Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 83

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 83
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 operation
of June 30, for which those operating losses incurred from January 2023 to June 2023 cannot be carried back. At the same time, we had
provided 100% allowance on its deferred tax assets on net operating losses for the nine months ended March 31, 2024.

Net Loss

Net loss increased by approximately
$2.8 million, or 137.6%, to approximately $2.1 million for the nine months ended March 31, 2025, from approximately $4.9 million
for the nine months ended March 31, 2024. Such change was mainly due to the reasons discussed above.

Foreign Currency Translation Adjustment

Changes in foreign currency
translation adjustment are mainly due to the fluctuation of foreign exchange rates between SGD (the functional currency of our subsidiary)
and the USD dollar (reporting currency).

45

Liquidity and Capital Resources

In assessing liquidity, we
monitor and analyses cash on-hand and operating and capital expenditure commitments. Our liquidity needs are to meet working capital requirements,
operating expenses, and capital expenditure obligations. Debt financing in the form of convertible promissory note and cash generated
from operations have been utilized to finance working capital requirements.

As of March 31, 2025, we
had cash and cash equivalents of approximately $3.8 million, while we had accumulated deficit of approximately $16.0 million.
During the nine months ended March 31, 2025, we had net loss of approximately $4.7 million and net operating cash outflow of approximately
$4.5 million.

If we are unable to generate
sufficient funds to finance the working capital requirements within the normal operating cycle of a twelve-month period from the date
of the unaudited condensed 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.

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 unaudited condensed consolidated financial statements are issued. The unaudited condensed 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