# EDGAR Filing Document

**Accession Number:** 0001820875
**File Stem:** 0001829126-26-002840
**Filing Date:** 2026-3
**Character Count:** 585178
**Document Hash:** d2240a0c16e7ebd2ff0c075f28fbd4d5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-26-002840.hdr.sgml**: 20260330

**ACCESSION NUMBER**: 0001829126-26-002840

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 106

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260330

**DATE AS OF CHANGE**: 20260330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CXApp Inc.
- **CENTRAL INDEX KEY:** 0001820875
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 852104918
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39642
- **FILM NUMBER:** 26813405

**BUSINESS ADDRESS:**
- **STREET 1:** FOUR PALO ALTO SQUARE, SUITE 200
- **STREET 2:** 3000 EL CAMINO REAL
- **CITY:** PALO ALTO
- **STATE:** CA
- **ZIP:** 94306
- **BUSINESS PHONE:** (650) 999-4009

**MAIL ADDRESS:**
- **STREET 1:** FOUR PALO ALTO SQUARE, SUITE 200
- **STREET 2:** 3000 EL CAMINO REAL
- **CITY:** PALO ALTO
- **STATE:** CA
- **ZIP:** 94306

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** KINS Technology Group, Inc.
- **DATE OF NAME CHANGE:** 20200812

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended December 31, 2025

Or

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Commission File No. 001-39642

**CXApp Inc.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **85-2104918** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(I.R.S. Employer<br> Identification No.)** |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Four Palo Alto Square, Suite 200<br> 3000 El Camino Real<br> Palo Alto, CA | 94306<br>|
| **(Address of Principal Executive Offices)** | **(Zip Code)** |

---

(650) 785-7171

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Class A common stock, $0.0001 par value per share** | **CXAI** | **The Nasdaq Stock Market LLC** |
| **Warrants to purchase Class A common stock** | **CXAIW** | **The Nasdaq Stock Market LLC** |

---

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

The aggregate market value of the Registrant's shares of Class A common stock outstanding, other than shares held by persons who may be deemed affiliates of the Registrant, computed as of June 30, 2025 (the last business day of the Registrant's most recently completed second fiscal quarter) was approximately $22,942,043.

As of March 24, 2026, there were 57,115,772 shares of the Registrant's Class A common stock, par value $0.0001 per share, issued and outstanding.

**CXAPP INC.**

**FORM 10-K FOR THE PERIOD ENDED DECEMBER 31, 2025**

**TABLE OF CONTENTS**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **Page** |
| [Part I.](#a_001) | [Part I.](#a_001) |  | 1 |
|  | [Item 1.](#a_002) | [Business.](#a_002) | 1 |
|  | [Item 1A.](#a_003) | [Risk Factors.](#a_003) | 8 |
|  | [Item 1B.](#a_004) | [Unresolved Staff Comments.](#a_004) | 33 |
|  | [Item 1C.](#a_005) | [Cybersecurity.](#a_005) | 33 |
|  | [Item 2.](#a_006) | [Properties.](#a_006) | 35 |
|  | [Item 3.](#a_007) | [Legal Proceedings.](#a_007) | 35 |
|  | [Item 4.](#a_008) | [Mine Safety Disclosures.](#a_008) | 35 |
| [Part II.](#a_009) | [Part II.](#a_009) |  | 36 |
|  | [Item 5.](#a_010) | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](#a_010) | 36 |
|  | [Item 6.](#a_011) | [\[Reserved\].](#a_011) | 36 |
|  | [Item 7.](#a_012) | [Management's Discussion and Analysis of Financial Condition and Results of Operations.](#a_012) | 37 |
|  | [Item 7A.](#a_013) | [Quantitative and Qualitative Disclosures About Market Risk.](#a_013) | 56 |
|  | [Item 8.](#a_014) | [Consolidated Financial Statements and Supplementary Data.](#a_014) | 56 |
|  | [Item 9.](#a_015) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](#a_015) | 57 |
|  | [Item 9A.](#a_016) | [Controls and Procedures.](#a_016) | 57 |
|  | [Item 9B.](#a_017) | [Other Information.](#a_017) | 58 |
|  | [Item 9C.](#a_018) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#a_018) | 58 |
| [Part III.](#a_019) | [Part III.](#a_019) |  | 59 |
|  | [Item 10.](#a_020) | [Directors, Executive Officers and Corporate Governance.](#a_020) | 59 |
|  | [Item 11.](#a_021) | [Executive Compensation.](#a_021) | 66 |
|  | [Item 12.](#a_022) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](#a_022) | 69 |
|  | [Item 13.](#a_023) | [Certain Relationships and Related Transactions, and Director Independence.](#a_023) | 70 |
|  | [Item 14.](#a_024) | [Principal Accountant Fees and Services.](#a_024) | 72 |
| [Part IV.](#a_025) | [Part IV.](#a_025) |  | 73 |
|  | [Item 15.](#a_026) | [Exhibits, Financial Statement Schedules.](#a_026) | 73 |
|  | [Item 16.](#a_027) | [Form 10-K Summary.](#a_027) | 75 |

---

i

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY**

This Annual Report on Form 10-K contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts, and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

A Glossary of Terms can be found in the next page for further information.

The forward-looking statements contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

The following summarizes the risks and uncertainties that could materially adversely affect our business, financial condition, results of operation and stock price. You should read this summary together with the more detailed description of each risk factor contained below. Unless the context otherwise requires, all references in this subsection to the "Company," "we," "us," or "our" refer to the business of CXApp.

● We have a history of operating losses and there is no assurance that we will ever be able to earn sufficient revenue to achieve profitability or raise additional financing to successfully operate our business plan.

● We will need to increase the size of our organization, and we may experience difficulties in managing growth, which could hurt our financial performance.

● Our business depends on experienced and skilled personnel, and if we are unable to attract and integrate skilled personnel, it will be more difficult for us to manage our business and complete contracts.

● If we do not adequately protect our intellectual property rights, we may experience a loss of revenue, and our operations and growth prospects may be materially harmed.

● The market price of our common stock may be volatile and fluctuate substantially, which could cause the value of your investment to decline.

● Changes in accounting principles and guidance, or their interpretation or implementation, may materially adversely affect our reported results of operations or financial position.

● General economic and political conditions such as recessions, interest rates, fuel prices, trade wars, tariffs, pandemics, currency fluctuations and acts of war or terrorism may materially adversely affect our results of operations or financial position.

● If we fail to meet the continued listing standards of Nasdaq, our common stock may be delisted, which could have a material adverse effect on the liquidity and market price of our common stock and expose us to litigation.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

ii

**Glossary of Terms**

Unless otherwise stated in this Annual Report or the context otherwise requires, reference to:

● "Board" refers to the board of directors of CXApp;

● "Business Combination" refers to the merger of Merger Sub with and into Legacy CXApp, with Legacy CXApp surviving the merger as a wholly owned subsidiary of CXApp and the other transactions contemplated by the Merger Agreement;

● "Bylaws" refers to the existing bylaws of CXApp currently in effect;

● "Charter" refers to the existing amended and restated certificate of incorporation of CXApp currently in effect;

● "Closing" refers to the closing of the Merger;

● "CXApp" refers to CXApp Inc., a Delaware Corporation;

● "Design Reactor" refers to Design Reactor Inc., a California corporation, which was formerly doing business under the name "The CXApp";

● "Distribution" refers to distribution of the Enterprise Apps Business to the holders of Inpixon stock and other Inpixon securities on a certain record date through the distribution of all of the outstanding shares of Legacy CXApp capital stock to holders of Inpixon stock and other Inpixon securities on a certain record date on a pro rata, one for one basis, as described in the Separation and Distribution Agreement;

● "Distribution Time" refers to the time at which Distribution occurs, which is deemed to be 12:01 a.m., New York time on the date Distribution occurs;

● "DGCL" refers to the General Corporation Law of the State of Delaware;

● "Employee Matters Agreement" refers to the Employee Matters Agreement, dated March 14, 2023, by and among KINS, KINS Merger Sub Inc., Inpixon, and Legacy CXApp;

● "Enterprise Apps Business" refers to the business conducted by CXApp and its direct and indirect subsidiaries, including the business related to the (i) software-as-a-service app and mapping platforms which enable corporate enterprise organizations to provide a custom-branded, location-aware employee app focused on enhancing the employee experience and hosting virtual and hybrid events, (ii) augmented reality (or AR), computer vision, localization, navigation, mapping, and 3D reconstruction technologies, and (iii) on-device "blue dot" indoor location and motion technologies;

● "Exchange Act" refers to the Securities Exchange Act of 1934, as amended;

● "GAAP" refers to accounting principles generally accepted in the United States of America;

● "Incentive Plan" refers to the CXApp Inc. 2023 Equity Incentive Plan;

● "Inpixon" refers to Inpixon, a Nevada corporation;

iii

● "IRS" refers to the U.S. Internal Revenue Service;

● "JOBS Act" refers to the Jumpstart Our Business Startups Act of 2012;

● "KINS" refers to KINS Technology Group Inc., a Delaware corporation;

● "Legacy CXApp" refers to CXApp Holding Corp., a Delaware corporation, prior to the Merger;

● "Merger" refers to the merger of Merger Sub with and into Legacy CXApp, with Legacy CXApp surviving the merger as a wholly-owned subsidiary of CXApp and the other transactions contemplated by the Merger Agreement;

● "Merger Agreement" refers to the Agreement and Plan of Merger, dated as of September 25, 2022, by and among KINS, Merger Sub, Inpixon and Legacy CXApp., as amended and modified from time to time;

● "Merger Sub" refers to KINS Merger Sub Inc.;

● "Nasdaq" refers to the Nasdaq Capital Market;

● "Sarbanes-Oxley Act" refers to the Sarbanes-Oxley Act of 2002;

● "Securities Act" refers to the Securities Act of 1933, as amended;

● "SEC" refers to the United States Securities and Exchange Commission;

● "Separation" refers to a series of transactions by Inpixon and certain of Inpixon's subsidiaries as result of which Inpixon's Enterprise Apps Business is held by Legacy CXApp and its subsidiaries and is separated from the remainder of Inpixon's businesses, on the terms and subject to the conditions of the Separation and Distribution Agreement;

● "Separation and Distribution Agreement" refers to the Separation and Distribution Agreement, dated as of September 25, 2022, by and among Inpixon, Design Reactor, Legacy CXApp and KINS, as amended and modified from time to time;

● "Sponsor" refers to KINS Capital, LLC, a Delaware limited liability company;

● "Sponsor Support Agreement" refers to that certain Sponsor Support Agreement, dated as of September 25, 2022, by and among the Sponsor, KINS and Legacy CXApp, as amended and modified from time to time.

● "Tax Matters Agreement" refers to the Tax Matters Agreement, dated March 14, 2023, by and among KINS, Inpixon, and Legacy CXApp; and

● "Transition Services Agreement" refers to the Transition Services Agreement, dated March 14, 2023, by and between Inpixon and Legacy CXApp.

iv

**PART I.**

*References in this Annual Report on Form 10-K (this "Annual Report") to "we," "us," "our," the "Company" or "CXApp" are to CXApp Inc., a Delaware corporation, and its subsidiaries. References to our "management" or our "management team" refer to our officers and directors.*

**Item 1. Business.**

**Overview**

CXApp Inc. ("CXApp" or the "Company") is a leading provider of AI-powered employee experience solutions, delivering enterprise-grade software that enhances workplace engagement, productivity, and operational efficiency. Our cloud-based, mobile-first platform integrates artificial intelligence, automation, and real-time analytics to streamline workplace interactions across people, spaces, and technology. By leveraging advanced mapping, location intelligence, and digital workplace tools, CXApp enables organizations to optimize hybrid work environments and foster meaningful employee experiences.

As businesses continue adapting to the evolving nature of work, CXApp is positioned as a strategic enabler of digital transformation, helping enterprises navigate the complexities of workspace utilization, employee engagement, and intelligent automation. Our commitment to innovation and customer success has allowed us to establish a strong presence in key industries, including technology, financial services, healthcare, and corporate real estate.

**Products and Services**

Our employee experience solution is a vertical software-as-a-service (or SaaS) platform for enterprise customers. Our technology platform delivers the following core components that work in combination to deliver an incredible experience for companies around the world.

Our flagship product, the CXAI Platform (pronounced "Sky"), provides a comprehensive suite of tools designed to empower employees and enable organizations to create smarter workplaces. Key components of the platform include:

● **CXAI Applications**: Mobile and web-based applications that provide employees and other users with access to workplace information, communications, and workflows across iOS, Android, kiosk and web environments.

● **CXAI BTS (Behind the Scenes)**: The platform's core infrastructure layer that supports content management, workflow automation, integrations with enterprise systems, and security and compliance controls. CXAI BTS includes a configurable rules engine designed to support complex customer requirements, including policy-based workflows, role-based access controls, and administrative governance.

● **CXAI-VU**: An analytics and AI-enabled insights module that aggregates and analyzes workplace and experience-related data to provide visibility into usage patterns, engagement metrics, and operational trends. CXAI-VU includes natural language processing capabilities that allow administrators to query data and retrieve insights using voice or text-based commands.

● **Agentic AI Capabilities**: AI-enabled functionality designed to support task execution, workflow orchestration, and self-service interactions across workplace, employee, and venue-related use cases.

The CXAI Platform is offered through subscription-based licensing arrangements and is available for deployment through major cloud service providers, including Amazon Web Services, Google Cloud Platform, and Microsoft Azure. The Company also provides implementation, configuration, and ongoing support services in connection with customer deployments.

![](img_001.jpg)

**Business Model**

CXApp's workplace solution is an AI-powered SaaS platform designed to meet the dynamic needs of enterprise organizations by providing a mobile-first approach to workplace management. Our platform empowers employees with a seamless, intelligent employee experience by integrating AI-driven insights, automation, and real-time analytics, ensuring a more efficient and engaging work environment. The CXApp platform delivers a comprehensive, cloud-based content management system (CMS), enabling customers to autonomously and dynamically configure workplace settings based on real-time data and evolving organizational needs. Our intelligent automation capabilities allow for personalized experiences, operational efficiency, and optimized space utilization at scale.

Our pricing structure consists of recurring software fees as well as a professional service fee to setup and deploy a new location or campus, including digitized maps and configurations at the global and regional level.

**Technology Overview**

CXApp's platform is a comprehensive employee experience solution that introduced a mobile-first mindset to everyday interactions and business needs to help customers drive engagement across their global workforce. We bring employee experience initiatives together in one simple and comprehensive system, so customers don't have to host, manage, support or maintain one of their own. We believe this results in low cost, low overhead and easy maintenance.

**Industry Background**

Since 2009, digital transformation initiatives have steadily reshaped the corporate workplace, introducing advancements such as conference room signage, desk booking systems, next-generation intranets, and transparent communications. These technologies provided enterprises with an efficient way to integrate and automate key workplace functions. The shift toward flexible work models, including hot-desking and occupancy sensors, gained momentum in the late 2010s. However, the COVID-19 pandemic in 2020 accelerated the adoption of remote and hybrid work strategies. Organizations rapidly deployed workplace technology solutions to address immediate challenges, enabling employees to work efficiently from distributed locations. This period saw the rapid proliferation of third-party workplace applications, leading to increasingly siloed data and fragmented experiences. In the years following the pandemic, organizations have sought to balance flexibility with operational efficiency. By 2024, return-to-office initiatives gained traction, with companies refining their hybrid models and investing in AI-powered employee experience platforms to enhance employee engagement, productivity, and space utilization. As more tools and systems connect, comprehensive workplace analytics will become crucial for job roles such as corporate real estate, facilities, and even human resources as they'll be able to glean cross-platform, actionable insights that impact spaces, technology, and the people that use them.

**Trends**

***The Evolving Return-to-Office Landscape: Technology's Role in Shaping the Future of Work***

The workplace is undergoing a fundamental transformation as companies strive to balance operational efficiency with employee expectations. While many organizations are pushing for a return-to-office model of 3-5 days per week, many employees remain disengaged, uncertain about in-office benefits, and wary of rigid mandates. To bridge this gap, companies must rethink how they optimize space, foster engagement, and create an office environment that truly enhances productivity and collaboration.

A major challenge in today's workplace is the lack of clarity and purpose behind the office experience. Employees question why they need to be physically present, struggle with unpredictable attendance from colleagues, and face inequities in hybrid work arrangements. Without clear value propositions for in-office work, attendance policies alone are not enough. Instead, businesses must focus on creating dynamic, tech-enabled workplaces that support both in-office and hybrid employees.

***The Role of Technology in Reinventing Workplace Engagement***

To successfully transition into this new era, organizations must adopt **smarter workplace technologies** that remove friction, improve collaboration, and provide real-time insights into how space is utilized. Key areas of focus include:

&nbsp;&nbsp;&nbsp;&nbsp;1. Unified Workplace Platforms – Employees and operations teams are often overwhelmed by fragmented workplace technologies, leading to app fatigue and inefficiencies. A single, integrated application that consolidates desk bookings, meeting spaces, navigation, and collaboration tools helps to streamline the employee experience.

&nbsp;&nbsp;&nbsp;&nbsp;2. Real-Time Occupancy Insights – Many hybrid models have disrupted traditional desk assignments, leading to ghost bookings, double reservations, and inefficient space utilization. AI-driven desk booking and reservation tools, paired with sensors, help to ensure companies can track and manage occupancy accurately, eliminating wasted real estate.

&nbsp;&nbsp;&nbsp;&nbsp;3. Adaptive Space Management – Many corporate offices no longer operate under a fixed environment where employees work from the same desk daily. Many offices are evolving into innovation hubs with dynamic layouts that adjust to employee demand. Successful organizations need flexible mapping, real-time navigation, and workspace reconfiguration tools to help ensure every square foot is optimized.

&nbsp;&nbsp;&nbsp;&nbsp;4. Automated Employee Experiences – To entice employees back, companies should strive to create a seamless and engaging workplace journey. This means leveraging AI-driven personalization, automated check-ins, smart notifications, and real-time updates to enhance the office experience.

***Why We Believe Mobile is the Future of Workplace Connectivity***

As companies continue phased re-entry strategies, mobile-first solutions are increasingly more critical. A workplace app serves as the central hub for booking resources, finding colleagues, receiving updates, and staying connected across distributed teams. The ability to manage workspaces, navigate changing office environments, and engage with real-time data is key to empowering employees and driving office attendance organically.

At CXApp we are leading this transformation through our state-of-the-art employee experience platform, backed by 37 filed patents, including 17 which have been granted. Our solutions are designed to help organizations navigate the complexities of modern work environments, optimize office space, and foster a workplace that employees want to return to.

***The Future of Work is Hybrid, Connected, and Intelligent***

We believe the future of the return-to-office model is not about rigid mandates — it's about creating an office experience that employees choose to be part of. We believe companies that invest in automation, real-time insights, and seamless digital experiences will successfully bridge the gap between attendance goals and employee expectations. With the right technology in place, organizations can transform the office into a hub of innovation, engagement, and productivity, setting the foundation for long-term workplace success.

***Competition***

The market for our products and services is highly competitive, rapidly evolving, and subject to changing technology trends and customer demands. As a provider of AI-driven employee experience solutions, we operate in a new and emerging category of vertical SaaS that redefines traditional approaches to workplace management. Our innovative platform represents a shift in how organizations engage with their employees and optimize physical spaces, offering a new way to integrate digital workplace tools with physical environments. As a result, we face competition not only from established enterprise software vendors but also from emerging cloud-based providers and niche solution providers specializing in employee experience and workplace optimization.

Our primary competitors include:

● Employee Experience and Desk Booking Platforms: We face competition from specialized SaaS providers focused on workplace optimization, such as Envoy, Modo Labs, Condeco, Robin, and Petur. These competitors offer comprehensive desk booking, space management, and employee experience solutions that directly address hybrid workplace needs. Their strong presence in the market and integration capabilities present a significant challenge.

● Intranet Solution providers like Appspace, Workvivo and Simplrr. These competitors have been providing traditional digital signage and intranet applications to enterprises.

● In-House Solutions: Some organizations choose to build and maintain their own internal solutions for employee experience and desk management, leveraging custom-built software or open-source tools.

● New Market Entrants and Niche Solution Providers: As the hybrid work trend continues to evolve, new competitors emerge with specialized solutions addressing aspects of employee experience, workplace analytics, and hybrid office management. Large technology-driven entrants like ServiceNow, Microsoft and Cisco have started looking at integrating space management and employee experience offerings in their enterprise platforms.

**Research and Development Expenses**

Our research and development (R&D) activities have primarily been focused on enhancing our workplace app and mapping platform with additional features and capabilities to strengthen the total offering of our workplace solutions. In addition, we have allocated development resources to integrating our recently acquired technologies with our existing solutions, such as integrating our mapping and app platform, and incorporating "on device" positioning and analytics capabilities within our platform. Our management believes that we must continue to dedicate a significant number of resources to research and development efforts to maintain a competitive position in the market. Our products intersect many emerging fields including AI, the metaverse, augmented reality and space management, and we plan to continue to innovate and patent new methods to solve problems for our customers. While our R&D expenses have historically exceeded our revenues, we anticipate R&D expenses will grow at a slower rate than our revenue, however, we may need additional funding to support our planned R&D activities after the next 12 months or if we decide to accelerate the time to availability for planned development activities to grow faster or meet customer demand.

**Sales and Marketing**

We utilize direct sales and marketing through sales representatives, who are compensated with a base salary and, in certain instances, may participate in incentive plans such as commissions or bonuses. To generate demand for our products and services, we utilize account-based marketing initiatives, lead gen and demand gen programs, tradeshows, webinars and other direct and indirect marketing activities to reach our target audience. Additionally, we have dedicated resources to support and grow our business through strategic channel and technology partner opportunities.

Our products are primarily sold on a recurring SaaS license model along with one-time implementation costs (for professional services). The SaaS model is typically for a multi-year contract and includes maintenance upgrades. It is common for our customers to expand our products to additional locations as well as implement new features resulting in additional revenue potential.

**Customers**

We believe in a unified workplace where employees have on-demand access to real-time communications, collaboration and contextual experiences in one app — from employee to employee, building to building, campus to campus. Customers use the CXApp platform to streamline operations in a single mobile app platform to deliver the best possible experience to employees whether they are onsite, in-person and everywhere in between.

We believe our unique approach to workplace apps offers customers a feature-rich, white label experience allowing the in-app experience to reflect each customer's distinct business goals and brand identity. We go beyond point-solutions, offering a robust product that serves multiple uses backed by native applications, technology partner integrations and workplace analytics that help employees and operations make data-informed decisions.

Our customers include Fortune 1000 enterprises primarily in the United States with deployments globally across industries, including, but not limited to software/technology, financial services, next-gen auto manufacturing, entertainment and life science companies. A list of customers is available on our website at www.cxapp.com.

**Intellectual Property**

To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights and trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements and other contractual rights. We do not believe that our proprietary technology is dependent on any single patent or copyright or groups of related patents or copyrights. We believe the duration of our patents is adequate relative to the expected lives of our products. Our patent portfolio offers protections including detecting objects and positioning in a 3D environment, indoor navigation with sensor fusion, wireless signal fingerprinting, source-based anonymity and time synchronization methods.

In connection with the terms of the Separation and Distribution Agreement, each of Inpixon and CXApp have granted the other party (the "Licensee") a limited worldwide, non-exclusive, irrevocable, royalty free, fully paid up, perpetual, non-exclusive license to use, practice and otherwise exploit such intellectual property (with certain exceptions) that is owned, controlled or purported to be owned or controlled by the other party (the "Licensor") to the extent used, practiced or otherwise exploited in the business of the Licensee during the twelve (12) months prior to the Distribution Time or is reasonably anticipated to be used after the Distribution Time based on the written business or product plans existing as of the Distribution Time, solely for the conduct of any business of the Licensee as conducted on or prior to the Distribution Time and reasonably anticipated extension or evolutions thereof that are not substitutes for any product or service of the Licensor as of the Distribution Time.

As of this time, and notwithstanding the license granted under the Separation and Distribution Agreement, we do not anticipate that any of our products and technologies will require reliance on any intellectual property retained by Inpixon.

**Government Regulation**

In general, we are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anticorruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition.

In general, we are subject to various federal, state, local and foreign laws and regulations and related enforcement, including those relating to data privacy, security and protection, intellectual property, employment and labor, anti-bribery, import and export controls, federal securities and tax. Additional laws and regulations relating to these areas likely will be passed in the future, and these or existing laws and regulations may be interpreted or enforced in new or expanded manners, each of which could result in significant limitations on ways we operate our business. New and evolving laws and regulations, and changes in their enforcement and interpretation, may require changes to our products and services, or to our business practices and relationships generally, and may significantly increase our compliance costs and otherwise adversely affect our business and results of operations. As our business expands to include additional products and services, and our operations continue to expand internationally, our compliance requirements and costs may increase, and we may be subject to increased regulatory scrutiny.

Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations. To date, compliance with these regulations has not been financially burdensome.

**Human Capital**

Our success depends on our ability to attract, develop, and retain top talent across our organization. We are committed to building an inclusive, and a high-performing workforce aligned with our mission to "redefine the employee experience through intelligent space management."

**Workforce Demographics**

As of March 24, 2026, we employed approximately 35 full-time employees. Our workforce includes professionals in software engineering, product development, sales, customer success, and corporate functions. A portion of our workforce is located outside the U.S., particularly in Canada and the Philippines.

**Compensation and Benefits**

We offer competitive compensation packages, including base salary, performance-based bonuses, stock-based awards, and comprehensive benefits. Our equity program aligns employees with shareholder value creation.

We also provide flexible work arrangements, including hybrid and remote options, to support work-life balance.

**Corporate History**

CXApp Inc. was incorporated in Delaware on July 20, 2020, as KINS Technology Group Inc, our predecessor. The Company was 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 (the "Business Combination"). The Company was not limited to a particular industry or sector for purposes of consummating a Business Combination.

The registration statement for the Company's Initial Public Offering became effective on December 14, 2020. On December 17, 2020, the Company consummated the Initial Public Offering of 27,600,000 units (the "Units" and, with respect to the Class A common stock included in the Units sold, the "Public Shares"), which includes the full exercise by the underwriter of its over-allotment option in the amount of 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276,000,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 10,280,000 warrants (the "Private Placement Warrants") at a price of $1.00 per Private Placement Warrant in a private placement to KINS Capital LLC (the "Sponsor") and certain funds and accounts managed by BlackRock, Inc. (the "Direct Anchor Investors" and which the Direct Anchor Investors, together with the Sponsor, are the "initial stockholders").

The Company has one wholly owned subsidiary, KINS Merger Sub Inc., which was incorporated in the State of Delaware on September 16, 2022 ("Merger Sub"). Merger Sub had no activity from it's date of incorporation, September 16, 2022, through March 14, 2023.

At the end of business on March 14, 2023, pursuant to the Merger Agreement, a business combination between KINS and Legacy CXApp was effectuated through the merger of Merger Sub with and into Legacy CXApp, with Legacy CXApp surviving as the surviving company and as a wholly owned subsidiary of KINS. KINS subsequently changed its name to CXApp, and shares of CXApp Class A common stock began trading on the Nasdaq on March 15, 2023.

Legacy CXApp was incorporated under the laws of the State of Delaware on September 19, 2022, specifically for the purpose of effecting the Separation and was a wholly owned subsidiary of Inpixon. Legacy CXApp has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions. Pursuant to the Separation and Distribution Agreement, (i) Inpixon undertook a series of internal reorganization and restructuring transactions to effect the transfer of its (direct or indirect) ownership of the Enterprise Apps Business to Legacy CXApp in the Separation and (ii) immediately prior to the Merger and after the Separation, Inpixon distributed 100% of the outstanding shares of CXApp common stock to Inpixon securityholders in the Distribution.

**Corporate Information**

We have four operating subsidiaries: (i) Legacy CXApp, a Delaware corporation, 100% of the capital stock of which is owned by CXApp, (ii) CXApp US, Inc. (formerly as Design Reactor Inc.), a California corporation ("CXApp US"), 100% of the capital stock of which is owned by Legacy CXApp; (iii) CXApp Canada, Inc. (formerly as Inpixon Canada), a British Columbia corporation, based in Coquitlam, British Columbia ("CXApp Canada"), 100% of the capital stock of which is owned by CXApp US; and (iv) CXApp Philippines, Inc. (formerly as Inpixon Philippines, Inc.), a Philippines corporation ("CXApp Philippines"), 99.97% of the capital stock of which is owned by CXApp US.

Our principal executive offices are located at Four Palo Alto Square, Suite 200, 3000 El Camino Real, Palo Alto, CA 94306. Our Canadian subsidiary maintains offices in Toronto, Ontario and our Philippines subsidiary maintains offices in Manila, Philippines. Our Internet website is www.cxapp.com. The information on, or that can be accessed through, our website is not part of this report, and you should not rely on any such information in making any investment decision relating to our common stock.

**Item 1A. Risk Factors.**

In addition to the other information contained in this Annual Report, the following risks have the potential to impact the business and operations of CXApp. An investment in our securities involves a high degree of risk. You should carefully consider all the risks described in this Annual Report, together with the other information contained in this Annual Report. These risk factors are not exhaustive, and all investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of CXApp. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe are immaterial could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

**Risk Factor Summary**

***Risks Relating to our Operations.***

● We have a history of net losses, and future financings may be dilutive or difficult to obtain. Integrating acquisitions or new offerings strains our infrastructure and may not generate expected benefits. Contract disputes or litigation can be costly and time-consuming, and any failure to control our expenses or effectively manage growth could negatively affect profitability.

**Risks Relating to our Growth**

● Our plans depend on scaling operations and expanding sales to new and existing customers. The rapidly evolving technology landscape requires us to anticipate and respond to shifts in customer needs and industry standards; if our solutions do not achieve broad adoption, our growth prospects and revenues may suffer.

