NASDAQ: FOXXW

The
Business Combination

Foxx
Development Holdings Inc. was incorporated under the name “Acri Capital Merger Sub I Inc.” as a Delaware corporation on November
13, 2023. On September 26, 2024 (the “Closing”), Acri Capital Acquisition Corporation, a Delaware corporation (“ACAC”)
consummated a business combination pursuant to the terms of the business combination agreement (as amended from time to time, the “Business
Combination Agreement”), by and among ACAC, Acri Capital Merger Sub I Inc., a Delaware corporation and wholly-owned subsidiary
of ACAC (the “Purchaser”), Acri Capital Merger Sub II Inc., a Delaware corporation and wholly-owned subsidiary of Purchaser
(“Merger Sub”), and Foxx Development Inc., a Texas corporation (“Foxx”), pursuant to which (i) ACAC merged with
and into Purchaser (the “Reincorporation Merger”), and (ii) Foxx merged with and into Merger Sub, with Merger Sub surviving
as a wholly-owned subsidiary of Purchaser (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”.
Upon Closing, the Purchaser was renamed as “Foxx Development Holdings Inc.”, and the Merger Sub was renamed as “Foxx
Development Inc.” (the “Operating Subsidiary”).

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.

Unless
the context otherwise requires, all references in this Annual Report to “we,” “us,”, “our” or the
“Company” refer to the business and operations of Old Foxx and its subsidiaries prior to consummation of the Business Combination
and to the Registrant and the Operating Subsidiary following the consummation of the Business Combination.

Merger
Consideration

Immediately
prior to the 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 stockholders
of ACAC 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.

●
At the Reincorporation
Merger Effective Time on September 25, 2024, (i) each share of ACAC Class A or Class B common stock issued and outstanding (other
than ACAC Redeeming Shares) was converted automatically into one (1) share of common stock of the Registrant, par value $0.0001 per
share (the “Common Stock”), and (ii) each issued and outstanding ACAC warrant was converted automatically into one (1)
redeemable warrant of the Registrant, exercisable for one (1) share of the Registrant’s Common Stock at an exercise price of
$11.50 per share (the “Warrant”).

●
At 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 Foxx (“Original Foxx Common Stock”) held by then exiting holders of Original Foxx Common Stock (the
“Original Foxx Shareholders”) immediately prior to the Closing (including shares of Original Foxx Common Stock issuable
upon conversion of the principal and accrued interest of promissory notes of 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 the Registrant’s Common Stock (the “Closing Payment Stock”, 500,000 of which are subject 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.

1

Pursuant
to the Business Combination Agreement, 500,000 shares of the Closing Payment Stock in aggregate will be deposited (the “Escrow
Arrangement”) to a segregated escrow account and released to the Original Foxx Shareholders 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.

Additionally,
the Original Foxx Shareholders may be entitled to receive “Earnout Shares”, which refer to 4,200,000 shares of the Registrant’s
Common Stock, subject to the vesting schedule (the “Vesting Schedule”) as follows:

●
(i) in connection with the financial performance for the fiscal year
ended June 30, 2024:

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

(B) 1,400,000 Earnout Shares
will be issued to Original Foxx Shareholders on a pro rata basis if and only if the Registrant 2024 Revenue reflected in the 2024 Registrant
Audited Financial Statements is no less than $84,000,000 (including $84,000,000) and less than $100,000,000 (excluding $100,000,000);

(C) 2,100,000 Earnout Shares
will be issued to Original Foxx Shareholders on a pro rata basis if and only if the Registrant 2024 Revenue reflected in the 2024 Registrant
Audited Financial Statements is no less than $100,000,000 (including $100,000,000);

provided,
however, that the Earnout Shares will be issued and delivered pursuant to one paragraph from (i)(A)-(i)(C) above only once; and

●
(ii) In connection with the financial performance for the fiscal year
ended June 30, 2025:

