Foxx Development Inc. entered into a definitive business combination agreement to acquire Acri Capital Acquisition Corporation (NasdaqCM:ACAC) in a reverse merger transaction on February 18, 2024. At the effective time of the Acquisition Merger (? Effective Time ?), by virtue of the Acquisition Merger and the Business Combination Agreement, and without any action on the part of Parent, Purchaser, Merger Sub, Foxx, or stockholders of Foxx immediately prior to the Effective Time (the ? Foxx Shareholders ?), the Foxx Shareholders? shares of common stock of Foxx (? Foxx Common Stock ?) issued and outstanding immediately prior to the Effective Time will be canceled and automatically converted into the right to receive, without interest, the applicable portion of the Closing Payment Stock (as defined herein) as set forth in the Closing Consideration Spreadsheet. ? Closing Payment Stock ? means 5,000,000 shares of Purchaser Common Stock, which are equal or equivalent in value to the sum of $50,000,000 divided by $10.00 per share, among which, 500,000 shares in aggregate will be deposited to a segregated escrow account and to be released to the Foxx Shareholders if and only if, prior to or upon one-year anniversary of the Business Combination Agreement, the U.S. Congress has approved the affordable connectivity program of no less than $4 billion; or otherwise be cancelled and forfeited by PubCo without consideration. In addition to Closing Payment Stock, the Foxx Shareholders are entitled to receive up to an additional 4,200,000 shares of Purchaser Common Stock subject to achievement of certain milestones (the ? Earnout Shares ?). Following the closing, assuming no redemption by existing public stockholders of Acri, the Acri stockholders will have approximately 51.98% equity interest in the Combined Company and the Foxx Stockholders will have approximately 48.02% equity interest in the Combined Company assuming there is no transaction financing in connection with the Proposed Transaction. If, however, there is a maximum redemption of existing public shareholders of Acri (without consideration of the $5 million net tangible asset requirements), the Acri shareholders will have approximately 30.13% equity interest in the Combined Company and the Foxx Stockholders will have approximately 69.87% equity interest in the Combined Company. Acri will become a publicly listed company combining Acri and Foxx (the ?Combined Company?) upon the closing of the transaction contemplated therein (the ?Proposed Transaction?). Upon closing, the Combined Company expects to list its common stock on Nasdaq.


Consummation of the Business Combination is subject to the satisfaction or waiver by the respective parties of a number of conditions, including the approval of the Business Combination Agreement and the Business Combination by Acri stockholders. Other conditions to each party?s obligations, include, among others: (i) a registration statement on Form S-4 (the ? Registration Statement ?) to register the Purchaser Common Stock issued under the Business Combination Agreement having become effective; (ii) no governmental order, statute, rule or regulation having been enacted or promulgated enjoining or prohibiting the consummation of the Business Combination; (iv) no Material Adverse Effect (v) the net tangible assets upon the consummation with the Business Combination no less than $5,000,001; (vi) the representations and warranties of parties being true and correct in all material aspect; and (vii) performance and compliance with all material respects of the Business Combination Agreement applicable to each party. The boards of directors of both Acri and Foxx have unanimously approved the Proposed Transaction, which is expected to be completed in the second quarter of 2024. EF Hutton LLC is serving as capital markets advisor to Acri, and Robinson & Cole LLP is serving as legal counsel to Acri. VCL Law LLP is serving as legal counsel to Foxx.