Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 69

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 1
Chunk 69
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approximately $0.5 million decrease in contract liabilities aligned with the increase of inventory, and (vi) approximately
$0.2 million increase in prepaid expenses and other current assets due to our prepaid rent payment in connection with our warehouse
lease which commenced in February 2025. The cash outflow was offset by (i) non-cash expenses of approximately $0.3 million, which
includes depreciation, accrued interest expenses incurred from the convertible notes, change in fair value of earnouts and amortization
of operating right-of-use assets, (ii) approximately $17.9 million increase in accounts payable due to purchase of more inventories
with vendors to meet customer demand, and (iii) approximately $0.2 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.

Investing activities

There were no investing activities for the three months ended September
30, 2025.

Net cash used in investing
activities was approximately $35,000 for the three months ended September 30, 2024, attributable to the purchase of an automobile for
our business uses.

Financing activities

Net cash provided by financing
activities was approximately $7,000 for the three months ended September 30, 2025, mainly attributable to the principal payments of long-term
loan of approximately $7,000.

Net cash provided by financing
activities was approximately $28.3 million for the three months ended September 30, 2024, mainly attributable to approximately $19.7
million proceeds from the reverse recapitalization and $9.0 million proceeds from issuance of convertible promissory notes, offset
by the repayment of short-term loans of approximately $0.3 million and approximately $0.1 million in payments of deferred transaction
costs.

40

Off-Balance Sheet Arrangements

As of September 30, 2025,
we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to our members.

Critical Accounting Estimates

The unaudited condensed consolidated
financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these unaudited
condensed consolidated financial statements and accompanying