(A) 700,000 Earnout Shares will be issued to Original Foxx Shareholders
on a pro rata basis if and only if the Registrant’s audited consolidated financial statements for the fiscal year ended June 30,
2025 (“2025 Registrant Audited Financial Statements”), prepared in accordance with U.S. GAAP and filed with the SEC on Form
10-K by the Registrant after Closing, reflect revenue of the Registrant for the fiscal year ended June 30, 2025 (the “Registrant
2025 Revenue”) no less than $77,050,000 (including $77,050,000) and less than $96,600,000 (excluding $96,600,000);

(B) 1,400,000 Earnout Shares
will be issued to Original Foxx Shareholders on a pro rata basis if and only if the Registrant 2025 Revenue reflected in the 2025 Registrant
Audited Financial Statements is no less than $96,600,000 (including $96,600,000) and less than $115,000,000 (excluding $115,000,000);

(C) 2,100,000 Earnout Shares
will be issued to Original Foxx Shareholders on a pro rata basis if and only if the Registrant 2025 Revenue reflected in the 2025 Registrant
Audited Financial Statements is no less than $115,000,000 (including $115,000,000);

provided,
however, that the Earnout Shares will be issued and delivered pursuant to one paragraph from (ii)(A) to (ii)(C) above only once.

On October 24, 2024, upon
the filing of the 2024 Audited Financial Statements as part of the Company’s Annual Report on Form 10-K filed with the SEC (the
“2024 10-K”), any Earnout Shares that the Original Foxx Shareholders may 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, 2024 as provided
in the Vesting Schedule. The Earnout Shares in connection with the fiscal year ended June 30, 2025 were also forfeited automatically as
the Company did not meet any of the vesting conditions for the fiscal year ended June 30, 2025 as provided in the Vesting Schedule.

In
addition, pursuant to that certain amendment to the Underwriting Agreement, by and between EF Hutton LLC and ACAC, dated February 20,
2024, 43,125 shares of the Registrant’s Common Stock were issued to EF Hutton LLC at the Closing.

2

Transaction
Financing

In
consideration of market 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”).

On June 21, 2023, Old Foxx 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 $2 million with an interest rate of 7%
per annum, convertible into shares of Original Foxx Common Stock at $30.00 per share upon the listing of Original Foxx Common Stock through
an initial public offering. On December 21, 2023, Old Foxx entered 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.

In
connection with the Business Combination Agreement and all the transaction contemplated therein (the “Business Combination”),
in the spring of 2024, Old Foxx and ACAC reached out to New Bay to seek its interest in participating in further financing in connection
with the Business Combination.

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 Original 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”).

On
February 20, 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 promissory notes in the amount of up to $9.0 million with an interest
rate of 7% per annum under the same terms and conditions as 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.

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 Original Foxx Common Stock for the New
Bay Notes, (y) 200,882 shares of Original 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 Original 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.

3

Current
Products

Our
current revenue stream is primarily derived from the sales of tablets and smartphones. For the fiscal year ended June 30, 2025,
we achieved sales of approximately 8,000 tablets and 328,000 smartphones sold, generating
approximately $60.4 million in revenue. For the fiscal year ended June 30, 2024, our sales reached
approximately 12,000 tablets and approximately 80,000 smartphones sold, generating
a revenue of approximately $3.2 million.

Tablet
Products

We
produce affordable tablets to meet the diverse needs of consumers across various demographics, aligning with our goal of democratizing
technology and enhancing digital inclusion for all. These tablets facilitate broader access to technology, enabling individuals from
diverse economic backgrounds to enjoy the benefits of digital devices while also serving as invaluable educational aids.

In 2024, we launched C10 LTE tablet, which is equipped with the following
key features:

●
10.1-Inch HD Display:
Offers vibrant visuals and ample screen real estate for immersive viewing of movies, and videos.

●
MT8766 2.0GHz Processor:
Delivers smooth performance, allowing users to seamlessly navigate through apps, games, and multitasking activities.

