Foxx Development Holdings Inc. Leases Disclosure
Note 19 — Leases
Short-term leases
The Company rented a mailbox for $450 per month from November 1, 2022 to October 31, 2024. The Company terminated this lease on August 5, 2023.
On August 1, 2023, the Company entered a twelve-month lease agreement to rent a general office and storage space for its purchased inventory for a monthly rental fee of $100. The Company renewed the lease for another twelve months at a monthly rental fee of $200.
On August 14, 2023, the Company entered a six-month lease agreement to rent an office for operating purposes with a monthly rental fee of $550. After the initial six-month term, the lease has been renewed on a month-to-month basis.
On September 18, 2023, the Company entered a month-to-month rental agreement to rent a dorm for the employee with a monthly rent of $3,000.
Long-term leases
In September 2023, the Company signed a three-year lease agreement to rent a general office and storage space for business operation with a monthly rent of $3,096, plus varied monthly CAM. The commencement date of this lease is October 1, 2023 and has no renewal option. On July 17, 2024, the Company extended the lease for another 35 months to be commenced on October 1, 2026 and ended August 31, 2029. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.
In June 2024, the Company signed a six years and 11.5 months lease agreement to rent a general office for business operation with a monthly rent of $3,500, plus varied monthly CAM. The commencement date of this lease is June 15, 2024 and the expiration date is May 31, 2031. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.
On July 17, 2024, the Company signed a five-year and one-half month lease agreement to rent a general office and storage space for business operation with a monthly rent of $10,534, plus varied monthly CAM. The commencement date of this lease is August 15, 2024 and has no renewal option. The Company considered this lease as an operating lease and recognized right-of-use asset and lease liability. The Company recognized lease expense on a straight-line basis over the lease term for operating lease.
On July 12, 2024, the Company signed and further amended a ten-year lease agreement to rent a 101,145 square feet factory and warehouse for business operation, which will be commenced on July 1, 2025. On December 20, 2024, the Company further expanded the existing lease to include additional 102,099 square feet with a commencement date of January 1, 2026 (See Note 20 for details).
The ROU assets and lease liabilities are determined based on the present value of the future minimum rental payments of the lease as of the adoption date, using incremental borrowing rate as the effective interest rate, with a weighted average rate of 4.07%.
As of June 30, 2025 and 2024, the weighted-average remaining operating lease term of its existing leases is approximately 4.51 year and 5.68 year.
The following table sets forth the Company’s minimum long-term lease payments in future periods as of June 30, 2025, which represents the operating lease liabilities on the accompanying balance sheet:
| Operating lease payments | |||||
| For the twelve months ending June 30, 2026 | $ | 251,566 | |||
| For the twelve months ending June 30, 2027 | 260,287 | ||||
| For the twelve months ending June 30, 2028 | 270,941 | ||||
| For the twelve months ending June 30, 2029 | 283,141 | ||||
| For the twelve months ending June 30, 2030 | 92,377 | ||||
| Thereafter | 50,437 | ||||
| Total lease payments | 1,208,749 | ||||
| Less: discount | (107,397 | ) | |||
| Present value of operating lease liabilities | 1,101,352 | ||||
| Operating lease liabilities, current portion | (211,525 | ) | |||
| Operating lease liabilities, non-current portion | $ | 889,827 |
Operating lease expenses consist of the following:
| Operating lease cost | Classification | For
the Year Ended June 30, 2025 | For
the Year Ended June 30, 2024 | |||||||
| Lease expenses | General, and administrative | $ | 245,801 | $ | 37,713 | |||||
| Lease expenses – short term | General, and administrative | 14,726 | 26,000 | |||||||
| Total operating lease cost | $ | 260,527 | $ | 63,713 | ||||||
For the years ended June 30, 2025 and 2024, $175,607 and $33,260 of cash were used for operating lease liabilities, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Oct 15, 2025 | Showing above |
| 2024 | Oct 24, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.