Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 586

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 2
Chunk 586
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 the normal operating cycle of a twelve-month
period from the date of the consolidated financial statements are issued, we may have to consider supplementing our available sources
of funds through the following sources:

    ●
    Other available sources
    of financing from banks, other financial institutions or private lenders;

    ●
    Financial support and credit
    guarantee commitments from our related parties; and

    ●
    Equity financing.

26

Our
management has determined that the factors discussed above have raised substantial doubt about our ability to continue as a going concern
within one year after the date that the consolidated financial statements are issued. The consolidated financial statements have been
prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the
outcome of this uncertainty.

The
following summarizes the key components of cash flows for the year ended June 30, 2025 and 2024.

    For
    the Years Ended  June 30, 

    2025  
    2024 

    Net
    cash used in operating activities 
    $(6,560,121) 
    $(4,680,079)
  
    Net
    cash used in investing activities 
     (40,236) 
     (8,743)
  
    Net
    cash provided by financing activities 
     7,890,820  
     3,451,421 
  
    Effect
    of exchange rate changes 
     (2,458) 
     - 
  
    Net
    change in cash and cash equivalents 
    $1,288,005  
    $(1,237,401)

Operating
Activities

Net cash used in operating activities was approximately $6.6 million
for the year ended June 30, 2025 and was primarily attributable to (i) approximately $9.0 million in net loss, (ii) approximately
$10.9 million increase in inventories because we stored more inventories to meet the demand of our anticipated sales orders, (iii) approximately
$7.1 million increase in accounts receivable due to the increase of credit sales during the period, (iv) non-cash expenses of
approximately $5.7 million, which primarily attributed to the change in fair value of earnout liabilities, (v) approximately $2.0
million increase in prepaid expenses and other current assets due to our prepaid rent payment