Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1276

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7
Chunk 1276
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 identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine
the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize
revenue when (or as) the entity satisfies a performance obligation.

The Company’s main business is selling electronic products to
1) wholesale customers and 2) individual E-Commerce customers, and the Company’s revenue also came from 3) the App service commission
from providing installation of applications on the Company’s mobile devices and revenue share from clicks and impressions.

F-12

Wholesale
Customers

The
Company recognizes a contract with a customer when the contract is committed in writing, the rights of parties, including payment terms,
are identified, the contract has commercial substance, and collectability is probable.

A
performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting
in ASC 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based on the
relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the performance
obligation is satisfied. For all the Company’s wholesale contracts, the Company has identified one performance obligation, which
is primarily satisfied at a point in time upon delivery of products based on terms stated in the contracts, either on Free on Board (“FOB”)
shipping point or destination, depending on the specified contract. The Company’s customers generally either pay the order in full
balance prior to shipment or in partial payments with credit terms of 30 to 90 days after shipment depends on the specified contract.
No sales returns are being given to its wholesale customers as they were being given additional 1-3% of
products on top of each customer’s order (see Note 3 - “Warranty” below). There are no transaction prices allocated
to future periods or future obligations and no revenue was recognized for performance obligations satisfied in previous periods.

Warranty

The
Company generally provides 30 days warranties or 1-year warranties for its product sold to its wholesale customer if an additional
1-3% of products on top of each customer’s order was not provided. For the sale transactions that were provided with 1-3% of
products on top of each customer’s order, these additional 1-3% products were recognized as