**Risks Relating to our Personnel**

● Our business depends on hiring, developing, and retaining highly skilled employees, including key executives and technical professionals. Competition for specialized talent is intense; any difficulty in recruiting or high turnover could disrupt operations and impede growth. If we lose critical personnel without adequate successors, fail to motivate our workforce, or incur excessive expenses to retain staff, our profitability and strategic objectives may be adversely affected.

**Risks Relating to our Intellectual Property**

● Our success depends on protecting proprietary technologies, methodologies, and trade secrets. We rely on patents, copyrights, confidentiality agreements, and other intellectual property measures to maintain our competitive advantage. However, the rapidly evolving nature of technology and the potential for unauthorized use or misappropriation of our intellectual property expose us to infringement claims and legal disputes that may be expensive, divert management's attention, or result in loss of proprietary rights.

**Risks Related to Ownership of our Securities**

● Our stock price can be volatile, and we have no current plans to pay dividends. Future equity issuances could dilute existing stockholders. Failure to meet Nasdaq listing standards or changing market conditions could reduce market liquidity or cause delisting. New or evolving regulations may also affect stockholder rights and the value of our common stock.

**Risks Related to our Accounting Policies**

● We prepare our consolidated financial statements in accordance with U.S. GAAP, which is subject to interpretation and may change over time. Adjustments in standards or unexpected changes in accounting estimates, goodwill impairments, or restatements of prior-period financial statements could adversely affect our reported results. If our internal control over financial reporting proves ineffective, we may be unable to provide accurate or timely financial information, potentially harming our credibility with investors and regulators.

**Risks Related to Cybersecurity Threats**

● We operate in an environment prone to security breaches, data corruption, hacking, and other cyber incidents. Our products, services, and corporate systems — along with those of our partners or suppliers — may be vulnerable to increasingly sophisticated cyber threats. A successful breach or service disruption could compromise customer data, impede operations, damage our reputation, result in legal and regulatory liability, and diminish market confidence in our solutions.

**Risks Related to our Industry**

● We compete in a rapidly evolving sector with frequent technological advances, emerging business models, and the introduction of new or improved products by competitors. Developing market-leading innovations is capital-intensive and uncertain. Failure to anticipate and respond to industry changes, standardize new offerings, or gain market acceptance could erode our competitive position. In addition, macroeconomic pressures, regulatory complexities, and intensifying competition all contribute to heightened operational and financial risks.

**Risks Related to External Factors and Third Parties**

● Fluctuations in global or regional economic conditions, political disruptions, pandemics, or conflicts can interrupt supply chains and dampen demand for our products. Compliance with diverse international regulations, including data privacy laws and trade restrictions, involves complexities and potential liabilities that can adversely affect our business.

**Risks Relating to our Operations**

***We have a history of operating losses and there is no assurance that we will ever be able to earn sufficient revenue to achieve profitability or raise additional financing to successfully operate our business plan.***

We have a history of operating losses and may not earn sufficient revenue to support our operations. We have incurred recurring net losses of approximately $13,473 thousand and $19,408 thousand for the fiscal years ended 2025 and 2024, respectively. Our continuation is dependent upon attaining and maintaining profitable operations and raising additional capital as needed, but there can be no assurance that we will be able to raise any further financing.

Our ability to generate positive cash flow from operations is dependent on implementing certain cost reductions and generating sufficient revenues. Based on our current business plan, we may need additional capital to support our operations, which may be satisfied by additional debt or equity financings. Future financings through equity offerings will be dilutive to existing stockholders. In addition, the terms of securities we may issue in future capital transactions may be more favorable to new investors than our current investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities. We may also issue incentive awards under our equity incentive plans, which may have additional dilutive effects. We may also be required to recognize non-cash expenses in connection with certain securities we may issue in the future such as convertible notes and warrants, which would adversely impact our financial condition and results of operations. Our ability to obtain needed financing may be impaired by certain factors, including the condition of the economy and capital markets, both generally and specifically in our industry, and the fact that we are not profitable, which could affect the availability or cost of future financing. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, we may need to reduce our operations by, for example, selling certain assets or business segments.

***Failure to manage or protect growth may be detrimental to our business because our infrastructure may not be adequate for expansion.***

Our corporate strategy contemplates potential future acquisitions and to the extent we acquire other businesses, we will also need to integrate and assimilate new operations, technologies and personnel. The integration of new personnel will continue to result in some disruption to ongoing operations. The ability to successfully manage growth in a rapidly evolving market requires effective planning and management processes. We will need to continue to improve operational, financial, and managerial controls, reporting systems and procedures, and will need to continue to expand, train and manage our workforce. There can be no assurance that we would be able to accomplish such an expansion on a timely basis. If we are unable to affect any required expansion and are unable to perform our contracts on a timely and satisfactory basis, our reputation and eligibility to secure additional contracts in the future could be damaged. The failure to perform could also result in contract terminations and significant liability. Any such result would adversely affect our business and financial condition.

***Insurance and contractual protections may not always cover lost revenue, increased expenses, or liquidated damages payments, which could adversely affect our financial results.***

Although we maintain insurance and intend to obtain warranties from suppliers, obligate subcontractors to meet certain performance levels and attempt, where feasible, to pass risks we cannot control to our customers, the proceeds of such insurance or the warranties, performance guarantees or risk sharing arrangements may not be adequate to cover lost revenue, increased expenses or liquidated damages payments that may be required in the future.

***Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results, and cash flows.***

We may be a party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, contracts, sub-contracts, protection of confidential information or trade secrets, adversarial proceedings arising from customer bankruptcies, employment of our workforce and immigration requirements or compliance with any of a wide array of state and federal statutes, rules or regulations that pertain to different aspects of our business. We may also be required to initiate expensive litigation or other proceedings to protect our business interests. There is a risk that we will not be successful or otherwise be able to satisfactorily resolve any such claims or litigation. In addition, litigation and other legal claims are subject to inherent uncertainties. Those uncertainties include, but are not limited to, litigation costs and attorneys' fees, unpredictable judicial or jury decisions and the differing laws and judicial proclivities regarding damage awards among the states in which we operate. Unexpected outcomes in such legal proceedings, or changes in management's evaluation or predictions of the likely outcomes of such proceedings (possibly resulting in changes in established reserves), could have a material adverse effect on our business, financial condition, results of operations and cash flows. Due to recurring losses and net capital deficiency, our current financial status may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation.

***Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results.***

If we are successful in consummating acquisitions, those acquisitions could subject us to a number of risks, including, but not limited to:

● the purchase price we pay and/or unanticipated costs could significantly deplete our cash reserves or result in dilution to our existing stockholders;

● we may find that the acquired company or technologies do not improve our market position as planned;

● we may have difficulty integrating the operations and personnel of the acquired company, as the combined operations will place significant demands on our management, technical, financial and other resources;

● key personnel and customers of the acquired company may terminate their relationships with the acquired company as a result of the acquisition;

● we may experience additional financial and accounting challenges and complexities in areas such as tax planning and financial reporting;

● we may assume or be held liable for risks and liabilities (including environmental-related costs) as a result of our acquisitions, some of which we may not be able to discover during our due diligence investigation or adequately adjust for in our acquisition arrangements;

● our ongoing business and management's attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises;

● we may incur one-time write-offs or restructuring charges in connection with the acquisition;

● we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; and

● we may not be able to realize the cost savings or other financial benefits we anticipated.

We cannot assure you that, following any acquisition, our continued business will achieve sales levels, profitability, efficiencies or synergies that justify the acquisition or that the acquisition will result in increased earnings for us in any future period. These factors could have a material adverse effect on our business, financial condition and operating results.

***The growth of our business is dependent on increasing sales to our existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance.***

Our ability to increase revenues from existing customers by identifying additional opportunities to sell more of our products and services and our ability to obtain new customers depends on a number of factors, including our ability to offer high quality products and services at competitive prices, the strength of our competitors and the capabilities of our sales and marketing departments. If we are not able to continue to increase sales of our products and services to existing customers or to obtain new customers in the future, we may not be able to increase our revenues and could suffer a decrease in revenues as well.

***If we are unable to sell additional products and services to our customers and increase our overall customer base, our future revenue and operating results may suffer.***

Our future success depends, in part, on our ability to expand the deployment of technologies with existing customers and finding new customers to sell our products and services to. This may require increasingly sophisticated and costly sales efforts and may not result in additional sales. In addition, the rate at which our customers purchase additional products and services, and our ability to attract new customers, depends on a number of factors, including the perceived need for indoor mapping products and services, as well as general economic conditions. If our efforts to sell additional products and services are not successful, our business may suffer.

***We may need additional cash financing and any failure to obtain cash financing, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.***

While we believe that we have sufficient cash funds to satisfy our working capital needs for the next 12 months, we expect that we may need to raise funds to continue our operations and implement our plans to grow our business. However, if we decide to seek additional capital, we may be unable to obtain financing on terms that are acceptable to us or at all. If we are unable to raise the required cash, our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges could be limited.

***If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital, or continue our business operations.***

Our business depends on our ability to successfully obtain payment from our customers of the amounts they owe us for products received from us and any work performed by us. The timely collection of our receivables allows us to generate cash flow, provide working capital and continue our business operations. Our customers may fail to pay or delay the payment of invoices for several reasons, including financial difficulties resulting from macroeconomic conditions or lack of an approved budget. An extended delay or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. If we are unable to timely collect our receivables from our customers for any reason, our business and financial condition could be adversely affected.

***Defects, errors, or vulnerabilities in our products or services or the failure of such products or services to prevent a security breach, could harm our reputation and adversely affect our results of operations.***

Because our location-based products and services are complex, they have contained and may contain design or manufacturing defects or errors that are not detected until after their commercial release and deployment by customers. Defects may cause such products to be vulnerable to advanced persistent threats ("APTs") or security attacks, cause them to fail to help secure information or temporarily interrupt customers' networking traffic. Because the techniques used by hackers to access sensitive information change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and provide a solution in time to protect customers' data. In addition, defects or errors in our subscription updates or products could result in a failure to effectively update customers' hardware products and thereby leave customers vulnerable to APTs or security attacks.

Any defects, errors or vulnerabilities in our products could result in:

● expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors or defects or to address and eliminate vulnerabilities;

● delayed or lost revenue;

● loss of existing or potential customers or partners;

● increased warranty claims compared with historical experience, or increased cost of servicing warranty claims, either of which would adversely affect gross margins; and

● litigation, regulatory inquiries, or investigations that may be costly and harm our reputation

***Our current research and development efforts may not produce successful products or features that result in significant revenue, cost savings or other benefits in the near future. If we do not realize significant revenue from our research and development efforts, our business and results of operations may be adversely affected.***

Developing products and related enhancements in our field is expensive. Investments in research and development may not result in significant design improvements, marketable products or features or may result in products that are more expensive than anticipated. We may not achieve the cost savings or the anticipated performance improvements expected, and we may take longer to generate revenue from products in development or generate less revenue than expected.

Our future plans include significant investments in research and development and related product opportunities. Our management believes that we must continue to dedicate a significant amount of resources to research and development efforts to maintain a competitive position. However, we may not receive significant revenue from these investments in the near future, or these investments may not yield the expected benefits, either of which could adversely affect our business and operating results.

**Risks Relating to our Growth**

***We will need to increase the size of our organization, and we may experience difficulties in managing growth, which could hurt our financial performance.***

In order to manage our future growth, we will need to continue to improve our management, operational and financial controls and our reporting systems and procedures. All of these measures will require significant expenditures and will demand the attention of management. If we do not continue to enhance our management personnel and our operational and financial systems and controls in response to growth in our business, we could experience operating inefficiencies that could impair our competitive position and could increase our costs more than we had planned. If we are unable to manage growth effectively, our business, financial condition and operating results could be adversely affected.

**Risks Relating to our Personnel**

***Our business depends on experienced and skilled personnel, and if we are unable to attract and integrate skilled personnel, it will be more difficult for us to manage our business and complete contracts.***

The success of our business depends on the skill of our personnel. Accordingly, it is critical that we maintain, and continue to build, a highly experienced management team and specialized workforce, including those who create software programs and sales professionals. Competition for personnel with skill sets specific to our industry is high, and identifying candidates with the appropriate qualifications can be costly and difficult. We may not be able to hire the necessary personnel to implement our business strategy given our anticipated hiring needs, or we may need to provide higher compensation or more training to our personnel than we currently anticipate.

Our business is labor intensive, and our success depends on our ability to attract, retain, train and motivate highly skilled employees, including employees who may become part of our organization in connection with our acquisitions. The increase in demand for consulting, technology integration and managed services has further increased the need for employees with specialized skills or significant experience in these areas. Our ability to expand our operations will be highly dependent on our ability to attract a sufficient number of highly skilled employees and to retain our employees and the employees of companies that we have acquired. We may not be successful in attracting and retaining enough employees to achieve our desired expansion or staffing plans. Furthermore, the industry turnover rates for these types of employees are high and we may not be successful in retaining, training or motivating our employees. Any inability to attract, retain, train and motivate employees could impair our ability to adequately manage and complete existing projects and to accept new customer engagements. Such inability may also force us to increase our hiring of independent contractors, which may increase our costs and reduce our profitability on customer engagements. We must also devote substantial managerial and financial resources to monitoring and managing our workforce. Our future success will depend on our ability to manage the levels and related costs of our workforce.

In the event we are unable to attract, hire and retain the requisite personnel and subcontractors, we may experience delays in completing contracts in accordance with project schedules and budgets, which may have an adverse effect on our financial results, harm our reputation and cause us to curtail our pursuit of new contracts. Further, any increase in demand for personnel may result in higher costs, causing us to exceed the budget on a contract, which in turn may have an adverse effect on our business, financial condition and operating results and harm our relationships with our customers.

***We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.***

We may be subject to claims that we and our employees may have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers or competitors. Litigation may be necessary to defend against these claims. We may be subject to unexpected claims of infringement of third-party intellectual property rights, either for intellectual property rights of which we are not aware, or for which we believe are invalid or narrower in scope than the accusing party. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending such claims, in addition to paying money damages, we may lose valuable intellectual property rights or personnel or be enjoined from selling certain products or providing certain services. A loss of key research personnel or their work product could hamper or prevent our ability to commercialize certain products, which could severely harm our business.

***The loss of key personnel may adversely affect our operations.***

Our success depends to a significant extent upon the operation, experience, and continued services of certain of our officers, and other key personnel. While our key personnel are employed under employment contracts, there is no assurance we will be able to retain their services. The loss of our key personnel could have an adverse effect on us. If certain of our executive officers were to leave, we would face substantial difficulty in hiring a qualified successor and could experience a loss in productivity while any successor obtains the necessary training and experience. Furthermore, we do not maintain "key person" life insurance on the lives of any executive officer and their death or incapacity would have a material adverse effect on us. The competition for qualified personnel is intense, and the loss of services of certain key personnel could adversely affect our business.

**Risks Relating to our Intellectual Property**

***If we do not adequately protect our intellectual property rights, we may experience a loss of revenue, and our operations and growth prospects may be materially harmed.***

We have not registered copyrights on any of the software we have developed, and while we may register copyrights in the software if needed before bringing suit for copyright infringement, such registration can introduce delays before suit of over three years and can constrain damages for infringement. We rely upon confidentiality agreements signed by our employees, consultants and third parties to protect our intellectual property. We cannot assure you that we can adequately protect our intellectual property or successfully prosecute actual or potential infringement of our intellectual property rights. In addition, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of ours or that we will be able to successfully resolve these types of conflicts to our satisfaction. Our failure to protect our intellectual property rights may result in a loss of revenue and could materially adversely affect our operations and financial condition.

In addition, any patents issued in the future may not provide us with any competitive advantages, and our patent applications may never be granted. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Even if issued, there can be no assurance that these patents will adequately protect our intellectual property, as the legal standards relating to the validity, enforceability and scope of protection of patent and other intellectual property rights are complex and often uncertain and are subject to change that can affect validity of patents issued under previous legal standards, particularly with respect to the law of subject matter eligibility. Our inability to protect our property rights could adversely affect our financial condition, operating results and growth prospects.

Our proprietary software is protected by common law copyright laws, as opposed to registration under copyright statutes. We have not registered copyrights on any of the proprietary software we have developed. Our performance and ability to compete are dependent to a significant degree on our proprietary technology. Common law protection may be narrower than that which we could obtain under registered copyrights. As a result, we may experience difficulty in enforcing our copyrights against certain third-party infringements. As part of our confidentiality-protection procedures, we generally enter into agreements with our employees and consultants and limit access to, and distribution of, our software, documentation and other proprietary information. There can be no assurance that the steps we have taken will prevent misappropriation of our technology or that agreements entered into for that purpose will be enforceable. The laws of other countries may afford us little or no protection of our intellectual property. We also rely on a variety of technology that we license from third parties. There can be no assurance that these third-party technology licenses will continue to be available to us on commercially reasonable terms, if at all. The loss of or inability to maintain or obtain upgrades to any of these technology licenses could result in delays in completing software enhancements and new developments until equivalent technology can be identified, licensed or developed and integrated. Any such delays would materially and adversely affect our business.

***We could incur substantial cost in protecting our proprietary software technology and if we fail to protect our technology, we could incur material harm to our business.***

We rely principally on a combination of contract provisions and copyright, trademark, patent and trade secret laws to protect our proprietary technology. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Policing unauthorized use of our products is difficult. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources, whether or not we ultimately prevail on the merits. The steps we take to protect our proprietary rights may be inadequate to prevent misappropriation of our technology; moreover, others could independently develop similar technology.

***We could be subject to claims that we infringe intellectual property rights of others, which could harm our business, financial condition, results of operations or cash flows.***

Third parties could assert infringement claims in the future with respect to our products and technology, and such claims might be successful. Litigation relating to any such claims could result in substantial costs and diversion of resources, whether or not we ultimately prevail on the merits. Any such litigation could also result in our being prohibited from selling one or more of our products, unanticipated royalty payments, reluctance by potential customers to purchase our products, or liability to our customers and could have a material adverse effect on our business, financial condition, operating results and cash flows.

**Risks Relating to Ownership of our Securities**

***The market price of our common stock may be volatile and fluctuate substantially, which could cause the value of your investment to decline.***

The trading price of our common stock, as well as our warrants, is likely to be volatile. The stock market has experienced extreme volatility in the past and may experience similar volatility moving forward. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors including the following:

● results of operations that vary from the expectations of securities analysts and investors;

● results of operations that vary from those of our competitors;

● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

● price and volume fluctuations in the market prices of stocks generally;

● strategic actions by us or our competitors;

● changes in how enterprises perceive the benefits of our platform and products;

● announcements by us or our competitors of new products, solutions or technologies or significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;

● any significant change in our management or departures of key personnel;

● changes in general economic or market conditions or trends in our industry or markets;

● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

● future sales of our common stock or other securities;

● investor perceptions or the investment opportunity associated with our common stock relative to other investment alternatives;

● the public's response to press releases or other public announcements by us or third parties, including our filings with the SEC;

● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;

● guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

● the development and sustainability of an active trading market for our common stock;

● actions by institutional or activist stockholders;

● changes in accounting standards, policies, guidelines, interpretations or principles;

● general economic and political conditions such as economic downturns, recessions, interest rates, fuel prices, trade wars, tariffs, pandemics, currency fluctuations and acts of war or terrorism; and

● the effects of natural disasters, terrorist attacks and the spread and/or abatement of infectious diseases, including with respect to potential operational disruptions, labor disruptions, increased costs, and impacts to demand related thereto.

These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

***We do not intend to pay dividends on our common stock, so any returns will be substantially limited to the value of our common stock.***

We have no current plans to pay any cash dividends on our common stock. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our board. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends from future earnings for the foreseeable future. Our board may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on our or our subsidiaries' payment of dividends to our stockholders and such other factors as our board may deem relevant. In addition, our ability to pay dividends is limited by our indebtedness and may be limited by covenants of any future indebtedness we incur. As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than that which you paid for it.

***If securities analysts do not publish research or reports about our business or if they publish inaccurate or unfavorable research about our common stock, the stock price and trading volume of our common stock could decline.***

The trading market for our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. In addition, some financial analysts may have limited expertise with our model and operations. Furthermore, if one or more of the analysts who do cover us downgrade their evaluations of our common stock, the price of our common stock could decline. If one or more of these analysts ceases to cover us, we could lose visibility in the market for our common stock, which in turn could cause our stock price or trading volume to decline.

***Any future sales or offerings of our common stock may cause substantial dilution to stockholders and could cause the price of our common stock to decline.***

The sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that it deems appropriate.

Pursuant to the Insider Letter (as defined in the Sponsor Support Agreement), during the Founder Shares Lock-Up Period (as defined in the Insider Letter), KINS' directors and executive officers will not, subject to the exceptions noted therein, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of any shares of our common stock, or any stock options, restricted stock units, or other equity awards outstanding as of immediately following the Closing in respect of our awards outstanding immediately following the Closing. Following the expiration or waiver of the Lockup Period, such shares will be eligible for resale, subject to volume, manner of sale and other limitations under Rule 144. Sales of substantial amounts of our common stock in the public market, or the perception that such sales will occur, could adversely affect the market price of our common stock and make it difficult for us to raise funds through securities offerings in the future.

If the stockholders to the Registration Rights Agreement, dated as of December 14, 2020, that was entered into by KINS, the Sponsor and the other parties thereto in connection with the KINS initial public offering, exercise their registration rights, the market price of shares of our common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities.

In addition, the shares of our common stock reserved for future issuance under our equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders.

A sustained depression in the market price of our common stock has happened (from October to December 2023) and could in the future happen, which could also reduce our market capitalization below the book value of net assets, which could increase the likelihood of recognizing goodwill or indefinite-lived intangible asset impairment losses that could negatively affect our financial condition and results of operations.

***Anti-takeover provisions in our organizational documents could delay or prevent a change of control.***

Certain provisions of our Charter and Bylaws have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in their best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions provide for, among other things:

● a classified board of directors whose members serve staggered three-year terms;

● the ability of our board to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

● advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;

● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

● certain limitations on convening special stockholder meetings;

● limiting the ability of stockholders to act by written consent;

● the limitation of the liability of, and the indemnification of, our directors and officers;

● providing that our board is expressly authorized to make, alter or repeal our bylaws; and

● the removal of directors only for cause and only upon the affirmative vote of holders of the majority of the voting power of all of the then outstanding shares of our voting stock entitled to vote at an election of directors.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third-party's offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

***Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.***

***The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the Nasdaq stock exchange, require significant resources, increase our costs and distract our management, and we may be unable to comply with these requirements in a timely or cost-effective manner. We have incurred increased costs as a result of operating as a public company and our management has devoted substantial time to compliance initiatives.***

Legacy CXApp has previously operated as a privately-owned company and we expect to incur additional legal, regulatory, finance, accounting, investor relations and other administrative expenses as a result of having publicly traded common stock. In addition, we are required under the Sarbanes-Oxley Act, as well as rules adopted by the SEC and Nasdaq to implement specified corporate governance practices that previously did not apply to Legacy CXApp as a private company.

As a public company with equity securities listed on Nasdaq, we must comply with rules and regulations of the SEC and the requirements of Nasdaq. Complying with these rules, regulations and requirements occupies a significant amount of the time of our board of directors and management and significantly increases our costs and expenses. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it. In addition, as a public company we incur substantial costs to obtain director and officer liability insurance policies. These factors could make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee.

We are required to ensure that we have the ability to prepare financial statements on a timely basis that fully comply with all SEC reporting requirements and maintain effective internal controls over financial reporting. The additional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. In addition, failure to comply with any laws or regulations applicable to us as a public company may result in legal proceedings and/or regulatory investigations and may cause reputational damage. Any of these effects could harm our business, financial condition and results of operations.

***If we fail to meet the continued listing standards of Nasdaq, our common stock may be delisted, which could have a material adverse effect on the liquidity and market price of our common stock and expose the Company to litigation.***

Our common stock is currently traded on the Nasdaq Capital Market. The Nasdaq Stock Market LLC ("Nasdaq") has requirements that a company must meet in order to remain listed. For example, on September 11, 2025, the Company received a letter from Nasdaq notifying the Company that, because the closing bid price for the Company's common stock has been below the minimum $1.00 per share required for continued listing on Nasdaq, the Company no longer complied with Nasdaq Listing Rule 5550(a)(2) (the "Nasdaq Minimum Bid Price Requirement"), which requires that the closing bid price of the Company's common stock meet or exceed $1.00 per share for a minimum of ten consecutive trading days. The Company initially had 180 calendar days, or until March 10, 2026, to regain compliance with the Nasdaq Minimum Bid Price Requirement. The Company was unable to regain compliance with the Nasdaq Minimum Bid Price Requirement by March 10, 2026.

On March 11, 2026, the Company received a letter (the "Extension Notice") from Nasdaq notifying the Company that it has been provided an additional compliance period of 180 calendar days, or until September 7, 2026, to regain compliance with the Nasdaq Minimum Bid Price Requirement. The Extension Notice has no immediate effect on the listing of the Common Stock, and the Common Stock will continue to trade on The Nasdaq Capital Market.

If at any time before September 7, 2026, the bid price of the Company's common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will notify the Company that it is in compliance with the Nasdaq Minimum Bid Price Requirement. However, if compliance with the Nasdaq Minimum Bid Price Requirement cannot be demonstrated by September 7, 2026, Nasdaq will notify the Company that its Common Stock will be delisted from Nasdaq, at which time, the Company may appeal Nasdaq's determination to a Hearings Panel.

The Company will continue to monitor the bid price of the Common Stock and consider its available options to regain compliance with the Nasdaq Minimum Bid Price Requirement. However, there can be no assurance that the Company will be able to regain compliance with the Nasdaq Minimum Bid Price Requirement.

If our common stock were to be delisted, the liquidity of our common stock would be adversely affected, and the market price of our common stock could decrease. In addition, the failure to meet the Nasdaq Minimum Bid Price Requirement could expose the Company to risk of litigation concerning any impact upon the Company's price of the Company's common stock. Any such litigation could distract management from day-to-day operations and further adversely affect the market price of our common stock.

**Risks Relating to our Accounting Policies**

***Changes in accounting principles and guidance, or their interpretation or implementation, may materially adversely affect our reported results of operations or financial position.***

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") These principles are subject to interpretation by the SEC and various bodies formed to create and interpret appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results, as well as our processes and related controls.

***Revenue forecasting is uncertain, and the failure to meet our forecasts could result in a decline in our stock price.***

Our revenues, particularly new software license revenues or economic impacts from M&A activities, are difficult to forecast. We use a pipeline system to forecast revenues and trends in our business. Our pipeline estimates may prove to be unreliable either in a particular quarter or over a longer period of time, in part because the conversion rate of the pipeline into contracts can be difficult to estimate and requires management judgment. A variation in the conversion rate could cause us to plan or budget incorrectly and result in a material adverse impact on our business or our planned results of operations. Furthermore, most of our expenses are relatively fixed, including costs of personnel and facilities. Thus, an unexpected reduction in our revenue, or failure to achieve the anticipated rate of growth or realize synergies from M&A activity, would have a material adverse effect on our profitability. If our operating results do not meet our publicly stated guidance or the expectations of investors or analysts, our stock price may decline.

***If our goodwill or amortizable intangible assets become impaired, we have been and may be required to record a significant charge to earnings.***

We review our goodwill for impairment at least annually and when events or changes in circumstances indicate that the carrying value may not be recoverable. As discussed in Note 5 – "Goodwill and Intangible Assets, net" in the Notes to the Consolidated Financial Statements under Item 15 of this Annual Report, we incurred a goodwill impairment loss of $2,148 thousand, resulting in a negative impact on our results of operations for the year ended December 31, 2025.

As required by current accounting standards, we review intangible assets for impairment either annually or whenever changes in circumstances indicate that the carrying value may not be recoverable. The risk of impairment to goodwill is higher during the early years following an acquisition. This is because the fair values of these assets align very closely with what we paid to acquire the reporting units to which these assets are assigned. When impairment charges are triggered, they tend to be material due to the size of the assets involved. Our business could be adversely affected, and impairment of goodwill could be triggered, if any of the following were to occur: higher attrition rates than planned as a result of the competitive environment or our inability to provide products and services that are competitive in the marketplace, lower-than-planned adoption rates by customers, higher-than-expected expense levels to provide services to customers, sustained declines in our stock price and related market capitalization and changes in our business model that may impact one or more of these variables.

***If we fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect the Company's business and share price.***

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

During the year ended December 31, 2025, management implemented enhanced controls and processes to address each of these material weaknesses, including the engagement of external consultants to support the tax provision process, the implementation of a formalized month-end close checklist, and the development of a revised process for identifying and evaluating new and amended contracts for derivative features and fair value considerations. Based on the steps taken and the testing performed as of December 31, 2025, management has concluded that each of these previously reported material weaknesses has been fully remediated and no longer exists as of December 31, 2025

Although we have undertaken remediation efforts to address the material weaknesses previously identified, we cannot provide assurance that such measures will be sufficient to avoid potential future material weaknesses. Remediation measures are time-consuming on the Company's financial and operational resources. In order to improve the effectiveness of its internal control over financial reporting, the Company will need to continue to expend resources, including accounting-related costs and management oversight. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If we are unable to remediate the material weaknesses or identify additional material weakness in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods required by the SEC, could be adversely affected which, in turn, may adversely affect our reputation and business and the market price of the Company's Class A Common Stock. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation of our business.

**Risks Relating to Cybersecurity Threats**

***Internal system or service failures could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability.***

Any system or service disruptions, on our hosted cloud infrastructure or those caused by ongoing projects to improve our information technology systems and the delivery of services, if not anticipated and appropriately mitigated, could have a material adverse effect on our business including, among other things, an adverse effect on our ability to bill our customers for work performed on our contracts, collect the amounts that have been billed and produce accurate financial statements in a timely manner. We are also subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, cyber security threats, natural disasters, power shortages, terrorist attacks or other events, which could cause loss of data and interruptions or delays in our business, cause us to incur remediation costs, subject us to claims and damage our reputation. In addition, the failure or disruption of our communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our future results could be adversely affected.

