Core Viewpoint - ICZOOM Group Inc. reported a positive financial performance for the six months ended December 31, 2024, with a revenue increase of 3.0% and a return to profitability, achieving diluted earnings per share of $0.07 compared to a loss in the same period of the previous year [2][3]. Financial Performance - Total revenue for the six months ended December 31, 2024, was $90,340,640, up from $87,720,553 in the same period of 2023, marking a 3.0% increase [2][3]. - The sales of electronic components contributed $89,068,580, representing 98.6% of total revenue, while service commission fees accounted for $1,272,060, or 1.4% [3][11]. - The company turned a profit with a net income of $780,942 for the six months ended December 31, 2024, compared to a net loss of $721,745 in the same period of 2023 [11][14]. Operational Highlights - The number of stock-keeping units (SKUs) available for sale increased by 7.3%, from 8,373 to 8,986, with semiconductor SKUs rising by 12.2% [4][3]. - The number of new customers grew by 15.1%, from 106 to 122, indicating effective customer acquisition strategies [3][4]. Industry Context - The growth of ICZOOM is closely linked to the expansion of China's automotive electronics industry, which reached approximately RMB 1.22 trillion (about $171.83 billion) in 2024, reflecting a growth of 10.95% year-over-year [5][3].

Group 1 - The core viewpoint of the article is the discussion of global opportunities and challenges in the electronics supply chain industry, particularly focusing on Southeast Asia and the strategic value of Penang as a hub for electronics manufacturing [2][3] - Mr. Lei Xia, the CEO of ICZOOM Group Inc., emphasized the potential of the "designed in China, made in Vietnam" model, highlighting the presence of over 100,000 Chinese electronics professionals in Bac Ninh province supporting research and development [2] - ICZOOM Group Inc. operates a B2B e-commerce platform primarily serving small and medium-sized enterprises in the consumer electronics, IoT, automotive electronics, and industrial control segments in Hong Kong and mainland China [3] Group 2 - The company provides additional services such as temporary warehousing, logistics, shipping, and customs clearance to enhance its offerings to customers [3] - Penang is identified as a vital springboard for global expansion due to its complete semiconductor ecosystem and a trilingual workforce, housing 60% of Malaysia's electronics industry [3]

Core Viewpoint - ICZOOM Group Inc. has achieved significant recognition in 2024, being named one of the Top 100 Innovative Enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area and one of the Top 100 Digitalization Enterprises in China, highlighting its strong position in the electronic component industry [1][2][3]. Group 1: Awards and Recognitions - ICZOOM was selected as one of the Top 100 Innovative Enterprises of 2024 at the Shenzhen-Hong Kong-Macao Science and Innovation Conference, focusing on high-tech companies in the science and technology sectors, evaluated on financial performance, intellectual property, revenue, core team, and recognitions [2]. - The company ranked 74th among the Top 100 Digitalization Enterprises of 2024 in China, based on scientific algorithms assessing news distribution, revenue and GMV, listing and financing data, website traffic, and court judgments [3]. Group 2: Company Performance and Strategy - The recognitions reflect ICZOOM's exceptional performance and strong market position in the electronic component industry, indicating a commitment to technological innovation and digital transformation in 2025 [4]. - ICZOOM primarily operates a B2B e-commerce platform for electronic component sales, catering to small and medium-sized enterprises in various sectors, including consumer electronics, IoT, automotive electronics, and industrial control [5].

Core Insights - ICZOOM Group Inc. and its subsidiary Hjet Supply Chain received prestigious awards at the 2024 International Integrated Circuit & Component Exhibition and Conference, highlighting their leadership in e-commerce and supply chain services [1][4]. Group 1: Company Recognition - ICZOOM was awarded the title of "Outstanding E-Commerce Distributor" by AspenCore for its exceptional performance in the e-commerce platform sector [1][4]. - Hjet Supply Chain was recognized as the "Annual Outstanding Supply Chain Service Provider," showcasing its excellence in supply chain services [1][4]. Group 2: Leadership and Insights - Ms. Duanrong Liu, COO of ICZOOM, spoke at the 2024 Global Distribution and Supply Chain Leaders Summit, addressing challenges faced by small and medium-sized enterprises in the electronic component sector [2]. - CEO Lei Xia provided insights on capital flow and market prospects in electronic component distribution during a roundtable forum at the event [3]. Group 3: Company Operations - ICZOOM operates a B2B e-commerce platform primarily serving small and medium-sized enterprises in Hong Kong and mainland China, focusing on sectors such as consumer electronics, IoT, automotive electronics, and industrial control [5]. - The company offers additional services including temporary warehousing, logistics, shipping, and customs clearance to enhance customer experience [5].

