, 2025 from $0.6 million for the same period in 2024, which is consistent with the direct result of an increase in our revenue. Cost of goods sold for wearable products and others increased by approximately $1.4 million, or 100.0%, to approximately $1.4 million for the three months ended March 31, 2025 from $0 for the same period in 2024. Other service cost increased by approximately $21,000, or 100.0% to approximately $21,000 for the three months ended March 31, 2025 from $0 for the same period in 2024.
Previous wording
Our gross profit increased by approximately $2.1 million, or 2,099.8%, to approximately $2.2 million for the three months ended December 31, 2024, from $0.1 million for the three months ended December 31, 2023.
Current wording
Our gross profit increased by approximately $0.7 million, or 1,771.6%, to approximately $0.7 million for the three months ended March 31, 2025, from approximately $(40,000) for the three months ended March 31, 2024.
Previous wording
For the three months ended December 31, 2024 and 2023, our overall gross profit percentage was 12.5% and 12.0%, respectively. The increase in gross profit percentage of 0.6% was primarily due to the all the increases in gross profit percentage for tablet, wearable products and App service commission revenue.
Current wording
For the three months ended March 31, 2025 and 2024, our overall gross profit percentage was 5.8% and (7.7)%, respectively. The increase in gross profit percentage of 13.5% was primarily due to the increases in gross profit percentage for tablet, mobile phone, wearable products and others and App service commission revenue and others.
Previous wording
Gross profit percentage of tablets improved from 12.5% to 21.1% from the three months ended December 31, 2023 to the same period in 2024. This was primarily due to our change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease in the unit purchase price of the purchasing goods.
Current wording
Gross profit percentage of tablets improved from 0% to 20.2% from the three months ended March 31, 2024 to the same period in 2025. This was primarily due to our change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease in the unit purchase price of the purchasing goods.
Previous wording
Gross profit percentage for mobile phones decreased from 11.0% to 8.2% for the three months ended December 31, 2023, to the same period in 2024. This decline was primarily due to the increasing sales of new model of mobile phones with lower gross profit percentage during the three months ended December 31, 2024.
Current wording
Gross loss percentage for mobile phones decreased from (7.7)% to (2.8)% for the three months ended March 31, 2024, to the same period in 2025. This decrease was primarily due to the increasing sales of mobile phones with higher gross profit percentage during the three months ended March 31, 2025.
Previous wording
For the three months ended December 31, 2024, our gross profit percentage of wearable products was 13.9%. We did not have this kind of products for the three months ended December 31, 2023.
Current wording
For the three months ended March 31, 2025, our gross profit percentage of wearable products was 9.2%. We did not have this kind of products for the three months ended March 31, 2024.
Previous wording
For the three months ended December 31, 2024, our gross profit percentage of App service commission was 100.0% because this revenue was commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions occur at a point in time when the end users of the mobile devices use the App and we received the App revenue share (service commission) from our partners without cost of goods. We did not have this kind of service for the three months ended December 31, 2023.
Current wording
For the three months ended March 31, 2025, our gross profit percentage of App service commission and others was 97.2% because App service commission revenue was commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions occur at a point in time when the end users of the mobile devices use the App and we received the App revenue share (service commission) from our partners without cost of goods. We did not have this kind of service for the three months ended March 31, 2024.
Previous wording
Total operating expenses increased by approximately $3.7 million, or 549.1%, to approximately $4.4 million for the three months ended December 31, 2024 from approximately $0.7 million for the three months ended December 31, 2023.
Current wording
Total operating expenses increased by approximately $3.4 million, or 461.0%, to approximately $4.2 million for the three months ended March 31, 2025 from approximately $0.8 million for the three months ended March 31, 2025.
Previous wording
Selling expenses increased, approximately $1.4 million, or 1,056.0%, to approximately $1.6 million for the three months ended December 31, 2024, from approximately $0.2 million for the three months ended December 31, 2023. The increased selling expenses was mainly attributable to approximately $0.6 million increase in commission, payroll and payroll related expense as we recruited and hired more salespersons to our team during the three months ended December 31, 2024, approximately $0.3 million increase in consulting fees, as the Company engaged additional sales consultant to enhance our sales efforts, approximately $0.2 million increase in warranty expenses due to the increase in sales, and approximately $0.2 million increase in sampling, testing and certification expenses, and advertising and marketing, which all directly related with boosting the brand awareness, adding new product models, and to attract more business opportunities in the electronic devices market during the three months ended December 31, 2024.
