Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 158

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 158
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 Mootness Fee.

Lease Commitment

On July 12, 2024, the Company signed a seven-year lease agreement to
rent a warehouse for business operation with a monthly rent of $65,745, plus varied monthly CAM, for 50,573 square feet. The commencement
date of this lease is February 1, 2025 and the termination date is January 31, 2032. On August 9, 2024, the Company expanded the existing
lease to include additional 50,572 square feet from April 1, 2025 to January 31, 2032 with an additional monthly rent of $65,744. These
two first-month rents were included in prepaid expenses and other current assets. On December 20, 2024, the Company revised the commencement
date to July 1, 2025 and termination date to December 31, 2035, and further expanded the existing lease to include additional 102,099
square feet from January 1, 2026 to December 31, 2035 with an additional monthly rent of $132,729., which was included in prepaid expenses
and other current assets. Additional $550,000 of security deposits were made as a result of this lease amendment, which was included in
the caption “security deposits” in the accompanying condensed consolidated balance sheets as of March 31, 2025. These leases
were not included in the operating right-of-use assets balance as of March 31, 2025.

Reference to Note 19 for detailed disclosure
of other entered lease agreements. 

Note 21 — Income taxes 

As of March 31, 2025 and
June 30, 2024, the Company’s deferred tax asset had a full valuation allowance recorded against it. The effective tax rate for each
of the three months ended March 31, 2025 and 2024 was 0% and (2.3)%. The effective tax rate for each of the nine months ended March 31,
2025 and 2024 was 0% and (1.0)%. The effective tax rate differs from the statutory tax rate of 21% primarily due to the valuation allowance
on the deferred tax assets. 

Note 22 — Disaggregated information
of revenues

Disaggregated information
of revenues by product type is as follows:

    For the Three Months Ended  
    For the Nine Months Ended