Part I [Key Information](index=7&type=section&id=Item%203.%20KEY%20INFORMATION) This section outlines principal risks related to business, corporate structure, China operations, and securities, including concentrated founder voting power [Risks Related to Our Business and Industry](index=11&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company's business is highly dependent on Chinese electronics SMEs, facing risks from intense competition, operational challenges, and a material weakness in internal control over financial reporting - The company's revenue heavily relies on Chinese SMEs in consumer electronics, IoT, automotive, and industrial control sectors, making it vulnerable to industry downturns[20](index=20&type=chunk)[42](index=42&type=chunk) - The company faces intense competition from offline suppliers, authorized distributors, and other B2B e-commerce platforms with superior resources[52](index=52&type=chunk)[71](index=71&type=chunk) - A material weakness in internal control over financial reporting was identified due to insufficient dedicated U.S. GAAP accounting resources[105](index=105&type=chunk)[106](index=106&type=chunk) Accounts Receivable Balance (Net) | Fiscal Year End | Accounts Receivable (USD) | |:---:|:---:| | June 30, 2024 | $28,297,491 | | June 30, 2023 | $76,690,246 | | June 30, 2022 | $76,020,296 | [Risks Related to Our Corporate Structure](index=26&type=section&id=Risks%20Related%20to%20Our%20Corporate%20Structure) The company faces residual risks from its terminated VIE structure, as PRC authorities could retroactively penalize non-compliance, despite current operations not being on the foreign investment 'negative list' - The company terminated its VIE structure in December 2021, with its B2B platform now operated by ICZOOM HK, a Hong Kong subsidiary not requiring a PRC ICP license[128](index=128&type=chunk)[325](index=325&type=chunk) - PRC authorities could retroactively penalize the company for prior VIE structure use if deemed non-compliant, potentially causing a material adverse operational impact[130](index=130&type=chunk)[131](index=131&type=chunk) [Risks Related to Doing Business in China](index=28&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20China) Operating in China exposes the company to significant risks from government intervention, legal uncertainties, currency controls, evolving cybersecurity laws, and new CSRC filing requirements for overseas listings - The PRC government exerts substantial influence over business operations, creating regulatory uncertainty through potential intervention[143](index=143&type=chunk) - New PRC regulations require CSRC filing for future overseas securities offerings, with non-compliance potentially leading to fines and penalties[157](index=157&type=chunk)[158](index=158&type=chunk) - Fund transfers from PRC subsidiaries are subject to government controls on currency conversion and remittance, potentially restricting cash movement out of China[98](index=98&type=chunk)[217](index=217&type=chunk) - The company is subject to evolving PRC data security and cybersecurity laws, including Cybersecurity Review Measures, with management's interpretation of applicability subject to PRC authorities[150](index=150&type=chunk)[328](index=328&type=chunk) [Risks Related to Our Offerings and the Ordinary Shares](index=49&type=section&id=Risks%20Related%20to%20Our%20Offerings%20and%20the%20Ordinary%20Shares) The dual-class share structure concentrates significant voting power with founders, limiting Class A shareholder influence, while the company's status as a foreign private issuer and emerging growth company allows less stringent disclosure, with potential PFIC classification risks - The dual-class share structure grants **10 votes per Class B share** versus **1 vote per Class A share**, with founders controlling approximately **83.98%** of total voting power[268](index=268&type=chunk)[298](index=298&type=chunk)[367](index=367&type=chunk) - The company's status as an 'emerging growth company' and 'foreign private issuer' allows exemptions from certain U.S. disclosure and corporate governance requirements[299](index=299&type=chunk)[292](index=292&type=chunk) - The company's auditor, Audit Alliance LLP, is subject to PCAOB inspection, but potential PRC regulatory changes could restrict access to audit work papers, impacting U.S. listing status under the HFCA Act[291](index=291&type=chunk)[330](index=330&type=chunk) [Information on The Company](index=56&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) ICZOOM Group Inc., a Cayman Islands holding