Company: CXAI
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001829126-25-002457
Chunk: 41

Company: CXApp Inc.
Filing Date: 2025-04-08
Form: 424B3
Chunk 41
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Background and Reasons for the Proposal

Under Nasdaq Listing
Rule 5635(d) (the “Nasdaq 20% Rule”), a Nasdaq-listed company must obtain stockholder approval prior to issuing (or potentially
issuing) shares of common stock (or securities convertible into or exercisable for common stock) in a private placement if the issuance
equals 20% or more of the company’s outstanding common stock (or 20% or more of the voting power), at a per-share price below the
“Minimum Price” (as defined by Nasdaq) at the time of issuance.

Our Board of Directors believes
it may be in the Company’s best interest to raise additional equity capital through one or more private placements, including (i)
a $20 million prepaid equity advance (the “Prepaid Equity Advance” or “Advance”) with Avondale Capital, LLC (“Avondale”),
pursuant to a Securities Purchase Agreement dated March 25, 2025 (the “Avondale Purchase Agreement”), and (ii) a $10 million
prepaid equity advance with Streeterville Capital, LLC (“Streeterville”), pursuant to a Securities Purchase Agreement dated
May 22, 2024 (the “Streeterville Purchase Agreement”). In some of these financings, the total shares issuable could exceed
20% of our currently outstanding common stock, or the effective offering price could be deemed below Nasdaq’s Minimum Price. To
preserve the flexibility to pursue such financings expeditiously, our Board has approved, subject to stockholder approval, the potential
issuance of shares in compliance with the Nasdaq 20% Rule.

Overview of Prepaid Equity Advance Under the Avondale Purchase Agreement

On March 25, 2025, we entered
into the Avondale Purchase Agreement with Avondale, under which the Company may: (i) issue and sell one or more Pre-Paid Purchases, in
the form substantially similar to the exhibit attached thereto, up to an aggregate purchase amount of $20,000,000 (the “Commitment
Amount”), covering shares of our common stock, par value $0.0001 per share (the “Common Stock”); (ii) issue and sell
an initial Pre-Paid Purchase in the principal amount of $4,200,000 (the “Initial Pre-Paid Purchase”); and (iii) deliver 80,000
shares of Common Stock (the “Commitment Shares”)