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.

• Offers one-stop online marketing solutions, focusing on short video ads through major platforms like Toutiao, Douyin, WeChat, and Weibo.

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

• Has served approximately 2,000 advertisers since 2018, with a growing client base and strong relationships with major media partners.

• Business model is based on CPC and CPT pricing, acting as principal in ad placements and recognizing revenue on a gross basis.

Financial performance and metrics

• Revenue for the six months ended December 31, 2023 was $23.50 million, up from $9.16 million in the prior year period.

• Net income for the same period was $760,198, compared to $447,046 in the prior year.

• Fiscal year 2023 revenue was $28.23 million, up from $16.16 million in 2022; net income was $969,752, up from $244,587.

• Gross margin for fiscal 2023 was 7.3%, an increase from 4.0% in 2022, attributed to direct contracts with key suppliers.

• Cash and cash equivalents as of December 31, 2023 were $1.11 million; company expects to require additional working capital for growth.

Use of proceeds and capital allocation

• Net proceeds of approximately $11.4 million expected from the offering.

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

• Management has broad discretion in the use of proceeds.