Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1150

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 6
Chunk 1150
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, inclusive of assumptions for risk-free interest rates, expected dividends, expected terms, expected
volatility, and the fair value of the underlying stock, and restricted stock is based on the market value of the Company’s common
stock. The value of awards that are ultimately expected to vest is recognized as expense on a straight-line basis over the vesting service
periods in the consolidated statements of operations. Forfeitures are accounted for as they occur.

 Warrants

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”),
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of equity at the time of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that
its warrants qualify for equity accounting treatment.

Upon
completion of the Business Combination, all of ACAC’s outstanding public and private warrants (See Note 16) were replaced by the
Company’s public and private warrants. The Company treated such warrants replacement as a warrant modification and no incremental
fair value was recognized for the year ended June 30, 2025.

Basic
and diluted loss per share

Basic
EPS is measured as net loss divided by the weighted average common shares outstanding for the period.

Diluted
net loss per share attributable to common stockholders adjusts basic loss per share for the potentially dilutive impact of non-participating
shares of common stock. Dilutive equivalent shares are excluded from the computation of diluted loss per share if their effects would
be anti-dilutive. Common stock issuable upon the conversion of the