Foxx Development Holdings Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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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, 2026 · Filed May 20, 2026
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 2025-12-31; filed 2026-02-13.
0001213900-26-016441
Item 2. – Management’s Discussion and Analysis of Financial Condition And Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001213900-26-059591
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 159 previous paragraphs and 157 current paragraphs.
84 unchanged; 48 reworded; 25 added; 24 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 20 previous and 16 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 (25)
Current report
For the nine months ended March 31, 2026, our sales decreased compared to the nine months ended March 31, 2025. The inflation rate was steadily increasing throughout 2024 and 2025, the consumers’ spending power was weakened, and the mobile phone replacement rate was lowered. Previously, consumers tended to replace their phones every more often between 1 to 2 years, whereas now many keep the same device for over 2 years. In addition, lower order volumes, resulting from our intention of increasing selling prices in response to higher costs driven by rising chip prices, contributed to the decline in sales. Our sales strategy did not execute smoothly as our customers did not respond well with the increase of selling prices which lead to the revenue decreased.
Current report
These transactions were completed in connection with the consummation of the Business Combination: (i) all 2,270,096 ACAC outstanding shares were converted on a one-for-one basis into our Common Stock; (ii) all issued and outstanding shares of Old Foxx Common Stock were cancelled in exchange for the rights for Old Foxx Shareholders, including the holders of Old Foxx’s convertible promissory notes upon the conversion of the convertible promissory notes and their interests into Old Foxx Common Stock immediately prior to Closing, to receive such stockholder’s pro rata share of 5,000,000 shares of our Common Stock were cancelled in exchange for the right by the Old Foxx Shareholders to receive a pro rata share of 3,303,333 shares of our Common Stock at the exchange ratio of 3.3033; (iii) 4,200,000 shares (“Earnout Shares”) of our Common Stock were reserved for issuance to Old Foxx’s stockholders subject to the vesting schedule based on our financial performance for the fiscal years ended June 30, 2025 and 2024. The Earnout Shares were forfeited since we did not meet the financial performance threshold; (iv) all issued and outstanding 12,156,417 ACAC warrants were converted on a one-for-one basis into our warrants.
Current report
In addition, in January 2026, we entered into a R&D agreement with a third party, pursuant to which the third party will provide the Company technical development services for the operating system of the Company’s mobile phone products, including developing a customized FOXX OS cross-platform inheritance framework to enable compatibility and adaptation across multiple platforms and operating systems; establishing a unified compatibility and integration framework for system modules and applications to ensure overall system stability and interoperability; optimizing core applications for multi-platform adaptation to enhance system performance, smooth operation, and user experience; developing proprietary applications, including a mobile manager, home screen, and browser, and complete their integration into the operating system; integrating and validating advertising and paid-service-related business modules to ensure proper functionality, regulatory compliance, and security; and conducting system and UX/UI design and implementation to enhance visual design and user interaction, ensuring a consistent overall style.
Current report
Gross (Loss) Profit
Current report
Our gross (loss) profit decreased by approximately $2.1 million, or 318.7%, to approximately $1.5 million gross loss for the three months ended March 31, 2026, from $0.7 gross profit for the three months ended March 31, 2025.
Current report
Gross loss percentage for mobile phones increased from 2.8% for the three months ended March 31, 2025 to 17.5% for the same period in 2026. This was primarily due to inventory impairment related to slow-moving inventory and increased chip prices without a corresponding increase in selling prices.
Current report
Gross profit percentage for other services increased from 62.6% for the three months ended March 31, 2025 to 98.0% for the same period in 2026. Gross profit for other services was insignificant in our operations for the three months ended March 31, 2026 and 2025.
Current report
R&D expenses increased by approximately $0.3 million, or 31.3%, from $0.8 million for the three months ended March 31, 2025 to $1.1 million for the same period in 2026. The increase was primarily due to the R&D agreement entered into in January 2026 with a third party, under which the third party will provide technical development services for our operating system across three phases. During the three months ended March 31, 2026, the Company recognized approximately $0.9 million of R&D expenses under this agreement, reflecting progress in the initial development phase.
Current report
Provision of credit losses
Current report
Provision of credit losses increased by approximately $1.3 million, or 318.3%, from $0.4 million for the three months ended March 31, 2025 to approximately $1.7 million for the same period in 2026. The increase was primarily due to continued aging of receivables, as well as our assessment of historical collection experience and probability of recovery from our customers and customer groups.
Current report
Impairments of right-of-use assets
Current report
Impairments of right-of-use assets increased by approximately $25.9 million, or 100.0%, from $0 for the three months ended March 31, 2025 to approximately $25.2 million for the same period in 2026. The increase was primarily attributable to impairment charges recognized following the change in our business strategy because we began engaging in dropship arrangement in our wholesale business and we are no longer required to use our warehouse space. As a result, our management decided to sublease our warehouse with lesser value as compared to our current lease payments, which indicated that the carrying amount of the right-of-use assets was not recoverable and exceeded their estimated fair value by approximately $25.9 million.
Current report
Other expense, net
Current report
Comparison for the nine months ended March 31, 2026 and 2025
Current report
Gross profit percentage for other services increased from 62.6% for the nine months ended March 31, 2025 to 88.2% for the same period in 2026. Gross profit percentage for other services was insignificant in our operations for the nine months ended March 31, 2026 and 2025.
Current report
R&D expenses were $1.6 million for the nine months ended March 31, 2026, remaining consistent with the same period in 2025.
Current report
Provision of credit losses
Current report
Provision of credit losses increased by approximately $1.3 million, or 279.6%, from $0.5 million for the nine months ended March 31, 2025 to approxmiamtley $1.8 million for the same period in 2026. The increase was primarily due to continued aging of receivables, as well as our assessment of historical collection experience and probability of recovery from customers and customer groups.
Current report
Impairments of right-of-use assets
Current report
Impairments of right-of-use assets increased by approximately $25.9 million, or 100.0%, from $0 for the nine months ended March 31, 2025 to approximately $25.2 million for the same period in 2026. The increase was primarily attributable to impairment charges recognized following the change in our business strategy because we began engaging in dropship arrangement in our wholesale business and we are no longer required to use our warehouse space. As a result, our management decided to sublease our warehouse with lesser value as compared to our current lease payments, which indicated that the carrying amount of the right-of-use assets was not recoverable and exceeded their estimated fair value by approximately $25.9 million.