***Any failures or interruptions in our services or systems could damage our reputation and substantially harm our business and results of operations.***

Our success depends in part on our ability to provide reliable remote services, technology integration and managed services to our customers. The operations of our cloud-based applications and analytics are susceptible to damage or interruption from human error, fire, flood, power loss, telecommunications failure, terrorist attacks and similar events. We could also experience failures or interruptions of our systems and services, or other problems in connection with our operations, as a result of:

● damage to or failure of our computer software or hardware or our connections;

● errors in the processing of data by our systems;

● computer viruses or software defects;

● physical or electronic break-ins, sabotage, intentional acts of vandalism and similar events;

● increased capacity demands or changes in systems requirements of our customers; and

● errors by our employees or third-party service providers.

Any production interruptions for any reason, such as a natural disaster, epidemic, capacity shortages, or quality problems, at one of our manufacturing partners would negatively affect sales of product lines manufactured by that manufacturing partner and adversely affect our business and operating results.

Any interruptions in our systems or services could damage our reputation and substantially harm our business and results of operations. While we maintain disaster recovery plans and insurance with coverage we believe to be adequate, claims may exceed insurance coverage limits, may not be covered by insurance or insurance may not continue to be available on commercially reasonable terms.

***Digital threats such as cyber-attacks, data protection breaches, computer viruses or malware may disrupt our operations, harm our operating results and damage our reputation, and cyber-attacks or data protection breaches on our customers' networks, or in cloud-based services provided by or enabled by us, could result in liability for us, damage our reputation or otherwise harm our business.***

Despite our implementation of network security measures, the products and services we sell to customers, and our servers, data centers and the cloud-based solutions on which our data, and data of our customers, suppliers and business partners are stored, are vulnerable to cyber-attacks, data protection breaches, computer viruses, and similar disruptions from unauthorized tampering or human error, any of which could be enhanced or facilitated by artificial intelligence. Any such event could compromise our networks or those of our customers, and the information stored on our networks or those of our customers could be accessed, publicly disclosed, lost or stolen, which could subject us to liability to our customers, business partners and others, and could have a material adverse effect on our business, operating results, and financial condition and may cause damage to our reputation. Efforts to limit the ability of malicious third parties to disrupt the operations of the Internet or undermine our own security efforts may be costly to implement and met with resistance and may not be successful. Breaches of network security in our customers' networks, or in cloud-based services provided by or enabled by us, regardless of whether the breach is attributable to a vulnerability in our products or services, could result in liability for us, damage our reputation or otherwise harm our business.

***Integration of artificial intelligence into our product offerings and our use of artificial intelligence in our operations could result in reputational or competitive harm, legal liability, and other adverse effects on our business.***

We have integrated, and plan to further integrate, AI capabilities into components of our product offerings, and we expect to use AI in our operations. Such integration and use of AI may become more important in our product offerings and operations over time. These AI-related initiatives, whether successful or not, could cause us to incur substantial costs and could result in delays in our software release cadence. Our competitors or other third parties may incorporate AI into their products or operations more quickly or more successfully than we do, which could impair our ability to compete effectively. Additionally, AI algorithms may be flawed and datasets underlying AI algorithms may be insufficient or contain biased information. If the AI tools integrated into our products or those we use in our operations produce analyses or recommendations that are or are alleged to be deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected. Other companies have experienced cybersecurity incidents that implicate confidential and proprietary company data and/or the personal data of end users of AI applications integrated into their software offerings or used in their operations. If we were to experience a cybersecurity incident, whether related to the integration of AI capabilities into our product offerings or our use of AI applications in our operations, our business and results of operations could be adversely affected. AI also presents various emerging legal, regulatory and ethical issues, and the incorporation of AI into our product offerings and our use of AI applications in our operations could require us to expend significant resources in developing, testing and maintaining our product offerings and may cause us to experience brand, reputational, or competitive harm, or incur legal liability. Jurisdictions that we operate in may decide to establish extensive new standards for AI safety and security or adopt similar or more restrictive legislation that may render the use of such technologies challenging. These restrictions may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI.

***We intend to use and leverage open-source technology which may create risks of security weaknesses.***

Some parts of our technology may be based on open-source technology. There is a risk that the development team or other third parties may intentionally or unintentionally introduce weaknesses or bugs into the core infrastructure elements of our technology solutions interfering with the use of such technology or causing loss to us.

**Risks Relating to our Customers**

***A delay in the completion of our customers' budget processes could delay purchases of our products and services and have an adverse effect on our business, operating results and financial condition.***

We rely on our customers to purchase products and services from us to maintain and increase our earnings, and customer purchases are frequently subject to budget constraints, multiple approvals and unplanned administrative, processing and other delays. If sales expected from a specific customer are not realized when anticipated or at all, our results could fall short of public expectations and our business, operating results and financial condition could be materially adversely affected.

***We rely on a limited number of key customers, the importance of which may vary dramatically from year to year, and a loss of one or more of these key customers may adversely affect our operating results.***

Our top three customers accounted for approximately 40% and 24% of our gross revenue during the year ended December 31, 2025 and the year ended December 31, 2024, respectively. One customer accounted for 16% of our gross revenue in 2025, and a separate customer accounted for 10% of our gross revenue in 2024; however, each of these customers may or may not continue to be a significant contributor to revenue in 2026. The loss of a significant amount of business from one of our major customers would materially and adversely affect our results of operations until such time, if ever, as we are able to replace the lost business. Significant customers or projects in any one period may not continue to be significant customers or projects in other periods. To the extent that we are dependent on any single customer, we are subject to the risks faced by that customer to the extent that such risks impede the customer's ability to stay in business and make timely payments to us.

**Risks Relating to our Industry**

***Our competitiveness depends significantly on our ability to keep pace with the rapid changes in our industry. Failure to anticipate and meet our customers' technological needs could adversely affect our competitiveness and growth prospects.***

We operate and compete in an industry characterized by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, product enhancements, services and distribution methods. Our success depends on our ability to develop expertise with these new products, product enhancements, services and distribution methods and to implement solutions that anticipate and respond to rapid changes in technology, the industry, and customer needs. The introduction of new products, product enhancements and distribution methods could decrease demand for current products or render them obsolete. Sales of products and services can be dependent on demand for specific product categories, and any change in demand for or supply of such products could have a material adverse effect on our net sales if we fail to adapt to such changes in a timely manner.

There can be no assurances that consumer or commercial demand for our future products will meet, or even approach, our expectations. In addition, our pricing and marketing strategies may not be successful. Lack of customer demand, a change in marketing strategy and changes to our pricing models could dramatically alter our financial results. Unless we are able to release location-based products that meet a significant market demand, we will not be able to improve our financial condition or the results of our future operations.

***We operate in a highly competitive market, and we may be required to reduce the prices for some of our products and services to remain competitive, which could adversely affect our results of operations.***

Our industry is developing rapidly, and related technology trends are constantly evolving. In this environment, we face, among other things, significant price competition from our competitors. As a result, we may be forced to reduce the prices of the products and services we sell in response to offerings made by our competitors and may not be able to maintain the level of bargaining power that we have enjoyed in the past when negotiating the prices of our products and services.

Our profitability is dependent on the prices we are able to charge for our products and services. The prices we are able to charge for our products and services are affected by a number of factors, including:

● our customers' perceptions of our ability to add value through our products and services;

● introduction of new products or services by us or our competitors;

● our competitors' pricing policies;

● our ability to charge higher prices where market demand or the value of our products or services justifies it;

● procurement practices of our customers; and

● general economic and political conditions.

If we are not able to maintain favorable pricing for our products and services, our results of operations could be adversely affected.

***If our products fail to satisfy customer demands or to achieve increased market acceptance our results of operations, financial condition and growth prospects could be materially adversely affected.***

The market acceptance of our products is critical to our continued success. Demand for our products is affected by a number of factors beyond our control, including continued market acceptance, the timing of development and release of new products by competitors, technological change, and growth or decline in the mobile device management market. We expect the proliferation of mobile devices to lead to an increase in the data security demands of our customers, and our products may not be able to scale and perform to meet those demands. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of these products, our business operations, financial results and growth prospects will be materially and adversely affected.

There is also a possibility of future tariffs, trade protection measures, import or export regulations or other restrictions imposed on our products or on our customers by the United States, China or other countries that could have a material adverse effect on our business. A significant trade disruption or the establishment or increase of any tariffs, trade protection measures or restrictions could result in lost sales adversely impacting our reputation and business. A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently do business or any resulting negative sentiments towards the United States could adversely affect our supply chain economics, consolidated revenue, earnings and cash flow.

***We may not be able to develop new products or enhance our product to keep pace with our industry's rapidly changing technology and customer requirements.***

The industry in which we operate is characterized by rapid technological changes, new product introductions, enhancements, and evolving industry standards. Our business prospects depend on our ability to develop new products and applications for our technology in new markets that develop as a result of technological and scientific advances, while improving performance and cost-effectiveness. New technologies, techniques or products could emerge that might offer better combinations of price and performance than the artificial intelligence technology solutions that are being developed by us. It is important that we anticipate changes in technology and market demand. If we do not successfully innovate and introduce new technology into our anticipated technology solutions or effectively manage the transitions of our technology to new product offerings, our business, financial condition and results of operations could be harmed.

**Risks Relating to External Factors and Third Parties**

***We may enter into joint ventures, teaming and other arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have material adverse results on our business and results of operations.***

We may enter into joint ventures, teaming and other arrangements. These activities involve risks and uncertainties, including the risk of the joint venture or applicable entity failing to satisfy its obligations, which may result in certain liabilities to us for guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. A failure of our business relationships could have a material adverse effect on our business and results of operations.

***Our business and operations expose us to numerous legal and regulatory requirements and any violation of these requirements could harm our business.***

We are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anticorruption, import/export controls, trade restrictions, internal control and disclosure control obligations, securities regulation and anti-competition. Compliance with diverse and changing legal requirements is costly, time-consuming and requires significant resources. We are also focused on expanding our business in certain identified growth areas, such as health information technology, energy and environment, which are highly regulated and may expose us to increased compliance risk. Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

***Global events and other general economic factors may impact our results of operations.***

Global events and other general economic factors that are beyond our control may impact our results of operations. These factors can include interest rates; economic downturn; recession; inflation; unemployment trends; the threat or possibility of war, terrorism or other global or national unrest; political or financial instability; and other matters that influence our customers spending. Increasing volatility in financial markets and changes in the economic climate could adversely affect our results of operation. The impact that these global events will have on general economic conditions is continuously evolving and the ultimate impact that they will have on our results of operations continues to remain uncertain. There are no assurances that we will be able to experience growth or not be materially adversely affected.

***Our businesses, results of operations and financial condition could be adversely affected by ongoing international conflicts and related disruptions in the global economy.***

The global economy has been negatively impacted by the military conflict between Russia and Ukraine, and the ongoing conflicts in the Middle East (including the conflict between Iran and Israel and the United States' military actions against Iran**)** has caused political, economic, and military instability in Israel and surrounding regions. While we have no operations in Russia, Ukraine, Iran, Israel, Palestine, or surrounding areas, our business may be indirectly adversely affected by this conflict and its effects, including as a result of financial and economic sanctions imposed by governments in the U.S., United Kingdom and European Union, among others, on certain industry sectors and parties in Russia.

We are unable to predict the impact of either the ongoing conflicts in the Middle East (including the conflict between Iran and Israel and the United States' military actions against Iran**)** or the Russia-Ukraine conflict on our business or the global economy. The impact of further escalation of geopolitical tensions related to these conflicts, including increased trade barriers or restrictions on global trade, is unknown and could result in, among other things, heightened cybersecurity threats, protracted or further increased inflation, lower consumer demand, fluctuations in interest and foreign exchange rates and increased volatility in financial markets, any of which could adversely affect our businesses, results of operations and financial condition.

***Our international business exposes us to geo-political and economic factors, legal and regulatory requirements, public health and other risks associated with doing business in foreign countries.***

We provide our products and services to customers worldwide. These risks differ from and potentially may be greater than those associated with our domestic business.

Our international business is sensitive to changes in the priorities and budgets of international customers and geo-political uncertainties, which may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic and political factors, risks and uncertainties, as well as U.S. foreign policy.

Our international sales are also subject to local government laws, regulations and procurement policies and practices, which may differ from U.S. Government regulations, including regulations relating to import-export control, investments, exchange controls and repatriation of earnings, as well as to varying currency, geo-political and economic risks. Our international contracts may include industrial cooperation agreements requiring specific in-country purchases, manufacturing agreements or financial support obligations, known as offset obligations, and provide for penalties if we fail to meet such requirements. Our international contracts may also be subject to termination at the customer's convenience or for default based on performance and may be subject to funding risks. We also are exposed to risks associated with using foreign representatives and consultants for international sales and operations and teaming with international subcontractors, partners and suppliers in connection with international programs. As a result of these factors, we could experience award and funding delays on international programs and could incur losses on such programs, which could negatively affect our results of operations and financial condition.

We are also subject to a number of other risks including:

● the absence in some jurisdictions of effective laws to protect our intellectual property rights;

● multiple and possibly overlapping and conflicting tax laws;

● restrictions on movement of cash;

● the burdens of complying with a variety of national and local laws;

● political instability;

● currency fluctuations;

● longer payment cycles;

● restrictions on the import and export of certain technologies;

● price controls or restrictions on exchange of foreign currencies; and

● trade barriers.

In addition, our international operations (or those of our business partners) could be subject to natural disasters such as earthquakes, tsunamis, flooding, typhoons, and volcanic eruptions that disrupt manufacturing or other operations. There may be conflict or uncertainty in the countries in which we operate, including public health issues, avian influenza, measles or Ebola), safety issues, natural disasters, fire, disruptions of service from utilities, nuclear power plant accidents or general economic or political factors. With respect to political factors, the United Kingdom's 2016 referendum, commonly referred to as "Brexit," has created economic and political uncertainty in the European Union. Also, the European Union's General Data Protection Regulation imposes significant new requirements on how we collect, process and transfer personal data, as well as significant fines for non-compliance. Any of the above risks, should they occur, could result in an increase in the cost of components, production delays, general business interruptions, delays from difficulties in obtaining export licenses for certain technology, tariffs and other barriers and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign laws, any of which could ultimately have a material adverse effect on our business.

***Difficult conditions in the global capital markets and the economy generally may materially adversely affect our business and results of operations, and we do not expect these conditions to improve in the near future.***

Our results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. Weak economic conditions generally, sustained uncertainty about global economic conditions, or a prolonged or further tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. Concerns over inflation, energy costs, geopolitical issues and the availability of credit in the U.S. have contributed to increased volatility and diminished expectations for the economy and the markets going forward. These factors, combined with volatile oil prices and wavering business and consumer confidence, have precipitated an economic slowdown and uncertain global outlook. Domestic and international equity markets have been experiencing heightened volatility and turmoil. These events and the continuing market upheavals may have an adverse effect on our business. In the event of extreme prolonged market events, such as the global economic recovery, we could incur significant losses.

***Changes in U.S. administrative policy, including changes to existing trade agreements and any resulting changes in international relations, could adversely affect our financial performance and supply chain economics.***

As a result of changes to U.S. administrative policy, among other possible changes, there may be (i) changes to existing trade agreements; (ii) greater restrictions on free trade generally; and (iii) significant increases in tariffs on goods imported into the United States, particularly those manufactured in China. China is currently a leading global source of hardware products, including the hardware products that we use. Since 2018, the United States and China have been engaged in a prolonged trade dispute that has resulted in several rounds of escalating tariffs imposed by both countries. While the U.S. and China entered into Phase One of the Economic and Trade Agreement Between the United States of America and the People's Republic of China (the "Phase One Trade Agreement") in January 2020, which took steps to ease certain trade tensions, including tensions involving intellectual property theft and forced intellectual property transfers by China, the broader trade relationship has since deteriorated significantly. In 2025, the U.S. administration imposed substantial new tariffs on a wide range of Chinese goods, and China has responded with retaliatory tariffs and other countermeasures. These actions have contributed to heightened uncertainty regarding the future of U.S.-China trade relations, and the risk of further escalation remains. The imposition of additional tariffs, export controls, or other trade restrictions by either country could adversely affect our ability to source our hardware products and therefore our ability to manufacture our products. Our ability to manufacture our products could also be affected by economic uncertainty in China or by our failure to establish a positive reputation and relationships in China. The occurrence of any of these events could have an adverse effect on our ability to source the components necessary to manufacture our products, which, in turn, could cause our long-term business, financial condition and operating results to be materially adversely affected.

***Domestic and foreign government regulation and enforcement of data practices and data tracking technologies is expansive, broadly defined and rapidly evolving. Such regulation could directly restrict portions of our business or indirectly affect our business by constraining our customers' use of our technology and services or limiting the growth of our markets.***

Federal, state, municipal and/or foreign governments and agencies have adopted and could in the future adopt, modify, apply or enforce laws, policies, and regulations covering user privacy, data security, technologies that are used to collect, store and/or process data, and/or the collection, use, processing, transfer, storage and/or disclosure of data associated with individuals. The categories of data regulated under these laws vary widely, are often broadly defined, and subject to new applications or interpretation by regulators. The uncertainty and inconsistency among these laws, coupled with a lack of guidance as to how these laws will be applied to current and emerging indoor positioning analytics technologies, creates a risk that regulators, lawmakers or other third parties, such as potential plaintiffs, may assert claims, pursue investigations or audits, or engage in civil or criminal enforcement. These actions could limit the market for our services and technologies or impose burdensome requirements on our services and/or customers' use of our services, thereby rendering our business unprofitable.

Some features of our services may trigger the data protection requirements of certain foreign jurisdictions, such as the EU General Data Protection Regulation (the "GDPR"), and the EU ePrivacy Directive. In addition, our services may be subject to regulation under current or future laws or regulations. For instance, the EU ePrivacy Directive is soon to be replaced in its entirety by the ePrivacy Regulation, which will bring with it an updated set of rules relevant to many aspects of our business. If our treatment of data, privacy practices or data security measures fail to comply with these current or future laws and regulations in any of the jurisdictions in which we collect and/or process information, we may be subject to litigation, regulatory investigations, civil or criminal enforcement, financial penalties, audits or other liabilities in such jurisdictions, or our customers may terminate their relationships with us. In addition, data protection laws, such as the GDPR, foreign court judgments or regulatory actions could affect our ability to transfer, process and/or receive transnational data that is critical to our operations, including data relating to users, customers, or partners outside the United States. For instance, the GDPR restricts transfers of personal data outside of the European Economic Area, including to the United States, subject to certain requirements. Such data protection laws, judgments or actions could affect the manner in which we provide our services or adversely affect our financial results if foreign customers and partners are not able to lawfully transfer data to us.

This area of the law is currently under intense government scrutiny and many governments, including the U.S. government, are considering a variety of proposed regulations that would restrict or impact the conditions under which data obtained from individuals could be collected, processed, stored, transferred, sold or shared with third parties. In addition, regulators such as the Federal Trade Commission and the California Attorney General are continually proposing new regulations and interpreting and applying existing regulations in new ways. For example, in June 2018, California passed the California Consumer Privacy Act (the "CCPA"), which provides new data privacy rights for consumers and new informational, disclosure and operational requirements for companies, effective January 2020. Fines for noncompliance may be up to $7,500 per violation. The burdens imposed by the GDPR and CCPA, and changes to existing laws or new laws regulating the solicitation, collection, processing, or sharing of personal and consumer information, and consumer protection could affect our customers' utilization of our services and technology and could potentially reduce demand or impose restrictions that make it more difficult or expensive for us to provide our services.

In addition, ongoing legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the European Economic Area to the United States could result in further limitations on the ability to transfer data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S. and Swiss-U.S. Privacy Shield frameworks and the European Commission's Model Contractual Clauses, each of which are currently under particular scrutiny. Additionally, certain countries have passed or are considering passing laws requiring local data residency. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, any of which could harm our business.

Furthermore, the uncertain and shifting regulatory environment and trust climate may cause concerns regarding data privacy and may cause our customers or our customers' customers to resist providing the data necessary to allow our customers to use our services effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our products or services and could limit adoption of our cloud-based solutions.

***If our customers fail to abide by applicable privacy laws or to provide adequate notice and/or obtain any required consent from end users, we could be subject to litigation or enforcement action or reduced demand for our services.***

Our customers utilize our services and technologies to track connected devices anonymously and we must rely on our customers to implement and administer notice and choice mechanisms required under applicable laws. If we or our customers fail to abide by these laws, it could result in litigation or regulatory or enforcement action against our customers or against us directly.

***Any actual or perceived failure to comply with our privacy policy or legal or regulatory requirements in one or multiple jurisdictions could result in proceedings, actions or penalties against us.***

Any failure or perceived failure to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations or other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personal data or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations could result in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.

***Changes in U.S. and foreign government administrative policy, including the imposition of or increases in tariffs and changes to existing trade agreements could have a material adverse effect on us.***

As a result of changes to U.S. and foreign government administrative policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, the imposition of or significant increases in tariffs on goods imported into the U.S., including tariffs on products manufactured in China, Canada, or Mexico, and adverse responses by foreign governments to U.S. trade policies, among other possible changes. During 2025, the U.S. administration imposed significant new tariffs on imports from a number of countries, including China, Canada, and Mexico, and has signaled its intent to further expand or increase tariffs on additional goods and trading partners. Foreign governments, including China, Canada, and Mexico, have responded with retaliatory tariffs and other countermeasures targeting U.S. goods and businesses. These developments have contributed to increased trade tensions and economic uncertainty globally. A continued or escalating trade war, additional governmental action related to tariffs or trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently develop and sell products, and any resulting negative sentiments towards the U.S. as a result of such changes, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

***Evolving and changing definitions of what constitutes "Personal Information" and "Personal Data" within the EU, the United States and elsewhere, may limit or inhibit our ability to operate or expand our business, including limiting technology alliance partners that may involve the sharing of data.***

If we are perceived to cause, or are otherwise unfavorably associated with, violations of privacy or data security requirements, it may subject us or our customers to public criticism, financial penalties and potential legal liability. Existing and potential privacy laws and regulations concerning privacy and data security and increasing sensitivity of consumers to unauthorized processing of personal data may create negative public reactions to technologies, products and services such as ours. Public concerns regarding personal data processing, privacy and security may cause some of our customers' end users to be less likely to visit their venues or otherwise interact with them. If enough end users choose not to visit our customers' venues or otherwise interact with them, our customers could stop using our platform. This, in turn, may reduce the value of our service, and slow or eliminate the growth of our business, or cause our business to contract.

Around the world, there are numerous lawsuits in process against various technology companies that process personal information and personal data. If those lawsuits are successful, it could increase the likelihood that our company may be exposed to liability for our own policies and practices concerning the processing of personal data and could hurt our business. Furthermore, the costs of compliance with, and other burdens imposed by laws, regulations and policies concerning privacy and data security that are applicable to the businesses of our customers may limit the use and adoption of our technologies and reduce overall demand for it. Privacy concerns, whether or not valid, may inhibit market adoption of our technologies. Additionally, concerns about security or privacy may result in the adoption of new legislation that restricts the implementation of technologies like ours or require us to make modifications to our existing services and technology, which could significantly limit the adoption and deployment of our technologies or result in significant expense.

**Item 1B. Unresolved Staff Comments.**

As a smaller reporting company, we are not required to provide this information.

**Item 1C. Cybersecurity.**

**Risk Management and Strategy**

CXApp's information security program is designed to identify, assess, and manage risks to the confidentiality, integrity, and availability of the Company's information assets and is implemented based on ISO 27001 and SOC 2 frameworks.

***Risk Management Program***

As part of its information security program, CXApp maintains a risk management program that includes the identification, evaluation, and treatment of risks across the organization's information assets, including risks arising from cybersecurity threats. The risk management program addresses uncertainties related to information assets in order to help ensure that desired business outcomes are achieved. CXApp performs formal risk assessments on an annual basis to identify security risks related to its corporate operations, products, and services and initiates appropriate remediation activities where necessary.

CXApp's information security program is aligned with the Company's business objectives and establishes processes governing the identification of risks, assignment of risk ownership, evaluation of how risks impact the confidentiality, integrity, and availability of information, and determination of appropriate risk treatment methods. A formal risk assessment methodology has been approved by management and is applied consistently across the organization.

The risk management framework includes guidelines for identifying and estimating the cost of protective measures designed to eliminate or reduce security risks to an acceptable level. All operations, products, services, information assets, and information systems that are owned and operated by CXApp are assessed for risks resulting from threats to the integrity, availability, and confidentiality of the Company's data.

The risk management program focuses on the following activities:

● **Identification of Strategic Objectives:** Alignment of strategic objectives and risk management to avoid a siloed approach to risk management and to support effective risk assessments.

● **Identification of Risks:** Ongoing identification and documentation of risks that could affect CXApp's strategic objectives, security functions, and business continuity.

● **Analysis of Risks:** Evaluation of the likelihood and potential impact of identified risks and prioritization of risks relative to one another.

● **Mitigation Planning:** Development of decisions and actions designed to reduce the likelihood or impact of risks or to improve the Company's response to risk events.

● **Tracking and Controlling Risks:** Ongoing monitoring, reporting, and management oversight of risks and associated mitigation plans, including adjustments in response to changes in the risk environment.

In addition to annual risk assessments, CXApp monitors cybersecurity risks on an ongoing basis through security monitoring, vulnerability management activities, and periodic reassessment in response to significant changes in the threat landscape or business operations.

CXApp engages independent third-party assessors and auditors in connection with its cybersecurity risk management processes, including for independent assurance examinations, certification audits, and periodic external testing activities. The Company also maintains processes to identify and oversee cybersecurity risks associated with third-party service providers, including through vendor risk assessments, review of independent assurance reports, and contractual security requirements.

**Governance**

As part of the risk management program, responsibility for cybersecurity risk management is distributed across the organization and includes the Information Technology department, system owners, department managers, and executive management.

***Management's Role in Managing Risks***

The Information Technology department is responsible for conducting risk assessments and for prioritizing, implementing, and maintaining appropriate risk-reduction measures identified through the risk assessment process.

Risk owners are individuals who are accountable for ensuring that assigned risks are managed appropriately. Multiple personnel may have direct responsibility for or oversight of activities designed to manage a given risk and work collaboratively with the designated risk owner. Responsibilities for the continued development, implementation, and maintenance of the risk management program are assigned internally.

Executive management is responsible for sponsoring and supporting the risk management program and processes, participating in risk management discussions, and reviewing and approving risk assessments and mitigation plans. As of December 31, 2025, the Company was not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition. For further discussion of risks associated with cybersecurity incidents, see Item 1A. Risk Factors – Risks Relating to Cybersecurity Threats in this Annual Report.

The Company's Senior Director of DevOps and IT is responsible for leading the assessment and management of cybersecurity risks and has prior professional experience in information security, risk management, and technology operations. The Senior Director of DevOps and IT provides regular reports regarding cybersecurity risks and related matters to executive management, the Audit Committee, and the Board of Directors.

***Board of Directors Oversight***

The Board of Directors plays an active role by meeting periodically to review the status of the organization's information security program and roadmap for new cybersecurity risk management initiatives.

The board oversees cybersecurity risk management by evaluating whether management has current cybersecurity policies and procedures, regularly assesses, and monitors cybersecurity risks and receives regular reports on the organization's cybersecurity posture.

**Item 2. Properties.**

Our executive offices are located at Four Palo Alto Square, Suite 200, 3000 El Camino Real, Palo Alto, CA 94306 and our telephone number is 650-785-7171. Through our subsidiary CXApp US, Inc., we lease additional office space in San Ramon, California. We also lease office space in Alabang, Philippines and Ontario, Canada through our subsidiary CXApp Philippines, Inc. and CXApp Canada, Inc., respectively.

The Company believes that the office facilities are sufficient for the foreseeable future and this arrangement will remain until we find a new business opportunity.

**Item 3. Legal Proceedings.**

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**PART II.**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

**(a) Market Information**

Our common stock and warrants currently trade on the Nasdaq Capital Market under the symbols "CXAI" and "CXAIW," respectively. Prior to the consummation of the Business Combination, KINS' Class A common stock and redeemable warrants that were separately traded on the Nasdaq Capital Market under the symbols "KINZ" and "KINZW" respectively.

**(b) Holders**

As of March 24, 2026, there were approximately 104 holders of record of our shares of Class A common stock and approximately 14 holders of record of our redeemable warrants. This includes Cede & Co., which holds shares on behalf of the beneficial owners of the Company's common stock. Because brokers and other institutions hold many of our shares on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

**(c) Dividend Policy**

We have never declared or paid any cash dividends on our common stock to date and do not intend to pay cash dividends. We anticipate that we will retain all available funds and any future earnings, if any, for use in the operation of our business and do not anticipate paying cash dividends in the foreseeable future. In addition, future debt instruments may materially restrict our ability to pay dividends on our common stock. Payment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of then-existing debt instruments and other factors the board of directors deems relevant.

**(d) Securities Authorized for Issuance Under Equity Compensation Plans**

For information required by this item with respect to our equity compensation plans, please see Item 12 of this report.

**(e) Performance Graph**

The performance graph has been omitted as permitted under rules applicable to smaller reporting companies.

**(f) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings**

None.

**(g) Purchase of Equity Securities by the Issuer and Affiliated Purchasers**

None.

**Item 6. [Reserved].**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*References in this report (the "Annual Report") to "we", "us" or the "Company" refer to CXApp Inc. References to our "management" or our "management team" refer to our officers and directors. The following management's discussion and analysis of financial condition and results of operations describes the principal factors affecting the results of our operations, financial condition, and changes in financial condition for the years ended December 31, 2025, and December 2024.*

**Overview of Our Business**

Executive Overview

At CXApp, we are at the forefront of transforming the modern workplace through AI-powered solutions that enhance employee experience, operational efficiency, and workplace intelligence. As a leader in this evolving market, our strategic focus is to drive sustainable growth, scale our enterprise customer base, and deliver innovative solutions that leverage data and artificial intelligence to optimize workplace experiences.

