Company: CXAI
Filing Date: 2025-03-07
Form Type: 424B3
Source: 0001829126-25-001566
Chunk: 44

Company: CXApp Inc.
Filing Date: 2025-03-07
Form: 424B3
Chunk 44
---
 thousand.

The convertible Pre-Paid Purchase #2 accrues
interest on the outstanding balance at 5% per annum. The Lender may redeem all or any part of the outstanding balance of the convertible
Pre-Paid Purchase #2, at any time following earlier of six months from the purchase price date and the effectiveness of the Initial Registration
Statement by providing a written notice, in cash or converting into shares of the Company’s common stock at a price equal to the
lower of (a) Fixed Price of $1.992 and (b) Market Price which is 91% multiplied by the lowest daily volume weighted average price (“VWAP”)
during the ten (10) consecutive trading days immediately prior to the written notice date, but in any event not lower than the Floor
Price of $0.332, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase.

On September 30, 2024, the Company received the net proceeds from the Lender.

During the period ended September 30, 2024, the Company
has issued no shares related to the convertible Pre-Paid Purchases.

NOTE 13 – Income Taxes

The Company recorded an income tax benefit of
approximately $147
thousand, $513
thousand, $417
thousand, and $2,958
thousand for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024
(Successor), for the three months ended September 30, 2023 (Successor), and for the period from March 15, 2023 to
September 30, 2023 (Successor), respectively. The Company did not
incur income tax expense for the period from January 1, 2023 to March 14, 2023 (Predecessor).

The effective tax rate for three months ended September 30, 2024 (Successor) and for the nine months ended September 30, 2024 (Successor) was (2.86)% and (3.22)%, respectively. The effective tax rate differs from the U.S. Federal statutory rate primarily due to recording a valuation allowance against deferred tax assets in the foreign jurisdictions and the significant permanent differences including impairment of goodwill and change in fair value of derivative warrant liabilities.

NOTE 14 – Credit Risk and Concentrations

Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and