Current wording
Selling expenses increased, approximately $1.4 million, or 899.5%, to approximately $1.6 million for the three months ended March 31, 2025, from approximately $0.2 million for the three months ended March 31, 2024. The increased selling expenses was mainly attributable to approximately $0.6 million increase in commission, payroll and payroll related expense as we recruited and hired more salespersons to our team during the three months ended March 31, 2025, approximately $0.3 million increase in consulting fees, as the Company engaged additional sales consultant to enhance our sales efforts, approximately $0.2 million increase in sampling, testing and certification expenses, approximately $0.1 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our sales team members under employee incentive plan, and approximately $0.2 million increase advertising and marketing, which all directly related with boosting the brand awareness, adding new product models, and to attract more business opportunities in the electronic devices market during the three months ended March 31, 2025.
Previous wording
General and administrative expenses increased approximately $1.4 million, or 254.6%, to approximately $1.9 million for the three months ended December 31, 2024 from approximately $0.5 million for the three months ended December 31, 2023. The increased general and administrative expense were mainly attributable to the approximately $0.7 million increase in professional expense on audit, legal and accounting fees as we became a public company, approximately $0.3 million increase in salary and wages as we made more new hires during the three months ended December 31, 2024, and approximately $0.4 million increase in other general and administrative miscellaneous expenses, such as insurance, rent expense, travel expense, and office expense due to increased expenses in the increased of our operations. We anticipate a continued rise in our G&A as we persist in executing our business expansion plan and integrating IoT-enabled devices alongside our cloud platform to streamline operations in 2025.
Current wording
General and administrative expenses increased approximately $1.2 million, or 230.2%, to approximately $1.8 million for the three months ended March 31, 2025 from approximately $0.6 million for the three months ended March 31, 2024. The increased general and administrative expense were mainly attributable to the approximately $0.2 million increase in professional expense on audit, legal and accounting fees as we became a public company, approximately $0.2 million increase in salary and wages as we made more new hires during the three months ended March 31, 2025, approximately $0.4 million increase in credit losses due to the increasing risk of uncollectable accounts from one customer, approximately $0.2 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our management team members under employee incentive plan, and approximately $0.2 million increase in other general and administrative miscellaneous expenses, such as insurance, rent expense, travel expense, and office expense due to increased expenses in the increased of our operations. We anticipate a continued rise in our G&A as we persist in executing our business expansion plan and integrating IoT-enabled devices alongside our cloud platform to streamline operations in 2025.
Previous wording
Research and development (“R&D”) expenses from a related party increased by approximately $46,000, or 100.0%, where the increase was primarily due to an R&D project began in 2024. During the three months ended December 31, 2024, a related party completed additional 20% of the remaining 5G development project pursuant to a R&D agreement between us and the related party, and we recognized a R&D expense approximately of $46,000 accordingly based on the progression of the R&D project. We expect our R&D expenses will continue to go up as we will need to development our IoT and MVNO capabilities products and to finish our development of the 5G products in 2025.
Current wording
Research and development (“R&D”) expenses from a related party decreased by approximately $23,000, or 50.0%, where the decrease was primarily due to an R&D project began in 2024. During the three months ended March 31, 2024, a related party completed initiated a 5G development project pursuant to a R&D agreement between us and the related party, and we recognized a R&D expense approximately of $46,000 accordingly based on the progression of the R&D project. During the three months ended March 31, 2025, the related party completed additional 20% of the remaining 5G development project, and we recognized a R&D expense approximately of $23,000. We expect to finish our development of the 5G products in 2025.
Previous wording
R&D expenses increased by approximately $0.7 million, or 100.0%, from $0 for the three months ended December 31, 2023 to $0.7 million for the same period in 2024. The increase is due to hiring more employees and engaging third parties to provide development services for new products during the three months ended December 31, 2024.
Current wording
R&D expenses increased by approximately $0.8 million, or 100.0%, from $0 for the three months ended March 31, 2024 to $0.8 million for the same period in 2025. The increase is due to hiring more employees and engaging third parties to provide development services for new products during the three months ended March 31, 2025. The increase is also attributable to approximately $0.1 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our R&D team members under employee incentive plan.
Previous wording
Our other income (expense), net is summarized as follows:
Current wording
Our other expense, net is summarized as follows:
Previous wording
Total other income (expense), net increased by approximately $3.3 million, or 3,560.8%, to approximately $3.2 million other income for the six months ended December 31, 2024, from approximately $93,000 other expense for the six months ended December 31, 2023. The increase was primarily due to the change in fair value of earnout liabilities in connection with the Business Combination and offset by the interest expenses incurred related to the financing offered by one of our vendors based upon the timing of our payment to their accounts payable.
