Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 49

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 49
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interests of and benefit to the Company, and without admitting the allegations the plaintiff made in the Complaint, the Company has agreed
to pay $85,000 (the “Mootness Fee,” inclusive of a $500 service award to the plaintiff) to the plaintiff’s counsel to
resolve the anticipated application by the plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses.
The fee was paid by the Company on March 18, 2025. 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.

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., which was included in prepaid expenses
and other current assets. Additional $550,000 of security deposits were made as a result of this lease amendment, which was included in
the caption “security deposits” in the accompanying condensed consolidated balance sheets as of March 31, 2025. These leases
were not included in the operating right-of-use assets balance as of March 31, 2025.

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

Note 21 — Income taxes 

As of March 31, 2025 and
June 30, 2024, the Company’s deferred tax asset had a full valuation allowance