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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~December~~ March 31, ~~2025~~2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number 001-42285

Foxx Development Holdings Inc.

(Exact name of registrant as specified in its charter)

Delaware		99-5119494
(State or other jurisdiction of Incorporation or organization)		(IRS Employer Identification No.)

15375 Barranca Parkway C106

Irvine, CA 92618

(Address of principal executive offices)

+201-962-5550

(Issuer’s telephone number including area code)

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	FOXX	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50	FOXXW	The Nasdaq Stock Market LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date. As of ~~February~~May 1311, 2026, there are 7,~~005~~041,~~191~~192 shares of common stock issued and outstanding.

FOXX DEVELOPMENT HOLDINGS INC.

CONTENTS

PART 1 – FINANCIAL INFORMATION	1
Item 1. – Financial Statements (unaudited)	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations and Comprehensive Loss	2
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	3
Condensed Consolidated Statements of Cash Flows	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. – Management’s Discussion and Analysis of Financial Condition And Results of Operations	33
Item 3. – Quantitative and Qualitative Disclosures about Market Risk	50
Item 4. – Controls and Procedures	50
PART II – OTHER INFORMATION	51
Item 1. – Legal Proceedings	51
Item 1A. – Risk Factors	51
Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3. – Defaults Upon Senior Securities	52
Item 4. – Mine Safety Disclosures	52
Item 5. – Other Information	52
Item 6. – Exhibits	52
SIGNATURES	53

PART 1 – FINANCIAL INFORMATION	1

Item 1. – Financial Statements (unaudited)	1

Condensed Consolidated Balance Sheets	1

Condensed Consolidated Statements of Operations and Comprehensive Loss	2

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	3

Condensed Consolidated Statements of Cash Flows	4

Notes to Condensed Consolidated Financial Statements	5

Item 2. – Management’s Discussion and Analysis of Financial Condition And Results of Operations	29

Item 3. – Quantitative and Qualitative Disclosures about Market Risk	45

Item 4. – Controls and Procedures	45

PART II – OTHER INFORMATION	46

Item 1. – Legal Proceedings	46

Item 1A. – Risk Factors	46

Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3. – Defaults Upon Senior Securities	46

Item 4. – Mine Safety Disclosures	46

Item 5. – Other Information	46

Item 6. – Exhibits	46

SIGNATURES	47

PART I: FINANCIAL INFORMATION

Item 1. - Financial Statements

FOXX DEVELOPMENT HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			June 30,
	March 31,			June 30,
	2025			2025
	2026			2025
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	13,~~769~~190,~~684~~474		$	1,875,453
Accounts receivable, net of allowance for credit losses of $478,526 and $595,907, as of December 31, 2025 and June 30, 2025, respectively		6,318,106			6,786,792
Accounts receivable, net of allowance for credit losses of $1,848,648 and $595,907, as of March 31, 2026 and June 30, 2025, respectively		4,112,151			6,786,792
Inventories		106,~~182~~965,~~579~~109			12,686,739
Contract assets		~~138~~41,~~664~~724			454,842
Prepaid expenses and other receivables, net of allowance for credit losses of $518,226 and $317,282, as of December 31, 2025 and June 30, 2025, respectively		1,376,395			1,837,812
Prepaid expenses and other receivables, net of allowance for credit losses of $829,681 and $317,282, as of March 31, 2026 and June 30, 2025, respectively		689,913			1,837,812
Prepaid expenses - related party		-			8,000
Amount due from related parties		53,157			-
Amount due from related parties - current		28,720			-
Total Current Assets		1915,~~838~~028,~~585~~091			23,649,638
PROPERTY AND EQUIPMENT, NET		~~102~~90,~~321~~934			131,722
NON-CURRENT ASSETS
Operating right-of-use assets		2011,~~947~~852,~~327~~167			1,063,438
Security deposits		1,155,516			1,155,016
Total Non-current Assets		2213,~~102~~007,~~843~~683			2,218,454
Total Assets	$	4228,~~043~~126,~~749~~708		$	25,999,814
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	29,678,545		$	26,244,987
Accounts payable – supplier financing	$	32,327,766		$	26,244,987
Other payables and accrued liabilities		25,~~938~~476,~~652~~994			3,570,959
Other payable - related parties		357,~~263~~000			272,917
Contract liabilities		23142,~~525~~852			378
Income taxes payable		65,243			76,743
Current maturity of long-term loan		2324,~~383~~094			23,743
Operating lease liabilities - current		1,~~187~~839,~~583~~557			211,525
Total Current Liabilities		3339,~~952~~883,~~194~~506			30,401,252
NON-CURRENT LIABILITIES
Operating lease liabilities - non-current		1936,~~851~~003,~~890~~926			889,827
Long-term loan - non-current		6155,~~376~~080			73,418
Total Non-current Liabilities		1936,~~913~~059,~~266~~006			963,245
Total Liabilities		5375,~~865~~942,~~460~~512			31,364,497
COMMITMENTS AND CONTINGENCIES (See Note 18)
STOCKHOLDERS’ DEFICIT
Common stock, $0.0001 par value, 50,000,000 shares authorized as of December 31, 2025 and June 30, 2025; 6,962,811 and 6,780,597 shares issued and outstanding as of December 31, 2025 and June 30, 2025, respectively		696			678
Common stock, $0.0001 par value, 50,000,000 shares authorized as of March 31, 2026 and June 30, 2025; 7,005,191 and 6,780,597 shares issued and outstanding as of March 31, 2026 and June 30, 2025, respectively		700			678
Additional paid-in capital		15,~~389~~669,~~806~~020			14,686,705
Accumulated deficit		(2763,~~198~~468,~~420~~413	)		(20,047,064	)
Accumulated other comprehensive loss		(1317,~~793~~111	)		(5,002	)
Total Stockholders’ Deficit		(1147,~~821~~815,~~711~~804	)		(5,364,683	)
Total Liabilities and Stockholders’ Deficit	$	4228,~~043~~126,~~749~~708		$	25,999,814

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FOXX DEVELOPMENT HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Three Months Ended						For the ~~Six~~Nine Months Ended
	December 31,			December 31,			December 31,			December 31,
	March 31,			March 31,			March 31,			March 31,
	2025			2024			2025			2024
	2026			2025			2026			2025
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
REVENUES, NET	$	168,~~716~~666,~~572~~261		$	1711,~~480~~392,~~231~~078		$	3645,~~939~~606,~~873~~134		$	4051,~~592~~984,~~283~~361
COST OF GOODS SOLD		1410,~~499~~116,~~792~~838			1510,~~289~~728,~~565~~765			3142,~~978~~095,~~526~~364			3848,~~003~~732,~~441~~206
GROSS PROFIT		2,216,780			2,190,666			4,961,347			2,588,842
GROSS (LOSS) PROFIT		(1,450,577	)		663,313			3,510,770			3,252,155
OPERATING EXPENSES:
Selling expenses		1964,~~142,567~~440			1,~~626~~551,~~740~~369			23,~~044~~008,~~223~~663			24,~~841~~393,~~782~~150
General and administrative expenses		32,~~103~~928,~~576~~172			21,~~042~~421,~~169~~299			58,~~532~~376,~~249~~858			34,~~003~~361,~~416~~716
Research and development - related party		-			4522,~~584~~792			-			6891,~~376~~168
Research and development		~~193~~1,~~208~~085,588			~~717~~826,~~273~~532			~~499~~1,~~640~~585,228			~~724~~1,~~301~~550,833
Total Operating Expenses		4,439,351			4,431,766			8,076,112			6,637,875
Provision of credit losses		1,681,606			401,988			1,765,169			464,988
LOSS FROM OPERATIONS		(2,222,571	)		(2,241,100	)		(3,114,765	)		(4,049,033	)
Impairments of right-of-use assets		25,855,427			-			25,855,427			-
Total Operating Expenses		32,515,233			4,223,980			40,591,345			10,861,855
LOSS FROM OPERATIONS		(33,965,810	)		(3,560,667	)		(37,080,575	)		(7,609,700	)
OTHER (EXPENSE) INCOME
Interest expense		(2,~~003~~304,~~236~~183	)		(1,~~042~~553,~~198~~993	)		(46,~~015~~319,~~141~~324	)		(13,~~451~~005,~~193~~186	)
Other (expense) income, net		(60,107	)		1,861			(21,450	)		1,861
Other expense, net		-			(2,118	)		(21,450	)		(257	)
Change in fair value of earnout liabilities		-			41,~~705~~032,~~583~~267			-			45,~~655~~687,~~722~~989
Total Other (Expense) Income, net		(2,~~063~~304,~~343~~183	)		3(523,~~665,246~~844	)		(46,~~036~~340,~~591~~774	)		32,~~206~~682,~~390~~546
(LOSS) INCOME BFORE INCOME TAXES		(4,285,914	)		1,424,146			(7,151,356	)		(842,643	)
LOSS BFORE INCOME TAXES		(36,269,993	)		(4,084,511	)		(43,421,349	)		(4,927,154	)
PROVISION FOR INCOME TAXES		-			-			-			-
NET (LOSS) INCOME		(4,285,914	)		1,424,146			(7,151,356	)		(842,643	)
NET LOSS		(36,269,993	)		(4,084,511	)		(43,421,349	)		(4,927,154	)
OTHER COMPREHENSIVE (LOSS) INCOME
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment		(23,~~266~~318	)		-(412	)		(812,~~791~~109	)		-(412	)
COMPREHENSIVE (LOSS) INCOME	$	(4,288,180	)	$	1,424,146		$	(7,160,147	)	$	(842,643	)
COMPREHENSIVE LOSS	$	(36,273,311	)	$	(4,084,923	)	$	(43,433,458	)	$	(4,927,566	)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Basic		6,~~892~~989,~~729~~278			7,~~280~~050,~~366~~260			6,~~836~~886,~~356~~673			5,~~389~~937,~~365~~756	*
Diluted		6,~~892~~989,~~729~~278			7,~~280~~050,~~366~~260			6,~~836~~886,~~356~~673			5,~~389~~937,~~365~~756	*
(LOSS) INCOME PER SHARE
LOSS PER SHARE
Basic	$	(05.6219	)	$	(0.2058	)	$	(16.0531	)	$	(0.1683	)
Diluted	$	(05.6219	)	$	(0.2058	)	$	(16.0531	)	$	(0.1683	)

*	Giving retroactive effect to reverse recapitalization effected on September 26, 2024 to reflect exchange ratio of approximately 3.3033 as described in Note 4.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FOXX DEVELOPMENT HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ ~~EQUITY~~ (DEFICIT)

	For the Six Months Ended December 31, 2025
	For the Nine Months Ended March 31, 2026
					Additional						Accumulated other
	Common stock				paid-in			Accumulated			comprehensive
	Shares		Amount		capital			deficit			loss			Total
BALANCE, June 30, 2025		6,780,597	$	678	$	14,686,705		$	(20,047,064	)	$	(5,002	)		(5,364,683	)
Stock-based compensation expenses		-		-		296,797			-			-			296,797
Foreign currency translation		-		-		-			-			(6,525	)		(6,525	)
Net loss		-		-		-			(2,865,442	)		-			(2,865,442	)
BALANCE, September 30, 2025 (Unaudited)		6,780,597		678		14,983,502			(22,912,506	)		(11,527	)		(7,939,853	)
Issuance of common stock under EIP		182,214		18		(18	)		-			-			-
Stock-based compensation expenses		-		-		406,322			-			-			406,322
Foreign currency translation		-		-		-			-			(2,266	)		(2,266	)
Net loss		-		-		-			(4,285,914	)		-			(4,285,914	)
BALANCE, December 31, 2025 (Unaudited)		6,962,811	$	696	$	15,389,806		$	(27,198,420	)	$	(13,793	)	$	(11,821,711	)
Issuance of common stock under EIP		42,380		4		(4	)		-			-			-
Stock-based compensation expenses		-		-		279,218			-			-			279,218
Foreign currency translation		-		-		-			-			(3,318	)		(3,318	)
Net loss		-		-		-			(36,269,993	)		-			(36,269,993	)
BALANCE, March 31, 2026 (Unaudited)		7,005,191	$	700	$	15,669,020		$	(63,468,413	)	$	(17,111	)	$	(47,815,804	)

	For the Six Months Ended December 31, 2024
	For the Nine Months Ended March 31, 2025
							Additional						Accumulated other
	Common stock						paid-in			Accumulated			comprehensive
	Shares*			Amount			capital			deficit			loss			Total
BALANCE, June 30, 2024		3,303,333		$	330		$	7,024,162		$	(11,026,928	)	$	-		$	(4,002,436	)
Conversion of convertible promissory notes into common stock upon completion of reverse recapitalization		1,696,668			170			15,408,515			-			-			15,408,685
Issuance of common stock upon completion of reverse recapitalization		2,270,096			227			(2,100,865	)		-			-			(2,100,638	)
Earnout liabilities		-			-			(5,688,007	)		-			-			(5,688,007	)
Transaction costs		-			-			(893,577	)		-			-			(893,577	)
Net loss		-			-			-			(2,266,789	)		-			(2,266,789	)
BALANCE, September 30, 2024 (Unaudited)		7,270,097			727			13,750,228			(13,293,717	)		-			457,238
Issuance of common stock through exercise of warrants		10,500			1			120,749			-						120,750
Stock-based compensation expenses		-			-			200,954			-						200,954
Net income		-			-			-			1,424,146						1,424,146
BALANCE, December 31, 2024 (Unaudited)		7,280,597		$	728		$	14,071,931		$	(11,869,571	)	$	-		$	2,203,088
Cancellation of common stock held in escrow		(500,000	)		(50	)		50			-			-			-
Stock-based compensation expenses		-			-			326,588			-			-			326,588
Foreign currency translation		-			-			-			-			(412	)		(412	)
Net loss		-			-			-			(4,084,511	)		-			(4,084,511	)
BALANCE, March 31, 2025 (Unaudited)		6,780,597		$	678		$	14,398,569		$	(15,954,082	)	$	(412	)	$	(1,555,247	)

*	Giving retroactive effect to reverse recapitalization effected on September 26, 2024 to reflect exchange ratio of approximately 3.3033 as described in Note 4.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FOXX DEVELOPMENT HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Six Months Ended
	For the Nine Months Ended
	December 31,			December 31,
	March 31,			March 31,
	2025			2024
	2026			2025
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(743,~~151~~421,~~356~~349	)	$	(~~842~~4,~~643~~927,154	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		2334,~~365~~752			2335,~~587~~951
Interest expense from convertible promissory notes		-			140,740
Amortization of operating right of use assets		~~872~~1,~~890~~611,924			~~107~~160,~~224~~521
Provision of credit losses, net		83,563			63,000
Provision of credit losses		1,765,169			464,988
Stock-based compensation expenses		~~703~~982,~~119~~337			~~200~~527,~~954~~542
Change in fair value of earnout liabilities		-			(45,~~655~~687,~~722~~989	)
Gain on disposal of equipment		(2,790	)		-
(Gain) loss on disposal of equipment		(2,790	)		3,400
Impairments of inventories		14,~~570~~663,~~862~~144			-
Impairments of right-of-use assets		25,855,427			-
Change in operating assets and liabilities:
Accounts receivable		~~586~~1,~~067~~421,900			(7,~~454~~359,~~174~~795	)
Inventories		~~933~~1,~~297~~058,486			(1314,~~997~~893,~~419~~859	)
Contract assets		~~316~~413,~~178~~118			7916,~~023~~259
Prepaid expenses and other current assets		~~260~~635,~~474~~470			(~~892~~1,~~774~~049,412	)
Amount due from related parties		(45,157	)		140
Amount due from related parties - current		(20,720	)		140
Security deposits		(500	)		(~~573~~1,123,807	)
Accounts payable		3,433,558			22,705,175
Accounts payable – supplier financing		6,082,779			27,958,120
Contract liabilities		23142,~~147~~474			~~134~~(438,~~707~~378	)
Income taxes payable		(11,500	)		(~~253~~299,~~932~~585	)
Other payables and accrued liabilities		~~(631~~1,~~493~~906,686	)		~~873~~1,~~182~~974,134
Other payable - related parties		(~~237~~265,~~654~~917	)		(5432,~~799~~007	)
Operating lease liabilities		(~~818~~1,~~659~~513,949	)		(77123,~~694~~471	)
Net cash used in operating activities		(92,589	)		(4,475,232	)
Net cash provided by (used in) operating activities		1,336,941			(4,653,662	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		-			(68,336	)
Proceeds from disposal of equipment		8,826			-28,100
Net cash provided by (used in) investing activities		8,826			(6840,~~336~~236	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments to short-term loans		-			(291,208	)
Principal payments of long-term loan		(1217,~~402~~988	)		(914,~~477~~432	)
Proceeds from convertible promissory note		-			9,000,000
Proceeds from reverse recapitalization, net of payments of transaction costs		-			19,710,288
Proceeds from issuance of common stock through exercise of warrants		-			120,750
Payment of redemption payable		-			(20,499,790	)
Payments of deferred transaction costs		-			(131,400	)
Net cash (used in) provided by financing activities		(1217,~~402~~988	)		7,~~899~~894,~~163~~208
EFFECT OF EXCHANGE RATE CHANGES		(912,~~604~~758	)		-2,297
NET CHANGE IN CASH		~~(105~~1,~~769~~315,021	)		3,~~355~~202,~~595~~607
CASH, beginning of the period		1,875,453			587,448
CASH, end of the period	$	13,~~769~~190,~~684~~474		$	3,~~943~~790,~~043~~055
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	$	11,500		$	50
Cash paid for interest	$	45,~~723~~332,~~963~~263		$	~~730~~1,~~795~~272,448
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Initial recognition of operating right-of-use assets and lease liabilities	$	2038,~~756~~256,~~779~~080		$	750,338
Modification of operating right-of-use assets and lease liabilities	$	-		$	121,655
Conversion of convertible promissory notes into common stock	$	-		$	15,408,685
Reverse recapitalization transaction costs net against additional-paid in capital	$	-		$	893,577
Deferred transaction costs included in other payables and accrued liabilities	$	-		$	300,000
Initial recognition of earnout liabilities	$	-		$	5,688,007

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FOXX DEVELOPMENT HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Nature of business and organization

Foxx Development Holdings Inc. (“Foxx” or the “Company”) was incorporated on November 13, 2023 under the name “Acri Capital Merger Sub I Inc.” On February 18, 2024, the Company entered into a business combination agreement (as amended on May 31, 2024, the “Business Combination Agreement”), by and among the Company, Acri Capital Acquisition Corporation, a Delaware corporation and our parent company at the time (“ACAC”), Acri Capital Merger Sub II Inc., a Delaware corporation and our wholly-owned subsidiary at the time (“Merger Sub”), and Foxx Development Inc. (“Old Foxx”), a Texas corporation incorporated on March 17, 2017 primarily engaged in the sales of electronic products, pursuant to which (i) ACAC merged with and into the Company, with the Company as the surviving Delaware corporation (the “Reincorporation Merger”), and (ii) Old Foxx merged with and into Merger Sub, with Merger Sub surviving as a wholly-owned Delaware subsidiary of the Company (the “Acquisition Merger”). The Reincorporation Merger, the Acquisition Merger, and other transactions contemplated under the Business Combination Agreement, are collectively referred to as the “Business Combination” (See Note 4).

Following the consummation of the Business Combination (the “Closing”) on September 26, 2024, the Company was renamed as “Foxx Development Holdings Inc.” and became a publicly traded company. The Merger Sub was renamed as “Foxx Development Inc.” and became the Delaware subsidiary of the Company.

On August 29, 2023, Foxx Technology Pte Ltd, a Singapore private company (“Foxx Technology”), was incorporated in Singapore, with Old Foxx holding 51% of the equity interests in Foxx Technology. Foxx Technology operated in the field of the manufacture of wireless communications equipment, and the wholesale of handphones, handphone peripheral equipment and other telecommunications equipment. On July 30, 2024, Foxx submitted the application to dissolve Foxx Technology to the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. On November 4, 2024, ACRA granted Foxx Technology’s application and struck it off from the company register of Singapore.

On March 3, 2025, Foxx Development (Singapore) Pte. Ltd (“Foxx Singapore”) was incorporated in Singapore. Foxx Singapore primarily engaged in assembling electronic products, and was 100% owned by the Company. Foxx Singapore had no significant operations as of ~~December~~March 31, ~~2025~~2026.

On April 8, 2025, Foxx Technologies Inc (“Foxx Tech”) was incorporated in the State of California. Foxx Tech is 100% owned by the Company. Foxx Tech had no significant operations as of ~~December~~March 31, ~~2025~~2026.

On May 19, 2025, Nexus IQ Technology Inc (“Nexus IQ”) was incorporated in the State of Delaware. Nexus IQ primarily engaged in developing, sales and rental of products involving Artificial Intelligence of Things (“AIoT”) technologies and was 100% owned by the Company. In December 2025, Nexus IQ began winding down its operations, disposed of related AIoT equipment, and sold its AIoT products to a third party.

Note 2 — Going Concern

In assessing the Company’s ability to continue as a going concern, the Company monitors and analyses its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses, and capital expenditure obligations.

The Company primarily engages in the sales of electronic products. Debt financing in the form of convertible notes, loans from bank, third parties, and related parties, and cash generated from operations have been utilized to finance the working capital. The Company’s management has considered whether there is substantial doubt about its ability to continue as a going concern due to (1) ~~net~~ ~~cash used in operating activities of approximately $90,000 for the six months ended December 31, 2025, (2)~~ net loss of approximately $743.24 million for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, and (32) working capital deficit of approximately $1424.19 million as of ~~December~~March 31, ~~2025~~2026.

If the Company is unable to generate sufficient funds to finance its working capital requirements within the normal operating cycle of a twelve-month period from the date of the unaudited condensed consolidated financial statements are issued, the Company may have to consider supplementing its available sources of funds through the following sources:

●

Other sources of available financing from banks in the United States of America and other financial institutions or private lenders;

●

Financial support and credit guarantee commitments from the Company’s related parties; and

●

Equity financing.

The Company can make no assurance that required financing will be available in the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or more of these events do not occur, or if subsequent capital raises are insufficient to bridge any financial and liquidity shortfall, there would likely be a material adverse effect on the Company and it would materially adversely affect its ability to continue as a going concern.

As such, the Company’s management has determined that the factors discussed above have raised substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements are issued. The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 — Basis of presentation and significant accounting policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position and operation results have been included. Interim results are not necessarily indicative of results for a full year. The information in this Quarterly Report on Form 10-Q (the “10-Q”) should be read in conjunction with information in the Annual Report for the fiscal year ended June 30, 2025, on Form 10-K filed by the Company with the SEC on October 15, 2025.

Principles of consolidation

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one-half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the Board of Directors, or to cast a majority of votes at the meetings of directors.

Use of estimates and assumptions

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates.

6Foreign currency translation and transactions

~~Foreign~~The reporting currency of the Company is the U.S. dollar. The functional currency for the holding company is the U.S. dollar (“USD”). In Singapore, the Company conducts its business in the local currency, Singapore dollar (“SGD”), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the Federal Reserve System at the end of the period. The statements of operations and cash flows are translated at the average translation rates during the reporting periods, and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive loss. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

The reporting currency of the Company is the U.S. dollar. The functional currency for the holding company is the U.S. dollar (“USD”). In Singapore, the Company conducts its business in the local currency, Singapore dollar (“SGD”), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the Federal Reserve System at the end of the period. The statements of operations and cash flows are translated at the average translation rates during the reporting periods, and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive loss. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.6

Translation adjustments are included in accumulated other comprehensive loss. The balance sheet amounts, with the exception of stockholders’ deficit at ~~December~~March 31, ~~2025~~2026, were translated at SGD 1.29 to USD 1.00. The average translation rates applied to the unaudited condensed consolidated statements of operations and cash flows for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, were SGD 1.29 to USD 1.00. The stockholders’ equity accounts were translated at their historical rates. Amounts reported on the unaudited condensed consolidated statement of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets.

Segments

The Company uses the management approach in determining reportable operating segments. The management approach considers the internal reporting used by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer and his direct reports, for making operating decisions about the allocation of resources and the assessment of performance in determining the Company’s reportable operating segments. The Company’s CODM reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines (electronic products revenues and App Service (as defined below) commission revenue) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. In addition, all of the Company’s revenues are derived solely from the U.S. Accordingly, no geographical information is presented. Management has determined that the Company has one operating segment.

Accounts receivable

Accounts receivables are recognized and carried at the original invoiced amount less an allowance for any uncollectible accounts or expected credit losses. An allowance for credit losses for accounts receivables is established based on various factors, including historical payments and current economic trends. The Company reviews its allowance for credit loss by assessing individual accounts receivable over a specific aging and ~~amount~~minimum baseline reserve percentage. All other balances are pooled based on historical collection experience, historical recovery speed, industry risk and broader economic trends. The estimate of expected credit losses is based on information about past events, current economic conditions, and forecasts of future economic conditions that affect collectability. Accounts receivable are written off on a case-by-case basis after exhaustive efforts at collection are made, net of any amounts that may be collected. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, $~~478~~1,~~526~~848,648 and $595,907, respectively, of allowance for credit losses of accounts receivable was recorded, and the Company had net accounts receivable of $64,~~318~~112,~~106~~151 and $6,786,792, respectively.

Inventories

Inventories are stated at the lower cost or net realizable value. The estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Cost is determined using the “First in, First out” method. Inventories mainly include electronic products and accessories, which are purchased from the Company’s suppliers as merchandized goods and freight-in. At least a quarterly basis, inventories are reviewed for potential write-downs for estimated obsolescence or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value. The estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. When inventories are written down to net realizable value, they are not marked up subsequently based on changes in underlying facts and circumstances. As of December 31, 2025 and June 30, 2025, the Company had inventories of $10,182,579 and $12,686,739, respectively. During the three months ended December 31, 2025 and 2024, $1,086,547 and $0 inventory write-down were recorded, respectively. During the six months ended December 31, 2025 and 2024, $1,570,862 and $0 inventory write-down were recorded, respectively.

7Contract assets

Contract assets consisted of cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of March 31, 2026 and June 30, 2025, no allowance for credit losses on contract assets was recorded.

Contract assets consisted of cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2025 and June 30, 2025, no allowance for credit losses on contract assets was recorded.liabilities

Contract liabilities mainly consist of deposits received from customers before all the relevant criteria for revenue recognition are met and are recorded as customer deposits.

