Company: FOXX
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006111
Chunk: 189

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-24
Form: 424B3
Chunk 189
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 shipping and no refund and no return will be granted to customers; or provided a one -yearwarranty period with no additional 2 -3% of products on top of each customer’s order, depending on the specified contract. In addition, when establishing the selling prices for delivery of the products, the Company has control to set its selling price. All these factors indicate that the Company is acting as the principal in this transaction. As a result, revenue from the wholesale customer is presented on a gross basis. Warranty The Company generally provides 1 -yearwarranties for its product sold to its wholesale customer if an additional 2 -3% of products on top of each customer’s order was not provided. For the sale transactions that were provided with 2 -3% of products on top of each customer’s order, these additional 2 -3% products were recognized as cost of goods sold at the same time the respective sale is recognized. For the sales transactions that the Company provided limited warranties to both wholesale customers and e -commercecustomers, the Company records estimated future warranty costs under ASC 460. Such estimated costs for warranties are estimated at the time of delivery, and these warranties are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranties are based on actual warranty experience or the Company’s best estimate. As of June 30, 2024 and 2023, the Company accrued warranty reserves of $48,361 and $0, respectively recorded under accrued liabilities and other current liabilities, and these reserves were recognized based on estimation and judgment from the Company’s management. E-Commerce Customers The Company recognizes a contract with a customer when the contract is committed in writing and signed electronically on the E -Commerceplatform, the rights of parties, including payment terms, are identified, the contract has commercial substance, and collectability is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in Topic 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based on the relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the performance obligation is satisfied. For all the Company’s contracts, the Company has identified one performance obligation, which is primarily satisfied at a point in time upon delivery of products based on terms stated in the contracts on shipping destination at its individual customer shipping address, which is the Company’s obligation to deliver the product to the end user