Current wording
Total other expense, net increased by approximately $0.4 million, or 606.6%, to approximately $0.5 for the three months ended March 31, 2025, from approximately $74,000 for the three months ended March 31, 2024. The increase was primarily due to the interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable and offset by the change in fair value of earnout liabilities in connection with the Business Combination.
Previous wording
The provision for income taxes is $0 for each of the three months ended December 31, 2024 and 2023 as we had made full allowance of our deferred tax assets on net operating losses.
Current wording
The provision for income taxes was $0 and approximately $20,000 for the three months ended March 31, 2025 and 2024, decreased by $20,000 or 100.0% as we had made full allowance of our deferred tax assets on net operating losses for the three months ended March 31, 2025. Foxx had provision for income taxes of approximately $20,000 resulted from timing difference between calendar year on income tax return in 2022 and fiscal year of operation of June 30, for which those operating losses incurred from January 2023 to June 2023 cannot be carried back. At the same time, we had provided 100% allowance on its deferred tax assets on net operating losses for the three months ended March 31, 2024.
Previous wording
Net loss decreased by approximately $0.4 million, or 29.0%, to approximately $0.8 million for the six months ended December 31, 2024, from approximately $1.2 million for the six months ended December 31, 2023. Such change was mainly due to the reasons discussed above.
Current wording
Net loss increased by approximately $3.2 million, or 360.8%, to approximately $4.1 million for the three months ended March 31, 2025, from approximately $0.9 million for the three months ended March 31, 2024. Such change was mainly due to the reasons discussed above.
Previous wording
Our revenue primarily derived from sales of electronic products. The total revenues increased by approximately $39.8 million, or 4,774.0%, to approximately $40.6 million for the six months ended December 31, 2024 as compared to $0.8 million for the six months ended December 31, 2023. The increase of the total revenue was mainly attributable to the sales from three new wholesale customers who aggregately accounted for 86% of our sales.
Current wording
Our revenue primarily derived from sales of electronic products. The total revenues increased by approximately $50.6 million, or 3,760.2%, to approximately $52.0 million for the nine months ended March 31, 2025 as compared to $1.3 million for the nine months ended March 31, 2025. The increase of the total revenue was mainly attributable to the sales from three new major wholesale customers who aggregately accounted for 78% of our sales.
Previous wording
Tablet product sales were insignificant in our operations for the six months ended December 31, 2024. Revenue from the sales of tablets decreased by approximately $0.4 million, or 68.6%, to approximately $0.2 million for the six months ended December 31, 2024 from $0.6 million for the same period in 2023. Revenue from sales of mobile phones increased by approximately $37.4 million, or 13,297.7%, to approximately $37.7 million for the six months ended December 31, 2024 from $0.3 million for the same period in 2023 as we rolled out some new mobile phone products beginning in January 2024 and the sales from three new wholesale customers who aggregately accounted for 93% of our sales. Revenue from sales of wearable products increased by approximately $1.8 million, or 100.0%, to approximately $1.8 million for the six months ended December 31, 2024 from $0 for the same period in 2023 as we rolled out some new wearable products beginning in October 2024. Revenue from App service commission increased by approximately $0.9 million, or 100.0%, to approximately $0.9 million for the six months ended December 31, 2024 from $0 for the same period in 2023 as we started to generate income by providing installation of App service to our partners on our mobile devices and procure the distribution of these devices to the end users beginning in July 2024.
Current wording
Tablet product sales were insignificant in our operations for the nine months ended March 31, 2025. Revenue from the sales of tablets decreased by approximately $0.3 million, or 40.3%, to approximately $0.4 million for the nine months ended March 31, 2025 from $0.7 million for the same period in 2024. Revenue from sales of mobile phones increased by approximately $45.9 million, or 6,660.7%, to approximately $46.6 million for the nine months ended March 31, 2025 from $0.7 million for the same period in 2024 as we rolled out some new mobile phone products beginning in January 2024 and the sales from three new major wholesale customers who aggregately accounted for 78% of our sales. Revenue from sales of wearable products and others increased by approximately $3.4 million, or 100.0%, to approximately $3.4 million for the nine months ended March 31, 2025 from $0 for the same period in 2024 as we rolled out some new wearable products beginning in October 2024. Revenue from App service commission and others increased by approximately $1.7 million, or 100.0%, to approximately $1.7 million for the nine months ended March 31, 2025 from $0 for the same period in 2024 as we started to generate income by providing installation of App service to our partners on our mobile devices and procure the distribution of these devices to the end users beginning in July 2024.
