Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 607

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 607
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 equivalents on account. Cash is maintained at financial institutions and,
at times, balances may exceed federally insured limits. Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation
up to $250,000. The Company has historically not experienced a loss related to these deposits.

Accounts
receivable

Accounts
receivables are recognized and carried at the original invoiced amount less an allowance for any uncollectible accounts on credit losses.
Allowance for credit losses for accounts receivables is established based on various factors including historical payments and current
economic trends. The Company reviews its allowance for credit loss by assessing individual accounts receivable over a specific aging
and amount. All other balances are pooled based on historical collection experience. The estimate of expected credit losses is based
on information about past events, current economic conditions, and forecasts of future economic conditions that affect collectability.
Accounts receivable are written-off on a case by case basis after exhaustive efforts at collection are made, net of any amounts that
may be collected. As of June 30, 2025 and 2024, $595,907 and $0, respectively, allowance for credit losses of accounts receivable was
recorded and the Company had net accounts receivable of $6,786,792 and $251,894, respectively.

F-10

Inventories

Inventories
are stated at the lower of cost or net realizable value, the estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal and transportation. Cost is determined using the “First in, First out” method.
Inventories mainly include electronic products and accessories which are purchased from the Company’s suppliers as merchandized
goods and freight-in. On an annual basis, inventories are reviewed for potential write-downs for estimated obsolescence or unmarketable
inventories which equals the difference between the costs of inventories and the 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 June 30, 2025 and 2024, the Company had inventories of $12,686,739 and
$1