Company: FGMCU
Filing Date: 2025-09-18
Form Type: S-4
Source: 0001104659-25-091249
Chunk: 405

Company: FG Merger II Corp.
Filing Date: 2025-09-18
Form: S-4
Chunk 405
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Our costs of goods sold increased significantly due to inventory adjustments related primarily to the write down of 68 units that management determined were obsolete following the inventory slow movement analysis, for which BOXABL determined that it was not cost effective to rework, resulting in an inventory write down of $8.4 million in the six months ended June 30, 2025. In addition, during the six months ended June 30, 2025, BOXABL recognized $3.4 million in inventory valuation adjustments within cost of goods sold related to adjusting the carrying value of finished goods inventory to its net realizable value. See Note 5 to our unaudited condensed consolidated financial statements for more information regarding inventory valuation adjustments. During the six months ended June 30, 2025, our manufacturing overhead was negative $353,000 due to the recapture of stock-based compensation expense resulting from terminations recognized in 2025. We continue to work to align production activity with delivery schedules. We produced 35 Casitas in the six months ended June 30, 2025 and 54 Casitas in the six months ended June 30, 2024, which bore the full manufacturing overhead costs in those periods, compared to an estimated full production rate of 300 Casitas per quarter. Operating Expenses Operating expenses for the six months ended June 30, 2025 and 2024, consisted of the following:

| ​                          
 ​                          | ​              
 (In Thousands) | ​        
 June 30, |      ​ 
   2025 | ​ | ​ |      ​ 
   2024 |
|:---------------------------|:---------------|:---------|-------:|:--|:--|-------:|
| General and administrative | ​              | $        |  7,745 | ​ | $ |  7,571 |
| Sales and marketing        | ​              |          | 21,492 | ​ |   |  5,060 |
| Research and development   | ​              |          |  1,259 | ​ |   |  3,579 |
| Impairment loss            | ​              |          |      — | ​ |   | 12,120 |
| Total Operating expenses   | ​              | $        | 30,496 | ​ | $ | 28,330 |

General and administrative expenses consist of compensation and benefits for various positions including company administration, rents, shop supplies, and utilities. The increase in general and administrative expenses was primarily