Haoxi Health Technology (HAO) Registration Filing summary

Company overview and business model

• Operates as an online marketing solution provider in China, primarily serving healthcare industry advertisers, offering one-stop services including short video ad production, placement, and optimization.

• Revenue is generated through customized online marketing campaigns, mainly on platforms like Toutiao, Douyin, WeChat, and Weibo.

• Utilizes proprietary data analysis software, “Bidding Compass,” to optimize ad placements and improve ROI for clients.

• Corporate structure includes a Cayman Islands holding company, with operations conducted through wholly owned PRC subsidiaries.

Financial performance and metrics

• For the six months ended December 31, 2023, revenue was $23.50 million and net income was $0.76 million; for the same period in 2022, revenue was $9.16 million and net income was $0.45 million.

• Fiscal year ended June 30, 2023: revenue of $28.23 million and net income of $0.97 million; fiscal year 2022: revenue of $16.16 million and net income of $0.24 million.

• Gross margin for the six months ended December 31, 2023 was 5.1%, down from 8.0% in the prior year period, due to increased competition and customer rebates.

• Cash and cash equivalents as of December 31, 2023 were $1.11 million; net cash provided by operating activities for the six months ended December 31, 2023 was $0.30 million.

• Major supplier concentration: Ocean Engine accounted for 99% of purchases in the six months ended December 31, 2023.

Use of proceeds and capital allocation

• Estimated net proceeds from the offering are approximately $9.09 million.

• 60% allocated to working capital and general corporate purposes, 30% for acquiring or investing in complementary technologies or businesses, and 10% for hiring experienced employees to enhance internal controls and compliance.

• Proceeds may be used for technology acquisitions, expansion into new geographic markets, and strengthening data analysis capabilities.