Company: FOXX
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014221
Chunk: 44

Company: Foxx Development Holdings Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 44
---
 are not deemed to be material to the consolidated
financial statements.

On November 22, 2024,
a plaintiff filed Semensato v. Foxx Development Holdings Inc., et al., No. 2024-1200 (Del. Ch. Ct.), a class action lawsuit in Delaware
Chancery Court against the Company and certain “Individual Defendants” (“Joy” Yi Hua, Haitao Cui, “Jeff”
Feng Jiang, “Eva” Yiqing Miao and Edmund R. Miller). The lawsuit 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 plaintiff seeks a declaration that the waiver provision is invalid, an injunction against the
Company and the Individual Defendants to prevent them from attempting to enforce the waiver, attorneys’ fees, and the costs and
disbursements of this action. The Company denies the claims and intends to vigorously defend the action but cannot estimate the outcome
of this lawsuit.

26

Lease Commitment

On
July 12, 2024, the Company signed a seven-year lease agreement to rent a warehouse for business operation with a monthly rent of $65,745,
plus varied monthly CAM, for 50,573 square feet. The commencement date of this lease is February 1, 2025 and the termination date
is January 31, 2032. On August 9, 2024, the Company expanded the existing lease to include additional 50,572 square feet from April 1,
2025 to January 31, 2032 with an additional monthly rent of $65,744. These two first-month rents were included in prepaid expenses and
other current assets. On December 20, 2024, the Company revised the commencement date to July 1, 2025 and termination date to December
31, 2035, and further expanded the existing lease to include additional 102,099 square feet from January 1, 2026 to December 31, 2035
with an additional monthly rent of $132,729. These leases were not included in the operating right-of-use assets balance as of December
31, 2024.

Reference to Note 19 for detailed disclosure of
other entered lease agreements. 

Note 21 — Income taxes 

As of December 31, 2024 and
June 30