Company: FOXX
Filing Date: 2025-01-10
Form Type: S-1
Source: 0001213900-25-002199
Chunk: 23

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-10
Form: S-1
Chunk 23
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 for the production of our products. To fulfill customer orders, we place purchase orders with suppliers, specifying the item description, quantity, and price of the products. We pay approximately 20% of the total purchase price upfront and the remaining balance upon shipment. We do not have short -termor long -termagreements with our suppliers and just rely on purchase orders. Because we had limited product lines, consisting mainly of our tablet and mobile phone products during the year ended December 31, 2023, we relied on a limited number of suppliers to fulfill our manufacturing needs. For the year ended June 30, 2024, three suppliers accounted for 49%, 31% and 18% of the Company’s total purchases. For the year ended June 30, 2023, one supplier accounted for 100% of the Company’s total purchases. Now that the COVID -19pandemic has ended, if we continue to have limited product lines, we may continue to rely on a limited number of suppliers for the products we plan to launch. As of the date of this prospectus, we have begun changing our business strategy from relying on a limited number of suppliers to expanding the number of suppliers and lowering supplier concentration by actively increasing our business scale and expanding our product lines. We have added seven new suppliers to manufacture additional product lines to meet evolving customer demand. We carefully select suppliers capable of meeting our customization requirements while maintaining the quality standards we demand and adhering to the desired timeframe for product launches. Although there are numerous suppliers of comparable quality worldwide, any disruptions to our current supply chain could lead to production delays and necessitate the allocation of time and resources for engaging with new suppliers. Additionally, transitioning to new suppliers may require extra time to communicate our customization needs effectively or to make adjustments to meet our specifications. Our reliance on a limited number of suppliers to manufacture our future products may present significant risks to us, including the following: •reduced control over delivery schedules, yields and product reliability; •price increases; •manufacturing deviations from internal and regulatory specifications; •the failure of a key manufacturer to perform as we require for technical, market or other reasons; •difficulties in establishing additional manufacturer relationships if we are presented with the need to transfer our manufacturing process technologies to them; •misappropriation of our intellectual property; and •other risks in potentially meeting our product development schedule or satisfying the requirements of our market partners, distributors, direct customers and end users. If we need to enter into agreements for the manufacturing of