●
4GB of RAM and 64GB of
storage and 8MP + 8MP Camera Setup: Allows users to capture and store multimedia content without worrying about running out of space.

●
Supporting 802.11 b/g/n/ac
Wi-Fi: Provides fast and reliable wireless internet access at home, work, or on the go.

Thus
far, we have successfully introduced several generations of products to the market, each tailored to meet specific consumer needs and
preferences. This strategic approach not only allows us to diversify our product range but also enables us to remain agile and responsive
to the evolving trends and demands of the marketplace. By continually innovating and expanding our offerings, we aim to ensure that we
remain at the forefront of meeting the diverse needs of our consumers.

Mobile
Phone Products

We
are committed to developing high performance smartphones at competitive prices to provide accessibility for all. Our focus on innovation,
efficient manufacturing, and strategic partnerships allows us to deliver premium technology without compromising affordability.

4

In
2019, we launched our MIRO product line to cater to users seeking an affordable smartphone with quality performance, which became available
at Metro® by T-Mobile stores beginning May 20, 2019. The MIRO phone is equipped with the following key
features:

●
Immersive 5.45” HD
Display: Enjoy a vivid viewing experience with our immersive 5.45” HD (1280 X 640) display, great for multimedia consumption
and browsing.

●
Large Lasting Battery:
Stay connected longer with up to 10 hours of talking time and up to 300 hours of standby time, supported by a large 2450mAh
battery.

●
High-Quality Cameras:
Capture life’s moments in stunning detail with the 8MP auto-focus rear camera and take brilliant selfies with the 5MP
front camera.

●
Google Voice Assistant:
Simplify daily tasks with Google Voice Assistant, enabling users to check the weather, search for restaurants, manage tasks, control
smart home devices, and more with just your voice.

●
Quality Performance: Experience
seamless app performance and multitasking capabilities with 2GB of RAM. Store photos and music effortlessly with 16GB of built-in memory,
expandable up to 32GB via a microSD card.

5

Since
our launch of the MIRO phones, we have introduced multiple product generations to the market to offer a range of options that can meet
evolving consumer needs. For our current products This added product diversity caters to end-users in different demographics with
varying requirements, ensuring that everyone can find the ideal smartphone solution. With each new generation, we aim to raise the bar
in delivering quality performance at an accessible price point, empowering users to stay connected, productive, and engaged.

Wearables

To complement our smartphones,
tablets, and the IoT cloud platform, we are developing customization standards for a diverse range of wearable devices, including Bluetooth
watches, Bluetooth bracelets, GPS watches, 4G watches, and etc. We are also researching for connecting wearable products with sports equipment
and will work with chip manufacturers, solution providers, and device manufacturers to develop high-quality components and equipment,
enabling us to offer reliable and innovative solutions to the end-users.

In February 2024, we partnered with a branded device Original Equipment
Manufacturer (“OEM”) and started developing a 4G LTE kids smartwatch for major US Mobile Network Operator (“MNO”)
and MVNO carriers. Our first generation wearable devices were launched in the first calendar quarter of 2025 through our E-Commerce channels.

Concurrently, we have been
developing our second generation smartwatches for kids that incorporate LTE and Bluetooth technologies. Once we complete the development
and certification of the products, we expect to sell such products to third-party distributors, as well as through open-market retail
and E-Commerce channels. The launch date for the second generation smartwatches for kids is in the fourth calendar quarter of 2025.

6

Smart Home Solutions

We expanded our business
into smart home market segments. In July 2025, we successfully launched our first product “Leak Shield”, a smart water leak
detector we developed through our strategic technology partnership with APEC Water Systems (“APEC”), a premier U.S. manufacturer
of water filtration systems. We worked closely with APEC throughout the product development process, bringing expertise in IoT connectivity,
mobile app development, and sensor integration to create the APEC Smart Water Leak Detector (SKU: SMTD-001-1PK).

