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 through short video and digital ad placements on major platforms like ByteDance's Ocean Engine, WeChat, and Weibo.

• Offers one-stop, customized marketing services including planning, production, placement, and optimization of online ads, leveraging proprietary data analysis software, Bidding Compass.

• Has served approximately 2,000 advertisers since 2018, with a focus on healthcare clients; business model is based on CPC and CPT pricing, acting as principal in ad placements.

• Maintains direct and agent-based relationships with major media platforms, with Ocean Engine accounting for 99% of purchases in recent periods.

• Growth strategy includes expanding media partnerships, deepening healthcare industry penetration, and investing in technology and R&D.

Financial performance and metrics

• Revenue for the six months ended Dec 31, 2023: $23.50M (up 157% YoY); net income: $0.76M (up 70% YoY).

• Fiscal year ended June 30, 2023: revenue $28.23M (up 75% YoY); net income $0.97M (up 296% YoY).

• Gross margin for FY2023: 7.3% (vs. 4.0% in FY2022); gross margin for six months ended Dec 31, 2023: 5.1% (vs. 8.0% prior year period).

• Cash and cash equivalents as of Dec 31, 2023: $1.11M; net cash provided by operating activities for six months ended Dec 31, 2023: $0.30M.

• Customer concentration risk: top five customers accounted for 36.8% of FY2023 revenue; supplier concentration risk: Ocean Engine accounted for 96% of FY2023 purchases.

Use of proceeds and capital allocation

• Estimated net proceeds of $11.4M from the offering, assuming all Units sold and no warrant exercise.

• 60% allocated to working capital and general corporate purposes, 30% for technology/business acquisitions or investments, 10% for hiring experienced employees to improve internal controls and compliance.

• Management has broad discretion over use of proceeds; proceeds may be used for R&D, expansion, and compliance improvements.