Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1278

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7
Chunk 1278
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 by installing applications from App developer partners (the “Partners”) onto its mobile devices and facilitating the
distribution of these devices to end users (the “App Service”). The App Service commission revenue is generated when end users
interact with Partner-developed Apps installed on the Company’s mobile devices (the “App”), such as through clicks and/or
impressions, App activations, and/or additional App installations, triggering the Partners’ obligation to pay the Company its App
revenue share (service commission). The revenue shares are considered variable consideration. Those revenue shares related to clicks,
impressions, and additional App installations are determined based on the contract price negotiated between the Partners and the third-party
advertisers, while those related to App activations are determined based on the number of App activations. The Partners are primarily
responsible in developing and maintaining the application, and is the primary obligor to users of the application and determines and controls
the revenue shares (service commission) to pay the Company. No refund or return policy is provided to the Partners. The Company recognizes
App Service commission revenue at a point in time when the activations and service commission is earned, which is when the app activations,
clicks/impressions, or additional app installations occur, and when the uncertainty of the variable consideration is resolved.

Practical
expedient

The
Company applies the practical expedient in ASC 606 to expense as incurred, the costs to obtain a contract with a customer when the amortization
period is one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects
the benefit of those costs to be longer than one year which need to be recognized as assets for years ended June 30, 2025 and 2024.

Cost
of revenues

The
cost of revenue consists primarily of the costs of electronic products sold and freight cost.

Selling
expenses

Selling
expenses consist primarily of the advertising and marketing expenses, warranty expenses, commission fees incurred in connection with
the E-Commerce platform sales, and consulting fees in connection with marketing activities.

General
and administrative expenses

General
and administrative expenses consist primarily of personnel costs of salaries and other compensation-related expenses for executive management,
finance, accounting, human resources, legal, compliance, and other administrative functions as well as professional services costs and
other facility related costs.

Research
and development

Research
and development expenses consist primarily of development fees that the Company incurred based on the progression of product development
and payroll and related