Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 14

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 1
Chunk 14
---
 Company expects to receive in exchange for those goods or services. An asset is transferred when the customer obtains control
of that asset. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized
at a point in time or over time, based on when control of goods and services transfers to a customer.

To achieve that core principle, the Company applies the five steps
defined under ASC 606, Revenue from Contracts with Customers: (i) 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.

8

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.

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 for the order in full balance prior
to shipment or in partial payments with credit terms of 30 to 90 days after shipment depending 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 is no transaction prices allocated to future periods or future obligations and
no