Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 203

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 2
Chunk 203
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 a party to any material legal proceedings
or subject to any material claims. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome,
litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Currently, we are not a party to any material legal proceedings or subject to any material claims, except as disclosed below.

On November 22, 2024, Ximena
Semensato (the “Plaintiff”) filed Semensato v. Foxx Development Holdings Inc., et al., No. 2024-1200 (Del. Ch. Ct.), a class
action complaint (the “Complaint”) in Delaware Chancery Court (the “Court”) against the Company and certain “Individual
Defendants” (“Joy” Yi Hua, Haitao Cui, “Jeff” Feng Jiang, “Eva” Yiqing Miao and Edmund R. Miller)
(the “Action”). The Plaintiff seeks declaratory relief under provisions of the Delaware General Corporation Law relating to
a waiver of the corporate opportunity doctrine that is contained in the Company’s Amended and Restated Certificate of Incorporation.
The Company and each of the Individual Defendants denied any and all wrongdoing alleged in the Complaint. However, to avoid the cost and
distraction of litigation, the directors of the board of the Company determined that it was advisable and in the best interests of the
Company and its stockholders to amend Article X of the Charter (the “Amendment”). The Board approved and adopted the Second
Amended and Restated Certificate of Incorporation of the Company (the “Amended Charter”), and was planning for the Amendment
to be submitted to the stockholders of the Company for adoption and approval at the next annual meeting of stockholders with the Board’s
recommendation that the Amendment be approved and adopted by the stockholders of the Company.

On March 3, 2025, after the
Plaintiff was advised of the Board’s approval of the Amended Charter, the Plaintiff filed a notice of voluntary dismissal of the
Action as moot, which the Court approved by order dated March 4, 2025. Believing that the swift resolution of the Action was in the best
interests of and benefit to the Company, and without admitting the allegations Plaintiff made in the Complaint, the Company agreed to
pay $85,000 (the “Mootness Fee,” inclusive of a $500 service award to