Company: FOXX
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006111
Chunk: 83

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-24
Form: 424B3
Chunk 83
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 |     |        |    (62.1 | )% |     |        |    |
| Total                   |     |                              |         |    |     |      |           |   |     |        |          |    |     |        |    |
| Gross profit            |     | $                            | 115,943 |    |     | $    | 1,108,780 |   |     | $      | (992,837 | )  |     | (89.5  | )% |
| Gross profit percentage |     |                              |     3.6 | %  |     |      |       5.1 | % |     |        |     (1.5 | )% |     |        |    |

For the years ended June 30, 2024 and 2023, overall gross profit percentage was 3.6% and 5.1%, respectively. The decrease in gross profit percentage of 1.5% was primarily due to the decrease in sales volume of all product lines. In the meantime, we generated a negative profit from the sale of mobile phone products, which happened during the period from January 1 to June 30, 2024 when our vendor had a delay in delivery the mobile phone products. We were willing to sell the goods to customer at a discounted price to minimize the risk of our customer cancelling existing orders, and to retain the customer relationship since we just started to make sales to our new customers. Gross profit percentage of tablets improved from 5.0% to 23.5% from the year ended June 30, 2023 to the same period in 2024. This was primarily due to our change of business strategy as discussed above, which lead to the increase in the unit selling price of electronic products, and the decrease in the unit purchase price of the purchasing goods. The gross profit percentage for mobile phones decreased from 5.6% to (1.5)% from the year ended June 30, 2023, to the same period in 2024. This decline was primarily due our decision to sell products to a new customer at discounted prices during the period from January 1 to June 30, 2024. During this time, we experienced a delay in delivery from our vendor and aimed to minimize the risk of the customer cancelling existing orders. Operating Expenses Total operating expenses increased by approximately $2.2 million, or 217.3%, to approximately $3.2