Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1270

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7
Chunk 1270
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 the outcome of this uncertainty.

Note 3
— Basis of presentation and significant accounting policies

Basis
of presentation

The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation of its financial position and operation results.

Principles
of consolidation

The
consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances
among the Company and its subsidiaries have been eliminated upon consolidation.

A
subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power
to govern the financial and operating policies, to appoint or remove the majority of the members of the Board of Directors, or to cast
a majority of votes at the meeting of directors.

Use
of estimates and assumptions

The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could
differ from these estimates.

Fair
value measurement

The
accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments
and requires disclosure of the fair value of financial instruments held by the Company.

F-9

The
accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and
enhance disclosure requirements for fair value measures. The three levels are defined as follows:

    ●
    Level
    1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

    ●
    Level
    2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
    are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

    ●
    Level
    3 inputs to the valuation methodology are unobservable and significant to the fair value.

Financial
instruments included in current assets and current liabilities are reported in the