In fiscal year 2025, we focused on three key priorities:

&nbsp;&nbsp;&nbsp;&nbsp;1. **AI-First Product Innovation:** During the year, we continued to strengthen our competitive differentiation through the development of AI-native workplace intelligence tools. Enhancements to our Generative AI analytics platform enabled improved data ingestion, real-time behavioral insights, and predictive modeling capabilities. These innovations support enterprise decision-makers in optimizing space utilization, workforce engagement, and operational agility. Our investment in state-of-the-art AI infrastructure in partnership with Google Cloud (GCP) is enabling intelligent and scalable solutions that will transform the modern workplace.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Subscription Revenue Quality Expansion:** Our customer expansion strategy remained focused on high-value enterprise accounts, particularly across the financial services, healthcare, and technology sectors with subscription based recurring revenue model. We deepened relationships with existing Fortune 1000 clients through expanded deployments and multi-site activations As a result, recurring SaaS revenue accounted for 98% of total revenue in 2025, underscoring the effectiveness of our recurring business model.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Margin Expansion through Cost Discipline:** In 2025, we reduced operating costs by streamlining SG&A and rationalizing our services delivery model. Gross profit totaled $4,005 thousand for the year ended December 31, 2025, compared to $5,857 thousand in the same periods of 2024, respectively. While total revenue declined due to the deliberate de-emphasis of non-recurring professional services, gross margin improved to 87% as we scaled our high-margin SaaS offerings. These actions demonstrate our ability to manage spend responsibly while building a more predictable, capital-efficient business model.

Looking forward, our leadership team remains committed to balancing innovation with financial discipline, ensuring that CXApp is positioned for long-term profitability and strategic growth. By leveraging our AI-driven platform and expanding our enterprise footprint, we aim to deliver scalable, data-driven solutions that address the evolving needs of hybrid workplaces.

Financial Performance Summary

*Revenue Growth and Customer Expansion*

● Fiscal year 2025 recurring revenue increased to 98% from 87%, driven by moving the company to a SaaS based model focused on AI-enabled services.

● Customer base remained stable and diversified, with continued presence across financial services, healthcare, and technology sectors, supporting our focus on high-value, recurring revenue clients.

● The transition to a recurring revenue model has improved revenue predictability and supports our long-term growth objectives.

*Operational Efficiencies and Cost Management*

● Total operating expenses increased to $21,582 thousand for the year ended December 31, 2025, compared to $19,598 thousand for the year ended December 31, 2024. The increase was primarily attributable to the $2,148 thousand goodwill impairment charge recorded during 2025, which was included in operating expenses. Excluding the impact of goodwill impairment, operating expenses declined year over year, reflecting the Company's cost optimization initiatives and continued focus on margin improvement.

● Strategic workforce realignments have ensured resources are allocated to high-impact growth areas.

● We remain focused on optimizing resource allocation, ensuring that investments are targeted toward high-impact areas such as AI development and customer acquisition.

*Cash Flow and Liquidity Position*

● As of year-end, cash and cash equivalents was $11,101 thousand with access to an additional $3,520 thousand from Streeterville Securities Purchase Agreement the Company entered into on May 22, 2024, and $3,200 thousand from Avondale Securities Purchase Agreement the company entered into on March 26, 2025, ensuring flexibility to support future growth.

*Strategic Growth Initiatives*

&nbsp;&nbsp;&nbsp;&nbsp;1. **Product Innovation:** We are expanding our AI-native capabilities, integrating agentic AI for desk booking, advanced analytics, and developing seamless integrations with key enterprise platforms to position CXApp as the go-to solution for hybrid workplace management.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Market Expansion:** By targeting new verticals and strengthening partnerships with cloud providers and key technology platforms, we aim to increase market share and drive cross-selling opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Operational Excellence:** Ongoing cost optimization, customer retention strategies, and sales efficiency initiatives remain key focus areas as we strive to enhance profitability and maintain financial discipline.

*Competitive Positioning and Market Outlook*

● According to industry research, the global employee experience and workplace technology market is expected to grow at a compound annual growth rate (CAGR) exceeding 20% over the coming years. This trend reflects ongoing enterprise investment in hybrid workplace enablement, data-driven decision-making, and employee-centric technology platforms.

● CXApp believes its AI-driven platform offers differentiated capabilities compared to traditional workplace management systems by integrating real-time analytics, behavioral insights, and predictive modeling. These features may support more agile decision-making for customers managing distributed workforces and dynamic office environments.

● While macroeconomic uncertainty persists, the Company continues to observe strong interest from enterprise clients for intelligent, flexible workplace infrastructure. Management believes this demand aligns with the Company's strategy to scale AI-enabled solutions that address evolving operational needs.

*Conclusion*

As we advance our strategic roadmap, CXApp remains focused on executing with discipline and precision. Our AI-first approach, financial discipline, and emphasis on customer-centric innovation are key drivers of our long-term vision to redefine employee experiences in the hybrid workplace. By leveraging our strong foundation and expanding our enterprise footprint, we are well-positioned to deliver sustained growth and value for our stakeholders.

![](img_002.jpg)

**Business Description**

***Company Overview***

CXApp Inc. ("CXAI"), is a provider of enterprise software designed to support employee experience, workplace operations, and organizational decision-making. CXAI delivers a cloud-based platform that integrates digital workplace applications, analytics, and artificial intelligence capabilities intended to improve how employees, administrators, and organizations interact with workplace environments.

CXAI is headquartered in the San Francisco Bay Area, with additional operating locations in Toronto, Canada and Manila, Philippines. The Company serves customers across more than 50 countries, including organizations in regulated industries such as financial services, healthcare, and technology, as well as media and entertainment and consumer sectors.

CXAI's platform is designed to operate within customers' existing enterprise technology environments and is deployed across physical, hybrid, and digital workplace settings.

***Market Context and Opportunity***

Organizations continue to adapt to distributed and hybrid work models, increasing demand for software that supports employee engagement, workplace utilization, and operational efficiency. At the same time, organizations are evaluating the use of artificial intelligence, including agentic AI, to automate tasks, coordinate workflows, and enable more responsive workplace services.

Many organizations, particularly in regulated and complex operating environments, require workplace software that supports configurable policies, governance, and compliance requirements. CXAI's platform is designed to support these requirements through administrative controls and configurable automation.

In addition to serving large enterprises, CXAI is expanding its product offerings and go-to-market approach to address midmarket customers. The Company also identifies opportunities to apply its platform beyond traditional office environments to additional use cases, including retail locations, sports and entertainment venues, healthcare facilities, and other public or shared spaces. These environments present opportunities for agentic, AI-enabled solutions that support workforce coordination, service delivery, and operational visibility.

CXAI competes in the employee experience and workplace technology markets, which include providers of digital workplace applications, analytics platforms, and enterprise software focused on employee engagement and workplace operations.

***Products and Services***

CXAI's primary offering is the CXAI Platform, a modular, cloud-based software platform designed for enterprise and midmarket deployment. The platform includes the following core components:

● **CXAI Applications**: Mobile and web-based applications that provide employees and other users with access to workplace information, communications, and workflows across iOS, Android, kiosk and web environments.

● **CXAI BTS (Behind the Scenes)**: The platform's core infrastructure layer that supports content management, workflow automation, integrations with enterprise systems, and security and compliance controls. CXAI BTS includes a configurable rules engine designed to support complex customer requirements, including policy-based workflows, role-based access controls, and administrative governance.

● **CXAI-VU**: An analytics and AI-enabled insights module that aggregates and analyzes workplace and experience-related data to provide visibility into usage patterns, engagement metrics, and operational trends. CXAI-VU includes natural language processing capabilities that allow administrators to query data and retrieve insights using voice or text-based commands.

● **Agentic AI Capabilities**: AI-enabled functionality designed to support task execution, workflow orchestration, and self-service interactions across workplace, employee, and venue-related use cases.

The CXAI Platform is offered through subscription-based licensing arrangements and is available for deployment through major cloud service providers, including Amazon Web Services, Google Cloud Platform, and Microsoft Azure. The Company also provides implementation, configuration, and ongoing support services in connection with customer deployments.

![](img_003.jpg)

***Revenue Model***

CXAI generates revenue through a mix of:

● **SaaS Subscriptions:** Recurring revenue streams from our cloud-based application offerings.

● **Professional Services:** Implementation, customization, and support services tailored to client needs for deployment of the application.

● **Hardware:** Pass through beacons delivered to the customers.

**Revenue Breakdown by Product Category**

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br> **December 31,<br>2025** | **Year ended<br>December 31, <br>2024** |
| Software | $4480 | $6202 |
| Professional services | 73 | 798 |
| Hardware | 30 | 142 |
| **Total revenue** | $**4583** | $**7142** |

---

With 98% of our revenue derived from recurring subscriptions, CXAI enjoys stable and predictable cash flow, further supported by strong net retention rates and customer upsell opportunities.

***Strategic Partnerships***

We have established strategic relationships with leading cloud providers, including Google Cloud, Microsoft Azure, and Amazon Web Services. These partnerships allow us to scale our solutions rapidly, access new markets, and leverage cutting-edge cloud technologies to enhance our offerings.

***Technology and Innovation***

CXAI differentiates itself through proprietary AI technology and a commitment to innovation. Our intellectual property portfolio includes 37 filed patents, with 17 already issued, positioning us as a leader in employee experience software. Our platform leverages generative AI and autonomous agents to automate workflows, drive employee engagement, and optimize resource utilization.

***Competition, Strengths, and Differentiation***

For our employee experience app products, we compete with companies such as Petur, Modo Labs, HqO, Robin Powered, and Comfy. For our mapping product, our competitors include MappedIn, Mapwize, and Esri.

We differentiate ourselves by offering a comprehensive and unified employee experience platform that addresses the evolving needs of modern enterprises.

● One App, Comprehensive Experience. Today's workplace is a dynamic mix of spaces, people, hybrid work, and technology. CXApp consolidates these elements into a single mobile command center, empowering enterprises to foster culture, drive innovation, and enhance employee engagement across distributed workforces.

● Seamless Employee Experience. CXApp serves as the central connection point for employees, helping organizations attract and retain top talent by delivering an intuitive, engaging, and equitable employee experience — whether in-office, remote, or hybrid.

● Versatile and Scalable Functionality. Our platform supports a wide range of use cases, including employee experience, mapping, meeting room reservations, desk booking, campus navigation, facility management, analytics, and security across multiple industries in both the private and public sectors.

● Expansive Ecosystem and Integrations. With over 90 partner integrations (including Slack, Zoom, Office365, Okta, and ServiceNow), CXApp acts as a centralized gateway to an enterprise's communication and productivity tools — streamlining tech stacks and reducing app fatigue.

● Enterprise-Grade Scalability. Our solution grows with our customers, making it easy to onboard employees, expand to new locations globally, and adapt to evolving workplace needs.

● Technology-Agnostic & Open Architecture. Our platform is designed to seamlessly integrate with third-party data, applications, and hardware. Our APIs facilitate data exchange, while our SDKs enable developers to build new applications or integrate location data into existing mobile apps, websites, or kiosks — designed to ensure long-term adaptability and investment protection.

***Competitive Positioning***

CXAI stands out in the competitive landscape through its deep AI integration, employee-first approach, and enterprise-grade security and compliance. Unlike traditional workplace management solutions, our platform offers:

● AI-driven automation to streamline workflows and reduce manual processes.

● Advanced analytics for actionable insights into workplace utilization and engagement.

● Seamless integration with enterprise systems and cloud environments, ensuring efficiency and scalability.

By combining AI-powered intelligence, user-centric design, and enterprise-ready capabilities, CXApp delivers a truly next-generation employee experience platform that sets us apart from the competition.

**Corporate Strategy**

The modern office is no longer confined to a single location. We believe that empowering employees and teams to manage diverse workplace scenarios from their personal devices is the future of work. Enterprise organizations are increasingly recognizing the pivotal role of AI-driven mobile applications in managing distributed workforces and optimizing office environments.

Over the next five years, we anticipate that artificial intelligence (AI) will become a cornerstone of employee experience initiatives. CXApp is uniquely positioned as the central intelligence layer for hybrid workplace models. Our AI-powered employee experience platform integrates advanced analytics, automation, and machine learning to enhance employee engagement, streamline operations, and optimize resource utilization.

Our strategic approach focuses on transforming workplace efficiency through:

● **Smart Workplace Automation**: AI-driven management of desk and meeting room bookings, space allocation, and resource management.

● **Predictive Analytics**: Real-time data analysis to drive informed decision-making regarding space utilization and employee engagement.

● **Contextual Employee Experiences**: AI-powered personalization delivering tailored notifications, workspace suggestions, and relevant content.

● **Proactive Facility Management**: Intelligent mapping and occupancy tracking to prevent operational bottlenecks.

Through an AI-first strategic model, CXApp aims to provide a seamless, intelligent employee experience that adapts to evolving work styles. Our commitment to innovation and enterprise-grade AI solutions ensures that organizations can thrive in an increasingly digital and dynamic work environment.

**Growth Strategy**

Since the launch of our core workplace product in 2017, CXApp has followed a direct-to-customer go-to-market strategy, targeting Fortune 1000 enterprises. This approach has allowed us to establish strong relationships with Fortune 500 companies in the financial services, media, and software industries, solidifying our leadership in enterprise workplace technology.

In addition, our technology partner program has played a crucial role in our expansion. With over 90 partnerships, including integrations with digital lockers, sensors, and single sign-on (SSO) platforms, we offer seamless workflows that enhance the employee experience.

Our future growth strategy focuses on the following key initiatives:

● **Advancing AI-Driven Product Development**: Expanding our platform with AI-powered automation, predictive analytics, and intelligent workplace recommendations to support digital transformation and hybrid workforce evolution.

● **Expanding into New Vertical Markets**: Scaling into industries such as corporate real estate, healthcare, financial services, and technology enterprises to capitalize on growing demand for AI-driven workplace solutions.

● **Strengthening Our Channel Partner Ecosystem**: Enhancing partnerships with Google Cloud and Amazon, while fostering relationships with workplace technology providers, resellers, and enterprise IT integrators.

● **Building AI-Enabled Sales and Marketing Strategies**: Leveraging AI-driven insights to increase brand awareness, expand industry collaborations, and drive thought leadership in workplace technology.

By combining innovation, strategic partnerships, and customer-centric solutions, we are committed to achieving sustainable growth and reinforcing our position as a market leader in employee experience technology.

***Risk Management and Compliance***

We take a proactive approach to risk management by monitoring regulatory changes and implementing robust internal controls. Our compliance programs include adherence to global data privacy standards and security frameworks such as GDPR and SOC 2. By integrating these elements into our business strategy, CXAI is well-positioned to continue driving innovation and delivering value to stakeholders.

**Recent Events**

**Convertible Debt Conversion**

On March 26, 2025, the Company entered into a Securities Purchase Agreement (the "SPA"), pursuant to which Avondale Capital, LLC may issue and sell up to $20,000 thousand shares of the Company's Common Stock and the Company issued an unsecured convertible Pre-Paid Purchase #1 to the Lender. The convertible Pre-Paid Purchase #1 has the original principal amount of $4,200 thousand and Lender gave consideration of $3,990 thousand, reflecting original issue discount of $200 thousand and Lender's transaction cost of $10 thousand. A second tranche was received on August 7, 2025, with a principal amount of $3,150 thousand and net proceeds of approximately $3,000 thousand. The third tranche of the SPA was issued on October 17, 2025, with the principal amount of $5,250 thousand, the company received net proceeds of $5,000 thousand which was received on October 17, 2025. The fourth tranche of the SPA was issued on December 30, 2025, with the principal amount of $4,200 thousand, the company received net proceeds of $4,000 thousand which was received on December 30, 2025. As of December 31, 2025, approximately $3,200 thousand remained available under this agreement.

During the year 2025, the Company converted all outstanding convertible debt in accordance with the agreement with Streeterville Capital LLC, were converted into class A Common Stock equity.

During the year ended December 31, 2025, the Company has issued 13,071,408 shares of the Company's Class A Common Stock pursuant to multiple purchase notices for an exchange amount of $8,102 thousand.

**Shelf Registration Statement (Form S-3)**

On August 11, 2025, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC"), authorizing the future offering and sale of up to $150,000 thousand of various securities. Concurrently, the Company filed a prospectus supplement allowing for the issuance of up to $7,959 thousand of common stock under this registration statement. This amount is included within the total aggregate offering authorized.

Subsequently, the Company commenced sales of its common stock pursuant to the shelf registration. These sales were facilitated through a third-party arrangement with Maxim Group LLC, acting as the Company's agent under an equity distribution agreement. The Company received $648 thousand and issued 782,102 shares of class A common stock, which are intended to be used for general working capital and other general corporate purposes.

**Key Factors Affecting CXApp's Results of Operations**

Our financial position and results of operations depend to a significant extent on the following factors:

***Customer Base***

CXApp serves a diverse range of industries, providing intelligent employee experience solutions to enterprise customers across key sectors such as technology, financial services, consumer goods, healthcare, and media & entertainment. As of December 31, 2025, our customer base spans approximately across 51 countries, with the majority of our customers headquartered in the United States. Our customers include Fortune 1000 companies that rely on our AI-powered CXAI platform to enhance employee engagement, workplace productivity, and operational efficiency. Our strong security and compliance credentials make us a preferred choice for enterprises in highly regulated industries. We focus on delivering value to our customers through innovative solutions, ongoing product enhancements, and dedicated customer success initiatives.

We monitor key performance indicators such as revenue growth, customer expansion, recurring revenue rates, and customer retention to measure our market penetration and growth trajectory. In 2025, approximately 98% of our revenue was recurring, reflecting a significant increase from 87% in 2024.

CXApp's ability to drive revenue growth depends on expanding relationships with existing customers and acquiring new customers by offering high-quality, scalable solutions that address the evolving needs of enterprises. Our direct sales efforts, strategic partnerships, and continuous innovation efforts play a crucial role in customer acquisition and retention. We maintain a diversified customer base, with our top three customers accounting for approximately 40% of our gross revenue in 2025, compared to 24% in 2024.

***Research and Development***

During the year 2025*,* the Company added resources dedicated to developing the Artificial Intelligence (AI) based Augmented Reality (AR), AI based analytics and our CXAI Agentic AI offerings on the CXAI platform. Management believes that this investment in research and development will maintain a competitive position and create opportunities for the Company.

**RESULTS OF OPERATIONS**

***Comparison of the results of operation for the year ended December 31, 2025 and December 31, 2024***

The following table sets forth our results of operations. This data should be read together with our audited financial statements and related notes.

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| | | |
|:---|:---|:---|
| **(in thousands)** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| **Consolidated Statements of Operations Data** |  |  |
| Revenues | $4583 | $7142 |
| Cost of revenues | (578) | (1285) |
| **Gross profit** | 4005 | 5857 |
| Operating expenses | (21582) | (19598) |
| **Loss from operations** | (17577) | (13741) |
| Other income (expense), net | 4058 | (6302) |
| Income tax benefit, provision (expense) | 46 | 635 |
| **Net loss** | $(13473) | $(19408) |

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**Revenues**

Revenue decreased $2.6 million, or 36%, to $4.6 million for the year ended December 31, 2025, compared to $7.1 million for the year ended December 31, 2024. The decrease was attributable to the following:

***Subscription Revenue***

Subscription revenue (software licenses and maintenance contracts) decreased $1.7 million, or 28%, to $4.5 million for the year ended December 31, 2025, from $6.2 million for the year ended December 31, 2024. The decrease represents 67% of the total revenue decline and was primarily driven by customer churn. Customers who did not renew their contracts during 2025 were concentrated in the healthcare and retail verticals, where budget constraints and delayed IT spending impacted renewal rates, particularly among mid-market customers. These decreases were partially offset by revenue from new customer engagements and continued expansion within select enterprise accounts.

The Company's recurring subscription revenue as a percentage of total revenue increased to 98% in 2025 from 87% in 2024, reflecting the Company's successful strategic transition toward a more scalable and capital-efficient SaaS business model with higher-quality recurring revenue streams.

***Professional Services Revenue***

Professional services revenue decreased $0.7 million, or 91%, to $73 thousand for the year ended December 31, 2025, from $798 thousand for the year ended December 31, 2024. This decline represents 28% of the total revenue decline and reflects significantly lower implementation and deployment services activity. The prior year included substantial professional services engagements associated with onboarding several large enterprise customers, with these implementation projects substantially completed in 2024 and not recurring at similar levels in 2025.

The near elimination of professional services revenue also reflects the Company's strategic shift toward a pure SaaS model with enhanced platform maturity and improved customer self-service capabilities, reducing the need for extensive implementation services and improving overall gross margins.

***Hardware Revenue***

Hardware revenue decreased $0.1 million, or 79%, to $30 thousand for the year ended December 31, 2025, from $142 thousand for the year ended December 31, 2024. This decline represents 5% of the total revenue decline and reflects lower hardware sales associated with new customer deployments, as hardware sales typically correlate with new customer onboarding and expansion activities. The reduction in hardware revenue is consistent with the Company's transition to a software-focused business model.

***Strategic Focus***

The Company is focused on improving customer retention through enhanced customer success programs and proactive engagement initiatives, increasing enterprise adoption of its AI-powered workplace experience platform, and expanding recurring subscription revenue to drive sustainable long-term growth. The Company's successful transition to 98% recurring revenue provides a more predictable revenue base and positions the business for improved unit economics and operational leverage.

**Gross Margin**

***Cost of Revenue***

Cost of revenue decreased $0.7 million, or 55%, to $0.6 million for the year ended December 31, 2025, compared to $1.3 million for the year ended December 31, 2024. The decrease was primarily attributable to:

&nbsp;&nbsp;&nbsp;&nbsp;· **Infrastructure and hosting costs** ($411 thousand in 2025): Reduced cloud infrastructure spending driven by lower usage
volumes from decreased active users, coupled with infrastructure optimization initiatives and vendor contract renegotiations that reduced
per-unit costs. Infrastructure and storage costs represent the largest component of cost of revenue at 71% of total COGS.

&nbsp;&nbsp;&nbsp;&nbsp;· **Third-party software licenses** ($106 thousand in 2025): Reduced usage-based licensing costs for integrated third-party
services that scale with active user counts, representing 18% of total COGS.

&nbsp;&nbsp;&nbsp;&nbsp;· **Customer support labor** ($35 thousand in 2025): Costs associated with the Company's Philippines-based customer support
operations, representing 6% of total COGS.

&nbsp;&nbsp;&nbsp;&nbsp;· **Hardware costs** ($26 thousand in 2025): Lower cost of goods sold for hardware, correlating with the 79% decrease in hardware
revenue and representing 5% of total COGS.

The 55% decline in cost of revenue significantly exceeded the 36% revenue decrease, reflecting the shift in revenue mix toward higher-margin subscription revenue (98% of total revenue in 2025 compared to 87% in 2024), the near elimination of lower-margin professional services and hardware revenue, and the Company's successful cost optimization initiatives.

***Gross Profit and Gross Margin***

Gross profit decreased $1.9 million to $4.0 million for the year ended December 31, 2025, from $5.9 million for the year ended December 31, 2024. Gross margin improved 500 basis points from 82.0% to 87.4%. The significant margin improvement was driven by:

&nbsp;&nbsp;&nbsp;&nbsp;· **Revenue mix optimization**: The increase in subscription revenue as a percentage of total revenue from 87% to 98% drove substantial
margin improvement, as subscription revenue carries significantly higher gross margins than professional services (which declined 91%)
and hardware revenue (which declined 79%). Professional services and hardware historically carried lower gross margins due to associated
delivery costs and cost of goods sold.

&nbsp;&nbsp;&nbsp;&nbsp;· **Cost efficiency and optimization**: Infrastructure optimization initiatives and improved operational efficiency reduced per-unit
costs across cloud hosting and third-party software licensing categories. The Company implemented resource right-sizing and vendor contract
renegotiations during 2025 that drove cost savings independent of volume declines.

&nbsp;&nbsp;&nbsp;&nbsp;· **Operating leverage**: The Company successfully reduced absolute COGS dollars by 55% while revenue declined only 36%, demonstrating
improved cost discipline and scalability of the platform infrastructure.

The Company expects to maintain or further improve gross margins as it continues to focus on subscription-based recurring revenue, platform scalability, and ongoing infrastructure optimization. The 87.4% gross margin achieved in 2025 reflects the Company's positioning as a high-margin SaaS business and provides a strong foundation for achieving profitability as the Company returns to revenue growth.

**Operating Expenses**

Operating expenses consist primarily of research and development ("R&D"), sales and marketing ("S&M"), and general and administrative ("G&A") costs. For the year ended December 31, 2025, total operating expenses were $21,582 thousand, compared to $19,598 thousand for the same period in 2024, representing an increase of $1,984 thousand.

The increase was driven by a $2.1 million goodwill impairment charge and increases in G&A and R&D expenses, partially offset by a decrease in S&M expenses. Each operating expense category is discussed in detail below.

***Research and Development***

R&D expenses increased $0.3 million, or 4%, to $6.7 million for the year ended December 31, 2025, from $6.4 million for the year ended December 31, 2024. The increase was primarily attributable to a $400 thousand one-time billing adjustment related to the Company's Google Cloud Platform committed use discount agreement, which required reconciliation of actual usage against the Company's three-year commitment in Q4 2025. This increase was partially offset by lower headcount costs of approximately $100 thousand resulting from delayed backfill timing, as two senior engineers departed in Q2 2025 with replacement hires starting in Q4 2025.

During 2025, the Company continued to invest in developing its Artificial Intelligence (AI)-powered Augmented Reality (AR) capabilities, AI-based analytics, and the CXAI Agentic AI offerings on the Company's platform. Management believes that these investments in research and development will maintain the Company's competitive position and create opportunities for long-term growth.

***Sales and Marketing***

S&M expenses decreased $1.2 million, or 36%, to $2.1 million for the year ended December 31, 2025, from $3.2 million for the year ended December 31, 2024. The decrease was primarily attributable to:

&nbsp;&nbsp;&nbsp;&nbsp;· **Reduced payroll and severance costs**: Lower ongoing sales headcount costs in 2025 following organizational
restructuring in early 2024, combined with the elimination of one-time severance expenses that were incurred in 2024 when certain sales
positions were eliminated.

&nbsp;&nbsp;&nbsp;&nbsp;· **Lower marketing program spending**: Reduced expenditures on events, conferences, and demand generation
campaigns as the Company focused resources on higher return-on-investment enterprise accounts.

&nbsp;&nbsp;&nbsp;&nbsp;· **Decreased sales commissions**: Lower variable compensation correlating with reduced new bookings
and customer acquisition activity.

The Company strategically reallocated its go-to-market resources toward high-ROI enterprise accounts and strategic channel partnerships, resulting in a more cost-efficient sales and marketing model.

***General and Administrative***

G&A expenses increased $0.7 million, or 10%, to $8.0 million for the year ended December 31, 2025, from $7.2 million for the year ended December 31, 2024. The increase was primarily attributable to:

&nbsp;&nbsp;&nbsp;&nbsp;· **Stock-based compensation**: $259 thousand increase resulting from vested RSUs in Q3 2025, with the
Company recording a catch-up in expense attribution.

&nbsp;&nbsp;&nbsp;&nbsp;· **CFO compensation**: $175 thousand increase due to a full twelve months of expense in 2025 compared
to four months in 2024, following the CFO hire in August 2024.

&nbsp;&nbsp;&nbsp;&nbsp;· **Investment advisor consulting**: $150 thousand increase reflecting a full year of engagement fees
in 2025 compared to two quarters in 2024, as the engagement commenced in June 2024.

&nbsp;&nbsp;&nbsp;&nbsp;· **Professional fees**: $597 thousand increase driven by CFO advisory services, fair valuation of convertible
notes, material weakness remediation support, and expanded audit services from Withum.

These increases were partially offset by:

&nbsp;&nbsp;&nbsp;&nbsp;· **Recruitment fees**: $168 thousand decrease as there were no new hires in 2025 compared to search
fees incurred in 2024.

&nbsp;&nbsp;&nbsp;&nbsp;· **Legal fees**: $373 thousand decrease primarily resulting from management's successful negotiation
of a financing and patents with the Company's legal counsel.

***Goodwill Impairment***

During the year ended December 31, 2025, the Company recognized a goodwill impairment charge of $2.1 million.

**Amortization of Intangibles**

Amortization of intangible assets remained consistent at $2.7 million for both the years ended December 31, 2025 and 2024, representing the ongoing amortization of intangible assets acquired in the Business Combination completed on March 14, 2023.

Management believes that the Company's focused investments in R&D innovation, combined with its disciplined approach to sales and marketing efficiency and operational management, position the Company to scale its AI-native offerings while driving long-term operating leverage and improved unit economics.

**Loss From Operations**

Loss from operations for the year ended December 31, 2025, was $17,577 thousand compared to the loss from operations of $13,741 thousand for the year ended December 31, 2024. This increase in loss of $3,836 thousand is primarily attributable to a decrease in gross profit margin and an increase of goodwill impairment.

**Other Income (Expense)**

Other income (expense) for the year ended December 31, 2025, was $4,058 thousand income compared to $6,302 thousand expense for the year ended December 31, 2024. The increase in other income of $10,360 thousand is primarily attributable to $7,700 thousand reduction in the change in fair value of derivative liabilities, plus the decrease in interest expense of $1,055 thousand, loss on debt extinguishment of $1,004 thousand and other expenses of $601 thousand.

**Provision for Income Taxes**

For the year ended December 31, 2025, the Company recorded an income tax benefits of approximately $46 thousand, compared to an income tax benefit of $635 thousand for the year ended December 31, 2024.