Previous wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold increased by approximately $37.3 million, or 5,082.9%, to approximately $38.0 million for the six months ended December 31, 2024 as compared to $0.8 million for the six months ended December 31, 2023. The increase in cost of goods sold is a direct result of an increase in our revenue, consistent with the acquisition of our three new wholesale customers as discussed above for the six months ended December 31, 2024 as compared to the same period in 2023.
Current wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold increased by approximately $47.4 million, or 3,687.2%, to approximately $48.7 million for the nine months ended March 31, 2025 as compared to $1.3 million for the nine months ended March 31, 2025. The increase in cost of goods sold is a direct result of an increase in our revenue, consistent with the acquisition of our three new major wholesale customers as discussed above for the nine months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
Our cost of goods sold for tables decreased by approximately $0.4 million, or 72.5%, to approximately $0.1 million for the three months ended December 31, 2024 from $0.5 million for the same period in 2023. Cost of goods sold for mobile phone products increased by approximately $13.4 million, or 5,335.5%, to approximately $13.6 million for the three months ended December 31, 2024 from $0.3 million for the same period in 2023, which is consistent with the direct result of an increase in our revenue. Cost of goods sold for wearable products increased by approximately $1.5 million, or 100.0%, to approximately $1.5 million for the three months ended December 31, 2024 from $0 for the same period in 2023.
Current wording
Our cost of goods sold for tables decreased by approximately $0.2 million, or 35.2%, to approximately $0.3 million for the nine months ended March 31, 2025 from $0.5 million for the same period in 2024. Cost of goods sold for mobile phone products increased by approximately $44.7 million, or 5,551.9%, to approximately $45.5 million for the nine months ended March 31, 2025 from $0.8 million for the same period in 2024, which is consistent with the direct result of an increase in our revenue. Cost of goods sold for wearable products and others increased by approximately $2.9 million, or 100.0%, to approximately $2.9 million for the nine months ended March 31, 2025 from $0 for the same period in 2024. Other service cost increased by approximately $21,000, or 100.0% to approximately $21,000 for the nine months ended March 31, 2025 from $0 for the same period in 2024.
Previous wording
Our gross profit increased by approximately $2.5 million, or 2,499.7%, to approximately $2.6 million for the six months ended December 31, 2024, from $0.1 million for the six months ended December 31, 2023.
Current wording
Our gross profit increased by approximately $3.2 million, or 5,329.2%, to approximately $3.3 million for the nine months ended March 31, 2025, from approximately $60,000 for the nine months ended March 31, 2024.
Previous wording
For the six months ended December 31, 2024 and 2023, our overall gross profit percentage was 6.4% and 12.0%, respectively. The decrease in gross profit percentage of 5.6% was primarily due to the decrease in gross profit percentage for mobile phones whose gross profit accounted for 54% of total gross profit.
Current wording
For the nine months ended March 31, 2025 and 2024, our overall gross profit percentage was 6.3% and 4.4%, respectively. The increase in gross profit percentage of 1.8% was primarily due to the increase in gross profit percentage for mobile phones, wearable products and others and App service commission revenue and others.
Previous wording
Gross profit percentage of tablets improved from 12.5% to 20.5% from the six months ended December 31, 2023 to the same period in 2024. This was primarily due to our change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease in the unit purchase price of the purchasing goods.
Current wording
Gross profit (loss) percentage for mobile phones increased from (16.7)% to 2.4% from the nine months ended March 31, 2024, to the same period in 2025. This was primarily due to our change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease in the unit purchase price of the purchasing goods.
Previous wording
For the six months ended December 31, 2024, our gross profit percentage of wearable products was 13.9%. We did not have this kind of products for the six months ended December 31, 2023.
Current wording
For the nine months ended March 31, 2025, our gross profit percentage of wearable products and others was 12.2%. We did not have this kind of products for the nine months ended March 31, 2024.
Previous wording
For the six months ended December 31, 2024, our gross profit percentage of App service commission was 100.0% because this revenue was commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions occur at a point in time when the end users of the mobile devices use the App and we received the App revenue share (service commission) from our partners without cost of goods. We did not have this kind of service for the six months ended December 31, 2023.
