Fujikon Industrial (HKG:0927) reached a settlement with one of its major customers over a headphones quality issue, a Monday Hong Kong bourse filing said.

The parties concluded the quality issue stemmed from the batteries used in the headphones supplied by an overseas supplier.

As per the settlement terms, the group will compensate the customer with a cash payment of $11.65 million in multiple batches until Oct. 30, 2025, put an additional $500,000 in engineering and development costs for the future projects granted by the said customer until Dec. 31, 2035, and offer an extension of 180 days for the customer to pay for the products bought from the group until Sept. 30, 2026.

The parties also agreed to replace the faulty batteries with batteries from another supplier while the customer also agreed to place further orders for such headphones amounting to $3.5 million.

The audio products manufacturer and seller's shares closed over 1% higher on Monday.

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