Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 780

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 3
Chunk 780
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 taxes. Reconciliations between the expected federal income tax rates using 21% for the years ended June 30, 2025 and 2024 to the
Company’s effective tax rate are as follows:

    For
    the Years Ended  June 30, 

    2025  
    2024 

    Federal statutory
    tax rate 
     21.0% 
     21.0%
  
    State statutory tax rate,
    net of deduction on federal tax return 
     (0.1)% 
     4.2%
  
    Permanent difference 
     (13.5)% 
     (1.7)%
  
    Others 
     (1.1)% 
     0.9%
  
    Change
    in valuation allowance 
     (7.2)% 
     (25.0)%
  
    Effective
    tax rate 
     (0.9)% 
     (0.6)%

The
Company had a cumulative net operating loss carryforward (“NOL”) for federal, state and foreign income tax purpose of approximately
$7.5 million, $2.7 million, and $0.1 million, respectively, as of June 30, 2025. The Company elected 100% allowance on deferred
tax asset for the years ended June 30, 2025 and 2024 and incurred approximately $0.7 million and $0.8 million allowance on deferred
tax asset, respectively. The Company’s NOL is limited to 80% of the excess of taxable income on federal level, and no limitation
on the state level. The Company’s federal NOL and state NOL of approximately $1.4 million will last indefinitely. The
state NOL of approximately $1.2 million can be carried for 20 years. The valuation allowance increased by approximately $0.7 million from
approximately $2.0 million on June 30, 2024 to approximately $2.7 million on June 30, 2025.

The
utilization of the Company’s net operating losses may be subject to a U.S. federal limitation due to the “change in ownership
provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations
may result in a reduction of the amount of net operating loss carryforwards in future years and possibly the expiration of certain