Current wording
For the nine months ended March 31, 2025, our gross profit percentage of App service commission and others was 98.8% because App service commission revenue was commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions occur at a point in time when the end users of the mobile devices use the App and we received the App revenue share (service commission) from our partners without cost of goods. We did not have this kind of service for the nine months ended March 31, 2024.
Previous wording
Total operating expenses increased by approximately $5.4 million, or 455.8%, to approximately $6.6 million for the six months ended December 31, 2024 from approximately $1.2 million for the six months ended December 31, 2023.
Current wording
Total operating expenses increased by approximately $9.0 million, or 457.8%, to approximately $10.9 million for the nine months ended March 31, 2025 from approximately $1.9 million for the nine months ended March 31, 2024.
Previous wording
Selling expenses increased, approximately $2.4 million, or 709.9%, to approximately $2.8 million for the six months ended December 31, 2024, from approximately $0.4 million for the six months ended December 31, 2023. The increased selling expenses was mainly attributable to approximately $1.2 million increase in commission, payroll and payroll related expense as we recruited and hired more salespersons to our team during the six months ended December 31, 2024, approximately $0.6 million increase in consulting fees, as the Company engaged additional sales consultant to enhance our sales efforts, approximately $0.3 million increase in warranty expenses due to the increase in sales, and approximately $0.3 million increase in sampling, testing and certification expenses, which all directly related with boosting the brand awareness, adding new product models, and to attract more business opportunities in the electronic devices market during the six months ended December 31, 2024.
Current wording
Selling expenses increased, approximately $3.9 million, or 779.0%, to approximately $4.4 million for the nine months ended March 31, 2025, from approximately $0.5 million for the nine months ended March 31, 2024. The increased selling expenses was mainly attributable to approximately $1.8 million increase in commission, payroll and payroll related expense as we recruited and hired more salespersons to our team during the nine months ended March 31, 2025, approximately $0.9 million increase in consulting fees, as the Company engaged additional sales consultant to enhance our sales efforts, approximately $0.3 million increase in warranty expenses due to the increase in sales, approximately $0.4 million increase in advertising and marketing expenses to boost sales, approximately $0.1 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our sales team members under employee incentive plan, consultants and independent directors under employee incentive plan, and approximately $0.4 million increase in sampling, testing and certification expenses, which all directly related with boosting the brand awareness, adding new product models, and to attract more business opportunities in the electronic devices market during the nine months ended March 31, 2025.
Previous wording
General and administrative expenses increased approximately $2.0 million, or 241.1%, to approximately $2.9 million for the six months ended December 31, 2024 from approximately $0.9 million for the six months ended December 31, 2023. The increased general and administrative expense were mainly attributable to the approximately $0.8 million increase in professional expense on audit, legal and accounting fees as we became a public company, approximately $0.6 million increase in salary and wages as we made more new hires during the six months ended December 31, 2024, and approximately $0.6 million increase in other general and administrative miscellaneous expenses, such as insurance, rent expense, travel expense, and office expense due to increased expenses in the increased of our operations. We anticipate a continued rise in our SG&A as we persist in executing our business expansion plan and integrating IoT-enabled devices alongside our cloud platform to streamline operations in 2025.
Current wording
General and administrative expenses increased approximately $3.4 million, or 244.3%, to approximately $4.4 million for the nine months ended March 31, 2025 from approximately $0.5 million for the nine months ended March 31, 2024. The increased general and administrative expense were mainly attributable to the approximately $1.0 million increase in professional expense on audit, legal and accounting fees as we became a public company, approximately $0.8 million increase in salary and wages as we made more new hires during the nine months ended March 31, 2025, approximately $0.5 million credit losses due to the increasing risk of uncollectable accounts from one customer, approximately $0.3 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our management team members under employee incentive plan, and approximately $0.7 million increase in other general and administrative miscellaneous expenses, such as insurance, rent expense, travel expense, and office expense due to increased expenses in the increased of our operations. We anticipate a continued rise in our SG&A as we persist in executing our business expansion plan and integrating IoT-enabled devices alongside our cloud platform to streamline operations in 2025.
Previous wording
Research and development (“R&D”) expenses from a related party increased by approximately $68,000, or 100.0%, where the increase was primarily due to an R&D project began in 2024. During the six months ended December 31, 2024, a related party completed additional 30% of the remaining 5G development project pursuant to a R&D agreement between us and the related party, and we recognized a R&D expense approximately of $68,000 accordingly based on the progression of the R&D project. We expect our R&D expenses will continue to go up as we will need to development our IoT and MVNO capabilities products and to finish our development of the 5G products in 2025.