~~Contract liabilities mainly consist of deposits received from customers before all the relevant criteria for revenue recognition are met and are recorded as customer deposits.~~7

~~Earnout liabilities~~Long-lived assets

At The Company reviews the ~~Closing~~impairment of ~~the~~its ~~Business Combination,~~long-lived ~~pursuant~~assets toon ~~the~~an ~~Business~~annual ~~Combination~~basis ~~Agreement,~~and whenever events or changes in circumstances indicate that the ~~stockholders~~carrying amount of ~~Old~~an ~~Foxx~~asset ~~were~~or ~~entitled~~group toof ~~receive~~assets upmay not be fully recoverable. These events or changes in circumstances may include but are not limited to, a ~~total~~significant deterioration of ~~4,200,000 contingent Earnout~~ ~~Shares~~operating ~~(as~~results, ~~defined~~a ~~below)~~change in the ~~form~~regulatory ofenvironment, ~~common~~changes ~~stock~~in ofbusiness ~~the Company~~plans, ~~par~~or ~~value~~adverse ~~$0.0001~~changes ~~per~~in ~~share~~anticipated ~~(“Common~~future ~~Stock”)~~cash flows. The ~~Earnout~~Company’s ~~Shares~~approach ~~would~~for bedetermining ~~issued~~and ~~upon~~measuring ~~certain~~impairment ~~vesting~~in ~~schedules~~long-lived ~~based~~asset ongroups is to exclude operating lease liabilities from the asset group. If an impairment indicator is present, the Company’s ~~financial~~evaluates ~~performance~~the ~~for~~recoverability by a comparison of the ~~fiscal~~carrying ~~years ended~~amount ~~June~~of ~~30,~~the ~~2025~~assets ~~and~~to ~~2024.~~future ~~The~~undiscounted ~~earnout~~net ~~conditions~~cash ~~failed~~flows expected to ~~meet~~result from the ~~indexation~~use ~~guidance~~and ~~under~~eventual ~~ASC~~disposition ~~815-40-15,~~of ~~therefore,~~the assets. If the ~~earnout shares~~assets are ~~required~~determined to be ~~classified~~impaired, asthe aimpairment ~~liability~~recognized ~~rather~~is ~~than~~the ~~equity~~excess of the carrying amount over the fair value of the assets. AsFair value is generally determined by the discounted cash flow method. The discount rate used in any estimate of discounted cash flows is the rate commensurate with a ~~result,~~similar investment of similar risk. During the ~~Earnout~~three ~~Shares~~months ~~are~~ended ~~classified~~March as31, ~~liability~~2026 and ~~measured~~ at2025, ~~fair~~the ~~value~~Company recognized $25,855,427 ~~with~~and ~~changes~~$0 impairment inof ~~fair~~long-lived assets, ~~value~~respectively. ~~included~~During inthe nine months ended March 31, 2026 and 2025, the ~~consolidated~~Company ~~statements~~recognized $25,855,427 and $0 impairment of ~~operations~~long-lived assets, respectively.

~~Convertible instrument~~Lease

The Company accounts for ~~its~~leases ~~convertible instrument~~ in accordance with ~~the Financial Accounting Standards Board (“FASB”)’s Accounting Standards Codification (“~~ASC~~”) No.~~ ~~470-20 “Debt~~842, ~~with~~Leases. ~~Conversion~~The ~~and~~Company ~~Other~~categorizes ~~Options ”,~~leases ~~whereby~~with ~~the~~contractual ~~convertible~~terms ~~instrument~~longer isthan ~~initially accounted~~12 months ~~for~~ as aeither ~~single~~operating ~~unit~~or offinance. ~~account,~~Finance ~~unless~~leases itare ~~contains~~generally athose ~~derivative~~leases that ~~must~~substantially beutilize ~~bifurcated~~or ~~from~~pay for the ~~host~~entire ~~contract~~asset inover ~~accordance with~~their ~~ASC 815-15 Derivatives~~estimated ~~and Hedging — Embedded Derivatives or the substantial premium model in ASC 470-20 Debt applies~~life. IfAll ~~the~~other ~~equity~~leases ~~securities underlying the embedded conversion option~~ are ~~readily~~categorized ~~convertible to cash, such~~ as ~~publicly~~operating ~~traded common shares, the embedded conversion option is likely to meet the net settlement criterion to be considered a derivative~~leases. IfCosts ~~the~~associated ~~equity~~with ~~securities~~operating ~~underlying~~lease ~~the~~assets ~~conversion option~~ are ~~not~~recognized ~~readily~~on ~~convertible~~a tostraight-line ~~cash,~~basis ~~the~~within ~~embedded~~operating ~~conversion~~expenses ~~option may~~over ~~not meet~~ the ~~net~~term ~~settlement~~of ~~criterion and therefore would not meet~~ the ~~definition of a derivative~~lease. ~~Because~~As ~~the~~of ~~convertible~~March ~~instrument has a fixed conversion price and therefore~~31, it2026 ~~lacks an underlying~~ and ~~does~~June ~~not~~30, ~~meet the requirement of a derivative. As a result~~2025, the Company ~~determined its embedded conversion option~~ does not ~~meet~~have ~~the~~finance ~~definition of a derivative for bifurcation~~leases. ~~All the convertible notes were converted into the Company’s Common Stock on September 26, 2024 as part of the business combination.~~

~~Revenue~~The ~~recognition~~Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.

~~The~~Operating ~~Company~~lease ~~recognizes~~right-of-use ~~revenue to~~(“ROU”) ~~depict~~assets and liabilities are initially recorded based on the ~~transfer~~present value of ~~promised~~lease ~~goods~~payments orover ~~services~~the ~~(that~~lease isterm, anwhich ~~asset)~~includes the minimum unconditional term of the lease, and may include options to ~~customers~~extend inor anterminate ~~amount~~the lease when it is reasonably certain at the commencement date that ~~reflects~~such options will be exercised. As the ~~consideration~~implicit ~~to which~~rate for each of the Company’s ~~expects~~leases tois ~~receive~~not inreadily ~~exchange~~determinable, ~~for~~the ~~those~~Company ~~goods~~uses orincremental ~~services.~~borrowing Anrate ~~asset~~as iseffective ~~transferred~~interest ~~when~~rate, based on the ~~customer~~information ~~obtains~~available ~~control~~ at the lease commencement date in determining the present value of ~~that~~its ~~asset~~expected lease payments. ItOperating lease assets also ~~requires~~include ~~the~~any ~~Company~~initial direct costs and any lease payments made prior to ~~identify~~the ~~contractual~~lease ~~performance~~commencement ~~obligations~~date and ~~determine~~are ~~whether~~reduced ~~revenue~~by ~~should~~any belease ~~recognized at~~incentives areceived. ~~point~~According into ~~time~~ASC 842-10-15-37, ora ~~over~~lessee ~~time~~may, ~~based~~as onan ~~when~~accounting ~~control~~policy election by class of ~~goods~~underlying ~~and~~asset, ~~services~~choose ~~transfers~~not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a ~~customer~~single lease component. The Company has identified the common area maintenance (“CAM”) fee as a non-lease component and elected to not separate it from the lease component.

8Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization of ROU assets along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expenses for operating leases on a straight-line basis over the lease term.

ToThe ~~achieve~~Company ~~that~~reviews ~~core~~the ~~principle,~~ impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets on an annual basis. The Company ~~applies~~reviews the ~~five~~recoverability ~~steps~~of ~~defined~~its ~~under~~long-lived ~~ASC 606,~~assets ~~Revenue~~when ~~from~~events ~~Contracts~~or ~~with~~changes ~~Customers:~~in ~~(i) identify~~circumstances occur that indicate that the ~~contract(s) with a~~carrying ~~customer,~~value ~~(ii) identify~~of the ~~performance~~asset ~~obligations~~may innot be recoverable. The assessment of possible impairment is based on its ability to recover the ~~contract,~~carrying ~~(iii) determine~~value of the ~~transaction~~asset ~~price,~~from ~~(iv) allocate~~ the ~~transaction~~expected ~~price~~undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the ~~performance~~carrying ~~obligations~~amount of operating lease right-of-use assets in ~~the~~any ~~contract,~~tested asset group and ~~(v) recognize~~include ~~revenue~~the ~~when~~associated ~~(or~~lease ~~as)~~payments in the ~~entity~~undiscounted ~~satisfies a~~future ~~performance~~pre-tax ~~obligation~~cash flows.

~~The~~For ~~Company’s~~a ~~main business~~lease iswith ~~selling~~a ~~electronic~~term ~~products~~of 12 months or less, a lessee is permitted to 1)make ~~wholesale~~an ~~customers~~accounting ~~and~~policy 2)election ~~individual~~by ~~E-commerce~~class ~~customers,~~of ~~and~~underlying ~~the~~asset ~~Company’s~~not ~~revenue also~~to ~~came~~recognize ~~from~~lease 3)assets ~~the~~and ~~App~~lease ~~Service~~liability. ~~commission~~For ~~from~~the ~~providing~~lease ~~installation~~that with lease term of ~~applications~~one onyear or shorter, the Company’s ~~mobile~~has ~~devices~~elected ~~and~~to ~~revenue share~~not ~~from~~recognize ~~clicks~~right-of-use asset and ~~impressions~~lease liability.

~~Wholesale Customers~~Warranty

The Company ~~recognizes~~generally ~~a contract~~provides 30-day warranties or 1-year warranties for its product sold to its wholesale customer if an additional 1-3% of products on top of each customer’s order was not provided. For the sale transactions that were provided with a1-3% of products on top of each customer’s ~~when~~order, these additional 1-3% products were recognized as cost of goods sold at the ~~contract~~same time the respective sale is ~~committed~~recognized. inFor ~~writing~~the sales transactions that the Company provided limited warranties to both wholesale customers and e-commerce customers, the ~~rights~~Company records estimated future warranty costs under ASC 460, Guarantees. Such estimated costs for warranties are estimated at the time of ~~parties~~delivery, ~~including~~and ~~payment~~these ~~terms~~warranties are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranties are ~~identified~~based on actual warranty experience or the Company’s best estimate. As of March 31, 2026 and June 30, 2025, the ~~contract~~ ~~has~~Company ~~commercial~~accrued ~~substance~~warranty reserves of $472,697 and ~~collectability~~$328,438, isrespectively ~~probable~~recorded under accrued liabilities and other current liabilities, and these reserves were recognized based on estimation and judgment from the Company’s management.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based on the relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the performance obligation is satisfied. For all the Company’s wholesale contracts, the Company has identified one performance obligation, which is primarily satisfied at a point in time upon delivery of products based on terms stated in the contracts, either on Free on Board (“FOB”) shipping point or destination, depending on the specified contract. The Company’s customers generally either pay for the order in full balance prior to shipment or in partial payments with credit terms of 30 to 90 days after shipment depending on the specified contract. No sales returns are being given to its wholesale customers as they were being given additional 1-3% of products on top of each customer’s order (see Note 3 - “Warranty” below). There is no transaction prices allocated to future periods or future obligations and no revenue was recognized for performance obligations satisfied in previous periods.8

~~Warranty~~Practical expedient

The Company ~~generally~~applies ~~provides 30-day~~the ~~warranties~~practical orexpedient ~~1-year~~in ~~warranties~~ASC ~~for~~606 ~~its product sold~~ to ~~its~~expense ~~wholesale~~as ~~customer~~incurred, ~~if an additional 1-3% of products on top of each customer’s order was not provided. For~~ the ~~sale~~costs ~~transactions~~to ~~that~~obtain ~~were~~a ~~provided~~contract with ~~1-3%~~a ~~of products on top of each~~ customer~~’s order,~~ ~~these~~when ~~additional 1-3% products were recognized as cost of goods sold at~~ the ~~same~~amortization ~~time~~period ~~the~~is ~~respective~~one ~~sale~~year isor ~~recognized~~less. ~~For~~The ~~the sales transactions that the~~ Company ~~provided~~has ~~limited~~no ~~warranties~~material toincremental ~~both wholesale customers and e-commerce customers, the Company records estimated future warranty~~ costs ~~under ASC 460, Guarantees. Such estimated costs~~ for ~~warranties~~obtaining ~~are~~contracts ~~estimated~~with atcustomers ~~the~~that ~~time of delivery, and these warranties are not service warranties separately sold by~~ the Company. ~~Generally,~~expects the ~~estimated~~benefit ~~claim rates~~ of ~~warranties are~~those ~~based~~costs onto ~~actual~~be ~~warranty~~longer ~~experience~~than orone ~~the~~year, ~~Company’s~~which ~~best~~need ~~estimate.~~to Asbe ofrecognized ~~December~~as ~~31,~~assets ~~2025~~for ~~and June 30, 2025,~~ the ~~Company~~three ~~accrued warranty reserves of $439,475~~ and ~~$328,438,~~nine ~~respectively~~months ~~recorded~~ended ~~under~~March ~~accrued liabilities and other current liabilities~~31, ~~and~~2026 ~~these reserves were recognized based on estimation~~ and ~~judgment from the Company’s management~~2025.

~~E-commerce~~Interest ~~Customers~~expenses

~~The~~ ~~Company~~Interest ~~recognizes~~expenses ~~a contract~~consist ~~with~~primarily of interest incurred on convertible notes, which were cancelled in exchange for the holders’ pro rata share of the Closing Payment Shares following consummation of the Business Combination (see Note 4), unpaid purchase balance from a ~~customer~~vendor ~~when~~(see Note 10), and borrowings and others. For the three ~~contract~~months isended ~~committed~~March in31, ~~writing~~2026 and ~~signed~~2025, ~~electronically~~the onCompany anhad ~~e-commerce~~interest ~~platform~~expenses that amounted to $2,304,183 and $1,553,993, respectively. Of the ~~rights~~total ~~of parties~~interest expense for the three months ended March 31, ~~including~~2026, ~~payment~~$2,301,681 ~~terms~~was related to unpaid purchase balance and $2,502 ~~are~~to ~~identified~~borrowings and others. Of the total interest expense for the three months ended March 31, 2025, $1,553,993 was related to unpaid purchase balance. For the nine ~~contract~~months ~~has~~ended ~~commercial~~March ~~substance~~31, 2026 and ~~collectability~~2025, isthe ~~probable~~Company had interest expenses that amounted to $6,319,324 and $3,005,186, respectively. Of the total interest expense for the nine months ended March 31, 2026, $6,310,353 was related to unpaid purchase balance and $8,971 to borrowings and others. Of the total interest expense for the nine months ended March 31, 2025, $140,740 was related to convertible notes, $2,862,722 to unpaid purchase balance, and $1,724 to borrowings and others.

ARecently ~~performance~~adopted ~~obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of~~ accounting in ASC 606. For all the Company’s contracts, the Company has identified one performance obligation, which is primarily satisfied at a point in time upon delivery of products based on terms stated in the contracts on shipping destination at its individual customer shipping address, which is the Company’s obligation to deliver the product to the end user/individual customer, depending on the specified contract. The Company’s e-commerce customers pay the order in full balance prior to shipment to the e-commerce platform and the e-commerce platform withholds the payment for 30 days before remitting payments to the Company. The Company offered one month of free exchange or return. As a result, the Company recognized its revenues from the e-commerce customers, in the third-party e-commerce platform, net of estimated sales returns, discount, and rebate, as a consideration reducing the transaction price. Historically, sales returns were insignificant to the Company’s operations. For the three and six months ended December 31, 2025 and 2024, the Company did not recognize any estimated sales returns. There is no transaction prices allocated to future periods or future obligations and no revenue was recognized for performance obligations satisfied in previous periods.standards

9The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

~~App~~Recently ~~Service~~issued ~~Commission~~accounting ~~Revenue~~pronouncements not yet adopted

~~The~~In ~~Company~~December 2023, ~~provides~~FASB anissued ~~App Service~~ASU ~~(as~~No. 2023-09, ~~defined~~“Income ~~below)~~Taxes ~~by installing applications from App~~ (asTopic 740): ~~defined~~Improvements ~~below)~~to ~~developer~~Income ~~partners~~Tax ~~(the~~Disclosures” (“~~Partners~~ASU 2023-09”), ~~onto its~~which ~~mobile~~modifies ~~devices and facilitating~~ the ~~distribution~~rules ofon ~~these~~income ~~devices~~tax disclosures to ~~end~~require ~~users~~entities ~~(the~~to ~~“App~~disclose ~~Service”~~(1). specific ~~The~~categories ~~App~~in ~~Service~~the ~~commission revenue~~rate isreconciliation, ~~generated when end users interact with Partner-developed mobile applications~~ (~~“App” or “Apps”~~2) ~~installed on~~ the ~~Company’s~~income ~~mobile~~or ~~devices,~~loss ~~such~~from ascontinuing ~~through~~operations ~~clicks~~before ~~and/or~~income ~~impressions,~~tax ~~App~~expense ~~activations, and/~~or ~~additional~~benefit ~~App~~(separated ~~installations, triggering~~between ~~the~~domestic ~~Partners’~~and ~~obligation~~foreign) toand ~~pay the Company its App revenue share~~ (~~service commission~~3). income ~~The~~tax ~~revenue~~expense ~~shares~~or ~~are~~benefit ~~considered variable~~from ~~consideration.~~continuing ~~Those~~operations ~~revenue~~(separated ~~shares~~by ~~related to clicks~~federal, ~~impressions,~~state and ~~additional~~foreign). ASU 2023-09 also ~~App~~requires ~~installations~~entities ~~are~~to ~~determined~~disclose ~~based~~their ~~on the~~income ~~contract~~tax ~~price~~payments ~~negotiated~~to ~~between~~international, ~~the~~federal, ~~Partners~~state and ~~the~~local ~~third-party advertisers~~jurisdictions, ~~while~~among ~~those~~other ~~related to App activations are determined based on the number of App activations~~changes. The ~~Partners~~guidance ~~are~~is ~~primarily~~effective ~~responsible~~for inannual ~~developing~~periods ~~and~~beginning ~~maintaining~~after ~~the App~~December 15, ~~and~~2025. ~~are~~Early ~~the~~adoption ~~primary obligor~~is topermitted ~~users~~for ofannual ~~the~~consolidated ~~application~~financial ~~and~~statements ~~determine~~that ~~and~~have ~~control~~not ~~the~~yet ~~revenue~~been ~~shares~~issued ~~(service commission) to pay the Company. No refund~~ or ~~return~~ ~~policy~~made isavailable ~~provided~~for ~~to the Partners~~issuance. ASU 2023-09 should ~~The~~be ~~Company~~applied ~~recognizes~~on ~~App Service commission revenue at~~ a ~~point~~prospective inbasis, ~~time~~but ~~when~~retrospective ~~the~~application ~~activations and service commission~~ is ~~earned,~~permitted. ~~which~~The Company is ~~when~~currently evaluating the ~~app~~impact ~~activations,~~these ~~clicks/impressions,~~standards orwill ~~additional~~have ~~app~~on ~~installations~~its ~~occur,~~financial ~~and when the uncertainty of the variable consideration is resolved~~statements.

~~Practical~~In ~~expedient~~November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact these standards will have on its financial statements.

~~The~~In ~~Company~~July ~~applies~~2025, ~~the~~FASB ~~practical expedient~~issued inASU ~~ASC~~2025-05, ~~606~~Financial toInstruments ~~expense~~– asCredit ~~incurred~~Losses (Subtopic 326) (“ASU 2025-05”), to simply the Current ~~costs~~Expected toCredit ~~obtain~~Loss (CECL) amodel for accounts receivable and contract ~~with~~assets by offering a ~~customer~~practical ~~when~~expedient ~~the~~to ~~amortization~~use ~~period~~current isconditions ~~one~~for ~~year~~forecasts ~~or less.~~and ~~The~~an ~~Company~~accounting ~~has~~policy noelection ~~material~~to ~~incremental~~consider ~~costs~~post-balance sheet collections, allowing for ~~obtaining~~early ~~contracts~~adoption ~~with~~for ~~customers~~financial ~~that~~statements ~~the~~not ~~Company~~yet ~~expects~~issued. ~~the~~The ~~benefit~~guidance ofis ~~those costs~~effective tofor beannual ~~longer~~reporting ~~than~~periods ~~one~~beginning ~~year~~after December 15, ~~which~~2025, ~~need~~but toearly beadoption ~~recognized~~is aspermitted. ~~assets~~The ~~for~~Company ~~the~~is ~~three~~currently ~~and~~evaluating ~~six~~the ~~months~~impact ~~ended~~these ~~December~~standards ~~31,~~will ~~2025~~have ~~and~~on ~~2024~~its financial statements.

~~Interest expenses~~9

~~Interest expenses consist primarily of interest incurred on convertible notes, unpaid purchase balance from a vendor (see~~ Note ~~10), and borrowings and others. For the~~ three months ended December 31, 2025 and 2024, the Company had interest expenses that amounted to $2,003,236 and $1,042,198, respectively. Of the total interest expense for the three months ended December 31, 2025, $2,000,569 was related to unpaid purchase balance and $2,667 to borrowings and others. Of the total interest expense for the three months ended December 31, 2024, $1,042,198 was related to unpaid purchase balance. For the six months ended December 31, 2025 and 2024, the Company had interest expenses that amounted to $4~~,015,141~~ ~~and $1,451,193, respectively. Of the total interest expense for the six months ended December 31, 2025, $4,008,672 was related to unpaid purchase balance and $6,469 to borrowings and others.~~— OfReverse ~~the total interest expense for the six months ended December 31, 2024, $140,740 was related to convertible notes, $1,305,933 to unpaid purchase balance, and $4,520 to borrowings and others.~~recapitalization

~~Lease~~ Upon the consummation of the Business Combination, these transactions were completed, based on the Company’s capitalization as of September 26, 2024 (the “Closing Date”): (i) all 2,270,096 ACAC outstanding shares were converted on a one-for-one basis into the Company’s Common Stock; (ii) all issued and outstanding shares of Old Foxx Common Stock were cancelled in exchange for the rights for Old Foxx Shareholders, including the holders of Old Foxx’s convertible promissory notes upon the conversion of the convertible promissory notes and their interests into Old Foxx Common Stock immediately prior to Closing (see Note 13), to receive such stockholder’s pro rata share of 5,000,000 shares (“Closing Payment Shares”) of the Company’s Common Stock were cancelled in exchange for the right by the Old Foxx Shareholders to receive a pro rata share of 3,303,333 shares of the Company’s Common Stock at the exchange ratio of 3.3033; (iii) 4,200,000 shares (“Earnout Shares”) of the Company’s Common Stock were reserved for issuance to Old Foxx’s stockholders subject to the vesting schedule based on the Company’s financial performance for the fiscal years ended June 30, 2025 and 2024. The Earnout Shares were forfeited since the Company did not meet the financial performance threshold; (iv) all issued and outstanding 12,156,417 ACAC warrants were converted on a one-for-one basis into warrants of the Company.

The ~~Company~~following ~~accounts~~table ~~for leases~~presents in accordance with ASC 842, Leases. The Company categorizes leases with contractual terms longer than 12 months as either operating or finance. Finance leases are generally those leases that substantially utilize or pay for the ~~entire~~number asset over their estimated life. All other leases are categorized as operating leases. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the ~~lease.~~Company’s Ascommon ofstock ~~December~~issued ~~31, 2025~~ and ~~June~~outstanding ~~30,~~immediately ~~2025,~~following the ~~Company does~~Reverse ~~not~~Recapitalization ~~have~~(as ~~finance~~defined ~~leases.~~below):

The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.

	Common
	Stock
ACAC’s common stock outstanding prior to Reverse Recapitalization		3,971,634
Less: redemption of ACAC’s common stock		(1,744,663	)
Common stock issued to underwriter		43,125
Conversion of Old Foxx’s common stock into Foxx’s common stock		3,303,333
Conversion of Old Foxx’s convertible promissory notes into Foxx’s common stock		1,696,668
Total common stock		7,270,097

10Old Foxx was determined to be the accounting acquirer given Old Foxx effectively controlled the combined entity after the Business Combination. The transaction is accounted for as a reverse recapitalization (“Reverse Recapitalization”), which is equivalent to the issuance of common stock by Old Foxx for the net monetary assets of ACAC, accompanied by a recapitalization. Old Foxx is determined as the accounting acquirer and the historical financial statements of Old Foxx became the Company’s historical financial statements, with retrospective adjustments to give effect of the Reverse Recapitalization. The net assets of ACAC were recognized as of Closing date at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Old Foxx and Old Foxx’s operations are the only ongoing operations of the Company.

~~Operating~~ ~~lease~~In ~~right-of-use (“ROU”)~~connection ~~assets~~with ~~and liabilities are initially recorded based on~~ the ~~present~~Reverse ~~value of lease payments over the lease term~~Recapitalization, ~~which includes~~ the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the implicit rate for each of the Company’s ~~leases~~raised isapproximately not readily determinable, the Company uses incremental borrowing rate as effective interest rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments$19. ~~Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. According to ASC~~7 ~~842-10-15-37,~~million ~~a lessee may, as an accounting policy election by class~~ of ~~underlying asset~~proceeds, ~~choose~~presented ~~not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component~~ as acash ~~single~~flows ~~lease component. The Company has identified the common area maintenance (“CAM”) fee as a non-lease component and elected to not separate it~~ from ~~the~~financing ~~lease component~~activities.

~~Operating~~The ~~lease~~following ~~assets~~table ~~are amortized~~reconciles ~~on a straight-line basis in operating lease expense over~~ the ~~lease~~elements ~~term on the consolidated statements~~ of ~~operations. The related amortization of ROU assets along with~~ the ~~change~~Reverse inRecapitalization ~~the~~to ~~operating lease liabilities are separately presented within~~ the ~~cash flows from operating activities on the~~ consolidated statements of cash flows. ~~The~~and ~~Company~~the ~~records~~changes ~~lease~~in ~~expenses~~stockholders’ ~~for operating leases on a straight-line basis over the lease term.~~deficit:

The Company reviews the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets on an annual basis. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease right-of-use assets in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the three and six months ended December 31, 2025 and 2024, the Company did not recognize impairment loss against its right-of-use assets.

	September 26,
	2024
Funds held in ACAC’s trust account	$	21,627,541
Funds held in ACAC’s operating cash account		298,643
Less: payments of transaction costs incurred by ACAC		(2,215,896	)
Proceeds from the Reverse Recapitalization		19,710,288
Less: non-cash net deficit assumed from ACAC		(21,810,926	)
Net distributions from issuance of Common Stock upon the Reverse Recapitalization	$	(2,100,638	)

~~For~~ aThe ~~lease~~shares ~~with~~and acorresponding ~~term~~capital ~~of 12 months~~amounts orand ~~less,~~all aper ~~lessee~~share isdata ~~permitted~~related to ~~make~~Old anFoxx’s ~~accounting~~outstanding ~~policy~~common ~~election~~stock byprior ~~class of underlying asset not~~ to ~~recognize lease assets and lease liability. For~~ the ~~lease~~Reverse ~~that~~Recapitalization ~~with~~have ~~lease~~been ~~term~~retroactively ofadjusted ~~one~~using ~~year or shorter,~~ the Exchange ~~Company~~Ratio ~~has elected to not recognize right-~~of~~-use asset and lease liability~~ 3.3033.

