Company: FOXX
Filing Date: 2025-01-10
Form Type: S-1
Source: 0001213900-25-002199
Chunk: 190

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-10
Form: S-1
Chunk 190
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 The Company orders the products, and the suppliers ship the products to the Company’s warehouse where the Company inspects and accepts the products. This enables the Company to direct the use of these products but to also bear inventory risk as legal owners. The Company has the responsibility of fulfilling the promise to provide the products to its customers, and to provide a one -yearwarranty period for each customer’s order. In addition, when establishing the selling prices for delivery of the products, the Company has control to set its selling price at the E -commerceplatform. All these factors indicate that the Company is acting as the principal in this transaction. As a result, revenue from the E -Commercecustomer is presented on a gross basis. Practical expedient The Company applies the practical expedient in ASC 606 to expense costs as incurred for costs to obtain a contract with a customer when the amortization period is one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year which need to be recognized as assets for the years ended June 30, 2024 and 2023. Cost of revenues The cost of revenue consists primarily of the costs of electronic products sold and freight -in. Selling expenses Selling expenses consist primarily of the advertising and marketing expenses, warranty expenses, commission fees incurred in connection with the E -Commerceplatform sales, and consulting fees in connection with marketing activities. Research and Development The research and development expenses primarily consisted of development fees that the Company incurred based on the progression of product development. For the years ended June 30, 2024 and 2023, the Company had research and development expenses that amounted to $ 91,168and $ 272,080, respectively. F-41 FOXX DEVELOPMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3 — Basis of presentation and significant accounting policies (cont.) Lease The Company accounts for leases in accordance with ASC 842. The Company categorizes leases with contractual terms longer than 12 months as either operating or finance. Finance leases are generally those leases that substantially utilize or pay for the entire asset over its estimated life. All other leases are categorized as operating leases. Costs associated with operating lease assets are recognized on a straight -linebasis within operating expenses over the term of the lease. As of June 30, 2024 and 2023, the Company does not have finance leases. The Company determines if an arrangement is, or contains, a lease