Current wording
Research and development (“R&D”) expenses from a related party increased by approximately $46,000, or 100.0%, where the increase was primarily due to an R&D project began in 2024. During the nine months ended March 31, 2025 and 2024, a related party completed additional 40% and 20%, respectively, of the 5G development project pursuant to a R&D agreement between us and the related party, and we recognized a R&D expense approximately of $91,000 and $46,000, respectively, accordingly based on the progression of the R&D project.
Previous wording
R&D expenses increased by approximately $0.7 million, or 100.0%, from $0 for the six months ended December 31, 2023 to $0.7 million for the same period in 2024. The increase is due to hiring more employees and engaging third parties to provide development services for new products during the six months ended December 31, 2024.
Current wording
R&D expenses increased by approximately $1.6 million, or 100.0%, from $0 for the nine months ended March 31, 2024 to $1.6 million for the same period in 2025. The increase is due to hiring more employees and engaging third parties to provide development services for new products during the nine months ended March 31, 2025. The increase is also attributable to approximately $0.1 million increase in stock-based compensation as we granted restricted stock units in November 2024 to our R&D team members under employee incentive plan.
Previous wording
Total other income (expense), net increased by approximately $3.7 million, or 6,482.2%, to approximately $3.7 million other income for the three months ended December 31, 2024, from approximately $57,000 other expense for the three months ended December 31, 2023. The increase was primarily due to the change in fair value of earnout liabilities in connection with the Business Combination and offset by the interest expenses incurred related to the financing offered by one of our vendors based upon the timing of our payment to their accounts payable.
Current wording
Total other income (expense), net increased by approximately $2.9 million, or 1,708.4%, to approximately $2.7 million other income for the nine months ended March 31, 2025, from approximately $0.2 million other expense for the nine months ended March 31, 2024. The increase was primarily due to the change in fair value of earnout liabilities in connection with the Business Combination and offset by the interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable.
Previous wording
The provision for income taxes are $0 for each of the six months ended December 31, 2024 and 2023 as we had made full allowance of our deferred tax assets on net operating losses.
Current wording
The provision for income taxes are $0 and approximately $20,000 for the nine months ended March 31, 2025 and 2024, decreased by $20,000 or 100.0% as we had made full allowance of our deferred tax assets on net operating losses for the nine months ended March 31, 2025. Foxx had provision for income taxes of approximately $20,000 resulted from timing difference between calendar year on income tax return in 2022 and fiscal year of operation of June 30, for which those operating losses incurred from January 2023 to June 2023 cannot be carried back. At the same time, we had provided 100% allowance on its deferred tax assets on net operating losses for the nine months ended March 31, 2024.
Previous wording
Net income (loss) decreased by approximately $2.0 million, or 322.3%, to approximately $1.4 million of net income for the three months ended December 31, 2024, from approximately $0.6 million of net loss for the three months ended December 31, 2023. Such change was mainly due to the reasons discussed above.
Current wording
Net loss increased by approximately $2.8 million, or 137.6%, to approximately $2.1 million for the nine months ended March 31, 2025, from approximately $4.9 million for the nine months ended March 31, 2024. Such change was mainly due to the reasons discussed above.
Previous wording
As of December 31, 2024, we had cash and cash equivalents of approximately $3.9 million, while we had accumulated deficit of approximately $11.9 million. During the six months ended December 31, 2024, we had net loss of approximately $0.8 million and net operating cash outflow of approximately $4.5 million.
Current wording
As of March 31, 2025, we had cash and cash equivalents of approximately $3.8 million, while we had accumulated deficit of approximately $16.0 million. During the nine months ended March 31, 2025, we had net loss of approximately $4.7 million and net operating cash outflow of approximately $4.5 million.
Previous wording
The following summarizes the key components of cash flows for the six months ended December 31, 2024 and 2023.
Current wording
The following summarizes the key components of cash flows for the nine months ended March 31, 2025 and 2024.
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Previous report — wording carried elsewhere
Stock-based compensation expenses increased by approximately $0.2 million, or 100.0%, from $0 for the three months ended December 31, 2023 to $0.2 million for the same period in 2024. The increase is due to restricted stock units granted to our employees, consultants and independent directors under employee incentive plan during the three months ended December 31, 2024.