Target
End-Users

Our
current product lines are tailored to cater to the following types of end-users:

Budget
Conscious/Practical Shopper: These individuals are meticulous researchers who make informed decisions. They seek practical tablets and
smartphones to seamlessly navigate their daily digital activities, including browsing, attending online lectures, messaging, social media
interactions, calls, web browsing, GPS navigation, and photography.

First-Time Tablets
or Smartphone Users: Embodying the essence of social connectivity, these users are driven by a fear of missing out among peers. They
are highly active online, engaging primarily in messaging, photo-sharing, gaming, and staying updated within their social circles. Despite
limited purchasing power, they aspire for visually appealing tablets phones with unique features, typically acquired through initial
jobs or parental support.

Parents
of First-Time Tablets or Smartphone Users: These individuals seek capable yet budget-friendly tablets and smartphones for their
children, understanding the importance of providing essential educational or daily functionalities without straining their finances.
With considerable purchasing power in some instances, they often begin their search online, prioritizing terms such as “best value”
or “affordable”. Influenced significantly by pricing and reviews, they prioritize obtaining the best value proposition for
their children’s needs.

Strategic
Approach to Sales and Distribution

Third
Party Customer-Driven Sales Model

Since inception, we have
been employing the strategy of engaging with distributors who purchase products from us and then market our products to consumers through
the networks of prominent telecommunications carriers across the United States. We have been able to achieve substantial sales by
working with customers who have existing relationships with prominent telecommunications carriers and can efficiently sell our products,
allowing us to build presence in the market. We also entered into multiple master agreements with Mobile Virtual Network Operators (MVNOs),
broadening our reach and delivering sophisticated telecommunications solutions to an extensive consumer base.

Diversified Sales Approach

In prior years, we actively
sought qualification for and participated in national initiatives aimed at enhancing the affordability and accessibility of communication
services for individuals with limited income. As a certified supplier for the FCC’s Lifeline and Affordable Connectivity Program
(ACP), we played a vital role in efforts to ensure essential communication services are economically accessible. Even though we continue
to serve as a key supplier for the Lifeline Program, we have diversified our product offerings to target customers who are interested
in other mobile devices, tablets, and IoT products. In addition, we launched our products through TikTok Shop in March 2024 and various
online E-Commerce platforms such as BestBuy.com, Walmart.com, Amazon, Shein, Newegg and Mercado Libre in 2025. We have been actively expanding
our presence in the digital marketplace and expect to increase our sales through a variety of leading E-Commerce channels. We believe
this approach not only broadens our reach but also caters to the preferences of digital consumers, offering them convenient access to
our telecommunications solutions. By integrating into various sales channels, both indirect and digital, we are committed to providing
high-quality products to a wide audience, driving our growth, and enhancing our position in the competitive electronics market.

7

Internal
Support

In
order to maximize product accessibility across the United States, we have a team of dedicated internal sales staff and key sales agents
who manage a network of hundreds of customers spread across seven major regions. In addition to managing direct partnerships with these
customers, our internal sales team also collaborates with prominent telecommunications carriers, enabling our products to be available
for sale online and in the physical retail stores of these carriers.

Competitive
Advantages

We
stand out in the competitive communications market by leveraging its foundational advantages and core operational strategies, which encompass
a range of competitive strengths crucial for maintaining and enhancing Foxx’s market position:

Geographical
Location and Market Presence

We have established a comprehensive
network anchored by our key operational facilities across various strategic locations. We are headquartered in Irvine, CA, where we have
established a center that integrates sales, retail and distribution, and after-sale support services, and research and development
of customization capabilities. The Irvine office serves as the epicenter for our research and development and sales and marketing activities,
highlighting our commitment to innovation and market expansion. The Dallas, TX, and Atlanta, GA offices play instrumental roles in executing
our sales and marketing initiatives and providing essential operational support. In addition, our Singapore office serves as the epicenter
for both our supply chain management and our research and development efforts in Southeast Asia. This strategic distribution of roles
and responsibilities across our office locations allows operational efficiency and market responsiveness.

