Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 260

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 2
Chunk 260
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, 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 Action 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 deny any and all wrongdoing alleged in the Complaint. However, to avoid the cost and
distraction of litigation, the Board 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 thus approved and adopted the Second Amended and Restated Certificate
of Incorporation of the Company (the “Amended Charter”), and will direct 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, 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 this Action was in the best interests
of and benefit to the Company, and without admitting the allegations Plaintiff made in the Complaint, the Company has agreed to pay $85,000
(the “Mootness Fee,” inclusive of a $500 service award to Plaintiff) to Plaintiff’s counsel to resolve the anticipated
application by Plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses. In connection with the March
13, 2025 stipulated order closing the case, the Court ordered that the Company provide this notice. The Court has not and will not pass
judgment on the amount of the Mootness Fee.

Item 1a. Risk Factors

For a discussion of our risk
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