~~Stock-based compensation~~ 10

~~The~~Note 5 ~~measurement~~— Accounts ~~and recognition of compensation expense for all stock-based payment awards made to employees and directors~~receivable, including employee stock options and restricted stock, is based on estimated fair value of the awards on the date of grant, of which stock options uses the Black-Scholes option pricing model, inclusive of assumptions for risk-free interest rates, expected dividends, expected terms, expected volatility, and the fair value of the underlying stock, and restricted stock is based on the market value of the Company’s common stock. The value of awards that are ultimately expected to vest is recognized as expense on a straight-line basis over the vesting service periods in the consolidated statements of operations. Forfeitures are accounted for as they occur.net

~~Warrants~~As of March 31, 2026 and June 30, 2025, accounts receivable consist of the following:

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

	March 31, 2026			June 30, 2025
	(Unaudited)
Accounts receivable	$	5,960,799		$	7,382,699
Less: allowance for credit losses		(1,848,648	)		(595,907	)
Accounts receivable, net	$	4,112,151		$	6,786,792

For ~~issued~~the orthree ~~modified~~months ~~warrants that~~ended ~~meet~~March ~~all~~31, of2026 and 2025, the ~~criteria~~Company ~~for~~recognized ~~equity~~$1,252,741 ~~classification~~and $401,988 ~~the~~on ~~warrants~~net ~~are~~provision ~~required~~for toallowance beon ~~recorded~~credit aslosses afor ~~component~~accounts ofreceivable, ~~equity~~respectively. atFor the ~~time of~~nine ~~issuance.~~months ~~The~~ended ~~Company~~March ~~determined~~31, ~~that~~2026 ~~upon~~and ~~further~~2025, ~~review~~the ofCompany ~~the~~recognized ~~warrant~~$1,370,122 ~~agreement~~and $464,988 ~~the~~on ~~Company~~net ~~concluded~~provision ~~that~~for ~~its~~allowance ~~warrants~~on ~~qualify~~ credit losses for ~~equity~~accounts ~~accounting~~receivable, ~~treatment~~respectively.

11Movement of allowance for credit losses consisted of the following for the periods ended indicated:

Upon completion of the Business Combination, all of ACAC’s outstanding public and private warrants (See Note 15) were replaced by the Company’s public and private warrants. The Company treated such warrants replacement as a warrant modification and no incremental fair value was recognized for the three and six months ended December 31, 2025 and 2024.

	For the Three Months Ended March 31,
	2026			2025
	(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	478,526		$	63,000
Addition		1,556,534			401,988
Recovery		(186,412	)		-
Balance as of the end of the period	$	1,848,648		$	464,988

Basic and diluted loss per share

	For the Nine Months Ended March 31,
	2026			2025
	(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	595,907		$	-
Addition		1,597,648			464,988
(Recovery)		(344,907	)		-
Balance as of the end of the period	$	1,848,648		$	464,988

~~Basic~~Note 6 ~~EPS is measured as net loss divided by the weighted average common shares outstanding for the period.~~— Inventories

~~Diluted~~As ~~net loss per share attributable to common stockholders adjusts basic loss per share for the potentially dilutive impact~~ of ~~non-participating~~March ~~shares~~31, of2026 ~~common stock.~~and ~~Dilutive~~June ~~equivalent~~30, ~~shares~~2025, ~~are~~inventories ~~excluded~~consist ~~from the computation~~ of ~~diluted loss per share if their effects would be anti-dilutive. Common stock issuable upon~~ the conversion of the warrants and the vesting of RSUs (defined in Note 15) are using the treasury stock method. Common stock issuable in connection with the Company’s convertible promissory notes are using the if-converted method. following:

Recently adopted accounting standards

	March 31, 2026		June 30, 2025
	(Unaudited)
Finished goods	$	6,965,109	$	12,686,739
Total inventories	$	6,965,109	$	12,686,739

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.11

~~The~~ ~~Company~~For ~~does~~the ~~not~~three ~~believe any~~months ~~recently~~ended ~~issued~~March ~~but~~31, ~~not~~2026 ~~yet~~and ~~effective~~2025, ~~accounting~~the ~~standards,~~impairment iffor ~~currently~~inventories ~~adopted~~amounted to $3,092,282 ~~would~~and ~~have~~$0, respectively. aFor ~~material~~the ~~effect~~nine onmonths ~~the~~ended ~~Company’s balance~~March ~~sheets~~31, ~~statements~~2026 ofand ~~operations~~2025, ~~and~~the ~~comprehensive~~impairment ~~loss,~~for ~~and~~inventories ~~statements~~amounted ofto ~~cash~~$4,663,144 ~~flows~~and $0, respectively.

~~Recently~~Note 7 ~~issued~~— Contract ~~accounting pronouncements not yet adopted~~assets

InThe ~~December 2023,~~following ~~FASB issued~~table ~~ASU~~presents ~~No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies~~ the ~~rules~~Company’s oncontract ~~income~~assets ~~tax~~balances disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes~~. The~~ guidance is effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual consolidated financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact these standards will have on its financial statements.therein:

In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact these standards will have on its financial statements.

	Three Months Ended March 31						Nine Months Ended March 31
	2026			2025			2026			2025
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	138,664		$	1,603,267		$	454,842		$	1,682,289
Add: net increase in current period contract asset		-			434,910			41,724			1,663,773
Less: inventory received from beginning contract asset		(96,940	)		(374,404	)		(454,842	)		(1,682,289	)
Total contract assets as the end of the period	$	41,724		$	1,663,773		$	41,724		$	1,663,773

~~In July 2025, FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Subtopic 326) (“ASU 2025-05”), to simply the~~Note ~~Current Expected~~8 ~~Credit Loss~~— ~~(CECL)~~Prepaid ~~model~~expenses ~~for accounts receivable~~ and ~~contract~~other ~~assets by offering a practical expedient to use~~ current conditions for forecasts and an accounting policy election to consider post-balance sheet collections, allowing for early adoption for financial statements not yet issued. The guidance is effective for annual reporting periods beginning after December 15, 2025, but early adoption is permitted. The Company is currently evaluating the impact these standards will have on its financial statements.assets

12As of March 31, 2026 and June 30, 2025, prepaid expenses and other current assets consist of the following:

Note 4 — Reverse recapitalization

	March 31, 2026			June 30, 2025
	(Unaudited)
Other receivables⁽¹⁾	$	213,565		$	177,814
Prepaid rent		-			355,677
Prepaid research and development fees		259,828			198,328
Prepaid insurance and subscriptions		391,265			153,659
Prepaid professional fee		13,364			96,839
Prepayment to be refunded⁽²⁾		616,116			1,116,116
Advances to a third party		18,500			19,500
Other prepaid expenses		6,956			37,161
Less: allowance for credit losses ^{(1) (2)}		(829,681	)		(317,282	)
Total prepaid expenses and other current assets	$	689,913		$	1,837,812

~~Upon~~(1) ~~the~~This ~~consummation~~represents receivables from payments made on behalf of ~~the~~ ~~Business~~a ~~Combination,~~vendor ~~the~~and ~~following~~other ~~transactions~~fees ~~were~~and ~~completed~~bank fee receivables. $213,565 ~~based~~and on$48,317 allowance for credit losses was recorded for the ~~Company’s~~balances ~~capitalization~~due to aging of the receivables as of ~~September~~March 2631, ~~2024 (the~~2026 ~~“Closing~~and ~~Date”):~~June 30, 2025, respectively.

(i2) ~~All~~This ~~70,721~~represents ~~shares~~prepayment ofto ~~Class~~be Arefunded ~~common~~resulting ~~stock~~from ofthe ~~ACAC~~cancellation ~~(“ACAC public shares”), net~~ of ~~redemption~~purchase oforders. 1$616,~~744,663~~116 ~~ACAC~~and ~~public shares at~~ $~~11.75 per share~~268,965 ~~and~~allowance ~~all~~for ~~2,156,250~~credit ~~shares~~losses ofwas ~~Class~~recorded Bfor ~~common~~the ~~stock~~balances ofdue ~~ACAC~~to ~~(“ACAC~~aging ~~private~~of ~~shares”),~~the ~~were~~prepayments ~~converted~~as onof aMarch ~~one-for-one~~31, ~~basis~~2026 ~~into~~and ~~the~~June ~~Company’s~~30, ~~Common~~2025, ~~Stock~~respectively.

~~(ii)~~ 43For the three months ended March 31,~~125~~ ~~shares~~2026 ofand 2025, the Company’s ~~Common~~recognized ~~Stock~~$200,751 ~~were~~and ~~issued~~$0 toon ~~ACAC’s~~provision ~~underwriter~~of allowance on credit losses for prepaid expenses and other current assets, EFrespectively. ~~Hutton~~For ~~LLC~~the nine months ended March 31, in2026 ~~connection~~and ~~with~~2025, the ~~Business~~Company ~~Combination~~recognized $401,695 and $0 on provision of allowance on credit losses for prepaid expenses and other current assets, respectively.

~~(iii)~~Movement ~~All issued and outstanding shares~~ of ~~Old~~allowance ~~Foxx Common Stock were cancelled in exchange~~ for ~~the~~credit ~~rights~~losses ~~for~~consisted ~~Old Foxx Shareholders, including the holders~~ of ~~Old Foxx’s convertible promissory notes upon~~ the ~~conversion~~following of the convertible promissory notes and their interests into Old Foxx Common Stock immediately prior to Closing (see Note 13), to receive such stockholder’s pro rata share of 5,000,000 shares (“Closing Payment Shares”) of the Company’s Common Stock, including: (x) 1,696,668 shares of Foxx’s $0.0001 par value common stock were issued to Old Foxx’s convertible promissory notes holders in connection with the Business Combination (see Note 13); (y) 1,000,000 outstanding shares of Old Foxx Common Stock issued to Old Foxx Shareholders (other than holders of the convertible notes) were cancelled in exchange for the ~~right~~period byended the ~~Old~~date ~~Foxx Shareholders to receive a pro rata share of 3,303,333 shares of the Company’s Common Stock at the exchange ratio of 3.3033.~~indicated:

(iv) 4,200,000 shares (“Earnout Shares”) of the Company’s Common Stock were reserved for issuance to Old Foxx’s stockholders subject to the vesting schedule as follows:

	For the Three Months Ended March 31,
	2026		2025
	(Unaudited)		(Unaudited)
Balance as of the beginning of the period	$	518,226	$	-
Addition		311,455		-
Balance as of the end of the period	$	829,681	$	-

~~in connection with the financial performance for the fiscal year ended June 30, 2024:~~12

● 700,000 Earnout Shares would be issued to Old Foxx Shareholders on a pro rata basis if and only if the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2024 (“2024 Foxx Audited Financial Statements”), prepared in accordance with U.S. GAAP and filed with the SEC on Form 10-K by Company after Closing, reflect revenue of the Company for the fiscal year ended June 30, 2024 (the “2024 Foxx Revenue”) to be no less than $67,000,000 (including $67,000,000) and less than $84,000,000 (excluding $84,000,000);

	For the Nine Months Ended March 31,
	2026		2025
	(Unaudited)		(Unaudited)
Balance as of the beginning of the period	$	317,282	$	-
Addition		512,399		-
Balance as of the end of the period	$	829,681	$	-

●Note 9 ~~1,400,000~~— Property ~~Earnout Shares would be issued to Old Foxx Shareholders on a pro rata basis if~~ and ~~only if the 2024 Foxx Revenue reflected in the 2024 Foxx Audited Financial Statements would be no less than $84~~equipment,~~000,000~~ ~~(including $100,000,000) and less than $100,000,000 (excluding $100,000,000);~~net

●As ~~2,100,000~~of ~~Earnout~~March ~~Shares~~31, ~~would~~2026 beand ~~issued~~June to30, ~~Old~~2025, ~~Foxx~~property ~~Shareholders on a pro rata basis if~~ and ~~only~~equipment, ifnet ~~the~~consist ~~2024~~of ~~Foxx Revenue reflected in~~ the ~~2024 Foxx Audited Financial Statements would be no less than $100,000,000 (including $100,000,000).~~following:

in connection with the financial performance for the fiscal year ended June 30, 2025:

	March 31, 2026			June 30, 2025
	(Unaudited)
Computer and office equipment	$	11,808		$	12,580
Equipment		23,597			30,697
Furniture and fixtures		3,432			3,432
Vehicles		191,091			191,091
Subtotal		229,928			237,800
Less: accumulated depreciation		(138,994	)		(106,078	)
Total property and equipment, net	$	90,934		$	131,722

● ~~700,000~~Depreciation ~~Earnout~~expense ~~Shares would be issued to Old Foxx Shareholders on a pro rata basis if and only if the Company’s audited consolidated financial statements~~ for the ~~fiscal~~three ~~year~~months ended ~~June~~March 3031, ~~2025~~2026 (“and 2025 amounted ~~Foxx~~to ~~Audited Financial Statements”)~~$11,387 ~~prepared in accordance with U.S. GAAP~~ and ~~filed with the SEC on Form 10-K by the Company after Closing~~$12,364, ~~reflect~~respectively. ~~revenue~~Depreciation ofexpense ~~the Company~~ for the ~~fiscal~~nine ~~year~~months ended ~~June~~March 3031, ~~2025~~2026 ~~(the~~and “2025 amounted ~~Foxx Revenue”)~~ to ~~be no less than~~ $7734,~~050,000~~752 ~~(including $77,050,000)~~ and ~~less than~~ $9635,~~600~~951,~~000~~ ~~(excluding~~respectively. ~~$96,600,000);~~

●Note 10 ~~1,400,000~~— Other ~~Earnout~~payables ~~Shares would be issued to Old Foxx Shareholders on a pro rata basis if~~ and ~~only~~accrued ~~if the 2025 Foxx Revenue reflected in the 2025 Foxx Audited Financial Statements would be no less than $96,600,000 (including $96,600,000) and less than $115,000,000 (excluding $115,000,000);~~liabilities

13As of March 31, 2026 and June 30, 2025, other payables and accrued liabilities consist of the following:

● 2,100,000 Earnout Shares would be issued to Old Foxx Shareholders on a pro rata basis if and only if the 2025 Foxx Revenue reflected in the 2025 Foxx Audited Financial Statements would be no less than $115,000,000 (including $115,000,000).

	March 31, 2026		June 30, 2025
	(Unaudited)
Payroll and payable tax payable	$	82,739	$	174,684
Interest payable*		3,110,408		2,309,106
Professional fee payable		157,244		168,186
Accrued warranty expenses		472,697		328,438
Excise tax payable**		556,620		556,620
Refunds payable		111,126		-
Research and development (“R&D”) fee payable***		934,500		-
Others		51,660		33,925
Total other payables and accrued liabilities	$	5,476,994	$	3,570,959

~~The~~* ~~Earnout~~On ~~Shares~~April in9, ~~connection~~2024, ~~with~~ the ~~financial~~Company ~~performance~~and ~~for~~a vendor entered into a purchase and financing agreement, pursuant to which the ~~fiscal~~Company ~~years~~is ~~ended~~subject to interest of 1.5% per month, or 0.05% per day, on the unpaid purchase amount, after forty-five (45) days from the date of shipment. There is an additional 0.083% per day if after 120 days from the date of shipment. As of March 31, 2026 and June 30, 2025, ~~and~~the ~~2024~~accounts ~~were~~payable ~~forfeited~~– ~~since~~supplier ~~the~~financing ~~Company~~balance ~~did~~due ~~not~~to ~~meet~~this ~~the~~vendor ~~financial performance~~were ~~threshold~~$32,327,516 and $26,244,987, respectively.

(v) All issued and outstanding 12,156,417 ACAC warrants were converted on a one-for-one basis into warrants of the Company, including conversion from (x) 4,312,500 ACAC’s public warrants, (y) 5,240,000 ACAC’s private warrants, and (z) 2,603,923 ACAC’s working capital warrants.

These balances were carried from ACAC, and payable by the Company, as a result on 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023 under the Inflation Reduction Act of 2022.

***

In January 2026, the Company and a third party entered into a R&D agreement, pursuant to which the third party will provide the Company technical development services for the operating system of the Company’s mobile phone products in three phases, and the Company will pay a total of $3,115,00 in four milestone-based installments. As of March 31, 2026, the Company was obligated to pay the first installment of $934,500. These balances represented balances due to a third party developer for their technical development services performed on the operating system.

~~The following table presents the number of the Company’s common stock issued and outstanding immediately following the Reverse Recapitalization (as defined below):~~13

	Common
	Stock
ACAC’s common stock outstanding prior to Reverse Recapitalization		3,971,634
Less: redemption of ACAC’s common stock		(1,744,663	)
Common stock issued to underwriter		43,125
Conversion of Old Foxx’s common stock into Foxx’s common stock		3,303,333
Conversion of Old Foxx’s convertible promissory notes into Foxx’s common stock		1,696,668
Total common stock		7,270,097

Note 11 — Contract liabilities

~~Old~~Contract ~~Foxx~~liabilities ~~was~~consist ~~determined~~of ~~to be~~customer the accounting acquirer given Old Foxx effectively controlled the combined entity after the Business Combination. The transaction is accounted for as a reverse recapitalization (“Reverse Recapitalization”)deposits, which isare ~~equivalent~~recorded toon the ~~issuance~~consolidated ofbalance ~~common~~sheets ~~stock by~~when ~~Old Foxx for~~ the ~~net~~Company ~~monetary~~has ~~assets~~received ~~of ACAC~~consideration, ~~accompanied~~or byhas ~~a recapitalization. Old Foxx is determined as~~ the ~~accounting~~right ~~acquirer and~~to ~~the~~receive ~~historical~~consideration, ~~financial~~in ~~statements~~advance of ~~Old~~transferring ~~Foxx became~~ the ~~Company’s~~performance ~~historical~~obligations ~~financial~~under ~~statements, with retrospective adjustments to give effect of~~ the ~~Reverse~~contract ~~Recapitalization. The net assets of ACAC were recognized as of Closing date at historical cost, with no goodwill or other intangible assets recorded. Operations prior~~ to the ~~Business Combination are those of Old Foxx and Old Foxx’s operations are the only ongoing operations of the Company~~customer.

InThe ~~connection~~following ~~with~~table ~~the~~presents ~~Reverse Recapitalization,~~ the Company ~~raised approximately $19.7 million of proceeds, presented as cash flows from financing activities, which included the contribution of approximately $21.6 million of funds held in ACAC~~’s ~~trust~~contract ~~account,~~liabilities ~~approximately~~balances ~~$0.3 million of cash held in ACAC’s operating cash account,~~ and ~~payments~~changes ~~of approximately $2.2 million in transaction costs incurred by ACAC.~~therein:

The following table reconciles the elements of the Reverse Recapitalization to the consolidated statements of cash flows and the changes in stockholders’ deficit:

	Three Months Ended March 31						Nine Months Ended March 31
	2026			2025			2026			2025
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance, beginning of the period	$	23,525		$	784,157		$	378		$	649,450
Add: net increase in current period contract liabilities		123,500			211,072			142,852			211,072
Less: revenue recognized from beginning contract liabilities		(4,173	)		(784,157	)		(378	)		(649,450	)
Total contract liabilities	$	142,852		$	211,072		$	142,852		$	211,072

	September 26,
	2024
Funds held in ACAC’s trust account	$	21,627,541
Funds held in ACAC’s operating cash account		298,643
Less: payments of transaction costs incurred by ACAC		(2,215,896	)
Proceeds from the Reverse Recapitalization		19,710,288
Less: non-cash net deficit assumed from ACAC		(21,810,926	)
Net distributions from issuance of Common Stock upon the Reverse Recapitalization	$	(2,100,638	)

Note 12 — Related party balances and transactions

~~The~~Related ~~shares~~party and corresponding capital amounts and all per share data related to Old Foxx’s outstanding common stock prior to the Reverse Recapitalization have been retroactively adjusted using the Exchange Ratio of 3.3033.balances

14Prepaid expenses to a related party

Note 5 — Accounts receivable, net

Name of Related Party

Relationship

Nature

March 31,
2026

June 30,
2025

(Unaudited)

Azure Horizon LLC (“Azure”)

Owned by an immediate family member of the Company’s 10% or more shareholder (a “10%+ shareholder”)

Prepaid service fees

8,000

AsAmount ofdue ~~December~~from ~~31,~~related ~~2025~~parties ~~and June~~- ~~30, 2025, accounts receivable consist of the following:~~current

	December 31, 2025			June 30, 2025
	(Unaudited)
Accounts receivable	$	6,796,632		$	7,382,699
Less: allowance for credit losses		(478,526	)		(595,907	)
Accounts receivable, net	$	6,318,106		$	6,786,792

Amount due from related parties consists of the following:

For the three months ended December 31, 2025 and 2024, the Company recognized $157,369 and $63,000 on net recovery and provision for allowance on credit losses, respectively. For the six months ended December 31, 2025 and 2024, the Company recognized $117,381 and $63,000 on net recovery and provision for allowance on credit losses, respectively.

Name of Related Party

Relationship

Nature

March 31,
2026

June 30,
2025

(Unaudited)

Haitao Cui⁽¹⁾

Executive Vice President and Director of the Company

Paid on behalf fees

20,868

Luying Mei⁽¹⁾

Executive Vice President of Sales of Old Foxx

Paid on behalf fees

7,852

Total

28,720

~~Movement~~(1) In November 2025, two executive officers of ~~allowance~~the Company incurred a reimbursement obligation to the Company for ~~credit~~ ~~losses~~withholding ~~consisted~~taxes paid on their behalf in connection with the vesting of Restricted Stock Units (RSUs). While the ~~following~~arrangement was initially structured to be settled via semi-monthly payroll deductions, the Company and the officers subsequently amended the terms of the arrangement to ensure compliance with Section 402 of the Sarbanes-Oxley Act of 2002. Pursuant to the amended terms, the officers have committed to fully reimburse the Company for the ~~periods~~remaining ~~ended~~balance ~~indicated:~~in a single lump-sum payment prior to May 31, 2026.

	For the Three Months Ended December 31,
	2025			2024
	(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	635,895		$	-
Addition		25,166			63,000
Recovery		(182,535	)		-
Balance as of the end of the period	$	478,526		$	63,000

	For the Six Months Ended December 31,
	2025			2024
	(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	595,907		$	-
Addition		43,051			63,000
(Recovery		(160,432	)		-
Balance as of the end of the period	$	478,526		$	63,000

Other payable — related party

~~Note 6~~Other payable — ~~Inventories~~related parties consists of the following:

As of December 31, 2025 and June 30, 2025, inventories consist of the following:

Name of Related Party	Relationship	Nature	March 31, 2026		June 30, 2025
			(Unaudited)
Wuhan Haoxun Communication Technology Co. Ltd (“Wuhan Haoxun”)⁽¹⁾	Controlled by an immediate family member of the Company’s 10%+ shareholder	Research and development fees	$	-	$	18,792
Acri Capital Sponsor LLC	the Company’s 10%+ shareholder	Unconverted working capital loan balance in ACAC		-		245,509
Swiftfulfill Warehouse LLC (“Swiftfulfill”) ⁽²⁾	Owned by an immediate family member of the Company’s 10%+ shareholder	Consulting fees and expenses paid on behalf of the Company		7,000		8,566
“Joy” Yi Hua	Chairwoman, Chief Financial Officer and Director of the Company	Expenses paid on behalf of the Company		-		50
Total			$	7,000	$	272,917

	December 31, 2025		June 30, 2025
	(Unaudited)
Finished goods	$	10,182,579	$	12,686,739
Total inventories	$	10,182,579	$	12,686,739

(1)	On September 1, 2022, the Company entered into an agreement with Wuhan Haoxun for the research and development project. The project was completed during the year ended June 30, 2025.

15(2) On October 1, 2024, the Company entered into a consulting agreement to receive consulting services provided by Swiftfulfill, a consulting company which is owned by an immediate family member of a 10%+ shareholder.

~~For~~Related ~~the~~party three months ended December 31, 2025 and 2024, the impairment for inventories amounted to $1,086,547 and $0, respectively. For the six months ended December 31, 2025 and 2024, the impairment for inventories amounted to $1,570,862 and $0, respectively.transactions

~~Note 7~~Research ~~— Contract~~and ~~assets~~development expenses

The following table presents the Company’s contract assets balances and changes therein:

Name of Related Party	Relationship	For the Three Months Ended March 31, 2026		For the Three Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Wuhan Haoxun ⁽¹⁾	Controlled by an immediate family member of the Company’s 10%+ shareholder	$	-	$	22,792

	Three Months Ended December 31						Six Months Ended December 31
	2025			2024			2025			2024
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance as of the beginning of the period	$	265,128		$	1,713,430		$	454,842		$	1,682,289
Add: net increase in current period contract asset		68,068			436,284			104,914			1,603,267
Less: inventory received from beginning contract asset		(194,532	)		(546,447	)		(421,092	)		(1,682,289	)
Total contract assets as the end of the period	$	138,664		$	1,603,267		$	138,664		$	1,603,267

Note 8 — Prepaid expenses and other current assets

Name of Related Party	Relationship	For the Nine Months Ended March 31, 2026		For the Nine Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Wuhan Haoxun ⁽¹⁾	Controlled by an immediate family member of the Company’s 10%+ shareholder	$	-	$	91,168

As(1) ofOn ~~December~~September 311, ~~2025~~2022, ~~and June~~the ~~30,~~Company ~~2025,~~entered ~~prepaid~~into ~~expenses~~an agreement with Wuhan Haoxun for a research and ~~other~~development ~~current~~project. ~~assets~~The ~~consist~~project ofwas completed during the ~~following:~~year ended June 30, 2025.

	December 31, 2025			June 30, 2025
	(Unaudited)
Other receivables(1)	$	224,708		$	177,814
Prepaid rent		364,801			355,677
Prepaid research and development fees		165,828			198,328
Prepaid insurance and subscriptions		484,043			153,659
Prepaid professional fee		13,364			96,839
Prepayment to be refunded(2)		616,116			1,116,116
Advances to a third party		19,500			19,500
Other prepaid expenses		6,261			37,161
Less: allowance for credit losses (1) (2)		(518,226	)		(317,282	)
Total prepaid expenses and other current assets	$	1,376,395		$	1,837,812

Consulting expenses

(1) This represents receivables from payments made on behalf of a vendor and other fees and freight claim receivables. $66,203 allowance for credit losses was recorded for the balances due to aging of the receivables.

Name of Related Party	Relationship	For the Three Months Ended March 31, 2026		For the Three Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Azure⁽¹⁾	Owned by an immediate family member of the Company’s 10%+ shareholder	$	24,600	$	141,000
Swiftfulfill⁽²⁾	Owned by an immediate family member of the Company’s 10%+ shareholder		21,000		-
Total		$	45,600		141,000

(2) This represents prepayment to be refunded resulting from the cancellation of purchase orders. $452,023 allowance for credit losses was recorded for the balances due to aging of the prepayments.

Name of Related Party	Relationship	For the Nine Months Ended March 31, 2026		For the Nine Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Azure⁽¹⁾	Owned by an immediate family member of the Company’s 10%+ shareholder	$	73,800	$	423,000
Swiftfulfill⁽²⁾	Owned by an immediate family member of the Company’s 10%+ shareholder		70,000		-
Total		$	143,800		423,000

~~For~~(1) ~~the~~On ~~three~~September ~~months ended December 31~~1, ~~2025 and 2024~~2022, the Company ~~recognized~~ ~~$345,208~~entered ~~and~~into $0a onconsulting ~~provision~~agreement ofto ~~allowance~~receive onconsulting ~~credit~~services ~~losses,~~provided ~~respectively.~~by ~~For the six months ended December 31~~Azure, ~~2025~~a ~~and~~consulting ~~2024, the~~company ~~Company~~which ~~recognized~~is ~~$200,944~~owned ~~and~~by $0an onimmediate ~~provision~~family member of ~~allowance~~a on10%+ ~~credit losses, respectively~~shareholder.