Current report
Net Loss
Current report
Allowance for Credit Losses
Current report
In establishing the required allowance for credit loss accounts, we consider historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial condition of the customers. Management reviews its receivables on a regular basis to determine if the allowance for credit loss accounts is adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit loss accounts after management has determined that the likelihood of collection is not probable. The allowance for credit losses is based on a review of specifically identified customer accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices and current economic trends based on our expectations over the expected life of the receivable, which is generally ninety days or less. With our accounts receivable balances, management would estimate its expected credit losses using an aging method with a baseline reserve percentage with the additional consideration of current industry and economic trend. Although actual losses have not differed materially from our previous estimates, future losses could differ from our current estimates. As of March 31, 2026 and June 30, 2025, $1,848,648 and $595,907, respectively, of allowance for credit losses of accounts receivable was recorded, and the Company had net accounts receivable of $4,112,151 and $6,786,792, respectively.
Current report
Impairment of long-lived assets
Current report
The impairment of long-lived assets is reviewed on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. During the period, management identified certain impairment indicators for right-of-use assets, including a current period loss, a history of losses, and management’s decision to sublease our warehouse. These factors required management to assess whether the carrying value of the asset group was recoverable. Recoverability is assessed by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to result from the use and eventual disposition of the assets. The right-of-use assets were determined to be impaired and the impairment recognized was the excess of the carrying amount over the fair value of the assets. Fair value was determined by the discounted cash flow method. The approach for determining and measuring impairment in long-lived asset groups is to exclude operating lease liabilities from the asset group. The discount rate used in the estimate of discounted cash flows is 8.70%, consistent with our incremental borrowing rate as of January 1, 2026, because from market participant and sublease standpoint as the interest rate in the market, our credit environment and market spreads have held steady with no change since January 1, 2026. These estimates are subject to significant uncertainty, particularly with respect to assumptions used in forecasting future cash flows. Changes in these assumptions could materially affect the estimated fair value and the amount of impairment recognized. For example, a decrease in projected sublease income or occupancy rates could result in additional impairment charges. Management believes the assumptions and methodology used are reasonable and consistent; however, these estimates may change in the near term as market conditions, sublease arrangements, and the Company’s business strategy evolve. During the three months ended March 31, 2026 and 2025, the Company recognized approximately $25.9 million and $0 impairment of long-lived assets, respectively. During the nine months ended March 31, 2026 and 2025, the Company recognized approximately $25.9 million and $0 impairment of long-lived assets, respectively.
Removed paragraphs (24)
Previous report
For the six months ended December 31, 2025, our sales remained consistent with our historical level, as we retained our two major customers and continued to sell our new products and services during the period.
Previous report
Merger Consideration
Previous report
Immediately prior to the effective time of the Reincorporation Merger (the “Reincorporation Merger Effective Time”), which was on September 25, 2024, one business day prior to the Closing, (i) each issued and outstanding ACAC unit was automatically separated into one (1) share of ACAC Class A common stock and one-half (1/2) of one ACAC warrant, and (ii) each share of ACAC Class A common stock held by ACAC stockholders who validly redeemed their shares of ACAC Class A common stock (each “ACAC Redeeming Share”) was automatically cancelled and ceased to exist and thereafter represented only the right to be paid a pro-rata redemption price.
Previous report
Pursuant to the Business Combination Agreement, 500,000 shares of the Closing Payment Stock in aggregate were deposited (the “Escrow Arrangement”) to a segregated escrow account and would be released to the Old Foxx Stockholders if and only if, prior to or upon the one-year anniversary of the Business Combination Agreement, the Affordable Connectivity Program (ACP) managed by the U.S. Federal Communication Commission is reauthorized by the U.S. Congress with funding of no less than $4 billion in total for such reauthorized period; or otherwise be cancelled and forfeited by the Registrant without consideration.
Previous report
Additionally, the Old Foxx Stockholders would be entitled to receive “Earnout Shares”, which refer to 4,200,000 shares of our Common Stock, subject to the vesting schedule (the “Vesting Schedule”) as follows:
Previous report
(A) 700,000 Earnout Shares would be issued to Foxx Stockholders on a pro rata basis if and only if our audited consolidated financial statements for the fiscal year ending June 30, 2024 (“2024 Audited Financial Statements”), prepared in accordance with the Generally Accepted Accounting Principles of the United States (“U.S. GAAP”) and filed with the SEC on Form 10-K by us after Closing, would reflect our revenue for the fiscal year ending June 30, 2024 (the “2024 Revenue”) to be no less than $67,000,000 (including $67,000,000) and less than $84,000,000 (excluding $84,000,000);
Previous report
(B) 1,400,000 Earnout Shares would be issued to Foxx Stockholders on a pro rata basis if and only if the Registrant 2024 Revenue reflected in the 2024 Audited Financial Statements would be no less than $84,000,000 (including $84,000,000) and less than $100,000,000 (excluding $100,000,000);
Previous report
(C) 2,100,000 Earnout Shares would be issued to Foxx Stockholders on a pro rata basis if and only if the 2024 Revenue reflected in the 2024 Audited Financial Statements would be no less than $100,000,000 (including $100,000,000);
Previous report
provided, however, that the Earnout Shares would be issued and delivered pursuant to one paragraph from (i)(A)-(i)(C) above only once; and
Previous report
(A) 700,000 Earnout Shares would be issued to Old Foxx Shareholders on a pro rata basis if and only if our audited consolidated financial statements for the fiscal year ending June 30, 2025 (“2025 Audited Financial Statements”), prepared in accordance with U.S. GAAP and filed with the SEC on Form 10-K by us after Closing, would reflect revenue of the Registrant for the fiscal year ending June 30, 2025 (the “2025 Revenue”) to be no less than $77,050,000 (including $77,050,000) and less than $96,600,000 (excluding $96,600,000);
Previous report
(B) 1,400,000 Earnout Shares would be issued to Old Foxx Stockholders on a pro rata basis if and only if the 2025 Revenue reflected in the 2025 Audited Financial Statements would be no less than $96,600,000 (including $96,600,000) and less than $115,000,000 (excluding $115,000,000);
Previous report
(C) 2,100,000 Earnout Shares will be issued to Old Foxx Stockholders on a pro rata basis if and only if the 2025 Revenue reflected in the 2025 Audited Financial Statements would be no less than $115,000,000 (including $115,000,000);
Previous report
provided, however, that the Earnout Shares would be issued and delivered pursuant to one paragraph from (ii)(A) to (ii)(C) above only once.
