Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1101

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 6
Chunk 1101
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manage inventory and meet market demand through our build-to-order business model. After customers place purchase orders in bulks with
us, we place purchase orders with suppliers to manufacture the products that meet customers’ products specifications and budget
requirements. Prior to 2023, we have relied on limited suppliers for the manufacturing of mobile phone and tablet products and on limited
customers for the distribution of these products. We selectively concentrated our resources on our tablet and mobile phone products because
such products held the strongest market potential and revenue generation capability at the time when remote work and online classes became
more prevalent.

18

Beginning
in 2023, we adjusted our business strategy to avoid reliance on limited suppliers and customers and to diversify suppliers and customers
to mitigate the concentration and reliance risk. We have added new product models across each product line to target a broader range
of customers. As of the date hereof, we have reached out to a total of eighteen wholesale customers to expand our operations in the market
and expects to secure purchase orders from these new customers. At the same time, to meet the various product demands of current and
prospective customers, we have connected with suppliers who can provide manufacturing support when we secure purchase orders from our
customers. In addition, we plan to further expand our product offerings and to launch an IoT platform to manage all end-products sold,
and began setting up a service team for our business to business (B2B) model in the artificial IoT department. Through the efforts of
expanding product offerings and reaching to broader customer base, we will be able to move away from relying on limited customers and
suppliers. 

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 cut down their sales teams in anticipation of the reduced customer base, which affected 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