16(2) On October 1, 2024, the Company entered into a consulting agreement to receive consulting services provided by Swiftfulfill, a consulting company which is owned by an immediate family member of a 10%+ shareholder.

~~Movement of allowance for credit losses consisted of the following for the period ended the date indicated:~~16

	For the Three Months Ended December 31,
	2025		2024
	(Unaudited)		(Unaudited)
Balance as of the beginning of the period	$	173,018	$	-
Addition		345,208		-
Balance as of the end of the period	$	518,226	$	-

Note 13 — Convertible promissory notes

	For the Six Months Ended December 31,
	2025		2024
	(Unaudited)		(Unaudited)
Balance as of the beginning of the period	$	317,282	$	-
Addition		200,944		-
Balance as of the end of the period	$	518,226	$	-

From June 2023 to May 2024, Old Foxx issued four convertible promissory notes (the “Notes”) to three investors, in an aggregated principal amount of $15,000,000 and an interest rate of 7% per annum. Each note would mature on the earlier of the 12-month anniversary of its issuance date, or the date of the initial closing of the initial public offering (“IPO”) of Old Foxx. Immediately prior to the Closing on September 26, 2024, the Notes of $15,000,000 and the related interests of $408,685 were automatically converted into 513,622 share of Old Foxx Common Stock, each at a price of $30.00 per share. On September 26, 2024, upon Closing of the Business Combination, all the Old Foxx Common Stock converted from the convertible promissory notes were cancelled in exchange for the holders’ pro rata share of the 5,000,000 Closing Payment Shares, resulting in a total of 1,696,668 shares of the Company’s Common Stock issued to the holders of the Notes at the exchange ratio of approximately 3.3033 following consummation of the Business Combination (see Note 4).

Note 914 — ~~Property~~Long-term ~~and equipment, net~~loan

In February 2023, the Company purchased and financed a vehicle, for which the lender put a lien on the title and will be taken as collateral in the situation if the Company is unable to make repayment and default on the loan, with a six-year loan for a total of approximately $137,000. As of ~~December~~March 31, ~~2025~~2026, ~~and June~~the 30carrying value of the asset that has been pledged as a collateral is $46,677. ~~2025~~The monthly payments are $2,694 ~~property~~from ~~and~~March 2023 ~~equipment~~to February 2029, ~~net~~with ~~consist~~an interest rate of ~~the~~11.85% ~~following:~~per annum.

	December 31, 2025			June 30, 2025
	(Unaudited)
Computer and office equipment	$	11,808		$	12,580
Equipment		23,597			30,697
Furniture and fixtures		3,432			3,432
Vehicles		191,091			191,091
Subtotal		229,928			237,800
Less: accumulated depreciation		(127,607	)		(106,078	)
Total property and equipment, net	$	102,321		$	131,722

The obligation is payable as follows:

Depreciation expense for the three months ended December 31, 2025 and 2024 amounted to $11,623 and $12,306, respectively. Depreciation expense for the six months ended December 31, 2025 and 2024 amounted to $23,365 and $23,587, respectively.

	Amount
For the three months ending June 30, 2026	$	5,756
For the twelve months ending June 30, 2027		24,826
For the twelve months ending June 30, 2028		27,984
Thereafter		20,608
Total long-term debt payment		79,174
Current portion of long-term debt		(24,094	)
Long-term debt – non-current portion	$	55,080

~~Note 10~~ —Interest expense for the three months ended March 31, 2026 and 2025 for the above loan amounted to $2,495 ~~Other~~and ~~payables~~$3,125, respectively. Interest expense for the nine months ended March 31, 2026 and ~~accrued~~ ~~liabilities~~2025 for the above loan amounted to $7,973 and $9,809, respectively.

~~As of December 31, 2025 and June 30, 2025, other payables and accrued liabilities consist of the following:~~17

	December 31, 2025		June 30, 2025
	(Unaudited)
Payroll and payable tax payable	$	101,629	$	174,684
Interest payable*		1,415,816		2,309,106
Professional fee payable		289,522		168,186
Accrued warranty expenses		439,475		328,438
Excise tax payable**		556,620		556,620
Others		135,590		33,925
Total other payables and accrued liabilities	$	2,938,652	$	3,570,959

Note 15 — Stockholders’ deficit

*Common On April 9, 2024, the Company and a vendor entered into a purchase and financing agreement, pursuant to which the Company is subject to interest of 1.5% per month, or 0.05% per day, on the unpaid purchase amount, after forty-five (45) days from the date of shipment. There is an additional 0.083% per day if after 120 days from the date of shipment.stock

** ~~These~~As ~~balances~~of ~~were~~March ~~carried from ACAC~~31, 2026 and ~~payable~~June by30, 2025, the Company, ashas a50,000,000 authorized ~~result~~shares ~~on 1% excise tax on certain repurchases (including redemptions)~~ of common stock, bypar ~~publicly~~value ~~traded U~~$0.S.0001 ~~domestic~~per ~~corporations and certain U~~share.S. ~~domestic~~As ~~subsidiaries~~ of ~~publicly~~March ~~traded~~31, ~~foreign~~2026 ~~corporations~~and ~~occurring~~June on30, or2025, ~~after~~there ~~January~~are 17,005,191 ~~2023~~and ~~under~~6,780,597 ~~the~~shares ~~Inflation~~of ~~Reduction~~common ~~Act~~stock ofoutstanding, ~~2022~~respectively.

17Issuance of common stock upon completion of the Reverse Recapitalization

~~Note 11~~ ~~— Contract~~On ~~liabilities~~September 26, 2024, upon the consummation of the business combination, the Company issued an aggregated total of 2,270,096 common stock to ACAC shareholders and its underwriter.

~~Contract~~The ~~liabilities~~following ~~consist of~~table ~~customer~~presents ~~deposits, which are recorded on~~ the ~~consolidated~~number ~~balance~~of ~~sheets when~~ the Company’s ~~has~~common ~~received~~stock ~~consideration,~~issued orupon ~~has~~completion ~~the right to receive consideration, in advance~~ of ~~transferring~~ the ~~performance~~Reverse ~~obligations under the contract to the customer.~~Recapitalization:

The following table presents the Company’s contract liabilities balances and changes therein:

	Shares of Common
	Stock
ACAC’s common stock outstanding prior to Reverse Recapitalization		3,971,634
Less: redemption of ACAC’s common stock		(1,744,663	)
Common stock issued to underwriter		43,125
Total common stock issued upon completion of the Reverse Recapitalization		2,270,096

	Three Months Ended December 31						Six Months Ended December 31
	2025			2024			2025			2024
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Balance, beginning of the period	$	367,709		$	143,600		$	378		$	649,450
Add: net increase in current period contract liabilities		23,525			784,157			23,525			784,157
Less: revenue recognized from beginning contract liabilities		(367,709	)		(143,600	)		(378	)		(649,450	)
Total contract liabilities	$	23,525		$	784,157		$	23,525		$	784,157

Conversion of convertible promissory notes into common stock

~~Note 12~~ ~~— Related~~On ~~party~~September ~~balances and~~26, ~~transactions~~2024, upon the consummation of the business combination, the Company issued an aggregated total of 1,696,668 common stock to the Old Foxx convertible notes holders (See Note 13).

~~Related~~Equity ~~party~~incentive ~~balances~~plan

~~Prepaid~~ ~~expenses~~On September 24, 2024, pursuant to the Equity Incentive Plan (the “EIP”), 1,454,019 shares of common stock, par value $0.0001 per share, of the Company were set aside and reserved for issuance of certain stock option award and certain restricted shares to certain of the Company’s employees and consultants. The EIP has a ~~related~~4-year ~~party~~vesting schedule, of which, 25% will be vested after year 1 with the 1/16th of these shares will vest each quarter thereafter on the same day of the month as the grant date. The vesting of each RSU is subject to the employee’s continued employment and the consultant’s continued engagement through applicable vesting dates.

Name of Related Party

Relationship

Nature

December 31, 2025

June 30, 2025

(Unaudited)

Azure Horizon LLC (“Azure”)

Owned by an immediate family member of the Company’s 10% or more shareholder (a “10%+ shareholder”)

Prepaid service fees

8,000

On November 5, 2024, the Company granted 707,860 restricted stock units (“RSUs”) to its employees, consultants, and independent directors under its EIP. These shares have a 4-year vesting schedule of which 25% will be vested after year 1 with the 1/16th of these shares will vest each quarter thereafter on the same day of the month as the grant date. The vesting of each RSU is subject to the employee’s continued employment and the consultant’s continued engagement through applicable vesting dates.

~~Amount~~ ~~due~~On ~~from~~January ~~related~~22, ~~parties~~ 2025, the Company granted 19,149 RSUs to one of its independent directors pursuant to the EIP. These shares have a 4-year vesting schedule, of which 25% will be vested after year 1 with the 1/16th of these shares will vest each quarter thereafter on the same day of the month as the grant date. The vesting of each RSU is subject to the director’s continued employment through applicable vesting date.

~~Amount~~ ~~due~~On ~~from~~April ~~related~~24, ~~parties consists~~2025, the Company cancelled 33,080 unvested RSUs previously granted to one of its consultants on November 5, 2024, due to termination of the ~~following:~~consultant’s engagement.

Name of Related Party	Relationship	Nature	December 31, 2025		June 30, 2025
			(Unaudited)
Gregory J Foley (1)	Chief Executive Officer of the Company	Paid on behalf fees	$	2,150	$	-
“Joy” Yi Hua (1)	Chairwoman, Chief Financial Officer and Director of the Company	Paid on behalf fees		8,330		-
James Liao (1)	Chief Technology Officer of the Company	Paid on behalf fees		3,069		-
Junzi Yuan (1)	Executive Vice President of Human Resources & Administration of Old Foxx	Paid on behalf fees		5,372		-
Haitao Cui	Executive Vice President and Director of the Company	Paid on behalf fees		21,775		-
Luying Mei	Executive Vice President of Sales of Old Foxx	Paid on behalf fees		8,566		-
Acri Capital Sponsor LLC(2)	The Company’s 10%+ shareholder	Temporary receivable due to overpayment		3,895		-
Total			$	53,157	$	-

On July 31, 2025, the Company cancelled 9,574 unvested RSUs previously granted to one of its employees on November 5, 2024, due to termination of the employment.

~~(1)~~ InOn November 4, 2025, two of the ~~officers~~Company’s employees resigned from their position with the Company and the Company agreed to ~~reimburse~~accelerate the ~~Company~~vesting term for ~~withholding~~an ~~taxes~~immediate ~~related~~vesting tofor a total of 31,819 or approximately 50% of their unvested RSUs ~~paid~~previously ongranted to them due to termination of their ~~behalf~~employment, ~~through~~resulting ~~four~~in ~~semi-monthly~~an ~~payroll~~acceleration ~~deductions~~of $174,204 ~~beginning~~recorded onin stock-based compensation during the six months ended December 31, 2025. ~~and~~A ~~ending~~total onof 31,817 or ~~February~~approximately 50% 15of their unvested RSUs previously granted to them were forfeited due to termination of their employment, ~~2026~~resulting in a forfeiture $58,068 recorded in stock-based compensation during the six months ended December 31, 2025.

~~(2) The temporary receivable of $3,895 was repaid on January 13, 2026.~~18

18 The RSUs are accounted for as equity awards and are measured at fair value based upon the grant date market value of the Company’s common stock. Compensation expense is recognized on a straight-line basis over the vesting service period of four years. Forfeitures are accounted for as they occur.

~~Other~~The ~~payable~~following table presents the total stock-based compensation expenses included in each of the respective expense line items for the periods presented: ~~— related party~~

Other payable — related parties consists of the following:

	For the Three Months Ended				For the Nine Months Ended
	March 31,				March 31,
	2026		2025		2026		2025
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Selling expenses	$	37,830	$	28,513	$	269,628	$	132,952
General and administrative expenses		172,599		224,917		517,795		275,912
Research and development expenses		68,789		73,158		194,914		118,678
Total stock-based compensation expenses	$	279,218	$	326,588	$	982,337	$	527,542

Name of Related Party	Relationship	Nature	December 31, 2025		June 30, 2025
			(Unaudited)
Wuhan Haoxun Communication Technology Co. Ltd (“Wuhan Haoxun”)(1)	Controlled by an immediate family member of the Company’s 10%+ shareholder	Research and development fees	$	-	$	18,792
Acri Capital Sponsor LLC	the Company’s 10%+ shareholder	Unconverted working capital loan balance in ACAC		-		245,509
Swiftfulfill Warehouse LLC (“Swiftfulfill”) (2)	Owned by an immediate family member of the Company’s 10%+ shareholder	Consulting fees and expenses paid on behalf of the Company		-		8,566
“Joy” Yi Hua	Chairwoman, Chief Financial Officer and Director of the Company	Expenses paid on behalf of the Company		35,263		50
Total			$	35,263	$	272,917

The following table summarizes the activity for all restricted stock units granted for the three and nine months ended March 31, 2026 and 2025:

(1) On September 1, 2022, the Company entered into an agreement with Wuhan Haoxun for the research and development project. The project was completed during the year ended June 30, 2025.

	Shares			Weight average grant date fair value		Total fair value			Weighted average remaining contractual term (in years)
Unvested at June 30, 2025		693,929		$	7.21	$	5,001,916			3.36
Granted		-		$	-		-			-
Vested		-		$	-		-			-
Forfeited		(9,574	)	$	7.30		(69,891	)		-
Unvested at September 30, 2025		684,355		$	7.21		4,932,025			3.11
Granted		-		$	-		-			-
Vested		(182,214	)	$	7.30		(1,330,162	)		-
Forfeited		(31,817	)	$	7.30		(232,264	)		-
Unvested at December 31, 2025		470,324		$	7.16		3,369,599			2.86
Granted		-		$	-		-			-
Vested		(42,380	)	$	6.92		(293,433	)		-
Forfeited		-		$	-		-			-
Unvested at March 31, 2026		427,944		$	7.19	$	3,076,166			2.61

(2) On October 1, 2024, the Company entered into a consulting agreement to receive consulting services provided by Swiftfulfill, a consulting company which is owned by an immediate family member of a 10%+ shareholder.

	Shares		Weight average grant date fair value		Total fair value		Weighted average remaining contractual term (in years)
Unvested at July 1, 2024		-	$	-	$	-		-
Granted		-		-		-		-
Vested		-		-		-		-
Forfeited		-		-		-		-
Unvested at September 30, 2024		-		-		-		-
Granted		707,860		7.30		5,167,378		4.00
Vested		-		-		-		-
Forfeited		-		-		-		-
Unvested at December 31, 2024		707,860		7.30		5,167,378		3.85
Granted		19,149		3.97		76,022		4.00
Vested		-		-		-		-
Forfeited		-		-		-		-
Unvested at March 31, 2025		727,009	$	7.21	$	5,243,400		3.61

~~Related party transactions~~19

~~Research~~ ~~and~~As ~~development~~of ~~expenses~~March 31, 2026, there was $2,901,739 total unrecognized compensation cost related to unvested RSUs granted under the employee incentive plan. The total cost is expected to be recognized over a remaining period of 2.61 years.

Name of Related Party	Relationship	For the Three Months Ended December 31, 2025		For the Three Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Wuhan Haoxun (1)	Controlled by an immediate family member of the Company’s 10%+ shareholder	$	-	$	45,584

Earnout Shares

Name of Related Party	Relationship	For the Six Months Ended December 31, 2025		For the Six Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Wuhan Haoxun (1)	Controlled by an immediate family member of the Company’s 10%+ shareholder	$	-	$	68,376

As described in Note 4 - Reverse recapitalization, the entitlement of the 4,200,000 Earnout Shares were forfeited because the Company did not meet the earnout requirements for the fiscal year ended June 30, 2025 and 2024.

As of September 26, 2024 (1the Closing Date), Onthe ~~September~~fair 1value of the earnout liabilities was $5,688,007. ~~2022~~For the three months ended March 31, 2026 and 2025, the Company ~~entered~~recognized ~~into~~gains anof ~~agreement~~$0 ~~with~~and ~~Wuhan~~$1,032,267, ~~Haoxun~~respectively, ~~for~~related to the ~~research~~change in fair value of earnout liabilities included in the change in fair value of earnout liabilities in the consolidated statements of operations. For the nine months ended March 31, 2026 and ~~development~~2025, ~~project~~the Company recognized gains of $0 and $5,687,989, respectively, related to the change in fair value of earnout liabilities included in the change in fair value of earnout liabilities in the consolidated statements of operations.

19Warrants

~~Consulting~~ ~~expenses~~In connection with the reverse recapitalization, each of 12,156,417 ACAC’s issued and outstanding warrants was converted automatically into one redeemable warrant of the Company, exercisable for one share of common stock of the Company at an exercise price of $11.50 per share. All of these warrants met the criteria for equity classification.

Name of Related Party	Relationship	For the Three Months Ended December 31, 2025		For the Three Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Azure(1)	Owned by an immediate family member of the Company’s 10%+ shareholder	$	24,600	$	141,000
Swiftfulfill(2)	Owned by an immediate family member of the Company’s 10%+ shareholder		28,000		-
Total		$	52,600		141,000

The Company may call the Warrants for redemption, in whole and not in part, at a price of $0.01 per Warrant:

Name of Related Party	Relationship	For the Six Months Ended December 31, 2025		For the Six Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Azure(1)	Owned by an immediate family member of the Company’s 10%+ shareholder	$	49,200	$	282,000
Swiftfulfill(2)	Owned by an immediate family member of the Company’s 10%+ shareholder		49,000		-
Total		$	98,200		282,000

●

in whole and not in part;

~~(1)~~● Onupon ~~September~~not 1,less ~~2022,~~than ~~the~~30 ~~Company~~days’ ~~entered~~prior ~~into~~written anotice ~~consulting~~of ~~agreement~~redemption to(the ~~receive~~“30-day ~~consulting~~redemption ~~services~~period”) ~~provided~~to byeach ~~Azure,~~warrant aholder; ~~consulting company which is owned by an immediate family member of a 10%+ shareholder.~~and

~~(2)~~● Onif, ~~October~~and 1,only ~~2024~~if, the ~~Company~~reported ~~entered~~last ~~into~~sale aprice ~~consulting~~of ~~agreement~~the tocommon ~~receive~~stock ~~consulting~~equals ~~services~~or ~~provided~~exceeds by$16.50 ~~Swiftfulfill~~per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a ~~consulting~~30-trading ~~company~~day ~~which~~period isending ~~owned~~three bybusiness andays ~~immediate~~before ~~family~~the ~~member~~Company sends the notice of aredemption ~~10%+~~to ~~shareholder~~the warrant holders.

~~Note~~ On October 3, 2024, the Company’s shareholders (ACAC’s public shareholders) exercised 10,500 13warrants —in the amount of $120,750 ~~Convertible~~or ~~promissory notes~~$11.50 per share.

~~From~~The ~~June 2023~~summary ~~to May 2024, Old Foxx issued four convertible promissory notes (the “Notes”) to three investors, in an aggregated principal amount~~ of ~~$15,000,000~~warrants ~~and~~activity anis ~~interest~~as rate of 7% per annum. Each note would mature on the earlier of the 12-month anniversary of its issuance date, or the date of the initial closing of the initial public offering (“IPO”) of Old Foxx. Upon the completion of the Business Combination, all outstanding principal and accrued and unpaid interest under the Notes would automatically convert into shares of Old Foxx’s common stock at a conversion price of $30.00 per share.follows:

Immediately prior to the Closing on September 26, 2024, the Notes of $15,000,000 and the related interests of $408,685 were automatically converted into (x) 212,050 shares of Old Foxx Common Stock for the Notes to the Investor, (y) 200,882 shares of Old Foxx Common Stock for Note 4, and (z) 100,690 share of Old Foxx Common Stock for Note 5, each at a price of $30.00 per share. On September 26, 2024, upon Closing of the Business Combination, all the Old Foxx Common Stock converted from the convertible promissory notes were cancelled in exchange for the holders’ pro rata share of the 5,000,000 Closing Payment Shares (see Note 4), resulting in a total of 1,696,668 shares of the Company’s Common Stock issued to the holders of the convertible promissory notes at the exchange ratio of approximately 3.3033 following consummation of the Business Combination, including (x) 700,473 shares of Common Stock issued to the Investor A, (y) 663,581 shares of Common Stock issued to Investor B, and (z) 332,614 shares of Common Stock issued to Investor C (see Note 4).

	Warrants Outstanding		Common Stock Issuable		Weighted Average Exercise Price		Average Remaining Contractual Life
June 30, 2025		12,145,917		12,145,917	$	11.50		4.24
Granted		-		-	$	-		-
Forfeited		-		-	$	-		-
Exercised		-		-	$	-		-
September 30, 2025		12,145,917		12,145,917	$	11.50		3.99
Granted		-		-	$	-		-
Forfeited		-		-	$	-		-
Exercised		-		-	$	-		-
December 31, 2025		12,145,917		12,145,917	$	11.50		3.74
Granted		-		-	$	-		-
Forfeited		-		-	$	-		-
Exercised		-		-	$	-		-
March 31, 2026		12,145,917		12,145,917	$	11.50		3.49

Note 14 — Long-term loan

	Warrants Outstanding			Common Stock Issuable			Weighted Average Exercise Price		Average Remaining Contractual Life
June 30, 2024							$	-		-
Granted		12,156,417			12,156,417		$	11.50		5.00
Forfeited		-			-		$	-		-
Exercised		-			-		$	-		-
September 30, 2024		12,156,417			12,156,417		$	11.50		4.99
Granted		-			-		$	-		-
Forfeited		-			-		$	-		-
Exercised		(10,500	)		(10,500	)	$	11.50		-
December 31, 2024		12,145,917			12,145,917		$	11.50		4.74
Granted		-			-		$	-		-
Forfeited		-			-		$	-		-
Exercised		-			-		$	-		-
March 31, 2025		12,145,917			12,145,917		$	11.50		4.49

In ~~February 2023,~~The ~~the~~ Company ~~purchased~~accounted ~~and financed a vehicle,~~ for ~~which~~ the 12,145,917 ~~lender~~Warrants ~~put~~assumed afrom ~~lien on~~ the ~~title~~merger ~~and will be taken~~ as ~~collateral~~equity instruments in ~~the~~accordance ~~situation if~~with ~~the~~ASC ~~Company~~480, isDistinguishing ~~unable~~Liabilities tofrom ~~make~~Equity, ~~repayment~~ and ~~default~~ASC ~~on the loan~~815-40, ~~with~~Derivatives aand ~~six-year~~Hedging: ~~loan~~Contracts ~~for~~in aEntity’s ~~total~~Own ~~of approximately $137,000~~Equity. As of ~~December~~ March 31, ~~2025,~~2026 ~~the~~and ~~carrying~~June ~~value~~30, of2025, the ~~asset~~Warrants ~~that~~had ~~has~~no ~~been~~intrinsic ~~pledged~~value, as athe ~~collateral~~Company’s isstock ~~$53,042.~~price ~~The~~was ~~monthly~~below ~~payments~~the ~~are~~strike ~~$2,694 from March 2023 to February 2029, with an interest rate of 11~~price.~~85%~~ ~~per annum.~~

~~The~~Note 16 ~~obligation~~— Concentrations isof ~~payable as follows:~~risks

	Amount
For the six months ending June 30, 2026	$	11,341
For the twelve months ending June 30, 2027		24,826
For the twelve months ending June 30, 2028		27,984
Thereafter		20,608
Total long-term debt payment		84,759
Current portion of long-term debt		(23,383	)
Long-term debt – non-current portion	$	61,376

(a) Major customers

~~Interest~~ ~~expense~~For ~~for~~ the three months ended ~~December~~March 31, ~~2025~~2026, ~~and~~one ~~2024~~customer, ~~for~~customer ~~the~~A, ~~above~~which ~~loan~~is ~~amounted~~a tothird ~~$2,659 and~~party ~~$3,271,~~of ~~respectively. Interest expense for~~ the ~~six months ended December 31~~Company, ~~2025~~accounted ~~and~~for ~~2024~~83% ~~for~~of the ~~above~~Company’s ~~loan~~total ~~amounted to $5,479 and $6,684, respectively~~revenues.

~~Note 15~~ ~~— Stockholders~~For the three months ended March 31, 2025, four customers, customer B, customer C, customer D, and customer E, which are the third parties of the Company, accounted for 32%, 20%, 20% and 13%, respectively, of the Company’ ~~deficit~~s total revenues.

~~Common~~ ~~stock~~ For the nine months ended March 31, 2026, one customer, customer A, which is a third party of the Company, accounted for 73% of the Company’s total revenues.

As ofFor ~~December~~the ~~31,~~nine ~~2025~~months ~~and June~~ended 30March 31, 2025, ~~the~~three ~~Company~~customers, ~~has~~customer 50A,~~000,000 authorized~~ ~~shares~~customer ofB ~~common~~and ~~stock~~customer C, ~~par~~which ~~value~~are ~~$0.0001~~the ~~per~~third ~~share.~~parties As of ~~December~~the 31Company, ~~2025 and~~accounted ~~June~~for 3027%, ~~2025,~~29% ~~there~~and ~~are 6~~23%,~~962,811~~ ~~and 6~~respectively,~~780,597~~ ~~shares~~ of ~~common~~the ~~stock~~Company’s ~~outstanding,~~total ~~respectively~~revenues.

~~Issuance~~(b) Major ~~of common stock upon completion of the Reverse Recapitalization~~ suppliers

On ~~September~~For ~~26,~~the ~~2024,~~three ~~upon the~~months ~~consummation~~ended ofMarch ~~the~~31, ~~business~~2026, ~~combination~~one supplier, ~~the~~supplier ~~Company~~A, ~~issued~~which anis ~~aggregated~~a ~~total~~third party of 2the Company,~~270,096~~ ~~common~~accounted ~~stock~~for to98% ~~ACAC~~of ~~shareholders~~the ~~and its~~Company’s ~~underwriter~~total purchases.

~~The following table presents the number of the Company’s common stock issued upon completion of the Reverse Recapitalization:~~21

	Shares of Common
	Stock
ACAC’s common stock outstanding prior to Reverse Recapitalization		3,971,634
Less: redemption of ACAC’s common stock		(1,744,663	)
Common stock issued to underwriter		43,125
Total common stock issued upon completion of the Reverse Recapitalization		2,270,096

For the three months ended March 31, 2025, one supplier, supplier A, which is a third party of the Company, accounted for 92% of the Company’s total purchases.

~~Conversion~~ For the nine months ended March 31, 2026, one supplier, supplier A, which is a third party of ~~convertible~~the ~~promissory~~Company, ~~notes into~~accounted ~~common~~for ~~stock~~97% of the Company’s total purchases.