company, operates a B2B e-commerce platform for electronic components in China and Hong Kong, focusing on SMEs, having terminated its VIE structure and completed its NASDAQ IPO in March 2023 [History and Development of the Company](index=56&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) ICZOOM Group Inc., a Cayman Islands entity, completed its NASDAQ IPO in March 2023, raising **$6 million**, after terminating its VIE structure in December 2021, and remains a 'controlled company' due to its dual-class share structure - The company completed its IPO on March 17, 2023, issuing **1,500,000 Class A Ordinary Shares** at **$4.00 per share**, raising gross proceeds of **$6 million**[308](index=308&type=chunk)[374](index=374&type=chunk) - The company terminated its VIE structure in December 2021, with its B2B online platform now operated by ICZOOM HK, a Hong Kong subsidiary not requiring a PRC ICP license[311](index=311&type=chunk)[325](index=325&type=chunk) - The company is a 'controlled company' with its CEO and COO collectively holding **83.98%** of total voting power due to the dual-class share structure[367](index=367&type=chunk) [Business Overview](index=72&type=section&id=B.%20Business%20Overview) The company operates a B2B e-commerce platform for electronic components, serving Chinese SMEs with product sales and service fees, enhancing market efficiency through real-time pricing and SaaS solutions, and holding AEO status for faster customs clearance - The company's e-commerce platform business model provides anonymous product offerings, real-time pricing, and integrated SaaS solutions to electronics industry SMEs[379](index=379&type=chunk)[396](index=396&type=chunk) Customer and Supplier Counts | Fiscal Year Ended | Total Customers | Total Suppliers | |:---|:---:|:---:| | June 30, 2024 | 805 | 821 | | June 30, 2023 | 813 | 836 | | June 30, 2022 | 1,051 | 1,012 | Revenue Breakdown by Source (FY2024) | Revenue Source | Percentage of Total Revenue | |:---|:---:| | Sales of electronic components | 98.5% | | Service commission fee | 1.5% | - The company holds **20 registered trademarks** and **69 registered software copyrights**, crucial for its e-commerce platform operations[453](index=453&type=chunk) [Operating and Financial Review and Prospects](index=110&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) For FY2024, revenue decreased by **17.0%** to **$177.9 million** due to reduced demand, resulting in a net loss of **$2.3 million** from lower revenue, decreased gross profit, and increased operating expenses, with liquidity managed through cash, bank loans, and related-party financing Key Financial Performance (Fiscal Years 2024 vs. 2023) | Metric | FY 2024 | FY 2023 | Change (%) | |:---|:---:|:---:|:---:| | Total Revenue | $177,933,890 | $214,405,226 | (17.0%) | | Gross Profit | $4,950,361 | $5,292,611 | (6.5%) | | Operating Expenses | $6,294,192 | $4,417,579 | 42.5% | | Net (Loss)/Income | ($2,272,297) | $1,751,170 | (230.0%) | - The **17.0%** decrease in FY2024 revenue was largely attributed to reduced customer demand due to high inventory levels carried over from the previous fiscal year[599](index=599&type=chunk) - Operating expenses increased significantly, driven by higher stock-based compensation, increased senior management salaries, and higher professional fees post-IPO[617](index=617&type=chunk)[620](index=620&type=chunk) [Results of Operations](index=116&type=section&id=Results%20of%20Operations) In FY2024, total revenue decreased to **$177.9 million**, with semiconductor sales down **34.5%** and equipment sales up **135.5%**, leading to a **6.5%** decrease in gross profit and a net loss of **$2.3 million**, primarily due to a foreign exchange loss and increased operating expenses Revenue by Product Category (USD) | Product Category | FY 2024 | FY 2023 | |:---|:---:|:---:| | Semiconductor Products | $124,138,137 | $189,388,293 | | Equipment, Tools & Others | $51,182,758 | $21,734,862 | | **Total Product Sales** | **$175,320,895** | **$211,123,155** | - Selling expenses increased by **17.7%** to **$2.3 million** in FY2024, primarily due to a significant rise in stock-based compensation for the sales team[617](index=617&type=chunk) - General and administrative expenses rose by **62.9%** to **$3.95 million** in FY2024, driven by increased senior management salaries, stock-based compensation, and professional service fees post-IPO[620](index=620&type=chunk) - The company experienced a foreign exchange loss of **$258,649** in FY2024, a sharp reversal from a gain of **$1,788,870** in FY2023, significantly contributing