Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 881

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 4
Chunk 881
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 full balance prior to shipment to the E-Commerce Platform and the E-Commerce Platform withholds the
payment for 30 days before remitting payments to the Company. The Company offered one month of free exchange or return. As a result, the
Company recognized its revenues from the E-Commerce customers, in the third-party E-commerce platform, net of estimated sales returns,
discount, and rebate, as a consideration reducing the transaction price. Historically, sales returns were insignificant to the Company’s
operations. For the years ended June 30, 2025 and 2024, the Company did not recognize any estimated sales returns. 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-13

App
Service Commission Revenue

The Company provides an App
Service by installing applications from App developer partners (the “Partners”) onto its mobile devices and facilitating the
distribution of these devices to end users (the “App Service”). The App Service commission revenue is generated when end users
interact with Partner-developed Apps installed on the Company’s mobile devices (the “App”), such as through clicks and/or
impressions, App activations, and/or additional App installations, triggering the Partners’ obligation to pay the Company its App
revenue share (service commission). The revenue shares are considered variable consideration. Those revenue shares related to clicks,
impressions, and additional App installations are determined based on the contract price negotiated between the Partners and the third-party
advertisers, while those related to App activations are determined based on the number of App activations. The Partners are primarily
responsible in developing and maintaining the application, and is the primary obligor to users of the application and determines and controls
the revenue shares (service commission) to pay the Company. No refund or return policy is provided to the Partners. The Company recognizes
App Service commission revenue at a point in time when the activations and service commission is earned, which is when the app activations,
clicks/impressions, or additional app installations occur, and when the uncertainty of the variable consideration is resolved.

Practical
expedient

The
Company applies the practical expedient in ASC 606 to expense as incurred, the costs to obtain a contract with a customer when the amortization
period is one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects
the benefit of those costs to be longer than one year