Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 609

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 609
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 undiscounted net cash flows expected to result from the use and eventual
disposition of the assets. If the assets are determined to be impaired, the impairment recognized is the excess of the carrying amount
over the fair value of the assets. Fair value is generally determined by the discounted cash flow method. The discount rate used in any
estimate of discounted cash flows is the rate commensurate with a similar investment of similar risk. As of June 30, 2025 and 2024,
there was no impairment of long-lived assets.

F-11

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 (See Note 4). As of June 30, 2025 and 2024, the Company had deferred transaction costs of $0 and $462,177,
respectively.

Contract
liabilities

Contract
liabilities mainly consisted of deposits received from customers before all the relevant criteria for revenue recognition are met and
are recorded as customer deposits.

Earnout
liabilities

At
the Closing of the Business Combination, pursuant to the Business Combination Agreement, the stockholders of Old Foxx were entitled to
receive up to a total of 4,200,000 contingent earnout shares (“Earnout Shares”) in the form of common stock of
the Company, par value $0.0001 per share (“Common Stock”). The Earnout Shares would be issued upon certain vesting schedules
based on the Company’s financial performance for the fiscal years ended June 30, 2025 and 2024. The Earnout Shares are classified
as a liability and measured at fair value, with changes in fair value included in the consolidated statements of operations. As of