to the net loss[624](index=624&type=chunk) [Liquidity and Capital Resources](index=122&type=section&id=Liquidity%20and%20capital%20resources) As of June 30, 2024, the company had **$5.5 million** in cash and **$14.5 million** in working capital, with liquidity supported by **$2.1 million** net cash from operations, bank borrowings, and related-party loans, and **$10.2 million** in outstanding short-term bank loans Key Balance Sheet Items (as of June 30) | Item | 2024 (USD) | 2023 (USD) | |:---|:---:|:---:| | Cash and Restricted Cash | $5,484,960 | $6,413,367 | | Accounts Receivable | $28,297,491 | $76,690,246 | | Accounts Payable | $5,263,945 | $51,127,328 | | Short-term Bank Loans | $10,238,369 | $14,022,523 | Cash Flow Summary (Fiscal Year Ended June 30) | Cash Flow | 2024 (USD) | 2023 (USD) | |:---|:---:|:---:| | Net Cash from Operating Activities | $2,082,250 | ($3,751,832) | | Net Cash used in Investing Activities | ($155,448) | ($144,227) | | Net Cash (used in)/from Financing Activities | ($2,246,032) | $8,749,216 | | **Net (decrease) increase in cash** | **($928,407)** | **$3,461,344** | - As of September 15, 2024, the company collected **79.8%** of its June 30, 2024 accounts receivable and settled **90.5%** of its accounts payable[633](index=633&type=chunk)[637](index=637&type=chunk) [Directors, Senior Management and Employees](index=132&type=section&id=Item%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) The company is led by co-founders Lei Xia (CEO) and Duanrong Liu (COO), with a five-member Board including three independent directors, and had **96 full-time employees** as of the report date, with executive compensation detailed and **6,250,000 Class A Ordinary Shares** reserved under its 2015 Equity Incentive Plan - The Board of Directors consists of **5 members**: Lei Xia (Chairman), Duanrong Liu, and three independent directors: Wei Xia, Qi (Jeff) He, and Tianshi (Stanley) Yang[681](index=681&type=chunk)[710](index=710&type=chunk) Executive Compensation (FY 2024) | Name/Position | Salary (USD) | |:---|:---:| | Lei Xia / CEO | $180,000 | | Duanrong Liu / COO | $133,325 | | Qiang He / CFO (resigned May 2024) | $157,541 | - The company has a 2015 Equity Incentive Plan with **6,250,000 Class A Ordinary Shares** reserved, with **1,373,962 options** issued and none outstanding as of the report date[700](index=700&type=chunk)[702](index=702&type=chunk) - As of the report date, the company had **96 full-time employees**, including **14 in R&D**, **21 in sales and marketing**, and **35 in technical and customer services**[464](index=464&type=chunk)[729](index=729&type=chunk) [Major Shareholders and Related Party Transactions](index=140&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) Founders Lei Xia (CEO) and Duanrong Liu (COO) are major shareholders, controlling approximately **82.89%** of total voting power, making ICZOOM a 'controlled company,' with related party transactions primarily involving non-interest-bearing loans and personal guarantees for bank loans Beneficial Ownership and Voting Power | Name | Class A Shares | Class B Shares | Total Voting Power* | |:---|:---:|:---:|:---:| | Lei Xia (CEO) | 250,000 | 1,969,500 | 42.63% | | Duanrong Liu (COO) | 250,000 | 1,860,000 | 40.26% | | **All execs & directors (5)** | **502,500** | **3,829,500** | **82.89%** | - As of June 30, 2024, the company had a balance of **$474,544** due to related parties, primarily non-interest bearing, on-demand loans from shareholders for working capital[739](index=739&type=chunk) - The company's controlling shareholders have provided personal guarantees and pledged personal property to secure short-term bank loans[741](index=741&type=chunk) [Additional Information](index=143&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section details the dual-class share capital structure concentrating founder control, outlines tax considerations across Cayman Islands, Hong Kong, and PRC jurisdictions, and discusses the risk of PRC resident enterprise classification and U.S. federal income tax implications for U.S. holders, including PFIC risks - The company's authorized share capital includes Class A Ordinary Shares (**1 vote per share**) and Class B Ordinary Shares (**10 votes per share**), with Class B shares convertible to Class A on a one-to-one basis[749](index=749&type=chunk)[750](index=750&type=chunk) - The company is subject to Hong Kong profits tax (up to **16.5%**) and PRC Enterprise Income Tax (**25%**), but not income or capital gains tax in the Cayman Islands[780](index=780&type=chunk)[782](index=782&type=chunk)[789](index=789&type=chunk) - PRC