Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 13

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 13
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 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 review 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 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 on credit losses. 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 March 31, 2025
and June 30, 2024, $464,988 and $0, respectively, allowance for credit losses of accounts receivable was recorded and the Company
had net accounts receivable of $7,146,701 and $251,894, respectively.

Inventories

Inventories are stated at
the lower of cost or net realizable value, the estimated selling prices in the ordinary course of business, less reasonably predictable
costs of completion, disposal and transportation. Cost is determined using the “First in, First out” method. Inventories mainly
include electronic products and accessories which are purchased from the Company’s suppliers as merchandized goods and freight-in.
On an annual basis, inventories are reviewed for potential write-downs for estimated obsolescence or unmarketable inventories which equals
the difference between the costs of inventories and the