Foxx Development Holdings Inc., a company specializing in mobile phone products and wearable electronics, has released its annual Form 10-K report, detailing substantial growth in revenue and strategic initiatives aimed at expanding its market presence. The report highlights the company’s financial performance, business operations, strategic plans, and the challenges it faces in the evolving technology market.
Financial Highlights
Revenues, net: $65.9 million, increased by approximately $62.7 million or 1,941.8% compared to the previous year, primarily due to sales from three new major wholesale customers and the launch of new wearable electronic products.
Gross Profit: $4.8 million, increased by approximately $4.7 million or 4,018.1% from the previous year, with an overall gross profit percentage of 7.2% compared to 3.6% in the prior year.
Loss from operations: $(9.7 million), increased by $(6.6 million) or 210.0% from the previous year, primarily due to increased operating expenses.
Net loss: $(9.0 million), increased by $(5.6 million) or 162.9% from the previous year, driven by higher operating expenses and interest expenses.
Loss per share – Basic and Diluted: $(1.47), compared to $(1.04) in the previous year, reflecting the increased net loss.
Business Highlights
Revenue Segments: The company primarily derives its revenue from the sales of mobile phone products, which accounted for 91% of total revenue. The sales of mobile phones increased significantly due to the introduction of new phone models and the acquisition of three new major wholesale customers.
Sales Units: For the fiscal year ended June 30, 2025, the company sold approximately 8,000 tablets and 328,000 smartphones. This represents a significant increase in smartphone sales compared to the previous year.
New Product Launches: The company launched several new products, including wearable electronic products such as smartwatches, smart rings, smart glasses, trackers, and headsets. Additionally, the company introduced a new line of smart home solutions, including the ‘Leak Shield’ smart water leak detector.
New Production Launches: The company expanded its product offerings by launching a second generation of its IoT cloud platform, which integrates advanced technologies and supports a wide range of IoT communication protocols.
Geographical Performance: The company has expanded its presence across various strategic locations in the United States, including San Francisco, Dallas, Atlanta, Los Angeles, Miami, and New York, to enhance its market penetration and customer engagement.
Future Outlook: The company plans to enter the U.S. IoT markets and potentially the private label Mobile Virtual Network Operator (MVNO) market. It aims to grow into a key player both domestically and globally by adding additional features and services to its Foxx-branded devices.
Strategic Initiatives
Strategic Initiatives: Foxx Development Holdings Inc. has undertaken strategic initiatives to diversify its supplier and customer base to mitigate concentration risks. The company has expanded its product offerings to include wearable electronics and IoT products, aiming to enter the U.S. IoT and MVNO markets. Additionally, the company has launched an IoT platform and set up a service team for its B2B model in the artificial IoT department.
Capital Management: The company completed a business combination with Acri Capital Acquisition Corporation, resulting in a reverse recapitalization. This transaction included the conversion of convertible promissory notes into common stock and the issuance of new shares. The company also secured financing through convertible promissory notes and engaged in a transaction financing strategy to support working capital and transaction expenses. As of June 30, 2025, the company had cash and cash equivalents of approximately $1.9 million, with a significant increase in accounts payable due to inventory purchases.
Future Outlook: Foxx Development Holdings Inc. plans to continue expanding its product offerings and customer base to reduce reliance on limited suppliers and customers. The company anticipates entering the U.S. IoT and MVNO markets, which could significantly influence future operating results. Management is focused on securing additional financing to meet working capital requirements and sustain operations, with potential sources including bank financing, related party support, and equity financing.
Challenges and Risks
Operational Risks: The company faces significant operational risks due to its reliance on a limited number of suppliers and customers, which could impact its ability to meet market demand and manage inventory effectively. The strategic shift to diversify suppliers and customers is aimed at mitigating these risks, but the transition may present challenges in maintaining supply chain efficiency and customer relationships.
Market Expansion Risks: The company’s expansion into the IoT and MVNO markets introduces new operational complexities and competitive pressures. The need to integrate additional features and services to enable Foxx-branded devices with IoT and MVNO capabilities requires substantial investment in technology and talent, posing a risk if these investments do not yield the expected returns.
Regulatory Risks: The cessation of the Affordable Connectivity Program (ACP) by the U.S. Federal Communication Commission poses a regulatory risk, as it temporarily impacted the company’s customer base and product demand. The company is attempting to mitigate this by targeting end-users eligible for the Lifeline Program and diversifying its product offerings to include other mobile devices and IoT products.
Customer Concentration Risks: The company experienced a significant increase in sales of mobile phone products due to the addition of three new major customers. However, this growth also brings the risk of over-reliance on these new customers, which could impact financial stability if these relationships do not sustain.
Financial Condition Risks: The company’s financial condition is further challenged by a substantial net loss and cash outflow, raising concerns about its ability to continue as a going concern. Management is considering various financing options, including equity financing and support from related parties, to address liquidity needs.
Market Risks: The company is exposed to market risks, including fluctuations in foreign currency exchange rates, which could adversely affect its financial results. The company’s operations in Singapore and other international markets increase its exposure to these risks, necessitating effective currency risk management strategies.
SEC Filing: Foxx Development Holdings Inc. [ FOXX ] – 10-K – Oct. 14, 2025