**Net Loss**

Net loss for the year ended December 31, 2025, was $13,473 thousand, compared to a net loss of $19,408 thousand for the year ended December 31, 2024, representing an improvement of approximately $5,935 thousand. The year-over-year decrease in net loss was primarily driven by a $7,700 thousand reduction in the change in fair value of derivative liabilities, lower interest expense of $1,055 thousand, a $1,004 thousand decrease in loss on debt extinguishment, and other income of $601 thousand. These improvements were partially offset by a $1,984 thousand increase in operating expenses, a $1,852 thousand decrease in gross margin, and a $589 thousand reduction in income tax benefit.

**Non-GAAP Financial information**

***EBITDA***

This Report includes a non-GAAP measure that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as earnings before interest and other income, tax and depreciation and amortization. Adjusted EBITDA is used by our management as the matrix in which it manages the business. It is defined as EBITDA plus adjustments for other income or expense items, non-recurring items and non-cash stock-based compensation. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods.

Adjusted EBITDA is not a recognized measure under U.S. GAAP and is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Investors should exercise caution in comparing our non-GAAP measure to any similarly titled measure used by other companies.

This non-GAAP measure excludes certain items required by U.S. GAAP and should not be considered as an alternative to information reported in accordance with U.S. GAAP. The table below presents our adjusted EBITDA reconciled to net income, the most comparative GAAP measure, for the periods indicated (in thousands).

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| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,<br>2025** | **Year Ended<br>December 31,<br>2024** |
| **Net loss** | $(13473) | $(19408) |
| &nbsp;&nbsp;&nbsp;Interest expense and other income | 701 | 1753 |
| &nbsp;&nbsp;&nbsp;Income tax (benefit)/provision | (46) | (635) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 2777 | 2811 |
| EBITDA | (10041) | (15479) |
| Adjusted for: |  |  |
| &nbsp;&nbsp;&nbsp;Changes in fair value of derivative liabilities | (4548) | 3152 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 48 | 1052 |
| &nbsp;&nbsp;&nbsp;Impairment of Goodwill | 2148 |  |
| &nbsp;&nbsp;&nbsp;Unrealized (gain) loss | (219) | 318 |
| &nbsp;&nbsp;&nbsp;Loss on contract to issue common stock | 21 | (68) |
| &nbsp;&nbsp;&nbsp;Loss on asset disposal | 4 |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation - compensation and related benefits | 2784 | 2831 |
| Adjusted EBITDA | $(9803) | $(8194) |

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We rely on Adjusted EBITDA, which is a non-GAAP financial measure for the following:

● To compare our current operating results with corresponding periods and with the operating results of other companies in our industry;

● As a basis for allocating resources to various projects;

● As a measure to evaluate potential economic outcomes of acquisitions, operational alternatives and strategic decisions; and

● To evaluate internally the performance of our personnel.

We have presented Adjusted EBITDA above because we believe it conveys useful information to investors regarding our operating results. We believe it provides an additional way for investors to view our operations, when considered with both our GAAP results and the reconciliation to net income (loss). By including this information, we can provide investors with a more complete understanding of our business. Specifically, we present Adjusted EBITDA as supplemental disclosure because of the following:

● We believe Adjusted EBITDA is a useful tool for investors to assess the operating performance of our business without the effect of interest, income taxes, depreciation and amortization and other non-cash items including financing costs, changes in fair value of warrant liabilities, loss on debt extinguishment unrealized (gains) losses, goodwill impairment, stock-based compensation;

● We believe that it is useful to provide investors with a standard operating metric used by management to evaluate our operating performance; and

● We believe that the use of Adjusted EBITDA is helpful to compare our results to other companies.

Even though we believe Adjusted EBITDA is useful for investors, it does have limitations as an analytical tool. Thus, we strongly urge investors not to consider this metric in isolation or as a substitute for net income (loss) and the other consolidated statement of operations data prepared in accordance with GAAP. Some of these limitations include the fact that:

● Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

● Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

● Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

● Adjusted EBITDA does not reflect income or other taxes or the cash requirements to make any tax payments; and

● Other companies in our industry may calculate Adjusted EBITDA differently than we do, thereby potentially limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business or as a measure of performance in compliance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and providing Adjusted EBITDA only as supplemental information.

***Liquidity and Capital Resources***

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities.

As of December 31, 2025, the Company has a working capital surplus of approximately $7,075 thousand and cash of approximately $11,101 thousand. For the period ended December 31, 2025, the Company incurred net loss of approximately $13,473 thousand and used approximately $10,381 thousand of cash for operating activities. For the year ended December 31, 2024, the Company incurred net loss of approximately $19,408 and used approximately $7,325 thousand cash for operating activities.

Management believes that the Companies current liquidity position is sufficient for the next twelve months, including under the SPA with the Streeterville Capital, LLC, pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company's Common Stock, par value $0.0001, with $3,520 thousand still available to withdraw. On March 26, 2025, the Company entered into a SPA with Avondale Capital, LLC, pursuant to which the Lender desires to purchase up to $20,000 thousand in shares of the Company's Common Stock, par value $0.0001, with $3,200 thousand still available to withdraw.

***Liquidity and Capital Resources as of December 31, 2025, Compared with December 31, 2024***

The Company's net cash flows used in operating, investing and financing activities and certain balances are as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year Ended<br> December 31,<br> 2024** |
| **Cash flows (used in) provided by** |  |  |
| Net cash used in operating activities | $(10381) | $(7325) |
| &nbsp;&nbsp;&nbsp;Net cash used in investing activities | (23) | (30) |
| Net cash provided by financing activities | 16638 | 5980 |
| &nbsp;&nbsp;&nbsp;Effect of exchange rates on cash | (13) | (20) |
| **Net increase (decrease) in cash and cash equivalents** | $6221 | $(1395) |

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| | | |
|:---|:---|:---|
|  | **Year ended<br>December 31,<br>2025** | **Year ended<br>December 31,<br>2024** |
| Cash and cash equivalents | $11101 | $4880 |
| Working capital surplus (deficit) | $7075 | $(4496) |

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**Operating Activities for the years ended December 31, 2025, and 2024**

Net cash used in operating activities during the period consisted of the following (in thousands):

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| | | |
|:---|:---|:---|
|  | **Year ended<br>December 31,<br>2025** | **Year ended<br>December 31,<br>2024** |
| Net loss | $(13473) | $(19408) |
| Non-cash income and expense | 4202 | 11802 |
| Net change in operating assets and liabilities | (1110) | 281 |
| Net cash used in operating activities | $(10381) | $(7325) |

---

The non-cash incomes were approximately $4,202 thousand, and $11,802 thousand for the years ended December 31, 2025 and December 31, 2024, respectively:

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| | | |
|:---|:---|:---|
|  | **Year ended<br>December 31,<br>2025** | **Year ended<br>December 31,<br>2024** |
| Depreciation and amortization | $2777 | $2811 |
| Amortization of right of use asset | 386 | 391 |
| Amortization of debt discount and deferred financing cost |  | 862 |
| Accrued interest expense on promissory note and convertible debt | 881 | 817 |
| Accrued monitoring fee on promissory note |  | 273 |
| Stock-based compensation expense | 2784 | 2831 |
| (Gain) loss on change in fair value of derivative liability | (4548) | 3152 |
| Impairment of goodwill | 2148 |  |
| Deferred income taxes | (46) | (635) |
| Loss on debt extinguishment | 48 | 1052 |
| Loss on asset disposal | 4 |  |
| (Gain) loss on foreign currency transactions | (245) | 316 |
| (Gain) loss on contract to issue common stock | 20 | (68) |
| Gain on debt settlement | (7) | - |
| Total non-cash expenses | $4202 | $11802 |

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The net cash used in the change in operating assets and liabilities were approximately $1,110 thousand, for the year ended December 31, 2025 and net cash provided in the change in operating assets and liabilities were approximately $281 thousand for the year ended December 31, 2024, respectively:

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| | | |
|:---|:---|:---|
| **Changes in Operating Assets and Liabilities** | **Year ended**<br>**December 31,**<br> **2025** | **Year ended**<br>**December 31,**<br> **2024** |
| Accounts receivable and other receivables | $825 | $372 |
| Prepaid expenses and other current assets and other assets | (343) | 162 |
| Other assets | (19) | 23 |
| Accounts payable | 264 | (453) |
| Accrued liabilities and other liabilities | (225) | 771 |
| Operating lease liabilities | (392) | (407) |
| Deferred revenue | (1220) | (187) |
| Net cash used in the changes in operating assets and liabilities | $(1110) | $281 |

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**Cash Flows from Investing Activities for the years ended December 31, 2025, and December 31, 2024**

Net cash flows used in investing activities during the year ended December 31, 2025 was approximately $23 thousand compared to net cash flows provided by investing activities for the year ended December 31, 2024 was approximately $30 thousand. Cash flows related to investing activities during the years ended December 31, 2025 and December 31, 2024 is attributable to the purchases of property and equipment.

**Cash Flows from Financing Activities for the years ended December 31, 2025, and December 31, 2024**

Net cash flows provided by financing activities during the year ended December 31, 2025 was approximately $16,638 thousand compared to net cash flows provided by financing activities for the year ended December 31, 2024 was approximately $5,980 thousand.

On March 26, 2025, the Company entered into a Securities Purchase Agreement with Avondale Capital, LLC, under which the Company may issue and sell one or more Pre-Paid Purchase Agreements for up to an aggregate of $20,000 thousand in exchange for shares of its common stock. The initial Pre-Paid Purchase, in the principal amount of $4,200 thousand, was structured with a $200 thousand original issue discount ("OID") and $10 thousand in transaction-related fees, resulting in net proceeds of approximately $3,990 thousand, which were received on April 8, 2025. The second tranche of the SPA was issued on August 7, 2025, with the principal amount of $3,150 thousand, was structured with $150 thousand of OID, net proceeds of $3,000 thousand which was received on August 7, 2025. The third tranche of the SPA was issued on October 17, 2025 with the principal amount of $5,250 thousand structured with $250 thousand, net proceeds of $5,000 thousand which was received on October 17, 2025. The fourth tranche of the SPA was issued on December 30, 2025 with the principal amount of $4,200 thousand was structured with $200 thousand, net proceeds of $4,000 thousand which was received on December 30, 2025.

On August 11, 2025, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC"), authorizing the future offering and sale of up to $150.0 million of various securities. Concurrently, the Company filed a prospectus supplement allowing for the issuance of up to $7.959 million of common stock under this registration statement. This amount is included within the total aggregate offering authorized.

Subsequently, the Company commenced sales of its common stock pursuant to the shelf registration. These sales were facilitated through a third-party arrangement with Maxim Group LLC, acting as the Company's agent under an equity distribution agreement. The Company received $648 thousand and issued 782,102 shares of class A Common Stock, which are intended to be used for general working capital and other general corporate purposes.

On May 22, 2024, the Company entered into the "SPA with the Lender, pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company's Common Stock, par value $0.0001. Pursuant to SPA, the Company issued three unsecured convertible Pre-Paid Purchases to Lender. The convertible Pre-Paid Purchases have original principal amount of $6,825 thousand. For the year ended December 31, 2024, the Company received net proceeds of $6,480 thousand, reflecting original issue discount of $325 thousand and Lender's transaction cost of $20 thousand. During the year ended December 31, 2024, the Company paid $500 thousand in cash outflows for a repayment of the promissory note.

**Off-Balance Sheet Arrangements**

We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

**Contractual Obligations and Commitments**

Contractual obligations are cash that we are obligated to pay as part of certain contracts that we have entered during our course of business. Our contractual obligations consist of operating lease liabilities that are included in our balance sheet. As of December 31, 2025, the total obligation for operating leases is approximately $226 thousand, of which approximately $204 thousand is expected to be paid in the next twelve months.

**Financing Obligations and Requirements**

Net cash used in operating activities for the year ended December 31, 2025 was $10,381 thousand, reflecting a net loss of $13,473 thousand adjusted for non-cash items and changes in working capital. During the year, the Company raised net proceeds of approximately $15,990 thousand under the SPA entered into on March 26, 2025, and also maintained access to additional liquidity sources, including remaining capacity under its financing arrangements and its at-the-market equity program, subject to market conditions such as stock price, trading volume, and issuance limitations. Management continues to implement expense-management initiatives and working-capital optimization measures and expects to use financing sources that are reasonably accessible to support operations. Based on current cash balances, expected collections, and management's cost-management actions, the Company believes it has sufficient liquidity to meet its working capital needs and other operating requirements for at least the next 12 months from the issuance date of the financial statements and thereafter for the reasonably foreseeable future.

**Critical Accounting Policies and Estimates**

Our consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 2 of the consolidated financial statements that are included elsewhere in this filing. We believe that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. There have been no changes to estimates during the periods presented in the filing. Historically changes in management estimates have not been material.

**Revenue Recognition**

The Company recognizes revenue, in accordance with ASC 606 "Revenue from Contracts with Customers" ("ASC 606"), when control of the promised products or services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. The Company derives revenue from its software as a service for cloud-based software, as well as design, implementation, other professional services for work performed in conjunction with its cloud-based software, and sale of hardware. The Company enters into contracts with its customers whereby it grants a non-exclusive cloud-based license for the use of its proprietary software and for professional services. The contracts may also provide for on-going services for a specified price, which may include maintenance services, designated support, and enhancements, upgrades and improvements to the software, depending on the contract. Licenses for cloud software provide the customer with a right to use the software as it exists when made available to the customer. All software provides customers with the same functionality and differs mainly in the duration over which the customer benefits from the software.

*License Subscription Revenue Recognition (Software As A Service)*

The timing of the Company's revenue recognition related to the licensing revenue stream is dependent on whether the software licensing agreement entered into represents a service. Software that relies on an entity's IP and is delivered only through a hosting arrangement, where the customer cannot take possession of the software, is a service. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software.

The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous access to its service. The Company's customers generally pay within 30 to 60 days from the receipt of a customer approved invoice.

*Professional Services Revenue Recognition*

Professional services under milestone contracts are accounted for using the percentage of completion method. As soon as the outcome of a contract can be estimated reliably, contract revenue is recognized in the statement of operations in proportion to the stage of completion of the contract. Contract costs are expensed as incurred. Contract costs include all amounts that relate directly to the specific contract, are attributable to contract activity, and are specifically chargeable to the customer under the terms of the contract.

*Hardware Revenue Recognition*

For sales of hardware, the Company's performance obligation is fulfilled when the products are shipped to the customer, transferring title and ownership risks. Deliveries occur via drop-shipment by a third-party vendor and the Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. The Company negotiates sale prices, pays suppliers directly, manages credit risk, and ensures product acceptability, acting as the principal in the transaction and recording revenue on a gross basis. Customers typically pay within 30 to 60 days of invoice receipt. The Company has elected the practical expedient to expense the costs of obtaining a contract when they are incurred because the amortization period of the asset that otherwise would have been recognized is less than a year.

**Goodwill, Acquired Intangible Assets and Other Long-Lived Assets — Impairment Assessments**

Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. The impairment test for long-lived assets requires us to assess the recoverability of our long-lived assets by comparing their net carrying value to the sum of undiscounted estimated future cash flows directly associated with and arising from our use and eventual disposition of the assets. If the net carrying value of a group of long-lived assets exceeds the sum of related undiscounted estimated future cash flows, we would be required to record an impairment charge equal to the excess, if any, of net carrying value over fair value.

When assessing the recoverability of our long-lived assets, which include property and equipment and finite-lived intangible assets, we make assumptions regarding estimated future cash flows and other factors. Some of these assumptions involve a high degree of judgment and bear a significant impact on the assessment conclusions. Included among these assumptions are estimating undiscounted future cash flows, including the projection of comparable sales, operating expenses, capital requirements for maintaining property and equipment and residual value of asset groups. We formulate estimates from historical experience and assumptions of future performance, based on business plans and forecasts, recent economic and business trends, and competitive conditions. In the event that our estimates or related assumptions change in the future, we may be required to record an impairment charge. Based on our evaluation we did not record a charge for impairment related to long-lived assets for the years ended December 31, 2025 and December 31, 2024.

We evaluate the remaining useful lives of long-lived assets and identifiable intangible assets whenever events or circumstances indicate that a revision to the remaining period of amortization is warranted. Such events or circumstances may include (but are not limited to): the effects of obsolescence, demand, competition, and/or other economic factors including the stability of the industry in which we operate, known technological advances, legislative actions, or changes in the regulatory environment. If the estimated remaining useful lives change, the remaining carrying amount of the long-lived assets and identifiable intangible assets would be amortized prospectively over that revised remaining useful life. We have determined that there were no events or circumstances during the years ended December 31, 2025 and December 31, 2024, which would indicate a revision to the remaining amortization period related to any of our long-lived assets. Accordingly, we believe that the current estimated useful lives of long-lived assets reflect the period over which they are expected to contribute to future cash flows and are therefore deemed appropriate.

We have recorded goodwill and other indefinite-lived assets in connection with the Business Combination. Goodwill, which represents the excess of acquisition cost over the fair value of the net tangible and intangible assets of the acquired company, is not amortized. Indefinite-lived intangible assets are stated at fair value as of the date acquired in a business combination. The recoverability of goodwill is evaluated at least annually and when events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company tests goodwill for impairment at least annually, or more frequently if events or circumstances indicate that the carrying amount of the reporting unit may not be recoverable. The Company has determined that it operates as a single reporting unit due to the integration of all of the Company's activities. In evaluating goodwill for impairment, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying amount. If the Company bypasses the qualitative assessment, or if the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative impairment test by comparing the estimated fair value of the reporting unit with its carrying amount.

The Company estimates the fair value of the reporting unit using a combination of the income and market approaches. For the income approach, the Company uses internally developed discounted cash flow models that include assumptions such as projected revenues, expenses, and related cash flows based on long-term growth rates and demand trends; expected future investments to support operations; and estimated discount rates. For the market approach, the Company relies on analyses based primarily on market comparables, including the guideline public company method, guideline transaction method, and market price method.

Based on its assessments, the Company has recorded impairment of goodwill of $2,148 thousand for the years ended December 31, 2025 and December 31, 2024, respectively.

**Deferred Income Taxes**

In accordance with ASC 740 "Income Taxes" ("ASC 740"), management routinely evaluates the likelihood of the realization of its income tax benefits and the recognition of its deferred tax assets. In evaluating the need for any valuation allowance, management will assess whether it is more likely than not that some portion, or all, of the deferred tax asset may not be realized on a jurisdictional basis. Ultimately, the realization of deferred tax assets is dependent upon the generation of future taxable income during those periods in which temporary differences become deductible and/or tax credits and tax loss carry-forwards can be utilized. In performing its analyses, management considers both positive and negative evidence including historical financial performance, previous earnings patterns, future earnings forecasts, tax planning strategies, economic and business trends and the potential realization of net operating loss carry-forwards within a reasonable timeframe. To this end, management considered (i) that we have had historical losses in the prior years and cannot anticipate generating a sufficient level of future profits in order to realize the benefits of our deferred tax asset; (ii) tax planning strategies and (iii) the adequacy of future income as of and for the year ended December 31, 2025, based upon certain economic conditions and historical losses through December 31, 2025. After consideration of these factors, management deemed it appropriate to establish a full valuation allowance with respect to the deferred tax assets for the Company as of December 31, 2025 and December 31, 2024, and no liability for unrecognized tax benefits was required to be reported.

The guidance also discusses the classification of related interest and penalties on income taxes. The Company's policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. No interest or penalties were recorded during the years ended December 31, 2025 and December 31, 2024.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk.**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

**Item 8. Consolidated Financial Statements and Supplementary Data.**

This information appears following Item 15 of this Report and is incorporated herein by reference.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

None.

**Item 9A. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.

**Management's Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP").

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

**Remediation of Prior Year Material Weaknesses**

In our Annual Report on Form 10-K for the year ended December 31, 2024, we disclosed the following material weaknesses in our internal control over financial reporting:

**●** **Tax accounting** — deficiencies related to the completeness and technical review of tax accruals and provisions;

**●** **Expense accrual process** — deficiencies related to the completeness and review of month-end expense accruals; and

**●** **Fair value election and embedded derivatives** — deficiencies related to the identification, valuation, classification, and disclosure of embedded derivative features and instruments for which the fair value option was elected.

During the year ended December 31, 2025, management implemented enhanced controls and processes to address each of these material weaknesses, including the engagement of external consultants to support the tax provision process, the implementation of a formalized month-end close checklist, and the development of a revised process for identifying and evaluating new and amended contracts for derivative features and fair value considerations. Based on the steps taken and the testing performed as of December 31, 2025, management has concluded that each of these previously reported material weaknesses has been fully remediated and no longer exists as of December 31, 2025.

**Changes in Internal Control Over Financial Reporting**

We have not identified any changes in our internal control over financial reporting in connection with our evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information.**

***Insider Trading Arrangements and Policies***

During the quarter ended December 31, 2025, no director or executive officer of CXApp notified CXApp of the adoption, modification or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

***Securities Purchase Agreement***

On March 27, 2026, the Company entered into a Securities Purchase Agreement with Avondale Capital, LLC, pursuant to which the Company may issue and sell one or more Pre-Paid Purchases, in the aggregate purchase amount of up to $40,000,000, for the purchase of the Company's Common Stock and the Company issued an unsecured convertible Pre-Paid Purchase #1 to the Lender. The convertible Pre-Paid Purchase #1 has the original principal amount of $1,050,000.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.**

Not applicable.

**PART III.**

**Item 10. Directors, Executive Officers and Corporate Governance.**

Our officers and directors are as follows:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Title** |
| Khurram Sheikh | 55 | Chairman, Chief Executive Officer and Director |
| Joy Mbanugo | 45 | Chief Financial Officer |
| Di-Ann Eisnor | 54 | Director |
| Camillo Martino | 64 | Director |
| George Mathai | 59 | Director |
| Shanti Priya | 56 | Director |

---

***Mr. Khurram Sheikh*** has served as the Founder, Chairman and Chief Executive Officer of KINS since its inception and Chief Financial Officer from August 2020 until August 2024. Mr. Sheikh has been at the forefront of innovation in the technology, mobile, semiconductor, telecom and media industries for the past 25 years with CEO and CTO roles at leading technology companies. Since March 2020, Mr. Sheikh has been the Founder, Executive Chairman & CEO of Aijaad, a boutique strategic advisory firm where he advises both large private equity firms as well as boards of public companies on the future of 5G, IoT, Edge Computing and AI technologies and is actively involved in M&A, technology strategy and market development. From 2016 to early 2020, Mr. Sheikh was the CEO of Kwikbit, a private company building a "network as a service" solution using gigabit radios, edge compute, virtualization, and artificial intelligence. Prior to Kwikbit, in 2014, Mr. Sheikh was appointed as the Chief Strategy and Technology Officer for Silicon Image (SIMG) and the President/CEO of its millimeter wave/5G subsidiary SiBEAM. SIMG was acquired by Lattice Semiconductor (Nasdaq:LSCC) in 2015 for $600 million after which Mr. Sheikh was appointed the Chief Strategy and Technology Officer of the combined company responsible for corporate strategy, roadmap, M&A and technology development and was there until 2016. From 2007 onwards, he was the CTO for Powerwave Technologies, a large wireless infrastructure vendor. Powerwave filed for Chapter 11 bankruptcy protection in January 2013, and in April 2013 Mr. Sheikh was appointed as the CEO of Powerwave to help with the sale of the company. Later that year, Mr. Sheikh successfully facilitated the sale of approximately 1,400 patents owned by Powerwave to private equity firm Gores Group. From 2005 to 2007, Mr. Sheikh was Vice President, Wireless Strategy and Development at Time Warner Cable leading the cable company's entry into the wireless space. From 1996 to 2005, Mr. Sheikh held senior technology roles at Sprint including CTO Mobile Broadband responsible for deploying the world's first 4G system and acquisition of multi-billion-dollar spectrum assets at 2.5GHz. Mr. Sheikh holds a Bachelor of Science degree in Electrical Engineering with highest honors from the University of Engineering & Technology in Pakistan, as well as a Master of Science degree in Electrical Engineering from Stanford University. Mr. Sheikh is well qualified to serve as Chairman of our board because of his extensive experience advising boards of directors of public and private companies and his extensive professional experience.

***Ms. Joy Mbanugo*** is currently the Chief Financial Officer and joined CXAppp in August 2024. Before joining CXApp, Ms. Mbanugo was the Chief Financial Officer at ServiceRocket. Ms. Mbanugo led the Finance, Accounting, Workforce Planning, and People teams while overseeing strategic finance, forecasting, budgeting, treasury management, tax, compensation planning, and more. With over 20 years of experience in audit, tax, business operations, financial services, and financial planning/analysis across diverse industries and markets, Ms. Mbanugo is a seasoned professional. Before her role at ServiceRocket, Ms. Mbanugo spent five years at Google, where she played a crucial role in evaluating Google Cloud Partnerships and Solutions, organizing Alphabet's financial data in Controllership, and optimizing the management of over $100 billion in cash in Treasury and Tax. Her extensive experience also includes a three-year stint at BlackRock, where she led the taxation of financial instruments, securities lending, information reporting, and withholding, among other responsibilities. During her 12-year tenure at EY, she further honed her expertise, offering tax and audit services to clients in international tax, financial services, and capital markets. Ms. Mbanugo holds a Juris Doctor from Cleveland State and a Master of Accountancy from Case Western Reserve University. She also has a double bachelor's degree in accounting and Black World Studies from Miami University of Ohio.

***Ms. Di-Ann Eisnor*** has served as a member of our board of directors since August 2020. Since November 2019, Ms. Eisnor has served as Co-Founder and CEO of Core, a venture-backed construction labor marketplace. Before that, from February 2019 until October 2019, she was an executive of The We Company, a part of the We Work Companies, where she was responsible for development of their city's platform. Prior to that, Ms. Eisnor served as Director of Urban Systems at Google, from June 2018 until February 2019. Previously, Ms. Eisnor was with Waze, Inc., a crowd-sourced navigation and real-time traffic application owned by Alphabet, Inc., for 10 years, most recently serving as the VP Platform and Director of Growth. Prior to joining Waze, Ms. Eisnor was co-founder and Chief Executive Officer of Platial Inc., a collaborative, user-generated cartographic website. Ms. Eisnor currently serves on the board of Saia Inc. (Nasdaq: SAIA) and Gray Area Foundation for the Arts. She is a venture partner at Obvious Ventures and is co-founder with Lupe Fiasco of Neighborhood Start Fund, a neighborhood-based micro-fund in underserved urban neighborhoods. She holds a bachelor's degree in Studio Art and Business Administration from New York University. She is a 2014 Henry Crown Fellow of the Aspen Institute and a member of the Aspen Global Leadership Network. Ms. Eisnor is well qualified to serve on our board because of her extensive experience advising boards of directors of public and private companies and her extensive professional experience.

***Mr. Camillo Martino*** has served as a member of our Board of Directors since August 2020. Mr. Martino was a senior global semiconductor company executive and now serves as a board member and executive advisor to many global technology companies. Prior to his current board roles, Mr. Martino was a chief executive officer and C-suite executive of a number of high technology companies worldwide. He is currently Chair of the Board of Directors of Magnachip Semiconductor (NYSE: MX) and has served on this Board since August 2016. Since 2018, he has also served on the Board of Directors at Sensera (ASX: SE1). Mr. Martino also serves on the Board of Directors at multiple privately held companies, including VVDN Technologies (fastest growing ODM based in India with a focus on Wireless, Networking & IoT) and Sakuu Corporation (multi-material, multi-process Additive Manufacturing platform). Mr. Martino's prior board service includes serving on the boards of Cypress Semiconductor from June 2017 through the sale of the company to Infineon in April 2020 and Moschip Technologies (BOM: 532407) from April 2017 to May 2019. As an operating executive, Mr. Martino served as Chief Executive Officer of Silicon Image, Inc. (where he also served as a director) from 2010 until the completion of its sale to Lattice Semiconductor Corporation (Nasdaq: LSCC) in March 2015, Chief Operating Officer of SAI Technology Inc. from January 2008 to December 2009 (where he also served as director from 2006 to 2010), and Chief Executive Officer of Cornice Inc. from 2005 to 2007 (where he also served as a director). From August 2001 to July 2005, Mr. Martino served as the executive vice president and chief operating officer at Zoran Corporation, a global SoC semiconductor company. Prior to that, Mr. Martino held multiple positions with National Semiconductor Corporation for a total of nearly 14 years. Mr. Martino holds a Bachelor of Applied Science from the University of Melbourne and a Graduate Diploma (in Digital Communications) from Monash University in Australia. Mr. Martino is well qualified to serve on our board because of his extensive experience advising boards of directors of public and private companies and his extensive professional experience.

***Mr. George Mathai*** has enjoyed decades working, consulting, and investing in early stage and small businesses at the crossroads of distinct technologies, multiple industries and novel markets. A technically trained business professional, his early experience in bridge design and infrastructure repair was at Edwards & Kelcey in New York, now Jacobs Engineering. In January 1993, Mr. Mathai transitioned to managing renovations projects and gaining strong communications and project execution skills, while driving revenue and profitability, at a small New York construction company. As a founder, he later parlayed his prior management and technical expertise in leading the biosensor development program at GenoRx in June 2000, an early stage, venture-backed concern in Hayward, California. His team accomplished a manufacturable process for detecting DNA electronically on a silicon biochip with the eventual sale of the technology to Bridger Technologies in April 2011. Thereafter, Mr. Mathai helped raise financing for an innovative antibiotic skin care start-up and worked to fundraise for an early-stage immune-mediated cancer therapeutic while at a boutique brokerage firm Objective Equity LLC. Overlapping these endeavors, were local business interests in retail, as well as due diligence consulting for mergers and acquisitions. The above broad and varied interests are also reflected in his educational history which includes bachelors and masters in civil engineering from University of California, Berkeley (May 1989) and City College of New York (June 1992), respectively, as well as, most recently upskilling at CalTech's cybersecurity program (December 2020). Mr. Mathai's extensive experience in several diverse industries, markets and customer types will bring a unique and inestimable resource to the board.

