Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1495

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 8
Chunk 1495
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 sheet date.

Deferred
taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable
tax. Deferred tax liabilities are recognized for all future taxable temporary differences. Deferred tax assets are recognized to the
extent that it is probable that taxable income will be available against which deductible temporary differences can be utilized. Deferred
tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled.

F-15

Deferred
taxes are charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Net
deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some
portion or all of the net deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws
of the relevant taxing authorities.

An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that
has a greater than 50% likelihood of being realized on examination. For tax positions not meeting the “more likely than not”
test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income taxes are classified as income tax
expenses in the period incurred. Income tax returns for the years prior to 2019 are no longer subject to examination by U.S. tax
authorities.

Stock-based
compensation 

The
measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors, including employee
stock options and restricted stock, is based on estimated fair value of the awards on the date of grant, of which stock options uses
the Black-Scholes option pricing model, 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.

 W