Company: FOXX
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001213900-25-112192
Chunk: 42

Company: Foxx Development Holdings Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 1
Chunk 42
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 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 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 December 20, 2024, the
Company further expanded the July 2024 Lease (see Note 17) 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 consolidated balance sheets as of September 30, 2025. These leases were not included in the operating right-of-use
assets balance as of September 30, 2025 as the commencement date of the lease was January 1, 2026.

Reference to Note 17 for detailed disclosure
of other entered lease agreements and liabilities. 

Risks and Uncertainties

On April 2, 2025, the President of the United States signed Executive
Order 14257, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual
United States Goods Trade Deficits” (the “Executive Order 14257”), to take action based on the results of certain investigations
related to the causes of the U.S.’s large and persistent annual trade deficits in goods. Subsequent to Executive Order 14257, there
have been additional executive orders that have, among other actions, effectively suspended the enforcement of certain country-specific
tariffs until November 10, 2025. The potential for further changes in trade policies, including new tariffs or changes to existing