On ~~September~~For ~~26, 2024, upon~~ the ~~consummation~~nine ofmonths ~~the~~ended ~~business~~March ~~combination~~31, ~~the~~2025, ~~Company~~one ~~issued~~supplier, ansupplier ~~aggregated~~A, ~~total~~which ofis ~~1,696,668~~a ~~common~~third ~~stock~~party toof the ~~Old~~Company, ~~Foxx~~accounted ~~convertible notes~~for ~~holders~~93% ~~(See~~of ~~Note~~the ~~13)~~Company’s total purchases.

21(c) Geographic areas

~~Equity~~For ~~incentive~~the ~~plan~~ three and nine months ended March 31, 2026 and 2025, all of the Company’s long-lived assets are located in the United States and substantially all of the Company’s revenues are derived from the United States, accordingly, no geographical information is presented.

On September 24, 2024, pursuant to the Equity Incentive Plan (the “EIP”), 1,454,019 shares of common stock, par value $0.0001 per share, of the Company were set aside and reserved for issuance of certain stock option award and certain restricted shares to certain of the Company’s employees and consultants. The EIP has a 4-year vesting schedule, of which, 25% will be vested after year 1 with the 1/16th of these shares will vest each quarter thereafter on the same day of the month as the grant date.Note ~~The~~17 ~~vesting of each RSU is subject to the employee’s continued employment and the consultant’s continued engagement through applicable vesting dates.~~— Leases

~~On November 5, 2024, the Company granted 707,860 restricted stock units (“RSUs”) to its employees, consultants, and independent directors under its EIP. These shares have a 4~~Short-~~year~~term vesting schedule of which 25% will be vested after year 1 with the 1/16th of these shares will vest each quarter thereafter on the same day of the month as the grant date. The vesting of each RSU is subject to the employee’s continued employment and the consultant’s continued engagement through applicable vesting dates.leases

On ~~January 22~~August 1, ~~2025~~2023, the Company ~~granted~~entered ~~19,149~~a ~~RSUs~~twelve-month tolease ~~one~~agreement ~~of its independent directors pursuant~~ to ~~the~~rent ~~EIP. These shares have~~ a ~~4-year~~general ~~vesting~~office ~~schedule,~~and ofstorage ~~which 25%~~space ~~will~~for beits ~~vested~~purchased ~~after~~inventory ~~year~~for 1a ~~with~~monthly ~~the~~rental ~~1/16th~~fee of ~~these~~$100. ~~shares~~The ~~will~~Company ~~vest~~renewed ~~each quarter thereafter on~~ the ~~same~~lease ~~day~~for ofanother ~~the~~twelve ~~month~~months asat ~~the grant~~a ~~date. The~~monthly ~~vesting~~rental fee of ~~each RSU is subject to the director’s continued employment through applicable vesting date~~$200.

On ~~April 24~~August 14, ~~2025~~2023, the Company ~~cancelled~~ ~~33,080~~entered ~~unvested~~a ~~RSUs~~six-month ~~previously~~lease ~~granted~~agreement to ~~one~~rent ofan ~~its~~office ~~consultants~~for onoperating ~~November~~purposes 5,with ~~2024,~~a ~~due~~monthly torental ~~termination~~fee of $550. After the ~~consultant’s engagement~~initial six-month term, the lease was renewed on a month-to-month basis.

OnLong-term ~~July 31, 2025, the Company cancelled 9,574 unvested RSUs previously granted to one of its employees on November 5, 2024, due to termination of the employment.~~leases

On ~~November~~In 4September 2023, ~~2025,~~the ~~two~~Company ofsigned ~~the~~a ~~Company’s~~three-year ~~employees~~lease ~~resigned from~~agreement ~~their~~to ~~position~~rent ~~with~~a ~~the~~general ~~Company~~office and ~~the~~storage ~~Company~~space ~~agreed~~for tobusiness ~~accelerate~~operations ~~the~~with ~~vesting~~a ~~term~~monthly ~~for~~rent anof ~~immediate~~$3,096, ~~vesting~~plus ~~for~~varied amonthly ~~total of~~CAM. ~~31,819 or approximately 50%~~The commencement date of ~~their~~this ~~unvested~~lease ~~RSUs~~is ~~previously~~October 1, ~~granted~~2023 toand ~~them~~has ~~due~~no torenewal ~~termination~~option. ofOn ~~their~~July ~~employment~~17, ~~resulting~~2024, inthe anCompany ~~acceleration of~~extended ~~$174,204~~the ~~recorded~~lease infor ~~stock-based~~another ~~compensation~~35 ~~during~~months ~~the~~to ~~six~~be ~~months~~commenced ~~ended~~on ~~December~~October 311, ~~2025.~~2026 Aand ~~total~~ended of August 31,~~817 or~~ ~~approximately 50% of their~~2029. ~~unvested~~The ~~RSUs~~Company ~~previously~~considered ~~granted~~this tolease ~~them~~as ~~were~~an ~~forfeited~~operating ~~due~~lease toand ~~termination~~recognized right-of-use ~~their~~asset ~~employment,~~and ~~resulting~~lease inliability. aThe ~~forfeiture $58,068~~Company ~~recorded~~recognized inlease ~~stock~~expense on a straight-~~based~~line ~~compensation~~basis ~~during~~over the ~~six~~lease ~~months~~term ~~ended~~for ~~December~~operating ~~31, 2025~~lease.

~~The~~ ~~RSUs~~In ~~are~~June ~~accounted~~2024, ~~for as~~the ~~equity~~Company ~~awards~~signed a six year and ~~are~~11.5 ~~measured~~months atlease ~~fair~~agreement ~~value~~to ~~based~~rent ~~upon~~a ~~the~~general ~~grant~~office ~~date~~for ~~market~~business ~~value~~operations with a monthly rent of $3,500, plus varied monthly CAM. The commencement date of this lease is June 15, 2024 and the expiration date is May 31, 2031. The Company’s ~~common~~considered ~~stock~~this lease as an operating lease and recognized right-of-use asset and lease liability. ~~Compensation expense~~The isCompany recognized lease expense on a straight-line basis over the ~~vesting~~lease ~~service~~term ~~period of four years. Forfeitures are accounted~~ for asoperating ~~they occur~~lease.

~~The~~ ~~following~~On ~~table~~July ~~presents~~ 17, 2024, the ~~total~~Company ~~stock~~signed a five-~~based~~year ~~compensation~~and ~~expenses~~one-half ~~included~~month inlease ~~each~~agreement to rent a general office and storage space for business operations with a monthly rent of ~~the~~$10,534, ~~respective~~plus varied monthly CAM. The commencement date of this lease is August 15, 2024 and has no renewal option. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line ~~items~~basis ~~for~~over the ~~periods~~lease ~~presented:~~ term for operating lease.

	For the Three Months Ended				For the Six Months Ended
	December 31,				December 31,
	2025		2024		2025		2024
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Selling expenses	$	164,934	$	50,996	$	231,798	$	50,996
General and administrative expenses		172,599		104,438		345,197		104,438
Research and development expenses		68,789		45,520		126,124		45,520
Total stock-based compensation expenses	$	406,322	$	200,954	$	703,119	$	200,954

On July 12, 2024, the Company signed and further amended a ten-and-half-year lease agreement (“July 2024 Lease”) to rent a 101,145 square feet factory and warehouse for business operations with an initial monthly rent of $131,489, plus varied monthly operating expenses and real estate tax. The commencement date of this lease is July 1, 2025 and the expiration date is December 31, 2035. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.

~~The~~ ~~following~~On ~~table~~December ~~summarizes~~ 20, 2024, the ~~activity~~Company ~~for~~further ~~all~~expanded ~~restricted~~the ~~stock~~July ~~units~~2024 ~~granted~~Lease ~~for~~to ~~the~~include ~~three~~additional 102,099 square feet from January 1, 2026 to December 31, 2035 with an initial monthly rent of $132,729, plus varied monthly operating expenses and ~~six~~real ~~months~~estate ~~ended~~tax. The commencement date of this lease is January 1, 2026 and the expiration date is December 31, ~~2025~~2035. The Company considered this lease as an operating lease and ~~2024:~~recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.

	Shares			Weight average grant date fair value		Total fair value			Weighted average remaining contractual term (in years)
Unvested at June 30, 2025		693,929		$	7.21	$	5,001,916			3.36
Granted		-		$	-		-			-
Vested		-		$	-		-			-
Forfeited		(9,574	)	$	7.30		(69,891	)		-
Unvested at September 30, 2025		684,355		$	7.21		4,932,025			3.11
Granted		-		$	-		-			-
Vested		(182,214	)	$	7.30		(1,330,162	)		-
Forfeited		(31,817	)	$	7.30		(232,264	)		-
Unvested at December 31, 2025		470,324		$	7.16	$	3,369,599			2.86

The ROU assets and lease liabilities are determined based on the present value of the future minimum rental payments of the lease as of the adoption date, using incremental borrowing rate as the effective interest rate, with a weighted average rate of 7.04%.

	Shares		Weight average grant date fair value		Total fair value		Weighted average remaining contractual term (in years)
Unvested at June 30, 2024		-	$	-	$	-		-
Granted		-	$	-		-
Vested		-	$	-		-
Forfeited		-	$	-		-
Unvested at September 30, 2024		-	$	-		-		-
Granted		707,860	$	7.30		5,167,378		4.00
Vested		-	$	-		-
Forfeited		-	$	-		-
Unvested at December 31, 2024		707,860	$	7.30	$	5,167,348		3.85

As of March 31, 2026 and June 30, 2025, the weighted-average remaining operating lease term of its existing leases is approximately 9.52 years and 4.51 years, respectively.

AsThe offollowing ~~December~~table ~~31,~~sets ~~2025, there~~forth ~~was~~the ~~$3,180,957~~Company’s ~~total~~minimum ~~unrecognized~~long-term ~~compensation~~lease payments ~~cost~~in ~~related~~future toperiods ~~unvested~~as ~~RSUs~~of ~~granted~~March ~~under~~31, ~~the~~2026, ~~employee~~which ~~incentive~~represents ~~plan.~~the ~~The~~operating ~~total cost~~lease isliabilities ~~expected~~on tothe beaccompanying ~~recognized~~balance ~~over a remaining period of 2.86 years.~~ sheet:

Earnout Shares

	Operating lease payments
For the three months ending June 30, 2026	$	796,777
For the twelve months ending June 30, 2027		4,804,277
For the twelve months ending June 30, 2028		4,996,179
For the twelve months ending June 30, 2029		5,197,074
For the twelve months ending June 30, 2030		5,202,868
Thereafter		32,039,129
Total lease payments		53,036,304
Less: discount		(15,192,821	)
Present value of operating lease liabilities		37,843,483
Operating lease liabilities, current portion		(1,839,557	)
Operating lease liabilities, non-current portion	$	36,003,926

AsOperating ~~described~~lease inexpenses ~~Note~~consist 4 - Reverse recapitalization, the Earnout Shares that are contingently issuable in connection with the Business Combination are subject to vesting based on the Company’s financial performance during the earnout period. The entitlement of the first batch of the 2,100,000 earnout shares to the Old Foxx Shareholders were forfeited in October 2024 because the Company did not meet the earnout requirements for the fiscal year ended June 30, 2024 vesting schedule. These 2,100,000 earnout shares are not included or contributing to the value of the earnout liabilities. The entitlement of the second batch of the 2,100,000 Earnout Shares to the Old Foxx Shareholders were also forfeited, as the Company did not meet the earnout requirements for the fiscal year ended June 30, 2025 vesting schedule. These 2,100,000 Earnout Shares, which were classified as liability and measured at fair value, were reduced to $0.following:

Operating lease cost	Classification	For the Three Months Ended March 31, 2026		For the Three Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Lease expenses	General, and administrative	$	1,402,439	$	63,808
Lease expenses – short term	General, and administrative		2,235		3,041
Total operating lease cost		$	1,404,674	$	66,849

As of December 31, 2025 and September 26, 2024 (the Closing Date), the fair value of the earnout liabilities was $0 and $5,688,007, respectively. For the three months ended December 31, 2025 and 2024, the Company recognized gains of $0 and $4,705,583, respectively, related to the change in fair value of earnout liabilities included in the change in fair value of earnout liabilities in the consolidated statements of operations. For the six months ended December 31, 2025 and 2024, the Company recognized gains of $0 and $4,655,722, respectively, related to the change in fair value of earnout liabilities included in the change in fair value of earnout liabilities in the consolidated statements of operations.23

Warrants

Operating lease cost	Classification	For the Nine Months Ended March 31, 2026		For the Nine Months Ended March 31, 2025
		(Unaudited)		(Unaudited)
Lease expenses	General, and administrative	$	2,852,736	$	181,181
Lease expenses – short term	General, and administrative		8,003		10,941
Total operating lease cost		$	2,860,739	$	192,122

In ~~connection~~For ~~with~~ the ~~reverse recapitalization,~~nine ~~each~~months ofended 12March 31,~~156,417~~ ~~ACAC’s~~2026 ~~issued~~ and ~~outstanding warrants~~2025, ~~which consisted of 4~~$1,~~312~~513,~~500~~949 ~~public warrants, 5,240,000 private warrants~~ and 2$123,~~603,917~~471 ~~working~~of ~~capital~~cash ~~warrants,~~were ~~was~~used ~~converted~~for ~~automatically~~operating ~~into~~lease ~~one redeemable warrant of the Company~~liabilities, ~~exercisable for one share of common stock of the Company at an exercise price of $11~~respectively.~~50 per share. All of these warrants met the criteria for equity classification.~~

~~Each~~ ~~whole~~The ~~Warrant~~Company ~~entitles~~ is in the ~~registered~~change ~~holder~~in tobusiness ~~purchase one whole~~strategy ~~share~~to ofengage ~~the~~in ~~Company’s~~dropship ~~common~~arrangement, ~~stock~~which athas aresulted ~~price~~in ofexcess ~~$11.50 per~~warehouse ~~share.~~space ~~Pursuant~~ to ~~the~~be ~~warrant~~subleased ~~agreement,~~at abelow-lease ~~warrant~~rates. ~~holder~~This ~~may~~change ~~exercise~~in ~~its~~circumstances ~~Warrants~~indicated ~~only~~that ~~for~~the acarrying ~~whole~~amount ~~number~~ of ~~shares~~the related right-of-use ~~common~~assets ~~stock~~may not be recoverable. ~~This~~The ~~means~~Company ~~that only~~performed a ~~whole~~recoverability ~~Warrant~~test ~~may~~and bedetermined ~~exercised~~that atthe ~~any~~carrying ~~given~~values ~~time~~of bythese aassets ~~warrant~~were ~~holder.~~not Norecoverable ~~fractional~~from ~~Warrants~~the ~~will~~expected beundiscounted ~~issued~~cash ~~upon~~flows. ~~separation~~Accordingly, of the ~~Units~~Company ~~and~~recognized ~~only~~impairment ~~whole~~loss ~~Warrants~~of ~~will~~$25,855,427 ~~trade.~~on ~~The~~its ~~Warrants~~right-of-use ~~will~~assets ~~expire five years~~for ~~after~~ the ~~completion~~three ofand ~~the~~nine ~~Company’s initial~~months ~~business~~ended ~~combination~~March 31, at2026, ~~5:00~~as ~~p.m.,~~the ~~New~~carrying ~~York~~amount ~~City~~of ~~time~~these assets exceeded their estimated fair value, oras ~~earlier~~determined ~~upon~~based ~~redemption~~on ordiscounted ~~liquidation~~cash flow.

~~The Company has agreed that as soon as practicable, but in no event later than~~Note ~~30 business days,~~18 ~~after the closing of the initial business combination, it will use its commercially reasonable efforts to file, and within~~— ~~60 business~~Commitments days following its initial business combination to have declared effective, a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Warrants. The Company will use its commercially reasonable efforts to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. No Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of common stock. Notwithstanding the above, if the Company’s common stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event it so elect, it will not be required to file or maintain in effect a registration statement, but it will be required to use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.contingencies

~~The Company may call the Warrants for redemption, in whole and not in part, at a price of $0.01 per Warrant:~~Contingencies

●From intime ~~whole~~to time, the Company is a party to certain legal proceedings, as well as certain asserted and ~~not~~unasserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in ~~part;~~aggregate, are not deemed to be material to the unaudited condensed consolidated financial statements.

● ~~upon~~On ~~not~~November 22, ~~less~~2024, ~~than~~a 30plaintiff ~~days~~filed Semensato v. Foxx Development Holdings Inc., et al., No. 2024-1200 (Del. Ch. Ct.), a class action complaint (“Complaint”) in Delaware Chancery Court against the Company and certain “Individual Defendants” (“Joy” Yi Hua, Haitao Cui, “Jeff” Feng Jiang, “Eva” Yiqing Miao and Edmund R. Miller) (“Action”). The plaintiff seeks a declaration that the waiver provision is invalid, an injunction against the Company and the Individual Defendants to prevent them from attempting to enforce the waiver, attorneys’ ~~prior~~fees, ~~written~~and ~~notice~~the costs and disbursements of ~~redemption~~this action. The Company and each of the Individual Defendants deny any and all wrongdoing alleged in the Complaint. However, to avoid the cost and distraction of litigation, the directors of the board of the Company (the “~~30-day~~Board”) ~~redemption~~approved ~~period~~and adopted the Second Amended and Restated Certificate of Incorporation of the Company (the “Amended Charter”) in the best interests of the Company and its stockholders. On March 3, 2025, the plaintiff filed a notice of voluntary dismissal of the Action as moot, which the Court approved by order dated March 4, 2025. On March 18, 2025, the Company paid $85,000 (the “Mootness Fee,” inclusive of a $500 service award to ~~each~~the ~~warrant~~plaintiff) ~~holder;~~to the plaintiff’s counsel to resolve the anticipated application by the plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses. In connection with the March 13, 2025 stipulated order closing the case, the Court ordered that the Company provide this notice. The Court has not and will not pass judgment on the amount of the Mootness Fee.

● ~~if,~~On ~~and~~November ~~only~~5, if2025, the ~~reported~~Company ~~last~~received ~~sale~~a ~~price~~deficiency ofletter from the ~~common~~Nasdaq ~~stock~~Listing ~~equals~~Qualifications orDepartment ~~exceeds~~(the ~~$16.50~~“Staff”) ~~per~~of ~~share~~the Nasdaq Stock Market LLC (as“Nasdaq”) ~~adjusted~~notifying it that, for ~~stock~~a ~~splits,~~period ~~stock~~of ~~dividends~~30 consecutive business days, ~~reorganizations~~its market value of listed securities (“MVLS”) closed below the $35,000,000 ~~recapitalizations~~MVLS ~~and~~threshold required for continued listing on the ~~like~~Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) ~~for~~(the ~~any~~“MVLS 20Rule”). ~~trading~~In ~~days~~accordance ~~within~~with aNasdaq ~~30-trading~~Listing ~~day~~Rule ~~period~~5810(c)(3)(C), ~~ending~~the ~~three~~Company has until May 4, 2026 to regain compliance with the MVLS requirement (the “Initial Compliance Period”). For the last 15 consecutive business days, ~~before~~from March 31 through April 21, 2026, the Company’s ~~sends~~MVLS has been $35,000,000 or greater. Accordingly, the ~~notice~~Company ofhas ~~redemption~~regained tocompliance with the ~~warrant~~Rule, ~~holders~~and this matter is now closed.

~~On October 3, 2024, the Company’s shareholders (ACAC’s public shareholders) exercised 10,500 warrants in the amount of $120,750 or $11.50 per share.~~24

24Risks and Uncertainties

On April 2, 2025, the President of the United States signed Executive Order 14257, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” (the “Executive Order 14257”), to take action based on the results of certain investigations related to the causes of the U.S.’s large and persistent annual trade deficits in goods. Subsequent to Executive Order 14257, there have been additional executive orders that have, among other actions, effectively suspended the enforcement of certain country-specific tariffs until November 10, 2026, extended from November 10, 2025. The ~~summary~~potential for further changes in trade policies, including new tariffs or changes to existing ones, introduces uncertainty regarding the Company’s future costs, revenues, collectability of ~~warrants~~account ~~activity~~ receivables, carrying value of inventories, and overall financial performance. The Company monitors these developments closely and will continue to evaluate their potential impact on its operations, financial condition, and results of operations. The ultimate financial impact of these uncertainties is asdifficult ~~follows:~~to quantify at this time.

	Warrants Outstanding		Common Stock Issuable		Weighted Average Exercise Price		Average Remaining Contractual Life
June 30, 2025		12,145,917		12,145,917	$	11.50		4.24
Granted		-		-	$	-		-
Forfeited		-		-	$	-		-
Exercised		-		-	$	-		-
September 30, 2025		12,145,917		12,145,917	$	11.50		3.99
Granted		-		-	$	-		-
Forfeited		-		-	$	-		-
Exercised		-		-	$	-		-
December 31, 2025		12,145,917		12,145,917	$	11.50		3.74

On July 4, 2025, the One Big Beautiful Bill Act, Public Law No. 119021 (“OBBBA”), was signed into law by the President of the United States, which introduced significant and wide-ranging changes to the U.S. tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect of the changes includes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions including limitations on tax deductions for charitable contributions were also adopted.

	Warrants Outstanding			Common Stock Issuable			Weighted Average Exercise Price		Average Remaining Contractual Life
June 30, 2024							$	-		-
Granted		12,156,417			12,156,417		$	11.50		5.00
Forfeited		-			-		$	-		-
Exercised		-			-		$	-		-
September 30, 2024		12,156,417			12,156,417		$	11.50		4.99
Granted		-			-		$	-		-
Forfeited		-			-		$	-		-
Exercised		(10,500	)		(10,500	)	$	11.50		-
December 31, 2024		12,145,917			12,145,917		$	11.50		4.74

The Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and cash flow. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.

~~The~~Note 19 ~~Company accounted for the~~— ~~12,145,917~~Income ~~Warrants assumed from the merger as equity instruments in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity.~~taxes

~~Cancellation~~ As of ~~Common~~March ~~Stock~~31, ~~Held~~2026 inand ~~Escrow~~June 30, 2025, the Company’s deferred tax asset had a full valuation allowance recorded against it. The effective tax rate for each of the three and nine months ended March 31, 2026 and 2025 was 0%. The effective tax rate differs from the statutory tax rate of 21% primarily due to the valuation allowance on the deferred tax assets

~~On September 26, 2024 (the Closing Date), pursuant to the Business Combination Agreement (see~~ Note 20 ~~4),~~— Disaggregated ~~500,000~~information ~~shares were deposited to a segregated escrow account and would be release to the Old Foxx Shareholders if and only if, prior to or upon the one-year anniversary~~ of the Business Combination Agreement, the Affordable Connectivity Program managed by the U.S. Federal Communication Commission is reauthorized by the U.S. Congress with funding of no less than $4 billion in total for such reauthorized period; or otherwise be cancelled and forfeited by the Registrant without consideration.revenues

OnDisaggregated ~~February~~information ~~18,~~of ~~2025,~~revenues ~~these 500,000~~by ~~shares~~product ~~have~~type ~~been~~is ~~cancelled~~as ~~and forfeited without consideration.~~follows:

Note 16 — Concentrations of risks

	For the Three Months Ended				For the Nine Months Ended
	March 31,				March 31,
	2026		2025		2026		2025
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Tablet products	$	83,301	$	219,545	$	412,491	$	392,660
Mobile phone products		8,002,139		8,868,686		40,875,567		46,571,691
Wearable products		254,039		1,557,962		2,999,116		3,358,138
Subtotal product revenues		8,339,479		10,646,193		44,287,174		50,322,489
App service commission revenue		324,342		690,817		1,314,402		1,606,804
Other services		2,440		55,068		4,558		55,068
Subtotal service revenues		326,782		745,885		1,318,960		1,661,872
Total revenues, net	$	8,666,261	$	11,392,078	$	45,606,134	$	51,984,361

~~(a) Major customers~~25

~~For~~Disaggregated ~~the~~information ~~three~~of ~~months~~revenues ~~ended December~~by ~~31,~~business ~~2025,~~line ~~one customers, customer A, which~~ is aas ~~third party of the Company, accounted for 75% of the Company’s total revenues.~~follows:

	For the Three Months Ended				For the Nine Months Ended
	March 31,				March 31,
	2026		2025		2026		2025
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Wholesale revenues	$	7,911,639	$	9,943,509	$	42,860,664	$	49,412,977
E-Commerce revenues		427,840		702,684		1,426,510		909,512
Subtotal product revenues		8,339,479		10,646,193		44,287,174		50,322,489
App service commission revenue		324,342		690,817		1,314,402		1,606,804
Other services		2,440		55,068		4,558		55,068
Subtotal service revenues		326,782		745,885		1,318,960		1,661,872
Total revenues, net	$	8,666,261	$	11,392,078	$	45,606,134	$	51,984,361

~~For~~Note 21 ~~the~~— Basic ~~three months ended December 31, 2024, three customers, customer C, customer A~~ and ~~customer~~diluted D,loss ~~which~~per ~~are the third parties of the Company, accounted for 54%, 30% and 10%, respectively, of the Company’s total revenues.~~share

~~For~~Basic EPS is measured as net loss divided by the ~~six~~weighted ~~months~~average ~~ended December~~common ~~31,~~shares ~~2025,~~outstanding ~~two~~for ~~customers,~~the ~~customer~~period. ADiluted ~~and~~net ~~customer~~loss B,per ~~which~~share ~~are~~attributable to common stockholders adjusts basic loss per share for the ~~third~~potentially ~~parties~~dilutive impact of non-participating shares of common stock that are subject to the ~~Company~~convertible note, ~~accounted~~and ~~for~~other ~~70%~~securities outstanding. Certain securities may be anti-dilutive and ~~11%,~~would ~~respectively,~~ be excluded from the calculation of diluted loss per share and disclosed separately. Because of the ~~Company’s~~nature ~~total~~of ~~revenues~~the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods.

~~For~~The ~~the~~following ~~six~~table ~~months~~presents ~~ended December~~the ~~31,~~computation ~~2024,~~of ~~three~~basic ~~customers, customer A, customer B~~ and ~~customer~~diluted C,loss ~~which~~per ~~are~~share ~~the~~attributable ~~third~~to ~~parties~~common ~~of the Company~~stockholders, ~~accounted~~ for ~~35%,~~ ~~28% and 23%, respectively, of~~ the ~~Company’s~~periods ~~total revenues.~~presented:

(b) Major suppliers

	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2026			2025			2026			2025
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net loss– basic and diluted EPS	$	(36,269,993	)	$	(4,084,511	)	$	(43,421,349	)	$	(4,927,154	)

Basic and diluted weighted average shares outstanding*		6,989,278			7,050,260			6,886,673			5,937,756

Basic and diluted loss per share	$	(5.19	)	$	(0.58	)	$	(6.31	)	$	(0.83	)

~~For~~* ~~the~~There ~~three~~were ~~months~~no ~~ended December~~shares ~~31,~~that ~~2025,~~have ~~one supplier, supplier A, which is~~ a ~~third~~dilutive ~~party~~effect offor the ~~Company,~~three ~~accounted~~and ~~for~~nine ~~99%~~months ofended ~~the~~March ~~Company’s~~31, ~~total~~2026 ~~purchases~~and 2025.