Previous report
On October 24, 2024, upon the filing of the 2024 Audited Financial Statements as part of the Annual Report of the Company on Form 10-K filed with the SEC (the “2024 10-K”), any Earnout Shares that the Old Foxx Shareholders would be entitled to receive under the Vesting Schedule were automatically forfeited, as the Company did not meet any of the vesting conditions for the fiscal year ended June 30, 2024 within the Vesting Schedule.
Previous report
In addition, on October 15, 2025, upon the filing of the 2025 Audited Financial Statements as part of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the SEC (the “2025 10-K”), any Earnout Shares that the Old Foxx Shareholders would be entitled to receive under the Vesting Schedule were automatically forfeited, as the Company did not meet any of the vesting conditions for the fiscal year ended June 30, 2025 within the Vesting Schedule.
Previous report
In addition to the foregoing, pursuant to that certain amendment to the Underwriting Agreement, by and between EF Hutton LLC and ACAC, dated February 20, 2024, 43,125 shares of our Common Stock were issued to EF Hutton LLC at the Closing.
Previous report
Our gross profit increased by approximately $26,000, or 1.2%, to approximately $2.2 million for the three months ended December 31, 2025, from $2.2 for the three months ended December 31, 2024.
Previous report
For the three months ended December 31, 2025, our gross profit percentage of other services was 36.9%. We did not have other logistics and warehouse management and MVNO services for the three months ended December 31, 2024.
Previous report
R&D expenses decreased by approximately $0.5 million, or 73.1%, from $0.7 million for the three months ended December 31, 2024 to $0.2 million for the same period in 2025. The decrease was primarily due to the reduction of headcounts and departmental expenses as we scaled back activities in the R&D department.
Previous report
Net (loss) income
Previous report
Gross Profit
Previous report
For the six months ended December 31, 2025, our gross profit percentage of other services was 76.96%. We did not have other logistic and warehouse management and MVNO services for the six months ended December 31, 2024.
Previous report
R&D expenses decreased by approximately $0.2 million, or 31.0%, from $0.7 million for the six months ended December 31, 2024 to $0.5 million for the same period in 2025. The decrease was primarily due to the reduction of headcounts and departmental expenses as we scaled back activities in R&D department.
Previous report
Other (expense) income, net
Reworded paragraphs (48)
Previous wording
Beginning in 2023, we adjusted our business strategy to avoid reliance on limited suppliers and customers and to diversify suppliers and customers to mitigate the concentration and reliance risk. We have added new product models across each product line to target a broader range of customers. As of the date hereof, we have reached out to a total of eight wholesale customers to expand our operations in the market and expect to secure purchase orders from these new customers. At the same time, to meet the various product demands of current and prospective customers, we have connected with suppliers who can provide manufacturing support when we secure purchase orders from our customers. In addition, we plan to further expand our product range and to launch an IoT platform to manage all end products sold and began setting up a service team for our business to business (B2B) model in the artificial IoT department. Through the efforts to expand product range and reaching a broader customer base, we will be able to move away from relying on limited customers and suppliers. As we dedicated our resources to expansion, we experienced a significant decrease in the sales of tablet and mobile phone products during the year ended June 30, 2024 as compared to the same period in 2023: (i) new customers began orders in much smaller quantities as compared to our previous customer in order to build up a trustworthy relationship; (ii) similarly and relevantly, we placed order with new suppliers in much smaller quantities to build up relationship and ensure the quality of the products; and (iii) new product models on both tablet and mobile phones order by new customers required approximately 6-9 months from development to mass production.
Current wording
Beginning in 2023, we adjusted our business strategy to avoid reliance on limited suppliers and customers and to diversify suppliers and customers to mitigate the concentration and reliance risk. We have added new product models across each product line to target a broader range of customers. As of the date hereof, we have reached out to a total of sixteen wholesale customers to expand our operations in the market and expect to secure purchase orders from these new customers. At the same time, to meet the various product demands of current and prospective customers, we have connected with suppliers who can provide manufacturing support when we secure purchase orders from our customers. In addition, we plan to further expand our product range and to launch an IoT platform to manage all end products sold and began setting up a service team for our business to business (B2B) model in the artificial IoT department. Through the efforts to expand product range and reaching a broader customer base, we will be able to move away from relying on limited customers and suppliers. As we dedicated our resources to expansion, we experienced a significant decrease in the sales of tablet and mobile phone products during the year ended June 30, 2024 as compared to the same period in 2023: (i) new customers began orders in much smaller quantities as compared to our previous customer in order to build up a trustworthy relationship; (ii) similarly and relevantly, we placed order with new suppliers in much smaller quantities to build up relationship and ensure the quality of the products; and (iii) new product models on both tablet and mobile phones order by new customers required approximately 6-9 months from development to mass production.
Previous wording
During the six months ended December 31, 2025, we revised our business strategy and decided to exit the AIoT business. Accordingly, in December 2025, we completed the sales of our AIoT products and disposed of related AIoT equipment.
Current wording
During the nine months ended March 31, 2026, we revised our business strategy and decided to exit the AIoT business. Accordingly, in December 2025, we completed the sales of our AIoT products and disposed of related AIoT equipment. In addition, in January 2026, we began engaging in dropship arrangement to reduce additional freight cost and usage of our warehouse spaces. This change of business strategy helped us to reduce our freight costs and promoted better gross margin with our wholesales business
Previous wording
On November 5, 2025, we received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for a period of 30 consecutive business days, our market value of listed securities (“MVLS”) closed below the $35,000,000 MVLS threshold required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have until May 4, 2026 to regain compliance with the MVLS requirement (the “Initial Compliance Period”). To regain compliance, our MVLS must close at $35 million or more for a minimum of ten consecutive business days during the Initial Compliance Period. If we do not regain compliance by the end of the MVLS Compliance Period, Nasdaq staff will provide written notice to us that our securities are subject to delisting. At that time, we may appeal any such delisting determination to a hearings panel. We intend to actively monitor our minimum market value of our listed securities and may, if appropriate, consider implementing available options to regain compliance with the MVLS requirement. There can be no assurance that we will be able to regain compliance with Nasdaq Listing Rule 5550(b)(2), or maintain compliance with any other listing requirements.