tax authorities could classify the Cayman Islands holding company as a PRC resident enterprise, subjecting its global income to a **25%** PRC tax and potential withholding tax on dividends to foreign shareholders[782](index=782&type=chunk)[785](index=785&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=157&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include concentration of credit risk, interest rate risk, and significant foreign currency risk from RMB-denominated transactions - Credit risk is concentrated in cash held at PRC and Hong Kong banks and unsecured accounts receivable from PRC customers[823](index=823&type=chunk) - Foreign currency risk is significant as most transactions, assets, and liabilities are RMB-denominated, subject to exchange rate volatility and non-convertibility against the U.S. dollar[825](index=825&type=chunk)[826](index=826&type=chunk) Part II [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=158&type=section&id=Item%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the allocation of net proceeds from the March 2023 IPO for sales and marketing, R&D, logistics, warehousing, and general working capital - The net proceeds from the IPO were allocated as follows: approximately **$0.87 million** for sales and marketing, **$0.87 million** for R&D, **$0.44 million** for logistics and warehousing, and **$2.19 million** for working capital[830](index=830&type=chunk) [Controls and Procedures](index=158&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) As of June 30, 2024, management concluded that disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, specifically a lack of dedicated U.S. GAAP accounting resources - Management identified a material weakness in internal control over financial reporting as of June 30, 2024[832](index=832&type=chunk) - The identified weakness is the lack of dedicated resources for finance/accounting functions and U.S. GAAP compliant financial statement preparation[832](index=832&type=chunk)[835](index=835&type=chunk) [Corporate Governance](index=160&type=section&id=Item%2016.%20Corporate%20Governance) This section covers corporate governance matters including the audit committee financial expert, code of ethics, change in certifying accountant to Audit Alliance LLP, reliance on home country governance as a foreign private issuer, and cybersecurity risk management processes - On April 3, 2023, the company dismissed Friedman LLP and appointed Audit Alliance LLP as its independent registered public accounting firm[845](index=845&type=chunk) Principal Accountant Fees (USD) | Fee Type | FY 2024 | FY 2023 | |:---|:---:|:---:| | Audit Fees | $200,000 | $330,000 | | Audit-Related Fees | $141,500 | $0 | | **Total Fees** | **$341,500** | **$330,000** | - The company has established processes for managing cybersecurity threats, overseen by its IT Engineering Department and Board of Directors, with no material incidents reported for FY2024[855](index=855&type=chunk)[856](index=856&type=chunk) Financial Statements [Consolidated Financial Statements](index=166&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for FY2024, 2023, and 2022, presented under U.S. GAAP, show total assets of **$40.0 million**, total liabilities of **$24.6 million**, and a net loss of **$2.3 million** in FY2024, reflecting the VIE structure termination and detailed notes on accounting policies Consolidated Balance Sheet Data (as of June 30) | Account | 2024 (USD) | 2023 (USD) | |:---|:---:|:---:| | **Total Assets** | **$39,975,042** | **$88,175,838** | | Total Current Assets | $39,132,067 | $86,887,613 | | **Total Liabilities** | **$24,594,328** | **$72,631,642** | | Total Current Liabilities | $24,594,328 | $72,256,586 | | **Total Shareholders' Equity** | **$15,380,714** | **$15,544,196** | Consolidated Statement of Operations Data (Year Ended June 30) | Account | 2024 (USD) | 2023 (USD) | 2022 (USD) | |:---|:---:|:---:|:---:| | Total Revenue | $177,933,890 | $214,405,226 | $290,376,371 | | Gross Profit | $4,950,361 | $5,292,611 | $7,814,464 | | (Loss)/Income from Operations | ($1,343,831) | $875,032 | $3,371,255 | | **Net (Loss)/Income** | **($2,272,297)** | **$1,751,170** | **$2,569,810** | | (Loss)/Earnings Per Share (Basic) | ($0.22) | $0.19 | $0.29 | Consolidated Statement of Cash Flows (Year Ended June 30) | Account | 2024 (USD) | 2023 (USD) | |:---|:---:|:---:| | Net cash from operating activities | $2,082,250 | ($3,751,832) | | Net cash used in investing activities | ($155,448) | ($144,227) | | Net cash (used in)/from financing activities | ($2,246,032) | $8,749,216 | | **Net (decrease) increase in cash** | **($928,407)** | **$3,461,344** |