~~For~~The ~~the~~following ~~three~~table ~~months~~outlines ~~ended December~~dilutive ~~31,~~common ~~2024,~~share ~~one~~equivalents ~~supplier~~outstanding, ~~supplier~~which A,are ~~which~~excluded isin athe ~~third~~above ~~party~~diluted ofnet ~~the~~loss ~~Company~~per share calculation, ~~accounted~~as ~~for~~the ~~90%~~effect of their inclusion would be anti-dilutive or the ~~Company’s~~share ~~total~~equivalents ~~purchases.~~ were contingently issuable as of each period presented:

For the six months ended December 31, 2025, one supplier, supplier A, which is a third party of the Company, accounted for 96% of the Company’s total purchases.

	For the Three Months Ended March 31,				For the Nine Months Ended March 31,
	2026		2025		2026		2025
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Earnout Shares*		-		2,100,000		-		2,100,000
Warrants **		12,145,917		12,145,917		12,145,917		12,145,917
RSUs**		427,944		727,009		427,944		727,009
Total		12,573,861		14,972,926		12,573,861		14,972,926

~~For~~* ~~the~~As ~~six~~described ~~months~~in ~~ended December~~Note ~~31,~~4 ~~2024,~~- ~~one~~Reverse ~~supplier~~recapitalization, ~~supplier~~the A,Earnout ~~which~~Shares isthat aare ~~third~~contingently ~~party~~issuable ofin connection with the ~~Company,~~Business ~~accounted~~Combination ~~for~~are ~~94%~~subject ofto vesting based on the Company’s ~~total~~financial ~~purchases~~performance during the earnout period. The Earnout Shares are excluded from the calculation of basic and diluted weighted-average number of common shares outstanding until vested.

~~(c) Geographic~~** ~~areas~~The Company’s outstanding warrants and RSUs were excluded from the computation of diluted EPS because it has anti-dilutive effect as the company had a net loss during the periods presented.

For the three and six months ended December 31, 2025 and 2024, all of the Company’s long-lived assets are located in the United States and all of the Company’s revenues are derived solely from the United States, accordingly, no geographical information is presented.26

Note 1722 — ~~Leases~~Segment information

~~Short-term~~ ~~leases~~ The Company conducts business as a single operating segment which is based upon the Company’s organizational and management structure, as well as information used by the Company’s CODM to allocate resources and other factors. The accounting policies of the segment are the same as those described in Note 3.

On ~~August 1,~~The ~~2023,~~key ~~the Company~~measure ~~entered~~of asegment ~~twelve-month~~profitability ~~lease~~that ~~agreement~~the toCODM ~~rent~~uses ato ~~general~~allocate ~~office~~resources and ~~storage~~assess ~~space~~performance ~~for~~is ~~its~~consolidated ~~purchased~~net ~~inventory~~loss, ~~for~~as areported ~~monthly~~in ~~rental fee~~the consolidated statements of ~~$100~~operations. The ~~Company~~following ~~renewed~~table presents the ~~lease~~significant ~~for~~revenue ~~another~~and ~~twelve~~expense ~~months~~categories atof athe ~~monthly~~Company’s ~~rental~~single ~~fee~~operating ~~of $200.~~segment:

On August 14, 2023, the Company entered a six-month lease agreement to rent an office for operating purposes with a monthly rental fee of $550. After the initial six-month term, the lease was renewed on a month-to-month basis.

	For The Three Months Ended
	March 31,			March 31,
	2026			2025
	(Unaudited)			(Unaudited)
Revenues, net	$	8,666,261		$	11,392,078
Less cost of goods sold		10,116,838			10,728,765
Less significant segment expenses:
Commission expenses		80,826			79,616
Marketing consulting expenses		195,892			426,262
Products testing and certification expenses		110,741			211,019
Warranty expenses		34,704			69,208
Marketing and advertising expenses		262,498			164,682
Other selling and marketing expenses		66,090			10,067
Payroll and payroll tax expenses		888,363			888,399
Professional expenses		344,167			441,663
Insurance expenses		161,048			111,284
Credit losses		1,681,606			401,988
Office expenses		80,614			74,883
Rent expenses		1,404,674			66,850
Travel expenses		32,008			44,392
Impairments of right-of-use assets		25,855,427			-
Other general and administrative		71,977			32,355
Other research and development expenses		965,380			851,932
Research and development expenses-related party		-			22,792
Stock-based compensation expenses		279,218			326,588
Other segment items:
Interest expense		2,304,183			1,553,993
Other expense (income), net		-			2,118
Change in fair value of earnout liabilities		-			(1,032,267	)
Provision for income taxes		-			-
Segment net loss	$	(36,269,993	)	$	(4,084,511	)

~~Long-term leases~~ 27

In September 2023, the Company signed a three-year lease agreement to rent a general office and storage space for business operations with a monthly rent of $3,096, plus varied monthly CAM. The commencement date of this lease is October 1, 2023 and has no renewal option. On July 17, 2024, the Company extended the lease for another 35 months to be commenced on October 1, 2026 and ended August 31, 2029. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.

	For The Nine Months Ended
	March 31,			March 31,
	2026			2025
	(Unaudited)			(Unaudited)
Revenues, net	$	45,606,134		$	51,984,361
Less cost of goods sold		42,095,364			48,732,206
Less significant segment expenses:
Commission expenses		230,965			421,802
Marketing consulting expenses		582,697			1,233,821
Products testing and certification expenses		349,921			465,350
Warranty expenses		198,995			344,937
Marketing and advertising expenses		630,488			334,673
Other selling and marketing expenses		215,940			83,214
Payroll and payroll tax expenses		2,734,084			2,825,028
Professional expenses		2,066,666			1,449,299
Insurance expenses		499,694			448,170
Credit losses		1,765,169			464,988
Office expenses		245,717			257,609
Rent expenses		2,860,739			192,122
Travel expenses		78,960			172,527
Impairments of right-of-use assets		25,855,427			-
Other general and administrative		140,250			117,452
Other research and development expenses		1,153,296			1,432,153
Research and development expenses-related party		-			91,168
Stock-based compensation expenses		982,337			527,542
Other segment items:
Interest expense		6,319,324			3,005,186
Other expense (income), net		21,450			257
Change in fair value of earnout liabilities		-			(5,687,989	)
Provision for income taxes		-			-
Segment net loss	$	(43,421,349	)	$	(4,927,154	)

~~In June 2024, the Company signed a six year and 11.5 months lease agreement to rent a general office for business operations with a monthly rent of $3,500, plus varied monthly CAM.~~Note ~~The~~23 commencement date of this lease is June 15, 2024 and the expiration date is May 31, 2031. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.— Subsequent events

26The Company evaluated all events and transactions that occurred after March 31, 2026 up through the date the Company issued these unaudited condensed consolidated financial statements. Based on this review, the Company did not identify any subsequent events that would require adjustment or disclosure in the unaudited condensed consolidated financial statements.

On July 17, 2024, the Company signed a five-year and one-half month lease agreement to rent a general office and storage space for business operations with a monthly rent of $10,534, plus varied monthly CAM. The commencement date of this lease is August 15, 2024 and has no renewal option. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease. 28

~~On July 12, 2024, the Company~~ITEM signed and further amended a ten-and-half-year lease agreement (“July 2024 Lease”) to rent a 101,145 square feet factory and warehouse for business operations with an initial monthly rent of $131,489, plus varied monthly operating expenses and real estate tax2. ~~The commencement~~ ~~date~~MANAGEMENT’S ofDISCUSSION ~~this~~AND ~~lease~~ANALYSIS isOF ~~July~~FINANCIAL 1,CONDITION ~~2025~~AND ~~and~~RESULTS ~~the~~OF expiration date is December 31, 2035. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.OPERATIONS

OnThe following ~~December~~discussion ~~20,~~and ~~2024,~~analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements ~~Company~~and ~~further~~the ~~expanded~~related notes included elsewhere in this Quarterly Report on Form 10-Q and the ~~July~~audited ~~2024~~financial ~~Lease~~statements toand ~~include~~the ~~additional~~other ~~102~~information set forth in the Annual Report on Form 10-K for the fiscal year ended June 30,~~099~~ ~~square~~2025 ~~feet~~filed with athe ~~commencement~~Securities ~~date~~and ofExchange ~~January~~Commission (the 1“SEC”) on October 15, ~~2026~~2025. ~~(See~~In addition to historical information, the following Management’s Discussion and Analysis ~~Note~~of ~~18)~~Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

AsFoxx Development Holdings Inc. (“we,” “our”, “us”, or the “Company”) was incorporated on November 13, 2023 under the name “Acri Capital Merger Sub I Inc.” On September 26, 2024 (the “Closing”), Acri Capital Acquisition Corporation, a Delaware corporation and our parent company at the time, (“ACAC”) consummated a previously announced business combination pursuant to the terms of ~~December~~the business combination agreement, dated February 18, 2024 (as amended on May 31, ~~2025~~2024, collectively, the “Business Combination Agreement”), by and among us, ACAC, Acri Capital Merger Sub II Inc., a Delaware corporation ~~June~~and 30our wholly-owned subsidiary at the time (“Merger Sub”), ~~2025~~and Foxx Development Inc., a Texas corporation incorporated on May 17, 2017 (“Old Foxx”), pursuant to which (i) ACAC merged with and into us (the ~~weighted-average~~“Reincorporation ~~remaining~~Merger”), with ~~operating~~us ~~lease~~surviving ~~term~~the ofReincorporation ~~its~~Merger, ~~existing~~and ~~leases~~(ii) isOld ~~approximately~~Foxx ~~9.64~~merged ~~years~~with and 4into Merger Sub, with Merger Sub surviving as our wholly-owned Delaware subsidiary (the “Acquisition Merger”).51 ~~years~~The Reincorporation Merger, the Acquisition Merger, and the transactions ~~respectively~~contemplated under the Business Combination Agreement, are collectively referred to as the “Business Combination”.

~~The following table sets~~Upon ~~forth~~Closing, ~~the~~we ~~Company’s~~were ~~minimum~~renamed ~~long-term lease payments in future periods~~ as of“Foxx ~~December~~Development ~~31,~~Holdings ~~2025~~Inc.”, ~~which~~and ~~represents~~ the ~~operating~~ ~~lease~~Merger ~~liabilities~~Sub onwas ~~the~~renamed ~~accompanying~~as ~~balance~~“Foxx ~~sheet:~~Development Inc.” (the “Subsidiary”).

	Operating lease payments
For the six months ending June 30, 2026	$	1,032,785
For the twelve months ending June 30, 2027		2,526,270
For the twelve months ending June 30, 2028		2,627,563
For the twelve months ending June 30, 2029		2,734,028
For the twelve months ending June 30, 2030		2,641,300
Thereafter		16,021,056
Total lease payments		27,583,002
Less: discount		(6,543,529	)
Present value of operating lease liabilities		21,039,473
Operating lease liabilities, current portion		(1,187,583	)
Operating lease liabilities, non-current portion	$	19,851,890

The ACAC securities previously traded on the Nasdaq Capital Market (“Nasdaq”) were delisted and ceased trading following the Closing. On September 27, 2024, one business day after the Closing, our Common Stock and Warrants became listed on the Nasdaq under trading symbols “FOXX” and “FOXXW,” respectively.

~~Operating~~Together with ~~lease~~our ~~expenses~~Subsidiary, we are a technology innovation firm specializing in the communications sector. Since our establishment in 2017, ~~consist~~we ofhave expanded our presence to include various locations throughout the ~~following:~~United States, such as San Francisco, CA, Dallas, TX, Atlanta, GA, Los Angeles, CA, Miami, FL, and New York, NY. This expansion enables us to provide sales, retail, distribution, and after-sales support services while simultaneously driving innovation through active research and development efforts aimed at pioneering new customization standards and services.

Operating lease cost	Classification	For the Three Months Ended December 31, 2025		For the Three Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Lease expenses	General, and administrative	$	725,165	$	65,988
Lease expenses – short term	General, and administrative		2,138		3,550
Total operating lease cost		$	727,303	$	69,538

Our business model involves providing comprehensive hardware and software specifications to original design manufacturers. Once the products are developed, we engage with third-party agencies to secure necessary testing and certifications, including Equipment Authorizations from the FCC and certifications from the Global Mobile Suppliers Association. We currently offer a range of Foxx-branded products, including tablets, smartphones, wearables, and expects to launch other high-quality communication terminals. Our products are generally priced competitively after considering various factors such as product costs, research and development investments, regulatory compliance, testing expenses, and shipping costs. Our customers are primarily distributors who sell Foxx-branded products in the U.S. public channels and to major carriers in the United States such as T-Mobile, AT&T, and Verizon. Our customers also included individual e-commerce customers from TikTok Shop, which we began our e-commerce operations in March 2024.

27We have generated most of our revenue from the sales of tablets and smartphones. We expect to enter the U.S. IoT markets and potentially the private label Mobile Virtual Network Operator (“MVNO”) market, with the aim of growing into a key player both domestically and globally. We have been preparing to enter these markets by adding additional features and providing related services that enable Foxx-branded devices to have IoT and MVNO capabilities.

Operating lease cost	Classification	For the Six Months Ended December 31, 2025		For the Six Months Ended December 31, 2024
		(Unaudited)		(Unaudited)
Lease expenses	General, and administrative	$	1,450,297	$	117,372
Lease expenses – short term	General, and administrative		5,768		7,900
Total operating lease cost		$	1,456,065	$	125,272

~~For~~We manage inventory and meet market demand through our build-to-order business model. After customers place purchase orders in bulk with us, we place purchase orders with suppliers to manufacture the ~~six~~products ~~months~~that ~~ended~~meet customers’ products specifications and budget ~~December~~requirements. 31Prior to 2023, ~~2025~~we relied on limited suppliers for the manufacturing of mobile phone and ~~2024,~~tablet ~~$818,659~~products and ~~$77,694~~on limited customers for the distribution of ~~cash~~these ~~were~~products. ~~used~~We ~~for~~selectively ~~operating~~concentrated ~~lease~~our ~~liabilities,~~resources ~~respectively~~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.

~~Note~~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 sixteen wholesale customers to expand our operations in the market and expect 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 range 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 to expand product range and reaching a broader customer base, we will be able to move away from relying on limited customers and suppliers. As we dedicated our resources to expansion, we experienced a significant decrease in the sales of tablet and mobile phone products during the year ended June 30, 2024 as compared to the same period in 2023: (i) 18new —customers began orders in much smaller quantities as compared to our previous customer in order to build up a trustworthy relationship; (ii) ~~Commitments~~similarly and ~~contingencies~~relevantly, we placed order with new suppliers in much smaller quantities to build up relationship and ensure the quality of the products; and (iii) new product models on both tablet and mobile phones order by new customers required approximately 6-9 months from development to mass production.

~~Contingencies~~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 are cutting down their sales teams in anticipation of the reduced customer base, which affects 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 the demand of our products. However, we may continue to target end-users who are eligible for the Lifeline Program, which is administered by the Universal Service Administrative Company (USAC) and receives funding from the Universal Service Fund, a government program that receives annual contributions from telecommunications companies or their customers. At the same time, because we have initiated our strategic shifts to diversify our product offerings, we expect to target customers who are interested in other mobile devices, tablets, and IoT products. In addition, we began launching our products through TikTok Shop in March 2024 and we expect to grow our sales through this e-commerce channel.

~~From~~During ~~time~~the tonine ~~time~~months ended March 31, ~~the~~2026, ~~Company is~~we arevised ~~party~~our business strategy and decided to ~~certain~~exit ~~legal~~the ~~proceedings~~AIoT business. Accordingly, asin ~~well~~December as2025, ~~certain~~we completed ~~asserted~~the sales of our AIoT products and ~~unasserted~~disposed ~~claims~~of related AIoT equipment. ~~Amounts~~In ~~accrued~~addition, asin ~~well~~January as2026, ~~the~~we ~~total~~began ~~amount~~engaging in ofdropship ~~reasonably~~arrangement ~~possible~~to ~~losses~~reduce ~~with~~additional ~~respect~~freight tocost ~~such~~and ~~matters,~~usage ~~individually~~of ~~and~~our inwarehouse ~~aggregate,~~spaces. ~~are~~This ~~not~~change ~~deemed~~of tobusiness bestrategy ~~material~~helped us to ~~the~~reduce ~~unaudited condensed~~our ~~consolidated~~freight ~~financial~~costs ~~statements.~~and promoted better gross margin with our wholesales business

OnFor ~~November 22,~~the ~~2024,~~nine months aended ~~plaintiff~~March ~~filed Semensato v. Foxx Development Holdings Inc.~~31, ~~et al.~~2026, ~~No. 2024-1200~~our ~~(Del.~~sales ~~Ch.~~decreased ~~Ct.),~~compared ato ~~class action complaint (“Complaint”) in Delaware Chancery Court against~~ the ~~Company~~nine ~~and~~months ~~certain~~ended ~~“Individual~~March ~~Defendants” (“Joy” Yi Hua~~31, ~~Haitao Cui, “Jeff” Feng Jiang, “Eva” Yiqing Miao and Edmund R~~2025. ~~Miller)~~ ~~(“Action”).~~ The ~~lawsuit~~inflation ~~seeks~~rate ~~declaratory relief~~was ~~under provisions of the Delaware General Corporation Law relating to a waiver of the corporate opportunity doctrine that is contained~~steadily inincreasing ~~the~~throughout ~~Company’s~~2024 ~~Amended~~ and ~~Restated Certificate of Incorporation. The plaintiff seeks a declaration that the waiver provision is invalid~~2025, ~~an injunction against~~ the ~~Company~~consumers’ ~~and~~spending ~~the~~power ~~Individual~~was ~~Defendants to prevent them from attempting to enforce the waiver~~weakened, ~~attorneys’ fees,~~ and the ~~costs~~mobile ~~and~~phone ~~disbursements~~replacement ofrate ~~this action~~was lowered. ~~The~~Previously, ~~Company~~consumers ~~and~~tended ~~each~~to ofreplace ~~the~~their ~~Individual~~phones ~~Defendants~~every ~~deny~~more ~~any~~often ~~and~~between ~~all~~1 ~~wrongdoing alleged in the Complaint. However,~~ to ~~avoid~~2 ~~the cost and distraction of litigation~~years, ~~the~~whereas ~~directors~~now ofmany ~~the~~keep ~~board of~~ the ~~Company (the “Board”)~~same ~~determined~~device ~~that~~for itover ~~was~~2 ~~advisable~~years. ~~and~~In inaddition, ~~the~~lower ~~best~~order ~~interests~~volumes, ofresulting ~~the~~from ~~Company~~our ~~and~~intention ~~its~~of ~~stockholders~~increasing toselling ~~amend~~prices ~~Article~~in Xresponse ~~of the Charter (the~~to ~~“Amendment”).~~higher ~~The~~costs ~~Board~~driven ~~thus~~by ~~approved~~rising ~~and~~chip ~~adopted the Second Amended and Restated Certificate of Incorporation of the Company (the “Amended Charter”)~~prices, ~~and~~contributed ~~will~~to ~~direct~~ the ~~Amendment~~decline toin besales. ~~submitted~~Our tosales ~~the~~strategy ~~stockholders~~did ofnot ~~the~~execute ~~Company~~smoothly ~~for~~as ~~adoption and~~our ~~approval~~customers atdid ~~the~~not ~~next~~respond ~~annual~~well ~~meeting of stockholders~~ with the ~~Board’s~~increase ~~recommendation~~of ~~that~~selling ~~the~~prices ~~Amendment~~which belead ~~approved~~to ~~and adopted by~~ the ~~stockholders~~revenue ~~of the Company~~decreased.

On March 3, 2025, after the plaintiff was advised of the Board’s approval of the Amended Charter, the plaintiff filed a notice of voluntary dismissal of the Action as moot, which the Court approved by order dated March 4, 2025. Believing that the swift resolution of this Action was in the best interests of and benefit to the Company, and without admitting the allegations the plaintiff made in the Complaint, the Company has agreed to pay $85,000 (the “Mootness Fee,” inclusive of a $500 service award to the plaintiff) to the plaintiff’s counsel to resolve the anticipated application by the plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses. The fee was paid by the Company on March 18, 2025. In connection with the March 13, 2025 stipulated order closing the case, the Court ordered that the Company provide this notice. The Court has not and will not pass judgment on the amount of the Mootness Fee.30

On November 5, 2025, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for a period of 30 consecutive business days, the Company’s market value of listed securities (“MVLS”) closed below the $35,000,000 MVLS threshold required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has until May 4, 2026 to regain compliance with the MVLS requirement (the “Initial Compliance Period”). To regain compliance, the Company’s MVLS must close at $35 million or more for a minimum of ten consecutive business days during the Initial Compliance Period. If the Company does not regain compliance by the end of the Initial Compliance Period, Nasdaq staff will provide written notice to the Company that its securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings panel. The ~~Company intends to~~ ~~actively~~Business ~~monitor~~Combination its minimum market value of its listed securities and may, if appropriate, consider implementing available options to regain compliance with the MVLS requirement. There can be no assurance that the Company will be able to regain compliance with Nasdaq Listing Rule 5550(b)(2), or maintain compliance with any other listing requirements.

~~Lease~~ Incorporated as ~~Commitment~~a Delaware corporation under the name “Acri Capital Merger Sub I Inc.” on November 13, 2023, we entered into the Business Combination Agreement on February 18, 2024, as amended on May 31, 2024, by and among us, ACAC, Merger Sub, and Old Foxx.

~~On December 20, 2024, the~~Upon ~~Company~~the ~~further~~Closing ~~expanded~~of the ~~July~~Business ~~2024~~Combination ~~Lease~~on ~~(see~~September ~~Note 17) to include additional 102~~26,~~099~~ ~~square feet from January 1~~2024, ~~2026~~ACAC tomerged ~~December 31, 2035~~ with ~~an additional monthly rent of $132,729. The first two months’ rent of $364,801 was included in prepaid expenses~~ and ~~other~~ ~~current~~into ~~assets. Additional $550~~us,~~000~~ ofwith ~~security~~us ~~deposits~~surviving ~~were~~the ~~made~~Reincorporation ~~as a result of this lease amendment~~Merger, ~~which was included in the~~ ~~caption~~and ~~“security~~(ii) ~~deposits”~~Old inFoxx ~~the~~merged ~~accompanying~~with ~~consolidated~~and ~~balance~~into ~~sheets~~Merger ~~as of December 31~~Sub, ~~2025.~~with ~~These~~Merger ~~leases~~Sub ~~were~~surviving ~~not included in the operating right-of-use assets balance~~ as ofour ~~December~~wholly ~~31,~~owned ~~2025~~Delaware assubsidiary ~~the~~after ~~commencement date of~~ the ~~lease was January 1, 2026~~Acquisition Merger.

28These transactions were completed in connection with the consummation of the Business Combination: (i) all 2,270,096 ACAC outstanding shares were converted on a one-for-one basis into our Common Stock; (ii) all issued and outstanding shares of Old Foxx Common Stock were cancelled in exchange for the rights for Old Foxx Shareholders, including the holders of Old Foxx’s convertible promissory notes upon the conversion of the convertible promissory notes and their interests into Old Foxx Common Stock immediately prior to Closing, to receive such stockholder’s pro rata share of 5,000,000 shares of our Common Stock were cancelled in exchange for the right by the Old Foxx Shareholders to receive a pro rata share of 3,303,333 shares of our Common Stock at the exchange ratio of 3.3033; (iii) 4,200,000 shares (“Earnout Shares”) of our Common Stock were reserved for issuance to Old Foxx’s stockholders subject to the vesting schedule based on our financial performance for the fiscal years ended June 30, 2025 and 2024. The Earnout Shares were forfeited since we did not meet the financial performance threshold; (iv) all issued and outstanding 12,156,417 ACAC warrants were converted on a one-for-one basis into our warrants.

~~Reference to Note 17 for detailed disclosure~~Public ~~of other entered lease agreements and liabilities.~~ Listing

~~Risks~~The ACAC securities previously traded on Nasdaq were delisted without any action needed to be taken on the part of the holders of such securities and ~~Uncertainties~~are no longer traded on Nasdaq following the Closing. On September 27, 2024, one business day after the Closing, our Common Stock and Warrants became listed on the Nasdaq Capital Market (“Nasdaq”) under trading symbols “FOXX” and “FOXXW,” respectively.

~~On April 2, 2025, the President~~Accounting of the United States signed Executive Order 14257, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” (the “Executive Order 14257”), to take action based on the results of certain investigations related to the causes of the U.S.’s large and persistent annual trade deficits in goods. Subsequent to Executive Order 14257, there have been additional executive orders that have, among other actions, effectively suspended the enforcement of certain country-specific tariffs until November 10, 2025. The potential for further changes in trade policies, including new tariffs or changes to existing ones, introduces uncertainty regarding the Company’s future costs, revenues, collectability of account receivables, carrying value of inventories, and overall financial performance. The Company monitors these developments closely and will continue to evaluate their potential impact on its operations, financial condition, and results of operations. The ultimate financial impact of these uncertainties is difficult to quantify at this time.Treatment

OnWhile the ~~July~~legal 4,acquirer ~~2025,~~in the ~~One Big~~Business ~~Beautiful~~Combination ~~Bill~~was ~~Act~~ACAC, ~~Public~~for ~~Law~~financial Noaccounting and reporting purposes under U.S. ~~119021~~GAAP, (Old Foxx was the accounting acquirer, and the Business Combination was accounted for as a “~~OBBBA~~reverse recapitalization.”) A reverse recapitalization (i.e., ~~was~~a ~~signed~~capital ~~into~~transaction ~~law~~involving the issuance of stock by ACAC for the ~~President~~stock of ~~the~~Old ~~United~~Foxx) ~~States,~~does ~~which introduced~~not ~~significant~~result ~~and~~in ~~wide-ranging~~a ~~changes~~new tobasis of accounting, and the ~~U.S.~~unaudited ~~tax~~condensed ~~system.~~consolidated ~~Significant~~financial ~~components~~statements ~~include~~of ~~restoration~~the combined company represent the continuation of ~~100%~~the ~~accelerated~~unaudited condensed ~~tax~~consolidated ~~depreciation~~financial onstatements ~~qualifying~~of ~~property~~Old ~~including~~Foxx ~~expansion~~in tomany ~~cover~~respects. ~~qualified~~Accordingly, ~~production~~the ~~property.~~assets, ~~Another~~liabilities ~~major~~and ~~aspect~~results of ~~the~~operations ~~changes~~of Old ~~includes~~Foxx became the ~~return~~historical tofinancial ~~immediate~~statements ~~expensing~~ of ~~domestic~~the ~~research~~combined company, and ~~experimental~~ACAC’s ~~expenditures~~assets, ~~(“R&E”)~~liabilities, ~~which~~and inresults ~~some~~of ~~cases~~operations ~~may~~were ~~include~~consolidated ~~retroactive~~with ~~application~~Old ~~back~~Foxx tobeginning ~~2021~~from ~~for~~the ~~businesses~~Closing ~~with~~on ~~gross~~September ~~receipts~~26, of2024. ~~less~~Operations ~~than~~prior ~~$31~~to ~~million~~the orBusiness ~~accelerated~~Combination ~~tax~~are ~~deductions~~presented ofas ~~R&E~~those ~~that~~of ~~was~~Old ~~previously~~Foxx. ~~capitalized~~The ~~for~~net ~~larger~~assets ~~businesses. The~~of ~~legislation~~ACAC ~~also~~are ~~reinstates~~recognized ~~EBITDA-based~~at ~~interest~~historical ~~deductions for~~cost ~~tax~~(which ~~purposes~~is ~~and~~expected ~~makes~~to ~~several~~be ~~business~~consistent ~~tax~~with ~~incentives~~carrying ~~permanent. Less~~value), with ~~favorable~~no ~~business~~goodwill ~~provisions~~or ~~including~~other ~~limitations~~intangible ~~on tax~~assets ~~deductions~~recorded ~~for~~upon ~~charitable~~execution ~~contributions~~of ~~were~~the ~~also~~Business ~~adopted~~Combination.

