Foxx Development Holdings Inc. (NASDAQ:FOXX), a leading provider of computer communications equipment, announced today the completion of its previously announced business combination with 06 Technology. The combined entity will continue to operate under the Foxx Development Holdings Inc. name and its common stock and warrants will be listed on the Nasdaq Capital Market under the ticker symbols "FOXX" and "FOXXW," respectively.
The business combination was finalized on September 26, 2024, following approval by ACAC stockholders at a special meeting held on August 27, 2024. The transaction introduces Foxx Development Holdings Inc. as a publicly listed company and marks a significant milestone in its growth strategy.
Foxx Development Holdings Inc. has received approximately $16.6 million in gross proceeds from the transaction, which includes $15.0 million from transaction financing and $1.6 million from ACAC's trust account, net of redemptions. The company anticipates that the funds will support its operations into 2025.
As part of the business combination, the ACAC securities that were previously listed on Nasdaq were delisted, and the new Foxx common stock and warrants began trading on Nasdaq the following business day. Additionally, EF Hutton LLC received 43,125 shares of New Foxx Common Stock as part of an amendment to the underwriting agreement.
Shares outstanding after the transaction include 5,000,000 shares issued to Foxx stockholders, 70,721 shares held by ACAC public stockholders, 2,156,250 shares held by ACAC's initial stockholders, and 43,125 shares issued to EF Hutton LLC. The former officers and directors of Foxx and Foxx stockholders now beneficially own approximately 68.8% of the outstanding shares of New Foxx Common Stock, with former ACAC security holders owning approximately 30.7%.
The transaction was structured to include a potential earnout for Foxx stockholders, contingent upon the company meeting certain revenue targets for the fiscal years ending June 30, 2024, and June 30, 2025. Depending on the achievement of these targets, up to 4,200,000 additional shares of New Foxx Common Stock may be issued.
Foxx Development Holdings Inc. specializes in the development, manufacture, and sale of advanced computer communications equipment and has a strategic focus on expanding its product offerings and market presence.
InvestingPro Insights
Recent market data from InvestingPro reveals some interesting insights about Foxx Development Holdings Inc. (NASDAQ:FOXX) following its business combination announcement. The stock has experienced significant volatility, with a sharp decline of 14.13% in the past week. This drop could be related to investor reactions to the newly combined entity and its future prospects.
Despite the recent downturn, FOXX has shown resilience over longer periods, with a 3.15% gain over the past month and a modest 1.83% increase over the last year. This suggests that while the market is digesting the news of the business combination, there may be underlying confidence in the company's long-term potential.
InvestingPro Tips highlight some challenges for FOXX, including weak gross profit margins and a valuation that implies a poor free cash flow yield. These factors may be contributing to the recent stock performance and could be areas of focus for the newly combined entity as it moves forward.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing FOXX's future prospects following this significant corporate event.
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