Core Insights - ICZOOM Group Inc. has been recognized as the 390th among Shenzhen Top 500 Enterprises in 2024, highlighting its industry competitiveness and brand influence [1][2] - The company focuses on building a trustworthy digital supply chain ecosystem and has developed advanced SaaS-based ERP and financial management software [2] - ICZOOM provides a comprehensive one-stop solution for supply chain management, including procurement, warehousing, logistics, customs clearance, inspection, sales, and automated settlement [2][3] Company Overview - ICZOOM Group Inc. operates a B2B e-commerce platform primarily selling electronic component products to small and medium-sized enterprises in Hong Kong and mainland China [3] - The company's product offerings cater to various sectors, including consumer electronics, IoT, automotive electronics, and industrial control [3] - In addition to product sales, ICZOOM offers services such as temporary warehousing, logistics, shipping, and customs clearance [3]

Core Insights - ICZOOM Group Inc. has been ranked 49th among the Top 100 Enterprises in China's Internet Industry, showcasing its strong operational strategies and market performance in the electronic industry internet sector [1] - The recognition highlights ICZOOM's role as a key player in technology innovation and digital transformation for traditional industries [1] Company Overview - ICZOOM Group Inc. operates a B2B e-commerce platform primarily selling electronic component products to small and medium-sized enterprises (SMEs) in Hong Kong and mainland China [3] - The company's product offerings cater to various sectors including consumer electronics, Internet of Things (IoT), automotive electronics, and industry control [3] - ICZOOM's platform utilizes advanced technologies to optimize product information from suppliers, providing transparency for SME customers to compare and select products [3] - In addition to product sales, the company offers services such as temporary warehousing, logistics, shipping, and customs clearance [3] Leadership Recognition - ICZOOM's CEO, Mr. Lei Xia, has been recognized as one of the 2024 China Industry Internet Leaders, reflecting his impactful leadership in navigating a competitive landscape and fostering innovation [2]

Core Insights - ICZOOM Group Inc. successfully participated in the ELEXCON 2024 Shenzhen International Electronics Exhibition, attracting significant customer interest and inquiries [1][2][3] Company Overview - ICZOOM Group Inc. operates a B2B e-commerce platform for electronic component products, primarily serving small and medium-sized enterprises (SMEs) in Hong Kong and mainland China [4] - The company's product offerings cater to various sectors, including consumer electronics, Internet of Things (IoT), automotive electronics, and industrial control [4] - In addition to product sales, ICZOOM provides services such as temporary warehousing, logistics, shipping, and customs clearance [4] Exhibition Highlights - The ELEXCON 2024 exhibition featured over 400 exhibitors and was held from August 27th to 29th at the Shenzhen Futian Exhibition Center [2] - ICZOOM's meticulous preparation led to numerous consultations and negotiations with both local and overseas customers, resulting in many inquiries and intent orders [2][3] - The company also invited original electronic component factory customers to share industry knowledge and products through live broadcasting, enhancing engagement and understanding [3]

Core Points - ICZOOM Group Inc. has regained compliance with Nasdaq Listing Rules regarding the Annual Shareholder Meeting Requirement after holding its annual general meeting on August 20, 2024 [1] - The company had previously received a notice of non-compliance on July 9, 2024, due to not holding the required annual meeting within twelve months of its fiscal year end [1] Company Overview - ICZOOM Group Inc. operates a B2B e-commerce platform focused on the sale of electronic component products primarily to small and medium-sized enterprises (SMEs) in Hong Kong and mainland China [2] - The company's product offerings cater to various sectors including consumer electronics, Internet of Things (IoT), automotive electronics, and industrial control [2] - In addition to product sales, ICZOOM provides services such as temporary warehousing, logistics, shipping, and customs clearance to its customers [2]