Current wording
On November 5, 2025, we received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for a period of 30 consecutive business days, our market value of listed securities (“MVLS”) closed below the $35,000,000 MVLS threshold required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have until May 4, 2026 to regain compliance with the MVLS requirement (the “Initial Compliance Period”). For the last 15 consecutive business days, from March 31 through April 21, 2026, our MVLS has been $35,000,000 or greater. Accordingly, we have regained compliance with the Rule, and this matter is now closed.
Previous wording
One of the key differentiating factors of us is the rich blended nature of our management team. Our management team comprises executives with extensive experience in electronics industry with IoT services related experience. The wide array of industry experience captured by our management team allows us to deliver advanced technology and superior products to our customers. Losing any member of our key executive team could significantly impact on the quality of services and products that we currently offer. Such departures may prompt customers to explore alternative products or IoT cloud platforms offered by different vendors or service providers.
Current wording
One of the key differentiating factors of ours is the rich blended nature of our management team. Our management team comprises executives with extensive experience in electronics industry with IoT services related experience. The wide array of industry experience captured by our management team allows us to deliver advanced technology and superior products to our customers. Losing any member of our key executive team could significantly impact on the quality of services and products that we currently offer. Such departures may prompt customers to explore alternative products or IoT cloud platforms offered by different vendors or service providers.
Previous wording
Our revenue is primarily derived from sales of electronic products. The total revenues decreased by approximately $0.8 million, or 4.4%, to approximately $16.7 million for the three months ended December 31, 2025 as compared to $17.5 million for the three months ended December 31, 2024. The decrease of the total revenue was mainly attributable to the decrease in wearable and other products revenues and service revenues.
Current wording
Our revenue is primarily derived from sales of electronic products. The total revenues decreased by approximately $2.7 million, or 23.9%, to approximately $8.7 million for the three months ended March 31, 2026 as compared to $11.4 million for the three months ended March 31, 2025. The decrease of the total revenue was mainly attributable to the decrease in mobile phone products and wearable and other products revenues.
Previous wording
Tablet product sales were insignificant in our operations for the three months ended December 31, 2025. Revenue from the sales of tablets increased by approximately $0.1 million, or 65.6%, to approximately $0.3 million for the three months ended December 31, 2025 from $0.2 million for the same period in 2024. Revenue from sales of phones slightly increased by approximately $0.4 million, or 2.5%, to approximately $15.2 million for the three months ended December 31, 2025 from $14.8 million for the same period in 2024. Revenue from sales of wearable products and others decreased by approximately $1.1 million, or 63.8%, to approximately $0.6 million for the three months ended December 31, 2025 from $1.8 million for the three months ended December 31, 2024, as the consumers’ spending power was weakened and the demands of the wearable products rate was lowered during the three months ended December 31, 2025 period. Revenue from App service commission decreased by approximately $0.1 million, or 14.8%, to approximately $0.7 million for the three months ended December 31, 2025 from approximately $0.6 million for the three months ended December 31, 2024, as the consumers’ spending power was weakened. Revenue from other services were income generated by our other logistic and warehouse management and MVNO services and it was insignificant in our operations for the three months ended December 31, 2025.
Current wording
Tablet product sales were insignificant in our operations for the three months ended March 31, 2026. Revenue from the sales of tablets decreased by approximately $0.1 million, or 62.1%, to approximately $0.1 million for the three months ended March 31, 2026 from $0.2 million for the same period in 2025. Revenue from sales of phones decreased by approximately $0.9 million, or 9.8%, to approximately $8.0 million for the three months ended March 31, 2026 from $8.9 million for the same period in 2025. This decrease was primarily attributed to lower order volumes resulting from our intention of increasing selling prices in response to higher costs driven by rising chip prices. Our sales strategy did not execute smoothly as our customers did not respond well with the increase of selling prices which lead to the phones revenue decreased. Revenue from sales of wearable products and others decreased by approximately $1.3 million, or 83.7%, to approximately $0.3 million for the three months ended March 31, 2026 from $1.6 million for the three months ended March 31, 2025, as the consumers’ spending power was weakened and the demands of the wearable products were lowered during the three months ended March 31, 2026 period. Revenue from App service commission decreased by approximately $0.4 million, or 53.0%, to approximately $0.3 million for the three months ended March 31, 2026 from approximately $0.7 million for the three months ended March 31, 2025, as the sales of phones decreased and the consumers’ spending power was weakened. Revenue from other services was income generated by our other logistic and warehouse management and MVNO services and it was insignificant in our operations for the three months ended March 31, 2026.
Previous wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold decreased by approximately $0.8 million, or 5.2%, to approximately $14.5 million for the three months ended December 31, 2025 as compared to approximately $15.3 million for the three months ended December 31, 2024. The decrease in cost of goods sold is a direct result of a decrease in our revenue, consistent with the decrease in wearable and other production costs. The decrease is also attributable to the decrease in cost of mobile phone products as we negotiated with our vendor to cover shipping and tariff costs beginning in July 2025.
Current wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold decreased by approximately $0.6 million, or 5.7%, to approximately $10.1 million for the three months ended March 31, 2026 as compared to approximately $10.7 million for the three months ended March 31, 2025. The decrease in cost of goods sold is a direct result of a decrease in our revenue. The decrease is also attributable to the decrease in cost of products as we negotiated with our vendor to cover shipping and tariff costs beginning in July 2025.
Previous wording
Our cost of goods sold for tablets increased by approximately $0.1 million, or 89.0%, to approximately $0.2 million for the three months ended December 31, 2025 from $0.1 million for the same period in 2024. Cost of goods sold for mobile phone products for the six months ended December 31, 2025 was approximately $13.6 million, unchanged from the same period in 2024, as we negotiated with our vendor to cover shipping and tariff costs beginning in July 2025. Cost of goods sold for wearable products and others decreased by approximately $0.9 million, or 59.0%, to approximately $0.6 million for the three months ended December 31, 2025 from $1.5 million for the same period in 2024, which is the direct result of our negotiation with our vendor to cover shipping and tariff costs beginning in July 2025. Cost of other services was insignificant in our operations for the three months ended December 31, 2025.
