Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 239

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 1A
Chunk 239
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2025  
    2024 

    Federal statutory
    tax rate 
     21.0% 
     21.0%
  
    State statutory tax rate,
    net of deduction on federal tax return 
     (0.1)% 
     4.2%
  
    Permanent difference 
     (13.5)% 
     (1.7)%
  
    Others 
     (1.1)% 
     0.9%
  
    Change
    in valuation allowance 
     (7.2)% 
     (25.0)%
  
    Effective
    tax rate 
     (0.9)% 
     (0.6)%

The
Company had a cumulative net operating loss carryforward (“NOL”) for federal, state and foreign income tax purpose of approximately
$7.5 million, $2.7 million, and $0.1 million, respectively, as of June 30, 2025. The Company elected 100% allowance on deferred
tax asset for the years ended June 30, 2025 and 2024 and incurred approximately $0.7 million and $0.8 million allowance on deferred
tax asset, respectively. The Company’s NOL is limited to 80% of the excess of taxable income on federal level, and no limitation
on the state level. The Company’s federal NOL and state NOL of approximately $1.4 million will last indefinitely. The
state NOL of approximately $1.2 million can be carried for 20 years. The valuation allowance increased by approximately $0.7 million from
approximately $2.0 million on June 30, 2024 to approximately $2.7 million on June 30, 2025.

The
utilization of the Company’s net operating losses may be subject to a U.S. federal limitation due to the “change in ownership
provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations
may result in a reduction of the amount of net operating loss carryforwards in future years and possibly the expiration of certain net
operating loss carryforwards before their utilization.  

The
Company’s deferred tax accounts are comprised of the following as of:

    June
                                            30,
                                                                  2025  
    June
    30,
    2024 
  
    Deferred
    tax