Company: FOXX
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014221
Chunk: 51

Company: Foxx Development Holdings Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 51
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 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.

In addition, on February 8,
2024, the U.S. Federal Communication Commission stopped accepting new enrollment in the Affordable Connectivity Program (ACP) and
announced that the ACP will stop accepting new applications and enrollments on February 7, 2024, and will stop funding for enrolled
customers starting on April 30, 2024. Temporarily impacted by such a change in ACP, most of our new customers are cutting down their
sales teams in anticipation of the reduced customer base, which affects the demand for our products across all channels during the year
ended June 30, 2024; and on the other hand, our competitors have stockpiled their products during the year ended June 30, 2024, due to
severely declining sales and they have started lower their sale price on their products which affected the demand of our products. However,
we may continue to target end-users who are eligible for the Lifeline Program, which is administered by the Universal Service Administrative
Company (USAC) and receives funding from the Universal Service Fund, a government program that receives annual contributions from telecommunications
companies or their customers. At the same time, because we have initiated our strategic shifts to diversify our product offerings, we
expect to target customers who are interested in other mobile devices, tablets, and IoT products. In addition, we began launching our
products through TikTok Shop in March 2024 and we expect to grow our sales through this E-Commerce channel.

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.

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.

30

The Business Combination 

Incorporated as a Delaware
corporation under the name “Acri Capital Merger Sub I Inc.” on November 13, 2023, we entered into the Business Combination
Agreement on February 18, 202