Austin, Texas, Feb. 20, 2024 (GLOBE NEWSWIRE) — Acri Capital Acquisition Corporation (NASDAQ: ACAC), a Delaware incorporated special purpose acquisition company listed on the Nasdaq Global Market, and Foxx Development Inc., a Texas based consumer electronics and integrated Internet-of-Things solution company, today announced that they have entered into a definitive business combination agreement pursuant to which a newly established subsidiary of Acri will become a publicly listed company combining Acri and Foxx upon the closing of the transaction contemplated therein. Upon closing, the Combined Company expects to list its common stock on Nasdaq.
Foxx, established in 2017 as a Texas incorporated company, is a consumer electronics and integrated Internet-of-Things (IoT) solution company catering to both retail and institutional clients. With robust research and development capabilities and a strategic commitment to cultivating long-term partnerships with mobile network operators, distributors and suppliers around the world, FOXX currently sells a diverse range of products including mobile phones, tablets and other consumer electronics devices throughout the United States, and is in the process of developing and distributing end-to-end communication terminals and IoT solutions.
“Acri’s inception revolved around the goal of identifying and partnering with companies led by visionary, mission-oriented leadership teams who harness the technology and innovation to disrupt thriving and expanding markets. In this context, Foxx is an ideal fit, aligning with our criteria.” said “Joy” Yi Hua, CEO and Chairwoman of Acri. “We are glad to forge a partnership with Foxx, strengthening their financial foundation and enabling them to pursue a diverse range of growth initiatives, including product development, customer expansion, geographical reach, and industry innovation.”
Haitao Cui, CEO of Foxx, expressed his excitement regarding the transaction, declaring, “Today’s announcement marks an incredible milestone for Foxx, and I am genuinely delighted with this strategic partnership. Combining forces with Acri will significantly accelerate our capacity to deliver products, services, and solutions at scale, transforming the consumer electronics and IoT solutions landscape. Foxx’s vision revolves around creating a world where technology seamlessly enriches people’s lives and revolutionizes the way we connect and interact with our environment. We are poised to tap into an immense total addressable market, where we have the potential to generate substantial value for both our valued customers and investors.”
Key Transaction Terms
As provided in the Business Combination Agreement, the merger consideration is $50,000,000, payable by newly-issued common stock of the Combined Company valued at $10.00 per share, among which 500,000 shares will be deposited into an escrow account (i) to be released to the shareholders of Foxx immediately prior to the closing (the “Foxx Stockholders”) if, within one year of the Business Combination Agreement, the Affordable Connectivity Program managed by the U.S. Federal Communication Commission is reauthorized by the U.S. Congress with funding of no less than $4 billion in total for the reauthorized period, or (ii) otherwise to be cancelled without consideration. Additional up to 4,200,000 shares of common stock may be issued to Foxx Stockholders upon achievement of certain financial performance milestones of the Combined Company for the fiscal years ending June 30, 2024 and June 30, 2025.
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.
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, subject to, among other things, approval by the Acri stockholders and the Foxx stockholders respectively, and satisfaction (or waiver, as applicable) of the conditions provided in the Business Combination Agreement, including regulatory approvals and other customary closing conditions, including a registration statement in connection with the Proposed Transaction being declared effective by the U.S. Securities and Exchange Commission (the “SEC”) and the listing application being approved by the Nasdaq Capital Markets LLC.
Additional information about the Proposed Transaction, including a copy of the Business Combination Agreement, will be provided in a Current Report on Form 8-K to be filed by Acri with the SEC and available at www.sec.gov. Additional information about the Proposed Transaction will be described in the Registration Statement, which Acri and/or its subsidiary will file with the SEC.
Advisors
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.
About Acri Capital Acquisition Corporation
Acri Capital Acquisition Corporation is a blank check company, also commonly referred to as a special purpose acquisition company, or SPAC, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses with one or more businesses or entities, provided that it will not undertake its initial business combination with any entity being based in or having the majority of its operations in China (including Hong Kong and Macau).
About Foxx Development Inc.
Founded in 2017 as a Texas-incorporated entity, Foxx stands as a distinguished player in the realm of consumer electronics and integrated Internet-of-Things (IoT) solutions, catering to both retail and institutional clients. Leveraging its robust research and development capabilities, the company’s strategic vision focuses on forging enduring alliances with global mobile network operators, distributors, and suppliers. This approach has translated into a robust presence within the United States, where the portfolio encompasses a diverse range of mobile phones, tablets, and consumer electronics. Concurrently, Foxx is diligently engaged in the development and distribution of end-to-end communication terminals and an innovative suite of IoT solutions, with the aim of positioning itself at the forefront of technological advancement to shape the future of global connectivity.
