Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 587

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 587
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 in connection with our factory and warehouse
leases to be commenced in July 2025, (vi) approximately $1.1 million increase in security deposit because we rented more office,
factory and warehouse space which were commenced in July 2025, (vii) approximately $0.2 million decrease in tax payable of ACAC due
to the payment of income tax carried from ACAC after the Business Combination, and (viii) approximately $0.6 million decrease in contract
liabilities due to purchase of more inventories with vendors to meet customer demand. The cash outflow was offset by (i) approximately
$24.8 million increase in accounts payable due to purchase of more inventories with vendors to meet customer demand, (ii) approximately
$2.4 million increase in other payables and accrued liabilities mainly due to accrued professional fees that associated with business
expansion, such as consulting fees, testing fees and legal fees, (iii) approximately $1.2 million decrease in contract assets due to purchase
of more inventories with vendors to meet customer demand, (iv) approximately $0.8 million increase in non-cash stock compensation due
to restricted stock units granted to our employees, consultants and independent director under the Incentive Plan, and (v) approximately
$0.9 million provision for credit losses due to the increasing risk of uncollectable accounts from a few of our customers.

Net cash used in operating
activities was approximately $4.7 million for the year ended June 30, 2024 and was primarily attributable to (i) approximately $3.4 million
net loss, (ii) approximately $0.3 million increasd in accounts receivable due to provision of credit term to our new customers during
the year, (iii) approximately $1.7 million increase in contract assets due to engagement with new vendors which required purchase deposits
to secure relevant transactions, (iv) approximately $1.8 million increase in inventories due to change in our business strategy where
we rented warehouse in the U.S. to store our inventories, (v) approximately $63,000 increase in prepaid expenses and other current assets,
and security deposit, (vi) approximately $33,000 in payment of operating lease liability, and (vii) approximately $16,000 decrease in
income taxes payable. The cash outflow was offset by (i) non-cash expenses of approximately $0.3 million, which includes depreciation