***Ms. Shanti Priya*** has been the CFO of Maxfield Enterprises, Inc., a luxury retail company based in Los Angeles and has been leading the organization's finance and operations since February 2018. Prior to that, Ms. Priya worked for over 12 years in corporate finance at Gap Inc. with her last role at the company as the Global Director of FP&A and Control overseeing the North American, European, and Asian markets. Before transitioning into a career in finance, Ms. Priya worked as a Producer managing content creation at a tech start-up, Knowledge Kids Network, an online educational media site. She holds a Bachelor of Arts in Honors English Literature with a minor in Biology from Scripps College.

In addition, she holds a Master of Arts in Print Journalism and a Master of Business Administration both from the University of Southern California. Ms. Priya also serves on the board and as treasurer of Secular Student Alliance, a non-profit organization that educates high school and college students regarding secularism and scientific reasoning. She has previously served on the board of Sequoyah School, a non-profit private school serving the ages from K-8. Ms. Priya is well qualified to serve on our board of directors because of her substantial financial and operations experience.

*Family Relationships*

There are no family relationships between any of our directors and executive officers.

*Director Independence*

Our board consists of five members. Our directors, other than Mr. Sheikh, are independent directors in accordance with the listing requirements of Nasdaq. The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his, her or their family members has engaged in various types of business dealings with us. There are no family relationships among any of our directors or executive officers.

*Classified Board of Directors*

Our board is divided into three classes with staggered, three-year terms, in accordance with the terms of the Charter. At each annual meeting of stockholders, the directors whose terms then expire will be eligible for reelection until the third annual meeting following reelection. The directors are divided among the three classes as follows:

● the Class I directors is Di-Ann Eisnor, and her term will expire at our 2027 annual meeting of stockholders;

● the Class II directors are Camillo Martino and Shanti Priya, and their terms will expire at our 2028 annual meeting of stockholders; and

● the Class III directors are Khurram P. Sheikh and George Mathai, and their terms will expire at our 2026 annual meeting of stockholders.

The Charter provides that the authorized number of directors may be changed only by resolution of our board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board into three classes with staggered three-year terms may delay or prevent a change of our board or a change in control of us. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock then entitled to vote in an election of directors.

*Board Leadership Structure*

Our board does not anticipate implementing a policy requiring the positions of the Chairman of the Board and Chief Executive Officer to be separate or held by the same individual. Any further determination to create such a policy is expected to be based on circumstances existing from time to time, based on criteria that are in our best interests and the best interests of our stockholders, including the composition, skills and experience of our board and its members, specific challenges faced by us or the industry in which it operates, and governance efficiency. We elected Mr. Sheikh as Chairman of the Board because of Mr. Sheikh's strategic vision for the business, his in-depth knowledge of our operations, and his experience in capital markets make him well qualified to serve as both Chairman of the board and Chief Executive Officer. Combining the roles of Chairman and Chief Executive Officer will help provide strong and consistent leadership for the management team and our board. However, our board may decide in the future to separate the roles of Chairman and Chief Executive Officers if it determines that such structure provides better and more effective oversight and management. If our board convenes for a meeting, it is expected that the non-management directors will meet in one or more executive sessions, if the circumstances warrant it. Our board may also consider appointing a lead independent director if the circumstances warrant it.

*Committees of the Board of Directors*

Our board of directors has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance.

*Role of Board in Risk Oversight Process*

Our board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, will regularly discuss with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process will include receiving regular reports from board committees and members of senior management to enable our board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.

The audit committee reviews information regarding liquidity and operations and oversees our management of financial risks. Periodically, the audit committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the audit committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The compensation committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk taking. The nominating and corporate governance committee manages risks associated with the independence of our board, corporate disclosure practices and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board will be regularly informed through committee reports about such risks. Matters of significant strategic risk will be considered by our board as a whole.

*Audit Committee*

The audit committee's main function is to oversee our accounting and financial reporting processes and the audits of our financial statements. This committee's responsibilities are set forth in a charter that include, among other things:

● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor's qualifications and independence, and (4) the performance of our internal audit function and independent auditors;

● the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;

● pre-approving all audit and permitted non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

● reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;

● setting clear hiring policies for employees or former employees of the independent auditors;

● setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

● obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor's internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor;

● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

● reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

The members of our audit committee are Shanti Priya, Camillo Martino and Di-Ann Eisnor. Shanti Priya serves as the chair of the committee. All members of our audit committee are independent directors and meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq. Shanti Priya is an "audit committee financial expert" as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq listing standards.

*Compensation Committee*

The compensation committee's main function is to oversee our policies relating to compensation and benefits of our officers and employees. This committee's responsibilities are set forth in a charter that include, among other things:

● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer's compensation, evaluating our Chief Executive Officer's performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

● reviewing and approving on an annual basis the compensation of all of our other officers;

● reviewing on an annual basis our executive compensation policies and plans;

● implementing and administering our incentive compensation equity-based remuneration plans;

● assisting management in complying with our proxy statement and annual report disclosure requirements;

● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

● if required, producing a report on executive compensation to be included in our annual proxy statement; and;

● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

The members of our compensation committee are Camillo Martino, Di-Ann Eisnor, and George Mathai. Di-Ann Eisnor serves as the chair of the committee. Each of Camillo Martino, Di-Ann Eisnor, and George Mathai is independent under the applicable Nasdaq listing standards and is a "non-employee director" as defined in Rule 16b-3 promulgated under the Exchange Act.

*Nominating and Corporate Governance Committee*

The nominating and corporate governance committee is responsible for assisting our board in discharging the board of directors' responsibilities regarding the identification of qualified candidates to become board members, the selection of nominees for election as directors at our annual meetings of stockholders (or special meetings of stockholders at which directors are to be elected), and the selection of candidates to fill any vacancies on our board and any committees thereof. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies, reporting and making recommendations to our board concerning governance matters and oversight of the evaluation of our board.

The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm's fees and other retention terms.

The members of our nominating and corporate governance committee are Camillo Martino, Di-Ann Eisnor, and Shanti Priya. Camillo Martino serves as the chair of the committee. All members of our nominating and corporate governance committee are independent directors under the applicable Nasdaq listing standards.

*Compensation Committee Interlocks and Insider Participation*

No member of the compensation committee serves or served during the fiscal year ended December 31, 2024, as a member of our board or compensation committee of a company that has one or more executive officers serving as a member of the board of directors or compensation committee.

*Board Composition*

Our nominating and corporate governance committee is responsible for reviewing with our board, on an annual basis, the appropriate characteristics, skills and experience required for our board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members) for election or appointment, the nominating and corporate governance committee and our board take into account many factors, including the following:

● personal and professional integrity, ethics and values;

● experience in corporate management, such as serving as an officer or former officer of a public company;

● experience as a board member or executive officer of another public company;

● strong finance experience;

● wide range of expertise and experience in substantive matters pertaining to our business relative to other board members;

● variety of background and perspectives, including, but not limited to, with respect to place of residence and specialized experience;

● experience relevant to our business industry and with relevant social policy concerns; and

● relevant academic expertise or other proficiency in an area of our business operations.

Our board evaluates, each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its wide range of experience in these various areas.

*Insider Trading Policy*

The Company has insider trading policies and procedures that govern the purchase, sale, and other dispositions of its securities by directors, officers, employees, and contractors, as well as by the Company itself. We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. A copy of our Insider Trading Policy is attached as Exhibit 19.1 to this Annual Report.

*Code of Ethics*

We have adopted a written code of business conduct and ethics that applies to its directors, officers and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our code of business conduct and ethics is available under the Corporate Governance section of our website at www.cxapp.com. In addition, we intend to post on its website all disclosures that are required by law or the listing standards of Nasdaq concerning any amendments to, or waivers from, any provision of the code. The reference to our website address does not constitute incorporation by reference of the information contained at or available through its website, and you should not consider it to be a part of this Annual Report.

**Item 11. Executive Compensation.**

This section discusses the material components of the executive compensation program for CXApp's executive officers who are named in the "Summary Compensation Table" below. CXApp complies with the executive compensation disclosure rules applicable to "smaller reporting companies," as such term is defined in the rules promulgated under the Securities Act, which for 2025 require compensation disclosure for CXApp's named executive officers.

***Overview***

The form and amount of the compensation to be paid to each of our directors and executive officers were determined by our board. Each executive officers' compensation were established by our compensation committee which is comprised solely of independent directors in accordance with Nasdaq listing standards.

The following tables disclose compensation received by our named executive officers.

**Summary Compensation Table**

The following table provides certain information regarding the compensation earned by the named executive officers from their services to CXApp, as applicable, during the fiscal years ended December 31, 2025, and 2024.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **Bonus<br> ($)** | **Stock<br> Awards<sup>(1)</sup><br> ($)** | **Option<br> Awards<sup>(1)</sup><br> ($)** | **All Other<br> Compensation<br> ($)<sup>(1)</sup>** | **Total<br> ($)** |
| Khurram P. Sheikh | 2025 | $325000 | $268125 | $200000 | $250000 | $- | $1043125 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer | 2024 | $325000 | $255938 | $200001 | $360000 | $- | $1140939 |
| Joy Mbanugo | 2025 | $250000 | $60000 | $- | $100000 | $- | $410000 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer | 2024 | $92948 | $8485 | $- | $552000 | $25000 | $678433 |

---

(1) The amounts reported in the "Stock Awards" and "Option Awards" columns represent the aggregate grant-date fair value of awards granted during the applicable fiscal year, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation. For the year ended December 31, 2025, stock awards granted to Mr. Sheikh had an aggregate grant-date fair value of $200,000. Option awards granted to Mr. Sheikh and Ms. Mbanugo had aggregate grant-date fair values of $250,000 and $100,000, respectively. The assumptions used in calculating these values are described in Note 10 to the Company's financial statements included in this Annual Report on Form 10-K.

(2) Except as disclosed in the "All Other Compensation" column, the Company confirms that there were no employer contributions to defined contribution plans, perquisites, or other compensation items required to be reported for the named executive officers for the fiscal years presented.

***Narrative Disclosure to the Summary Compensation Table***

The Company's executive compensation program is designed to attract, retain, and motivate executive officers while aligning their interests with those of stockholders. Compensation consists of base salary, annual cash bonuses, and long-term equity incentives.

The Company maintains an annual bonus program intended to reward performance against corporate and individual objectives. Bonus awards are determined based on a combination of financial performance and individual contributions, as evaluated by the Board of Directors.

Equity awards are a key component of the Company's long-term incentive program and are intended to align executive compensation with stockholder value creation.

Khurram P. Sheikh, our chief executive officer, received (i) a salary of $325,000 and a bonus of $268,125 as compensation during the fiscal year ended December 31, 2025, and (ii) a salary of $325,000 and a bonus of $255,938 as compensation for his services to CXApp during the fiscal year ended December 31, 2024; and

Joy Mbanugo, our Chief Financial Officer, received (i) a salary of $250,000 and a bonus of $60,000 as compensation for her services during the fiscal year ended December 31, 2025, and (ii) a salary of $92,948 and a bonus of $8,485 as compensation for her services during the fiscal year ended December 31, 2024.

**Outstanding Equity Awards at Fiscal Year-End**

Other than as set forth below, there were no outstanding unexercised options, unvested stock, and/or equity incentive plan awards issued to our Named Executive Officers as of December 31, 2025.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** |
| <br>**Name** | <br>**Grant Date** | <br>**Expiration Date** | **Number of<br> securities<br> underlying<br> unexercised<br> options <br> (#)<br> exercisable** | **Number of<br> securities<br> underlying<br> unexercised<br> options <br> (#)<br> unexercisable** | **Equity incentive<br> plan awards:<br> Number of<br> securities<br> underlying<br> unexercised<br> unearned<br> options<br> (#)** | **Option<br> exercise<br> price<br> ($)** | **Number of<br> Shares or<br> Units of<br> Stock That<br> Have Not<br> Vested<br> (#)** | **Market Value of<br> Shares or<br> Units of<br> Stock That<br> Have Not<br> Vested<br> ($)** | **Equity incentive<br> plan awards:<br> Number of<br> unearned<br> shares,<br> units or<br> other rights<br> that have<br> not vested**<br> **(#)** | **Equity incentive<br> plan awards:<br> Market or<br> payout value of<br> unearned shares,<br> units or other<br> rights that**<br> **have not<br> vested<br> ($)** |
| Khurram P. Sheikh | Mar 29, 2023 | Mar 29, 2033 | 844200 |  |  | 1.53 |  |  |  |  |
|  | Aug 14, 2023 | Aug 14, 2033 |  |  |  |  | 10000 | 3300 |  |  |
|  | Feb 6, 2024 | Feb 6, 2034 |  | 300000<sup>(1)</sup> |  | 1.20 |  |  |  |  |
|  | May 23, 2025 | May 23, 2035 |  |  |  |  | 200000 | 66000 |  |  |
|  | May 23, 2025 | May 23, 2035 |  | 250000<sup>(1)</sup> |  | 1.00 |  |  |  |  |
| Joy Mbanugo | Aug 26, 2024 | Aug 6, 2034 | 76667 | 153333<sup>(2)</sup> |  | 2.40 |  |  |  |  |
|  | May 23, 2025 | May 23, 2035 |  | 100000<sup>(2)</sup> |  | 1.00 |  |  |  |  |

---

(1) This option vests in four years with 50% vesting in the second year of anniversary, and 25% in the third year of anniversary, and 25% on its fourth year of anniversary.

(2) This option vests in three years with 1/3 vesting in the first year of anniversary, then monthly for the following two years.

**Executive Compensation Arrangements**

We have entered into an employment agreement with Khurram Sheikh who serves as our Chief Executive Officer for a term commencing on the consummation of the Business Combination and will continue until terminated by us or the employee or in accordance with the terms of the employment agreement. Mr. Sheikh will be paid an annualized base salary of $325,000, as revised periodically by us, as well as an annual bonus with a target amount of $325,000 for each complete calendar year. The employment agreement contains provisions regarding non-solicitation, confidentiality of information and arbitration of disputes. Mr. Sheikh may terminate his employment by giving advance written notice to us. We may also terminate the employment agreement for cause, as defined in the employment agreement, a copy of which is attached hereto as Exhibit 10.5 and is also incorporated herein by reference.

In connection with Mrs. Mbanugo's appointment as Chief Financial Officer, the Company entered into a letter agreement with Mrs. Mbanugo (the "CFO Offer Letter"). Pursuant to the CFO Offer Letter, Mrs. Mbanugo will receive (i) an annual base salary of $250,000 and (ii) a total annual bonus of $100,000 to be paid in quarterly installments subject to achievement of certain performance goals. Pursuant to the CFO Offer Letter, Mrs. Mbanugo will also receive a one-time sign-on cash bonus of $25,000 and an option award to purchase 230,000 shares of the Company's Class A common stock (the "Stock Options"). The Stock Options (i) will be subject to the terms and conditions of the Company's 2023 Equity Incentive Plan and a stock option agreement, (ii) are subject to the approval of the Company's compensation committee, and (iii) will vest with one-third becoming vested on the first anniversary of the grant date, and the remaining two thirds vesting in equal monthly installments over the next 24 months.

***2023 Equity Incentive Plan***

At the special meeting held on March 10, 2023, the KINS stockholders considered and approved, among other things, the CXApp Inc. 2023 Equity Incentive Plan (the "Incentive Plan"). The Incentive Plan was previously approved, subject to stockholder approval, by KINS' board of directors. The Incentive Plan became effective immediately upon the Closing. Pursuant to the terms of the Incentive Plan, there are 2,110,500 shares of CXApp Class A common stock available for issuance under the Incentive Plan, which is equal to 15% of the aggregate number of shares of CXApp common stock issued and outstanding immediately after the Closing (giving effect to the redemptions). In addition, at the Company's annual meeting held on May 20, 2025, the Company's stockholders considered and approved, among other things, the amendment and restatement of the 2023 Equity Incentive Plan, including the reservation of a total of 5,676,000 shares of common stock for issuance under the plan. This description is qualified in its entirety by reference to the text of the Incentive Plan, a copy of which is attached hereto as Exhibit 10.7 and also is incorporated herein by reference.

**Director Compensation**

The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Directors in the year ended December 31, 2024, except Khurram Sheikh whose aggregate compensation information has been disclosed above.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Fees Earned<br> or paid<br> in cash<br> ($)** | **Option<br> Awards<br> ($)** | **Restricted<br> Stock Units<br> ($)<sup>(1)</sup>** | **Non-equity<br> Incentive plan<br> compensation<br> ($)** | **Total<br> ($)** |
| Camillo Martino | $37000 | $– $| 200000 | $– $– $– $| 237000 |
| Di-Ann Eisnor | $37000 | $– $| 200000 | $– $– $– $| 237000 |
| Shanti Priya | $37000 | $– $| 200000 | $– $– $– $| 237000 |
| George Mathai | $37000 | $– $| 200000 | $– $– $– $| 237000 |

---

(1) The fair value of director restricted stock unit granted are valued using the closing price of the Company's common stock on the date of grant.

Directors are entitled to reimbursement of ordinary and reasonable expenses incurred in exercising their responsibilities and duties as a director.

On August 26, 2024, the Board decided to maintain the current compensation structure and approved a grant of $200,000 restricted stock units to each director.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

The following table sets forth the beneficial ownership of our common stock as of March 24, 2026, by the following persons:

● each person who is known to be the beneficial owner of more than 5% of shares of our common stock;

● each of our current named executive officers and directors; and

● all our current executive officers and directors as a group.

Except as indicated in the footnotes to the following table, subject to applicable community property laws, each stockholder named in the table has sole voting and investment power. Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of March 24, 2026, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder. The information provided in the following table is based on our records, information filed with the SEC, and information furnished by our stockholders.

---

| | | |
|:---|:---|:---|
| **Name of and Address of Beneficial Owner** | **Amount held by<br> beneficial<br> owner** | **%<sup>(1)</sup>** |
| **5% of More Stockholders** |  |  |
| Avondale Capital, LLC<sup>(2)</sup> | 2860068 | 5.01% |
| **Directors and Executive Officers** |  |  |
| Khurram P. Sheikh | 1859178 | 3.26% |
| Camillo Martino | 201010 | \* |
| Di-Ann Eisnor | 130471 | \* |
| Shanti Priya | 66016 | \* |
| George Mathai | 34342 | \* |
| Joy Mbanugo | - | \* |
| *All directors and executive officers as a group (6 individuals)* | 2291017 | 4.01% |

---

*\** *Represents beneficial ownership of less than 1%*

*(1)* *Based on 57,115,772 shares outstanding as of March 24, 2026.* 

*(2)* *Includes (i) sole voting power over 2,860,068 of Common Stock and (ii) sole dispositive power over 2,860,068 shares of Common Stock as reported in the Schedule 13G filed with SEC on December 11, 2025. The principal address of Avondale Capital, LLC is 297 W Auto Mall Drive, Suite 4, St. George, UT 84770.* 

**Item 13. Certain Relationships and Related Transactions, and Director Independence.**

*Agreements with Inpixon*

CXApp and Inpixon operate separately, each as a public company. In connection with the Separation, Legacy CXApp has entered into various agreements to effect the Separation and provide a framework for CXApp's relationship with Inpixon after the Separation, including the Separation and Distribution Agreement, an Employee Matters Agreement, a Tax Matters Agreement and a Transition Services Agreement. These agreements provide for the allocation between Legacy CXApp and Inpixon of Inpixon's assets, employees, liabilities and obligations (including its property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Legacy CXApp's separation from Inpixon and will govern certain relationships between CXApp and Inpixon after the Separation.

The following summaries of each of the agreements listed above are qualified in their entirety by reference to the full text of the applicable agreements which are filed as exhibits to this Annual Report.

*Separation and Distribution Agreement*

On September 25, 2022, in connection with the execution of the Merger Agreement, Inpixon, Legacy CXApp, Design Reactor and KINS entered into the Separation and Distribution Agreement which sets forth the principal actions to be taken in connection with the Separation. The Separation and Distribution Agreement identifies assets to be transferred, liabilities to be assumed and contracts to be assigned to each of Inpixon and Legacy CXApp as part of the internal reorganization described therein and requires an Inpixon contribution to be made to Legacy CXApp. The Separation and Distribution Agreement also sets forth other agreements that govern certain aspects of Legacy CXApp's relationship with Inpixon following the Business Combination. In connection with the Separation and Distribution Agreement and related ancillary agreements, Legacy CXApp issued additional shares of Legacy CXApp common stock to Inpixon. Inpixon distributed on a pro rata basis all of the outstanding shares of Legacy CXApp common stock to the Inpixon securityholders as of March 6, 2023 by delivering to the distribution agent a book-entry authorization representing the shares of Legacy CXApp common stock being distributed for the account of Inpixon securityholders. The distribution agent held such book-entry shares for the account of Legacy CXApp's stockholders (as of immediately after consummation of the Distribution) pending the Merger.

On the date of the Distribution, Inpixon distributed on a pro rata basis all of the outstanding shares of Legacy CXApp common stock to the holders of Inpixon common stock and certain other holders of its securities as of March 6, 2023. The Distribution was effected by Inpixon delivering to the distribution agent a book-entry authorization representing the shares of Legacy CXApp common stock being distributed in the Distribution for the account of Inpixon securityholders. The distribution agent held such book-entry shares for the account of Legacy CXApp's stockholders (as of immediately after consummation of the Distribution) pending the Merger. The shares of Legacy CXApp common stock were not transferrable prior to the exchange of such shares for the shares of KINS common stock pursuant to the Merger.

*Employee Matters Agreement*

Prior to the Distribution, KINS, Inpixon, Legacy CXApp and Merger Sub entered into the Employee Matters Agreement, which set forth the terms and conditions of certain employee-related matters in connection with the transaction, including allocation of benefit plan assets and liabilities between Inpixon and Legacy CXApp, treatment of incentive equity awards in the Distribution and the Business Combination and related covenants and commitments of the parties.

*Tax Matters Agreement*

Prior to the Distribution, KINS, Legacy CXApp and Inpixon entered into the Tax Matters Agreement that governs each party's respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes.

In general, KINS and Legacy CXApp are liable for all U.S. federal, state, local and foreign taxes (and any related interest, penalties or audit adjustments) that are (i) imposed with respect to tax returns that include both Legacy CXApp and Inpixon, to the extent such taxes are attributable to Legacy CXApp or the Enterprise Apps Business, or (ii) imposed with respect to tax returns that include Legacy CXApp but not Inpixon, in each case, for tax periods (or portions thereof) beginning after the Distribution.

Notwithstanding the foregoing, KINS and Legacy CXApp may be liable for certain taxes resulting from the restructuring transactions undertaken to effectuate the Distribution.

The Distribution, together with certain related transactions, is intended to qualify as a reorganization under Sections 355 and 368(a) (1)(D) of the Code. If the Distribution does not so qualify, the difference between the fair market value and the tax basis of the Legacy CXApp shares distributed by Inpixon to the Inpixon stockholders will be taxable income to Inpixon.

Even if the contribution and distribution, taken together, otherwise qualify as a transaction described in Sections 355 and 368(a)(1) (D) of the Code, the Distribution is still taxable to Inpixon (but not to Inpixon stockholders) pursuant to Section 355(e) of the Code if one or more persons acquire a 50% or greater interest (measured by vote or value) in the stock of Inpixon or Legacy CXApp, directly or indirectly (including through acquisitions of our stock), as part of a plan or series of related transactions that includes the Distribution. For purposes of this test, the Merger is treated as part of a plan that includes the Distribution, but the Merger standing alone did not cause the Distribution to be taxable to Inpixon under Section 355(e) of the Code because holders of Legacy CXApp common stock own more than 50% of our common stock.

Per the terms of the Sponsor Support Agreement, the Sponsor has agreed to exchange up to 1 million shares of KINS Class B common stock for such number of shares of KINS Class A common stock as shall be necessary to ensure that the number of shares of KINS common stock issued as aggregate merger consideration to the holders of Legacy CXApp common stock exceeds 50% by at least one share than the number of shares of KINS common stock owned by all other holders of KINS common stock. Pursuant to the Sponsor Support Agreement, the Sponsor and related parties have agreed, subject to the limitation set forth therein, to forfeit 22,224 shares of KINS common stock (as of immediately prior to the consummation of the Merger).

The Tax Matters Agreement requires KINS and Legacy CXApp to comply with the representations made in the materials submitted to RSM US LLP in connection with a distribution tax opinion that Inpixon received regarding the intended tax treatment of the Distribution and certain related transactions.

The Tax Matters Agreement also includes covenants restricting Legacy CXApp's and KINS' ability to take or fail to take any action if such action or failure to act could reasonably be expected to adversely affect the intended tax treatment. In particular, in the two years following the Distribution, such restrictive covenants will generally prevent KINS and Legacy CXApp from (i) entering into any transaction which could, when combined with other transactions (including the Merger), result in a 45% or greater change in ownership of KINS' or Legacy CXApp's equity as part of a plan or series of related transactions that includes the Distribution, (ii) ceasing the active conduct of certain of Legacy CXApp's businesses, (iii) voluntarily dissolving or liquidating KINS or Legacy CXApp and (iv) causing, permitting, or agreeing to the sale, transfer, or disposal of assets of Legacy CXApp that, in the aggregate, constitute more than 30% of the consolidated gross assets of Legacy CXApp, in each case, unless Legacy CXApp obtains a private letter ruling from the IRS, an unqualified opinion of a nationally recognized tax advisor that such action will not cause a failure of the intended tax treatment, or Inpixon consents to the undertaking of such action. Notwithstanding receipt of such ruling, opinion or consent, in the event that such action causes a failure of the intended tax treatment, KINS and Legacy CXApp could be responsible for all taxes arising therefrom.

*Director Independence*

For information on director independence, see *Item 10. Directors, Executive Officers and Corporate Governance*.

**Item 14. Principal Accountant Fees and Services.**

WithumSmith+Brown, PC ("Withum") acts as our independent registered public accounting firm. Withum acted as the independent registered public accounting firm for the year ended December 31, 2025 and for the year ended December 31, 2024.

*Audit Fees.* For the year ended December 31, 2025 and for the year ended December 31, 2024, fees were approximately $501,495 and $319,000, respectively, for the services Withum performed in connection with the audits of our annual financial statements in our Annual Reports on Form 10-K and for reviews of the quarterly financial statements included in the Company's Quarterly Reports on Form 10 Q.

*Audit-Related Fees.* For the year ended December 31, 2025 and the year ended December 31, 2024, our independent registered public accounting firms did not render audit-related services.

*Tax Fees.* For the year ended December 31, 2025 and for the year ended December 31, 2024, fees for our independent registered public accounting firm, Withum, were approximately $31,500 and $38,000 respectively, for preparation of the Company's federal and state tax returns.

*All Other Fees.* For the year ended December 31, 2025 and for the year ended December 31, 2024, fees for our independent registered public accounting firm, Withum, were approximately $59,000 and $34,000, respectively. for the services performed by Withum related to our Form S-1, Form S-3 and Form S-8 filings.

**Pre-Approval Policy**

Consistent with SEC policies regarding auditor independence and the Audit Committee's charter, the Audit Committee has responsibility for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. In exercising this responsibility, the Audit Committee pre-approves all audit and permitted non-audit services provided by any independent registered public accounting firm prior to each engagement.

**PART IV.**

**Item 15. Exhibits, Financial Statement Schedules**

The following documents are filed as part of this Annual Report:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Consolidated Financial Statements:

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100)](#b_001) | F-2 |
| Consolidated Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets](#b_002) | F-5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations and Comprehensive Loss](#b_003) | F-6 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Stockholders' Equity](#b_004) | F-7 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows](#b_005) | F-8 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements](#b_006) | F-9 to F-42 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(2) Financial Statement Schedules:

None.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Exhibits

We hereby file as part of this Annual Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.

**CXAPP INC. AND SUBSIDIARIES**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100)](#b_001) | F-2 |
| Consolidated Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets](#b_002) | F-5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations and Comprehensive Loss](#b_003) | F-6 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Stockholders' Equity](#b_004) | F-7 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows](#b_005) | F-8 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements](#b_006) | F-9 to F-42 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Stockholders of

CXApp Inc. and Subsidiaries:

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of CXApp Inc. and Subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, consolidated statements of changes in stockholders' equity, and consolidated statements of cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024 in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to those charged with governance and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

**Impairment Assessment of Goodwill** 

As described in Notes 2 and 5 to the consolidated financial statements, the Company evaluates goodwill for impairment annually and more frequently if events or changes in circumstances indicate that the carrying amount of the reporting unit may not be recoverable. The Company's goodwill impairment assessment utilizes a weighting of the income and market approach to estimate the reporting unit's fair value. The income approach is based on a discounted future cash flow analysis and involves the use of assumptions, including projections of revenues and expenses, long-term growth rates and estimated discount rates. The Company's goodwill impairment assessment indicated that the carrying values of the Company's reporting unit exceeded its estimated fair value, resulting in a goodwill impairment charge of $2,148 thousand for the year ended December 31, 2025.

We identified the impairment assessment of goodwill as a critical audit matter because of the significant judgment required by management to develop the fair value measurement of the reporting unit and the valuation methodologies. This required a high degree of auditor judgment and an increased level of effort when performing audit procedures, including the involvement of professionals with specialized skills and knowledge.

The primary procedures we performed to address this critical audit matter included:

● We compared the significant assumptions of projected revenue growth rates and projected operating income margins used by management to peer companies while also evaluating the reasonableness of these peer companies used to develop the fair value estimates of the reporting unit.

● We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

● We tested management's reconciliation of the fair value of the reporting unit to the market capitalization of the Company.

● We recalculated the goodwill impairment charge and evaluated the related goodwill disclosures included in Notes 2 and 5 to the consolidated financial statements.

● With the assistance of our personnel with specialized knowledge and skills in valuation, we (i) evaluated the appropriateness of the valuation methodologies used and the weighting assigned to those methods, (ii) evaluated the reasonableness of the discount rate, selected market multiples, and control premium assumptions used in the valuation, and (iii) evaluated the reasonableness of management's reconciliation of the concluded fair value to market capitalization.

