Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 1015

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 5
Chunk 1015
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of revenues

The
cost of revenue consists primarily of the costs of electronic products sold and freight cost.

Selling
expenses

Selling
expenses consist primarily of the advertising and marketing expenses, warranty expenses, commission fees incurred in connection with
the E-Commerce platform sales, and consulting fees in connection with marketing activities.

General
and administrative expenses

General
and administrative expenses consist primarily of personnel costs of salaries and other compensation-related expenses for executive management,
finance, accounting, human resources, legal, compliance, and other administrative functions as well as professional services costs and
other facility related costs.

Research
and development

Research
and development expenses consist primarily of development fees that the Company incurred based on the progression of product development
and payroll and related expenses for research and development personnel. For the years ended June 30, 2025 and 2024, the Company
had research and development expenses that amounted to $2,220,649 and $91,168, respectively.

Interest expenses

Interest expenses consist
primarily of interest incurred on convertible notes, unpaid purchase balance from a vendor (see Note 10 for details), and borrowings and
others. For the years ended June 30, 2025 and 2024, the Company had interest expenses that amounted to $4,959,055 and $278,328,
respectively. Of the total interest expense for the year ended June 30, 2025, $140,740 was related to convertible notes, $4,798,339 to
unpaid purchase balance, and $19,976 to borrowings and others. Of the total interest expense for the year ended June 30, 2024, $264,445
was related to convertible notes and $13,883 to borrowings and others.

F-14

Lease

The
Company accounts for leases in accordance with ASC 842 “Leases”. 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-line basis within operating expenses over the term of the lease. As of June 30, 2025 and 2024,
the Company does not have finance leases.

The
Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s