We also maintain a strong
sales presence in major metropolitan areas such as Los Angeles, CA, Dallas, TX, and New York, NY. These strategic locations
are carefully selected to maximize our market penetration and facilitate direct engagement with our diverse customer base. Through this
geographically diverse presence, we offer comprehensive after-sales services and tailored solutions, thereby reinforcing our commitment
to customer satisfaction and technological leadership in the electronics industry.

Experienced
Management Team

Our
leadership team has decades of combined experience across various aspects of the communications sector, with more than 20 years
of experience in major domestic and overseas electronics companies, having held leadership and management roles. Mr. Greg Foley,
our Chief Executive Officer, has more than 25 years of experience in leading the sales and marketing of electronic products. Mr. James
Liao, our Chief Technology Officer, has a background in electrical engineering and has been leading product innovation and development
projects for more than 25 years. Mr. Haitao Cui, our Director and Executive Vice President, also has a background in electrical
and engineering automation and over 25 years of experience in sales and marketing of electronics. Our experienced team comprehensively
understands market dynamics, consumer demands, and technological trends. We rely on their insights and strategic decision-making to
effectively navigate the complex market and to adapt and grow amidst constantly changing industry conditions.

8

Build-to-Order
Business Model

We
manage our inventory and meet market demand through our build-to-order business model. Our sales begin with receiving bulk purchase
orders with general product designs, specifications, and budgets from our customers, who are third-party distributors specializing
in selling mobile phones and tablets to end-users through sales channels. We then provide our customers advice on adjustments and
customize the products to secure the desired performance within their budget. Once the product specification is determined, we work with
suppliers to build customized products that meet such our customers’ expectations. Over time, by listening to the demands and specifications
of our customers, we have been able to deliver high-quality, high-performance products that our customer trust and value. Our business
model allows us to effectively manage inventory costs and mitigate risks associated with changes in customer demand. We secure steady
revenue from bulk purchase orders placed by the customers.

The
orders we receive from customers provide us with a great opportunity to understand market trends and customer demand. Direct relationships
with our customers give us an advantage in observing the changes in market demands. As a result, we can develop new models based on our
understanding of the market. After establishing a market presence through our customers, we can further diversify our revenue and profit
streams. We take our own Foxx-branded products as an initiative to innovate. Our growth strategy involves reaching more end-users through
maintaining the relationship with current customers and cultivating relationship with new customers. We aim to optimize the balance of
liquidity, profitability, and growth with a focus on increasing the mix of our product portfolio to higher-margin products and recurring
revenue streams.

Research
and Development/Innovation Capability

We
have strong competitive advantages in our product design and innovation capabilities. Moreover, we have resources that allow us to outsource
customized research and development capabilities as needed, thereby gaining additional insights into the market and developing more robust
product design and customization standards. Our innovative product planning keeps us at the forefront of technological trends, ensuring
that the company remains as the forerunner in introducing novel and high-performance products to the market.

Supply
Chain Management

We
have efficiently managed our supply chain through diversification of sources, strategic partnerships, optimized logistics, and efficient
inventory management, all of which have contributed to our current success. We have cultivated strong relationships with multiple suppliers
in Indonesia and Southeast Asian countries. This capability enables the company to maintain a balance between supply and demand, reduce
operational costs, and promptly respond to market changes, thereby enhancing competitiveness and customer satisfaction.

Quality
Control

Quality
is the cornerstone of our value proposition. We implement strict quality control measures at every stage of the manufacturing process
in our original equipment manufacturer factories, from material procurement to manufacturing processes and final product testing. Our
commitment to quality ensures that all our products meet the highest reliability and performance standards, fostering trust and loyalty
among customers and setting us apart from our competitors.

These competitive advantages
contribute to our success and resilience in the market. The combination of experienced leadership, innovation, efficient supply chain
management, and stringent quality control positions us as a leader in the communication section. This enables us to deliver exceptional
value to customers and stakeholders alike.

