Company: FOXX
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001213900-25-098953
Chunk: 988

Company: Foxx Development Holdings Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 5
Chunk 988
---
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 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