AUSTIN - Acri Capital Acquisition Corporation (NASDAQ: ACAC), a special purpose acquisition company, and Foxx Development Inc., a Texas-based consumer electronics firm, have announced a definitive business combination agreement. The merger is slated to form a publicly listed entity on Nasdaq upon completion.
The transaction, valued at $50M in stock, will see Foxx merge with a subsidiary of Acri, with the resulting combined company expected to list its common stock on the Nasdaq exchange. Foxx, established in 2017, specializes in consumer electronics and integrated Internet-of-Things (IoT) solutions for both retail and institutional clients.
The merger consideration includes the issuance of 500,000 shares to be deposited into an escrow account, contingent on the reauthorization of the Affordable Connectivity Program by the U.S. Congress. Additional shares up to 4.2 million may be issued based on the combined company's financial performance for fiscal years 2024 and 2025.
Post-merger, Acri stockholders will hold approximately 51.98% of the equity interest in the combined company, while Foxx stockholders will hold around 48.02%, assuming no transaction financing. If there is maximum redemption by Acri's public shareholders, these proportions would shift to approximately 30.13% and 69.87%, respectively.
The boards of both Acri and Foxx have unanimously approved the transaction, which is anticipated to close in the second quarter of 2024. It is subject to approval by both companies' stockholders and other customary closing conditions, including regulatory approvals and a registration statement being declared effective by the U.S. Securities and Exchange Commission (SEC).
EF Hutton LLC is acting as the capital markets advisor to Acri, with Robinson & Cole LLP as legal counsel. Foxx has appointed VCL Law LLP as its legal counsel.
The partnership aims to bolster Foxx's financial foundation and drive growth initiatives such as product development, customer expansion, and industry innovation. Acri's CEO, Joy Yi Hua, remarked on the strategic fit of Foxx, highlighting its technology and innovation in expanding markets. Haitao Cui, CEO of Foxx, expressed enthusiasm for the deal's potential to transform the consumer electronics and IoT solutions landscape.
This news is based on a press release statement.
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