Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1249

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7
Chunk 1249
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 our business expansion plan and integrating IoT-enabled devices alongside our cloud platform to streamline operations in
2026.

Research
and Development — related party

Research
and development (“R&D”) expenses from a related party increased by approximately $46,000, or 50.0%, where the increase
was primarily due to an R&D project began in 2024. During the year ended June 30, 2024, a related party completed 40% of the remaining
5G development project pursuant to an R&D agreement between us and the related party, and we recognized an R&D expense approximately
of $91,000 accordingly based on the progression of the R&D project. During the year ended June 30, 2025, the related party completed
the remaining 5G development project, and we recognized a R&D expense of approximately $137,000.

Research
and Development 

R&D
expenses increased by approximately $2.1 million, or 100.0%, from $0 for the year ended June 30, 2024 to $2.1 million for the same
period in 2025. The increase is due to hiring of more employees and engaging third parties to provide development services for new
products during the year ended June 30, 2025. The increase is also attributable to approximately $0.1 million increase in
stock-based compensation as we granted restricted stock units in November 2024 to our R&D team members under the Incentive Plan.

25

Other
Income (Expense), Net

Our
other expense, net is summarized as follows:

    For
    the Years ended June 30, 

    2025  
    2024  
    Change  
    Change
    (%) 

    Other income
    (expense) 

    Interest
    expense 
    $(4,959,055) 
    $(278,328) 
    $(4,680,727) 
     1,681.7%
  
    Other
    income (expense), net 
     25,589  
     (4,016) 
     29,605  
     (737.2)%
  
    Change
    in fair value of earnout liabilities 
     5,688,007  
     -  
     5,688,007  
     100.0%
  
    Total
    other income (expense), net