Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 97

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 8
Chunk 97
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 by disaggregated information
about revenues, cost of revenues, and gross profit by business lines (electronic products revenues and App Service (as defined below)
commission revenue) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held
accountable for operations, operating results and plans for levels or components below the consolidated unit level. In addition, all of
the Company’s revenues are derived solely from the U.S. Accordingly, no geographical information is presented. Management has determined
that the Company has one operating segment.

Accounts receivable

Accounts receivables
are recognized and carried at the original invoiced amount less an allowance for any uncollectible accounts or credit losses. An
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 September 30, 2025, and June 30, 2025, $635,895 and $595,907, respectively, of
allowance for credit losses of accounts receivable was recorded, and the Company had net accounts receivable of $12,768,345 and
$6,786,792, respectively.

Inventories

Inventories are stated at the lower 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. At least a quarterly 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,