Growth
Strategies with IoT Cloud Platform

Our
IoT Cloud Platform

We have developed a cloud
platform that connects all our devices to a secure central server, creating a unified ecosystem. The platform brings significant
benefits, particularly in systematized upgrades, more efficient IoT operations, improved human-machine interactions, enhanced data
analytics, and smarter decision-making.

The
cloud platform is able to streamline the upgrade process for our devices. Centralized cloud server management allows for efficient updates,
patches, and new features across our product line, ensuring devices remain up to date with the latest advancements and security measures,
significantly enhancing performance and customer satisfaction.

We
prioritize data security and reliability in designing and developing the platform because we understand that the reliability of our cloud
infrastructure is the foundation for continuous service, trust, and confidence among customers. To achieve this, we plan to establish
our centralized server in Irvine, CA for secured data storage and management.

9

The
platform facilitates comprehensive data analytics and insights, allowing users to gain valuable insights into their personal information
and habits from connected device data. These insights enable informed decisions, efficient operations, personalized experiences, and
customized solutions based on individual behavior and preferences.

Our
cloud platform is designed to offer the following functionalities:

●
Firmware-over-the-air (FOTA)
software upgrade.

●
Launch new software releases.

●
Device and sensors management.

●
SIM cards activation, provisioning
and management.

●
Data usage monitoring,
reporting and billing management.

●
Using Application Programming
Interfaces (API) & Software Development Kit (SDK) to integrate many device types and IoT protocols.

●
Enable both “upward”
integration with existing cloud service providers (e.g. Amazon Web Services (AWS)) and “downward” integration with 3rd party
application for various IoT verticals (e.g., smart home, healthcare, smart building, etc.).

●
IoT data management &
analytics using artificial intelligence (AI) or machine learning (ML) algorithms.

●
Storing data from production
processes locally to prevent security breaches.

●
Data security, firewall,
cyberattack alert and prevention, data backup.

●
Provide IoT standard —
MATTER certification (in plan).

●
24x7 technical support.

This open platform allows
compatibility and interoperability with a wide range of device types, IoT protocols, and ecosystems. It not only serves as a device management
platform for Foxx’s own communication terminals (such as smartphones, tablets, and IoT sensors) but also offers software development
kits and application programming interfaces to other device manufacturers and third-party application developers. This design allows
third-party devices and apps to integrate with our cloud platform seamlessly. Additionally, our infrastructure is designed to interact
with multiple cloud providers, including Amazon Web Services, Google Cloud Platform, and Microsoft Azure. We believe that our unique model,
which combines IoT modules, devices, data, the cloud platform, and services, positions us to deliver comprehensive end-to-end IoT
solutions to our customers.

We
launched the first generation of our IoT cloud platform in the third
calendar quarter of 2024. We allocated time and resources since the first calendar quarter of 2024 to finalize the design and setup of
the cloud platform that integrates with the AWS system. The first generation of our IoT cloud platform leverages AWS cloud services and
AWS IoT Core services in addition to the customized development by us to provide device management, user management, data management
and security management functions.

10

We developed a second generation
of our IoT cloud platform, driven by the vision of a much more inclusive and smarter IoT platform that is compatible with all our devices
and potentially products from other brands. This platform integrates more advanced technologies researched and developed by Foxx, with
the potential scalability to connect tens of millions of devices. This platform was launched to the market in the fourth calendar quarter
of 2024. Our second generation IoT cloud platform involves a full IoT PaaS with the fundamental capabilities of device management,
control and status management, user management, access and permission, and physical model management. It supports comprehensive and modern
IoT communication protocols. In addition, the second generation IoT platform has full IoT SaaS capabilities with openness and flexibilities
of integrating with different IoT verticals, which enables developing customized and compatible services on multiple protocols module,
vertical module, Edge module, mobile devices module, and online customized module. It will also provide front-end apps (Android/iOS
mobile apps) to the end-users to manage and monitor their IoT devices, and offer multi-tenants services including data, notification,
alert, subscription, visualization, and devices interoperable services.

