Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 653

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 653
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 are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts
    and expenditures are being made only in accordance with authorizations of our management and directors, and

    (3)
    provide reasonable assurance
    regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
    effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial
statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed
the effectiveness of our internal control over financial reporting at June 30, 2025. In making these assessments, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated
Framework (2013). Based on our assessments and those criteria, management determined that we did not maintain effective internal control
over financial reporting as of June 30, 2025 due to the material weaknesses in the design or operation of internal controls which could
adversely affect our ability to record, process, summarize, and report financial data, which includes:

    -
    lack of sufficient segregation
    of duties due to limited resources;

    -
    lack of adequate design
    of controls and proper documentation needed in order to demonstrate that controls in place are operating effectively for significant
    transaction classes;

    -
    inability to prepare
    complete and accurate financial statements in accordance with generally accepted accounting principle (“GAAP) in a timely
    manner; 

    -
    inappropriate implementation
    of controls over the identification of related party transactions; and

    -
    lack of appropriate design of controls over the completeness and accuracy of App services revenue.

Following
the identification of the material weakness, we plan to take remedial measures including:

    -
    hiring more qualified accounting
    personnel with relevant GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to
    set up a financial and system control framework;

    -
    implementing regular and
    continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; and

    -
    establishing internal audit
    function by engaging an external consulting firm to assist us with assessment of Sarbanes-Ox