~~Note 19 — Income taxes~~ Transaction Financing

AsIn consideration of ~~December~~market 31conditions, ~~2025~~pursuant ~~and June~~to ~~30,~~the ~~2025~~Business Combination Agreement, the ~~Company’s~~parties ~~deferred~~agreed ~~tax~~to ~~asset~~use ~~had~~commercially abest ~~full~~efforts to ~~valuation~~secure ~~allowance~~financing ~~recorded~~to ~~against~~pay ~~it.~~transaction ~~The~~expense ~~effective~~and ~~tax~~working ~~rate~~capital ~~for each~~ of ~~the~~Foxx, ~~three~~including ~~and~~without ~~six~~limitation, ~~months~~a ~~ended~~PIPE ~~December 31~~financing, ~~2025~~private ~~and~~financing, redemption ~~2024~~waiver, ~~was 0%.~~convertible ~~The~~debt, ~~effective~~forward ~~tax~~purchase ~~rate~~agreement, ~~differs~~backstop, ~~from~~or ~~the~~equity ~~statutory~~line ~~tax rate~~ of ~~21% primarily~~ ~~due~~credit to(collectively, the ~~valuation allowance on the deferred tax assets~~“Transaction Financing”).

On June 21, 2023, Old Foxx entered into a securities purchase agreement (the “Convertible Note 20 —Agreement 1”) with New Bay Capital Limited, a Hong Kong registered company (“New Bay”), and issued a promissory note (“Note 1”) to New Bay in the principal amount of $2 ~~Disaggregated~~million ~~information~~with an interest rate of 7% per annum, convertible into shares of Old Foxx common stock at $30.00 per share upon the listing of ~~revenues~~Old Foxx common stock through an initial public offering. On December 21, 2023, Old Foxx issued into another securities purchase agreement (the “Convertible Note Agreement 2”) with New Bay with the same terms and conditions as the Convertible Note Agreement and issued another promissory note (“Note 2”) to New Bay in the principal amount of $2 million.

~~Disaggregated~~In connection ~~information~~with the Business Combination Agreement and all the transaction contemplated therein (the “Business Combination”), in the spring of ~~revenues~~2024, byOld ~~product~~Foxx ~~type~~and isACAC asreached ~~follows:~~out to New Bay to seek its interest in participating in further financing in connection with the Business Combination.

	For the Three Months Ended				For the Six Months Ended
	December 31,				December 31,
	2025		2024		2025		2024
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Tablet products	$	278,720	$	168,360	$	329,190	$	173,115
Mobile phone products		15,209,368		14,845,446		32,873,429		37,722,545
Wearable products		643,992		1,780,637		2,745,077		1,780,637
Subtotal product revenues		16,132,080		16,794,443		35,947,696		39,676,297
App service commission revenue		584,294		685,788		990,060		915,986
Other services		198		-		2,117		-
Subtotal service revenues		584,492		685,788		992,177		915,986
Total revenues, net	$	16,716,572	$	17,480,231	$	36,939,873	$	40,592,283

After negotiations with New Bay, On March 15, 2024, Old Foxx and New Bay agreed to an amendment to amend both Convertible Note Agreement 1 and Convertible Note Agreement 2, and to amend Note 1 and Note 2, by removing the lock-up provisions as provided therein and allowing the unpaid principal and accrued interest on Note 1 and Note 2 to convert to Old Foxx common stock immediately prior to the closing of the Business Combination. New Bay also subscribed for a new promissory note (“Note 3”) in the principal amount of $2 million under the same terms and conditions as amended Note 1 and Note 2 (collectively, the “New Bay Notes”).

29On March 15, 2024, Old Foxx and New Bay amended the terms of the Note 1 and Note 2 accordingly, and New Bay subscribed for a new promissory note (“Note 3”) in the principal amount of $2 million under the same terms and conditions as amended Note 1 and Note 2 (collectively “New Bay Notes”).

~~Disaggregated~~On February 20, ~~information~~2024, New Bay introduced Old Foxx to BR Technologies PTE, Ltd. (“BR Technologies”), a Singapore-based company. On May 30, 2024, Old Foxx, BR Technologies and Grazyna Plawinski Limited, a Singapore-based company (“Grazyna”), entered into a securities purchase agreement for issuance of ~~revenues~~promissory bynotes ~~business~~in ~~line~~the isamount of up to $9.0 million with an interest rate of 7% per annum under the same terms and conditions as ~~follows:~~provided in the New Bay Notes. A promissory note was issued by Old Foxx to BR (the “Note 4”) in the principal amount of $6 million and promissory notes issued by Old Foxx to Grazyna (the “Note 5”) in the total principal amount of $3 million on September 12, 2024.

	For the Three Months Ended				For the Six Months Ended
	December 31,				December 31,
	2025		2024		2025		2024
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Wholesale revenues	$	15,422,142	$	16,610,016	$	34,949,026	$	39,469,469
E-Commerce revenues		709,938		184,427		998,670		206,828
Subtotal product revenues		16,132,080		16,794,443		35,947,696		39,676,297
App service commission revenue		584,294		685,788		990,060		915,986
Other services		198		-		2,117		-
Subtotal service revenues		584,492		685,788		992,177		915,986
Total revenues, net	$	16,716,572	$	17,480,231	$	36,939,873	$	40,592,283

Immediately prior to the Closing, all the accrued and unpaid principal and interests on the New Bay Notes, Note 4, and Note 5 were converted into: (x) 212,050 shares of Old Foxx common stock for the New Bay Notes, (y) 200,882 shares of Old Foxx common stock for Note 4, and (z) 100,690 share of Old Foxx common stock for Note 5, at a price of $30.00 per share. At the Closing, all of the converted shares of Old Foxx common stock were cancelled in exchange for the holders’ pro rata share of the Closing Payment Shares using the exchange ratio of 3.3033, resulting in (x) 700,473 shares of our Common Stock issued to New Bay, (y) 663,581 shares of our Common Stock issued to BR Technologies, and (z) 332,614 shares of our Common Stock issued to Grazyna.

~~Note 21 — Basic and diluted loss per share~~32

~~Basic EPS is measured as~~Nasdaq ~~net~~Listing loss divided by the weighted average common shares outstanding for the period. Diluted net loss per share attributable to common stockholders adjusts basic loss per share for the potentially dilutive impact of non-participating shares of common stock that are subject to the convertible note, and other securities outstanding. Certain securities may be anti-dilutive and would be excluded from the calculation of diluted loss per share and disclosed separately. Because of the nature of the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods.Update

~~The~~On ~~following~~November ~~table~~5, ~~presents~~2025, we received a deficiency letter from the ~~computation~~Nasdaq Listing Qualifications Department (the “Staff”) of ~~basic~~the ~~and~~Nasdaq ~~diluted~~Stock ~~loss~~Market ~~per~~LLC ~~share~~(“Nasdaq”) notifying ~~attributable~~us tothat, ~~common~~for ~~stockholders~~a period of 30 consecutive business days, our market value of listed securities (“MVLS”) closed below the $35,000,000 MVLS threshold required for continued listing on the ~~periods~~Nasdaq ~~presented:~~Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have until May 4, 2026 to regain compliance with the MVLS requirement (the “Initial Compliance Period”). For the last 15 consecutive business days, from March 31 through April 21, 2026, our MVLS has been $35,000,000 or greater. Accordingly, we have regained compliance with the Rule, and this matter is now closed.

	For the Three Months Ended December 31,					For the Six Months Ended December 31,
	2025			2024		2025			2024
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Net (loss) income – basic and diluted EPS	$	(4,285,914	)	$	1,424,146	$	(7,160,147	)	$	(842,643	)
Basic and diluted weighted average shares outstanding*		6,892,729			7,280,366		6,836,356			5,389,365
Basic and diluted (loss) income per share	$	(0.62	)	$	0.20	$	(1.05	)	$	(0.16	)

Key Factors that Affect Operating Results

*We believe ~~There~~the ~~were~~key nofactors ~~shares~~affecting ~~that~~our ~~have~~financial acondition ~~dilutive effect for the three~~ and ~~six~~results ~~months~~of ~~ended~~operations ~~December~~include ~~31,~~the ~~2025 and 2024.~~following:

30Retention of Key Management Team Members

One of the key differentiating factors of ours is the rich blended nature of our management team. Our management team comprises executives with extensive experience in electronics industry with IoT services related experience. The ~~following~~wide ~~table~~array ~~outlines~~of industry experience captured ~~dilutive~~by ~~common~~our ~~share~~management ~~equivalents~~team ~~outstanding,~~allows ~~which~~us ~~are~~to ~~excluded~~deliver inadvanced ~~the~~technology ~~above~~and ~~diluted~~superior ~~net~~products ~~loss~~to ~~per~~our ~~share~~customers. ~~calculation,~~Losing asany member of our key executive team could significantly impact on the ~~effect~~quality of services and products that we currently offer. Such departures may prompt ~~their~~customers ~~inclusion~~to ~~would~~explore bealternative ~~anti-dilutive~~products or ~~the~~IoT ~~share~~cloud ~~equivalents~~platforms ~~were~~offered ~~contingently~~by ~~issuable~~different asvendors ofor ~~each~~service ~~period presented:~~providers.

	For the Three Months Ended December 31,				For the Six Months Ended December 31,
	2025		2024		2025		2024
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Earnout Shares*		-		2,100,000		-		2,100,000
Warrants **		12,145,917		12,145,917		12,145,917		12,145,917
RSUs**		470,324		707,860		470,324		707,860
Total		12,616,241		14,953,777		12,616,241		14,953,777

Investment in technology and talent

*We invest Assignificant ~~described~~resources in ~~Note~~outsourcing 4partnerships -and ~~Reverse~~dedicate ~~recapitalization,~~efforts ~~the~~to ~~Earnout~~research ~~Shares~~and ~~that~~develop ~~are~~new ~~contingently~~products, ~~issuable~~solutions, inagent platforms, ~~connection~~and ~~with~~related ~~the~~services. ~~Business~~This ~~Combination~~commitment ~~are~~is ~~subject~~essential to ~~vesting~~uphold ~~based~~our oncompetitiveness in the ~~Company’s~~industry, ~~financial~~especially ~~performance~~in ~~during~~ the ~~earnout~~realm of ~~period~~IoT services. ~~The~~Advancing ~~Earnout~~technology ~~Shares~~and ~~are~~enhancing ~~excluded~~capabilities ~~from~~are ~~the~~pivotal ~~calculation~~for ofenterprise ~~basic~~growth, ~~and~~necessitating ~~diluted~~continual ~~weighted-average~~progress in ~~number~~electronic ofproduct ~~common~~technologies, ~~shares~~novel ~~outstanding~~services, ~~until~~and ~~vested~~expanded capabilities.

**To maintain ~~The~~and ~~Company~~expand our customer base, we must sustain a culture of innovation that aligns with the industry’s ~~outstanding~~evolution. ~~warrants~~This entails ~~and~~continuously ~~RSUs~~introducing ~~were~~cutting-edge ~~excluded~~technologies ~~from~~to the ~~computation~~market. ofOur ~~diluted~~current ~~EPS~~focus ~~because~~in itresearch ~~has~~and ~~anti-dilutive~~development ~~effect~~revolves around bolstering comprehensive communication, storage, and energy solutions, as ~~the~~well ~~company~~as ~~had~~advancing a5G ~~net~~technology. ~~loss~~This ~~during~~includes ~~the~~areas ~~periods~~such ~~presented~~as baseband development, Radio Frequency (RF) layout optimization, Session Initiation Protocol (SIP) integration, and rigorous system testing.

~~Note 22~~In ~~— Segment~~addition, ~~information~~in January 2026, we entered into a R&D agreement with a third party, pursuant to which the third party will provide the Company technical development services for the operating system of the Company’s mobile phone products, including developing a customized FOXX OS cross-platform inheritance framework to enable compatibility and adaptation across multiple platforms and operating systems; establishing a unified compatibility and integration framework for system modules and applications to ensure overall system stability and interoperability; optimizing core applications for multi-platform adaptation to enhance system performance, smooth operation, and user experience; developing proprietary applications, including a mobile manager, home screen, and browser, and complete their integration into the operating system; integrating and validating advertising and paid-service-related business modules to ensure proper functionality, regulatory compliance, and security; and conducting system and UX/UI design and implementation to enhance visual design and user interaction, ensuring a consistent overall style.

~~The Company conducts business~~Our asability ato ~~single~~expand ~~operating~~our ~~segment~~products ~~which is based upon the Company’s organizational~~ and ~~management~~services ~~structure, as well as information used by the Company’s CODM to allocate resources~~ and ~~other~~diversify ~~factors.~~customer ~~The accounting policies of the segment are the same as those described in Note 3.~~base

~~The~~Currently, our ~~key~~main ~~measure~~revenue ofstream ~~segment profitability~~originates ~~that~~from the ~~CODM~~sale ~~uses~~of totablets ~~allocate~~and ~~resources~~mobile ~~and~~phones. ~~assess~~As ~~performance~~brand isrecognition ~~consolidated~~and ~~net~~acceptance ~~loss~~grow, aswe ~~reported~~anticipate a surge in ~~the~~user ~~consolidated statements~~adoption of ~~operations~~our wireless services and intelligent products. ~~The~~Our ~~following~~capacity ~~table~~to ~~presents~~broaden ~~the~~our ~~significant~~products ~~revenue~~portfolio, offer new services and ~~expense~~attract ~~categories~~a ofmore ~~the~~diversified ~~Company’s~~customer ~~single~~base could significantly influence our future operating ~~segment:~~ results.

	For The Three Months Ended
	December 31,			December 31,
	2025			2024
	(Unaudited)			(Unaudited)
Revenues, net	$	16,716,572		$	17,480,231
Less cost of goods sold		14,499,792			15,289,565
Less significant segment expenses:
Commission expenses		96,902			38,700
Marketing consulting expenses		192,378			513,112
Products testing and certification expenses		52,483			162,226
Warranty expenses		92,103			169,651
Marketing and advertising expenses		267,190			114,469
Other selling and marketing expenses		101,073			72,516
Payroll and payroll tax expenses		964,438			1,195,726
Professional expenses		995,246			762,549
Insurance expenses		166,746			253,691
Credit losses		187,840			63,000
Office expenses		89,775			95,814
Rent expenses		727,303			69,538
Travel expenses		26,726			75,024
Other general and administrative		42,298			26,019
Other research and development expenses		30,528			573,193
Research and development expenses-related party		-			45,584
Stock-based compensation expenses		406,322			200,954
Other segment items:		-			-
Interest expense		2,003,236			1,042,198
Other expense (income), net		60,107			(1,861	)
Change in fair value of earnout liabilities		-			(4,705,583	)
Provision for income taxes		-			-
Segment net (loss) income	$	(4,285,914	)	$	1,424,146

31Results of Operations

	For The Six Months Ended
	December 31,			December 31,
	2025			2024
	(Unaudited)			(Unaudited)
Revenues, net	$	36,939,873		$	40,592,283
Less cost of goods sold		31,978,526			38,003,441
Less significant segment expenses:
Commission expenses		150,139			342,186
Marketing consulting expenses		386,805			807,559
Products testing and certification expenses		239,180			254,331
Warranty expenses		164,291			275,729
Marketing and advertising expenses		367,990			169,991
Other selling and marketing expenses		149,850			73,147
Payroll and payroll tax expenses		1,845,721			1,936,629
Professional expenses		1,722,499			1,007,636
Insurance expenses		338,646			336,886
Credit losses		83,563			63,000
Office expenses		165,103			182,726
Rent expenses		1,456,065			125,272
Travel expenses		46,952			128,135
Other general and administrative		68,273			85,097
Other research and development expenses		187,916			580,221
Research and development expenses-related party		-			68,376
Stock-based compensation expenses		703,119			200,954
Other segment items:
Interest expense		4,015,141			1,451,193
Other expense (income), net		21,450			(1,861	)
Change in fair value of earnout liabilities		-			(4,655,722	)
Provision for income taxes		-			-
Segment net loss	$	(7,151,356	)	$	(842,643	)

Comparison for the three months ended March 31, 2026 and 2025

Note 23 — Subsequent events

	For the Three Months Ended March 31,
	2026			2025			Change ($)			Change (%)
	(Unaudited)			(Unaudited)
Revenues, net	$	8,666,261		$	11,392,078		$	(2,725,817	)		(23.9	)%
Cost of goods sold		10,116,838			10,728,765			(611,927	)		(5.7	)%
Gross (loss) profit		(1,450,577	)		663,313			(2,113,890	)		(318.7	)%
Operating expenses
Selling expense		964,440			1,551,369			(586,929	)		(37.8	)%
General, and administrative expense		2,928,172			1,421,299			1,506,873			106.0	%
Research and development – related party		-			22,792			(22,792	)		(100.0	)%
Research and development		1,085,588			826,532			259,056			31.3	%
Provision of credit losses		1,681,606			401,988			1,279,618			318.3	%
Impairments of right-of-use assets		25,855,427			-			25,855,427			100.0	%
Loss from operations		(33,965,810	)		(3,560,667	)		(30,405,143	)		853.9	%
Other expense, net		(2,304,183	)		(523,844	)		(1,780,339	)		339.9	%
Provision for income tax		-			-			-			-	%
Net loss		(36,269,993	)		(4,084,511	)		(32,185,482	)		788.0	%
Foreign currency translation adjustment		(3,318	)		(412	)		(2,906	)		705.3	%
Comprehensive loss	$	(36,273,311	)	$	(4,084,923	)	$	(32,188,388	)		788.0	%

The Company evaluated all events and transactions that occurred after December 31, 2025 up through the date the Company issued these unaudited condensed consolidated financial statements. Based on this review, the Company did not identify any subsequent events that would require adjustment or disclosure in the unaudited condensed consolidated financial statements.Revenues

32Our revenue is primarily derived from sales of electronic products. The total revenues decreased by approximately $2.7 million, or 23.9%, to approximately $8.7 million for the three months ended March 31, 2026 as compared to $11.4 million for the three months ended March 31, 2025. The decrease of the total revenue was mainly attributable to the decrease in mobile phone products and wearable and other products revenues.

~~ITEM~~Our revenues 2.from ~~MANAGEMENT’S~~our ~~DISCUSSION~~revenue ~~AND~~categories ~~ANALYSIS~~are OFsummarized ~~FINANCIAL~~as ~~CONDITION AND RESULTS OF OPERATIONS~~follows:

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in the Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the Securities and Exchange Commission (the “SEC”) on October 15, 2025. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

	For the Three Months Ended
	March 31, 2026		March 31, 2025
	(Unaudited)		(Unaudited)
Tablet products	$	83,301	$	219,545
Mobile phone products		8,002,139		8,868,686
Wearable products and others		254,039		1,557,962
Subtotal product revenues		8,339,479		10,646,193
App service commission revenue		324,342		690,817
Other services		2,440		55,068
Subtotal service revenues		326,782		745,885
Total revenues, net	$	8,666,261	$	11,392,078

~~Overview~~Tablet product sales were insignificant in our operations for the three months ended March 31, 2026. Revenue from the sales of tablets decreased by approximately $0.1 million, or 62.1%, to approximately $0.1 million for the three months ended March 31, 2026 from $0.2 million for the same period in 2025. Revenue from sales of phones decreased by approximately $0.9 million, or 9.8%, to approximately $8.0 million for the three months ended March 31, 2026 from $8.9 million for the same period in 2025. This decrease was primarily attributed to lower order volumes resulting from our intention of increasing selling prices in response to higher costs driven by rising chip prices. Our sales strategy did not execute smoothly as our customers did not respond well with the increase of selling prices which lead to the phones revenue decreased. Revenue from sales of wearable products and others decreased by approximately $1.3 million, or 83.7%, to approximately $0.3 million for the three months ended March 31, 2026 from $1.6 million for the three months ended March 31, 2025, as the consumers’ spending power was weakened and the demands of the wearable products were lowered during the three months ended March 31, 2026 period. Revenue from App service commission decreased by approximately $0.4 million, or 53.0%, to approximately $0.3 million for the three months ended March 31, 2026 from approximately $0.7 million for the three months ended March 31, 2025, as the sales of phones decreased and the consumers’ spending power was weakened. Revenue from other services was income generated by our other logistic and warehouse management and MVNO services and it was insignificant in our operations for the three months ended March 31, 2026.

Foxx Development Holdings Inc. (“we,” “our”, “us”, or the “Company”) was incorporated on November 13, 2023 under the name “Acri Capital Merger Sub I Inc.” On September 26, 2024 (the “Closing”), Acri Capital Acquisition Corporation, a Delaware corporation and our parent company at the time, (“ACAC”) consummated a previously announced business combination pursuant to the terms of the business combination agreement, dated February 18, 2024 (as amended on May 31, 2024, collectively, the “Business Combination Agreement”), by and among us, ACAC, Acri Capital Merger Sub II Inc., a Delaware corporation and our wholly-owned subsidiary at the time (“Merger Sub”), and Foxx Development Inc., a Texas corporation incorporated on May 17, 2017 (“Old Foxx”), pursuant to which (i) ACAC merged with and into us (the “Reincorporation Merger”), with us surviving the Reincorporation Merger, and (ii) Old Foxx merged with and into Merger Sub, with Merger Sub surviving as our wholly-owned Delaware subsidiary (the “Acquisition Merger”). The Reincorporation Merger, the Acquisition Merger, and the transactions contemplated under the Business Combination Agreement, are collectively referred to as the “Business Combination”.34

~~Upon Closing, we were renamed~~Cost asof ~~“Foxx~~Goods ~~Development Holdings Inc.”, and the Merger Sub was renamed as “Foxx Development Inc.” (the “Subsidiary”).~~Sold

~~The~~Our cost ~~ACAC~~of ~~securities~~goods ~~previously~~sold mainly consists of cost of merchandise and freight. Total cost of goods sold decreased by approximately $0.6 million, ~~traded~~or on5.7%, to approximately $10.1 million for the ~~Nasdaq~~three ~~Capital~~months ~~Market~~ended ~~(“Nasdaq”)~~March ~~were~~31, ~~delisted~~2026 ~~and~~as ~~ceased~~compared ~~trading~~to ~~following~~approximately $10.7 million for the ~~Closing.~~three Onmonths ~~September~~ended ~~27,~~March ~~2024~~31, 2025. The decrease in cost of goods sold is a direct result of a decrease in our revenue. The decrease ~~one~~is ~~business~~also ~~day~~attributable ~~after~~to the ~~Closing,~~decrease ~~our~~in ~~Common~~cost ~~Stock~~of ~~and~~products ~~Warrants~~as ~~became~~we ~~listed~~negotiated onwith ~~the~~our ~~Nasdaq~~vendor ~~under~~to ~~trading~~cover ~~symbols~~shipping ~~“FOXX”~~ and ~~“FOXXW,”~~tariff ~~respectively~~costs beginning in July 2025.

~~Together with our Subsidiary,~~Our wecost ~~are~~of agoods ~~technology~~sold ~~innovation~~from ~~firm~~their ~~specializing~~revenue incategories ~~the~~are ~~communications~~summarized ~~sector. Since our establishment in 2017, we have expanded our presence to include various locations throughout the United States, such~~ as San Francisco, CA, Dallas, TX, Atlanta, GA, Los Angeles, CA, Miami, FL, and New York, NY. This expansion enables us to provide sales, retail, distribution, and after-sales support services while simultaneously driving innovation through active research and development efforts aimed at pioneering new customization standards and services.follows:

	For the Three Months Ended
	March 31, 2026		March 31, 2025
	(Unaudited)		(Unaudited)
Tablet products	$	154,074	$	175,135
Mobile phone products		9,405,459		9,117,657
Wearable products and others		557,255		1,415,375
Other services cost		50		20,598
Total cost of goods sold	$	10,116,838	$	10,728,765

WeOur ~~have~~cost ~~generated~~of ~~most~~goods ofsold for ~~our~~tablets ~~revenue~~decreased by approximately $21,000, or 12.0%, to approximately $154,000 for the three months ended March 31, 2026 from approximately $175,000 for the ~~sales~~same period in 2025. Cost of ~~tablets~~goods ~~and~~sold ~~smartphones~~for mobile phone products increased by approximately $0.3 Wemillion, ~~expect~~or 3.2%, to approximately ~~enter~~$9.4 million for the ~~U.S. IoT~~three ~~markets~~months ~~and~~ended ~~potentially~~March 31, 2026 from approximately $9.1 million for the ~~private~~same ~~label~~period in 2025, primarily ~~Mobile~~due ~~Virtual~~to ~~Network~~inventory ~~Operator~~impairment ~~(“MVNO”)~~related ~~market~~to slow-moving inventory of approximately $2.6 million, ~~with~~and the ~~aim~~increased ofchip ~~growing~~prices. Cost ~~into~~of agoods ~~key~~sold ~~player~~for ~~both~~wearable ~~domestically~~products and ~~globally~~others decreased by approximately $0.8 million, or 60.6%, to approximately $0.6 million Wefor ~~have~~the ~~been~~three ~~preparing~~months toended ~~enter~~March ~~these~~31, ~~markets~~2026 byfrom ~~adding~~$1.4 ~~additional~~million ~~features~~for ~~and~~the ~~providing~~same ~~related~~period ~~services~~in ~~that~~2025, ~~enable~~which ~~Foxx-branded~~is ~~devices~~consistent with the decrease of sales and is the direct result of our negotiation with our vendor to ~~have~~cover ~~IoT~~shipping and ~~MVNO~~tariff ~~capabilities~~costs beginning in July 2025. Cost of other services was insignificant in our operations for the three months ended March 31, 2026 and 2025.

