Company: FOXX
Filing Date: 2025-01-10
Form Type: S-1
Source: 0001213900-25-002199
Chunk: 204

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-10
Form: S-1
Chunk 204
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 |     |    — | %  |
| Change in valuation allowance                                    |     |               (25.0 | )% |     | (8.4 | )% |
| Effective tax rate                                               |     |                (0.6 | )% |     | 19.7 | %  |

The Company had a cumulative net operating loss carryforward (“NOL”) for federal, California, and Georgia state income tax purpose of approximately $ million, $ million, and $ million, respectively, as of June 30, 2024. The Company elected % allowance on deferred tax asset for the years ended June 30, 2024 and 2023 and incurred approximately $ million and $ million allowance on deferred tax asset, respectively. The Company’s NOL is limited to % of the excess of taxable income on federal level, same apply to the state of Georgia, with no limitation to the state of California. Both Company’s federal and the state of Georgia NOLs will last indefinitely. The state of California NOLs can be carried for 20 years. The valuation allowance increased by approximately $ million from approximately $ million on June 30, 2023 to approximately $ million on June 30, 2024.

The Company’s ability to use its federal net operating carryforward may be limited if the Company experiences an “ownership change” as defined in Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended. As of June 30, 2024 and 2023, the Company has not performed any Section 382 study.

F-51

FOXX DEVELOPMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 19 — Income taxes (cont.)

|                                        |     |   |   June 30, 
       2024 |   |     |   |   June 30, 
       2023 |   |
|:---------------------------------------|:----|:--|-----------:|:--|:----|:--|-----------:|:--|
| Deferred tax assets                    |     |   |            |   |     |   |            |   |
| Net operating loss                     |     |   |            |   |     |   |            |   |
| Federal                                |     | $ |  1,758,686 |   |     |   |  1,086,843 |   |
| State                                  |     |   |    212,385 |