Smart
Home Solutions

Our Smart Home Solutions can be divided into three categories: Home
Security, Home Safety, and Home Care. “Leak Shield”, the smart water leak detector, was the first “Home Safety”
product we launched. In the “Home Security” category, we have been developing a solar-powered 4G LTE outdoor security camera
and plan to launch this product in the fourth calendar quarter of 2025. To achieve the goal of offering reliable and eco-friendly surveillance
solutions, Foxx has incorporated the following features into this product: 1) These cameras can operate independently of traditional power
sources, making them ideal for remote areas like cabins, farms, or construction sites; 2) With the ability to connect to both Wi-Fi and
4G LTE, these cameras offer flexibility in placement and connectivity options; and 3) The integration of 4G connectivity allows for real-time
data transfer and remote access, enhancing the monitoring capabilities. Our 4G LTE outdoor security camera is expected to launch in the
market in the fourth calendar quarter of 2025. In the “Home Care” category, we plan to develop software applications that
will integrate with our wearable products.

To achieve our goal of becoming
a “one-stop shop” for smart home solutions, we source products that are essential ancillary devices and components of
a full smart home management solution including Home Security, Home Safety, and Home Care from various suppliers that manufacture high-quality products.
We will integrate the appropriate modules that we will develop, using various open-source AI algorithms and technologies, into the
final products we offer. These products will be designed to allow 1) compatibility with other smart home management solutions we offer
and 2) connectivity with the rest of Foxx-branded products.

IoT
in Automotive

We
have been developing a 4G LTE dashcam as our first foray into the IoT in Automotive market segment. A dashcam with LTE (Long-Term Evolution)
is a type of dashboard camera that is equipped with a cellular data connection. With LTE connectivity, a dashcam can provide real-time
data transfer, allowing the users to view their dashcams’ live stream and remotely access their dashcams. Users can also benefit
from automatic cloud uploads, which makes it easy to access their footage from anywhere. Our 4G LTE dashcam is expected to be launched
in the market in the fourth calendar quarter of 2025.

We
are in the process of developing a 4G LTE jump starter and a 4G LTE tracker for commercial use. Such devices with 4G connection are smart,
networked tools with advanced features like remote tracking, over-the-air (OTA) updates, and fleet management. Both products are expected
to be launched in the fourth calendar quarter of 2025.

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IoT
Modules

We
are building a portfolio of IoT modules, which are hardware or software components that enable devices to connect to the Internet and
share data with other connected devices and systems. Our portfolio includes a wide range of IoT modules, including 4G LTE Cat 1 bis,
Cat 4, Cat M, NB-IoT, 5G, 5G Redcap, 5G AI, Bluetooth, and Wi-Fi modules. These modules enable the connectivity and intelligence
of IoT devices, allowing them to collect, transmit and process data, and communicate with other devices and systems. Currently, we have
completed the development and pre-production work for the LTE Cat 1 bis, Cat 4, Cat M/NB-IoT, and Bluetooth modules and will
undergo lab testing. We have launched these modules in the first calendar quarter of 2025. We have started to develop 5G modules, 5G
Redcap modules, and 5G AI modules, which may potentially launch in the first half of
2026.

Warranties
and Customer Services

We
provide a one-year warranty on its products, offering after-sales service support to dealers in two ways. Dealers can opt for
direct product replacement by us, or they can choose to receive 2% after-sales service spares from Foxx. In the latter case, our
customers handle after-sales service to end-users independently after exhausting the supplied spares, without further support
from us.

Competition

We
believe the principal competitive factors impacting the market for our products are features and functionality, performance, quality
and brand. To maintain and improve our competitive position, we must continue to expand our user base, invest in research and development,
grow our distribution network, and leverage our strategic relationships.

Our
products compete with a variety of solutions providers in different market segments. Our current competitors include:

●
Smartphones and Tablets — Motorola,
Inseego, HMD, TCL, Vortex, Tinno, BLU, Sky, Maxwest, and Hot Pepper.