Financial Performance - Total revenue for the six months ended December 31, 2023, was $87.72 million, a decrease of 27.0% compared to $120.21 million for the same period in 2022[6]. - Gross profit for the same period was $2.19 million, down 29.4% from $3.10 million year-over-year[6]. - The net loss for the six months ended December 31, 2023, was $721,745, compared to a net income of $926,717 for the same period in 2022[6]. - Sales of electronic components products totaled $86,329,512 for the six months ended December 31, 2023, down 27.0% from $118,348,676 in 2022[76]. - Integrated Circuits sales increased significantly to $30,881,697 in 2023 from $9,097,914 in 2022, representing a growth of 238.5%[76]. - The company reported a net loss attributable to ordinary shareholders of $721,745 for the six months ended December 31, 2023, compared to a net income of $926,717 in 2022[88]. - Basic and diluted earnings per share for the six months ended December 31, 2023, were both $(0.07), compared to $0.10 in 2022[88]. Assets and Liabilities - Total current assets decreased to $63.60 million as of December 31, 2023, from $86.89 million as of June 30, 2023, representing a decline of 26.8%[2]. - Total liabilities decreased to $49.40 million as of December 31, 2023, from $72.63 million as of June 30, 2023, a reduction of 31.9%[3]. - The company reported total shareholders' equity of $15.67 million as of December 31, 2023, an increase from $15.54 million as of June 30, 2023[4]. - Accounts receivable decreased significantly to $53.12 million as of December 31, 2023, from $76.69 million as of June 30, 2023, a decline of 30.8%[2]. - Total inventory, net, decreased to $454,999 as of December 31, 2023, from $833,858 as of June 30, 2023, representing a decline of about 45.5%[109]. - The balance due to related parties increased significantly to $3,280,522 as of December 31, 2023, compared to $1,508,766 as of June 30, 2023[160]. Cash Flow and Financing Activities - Cash and cash equivalents increased slightly to $1.13 million as of December 31, 2023, compared to $1.11 million as of June 30, 2023[2]. - The net cash used in operating activities was $1,026,221, a decrease from $1,905,166 in the prior year, showing an improvement of approximately 46%[10]. - The company experienced a net cash provided by financing activities of $2,987,399, up from $2,023,947 in the previous year, marking an increase of approximately 48%[10]. - The total interest expense for loans from PRC banks amounted to $321,697 for the six months ended December 31, 2023[144]. - The Company borrowed a total of RMB 16.0 million (approximately USD 2.3 million) from SPD Bank on October 24, 2023, with an effective interest rate of 2.74% per annum[126]. - The Company borrowed $2.75 million from Agricultural Bank of China on February 22, 2023, with an effective interest rate of 5.69% per annum[128]. Operational Highlights - The company has been actively engaged in the sales of electronic components primarily to small and medium-sized enterprises in China, focusing on the consumer electronics and automotive electronics sectors[13]. - ICZOOM has established a comprehensive logistics and shipping service to enhance customer experience and generate additional service commission fees[13]. - The company operates a B2B online platform, where customers can post quotes for electronic components, and revenue is recognized upon delivery[68][71]. - The company generates revenue from sales of electronic components and service commission fees, with commission fees ranging from 0.15% to 2% based on merchandise value[72][73]. Taxation and Regulatory Matters - ICZOOM Shenzhen was approved as a High and New Technology Enterprise, entitled to a reduced income tax rate of 15% beginning December 2023[152]. - For the six months ended December 31, 2023, the actual income tax expense was $(324,977), compared to a benefit of $1,052 for the same period in 2022[154]. - The deferred tax assets derived from net operating loss carry forwards increased to $741,077 as of December 31, 2023, from $406,760 as of June 30, 2023[156]. Shareholder Information - The weighted average number of ordinary shares outstanding for the six months ended December 31, 2023, was 10,362,861, compared to 8,826,374 for the same period in 2022[6]. - The total number of outstanding stock options is 742,762 with a weighted average exercise price of $0.18[183]. - The fair value of share options vested during the six months ended December 31, 2023 was nil, compared to $4,683 for the same period in 2022[188]. - The company recorded share-based compensation expense of nil for the six months ended December 31, 2023, down from $58,598 in 2022[188].