Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 193

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 193
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2,687,679 
  
    Effect of exchange rate changes 
     2,297  
     - 
  
    Net change in cash and cash equivalents 
    $3,202,607  
    $(1,570,097)

Operating activities

Net cash used in operating
activities was approximately $4.7 million for the nine months ended March 31, 2025 and was primarily attributable to (i) approximately
$4.9 million net loss, (ii) approximately $14.9 million increased in inventories because we stored more inventories to meet
the demand of our anticipated sales orders, (iii) approximately $7.4 million increased 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 earnouts, (v) approximately $1.0 million increased in prepaid expenses and other current assets due to our prepaid
rent payment in connection with our warehouse lease to be commenced in February 2025, (vi) approximately $1.1 million increased
in security deposit because we rented more office and warehouse space, (vii) approximately $0.3 million decreased in tax payable
of ACAC due to the payment of tax at business combination, and (viii) approximately $0.4 million decrease in contract liabilities due
to purchase of more inventories with vendors to meet customer demand. The cash outflow was offset by (ix) approximately $28.0 million
increased in accounts payable due to purchase of more inventories with vendors to meet customer demand, (x) approximately $2.0 million
increased 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, (xi) approximately $0.5 million increase in stock compensation due to restricted stock
units granted to our employees, consultants and independent director under employee incentive plan, and (xii) approximately $0.5 million
provision for credit losses due to the increasing risk of uncollectable accounts from one customer.

46

Net cash used in operating
activities was approximately $4.3 million for the nine months ended March 31, 2024 and was primarily attributable to (i) approximately
$2.1 million net loss, (ii) approximately $0