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

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 1
Chunk 11
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holders’
equity accounts were translated at their historical rates. Amounts reported on the unaudited condensed consolidated statement of cash
flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. 

Segments

The Company uses the management
approach in determining reportable operating segments. The management approach considers the internal reporting used by the chief operating
decision maker (“CODM”), which is the Company’s Chief Executive Officer and his direct reports, for making operating
decisions about the allocation of resources and the assessment of performance in determining the Company’s reportable operating
segments. The Company’s CODM reviews financial information presented on a consolidated basis, accompanied 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