Company: FOXX
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043597
Chunk: 346

Company: Foxx Development Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part II, Item 1
Chunk 346
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Item 1. Legal Proceedings 

From time to time, we may
be subject to legal proceedings and claims in the ordinary course of business. Currently, we are not a party to any material legal proceedings
or subject to any material claims. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome,
litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

On November 22, 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 $