Company: FOXX
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014221
Chunk: 129

Company: Foxx Development Holdings Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 129
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 the fiscal year ended June 30, 2025. The 2,100,000 Earnout Shares are
classified as a liability and measured at fair value, with changes in fair value included in the consolidated statements of operations.

As of December 31, 2024 and
September 26, 2024 (issuance date), the fair value of the earnout liabilities was $1,032,285 and $5,688,007, respectively. For the three
and six months ended December 31, 2024, the Company recognized $4,705,583 and $4,655,722 of gains related to the change in fair value
of earnout liabilities included in the change in fair value of earnout liabilities in the consolidated statements of operations, respectively.
(See Note 17 – Fair value measurement).

Warrants

In connection with the reverse
recapitalization, each of 12,156,423 ACAC’s issued and outstanding warrants, which consisted of 4,312,500 public warrants, 5,240,000
private warrants and 2,603,923 working capital warrants, was converted automatically into one redeemable warrant of the Company, exercisable
for one share of common stock of the Company at an exercise price of $11.50 per share. All of these warrants met the criteria for equity
classification.

Each whole Warrant entitles
the registered holder to purchase one whole share of the Company’s common stock at a price of $11.50 per share. Pursuant
to the warrant agreement, a warrant holder may exercise its Warrants only for a whole number of shares of common stock. This means that
only a whole Warrant may be exercised at any given time by a warrant holder. No fractional Warrants will be issued upon separation of
the Units and only whole Warrants will trade. The Warrants will expire five years after the completion of the Company’s
initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

21

The Company has agreed that
as soon as practicable, but in no event later than 30 business days, after the closing of the initial business combination,
it will use its commercially reasonable efforts to file, and within 60 business days following its initial business combination
to have declared effective, a registration statement for the registration, under the Securities Act, of the shares of common stock issuable