Current wording
Our cost of goods sold for tablets decreased by approximately $21,000, or 12.0%, to approximately $154,000 for the three months ended March 31, 2026 from approximately $175,000 for the same period in 2025. Cost of goods sold for mobile phone products increased by approximately $0.3 million, or 3.2%, to approximately $9.4 million for the three months ended March 31, 2026 from approximately $9.1 million for the same period in 2025, primarily due to inventory impairment related to slow-moving inventory of approximately $2.6 million, and the increased chip prices. Cost of goods sold for wearable products and others decreased by approximately $0.8 million, or 60.6%, to approximately $0.6 million for the three months ended March 31, 2026 from $1.4 million for the same period in 2025, which is consistent with the decrease of sales and is the direct result of our negotiation with our vendor to cover shipping and tariff costs beginning in July 2025. Cost of other services was insignificant in our operations for the three months ended March 31, 2026 and 2025.
Previous wording
Our gross profit from their major revenue categories is summarized as follows:
Current wording
Our gross (loss) profit from their major revenue categories is summarized as follows:
Previous wording
For the six months ended December 31, 2025 and 2024, our overall gross profit percentage was 13.4% and 6.4%, respectively. The increase in gross profit percentage of 7.0% was primarily due to the increase in gross profit percentage for mobile phone products, which accounted for 78% of our gross profit.
Current wording
For the three months ended March 31, 2026 and 2025, our overall gross (loss) profit percentage was (16.7) % and 5.8%, respectively. The decrease in gross (loss) profit percentage of 22.6% was primarily due to the decrease in gross profit percentage for all products.
Previous wording
Gross profit percentage of tablets decreased from 21.1% for the three months ended December 31, 2024 to 9.9% for the same period in 2025. This was primarily due to the decrease of sales of those with higher unit selling prices and lower unit purchase prices, as well as inventory impairment related to slow-moving inventory.
Current wording
Gross (loss) profit percentage of tablets decreased from 20.2% for the three months ended March 31, 2025 to (85.0) % for the same period in 2026. This was primarily due to the decrease of sales of those with higher unit selling prices and lower unit purchase prices, as well as inventory impairment related to slow-moving inventory of approximately $99,000.
Previous wording
Gross profit percentage for wearable products and others decreased from 13.9% for the three months ended December 31, 2024 to 2.5% for the same period in 2025. This was primarily due to inventory impairment related to slow-moving inventory.
Current wording
Gross (loss) profit percentage for wearable products and others decreased from 9.2% for the three months ended March 31, 2025 to (119.4) % for the same period in 2026. This was primarily due to inventory impairment related to slow-moving inventory of approximately $0.4 million.
Previous wording
Total operating expenses increased by approximately $8,000, or 0.2%, to approximately $4.4 million for the three months ended December 31, 2025, from approximately $4.4 million for the three months ended December 31, 2024.
Current wording
Total operating expenses increased by approximately $1.2 million, or 28.3%, to approximately $5.4 million for the three months ended March 31, 2026, from approximately $4.2 million for the three months ended March 31, 2025.
Previous wording
Selling expenses decreased approximately $0.5 million, or 29.8%, to approximately $1.1 million for the three months ended December 31, 2025, from approximately $1.6 million for the three months ended December 31, 2024. The decreased selling expenses was mainly attributable to approximately $0.3 million decrease in payroll and payroll related expenses, approximately $0.3 million decrease in consulting fees, and approximately $0.1 million decrease in testing and certification expenses during the three months ended December 31, 2025, as we reduced salespersons and consultants and the test for products to cut expenses and improve profitability to improve cost efficiency. The decrease was offset by 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 $0.1 million increase in advertising and marketing expenses primarily due to the increased marketing investment in e-commerce channels.
Current wording
Selling expenses decreased approximately $0.6 million, or 37.8%, to approximately $0.1 million for the three months ended March 31, 2026, from approximately $1.6 million for the three months ended March 31, 2025. The decreased selling expenses was mainly attributable to approximately $0.3 million decrease in payroll and payroll related expenses, approximately $0.2 million decrease in marketing consulting fees, and approximately $0.1 million decrease in testing and certification expenses during the three months ended December 31, 2025, as we reduced salespersons and consultants and the test for products to cut expenses and streamline sales department.
Previous wording
General and administrative expenses increased approximately $1.1 million, or 52.0%, to approximately $3.1 million for the three months ended December 31, 2025 from approximately $2.0 million for the three months ended December 31, 2024. The increased general and administrative expense were mainly attributable to the approximately $0.2 million increase in professional expense on audit and accounting fees as we became a public company and incurred additional capital market and legal consulting fees, approximately $0.1 million increase in salary and wages as a result of allocating certain personnel compensation from selling expenses to general and administrative expenses, reflecting a change in the personnel’s primary responsibilities, approximately $0.1 million increase in provision for credit losses due to continued aging of receivables, and approximately $0.7 million increase in rent due to the new factory and warehouse lease that commenced in July 2025.
Current wording
General and administrative expenses increased approximately $1.5 million, or 106.0%, to approximately $2.9 million for the three months ended March 31, 2026 from approximately $1.4 million for the three months ended March 31, 2025. The increased general and administrative expense were mainly attributable to the approximately $0.2 million increase in salary and wages as a result of allocating certain personnel compensation from selling expenses to general and administrative expenses, reflecting a change in the personnel’s primary responsibilities, and approximately $1.3 million increase in rent due to the new warehouse leases that commenced in July 2025 and January 2026.
Previous wording
Research and development (“R&D”) expenses from a related party decreased by approximately $46,000, or 100.0%, where the decrease was primarily due to an R&D project which commenced in 2024 and was completed in June 2025. 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 did not have this expense for the same period in 2025.
Current wording
Research and development (“R&D”) expenses from a related party decreased by approximately $23,000, or 100.0%, where the decrease was primarily due to an R&D project which commenced in 2024 and was completed in June 2025. During the three months ended March 31, 2025, a related party completed additional 20% of the remaining 5G development project pursuant to an R&D agreement between us and the related party, and we recognized a R&D expense approximately of $23,000 accordingly based on the progression of the R&D project. We did not have this expense for the same period in 2026.