**Impairment Assessment of Acquired Intangible Assets and Other Long-Lived Assets**

As described in Note 2 to the consolidated financial statements, the Company reviews its acquired intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. These assets are evaluated together with other long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. The impairment assessment begins with a comparison of the carrying amount of the asset group to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount exceeds the estimated undiscounted cash flows, an impairment loss is recognized for the amount by which the carrying value exceeds fair value. The Company recorded no impairment charges for acquired intangible assets or other long-lived assets for the year ended December 31, 2025.

We identified the impairment assessment of acquired finite-lived intangible assets and other long-lived assets as a critical audit matter because the analysis required significant judgment by management in estimating the future undiscounted cash flows of the asset group and in determining certain significant assumptions used in the recoverability analysis. This required a high degree of auditor judgment and an increased level of effort when performing audit procedures, including the involvement of professionals with specialized skills and knowledge.

The primary procedures we performed to address this critical audit matter included:

● We evaluated the reasonableness of management's assumptions used in projecting future cash flows of the related asset group, including projected revenue, operating margins, and other significant operating assumptions, by comparing them to historical results, approved forecasts, and relevant industry and economic trends.

● We tested the completeness and accuracy of the data used in management's impairment analysis.

● We evaluated the reasonableness of the expected remaining useful life of the acquired assets used in the analysis.

● With the assistance of our personnel with specialized knowledge and skills in valuation, we (i) assessed the appropriateness of the forecast used in the recoverability analysis by way of sensitivities performed, and (ii) evaluated the appropriateness of the valuation methodology used, where fair value measurement was required, and in assessing the reasonableness of certain significant assumptions incorporated into the analysis.

**Fair Value Measurement of Convertible Debt**

As described in Notes 2 and 11 to the consolidated financial statements, the Company issues convertible debt instruments in the normal course of business to raise capital. In order to determine the proper accounting for these convertible debt instruments, management evaluated the relevant guidance and elected the fair value option for the instruments. Under the fair value option election, the convertible debt is initially measured at its issuance date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis. The estimated fair value adjustment is presented within change in fair value of derivative liability in the consolidated statements of operations and comprehensive loss.

The Company measures the convertible debt instruments at fair value at each reporting period. Management estimated the fair value of the instruments using a probability-weighted valuation model that considered the various contractual settlement outcomes available under the agreements. The valuation incorporated significant assumptions and inputs including the Company's stock price, risk-free rate, expected term, contractual pricing features, expected timing of settlement, ownership-related conversion limitations, the discount rate used to present value the exchange scenario, and the probability assigned to each scenario.

We identified the fair value measurement of the convertible debt as a critical audit matter because of complexity and judgment involved in evaluating the classification and embedded features of the instruments and in applying the accounting framework and the complexity and judgment made by management in estimating the fair value of the convertible debt under the fair value option. This required a high degree of auditor judgment and an increased level of effort when performing audit procedures, including the involvement of professionals with specialized skills and knowledge.

The primary procedures we performed to address this critical audit matter included:

● We assessed the accounting for complex financial instruments to evaluate the appropriateness of management's application of the authoritative accounting guidance.

● We tested the completeness and accuracy of the underlying data used by management in the valuation by comparing it to the debt agreement, share price, and stock register.

● With the assistance of our personnel with specialized knowledge and skills in valuation, we (i) assessed the appropriateness of the methodology used in estimating the fair value of the convertible debt; (ii) evaluated the reasonableness of certain significant assumptions, such as volatility, discount rate, risk-free rate, expected term, stock price, contractual pricing provisions such as fixed price, floor price, and variable conversion pricing, expected settlement outcomes, and share conversion limitations; and (iii) developed a range of independent estimates and comparing those to the fair value of the convertible debt determined by management.

/s/ WithumSmith+Brown, PC

We have served as the Company's auditors since 2020.

San Francisco, CA

March 30, 2026

PCAOB ID Number 100

**CXAPP INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| **Assets** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $11101 | $4880 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 789 | 1686 |
| &nbsp;&nbsp;&nbsp;Unbilled and other receivables | 178 | 89 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 765 | 425 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 12833 | 7080 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 39 | 64 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 12672 | 15404 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use asset, net | 224 | 465 |
| &nbsp;&nbsp;&nbsp;Goodwill | 6589 | 8737 |
| &nbsp;&nbsp;&nbsp;Other assets | 73 | 53 |
| **Total Assets** | $32430 | $31803 |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $766 | $509 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 2281 | 2383 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1465 | 2683 |
| &nbsp;&nbsp;&nbsp;Warrant liability | 1051 | 5048 |
| &nbsp;&nbsp;&nbsp;Operating lease obligation, current | 195 | 350 |
| &nbsp;&nbsp;&nbsp;Promissory note, net | - | 603 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 5758 | 11576 |
| &nbsp;&nbsp;&nbsp;Operating lease obligation, noncurrent | 31 | 123 |
| &nbsp;&nbsp;&nbsp;Convertible debt | 12659 | 4512 |
| **Total Liabilities** | $18448 | $16211 |
| **Commitments and Contingencies** |  |  |
| **Stockholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Class A Common Stock, $0.0001 par value; 200,000,000 shares authorized; 33,773,696 shares issued and outstanding as of December 31, 2025 and 19,248,390 shares issued and outstanding as of December 31, 2024 | $3 | $2 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 104691 | 92583 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (90682) | (77209) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (30) | 216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Stockholders' Equity** | $13982 | $15592 |
| **Total Liabilities and Stockholders' Equity** | $32430 | $31803 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**CXAPP INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** |
| **Revenues** | $4583 | $7142 |
| **Cost of Revenues** | 578 | 1285 |
| **Gross Profit** | 4005 | 5857 |
| **Operating Expenses** |  |  |
| Research and development | 6636 | 6380 |
| Sales and marketing | 2093 | 3249 |
| General and administrative | 7973 | 7237 |
| Amortization of intangible assets | 2732 | 2732 |
| Impairment of goodwill | 2148 | - |
| **Total Operating Expenses** | 21582 | 19598 |
| **Loss from Operations** | (17577) | (13741) |
| **Other Income (Expense)** |  |  |
| Interest expense, net | (701) | (1756) |
| Change in fair value of derivative liability | 4548 | (3152) |
| Loss on debt extinguishment | (48) | (1052) |
| Other income (expense), net | 259 | (342) |
| **Total Other Income (Expense)** | 4058 | (6302) |
| **Loss, before tax** | (13519) | (20043) |
| Deferred income tax benefit | 46 | 635 |
| **Net Loss** | $(13473) | $(19408) |
| Unrealized foreign exchange gain (loss) from cumulative translation adjustments | (246) | 301 |
| **Comprehensive Loss** | $(13719) | $(19107) |
| Basic and diluted weighted average shares outstanding, Class A common stock | 23414190 | 15907946 |
| **Basic and diluted net loss per share, Class A common stock** | $(0.58) | $(1.20) |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**CXAPP INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**(in thousands, except share data)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A<br> Common Stock** | **Class A<br> Common Stock** | | | | |
|  | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Accumulated<br> Other<br> Comprehensive<br> Income**<br>**(Loss)** | **Total<br> Stockholders'**<br> **Equity** |
| **Balance at December 31, 2023** | **15254389** | $**2** | $**83282** | $**(57801)** | $**(85)** | $**25398** |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  | (19408) |  | (19408) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 2831 |  |  | 2831 |
| &nbsp;&nbsp;&nbsp;Net exercise of options | 12570 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common shares issued for extinguishment of debt | 3695211 |  | 6579 |  |  | 6579 |
| &nbsp;&nbsp;&nbsp;Common shares issued for vested restricted stock units | 246220 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Taxes withheld on stock-based compensation |  |  | (171) |  |  | (171) |
| &nbsp;&nbsp;&nbsp;Common shares issued as commitment shares | 40000 |  | 62 |  |  | 62 |
| &nbsp;&nbsp;&nbsp;Cumulative translation adjustment | - | - | - | - | 301 | 301 |
| **Balance at December 31, 2024** | **19248390** | **2** | **92583** | **(77209)** | **216** | **15592** |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  | (13473) |  | (13473) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 2784 |  |  | 2784 |
| &nbsp;&nbsp;&nbsp;Common shares issued for extinguishment of debt | 13383191 | 1 | 8754 |  |  | 8755 |
| &nbsp;&nbsp;&nbsp;Common shares issued in the at-the-market offering | 782102 |  | 648 |  |  | 648 |
| &nbsp;&nbsp;&nbsp;Common shares issued as commitment shares | 80000 |  | 89 |  |  | 89 |
| &nbsp;&nbsp;&nbsp;Common shares issued for vested restricted stock units | 280013 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Taxes withheld on stock-based compensation |  |  | (167) |  |  | (167) |
| &nbsp;&nbsp;&nbsp;Cumulative translation adjustment | - | - | - | - | (246) | (246) |
| **Balance at December 31, 2025** | **33773696** | $**3** | $**104691** | $**(90682)** | $**(30)** | $**13982** |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**CXAPP INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Operating activities** |  |  |
| Net loss | $(13473) | $(19408) |
| Adjustments to reconcile net loss to net cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 45 | 79 |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | 2732 | 2732 |
| &nbsp;&nbsp;&nbsp;Amortization of right of use asset | 386 | 391 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount and deferred financing cost |  | 862 |
| &nbsp;&nbsp;&nbsp;Accrued interest expense on promissory note and convertible debt | 881 | 817 |
| &nbsp;&nbsp;&nbsp;Accrued monitoring fee on promissory note |  | 273 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (46) | (635) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense | 2784 | 2831 |
| &nbsp;&nbsp;&nbsp;(Gain) loss on foreign currency transactions | (245) | 316 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 48 | 1052 |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | (4548) | 3152 |
| &nbsp;&nbsp;&nbsp;(Gain) loss on contract to issue common stock | 20 | (68) |
| &nbsp;&nbsp;&nbsp;Loss on asset disposal | 4 |  |
| &nbsp;&nbsp;&nbsp;Impairment of goodwill | 2148 |  |
| &nbsp;&nbsp;&nbsp;Gain on debt settlement | (7) |  |
| Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable and other receivables | 825 | 372 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (343) | 162 |
| &nbsp;&nbsp;&nbsp;Other assets | (19) | 23 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 264 | (453) |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | (225) | 771 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (392) | (407) |
| &nbsp;&nbsp;&nbsp;Deferred revenue | (1220) | (187) |
| Net cash used in operating activities | (10381) | (7325) |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (23) | (30) |
| Net cash used in investing activities | (23) | (30) |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible debt, net of issuance costs | 15990 | 6480 |
| &nbsp;&nbsp;&nbsp;Proceeds from at-the-market offering, net of issuance cost | 648 |  |
| &nbsp;&nbsp;&nbsp;Repayment of promissory note | - | (500) |
| Net cash provided by financing activities | 16638 | 5980 |
| Effect of exchange rate changes on cash and cash equivalents | (13) | (20) |
| Net increase (decrease) in cash and cash equivalents | 6221 | (1395) |
| Cash and cash equivalents, beginning of Year | 4880 | 6275 |
| Cash and cash equivalents, end of year | $11101 | $4880 |
| **Supplemental disclosures of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | $- | $29 |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $56 |
| Supplemental schedule of noncash investing and financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Financing of Directors and Officers Insurance | $240 | $225 |
| &nbsp;&nbsp;&nbsp;Common shares issued for debt extinguishment | $8755 | $6579 |
| &nbsp;&nbsp;&nbsp;Common shares issued as commitment shares | $89 | $62 |
| &nbsp;&nbsp;&nbsp;Right of use asset obtained in exchange for lease liability | $144 | $393 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**CXAPP INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – Organization, Nature of Business and Basis of Presentation**

CXApp Inc. and its subsidiaries ("CXApp" or the "Company") is in the business of delivering intelligent enterprise workplace experiences. The CXApp SaaS platform is anchored on the intersection of customer experience (CX) and artificial intelligence (AI) providing digital transformation for the physical workplace for enhanced experiences across people, places and things.

The CXApp SaaS platform offers a suite of leading-edge technology workplace experience solutions including an enterprise employee application, indoor mapping, on-device positioning, augmented reality technologies, generative AI applications and an AI-based analytics platform, targeting the emerging hybrid workplace market. CXApp creates a connected workplace by reducing app overload, data fragmentation, and complex workflows and streamlines all capabilities through The Workplace SuperApp. All features, services and integrations are housed in one easy-to-access platform allowing businesses to deliver a more holistic employee experience in a hybrid workplace.

**NOTE 2 – Summary of Significant Accounting Policies**

***Liquidity***

As of December 31, 2025, the Company had cash and cash equivalents of approximately $11,101 thousand. For the year ended December 31, 2025, the Company incurred net losses of approximately $13,473 thousand and used approximately $10,381 thousand of cash for operating activities. The Company's recurring losses and negative operating cash flows raise substantial doubt about its ability to continue as a going concern.

Management has implemented plans to address these conditions, including reductions in discretionary spending, optimization of vendor payment terms, enhanced expense governance, and focused collection efforts to accelerate customer payments. The Company will also utilize external financing sources, including existing credit facilities and its at-the-market equity program, where accessible under prevailing market and contractual conditions.

Management's assessment considers that the availability of certain financing sources is subject to market conditions including stock price, trading volume, and registration effectiveness. Additionally, liquidity depends on future cash collections from customers and the timing of operating cash requirements.

Based on these mitigation actions, existing liquidity, and expected business activity, management believes that these plans, which are within the Company's control and are expected to be effectively implemented, alleviate the substantial doubt and concluded that the Company will be able to meet its obligations as they come due for at least twelve months following the issuance of these financial statements.

On March 26, 2025, the Company entered into a Securities Purchase Agreement ("SPA") with Avondale Capital, LLC, under which the Company may issue and sell one or more Pre-Paid Purchase Agreements for up to an aggregate of $20,000 thousand in exchange for shares of its common stock. The initial Pre-Paid Purchase, in the principal amount of $4,200 thousand, closed on April 8, 2025, the Company received net proceeds of approximately $3,990 thousand. A second tranche was received on August 7, 2025, with a principal amount of $3,150 thousand and net proceeds of approximately $3,000 thousand. The third tranche of the SPA was issued on October 17, 2025 with the principal amount of $5,250 thousand, of which, the Company received net proceeds of $5,000 thousand. The fourth tranche of the SPA was issued on December 30, 2025 with the principal amount of $4,200 thousand, of which, the Company received net proceeds of $4,000 thousand. As of December 31, 2025, approximately $3,200 thousand remained available under this agreement.

Additionally, under the SPA with Streeterville Capital, LLC, entered into on May 22, 2024, the Company had access to up to $10,000 thousand in funding. As of December 31, 2025, the Company had $3,520 thousand in remaining available funding under this agreement.

On August 11, 2025, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC"), authorizing the future offering and sale of up to $150,000 thousand of various securities. Concurrently, the Company filed a prospectus supplement allowing for the issuance of up to $7,959 thousand of common stock under this registration statement. This amount is included within the total aggregate offering authorized.

The Company commenced sales of its common stock pursuant to the shelf registration. These sales were facilitated through a third-party arrangement with Maxim Group LLC, acting as the Company's agent under an equity distribution agreement under its At-The-Market ("ATM") offering program. During the year ended December 31, 2025, the Company received $648 thousand and issued 782,102 shares of class A Common Stock, which are intended to be used for general working capital and other general corporate purposes.

***Use of Estimates***

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company's significant estimates consist of:

● the valuation of stock-based compensation;

● the valuation of warrant liabilities;

● the allowance of credit losses;

● the valuation of convertible debt;

● the valuation of allowance for deferred tax assets; and

● impairment of long-lived assets and goodwill.

***Basis of Presentation***

The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the "SEC").

***Principles of Consolidation***

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation.

***Concentration of Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, and trade receivables. The Company's cash is placed with high-credit-quality financial institutions, which periodically exceed federally insured limits. The Company's cash equivalents are certificates of deposit held by a number of banks limited to $250 thousand per bank with a duration of 90 days or less. The Company has not realized any losses relating to its cash, cash equivalents, and trade receivables. However, a material loss resulting from the failure of one or more financial institutions, or from a significant default in accounts receivable, could have a substantial adverse effect on the Company's liquidity, financial position, and operating results. Given the concentration of these financial instruments, any unexpected credit event could impair the Company's ability to meet its short-term obligations and fund ongoing operations.

***Cash and Cash Equivalents***

Cash and cash equivalents consist of cash, checking accounts, money market accounts, temporary investments and certificates of deposit with maturities of three months or less when purchased. As of December 31, 2025, the Company had cash equivalents of approximately $10,687 thousand of certificates of deposit held by a number of banks limited to $250 thousand per bank with a duration of 90 days or less. As of December 31, 2024, the Company had cash equivalents of approximately $4,353 thousand of certificates of deposit.

***Accounts Receivable and Allowance for Credit Losses***

Accounts receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for credit losses to ensure accounts receivable are not overstated due to uncollectability. Allowance for credit losses is maintained for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional allowance for credit losses for individual accounts is recorded when the Company becomes aware of a customer's inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in such customer's operating results or financial position. If circumstances related to a customer change, estimates of the recoverability of receivables would be further adjusted. The Company has no allowance for credit losses as of December 31, 2025 and December 31, 2024. The opening balance of accounts receivable as of January 1, 2025 was $1,686 thousand. Changes during the year primarily reflected amounts billed to customers and cash collected, resulting in an ending balance of $789 thousand as of December 31, 2025.

Other receivables as presented within "unbilled and other receivables" includes mainly unbilled receivables and sales tax recoverable from tax authorities. These are recognized when the underlying transaction occurs and reviewed periodically for collectability. As of December 31, 2025 and December 31, 2024, sales tax receivables were $54 thousand and $67 thousand, respectively.

***Property and Equipment, net***

Property and equipment are recorded at cost, less accumulated depreciation and amortization. The Company depreciates its property and equipment for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range from 5 to 10 years. Leasehold improvements are amortized over the lesser of the useful life of the asset or the initial lease term. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life, are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. Depreciation expense related to property and equipment is not included as part of cost of revenues, but as part of operating expenses.

***Intangible Assets, net***

Intangible assets primarily consist of developed technology, customer lists/relationships, non-compete agreements, intellectual property agreements, export licenses and trade names/trademarks. They are amortized ratably over a range of 5 to 10 years, which approximates customer attrition rate and technology obsolescence. The Company assesses the carrying value of its intangible assets for impairment annually, or more frequently if an event or other circumstances indicates that the Company may not be able to recover the carrying amount of the assets. Based on its assessments, the Company did not incur any impairment charges for the years ended December 31, 2025 and December 31, 2024.

***Goodwill***

The Company tests goodwill for impairment at least annually, or more frequently if events or circumstances indicate that the carrying amount of the reporting unit may not be recoverable. The Company has determined that it operates as a single reporting unit due to the integration of all of the Company's activities. In evaluating goodwill for impairment, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying amount. If the Company bypasses the qualitative assessment, or if the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative impairment test by comparing the estimated fair value of the reporting unit with its carrying amount.

The Company estimates the fair value of the reporting unit using a combination of the income and market approaches. For the income approach, the Company uses internally developed discounted cash flow models that include assumptions such as projected revenues, expenses, and related cash flows based on long-term growth rates and demand trends; expected future investments to support operations; and estimated discount rates. For the market approach, the Company relies on analyses based primarily on market comparables, including the guideline public company method, guideline transaction method, and market price method.

The Company completed both qualitative and quantitative goodwill impairment assessments as of December 31, 2025, and concluded that the carrying amount of goodwill exceeded its estimated fair value. Accordingly, the Company recognized a goodwill impairment charge of $2,148 thousand for the year ended December 31, 2025. Based on the annual goodwill impairment evaluation performed as of November 30, 2024, the Company determined that goodwill was not impaired and therefore recorded no goodwill impairment for the year ended December 31, 2024. The impairment assessment was based on management's evaluation of historical operating results, third-party valuation analyses, industry projections, relevant micro- and macroeconomic conditions, and the Company's expectations regarding future cash flows. The impairment charge is recorded within operating expenses in the consolidated statements of operations.

***Leases and Right-of-Use Assets and Liabilities***

The Company determines if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company generally uses their incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use assets related to the Company's operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. The Company's lease terms that are used in determining their operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that the Company will exercise such options. The Company amortizes their right-of-use assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The Company does not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

***Income Taxes***

The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Income tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain.

***Comprehensive Income (Loss) and Foreign Currency Translation***

The Company reports comprehensive income (loss) and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders' equity that, under U.S. GAAP, are excluded from net loss.

Assets and liabilities related to the Company's foreign operations are calculated using the Philippine Peso and Canadian Dollar and are translated at end-of-period exchange rates, while the related revenues and expenses are translated at average exchange rates prevailing during the period. Gains or losses resulting from transactions denominated in foreign currencies are included in other income (expense) in the consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. dollar. Aggregate foreign currency net translation loss was approximately $246 thousand for the year ended December 31, 2025 and gain of $301 thousand for the year ended December 31, 2024.

***Convertible Debt***

The Company issued convertible debt in the form of Pre-Paid Purchases during December 2024, March 2025 (Settled in April 2025), August 2025, October 2025 and December 2025 and evaluated such instruments to determine whether they contain features that qualify as embedded derivatives in accordance with ASC 815 "Derivatives and Hedging" ("ASC 815"). Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. In accounting for the issuance of the convertible debt, the Company elected the fair value option under ASC 825 "Financial Instruments" ("ASC 825"). Under the fair value option election, the convertible debt is initially measured at its issuance date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis. The estimated fair value adjustment is presented within change in fair value of derivative liability in the Consolidated Statements of Operations and Comprehensive loss. The Company classifies its convertible debt that are being valued under the fair value option election as Level 3 due to the lack of relevant observable market data over fair value inputs, such as the probability weighting of the various scenarios that can impact settlement of the arrangement. The Company recognized a gain on the changes in the estimated fair value of the convertible debt of approximately $551 thousand and $213 thousand for the years ended December 31, 2025 and December 31, 2024, respectively.

***Debt Issuance Cost***

Under the fair value option election, costs directly associated with the borrowing are expensed as incurred.

***Note Conversion***

Convertible notes that are exchanged for equity pursuant to their original contractual terms are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options. Upon conversion, the carrying amount of the convertible debt is reclassified to equity. No gain or loss is recognized in earnings, as the conversion is executed under the original terms of the instrument.

If the debt is settled under modified terms, the transaction is accounted for in accordance with ASC 470-50, "Debt - Modifications and Extinguishments" ("ASC 470-50"). In such cases, a gain or loss is recognized equal to the difference between the reacquisition price and the net carrying amount of the extinguished debt.

***Debt Extinguishment***

The note exchanges are accounted for under ASC 470-50 on Modifications and Extinguishments. This standard requires the recognition of a gain or loss on the difference between the reacquisition price and the net carrying amount of the extinguished debt.

***Revenue Recognition***

The Company recognizes revenue, in accordance with ASC 606 "Revenue from Contracts with Customers" ("ASC 606"), when control is transferred of the promised products or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. The Company derives revenue from its software as a service for cloud-based software, as well as design, implementation and other professional services for work performed in conjunction with its cloud-based software, and sale of hardware. The Company enters into contracts with its customers whereby it grants a non-exclusive cloud-based license for the use of its proprietary software and for professional services. The contracts may also provide for on-going services for a specified price, which may include maintenance services, designated support, and enhancements, upgrades and improvements to the software, depending on the contract. Licenses for cloud software provide the customer with a right to use the software as it exists when made available to the customer. All software provides customers with the same functionality and differs mainly in the duration over which the customer benefits from the software.

The standard introduces a five-step model for revenue recognition that replaces the four criteria for revenue recognition under previous U.S. GAAP. The five steps are shown below:

&nbsp;&nbsp;&nbsp;&nbsp;1. Identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;2. Identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;3. Determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;4. Allocate the transaction price to performance obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;5. Recognize revenue when (or as) the entity satisfies a performance obligation

*<u>License Subscription Revenue Recognition (Software As A Service)</u>*

With respect to sales of the Company's license agreements, customers generally pay fixed annual fees in advance in exchange for the Company's software service provided via electronic means, which are generally recognized ratably over the license term. Some agreements allow the customer to terminate their subscription contracts before the end of the applicable term, and in such cases the customer is generally entitled to a refund pro-rata but only for the elapsed time remaining at the point of termination, which would approximate the deferred revenue at such time. The Company's performance obligation is satisfied over time as the electronic services are provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous access to its service. The Company's customers generally pay within 30 to 60 days from the receipt of a customer approved invoice.

The timing of the Company's revenue recognition related to the licensing revenue stream is dependent on whether the software licensing agreement entered into represents a service. Software that relies on an entity's IP and is delivered only through a hosting arrangement, where the customer cannot take possession of the software, is a service. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software.

Renewals or extensions of licenses are evaluated as distinct licenses and revenue attributed to the distinct service is not recognized until: (1) the entity provides the distinct license (or makes the license available) to the customer and (2) the customer is able to use and benefit from the distinct license. Renewal contracts are not combined with original contracts, and, as a result, the renewal right is evaluated in the same manner as all other additional rights granted after the initial contract. The revenue is not recognized until the customer can begin to use and benefit from the license, which is typically at the beginning of the license renewal period. The Company recognizes revenue resulting from renewal of licensed software over time.

*<u>Professional Services Revenue Recognition</u>*

The Company provides integration and software customization professional services to its customers.

Professional services under milestone contracts are accounted for using the percentage of completion method. As soon as the outcome of a contract can be estimated reliably, contract revenue is recognized in the statement of operations in proportion to the stage of completion of the contract. Contract costs are expensed as incurred. Contract costs include all amounts that relate directly to the specific contract, are attributable to contract activity, and are specifically chargeable to the customer under the terms of the contract.

Professional services are also contracted on the fixed fee and in some cases on a time and materials basis. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company's time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company's right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts provided by in house personnel, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company's contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known.

For the years ended December 31, 2025 and December 31, 2024, the Company did not incur any such losses. These amounts are based on known and estimated factors.

*<u>Hardware Revenue Recognition</u>*

For sales of hardware, the Company's performance obligation is fulfilled when the products are shipped to the customer, transferring title and ownership risks. Deliveries occur via drop-shipment by a third-party vendor and the Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. The Company negotiates sale prices, pays suppliers directly, manages credit risk, and ensures product acceptability, acting as the principal in the transaction and recording revenue on a gross basis. Customers typically pay within 30 to 60 days of invoice receipt. The Company has elected the practical expedient to expense the costs of obtaining a contract when they are incurred because the amortization period of the asset that otherwise would have been recognized is less than a year.

*<u>Contract Balances</u>*

The timing of the Company's revenue recognition may differ from the timing of invoicing to and payment by its customers. The Company records an unbilled receivable when revenue is recognized prior to invoicing and the Company has an unconditional right to payment. Alternatively, when invoicing a customer precedes the Company providing of the related services, the Company records deferred revenue until the performance obligations are satisfied.

**Changes in contract balances were as follows:**

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| | | |
|:---|:---|:---|
| **(in thousands)** | **Accounts<br> Receivable, net** | **Deferred Revenue** |
| **Balance at January 1, 2024** | $1956 | $2878 |
| **Balance at December 31, 2024** | $1686 | $2683 |
| **Balance at December 31, 2025** | $789 | $1465 |

---

The Company had deferred revenue of approximately $1,465 thousand and $2,683 thousand as of December 31, 2025 and December 31, 2024, respectively, related to customer invoices rendered in advance for software licenses and professional services provided by the Company's technical staff. The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with professional services, and recognize the deferred revenue related to licenses generally over the remaining contract term which is generally twelve months following the commencement of the license.

The Company recognized revenue in the reporting period of $2,558 thousand and $2,606 thousand for the years ended December 31, 2025 and 2024, respectively, that was included in the deferred revenue balance at the beginning of each period.

*<u>Costs to Obtain a Contract</u>*

The Company recognizes eligible sales commissions as an asset within prepaid expenses and other current assets as the commissions are an incremental cost of obtaining a contract with the customer and the Company expects to recover these costs. The capitalized costs are amortized over the expected contract term.

*<u>Cost to Fulfill a Contract</u>*

The Company incurs costs to fulfill their obligations under a contract once it has obtained the contract. These costs are generally not significant and are recorded to expense as incurred.

*<u>Multiple Performance Obligations</u>*

The Company enters into contracts with customers for its technology that include multiple performance obligations. Each distinct performance obligation was determined by whether the customer could benefit from the good or service on its own or together with readily available resources. The Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company's process for determining standalone selling price considers multiple factors including the Company's internal pricing model and market trends that may vary depending upon the facts and circumstances related to each performance obligation.

*<u>Sales and Use Taxes</u>*

The Company presents transactional taxes such as sales and use tax collected from customers and remitted to government authorities on a net basis.

*<u>Shipping and Handling Costs</u>*

Shipping and handling costs are expensed as incurred as part of cost of revenues. These costs were deemed to be de minimis during each of the reporting periods.

***Research and Development***

Research and development ("R&D") costs are expensed when incurred. R&D expenses consist primarily of personnel and related headcount costs, costs of professional services associated with the ongoing development of the Company's technology, and allocated overhead.

***Business Combinations***

The Company accounts for business combinations under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805 "Business Combinations" using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are included as of and subsequent to the acquisition date.

***Segments***

The Company and its Chief Executive Officer ("CEO"), acting as the Chief Operating Decision Maker ("CODM") determines its reporting units in accordance with FASB ASC 280, "Segment Reporting" ("ASC 280"). The Company evaluates a reporting unit by first identifying its operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. The Company has one operating segment and reporting unit. The Company is organized and operated as one business. Management reviews its business as a single operating segment, using financial and other information rendered meaningful only by the fact that such information is presented and reviewed in the aggregate.

