Company: FOXX
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006111
Chunk: 188

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-24
Form: 424B3
Chunk 188
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 or as, the performance obligation is satisfied. For all the Company’s 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 the order in full balance prior to shipment or in partial payments with credit terms of 30 to 60 days after shipment depends on the specified contract. No sales returns are being given to its wholesale customers as they were being given additional 2 -3% of products on top of each customer’s order (see “Warranty: accounting policy below). There are no transaction prices allocated to future periods or future obligations and no revenue was recognized for performance obligations satisfied in previous periods. F-39 FOXX DEVELOPMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3 — Basis of presentation and significant accounting policies (cont.) Gross versus Net Revenue Reporting The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction in accordance with ASC 606 -10-55and depends on whether the promise to the customer is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company controls the products prior to transferring them. When the Company controls the products, the promise is to provide and deliver the products and revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is presented net. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606 -10-55-37Aand the indicators in ASC 606 -10-55-39. The Company considers this guidance in conjunction with the terms in its arrangements with both suppliers and customers. The Company orders the products and pays in advance from its supplier. When the supplier has completed production, the Company inspects and accepts the products in its suppliers’ warehouse or at the designated logistic warehouse of the supplier. This enables the Company to direct the use of these products but to also bear inventory risk as legal owners. The Company has the responsibility of fulfilling the promise to provide the products to its customers, and also includes an additional 2 -3% of products on top of each customer’s order, which covers any damage incurred in