●
IoT Products — Netgear,
Franklin Wireless, TCL and ZTE.

As
the market for our solutions and services expands, other entrants may seek to compete with us either directly or indirectly.

Intellectual
Property

Trademarks

Trademarks

Registration
Number

Jurisdiction

Registration
Date

5,864,015

U.S.

September 17,
2019

6,205,214

U.S.

November 20,
2020

87,944,543

U.S.

June 1,
2018

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Domain
Names

Domain

Registration
Date

Expiration
Date

www.foxxusa.com

August 3, 2017

August 3, 2028

Patents

We
do not currently have any registered patents. However, our research and development team is actively assessing our customizations, specifications,
and other technical expertise and know-how currently protected as trade secrets. We plan to file patents to safeguard our technical
expertise and innovations.

Research
and Development

For
the year ended June 30, 2025, our research and development expenses amounted to approximately $ 2.2
million, a significant portion directed towards the development of new products.

Our
strategic allocation of spending in product research and development reflects our commitment to innovation and technological advancement
in emerging sectors. To achieve our goals in IoT product development, we have engaged, and may continue to engage, in outsourcing collaborations
with industry-leading partners, leveraging their expertise and resources to accelerate our progress and ensure the delivery of cutting-edge solutions.

Employees

As of the date of this report,
we had 25 full-time employees. We believe that we maintain a good working relationship with our employees, and we have not experienced
any material labor disputes.

Department
Number of

Employees

Customer Service
1

Sales and Marketing
5

Product Research and Testing
6

Information Technology
1

Human Resources and Administration
3

Finance
3

Operations
6

Total
25

Certifications

For
open market products including U.S. E-Commerce sites, retail stores and distributor channels, etc., we have conducted FCC and
Google Mobile Services test and obtained corresponding certifications.

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FCC
certification is to ensure that an eligible electronics device only produces safe levels of radio frequency (RF). For more information,
see “Government Regulation — FCC Equipment Authorization” below.

GMS
refers to a selected array of Google proprietary applications and services that embody the company’s core values (such as Chrome,
Gmail, YouTube, Maps, PlayStore, etc.). Android devices need the GMS certification to run all the Google proprietary applications, without
which, the device will not be able to operate any of these applications.

Government
Regulation

FCC
Equipment Authorization

In
the United States, the FCC regulates RF devices. RF devices, including components used in cell phones, routers, and other devices
we sell, are devices capable of emitting radio frequencies by radiation, conduction, or other means. An RF device being imported, marketed,
or used in the United States is subject to the equipment authorization requirements established by the FCC and cannot be imported,
marketed, or used without complying with such requirements. Equipment authorization requirements are intended to ensure that RF devices
comply with the FCC’s emissions, power level, and other technical rules.

FCC
Covered List

Pursuant
to the Secure and Trusted Communications Networks Act of 2019, the FCC created and maintains a list (Covered List) of telecommunications
services and equipment that pose an unacceptable risk to the national security of the United States. The FCC periodically updates
the Covered List, and companies that appear on the Covered List are subject to change based on the security determinations of the FCC
and other U.S. Federal agencies with which the FCC works. Categories of equipment made by companies, including equipment manufactured
by their subsidiaries or affiliates, on the Covered List cannot be authorized in the United States.

Environmental
Matters

Our
facilities and operations, in common with those of our industry in general, are not subject to domestic or international laws and regulations
designed to environmental protections. We have always been dedicated to environmental protection. With a steadfast commitment to sustainable
development, the brand prioritizes environmentally friendly materials in the composition, manufacturing processes, and design of its
products. It adopts eco-friendly manufacturing processes, showcasing innovative designs that emphasize a low carbon footprint, green
practices, and energy efficiency principles. Each product embodies our comprehensive approach, seamlessly integrating environmental values
into material selection, production techniques, and overall design philosophy.

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