Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 14

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 14
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 estimated net realizable value, the estimated selling prices in the ordinary course
of business, less reasonably predictable costs of completion, disposal and transportation, based upon forecasts for future demand and
market conditions. When inventories are written down to net realizable value, it is not marked up subsequently based on changes in underlying
facts and circumstances. As of March 31, 2025 and June 30, 2024, the Company had inventories of $16,661,931 and $1,768,072, respectively.
During the three and nine months ended March 31, 2025 and 2024, no inventory write-down was recorded.

Contract assets

Contract assets consisted
of cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances
to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize
an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance
is adequate and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for credit losses
after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate
the reasonableness of the valuation allowance policy and update it if necessary. As of March 31, 2025 and June 30, 2024, no allowance
for credit losses on contract assets was recorded.

Deferred transaction costs

The Company complies with the requirements of Financial Accounting
Standards Board (“FASB”) ASC 340-10-S99-1, “Other Assets and Deferred Costs — SEC Materials”
(“ASC 340-10-S99”) and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Deferred
transaction costs consist of underwriting, legal, accounting, and other professional expenses incurred through the balance sheet date
that are directly related to the Business Combination and that will be charged to shareholders’ equity (deficit) upon the completion
of the Business Combination. The Company completed the Business Combination on September 26, 2024. As of September 26, 2024, and the Company
had deferred transaction costs of $893,577 and charged against shareholders’ deficit. As of March 31, 2025 and June 30, 2024,
the Company had deferred transaction costs of $0 and $462,177, respectively.

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