Company: FGMCU
Filing Date: 2025-09-18
Form Type: S-4
Source: 0001104659-25-091249
Chunk: 402

Company: FG Merger II Corp.
Filing Date: 2025-09-18
Form: S-4
Chunk 402
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5. In addition, during the three months ended June 30, 2025, BOXABL recognized $1.3 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 three months ended June 30, 2025, our manufacturing overhead was negative $344,000 due to the recapture of stock-based compensation expense resulting from terminations recognized in the second quarter of 2025. We continue to work to align production activity with delivery schedules. Our costs of goods sold compared to revenues for each period presented remain significantly elevated due to our reduced production levels as we faced delays on revenues mainly from permitting and regulatory issues, customer readiness and financing. As a result, the factory overhead, including the costs of leasing and operating our factories and indirect labor costs, was allocated to the total units produced during the respective periods. While we estimate that we could produce and deliver 1,200 Casitas per year at full factory capacity, or 300 Casitas per quarter, we only produced 25 Casitas and 35 Casitas in the three month ended June 30, 2025 and 2024, respectively.

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Operating Expenses Operating expenses for the three months ended June 30, 2025 and 2024, consisted of the following:

| ​                          
 ​                          | ​              
 (In Thousands) | ​        
 June 30, |      ​ 
   2025 | ​ | ​ |      ​ 
   2024 |
|:---------------------------|:---------------|:---------|-------:|:--|:--|-------:|
| General and administrative | ​              | $        |  5,938 | ​ | $ |  3,842 |
| Sales and marketing        | ​              |          | 15,142 | ​ |   |  2,201 |
| Research and development   | ​              |          |    676 | ​ |   |  1,332 |
| Impairment loss            | ​              |          |      — | ​ |   | 12,120 |
| Total Operating expenses   | ​              | $        | 21,756 | ​ | $ | 19,495 |

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