Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 608

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 608
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,768,072, respectively. During the years ended June 30, 2025 and 2024, no inventory write-down was recorded.

Contract
assets

Contract
assets consisted of cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest.
For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company
will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine
if the allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance
for credit losses after management has determined that the likelihood of collection is not probable. The Company’s management continues
to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of June 30, 2025 and 2024, no allowance
for credit losses on contract assets was recorded.

Property
and equipment, net

Property
and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets with no residual value. The estimated useful lives are as follows:

      Useful Life   Computer and office equipment   5 years   Equipment   5 years   Vehicles   5 years  

The
cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any
gain or loss is included in the statements of operations. Expenditures for maintenance and repairs are charged to earnings as incurred,
while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also
re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful
lives.

Long-lived assets

The
Company reviews the impairment of its long-lived assets on an annual basis and whenever events or changes in circumstances indicate that
the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include
but are not limited to, a significant deterioration of operating results, a change in the regulatory environment, changes in business
plans, or adverse changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates the recoverability
by a comparison of the carrying amount of the assets to future