Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 55

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 1
Chunk 55
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, 2024, one business day after the Closing, our Common Stock and Warrants became listed
on the Nasdaq Capital Market (“Nasdaq”) under trading symbols “FOXX” and “FOXXW,” respectively.

Accounting Treatment

While the legal acquirer
in the Business Combination was ACAC, for financial accounting and reporting purposes under U.S. GAAP, Old Foxx was the accounting acquirer,
and the Business Combination was accounted for as a “reverse recapitalization.” A reverse recapitalization (i.e., a capital
transaction involving the issuance of stock by ACAC for the stock of Old Foxx) does not result in a new basis of accounting, and the unaudited
condensed consolidated financial statements of the combined company represent the continuation of the unaudited condensed consolidated
financial statements of Old Foxx in many respects. Accordingly, the assets, liabilities and results of operations of Old Foxx became the
historical financial statements of the combined company, and ACAC’s assets, liabilities, and results of operations were consolidated
with Old Foxx beginning from the Closing on September 26, 2024. Operations prior to the Business Combination are presented as those of
Old Foxx. The net assets of ACAC are recognized at historical cost (which is expected to be consistent with carrying value), with no goodwill
or other intangible assets recorded upon execution of the Business Combination.

Transaction Financing

In consideration of market
conditions, pursuant to the Business Combination Agreement, the parties agreed to use commercially best efforts to secure financing to
pay transaction expense and working capital of Foxx, including without limitation, a PIPE financing, private financing, redemption waiver,
convertible debt, forward purchase agreement, backstop, or equity line of credit (collectively, the “Transaction Financing”).

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On June 21, 2023, Old Foxx entered into a securities purchase agreement
(the “Convertible Note Agreement 1”) with New Bay Capital Limited, a Hong Kong registered company (“New Bay”),
and issued a promissory note (“Note 1”) to New Bay in the principal amount of $2 million with an interest rate of 7%
per annum, convertible into shares of Old Foxx common stock at $30.00 per share upon the listing of Old Foxx common stock through an initial
public offering. On December 21, 2023, Old Foxx issued into another securities purchase agreement (the “Convertible Note Agreement
2”) with New Bay