Previous wording
Total other (expense) income, net decreased by approximately $7.2 million, or 225.9%, to approximately $4.0 million of other expense, net for the six months ended December 31, 2025, from approximately $3.2 million of other income, net for the six months ended December 31, 2024. The decrease was primarily due to the increase of approximately $2.6 million interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable and the decrease of approximately $4.7 million change in fair value of earnout liabilities as we no longer had earnout liabilities after June 30, 2025.
Current wording
Total other expense, net increased by approximately $1.8 million, or 339.9%, to approximately $2.3 million of other expense, net for the three months ended March 31, 2026, from approximately $0.5 million for the three months ended March 31, 2025. The increase was primarily due to the increase of approximately $0.8 million interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable – supplier financing and the decrease of approximately $1.0 million change in fair value of earnout liabilities as we no longer had earnout liabilities after June 30, 2025.
Previous wording
The provision for income taxes was $0 for each of the three months ended December 31, 2025 and 2024 as we had made full allowance of our deferred tax assets on net operating losses.
Current wording
There was no provision for income taxes in each of the three months ended March 31, 2026 and 2025 as we had made full allowance of our deferred tax assets on net operating losses.
Previous wording
Net loss increased by approximately $6.4 million, or 748.7%, to approximately $7.2 million for the six months ended December 31, 2025, from approximately $0.8 million for the six months ended December 31, 2024. Such change was mainly due to the reasons discussed above.
Current wording
Net loss increased by approximately $32.2 million, or 788.0%, to approximately $36.3 million for the three months ended March 31, 2026, from approximately $4.1 million for the three months ended March 31, 2025. Such change was mainly due to the reasons discussed above.
Previous wording
Changes in foreign currency translation adjustment of approximately $2,000 are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of one of our subsidiaries) and the USD dollar (reporting currency) for the three months ended December 31, 2025.
Current wording
Changes in foreign currency translation adjustment of approximately $3,000 are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of one of our subsidiaries) and the USD dollar (reporting currency) for the three months ended March 31, 2026.
Previous wording
Our revenue is primarily derived from sales of electronic products. The total revenues decreased by approximately $3.7 million, or 9.0%, to approximately $36.9 million for the six months ended December 31, 2025 as compared to $40.6 million for the six months ended December 31, 2024. The decrease of the total revenue was mainly attributable to the decrease in mobile phone products revenues, which accounted for 89% of our sales.
Current wording
Our revenue is primarily derived from sales of electronic products. The total revenues decreased by approximately $6.4 million, or 12.3%, to approximately $45.6 million for the nine months ended March 31, 2026 as compared to $52.0 million for the nine months ended March 31, 2025. The decrease of the total revenue was mainly attributable to the decrease in mobile phone products revenues, which accounted for 90% of our sales.
Previous wording
Tablet product sales were insignificant in our operations for the six months ended December 31, 2025. Revenue from the sales of tablets increased by approximately $0.1 million, or 90.2%, to approximately $0.3 million for the six months ended December 31, 2025 from $0.1 million for the same period in 2024. Revenue from sales of phones decreased by approximately $4.8 million, or 12.9%, to approximately $32.9 million for the six months ended December 31, 2025 from $37.7 million for the same period in 2024 as the consumers’ spending power was weakened and the mobile phone replacement rate was lowered. Previously, consumers tended to replace their phones every six months, whereas now many keep the same device for over a year. Revenue from sales of wearable products and others increased by approximately $1.0 million, or 54.2%, to approximately $2.7 million for the six months ended December 31, 2025 from $1.7 million for the six months ended December 31, 2024, primarily due to the rollout of new wearable products beginning in October 2024, which resulted in only three months of sales recognized during the six months ended December 31, 2024. Revenue from App service commission increased by approximately $0.1 million, or 8.1%, to approximately $1.0 million for the six months ended December 31, 2025 from $0.9 million for the six months ended December 31, 2024, as we engaged more partners and generate more 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. Revenue from other services was income generated by our other logistic and warehouse management and MVNO services and it was insignificant in our operations for the six months ended December 31, 2025.
Current wording
Tablet product sales were insignificant in our operations for the nine months ended March 31, 2026. Revenue from the sales of tablets increased by approximately $19,000, or 5.1%, to approximately $412,000 for the nine months ended March 31, 2026 from $393,000 for the same period in 2025. Revenue from sales of phones decreased by approximately $5.7 million, or 12.2%, to approximately $40.9 million for the nine months ended March 31, 2026 from $46.6 million for the same period in 2025 as the consumers’ spending power was weakened and the mobile phone replacement rate was lowered. Previously, consumers tended to replace their phones every more often between 1 to 2 years, whereas now many keep the same device for over 2 years. This decrease was also attributed to lower order volumes, resulting from our intention of increasing selling prices in response to higher costs driven by rising chip prices. Revenue from sales of wearable products and others decreased by approximately $0.4 million, or 10.7%, to approximately $3.0 million for the nine months ended March 31, 2026 from $3.4 million for the nine months ended March 31, 2025, as the consumers’ spending power was weakened and the demands of the wearable products were lowered during the nine months ended March 31, 2026 period. Revenue from App service commission decreased by approximately $0.3 million, or 18.2%, to approximately $1.3 million for the nine months ended March 31, 2026 from $1.6 million for the nine months ended March 31, 2025, as the sales of phones decreased the consumers’ spending power was weakened. Revenue from other services was income generated by our other logistic and warehouse management and MVNO services and it was insignificant in our operations for the nine months ended March 31, 2026.
Previous wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold decreased by approximately $6.0 million, or 15.9%, to approximately $32.0 million for the six months ended December 31, 2025 as compared to $38.0 million for the six months ended December 31, 2024. The decrease in cost of goods sold is a direct result of a decrease in our revenue, consistent with the decrease in mobile phone production costs, which accounted for 91% of our cost of goods sold.
Current wording
Our cost of goods sold mainly consists of cost of merchandise and freight. Total cost of goods sold decreased by approximately $6.6 million, or 13.6%, to approximately $42.1 million for the nine months ended March 31, 2026 as compared to $48.7 million for the nine months ended March 31, 2025. The decrease in cost of goods sold is a direct result of a decrease in our revenue, consistent with the decrease in mobile phone production costs, which accounted for 91% of our cost of goods sold.