33Gross (Loss) Profit

~~We manage inventory and meet~~Our ~~market~~gross ~~demand~~(loss) ~~through~~profit ~~our~~decreased ~~build-to-order~~by ~~business~~approximately ~~model~~$2.1 ~~After~~million, ~~customers~~or ~~place purchase orders in bulk with us~~318.7%, ~~we place purchase orders with suppliers~~ to ~~manufacture~~approximately ~~the products that meet customers’ products specifications and budget requirements~~$1.5 ~~Prior~~million gross toloss ~~2023, we relied on limited suppliers~~ for the ~~manufacturing~~three ofmonths ended ~~mobile~~March ~~phone~~31, ~~and~~2026, ~~tablet~~from ~~products~~$0.7 ~~and~~gross onprofit ~~limited customers~~ for the ~~distribution of~~three ~~these~~months ~~products.~~ended WeMarch ~~selectively~~31, 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 prevalent2025.

~~Beginning in 2023, we adjusted~~Our ~~our~~gross 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 eight wholesale customers to expand our operations in the market and expect 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 range 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~~loss) ~~model~~profit ~~in the artificial IoT department. Through the efforts to expand product range and reaching a broader customer base, we will be able to move away~~ from ~~relying~~their onmajor ~~limited~~revenue ~~customers~~categories ~~and~~is ~~suppliers.~~summarized ~~As we dedicated our resources to expansion, we experienced a significant decrease in the sales of tablet and mobile phone products during the year ended June 30, 2024~~ as ~~compared to the same period in 2023~~follows: (i) new customers began orders in much smaller quantities as compared to our previous customer in order to build up a trustworthy relationship; (ii) similarly and relevantly, we placed order with new suppliers in much smaller quantities to build up relationship and ensure the quality of the products; and (iii) new product models on both tablet and mobile phones order by new customers required approximately 6-9 months from development to mass production.

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 are cutting down their sales teams in anticipation of the reduced customer base, which affects 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 the demand of our products. However, we may continue to target end-users who are eligible for the Lifeline Program, which is administered by the Universal Service Administrative Company (USAC) and receives funding from the Universal Service Fund, a government program that receives annual contributions from telecommunications companies or their customers. At the same time, because we have initiated our strategic shifts to diversify our product offerings, we expect to target customers who are interested in other mobile devices, tablets, and IoT products. In addition, we began launching our products through TikTok Shop in March 2024 and we expect to grow our sales through this e-commerce channel.

	For the Three Months Ended March 31,
	2026			2025			Change			Change (%)
	(Unaudited)			(Unaudited)
Tablet products
Gross (loss) profit	$	(70,773	)	$	44,410		$	(115,183	)		(259.4	)%
Gross (loss) profit percentage		(85.0	)%		20.2	%		(105.2	)%

Mobile phone products
Gross loss	$	(1,403,320	)	$	(248,971	)	$	(1,154,349	)		463.6	%
Gross loss percentage		(17.5	)%		(2.8	)%		(14.7	)%

Wearable products and others
Gross (loss) profit	$	(303,216	)	$	142,587		$	(445,803	)		(312.7	)%
Gross (loss) profit percentage		(119.4	)%		9.2	%		(128.5	)%

App service commission revenue
Gross profit	$	324,342		$	690,817		$	(366,475	)		(53.0	)%
Gross profit percentage		100.0	%		100.0	%		0.0	%

Other services
Gross profit	$	2,390		$	34,470		$	(32,080	)		(93.1	)%
Gross profit percentage		98.0	%		62.6	%		35.4	%

Total
Gross (loss) profit	$	(1,450,577	)	$	663,313		$	(2,113,890	)		(318.7	)%
Gross (loss) profit percentage		(16.7	)%		5.8	%		(22.6	)%

During the six months ended December 31, 2025, we revised our business strategy and decided to exit the AIoT business. Accordingly, in December 2025, we completed the sales of our AIoT products and disposed of related AIoT equipment.35

For the ~~six~~three months ended ~~December~~ March 31, 2026 and 2025, our ~~sales~~overall ~~remained~~gross ~~consistent~~(loss) ~~with~~profit ~~our~~percentage ~~historical~~was ~~level~~(16.7) % and 5.8%, asrespectively. weThe ~~retained~~decrease in ~~our~~gross ~~two~~(loss) ~~major~~profit ~~customers~~percentage ~~and~~of ~~continued~~22.6% was primarily due to ~~sell our~~the ~~new~~decrease ~~products~~in ~~and~~gross ~~services~~profit ~~during~~percentage ~~the~~for ~~period~~all products.

~~The~~Gross ~~Business~~(loss) ~~Combination~~profit percentage of tablets decreased from 20.2% for the three months ended March 31, 2025 to (85.0) % for the same period in 2026. This was primarily due to the decrease of sales of those with higher unit selling prices and lower unit purchase prices, as well as inventory impairment related to slow-moving inventory of approximately $99,000.

~~Incorporated~~Gross asloss apercentage ~~Delaware~~for ~~corporation~~mobile ~~under~~phones ~~the~~increased ~~name~~from ~~“Acri~~2.8% ~~Capital~~for ~~Merger~~the ~~Sub~~three Imonths ~~Inc.”~~ended onMarch ~~November 13~~31, ~~2023,~~2025 weto ~~entered~~17.5% ~~into~~for the ~~Business Combination~~same ~~Agreement~~period onin ~~February~~2026. This ~~18,~~was ~~2024,~~primarily asdue ~~amended~~to inventory onimpairment ~~May~~related ~~31,~~to ~~2024,~~slow-moving byinventory and ~~among~~increased ~~us,~~chip ~~ACAC,~~prices ~~Merger~~without ~~Sub,~~a ~~and~~corresponding increase ~~Old~~in ~~Foxx~~selling prices.

~~Upon~~Gross ~~the~~(loss) ~~Closing~~profit ~~of the Business~~percentage ~~Combination~~for onwearable ~~September~~products ~~26,~~and ~~2024,~~others ~~ACAC~~decreased ~~merged~~from ~~with~~9.2% ~~and~~for ~~into~~the ~~us,~~three ~~with~~months usended ~~surviving~~March ~~the Reincorporation Merger~~31, ~~and~~2025 to (ii119.4) ~~Old~~% ~~Foxx~~for ~~merged with~~the ~~and~~same ~~into~~period ~~Merger~~in ~~Sub,~~2026. This ~~with~~was ~~Merger~~primarily ~~Sub~~due ~~surviving~~to inventory asimpairment ~~our~~related ~~wholly~~to ~~owned~~slow-moving ~~Delaware~~inventory ~~subsidiary~~of ~~after~~approximately ~~the~~$0.4 ~~Acquisition Merger~~million.

34For the three months ended March 31, 2026 and 2025, our gross profit percentage of App service commission was 100.0%. This high margin was primarily attributable to the nature of App service commission revenue, which was commission based revenue that was earned at a point in time when the revenue is generated from the App, that is when clicks and/or impressions, activation of Apps, and installation of additional Apps occur at a point in time when the end users of the mobile devices interact with those Apps. We earned the App revenue share (service commission) from our partners without incurring any direct cost, as the pre-installation expenses were included in the research and development expenses prior to installation, and any labor costs with minimal time spent were immaterial to be allocated to cost of revenue.

~~Merger~~Gross profit ~~Consideration~~percentage for other services increased from 62.6% for the three months ended March 31, 2025 to 98.0% for the same period in 2026. Gross profit for other services was insignificant in our operations for the three months ended March 31, 2026 and 2025.

~~Immediately prior to the~~Operating effective time of the Reincorporation Merger (the “Reincorporation Merger Effective Time”), which was on September 25, 2024, one business day prior to the Closing, (i) each issued and outstanding ACAC unit was automatically separated into one (1) share of ACAC Class A common stock and one-half (1/2) of one ACAC warrant, and (ii) each share of ACAC Class A common stock held by ACAC stockholders who validly redeemed their shares of ACAC Class A common stock (each “ACAC Redeeming Share”) was automatically cancelled and ceased to exist and thereafter represented only the right to be paid a pro-rata redemption price.Expenses

●Total operating Atexpenses ~~the~~increased ~~Reincorporation~~by ~~Merger~~approximately ~~Effective~~$1.2 ~~Time on September 25~~million, ~~2024, (i) each share of ACAC Class A~~ or ~~Class~~28.3%, Bto ~~common~~approximately ~~stock~~$5.4 ~~issued~~million ~~and~~for ~~outstanding~~the ~~(other~~three ~~than~~months ~~ACAC~~ended ~~Redeeming~~March 31, ~~Shares) was converted automatically into one (1) share of our common stock~~2026, ~~par~~from ~~value~~approximately $04.~~0001~~2 ~~per~~million ~~share~~for (the ~~“Common~~three ~~Stock”),~~months ~~and~~ended ~~(ii)~~March ~~each issued and outstanding ACAC warrant was converted automatically into one (1) redeemable our warrant~~31, ~~exercisable for one (1) share of our Common Stock at an exercise price of $11~~2025.~~50 per share (the “Warrant”).~~

●Our operating Atexpenses the Closing on September 26, 2024, by virtue of the Acquisition Merger and the Business Combination Agreement, and without any action on the part of any party to the Business Combination Agreement or affiliate or security thereof, the issued and outstanding shares of common stock of Old Foxx (“Old Foxx Common Stock”) held by exiting holders of Old Foxx common stock (the “Old Foxx Stockholders”) immediately prior to the Closing (including shares of Old Foxx Common Stock issuable upon conversion of the principal and accrued interest of promissory notes of Old Foxx issued in the Transaction Financing, as defined below) were cancelled and automatically converted into (i) the right to receive, without interest, the applicable portion of 5,000,000 shares of our Common Stock (the “Closing Payment Stock”, 500,000 of which are ~~subject~~summarized ~~to the Escrow Arrangement noted below), and (ii) the contingent right to receive the applicable portion of the Earnout Shares (~~as ~~defined below), if, as and when payable in accordance with the earnout provisions of the Business Combination Agreement.~~follows:

~~Upon Closing, we were renamed~~The asincrease ~~“Foxx~~in ~~Development~~operating ~~Holdings~~expenses ~~Inc.”, and the Merger Sub~~ was ~~renamed~~mainly asattributed ~~“Foxx~~to ~~Development Inc.” (i.e.~~ the ~~Subsidiary).~~following:

Pursuant to the Business Combination Agreement, 500,000 shares of the Closing Payment Stock in aggregate were deposited (the “Escrow Arrangement”) to a segregated escrow account and would be released to the Old Foxx Stockholders if and only if, prior to or upon the one-year anniversary of the Business Combination Agreement, the Affordable Connectivity Program (ACP) managed by the U.S. Federal Communication Commission is reauthorized by the U.S. Congress with funding of no less than $4 billion in total for such reauthorized period; or otherwise be cancelled and forfeited by the Registrant without consideration.

	For the Three Months ended March 31,
	2026		2025		Change ($)			Change (%)
	(Unaudited)		(Unaudited)
Operating expenses
Selling expenses	$	964,440	$	1,551,369	$	(586,929	)		(37.8	)%
General and administrative expense		2,928,172		1,421,299		1,506,873			106.0	%
Research and development – related party		-		22,792		(22,792	)		(100.0	)%
Research and development		1,085,588		826,532		259,056			31.3	%
Provision of credit losses		1,681,606		401,988		1,279,618			318.3	%
Impairments of right-of-use assets		25,855,427		-		25,855,427			100.0	%
Total operating expense	$	32,515,233	$	4,223,980	$	28,291,253			669.8	%

Additionally, the Old Foxx Stockholders would be entitled to receive “Earnout Shares”, which refer to 4,200,000 shares of our Common Stock, subject to the vesting schedule (the “Vesting Schedule”) as follows: 36

~~● (i) in connection with the financial performance for the fiscal year ending June 30, 2024:~~Selling Expenses

~~(A)~~Selling expenses ~~700,000~~decreased ~~Earnout~~approximately ~~Shares~~$0.6 million, ~~would~~or be37.8%, ~~issued~~ to ~~Foxx~~approximately ~~Stockholders~~$0.1 onmillion afor ~~pro~~the ~~rata~~three ~~basis~~months ifended ~~and~~March ~~only~~31, if2026, from ~~our~~approximately ~~audited~~$1.6 million ~~consolidated financial statements~~ for the ~~fiscal~~three ~~year~~months ~~ending~~ended ~~June~~March 3031, ~~2024~~2025. ~~(“2024~~The ~~Audited~~decreased ~~Financial~~selling ~~Statements”),~~expenses ~~prepared~~was inmainly ~~accordance~~attributable to ~~with~~approximately ~~the~~$0.3 ~~Generally~~million ~~Accepted~~decrease ~~Accounting~~in ~~Principles~~payroll ofand ~~the~~payroll ~~United~~related ~~States~~expenses, ~~(“U~~approximately $0.S.2 ~~GAAP”)~~million ~~and~~decrease ~~filed~~in ~~with~~marketing ~~the~~consulting fees, ~~SEC~~and onapproximately ~~Form~~$0.1 ~~10-K~~million bydecrease usin ~~after~~testing ~~Closing,~~and ~~would~~certification ~~reflect~~expenses ~~our~~during ~~revenue for~~ the ~~fiscal~~three ~~year~~months ~~ending~~ended ~~June~~December 3031, ~~2024~~2025, as ~~(the~~we ~~“2024~~reduced ~~Revenue”)~~salespersons toand beconsultants noand ~~less~~the ~~than~~test ~~$67,000,000~~for ~~(including~~products ~~$67,000,000)~~to ~~and~~cut ~~less~~expenses ~~than~~and ~~$84,000,000~~streamline ~~(excluding~~sales ~~$84,000,000);~~department.

~~(B) 1,400,000 Earnout Shares would be issued to Foxx Stockholders on a pro rata basis if~~ General and ~~only~~Administrative ~~if the Registrant 2024 Revenue reflected in the 2024 Audited Financial Statements would be no less than $84,000,000 (including $84,000,000) and less than $100,000,000 (excluding $100,000,000);~~Expenses

~~(C)~~General and administrative expenses increased approximately $1.5 million, or 106.0%, to approximately $2.9 million for the three months ended March 31,~~100~~ 2026 from approximately $1.4 million for the three months ended March 31,~~000~~ ~~Earnout~~2025. ~~Shares~~The ~~would~~increased begeneral ~~issued~~and administrative expense were mainly attributable to ~~Foxx~~the ~~Stockholders~~approximately on$0.2 million increase in salary and wages as a ~~pro~~result ~~rata~~of ~~basis~~allocating ifcertain personnel compensation from selling expenses to general and ~~only~~administrative expenses, ifreflecting a change in the ~~2024~~personnel’s ~~Revenue~~primary ~~reflected~~responsibilities, and approximately $1.3 million increase in ~~the~~rent ~~2024~~due ~~Audited~~to the ~~Financial~~new ~~Statements~~warehouse ~~would~~leases bethat nocommenced ~~less~~in ~~than~~July ~~$100,000,000~~2025 ~~(including~~and ~~$100,000,000);~~January 2026.

~~provided, however, that the~~Research ~~Earnout Shares would be issued~~ and ~~delivered~~Development — related ~~pursuant to one paragraph from (i)(A)-(i)(C) above only once; and~~party

35Research and development (“R&D”) expenses from a related party decreased by approximately $23,000, or 100.0%, where the decrease was primarily due to an R&D project which commenced in 2024 and was completed in June 2025. During the three months ended March 31, 2025, a related party completed additional 20% of the remaining 5G development project pursuant to an R&D agreement between us and the related party, and we recognized a R&D expense approximately of $23,000 accordingly based on the progression of the R&D project. We did not have this expense for the same period in 2026.

●Research and ~~(ii) In connection with the financial performance for the fiscal year ending June 30, 2025:~~Development

~~(A)~~R&D expenses ~~700,000~~increased ~~Earnout~~by ~~Shares~~approximately ~~would~~$0.3 bemillion, ~~issued~~or to31.3%, ~~Old~~from ~~Foxx~~$0.8 ~~Shareholders~~million onfor athe ~~pro~~three ~~rata~~months ~~basis~~ended ifMarch ~~and~~31, ~~only~~2025 ifto ~~our~~$1.1 ~~audited~~million for ~~consolidated~~the ~~financial~~same ~~statements~~period ~~for~~in ~~the~~2026. ~~fiscal~~The ~~year~~increase ~~ending~~was ~~June~~primarily ~~30,~~due ~~2025~~to ~~(“2025~~the ~~Audited~~R&D ~~Financial~~agreement ~~Statements”),~~entered ~~prepared~~into in ~~accordance~~January 2026 with ~~U.S.~~a ~~GAAP~~third ~~and~~party, under ~~filed~~which ~~with~~ the ~~SEC~~third onparty ~~Form~~will ~~10-K~~provide bytechnical usdevelopment ~~after~~services ~~Closing,~~for ~~would~~our ~~reflect~~operating ~~revenue~~system ofacross ~~the~~three ~~Registrant~~phases. ~~for~~During the ~~fiscal~~three months ~~year~~ended ~~ending~~March ~~June~~31, 302026, ~~2025 (~~the ~~“2025~~Company ~~Revenue”)~~recognized toapproximately be$0.9 nomillion ~~less~~of ~~than~~R&D ~~$77,050,000~~expenses ~~(including~~under ~~$77~~this agreement,~~050,000)~~ ~~and~~reflecting ~~less~~progress in ~~than~~the ~~$96,600,000~~initial ~~(excluding~~development ~~$96,600,000);~~phase.

~~(B)~~Provision ~~1,400,000~~of ~~Earnout~~credit Shares would be issued to Old Foxx Stockholders on a pro rata basis if and only if the 2025 Revenue reflected in the 2025 Audited Financial Statements would be no less than $96,600,000 (including $96,600,000) and less than $115,000,000 (excluding $115,000,000);losses

~~(C)~~Provision 2of credit losses increased by approximately $1.3 million,~~100~~ or 318.3%,~~000~~ ~~Earnout~~from ~~Shares~~$0.4 ~~will~~million befor ~~issued~~the three months ended March 31, 2025 to ~~Old~~approximately ~~Foxx~~$1.7 million ~~Stockholders~~for onthe asame ~~pro~~period ~~rata~~in ~~basis~~2026. ifThe ~~and~~increase ~~only~~was ifprimarily ~~the~~due ~~2025~~to ~~Revenue~~continued ~~reflected~~aging inof ~~the~~receivables, ~~2025~~as ~~Audited~~well ~~Financial~~as ~~Statements~~our ~~would~~assessment beof nohistorical collection ~~less~~experience ~~than~~and ~~$115,000,000~~probability ~~(including~~of ~~$115,000,000);~~recovery from our customers and customer groups.

~~provided,~~Impairments ~~however,~~of ~~that~~right-of-use ~~the Earnout Shares would be issued and delivered pursuant to one paragraph from (ii)(A) to (ii)(C) above only once.~~assets

OnImpairments ~~October~~of 24right-of-use assets increased by approximately $25.9 million, ~~2024~~or 100.0%, ~~upon the~~from ~~filing~~$0 offor the ~~2024~~three ~~Audited~~months ~~Financial~~ended ~~Statements~~March as31, ~~part~~2025 ofto approximately $25.2 million for the ~~Annual~~same ~~Report~~period ofin ~~the~~2026. ~~Company~~The onincrease ~~Form~~was ~~10-K~~primarily ~~filed~~attributable ~~with~~to ~~the~~impairment ~~SEC~~charges (recognized following the ~~“2024~~change in our business ~~10-K”),~~strategy ~~any~~because ~~Earnout~~we ~~Shares~~began ~~that~~engaging ~~the~~in ~~Old~~dropship ~~Foxx~~arrangement ~~Shareholders~~in ~~would~~our bewholesale ~~entitled~~business toand ~~receive~~we ~~under~~are ~~the~~no ~~Vesting~~longer ~~Schedule~~required ~~were~~to ~~automatically~~use our warehouse ~~forfeited~~space. As a result, our management decided to sublease our warehouse with lesser value as ~~the~~compared ~~Company~~to ~~did~~our ~~not~~current ~~meet~~lease ~~any~~payments, ofwhich indicated that the ~~vesting~~carrying ~~conditions~~amount ~~for~~of the ~~fiscal~~right-of-use ~~year~~assets ~~ended~~was ~~June~~not ~~30,~~recoverable ~~2024~~and ~~within~~exceeded ~~the~~their ~~Vesting~~estimated ~~Schedule~~fair value by approximately $25.9 million.

~~In addition, on October 15,~~Other ~~2025~~expense, upon the filing of the 2025 Audited Financial Statements as part of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the SEC (the “2025 10-K”), any Earnout Shares that the Old Foxx Shareholders would be entitled to receive under the Vesting Schedule were automatically forfeited, as the Company did not meet any of the vesting conditions for the fiscal year ended June 30, 2025 within the Vesting Schedule.net

~~In addition to the foregoing,~~Our ~~pursuant~~other ~~to that certain amendment to the Underwriting Agreement~~expense, bynet ~~and~~is ~~between~~summarized EFas ~~Hutton LLC and ACAC, dated February 20, 2024, 43,125 shares of our Common Stock were issued to EF Hutton LLC at the Closing.~~follows:

Public Listing

	For the Three Months ended March 31,
	2026			2025			Change			Change (%)
	(Unaudited)			(Unaudited)
Other expense
Interest expense	$	(2,304,183	)	$	(1,553,993	)	$	(750,190	)		48.3	%
Other expense, net		-			(2,118	)		2,118			(100.0	)%
Change in fair value of earnout liabilities		-			1,032,267			(1,032,267	)		(100.0	)%
Total other expense, net	$	(2,304,183	)	$	(523,844	)	$	(1,780,339	)		339.9	%

The ACAC securities previously traded on Nasdaq were delisted without any action needed to be taken on the part of the holders of such securities and are no longer traded on Nasdaq following the Closing. On September 27, 2024, one business day after the Closing, our Common Stock and Warrants became listed on the Nasdaq Capital Market (“Nasdaq”) under trading symbols “FOXX” and “FOXXW,” respectively.37

~~Accounting~~Total ~~Treatment~~other expense, net increased by approximately $1.8 million, or 339.9%, to approximately $2.3 million of other expense, net for the three months ended March 31, 2026, from approximately $0.5 million for the three months ended March 31, 2025. The increase was primarily due to the increase of approximately $0.8 million interest expenses incurred related to the financing offered by our vendors based upon the timing of our payment to their accounts payable – supplier financing and the decrease of approximately $1.0 million change in fair value of earnout liabilities as we no longer had earnout liabilities after June 30, 2025.

~~While the legal acquirer~~Provision ~~in the Business Combination was ACAC,~~ for ~~financial~~income accounting and reporting purposes under U.S. GAAP, Old Foxx was the accounting acquirer, and the Business Combination was accounted for as a “reverse recapitalization.” A reverse recapitalization (i.e., a capital transaction involving the issuance of stock by ACAC for the stock of Old Foxx) does not result in a new basis of accounting, and the unaudited condensed consolidated financial statements of the combined company represent the continuation of the unaudited condensed consolidated financial statements of Old Foxx in many respects. Accordingly, the assets, liabilities and results of operations of Old Foxx became the historical financial statements of the combined company, and ACAC’s assets, liabilities, and results of operations were consolidated with Old Foxx beginning from the Closing on September 26, 2024. Operations prior to the Business Combination are presented as those of Old Foxx. The net assets of ACAC are recognized at historical cost (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded upon execution of the Business Combination.taxes

~~Transaction~~There was ~~Financing~~no provision for income taxes in each of the three months ended March 31, 2026 and 2025 as we had made full allowance of our deferred tax assets on net operating losses.

~~In consideration of market~~Net conditions, pursuant to the Business Combination Agreement, the parties agreed to use commercially best efforts to secure financing to pay transaction expense and working capital of Foxx, including without limitation, a PIPE financing, private financing, redemption waiver, convertible debt, forward purchase agreement, backstop, or equity line of credit (collectively, the “Transaction Financing”).loss

OnNet ~~June~~loss ~~21,~~increased ~~2023,~~by ~~Old Foxx~~approximately entered into a securities purchase agreement (the “Convertible Note Agreement 1”) with New Bay Capital Limited, a Hong Kong registered company (“New Bay”), and issued a promissory note (“Note 1”) to New Bay in the principal amount of $32.2 million, ~~with~~or ~~an interest rate of 7~~788.0% ~~per annum~~, ~~convertible~~to ~~into~~approximately ~~shares of Old Foxx common stock at~~ $3036.003 ~~per~~million ~~share~~for ~~upon~~ the ~~listing of~~three ~~Old~~months ~~Foxx~~ended ~~common~~March ~~stock through an initial public offering. On December 21~~31, ~~2023~~2026, ~~Old~~from ~~Foxx~~approximately ~~issued~~$4.1 ~~into another securities purchase agreement~~million ~~(the~~for ~~“Convertible Note Agreement 2”) with New Bay with~~ the ~~same~~three ~~terms~~months ~~and~~ended ~~conditions~~March as31, ~~the~~2025. ~~Convertible~~Such ~~Note~~change ~~Agreement~~was ~~and issued~~mainly ~~another~~due ~~promissory note (“Note 2”)~~ to ~~New Bay in~~ the ~~principal~~reasons ~~amount~~discussed ~~of $2 million~~above.

36Foreign Currency Translation Adjustment

~~In connection with the Business~~Changes ~~Combination~~in ~~Agreement~~foreign ~~and~~currency ~~all~~translation ~~the~~adjustment ~~transaction~~of ~~contemplated~~approximately ~~therein~~$3,000 ~~(the~~are ~~“Business~~mainly ~~Combination”),~~due into the ~~spring~~fluctuation of ~~2024,~~foreign ~~Old Foxx~~exchange ~~and~~rates ~~ACAC~~between SGD ~~reached~~(the ~~out~~functional tocurrency ~~New~~of ~~Bay~~one toof ~~seek~~our ~~its~~subsidiaries) ~~interest~~and inthe ~~participating~~USD indollar ~~further~~(reporting ~~financing~~currency) infor ~~connection~~the ~~with~~three ~~the~~months ~~Business~~ended ~~Combination~~March 31, 2026.

~~After negotiations with New~~Comparison Bay, On March 15, 2024, Old Foxx and New Bay agreed to an amendment to amend both Convertible Note Agreement 1 and Convertible Note Agreement 2, and to amend Note 1 and Note 2, by removing the lock-up provisions as provided therein and allowing the unpaid principal and accrued interest on Note 1 and Note 2 to convert to Old Foxx common stock immediately prior to the closing of the Business Combination. New Bay also subscribed for ~~a new promissory note (“Note 3”) in~~ the ~~principal~~nine ~~amount~~months ofended ~~$2 million~~March ~~under~~31, ~~the~~2026 ~~same terms~~ and ~~conditions as amended Note 1 and Note 2 (collectively, the “New Bay Notes”).~~2025

On March 15, 2024, Old Foxx and New Bay amended the terms of the Note 1 and Note 2 accordingly, and New Bay subscribed for a new promissory note (“Note 3”) in the principal amount of $2 million under the same terms and conditions as amended Note 1 and Note 2 (collectively “New Bay Notes”).

For the Nine Months Ended March 31,

2026

2025

Change ($)

Change (%)

(Unaudited)

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