Previous wording
Our cost of goods sold for tablets increased by approximately $0.2 million, or 111.8%, to approximately $0.3 million for the six months ended December 31, 2025 from $0.1 million for the same period in 2024. Cost of goods sold for mobile phone products decreased by approximately $7.3 million, or 20.2%, to approximately $29.0 million for the six months ended December 31, 2025 from $36.3 for the same period in 2024, which is consistent with the direct result of an decrease in our revenue. The decrease is also attributable to the decrease in unit cost as we negotiated with our vendor to cover shipping and tariff costs beginning in July 2025. Cost of goods sold for wearable products and others increased by approximately $1.2 million, or 76.4%, to approximately $2.7 million for the six months ended December 31, 2025 from $1.5 million for the same period in 2024, which is also the direct result of an increase in our revenue as we rolled out some new wearable products beginning in October 2024. Cost of other services was insignificant in our operations for the six months ended December 31, 2025.
Current wording
Our cost of goods sold for tablets increased by approximately $0.1 million, or 42.4%, to approximately $0.4 million for the nine months ended March 31, 2026 from approximately $0.3 million for the same period in 2025. Cost of goods sold for mobile phone products decreased by approximately $7.1 million, or 15.5%, to approximately $38.4 million for the nine months ended March 31, 2026 from approximately $45.5 million for the same period in 2025, which is consistent with the direct result of an decrease in our revenue. The decrease is also attributable to the decrease in unit cost as we negotiated with our vendor to cover shipping and tariff costs beginning in July 2025 offset by the increase of inventory impairment related to slow-moving inventory of approximately $3.7 million. Cost of goods sold for wearable products and others increased by approximately $0.4 million, or 10.6%, to approximately $3.3 million for the nine months ended March 31, 2026 from $2.9 million for the same period in 2025, which is primarily due to inventory impairment related to slow-moving inventory of approximately $0.8 million. Cost of other services was insignificant in our operations for the nine months ended March 31, 2026 and 2025.
Previous wording
Our gross profit increased by approximately $2.4 million, or 91.6%, to approximately $5.0 million for the six months ended December 31, 2025, from $2.6 for the six months ended December 31, 2024.
Current wording
Our gross profit increased by approximately $0.2 million, or 8.0%, to approximately $3.5 million for the nine months ended March 31, 2026, from $3.3 for the nine months ended March 31, 2025.
Previous wording
For the three months ended December 31, 2025 and 2024, our overall gross profit percentage was 13.3% and 12.5%, respectively. The increase in gross profit percentage of 1.2% was primarily due to the increase in gross profit percentage for mobile phone products, which accounted for 72% of our gross profit.
Current wording
For the nine months ended March 31, 2026 and 2025, our overall gross profit percentage was 7.7% and 6.3%, respectively. The increase in gross profit percentage of 1.4% was primarily due to the increase in gross profit percentage for mobile phone products, which accounted for 71% of our gross profit.
Previous wording
Gross profit percentage of tablets decreased from 20.5% for the six months ended December 31, 2024 to 11.5% for the same period in 2025. This was primarily due to inventory impairment related to slow-moving inventory.
Current wording
Gross (loss) profit percentage of tablets decreased from 20.4% for the nine months ended March 31, 2025 to (8.0) % for the same period in 2026. This was primarily due to the inventory impairment related to slow-moving inventory of approximately $0.1 million.
Previous wording
Gross profit percentage for mobile phones increased from 3.7% for the six months ended December 31, 2024 to 11.8% for the same period in 2025. This was primarily due to the increasing sales of new phone models with higher gross profit margins and the reduction of shipping and tariff costs as we negotiated with our vendor to cover such costs.
Current wording
Gross profit percentage for mobile phones increased from 2.4% for the nine months ended March 31, 2025 to 6.1% for the same period in 2026. This was primarily due to the increasing sales of new phone models with higher gross profit margins and the reduction of shipping and tariff costs as we negotiated with our vendor to cover such costs. The increase was offset by the inventory impairment related to slow-moving inventory of approximately $3.7 million.
Previous wording
Gross profit percentage for wearable products and others decreased from 13.9% for the six months ended December 31, 2024 to 1.5% for the same period in 2025. This was primarily due to the increasing sales in products with lower gross profit margins and inventory impairment related to slow-moving inventory.
Current wording
Gross (loss) profit percentage for wearable products and others decreased from 12.2% for the nine months ended March 31, 2025 to (8.8) % for the same period in 2026. This was primarily due to the increasing sales of products with lower gross profit margins and the inventory impairment related to slow-moving inventory of approximately $0.8 million.
Previous wording
For the six months ended December 31, 2025 and 2024, our gross profit percentage of App service commission was 100.0%. This high margin was primarily attributable to the nature of App service commission revenue, which 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, activation of Apps, and installation of additional Apps occur at a point in time when the end users of the mobile devices interact with those Apps. We earned the App revenue share (service commission) from our partners without incurring any direct cost, as the pre-installation expenses were included in the research and development expenses prior to installation, and any labor costs with minimal time spent were immaterial to be allocated to cost of revenue.
Current wording
For the nine months ended March 31, 2026 and 2025, our gross profit percentage of App service commission was 100.0%. This high margin was primarily attributable to the nature of App service commission revenue, which 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, activation of Apps, and installation of additional Apps occur at a point in time when the end users of the mobile devices interact with those Apps. We earned the App revenue share (service commission) from our partners without incurring any direct cost, as the pre-installation expenses were included in the research and development expenses prior to installation, and any labor costs with minimal time spent were immaterial to be allocated to cost of revenue.
Previous wording
Total operating expenses increased by approximately $1.5 million, or 21.7%, to approximately $8.1 million for the six months ended December 31, 2025, from approximately $6.6 million for the six months ended December 31, 2024.
Current wording
Total operating expenses increased by approximately $2.6 million, or 24.3%, to approximately $13.5 million for the nine months ended March 31, 2026, from approximately $10.9 million for the nine months ended March 31, 2025.
Previous wording
Selling expenses decreased approximately $0.8 million, or 28.1%, to approximately $2.0 million for the six months ended December 31, 2025, from approximately $2.8 million for the six months ended December 31, 2024. The decreased selling expenses was mainly attributable to approximately $0.7 million decrease in commission, payroll and payroll related expenses and approximately $0.4 million decrease in consulting fees during the six months ended December 31, 2025, as we reduced salespersons and consultants to cut expenses and improve profitability to improve cost efficiency. The decrease was offset by approximately $0.2 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 in advertising and marketing expenses primarily due to the increased marketing investment in e-commerce channels.
Current wording
Selling expenses decreased approximately $1.4 million, or 31.5%, to approximately $3.0 million for the nine months ended March 31, 2026, from approximately $4.4 million for the nine months ended March 31, 2025. The decreased selling expenses was mainly attributable to approximately $1.1 million decrease in commission, payroll and payroll related expenses and approximately $0.7 million decrease in consulting fees during the six months ended December 31, 2025, as we reduced salespersons and consultants to reduce expenses and streamline sales department. The decrease was offset by 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 $0.3 million increased in advertising and marketing expenses primarily due to the increased marketing investment in e-commerce channels.
Previous wording
General and administrative expenses increased approximately $2.5 million, or 84.2%, to approximately $5.5 million for the six months ended December 31, 2025 from approximately $3.0 million for the six months ended December 31, 2024. The increased general and administrative expense were mainly attributable to the approximately $0.7 million increase in professional expense on audit and accounting fees as we became a public company and incurred additional capital market and legal consulting fees, approximately $0.4 million increase in salary and wages as a result of allocating certain personnel compensation from selling expenses to general and administrative expenses, reflecting a change in the personnel’s primary responsibilities, approximately $1.3 million increase in rent due to the new factory and warehouse lease that commenced in July 2025, and approximately $0.2 million increase in stock-based compensation expenses as we granted restricted stock units in November 2024 to our general and administrative team members under employee incentive plan.
Current wording
General and administrative expenses increased approximately $4.0 million, or 92.1%, to approximately $8.4 million for the nine months ended March 31, 2026 from approximately $4.4 million for the nine months ended March 31, 2025. The increased general and administrative expense were mainly attributable to the approximately $0.6 million increase in professional expense as we became a public company and incurred additional capital market and legal consulting fees, approximately $0.6 million increase in salary and wages as a result of allocating certain personnel compensation from selling expenses to general and administrative expenses, reflecting a change in the personnel’s primary responsibilities, approximately $2.7 million increase in rent due to the new warehouse leases that commenced in July 2025 and January 2026, and approximately $0.2 million increase in stock-based compensation expenses as we granted restricted stock units in November 2024 to our general and administrative team members under employee incentive plan.
Previous wording
Research and development (“R&D”) expenses from a related party decreased by approximately $68,000, or 100.0%, where the decrease was primarily due to an R&D project which commenced in 2024 and was completed in June 2025. 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 did not have this expense for the same period in 2025.
Current wording
Research and development (“R&D”) expenses from a related party decreased by approximately $91,000, or 100.0%, where the decrease was primarily due to an R&D project which commenced in 2024 and was completed in June 2025. During the nine months ended March 31, 2025, a related party completed additional 40% 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 $91,000 accordingly based on the progression of the R&D project. We did not have this expense for the same period in 2026.
Previous wording
Our other (expense) income, net is summarized as follows:
Current wording
Our other expense, net is summarized as follows:
Previous wording
Total other (expense) income, net decreased by approximately $5.7 million, or 156.3%, to approximately $2.1 million of other expense, net for the three months ended December 31, 2025, from approximately $3.7 million of other income, net for the three months ended December 31, 2024. The decrease was primarily due to the increase of approximately $1.0 million interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable and the decrease of approximately $4.7 million change in fair value of earnout liabilities as we no longer had earnout liabilities after June 30, 2025.
Current wording
Total other (expense) income, net decreased by approximately $9.0 million, or 336.4%, to approximately $6.3 million of other expense, net for the nine months ended March 31, 2026, from approximately $2.7 million of other income, net for the nine months ended March 31, 2025. The decrease was primarily due to the increase of approximately $3.3 million interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable – supplier financing and the decrease of approximately $5.7 million of change in fair value of earnout liabilities as we no longer had earnout liabilities after June 30, 2025.
Previous wording
The provision for income taxes was $0 for each of the six months ended December 31, 2025 and 2024 as we had made full allowance of our deferred tax assets on net operating losses.
Current wording
There was no provision for income taxes for each of the nine months ended March 31, 2026 and 2025 as we had made full allowance of our deferred tax assets on net operating losses.
Previous wording
Net (loss) income decreased by approximately $5.7 million, or 400.9%, to approximately $4.3 million of net loss for the three months ended December 31, 2025, from approximately $1.4 million of net income for the three months ended December 31, 2024. Such change was mainly due to the reasons discussed above.
Current wording
Net loss increased by approximately $38.5 million, or 781.3%, to approximately $43.4 million for the nine months ended March 31, 2026, from approximately $4.9 million for the nine months ended March 31, 2025. Such change was mainly due to the reasons discussed above.
Previous wording
Changes in foreign currency translation adjustment of approximately $9,000 are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of one of our subsidiaries) and the USD dollar (reporting currency) for the six months ended December 31, 2025.
Current wording
Changes in foreign currency translation adjustment of approximately $12,000 are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of one of our subsidiaries) and the USD dollar (reporting currency) for the nine months ended March 31, 2026.
Previous wording
As of December 31, 2025, we had cash and cash equivalents of approximately $1.8 million, while we had working capital deficit of approximately $14.1 million and accumulated deficit of approximately $27.2 million. During the six months ended December 31, 2025, we had net loss of approximately $7.2 million and net operating cash outflow of approximately $93,000.
Current wording
As of March 31, 2026, we had cash and cash equivalents of approximately $3.2 million, while we had working capital deficit of approximately $24.9 million and accumulated deficit of approximately $63.5 million. During the nine months ended March 31, 2026, we had net loss of approximately $43.4 million.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Upon Closing, we were renamed as “Foxx Development Holdings Inc.”, and the Merger Sub was renamed as “Foxx Development Inc.” (i.e. the Subsidiary).
Previous report — wording carried elsewhere
Gross profit percentage for mobile phones increased from 8.2% for the three months ended December 31, 2024 to 10.4% for the same period in 2025. This was primarily due to the increasing sales in new phone models with higher gross profit margins with the reduction of shipping and tariff costs as we negotiated with our vendor to cover such costs.
Previous report — wording carried elsewhere
Comparison for the six months ended December 31, 2025 and 2024