***Stock-Based Compensation***

The Company measures the cost of employee and non-employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company has issued stock-based compensation awards in the form of options and restricted stock units. The grant date fair value is recognized over the requisite service period during which an employee and non-employee is required to provide service in exchange for the award.

The grant date fair value of options is estimated using the Black-Scholes option pricing model based on the average of the high and low stock prices at the grant date for awards under the CXApp Inc. 2023 Equity Incentive Plan (the "Incentive Plan"). The risk-free interest rate assumptions were based upon the observed interest rates appropriate for the expected term of the equity instruments. The expected dividend yield is assumed to be zero as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The Company uses the simplified method to estimate the expected term.

The grant date fair value for restricted stock units is valued using the closing price of the Company's common stock on the date of grant.

The Company estimates forfeitures at the time of grant and revises these estimates in subsequent periods if actual forfeitures differ from those estimates.

***Derivative Warrant Liabilities***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an evaluation of the warrant terms and the applicable guidance in ASC 480, *Distinguishing Liabilities from Equity* ("ASC 480"), and ASC 815, *Derivatives and Hedging* ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments, whether they meet the definition of a liability under ASC 480, and whether they meet all requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock. This evaluation, which requires the use of professional judgment, is performed at issuance and at each subsequent reporting date while the warrants remain outstanding.

The Company currently has two classes of warrants outstanding, the Private Placement Warrants and the Public Warrants, both of which are classified as liabilities. Warrants that do not meet all of the criteria for equity classification are recorded as warrant liabilities at their initial fair value on the issuance date and are remeasured to fair value at each balance sheet date. Changes in fair value are recognized in the consolidated statements of operations as a non-cash gain or loss. The Company uses the quoted market price of the Public Warrants as the fair value for both warrant classes at each reporting date, and therefore classifies the warrant liabilities as Level 3 within the fair value hierarchy due to the absence of observable market inputs specific to the Private Placement Warrants.

For the years ended December 31, 2025 and 2024, the Company recognized a non-cash gain of approximately $3,997 thousand and a non-cash loss of approximately $3,365 thousand, respectively, related to changes in the estimated fair value of its warrant liabilities.

***Earnings Per Share***

The Company computes basic and diluted earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share are similarly calculated with the inclusion of dilutive common stock equivalents. For the years ended December 31, 2025 and December 31, 2024, basic and dilutive net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options, warrants, and vesting of restricted units in the calculation of diluted net loss per common shares would have been anti-dilutive.

The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the years ended December 31, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
| ***(in thousands)*** | **Year Ended<br> December 31,**<br> **2025** | **Year Ended<br> December 31,<br> 2024** |
| Stock options | 2150 | 1627 |
| Restricted stock units | 1062 | 558 |
| Warrants | 21032 | 21032 |
| Total | 24244 | 23217 |

---

***Fair Value Measurements***

FASB ASC 820, "Fair Value Measurements" ("ASC 820"), provides guidance on the development and disclosure of fair value measurements. The Company follows this authoritative guidance for fair value measurements, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States, and expands disclosures about fair value measurements. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

● Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

● Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

● Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management. The fair value of the warrants has been measured based on the listed market price of such warrants, a Level 1 measurement. For the year ended December 31, 2025, the Company recognized an unrealized gain in the consolidated statements of operations and comprehensive loss of $3,997 thousand. For the year ended December 31, 2024, the Company recognized an unrealized loss in the consolidated statements of operations and comprehensive loss of $3,365 thousand, which are presented as changes in fair value of derivative liability.

The following table presents information about the Company's financial liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **Quoted price in**<br> **Active Market**<br> **(Level 1)** | **Significant other<br> observable input**<br> **(Level 2)** | **Significant other unobservable input**<br> **(Level 3)** |
| Warrants | $1051 | $1051 | $- | $- |
| Convertible Note |  |  |  |  |
| &nbsp;&nbsp;&nbsp;-Avondale Prepaid Purchase #1 | 1231 |  |  | 1231 |
| &nbsp;&nbsp;&nbsp;-Avondale Prepaid Purchase #2 | 2749 |  |  | 2749 |
| &nbsp;&nbsp;&nbsp;-Avondale Prepaid Purchase #3 | 4683 |  |  | 4683 |
| &nbsp;&nbsp;&nbsp;-Avondale Prepaid Purchase #4 | 3996 |  |  | 3996 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **Quoted price in<br> Active Market**<br> **(Level 1)** | **Significant other<br> observable input**<br> **(Level 2)** | **Significant other unobservable input**<br> **(Level 3)** |
| Warrants | $5048 | $5048 | $- | $- |
| Convertible Note |  |  |  |  |
| &nbsp;&nbsp;&nbsp;-Streeterville Prepaid Purchase #1 | 543 |  |  | 543 |
| &nbsp;&nbsp;&nbsp;-Streeterville Prepaid Purchase #2 | 1028 |  |  | 1028 |
| &nbsp;&nbsp;&nbsp;-Streeterville Prepaid Purchase #3 | 2941 |  |  | 2941 |

---

The Company accounts for its public and private warrants as a derivative liability initially measured at its fair values and remeasured in the consolidated statements of operations at the end of each reporting period. When the warrants are exercised, the corresponding derivative liability is de-recognized at the underlying fair value of the Class A Common Stock that is issued to the warrant holder less any cash paid in accordance with the warrant agreement. Upon either cash or cashless exercise, the de-recognized derivative liability results in an increase in additional paid in capital equal to the difference between the fair value of the underlying Class A Common Stock and its par value. A cashless exercise results in the warrant holder surrendering Class A Common Stock equal to the stated warrant exercise price based on the contractual terms in the warrant agreement that governs the cashless conversion.

The following table shows the changes in fair value of the liability:

---

| | |
|:---|:---|
| Warrant liability - January 1, 2025 | $5048 |
| &nbsp;&nbsp;&nbsp;**Change in FV of derivative instruments** | (3997**)** |
| **Warrant liability – December 31, 2025** | $**1051** |
| Warrant liability - January 1, 2024 | $1683 |
| &nbsp;&nbsp;&nbsp;**Change in FV of derivative instruments** | **3365** |
| **Warrant liability – December 31, 2024** | $**5048** |

---

The Company accounts for convertible debt under the fair value option election using Level 3 inputs. For the year ended December 31, 2025 and December 31, 2024, the Company recognized an unrealized gain in the Consolidated Statements of Operations and Comprehensive Loss of $551 thousand and $213 thousand, respectively, which are presented as change in fair value of derivative liability. See additional details within *Note 11, Convertible debt*.

The significant inputs in the valuations models for each of the three issuances were as follows:

*Avondale*

*Pre-Paid Purchase #1*

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| | |
|:---|:---|
| **Inputs** | **December 31, <br>2025** |
| Valuation method | Scenario based analysis |
| Stock price | $0.33 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.32 |
| Volatility | 116.4% |
| Discount rate | 3.59% |
| Risk free rate | 3.57% |

---

*Avondale*

*Pre-Paid Purchase #2*

---

| | |
|:---|:---|
| **Inputs** | **December 31,<br>2025** |
| Valuation method | Scenario based analysis |
| Stock price | $0.33 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.23 |
| Volatility | 116.4% |
| Discount rate | 3.59% |
| Risk free rate | 3.46% |

---

*Avondale*

*Pre-Paid Purchase #3*

---

| | |
|:---|:---|
| **Inputs** | **December 31,<br> 2025** |
| Valuation method | Scenario based analysis |
| Stock price | $0.33 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.23 |
| Volatility | 116.4% |
| Discount rate | 3.59% |
| Risk free rate | 3.46% |

---

*Avondale*

*Pre-Paid Purchase #4*

---

| | |
|:---|:---|
| **Inputs** | **December 31,<br> 2025** |
| Valuation method | Scenario based analysis |
| Stock price | $0.33 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.23 |
| Volatility | 116.4% |
| Discount rate | 3.59% |
| Risk free rate | 3.46% |

---

*Streeterville*

*Pre-Paid Purchase #1*

---

| | |
|:---|:---|
| **Inputs** | **December 31,<br> 2024** |
| Valuation method | Scenario based analysis |
| Stock price | $1.82 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.42 |
| Volatility | 100.8% |
| Discount rate | 11.8% |
| Risk free rate | 4.22% |

---

*Streeterville*

*Pre-Paid Purchase #2*

---

| | |
|:---|:---|
| **Inputs** | **December 31,<br> 2024** |
| Valuation method | Scenario based analysis |
| Stock price | $1.82 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.42 |
| Volatility | 100.8% |
| Discount rate | 11.8% |
| Risk free rate | 4.22% |

---

*Streeterville*

*Pre-Paid Purchase #3*

---

| | |
|:---|:---|
| **Inputs** | **December 31, <br>2024** |
| Valuation method | Scenario based analysis |
| Stock price | $1.82 |
| Equity dividend yield | 0.00% |
| Expected term (years) | 2.42 |
| Volatility | 100.8% |
| Discount rate | 11.8% |
| Risk free rate | 4.22% |

---

***Fair Value of Financial Instruments***

Financial instruments consist of cash and cash equivalents, accounts receivable, unbilled and other receivables and accounts payable. The Company determines the estimated fair value of such financial instruments presented in the financial statements is equal to its carrying value due to their short-term nature.

***Carrying Value, Recoverability and Impairment of Long-Lived Assets***

The Company follows FASB ASC 360 "Property, Plant, and Equipment" ("ASC 360") for its long-lived assets. Pursuant to ASC 360-10-35-17, an impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. Pursuant to ASC 360-10-35-20, if an impairment loss is recognized, the adjusted carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated (amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited.

Pursuant to ASC 360-10-35-21, the Company's long-lived asset (asset group) is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The Company considers the following to be some examples of such events or changes in circumstances that may trigger an impairment review: (a) significant decrease in the market price of a long-lived asset (asset group); (b) a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition; (c) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator; (d) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group); (e) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group); and (f) a current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company tests its long-lived assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

Based on its assessments, the Company recorded no impairment charges on long-lived assets for the years ended December 31, 2025 and December 31, 2024.

***Recently Adopted Accounting Pronouncement***

The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, as of January 1, 2025, on a prospective basis (with optional retrospective application for certain elements). This ASU requires enhanced disaggregation in the rate reconciliation, income taxes paid by jurisdiction, and related pretax income/tax expense information. Adoption resulted in expanded disclosures in Note 13 – Income Taxes but had no impact on the Company's financial position, results of operations, or cash flows.

In March 2024, the FASB issued ASU 2024-02 "Codification Improvements-Amendments to Remove References to the Concept Statements," which amends the Codification to remove references to various FASB Concepts Statements and impacts a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and are not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024 and interim periods within those fiscal years. Entities may apply the guidance either retrospectively to the beginning of the earliest comparative period presented or prospectively to all new or modified transactions recognized on or after the date of adoption. We adopted this guidance as of January 1, 2025, on a prospective basis and the adoption did not have a material impact on our consolidation financial statements.

***Recently Issued Accounting Standards Not Yet Adopted***

In November 2024, the FASB issued ASU No. 2024-03 "Disaggregation of Income Statement Expenses". The amendment requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact this ASU will have on our disclosures.

In November 2024, the FASB issued ASU No. 2024-04 "Debt - Debt with Conversion and Other Options (Subtopic 470-20)". The amendment requires companies to apply a preexisting contract approach. Under this approach, a settlement qualifies for induced conversion accounting if the inducement offer preserves the form of consideration and results in an amount of consideration that is no less than that issuable pursuant to the preexisting conversion privileges. The ASU is effective for all entities in annual and interim reporting periods in fiscal years beginning after December 15, 2025. Early adoption permitted for entities that have adopted the amendments in ASU 2020-06. The amendments may be applied either (1) prospectively to any settlements of convertible debt instruments that occur after the effective date of this ASU or (2) retrospectively to all prior periods that occurred after the adoption of the amendments in ASU 2020-06. We are currently evaluating the impact of this standard on our consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The practical expedient allows companies to assume the current conditions as of the balance sheet date do not change for the remaining life of the asset when measuring credit losses. The amendments in ASU 2025-05 are effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the Company's consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs, and enhances disclosure requirements. The amendments in ASU 2025-06 are effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the Company's consolidated financial statements.

**NOTE 3 – Disaggregation of Revenue**

The Company recognizes revenue when control is transferred of the promised products or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. The Company derives revenue from software as a service, design and implementation services for its enterprise apps solutions systems, professional services for work performed in conjunction with its systems, and sale of hardware.

Revenues consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year Ended <br>December 31, <br>2024** |
| **Subscription revenue** |  |  |
| Software, License & Maintenance Contracts | $4480 | $6202 |
| **Total subscription revenue** | $**4480** | $**6202** |
| **Non-subscription revenue** |  |  |
| Professional services | $73 | $798 |
| Hardware | 30 | 142 |
| **Total non-subscription revenue** | $**103** | $**940** |
| **Total Revenue** | $**4583** | $**7142** |

---

---

| | | |
|:---|:---|:---|
|  | **Year ended<br> December 31,<br> 2025** | **Year Ended <br>December 31, <br>2024** |
| **Revenue recognized over time<sup>(1)(2)</sup>** | $4553 | $7000 |
| **Revenue recognized at point in time<sup>(3)</sup>** | 30 | 142 |
|  | $**4583** | $**7142** |

---

(1) Professional services are also contracted on the fixed fee and time and materials basis. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company has generally elected the practical expedient to recognize revenue for the right to invoice because the Company's right to consideration corresponds directly with the value to the customer of the performance completed to date.

(2) Software As a Service Subscription Revenue's performance obligation is satisfied evenly over the service period using a time-based measure because the Company is providing continuous access to its service and service is recognized over time.

(3) Hardware revenue is recognized at a point in time when the control over the goods transfers to the customer - upon delivery to the customers.

**NOTE 4 – Property and Equipment, net**

Property and equipment consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,<br>2025** | **December 31,<br>2024** |
| Computer and office equipment | $207 | $177 |
| Furniture and fixtures | 13 | 11 |
| Leasehold improvements | 5 | 4 |
| &nbsp;&nbsp;&nbsp;Total | 225 | 192 |
| Less: accumulated depreciation and amortization | (186) | (128) |
| **Total Property and Equipment, Net** | $39 | $64 |

---

Depreciation and amortization expense was approximately $45 thousand and $79 thousand for the years ended December 31, 2025 and December 31, 2024, respectively.

**NOTE 5 – Goodwill and Intangible Assets, net**

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company operates as one reporting unit for purposes of assessing goodwill. The carrying amount of goodwill was $8,737 thousand as of both December 31, 2025 and December 31, 2024. During the fourth quarter of 2025, the Company identified indicators of potential impairment, including a decline in the Company's market capitalization, macroeconomic conditions, decline in share price and continued operating losses. These indicators required the Company to perform a quantitative goodwill impairment test as of December 31, 2025.

The Company estimated the fair value of the reporting unit using a weighted average of an income approach and market approach. Under the income approach, the Company prepared a discounted cash flow model (DCF) that incorporated updated revenue growth expectations, projected operating margins, long-term cash flow forecasts, and a discount rate of approximately 40% reflecting the Company's risk profile and market conditions. This approach was assigned lower weighting due to limited comparability and volatility in market-based multiples. After weighting the approaches, the Company determined that the estimated equity fair value of the reporting unit was approximately $13,964 thousand compared to a carrying amount of $16,112 thousand, resulting in a shortfall of $2,148 thousand. As a result, the Company recorded a goodwill impairment charge of $2,148 thousand for the year ended December 31, 2025. No goodwill impairment was recognized for the year ended December 31, 2024. Following recognition of the impairment charge, goodwill totaled $6,589 thousand as of December 31, 2025 and $8,737 thousand as of December 31, 2024.

The Company evaluated and determined that changes in certain valuation inputs could have materially affected the impairment outcome. A one to two percentage point increase in the discount rate or a reduction of approximately five to ten percent in projected cash flows would have resulted in additional impairment as of the testing date. Future changes in macroeconomic conditions, discount rate assumptions or forecasted cash flows could result in further impairment of goodwill.

Intangible assets consisted of the following (in thousands):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Weighted<br> Average<br> Remaining<br> Useful Life<br> (Years)** | **Gross<br> Amount** | **Accumulated<br> Amortization** | **Net<br> Carrying<br> Amount** | **Gross<br> Amount** | **Accumulated<br> Amortization** | **Net<br> Carrying<br> Amount** |
| Trade Name/Trademarks | 4.17 | $3294 | $(1314) | $1980 | $3294 | $(843) | $2451 |
| Customer Relationships | 2.17 | 5604 | (3129) | 2475 | 5604 | (2008) | 3596 |
| Developed Technology | 7.17 | 8697 | (2428) | 6269 | 8697 | (1558) | 7139 |
| Patents and Intellectual Property | 7.17 | 2703 | (755) | 1948 | 2703 | (485) | 2218 |
| **Totals** |  | $**20298** | $**(7626)** | $**12672** | $**20298** | $**(4894)** | $**15404** |

---

Future amortization expense on intangible assets as of December 31, 2025, is anticipated to be as follows (in thousands):

---

| | |
|:---|:---|
| **For the Years Ending December 31,** | **Amount** |
| 2026 | $2731 |
| 2027 | 2731 |
| 2028 | 1844 |
| 2029 | 1611 |
| 2030 | 1238 |
| 2031 and thereafter | 2517 |
| **Total** | $**12672** |

---

**NOTE 6 – Deferred Revenue**

Deferred revenue consisted of the following (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **License<br> Agreement** | **Professional<br> Service<br> Agreements** | **Hardware** | **Total** |
| Deferred Revenue - January 1, 2025 | $2604 | $61 | $18 | $2683 |
| Revenue recognized | (4480) | (73) | (30) | (4583) |
| Revenue deferred | 3234 | 63 | 12 | 3310 |
| Advance from Customer | 56 | - | - | 56 |
| **Deferred Revenue - December 31, 2025** | $**1414** | $**51** | $**-** | $**1465** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **License<br> Agreement** | **Professional<br> Service<br> Agreements** | **Hardware** | **Total** |
| Deferred Revenue - January 1, 2024 | $2404 | $474 | $- | $2878 |
| Revenue recognized | (6202) | (798) | (142) | (7142) |
| Revenue deferred | 6402 | 385 | 160 | 6947 |
| **Deferred Revenue - December 31, 2024** | $**2604** | $**61** | $**18** | $**2683** |

---

The fair value of the deferred revenue approximates the services to be rendered.

**NOTE 7 – Accrued Liabilities**

Accrued liabilities consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,<br>2025** | **December 31,<br>2024** |
| Accrued expenses and reimbursements | $1502 | $1690 |
| Accrued compensation and benefits | 469 | 382 |
| Accrued bonus and commissions | 115 | 134 |
| Accrued sales and other indirect taxes payable | 158 | 95 |
| Accrued insurance premium and interest | 24 | 23 |
| Accrued transaction costs | 13 | 13 |
| Income Tax Payables | - | 46 |
| Accrued liabilities | $2281 | $2383 |

---

*Financing of Directors & Officers Insurance*

The Company entered into a Directors & Officers ("D&O") insurance agreement with Oakwood D&O Insurance, effective on March 15, 2025. The agreement states that the Company will pay a total of $310 thousand in premiums at an annual percentage rate of 9.25%. The first of ten monthly separate installment payments begin on April 14, 2025. The Company paid a down payment on the policy of $70 thousand. As of December 31, 2025 and December 31, 2024, the Company owes $24 thousand and $23 thousand on the D&O insurance policy, respectively.

**NOTE 8 – Promissory Note**

Promissory note consisted of the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Schedule of promissory note** | | |
| | | <br>**December 31,<br> 2025** | <br>**December 31,<br> 2024** |
| Principal amount at beginning | Principal amount at beginning | $603 | $3885 |
| Add: Interest | Add: Interest | 2 | 372 |
|  | Accrued monitoring fee | - | 273 |
|  |  | 605 | 4530 |
| Less: | Extinguishment | 605 | 3927 |
| Principal amount at end | Principal amount at end | $- | $603 |

---

On December 15, 2023, the Company entered into a note purchase agreement with Streeterville Capital, LLC (the "Lender"), pursuant to which we agreed to issue and sell to the Lender an unsecured promissory note (the "Note") in an aggregate initial principal amount of $3,885 thousand, which is payable on or before the date that is 12 months from the issuance date. The initial principal amount included an original issue discount of $870 thousand and $15 thousand that we agreed to pay to the Lender to cover the Lender's legal fees, accounting costs, due diligence, monitoring and other transaction costs. The net proceeds of the Note are $3,000 thousand.

Interest on the Note accrued at a rate of 10% per annum and is payable on the maturity date.

A monitoring fee of 10% of the outstanding balance was to be charged starting six (6) months from the issuance of the Note to cover Lender's accounting, legal and other costs incurred in monitoring. The foregoing fee shall automatically be added to the outstanding balance on the applicable date without any further action by either party.

The Lender had the right to redeem up to an aggregate of 1/6th of the initial principal balance of the Note plus any interest accrued thereunder each month by providing written notice delivered to us; provided, however, that if the Lender does not exercise any monthly redemption amount in its corresponding month then such monthly redemption amount shall be available for the Lender to redeem in any further month in addition to such future month's monthly redemption amount.

Upon receipt of any monthly redemption notice, we shall pay the applicable monthly redemption amount in cash to the Lender within five (5) business days of the Company's receipt of such monthly redemption notice.

The Note included customary event of default provisions, subject to certain cure periods, and provides for a default interest rate of 22%. Upon the occurrence of an event of default, interest would accrue on the outstanding balance beginning on the date the applicable event of default occurred at an interest rate equal to the lesser of twenty-two percent (22%) or the maximum rate permitted under applicable law.

***Note Exchanges***

During the period from July 15, 2024, to December 26, 2024, the Company exchanged $3,428 thousand of the outstanding balance of the Note for approximately 2,012,107 shares of the Company's Class A Common Stock at exchange prices between $1.47 and $2.23 per share.

The Company analyzed the exchange of principal under the note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and recorded an approximately $1,052 thousand loss on the exchange of debt for equity as a separate item in the other income (expense) section of the consolidated statements of operations for the year ended December 31, 2024.

As of January 17, 2025, the Company paid down the entire December 2023 Note.

Interest expense for the note recognized on the consolidated statement of operations and comprehensive loss were approximately $2 thousand and $1,069 thousand for the years ended December 31, 2025 and December 31, 2024, respectively.

**NOTE 9 – Warrants**

***Public Warrants***

As of December 31, 2025 and December 31, 2024, there were 10,751,862 Public Warrants outstanding. Each whole warrant entitles the holder thereof to purchase one share of the Company's Class A Common Stock at a price of $11.50 per share, subject to adjustments described in the Company's registration statement on Form S-1 (Registration No. 333-249177) filed in connection with its initial public offering.

The Public Warrants is exercisable and will expire on March 15, 2028 or earlier upon redemption or liquidation. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

***Private Warrants***

As of December 31, 2025 and December 31, 2024, there were 10,280,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until April 14, 2023, subject to certain limited exceptions.

Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

For the years ended December 31, 2025 and December 31, 2024, there were no exercises or exchanges made in relation with the Company's Warrants.

**NOTE 10 – Stock Option Plan and Stock-Based Compensation**

***2023 Equity Incentive Plan***

At the special meeting held on March 10, 2023, the KINS stockholders considered and approved, among other things, the Incentive Plan. The Incentive Plan was previously approved, subject to stockholder approval, by KINS' board of directors. The Incentive Plan became effective immediately upon the closing of the Business Combination. Pursuant to the terms of the Incentive Plan, there are 5,676,000 shares of CXApp Class A Common Stock available for issuance under the Incentive Plan, which is equal to 15% of the aggregate number of shares of CXApp common stock issued and outstanding immediately after the closing of the Business Combination (giving effect to the redemptions).

***Employee Stock Options***

To calculate the stock-based compensation resulting from the issuance of options, the Company uses the Black-Scholes option pricing model, which is affected by the Company's fair value of its stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company's expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

On February 6, 2024, a total of 665,000 stock options to purchase the Company's common stock were granted to employees and consultants of the Company. These options vest over a 4-year period. The options have a life of 10 years and an exercise price of $1.20 per option. The stock options were valued using the Black-Scholes option valuation model and the weighted average fair value of the awards granted during the period was determined to be $0.78 per option on the grant date. The fair value of the common stock as of the grant date utilized in the Black-Scholes option valuation model was $1.21 per share.

In June 2024, the Company received a notice for a net exercise of 70,350 options to purchase shares of common stock resulting in the issuance of 12,570 shares of the Company's Class A Common Stock with par value $0.0001 per share. In accordance with the terms of the Incentive Plan, 51,012 shares were withheld by the Company to cover the exercise price, and 6,768 shares were withheld in satisfaction of the taxes required to be paid in connection with the exercise.

On August 26, 2024, the Board approved the award of 230,000 options to purchase common stock pursuant to the 2023 Equity Incentive Plan to Joy Mbanugo, the Chief Financial Officer of the Company. The option has an exercise price of $2.40 per share. The options expire on August 26, 2034. The stock options were valued using the Black-Scholes option valuation model and the fair value of the awards granted was determined to be $1.49 per option on the grant date. The fair value of the common stock as of the grant date utilized in the Black-Scholes option valuation model was $2.40 per share.

On April 4, 2025, the Board approved the award of 350,000 options to purchase common stock pursuant to the 2023 Equity Incentive plan to Khurram Sheikh, the Chief Executive Officer of the company and Joy Mbanugo, the Chief Financial Officer of the company. The options have an exercise price of $1.00 per share and expire on May 23, 2035. The stock options were valued using the Black-Scholes option valuation model and the fair value of the awards granted was determined to be $0.56 per option on the grant date. The fair value of the common stock as of the grant date utilized in the Black-Scholes options valuation model was $1.00 per share.

See below for a summary of the stock options granted under the Incentive Plan:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Schedule of stock options activity** | | | | | |
|  | <br>**Number of<br>Options** | <br>**Weighted-<br>average<br>exercise<br>price** | <br>**Weighted<br>average<br>remaining<br>contractual<br>term (years)** | <br>**Weighted-<br>Average**<br> **Fair Value at<br>Grant Date** | <br>**Aggregate<br> Intrinsic<br> Value**<br> **(In thousands)** |
| Options outstanding at January 1, 2025 | 1799550 | $1.52 | 8.74 | $0.93 |  |
| Granted | 350000 | $1.00 | 9.40 | $0.56 |  |
| Exercised |  | $- |  | $- | $- |
| Forfeited | - | $- |  | $- |  |
| Options outstanding at December 31, 2025 | 2149550 | $1.44 | 8.01 | $0.87 |  |
| Options exercisable at December 31, 2025 | 1087837 | $1.59 |  |  |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Number of<br>Options** | **Weighted-<br>average<br>exercise<br>price** | **Weighted<br>average<br>remaining<br>contractual<br>term (years)** | **Weighted-<br>Average**<br> **Fair Value at<br>Grant Date** | **Aggregate<br> Intrinsic<br> Value<br> (In thousands)** |
| Options outstanding at January 1, 2024 | 984900 | $1.53 | 9.25 | $0.90 |  |
| Granted | 895000 | $1.51 | 9.25 | $0.96 |  |
| Exercised | (70350) | $1.53 |  | $0.90 | $108 |
| Forfeited | (10000) | $1.20 |  |  |  |
| Options outstanding at December 31, 2024 | 1799550 | $1.52 | 8.74 | $0.93 |  |
| Options exercisable at December 31, 2024 | 422100 | $1.53 |  |  |  |

---

Non-cash stock-based compensation expenses related to stock option were recorded in the financial statements as summarized below:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** |
| Research and development | $37 | $18 |
| Sales and marketing | 62 | 81 |
| General and administrative | 413 | 454 |
| **Total non-cash stock compensation** | $**512** | $**553** |

---

The remaining unrecognized stock compensation expense totaled approximately $574 thousand as of December 31, 2025. This amount will be recognized as an expense over the weighted average remaining term of 2.04 years.

The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. Key weighted-average assumptions used to apply this pricing model during the years ended December 31, 2025 and December 31, 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Risk-free interest rate | 4.08% | 3.66% – 4.03% |
| Expected life of option grants | 6 Years | 6 – 6.25 years |
| Expected volatility of underlying stock | 54.62% | 65.17% – 65.97% |

---

***Restricted Stock Units***

The grant date fair value for Restricted Stock Units (RSU) are valued using the closing price of the Company's common stock on the date of grant.

On January 2024, a total of 47,000 restricted stock units of the Company's common stock were granted to employees of the Company under the Incentive Plan at various dates.

On August 29, 2024, a total of 473,935 restricted stock units of the Company's common stock were granted to directors of the Company under the 2023 Equity Incentive Plan.

On May 23, 2025, a total of 1,000,000 restricted stock units of the Company's common stock were granted to directors of the Company under the 2023 Equity Incentive Plan.

The fair value of the common stock as of the various grant dates was determined to be $1.00 to $11.80 per restricted stock unit, for a weighted average fair value of $3.6 per restricted stock unit for the year ended December 31, 2025. There was no other activity related to restricted stock units for the year ended December 31, 2025.

The following summarizes our RSUs transaction activity for the years ended December 31, 2025 and December 31, 2024:

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| | | |
|:---|:---|:---|
|  | **Shares** | **Weighted Average<br> Grant Date<br> Fair Value** |
| Outstanding at January 1, 2025 | 688935 | $3.70 |
| Granted | 1000000 | $1.00 |
| Vested | (627435) | $3.55 |
| Forfeited | - |  |
| Outstanding at December 31, 2025 | 1061500 |  |

---

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Weighted Average<br> Grant Date<br> Fair Value** |
| Outstanding at January 1, 2024 | 486165 | $7.80 |
| Granted | 520935 | $2.04 |
| Vested | (318165) | $7.33 |
| Forfeited | - |  |
| Outstanding at December 31, 2024 | 688935 |  |

---

The total fair value of RSUs vested during the years ended December 31, 2025 and December 31, 2024, was $2,226 thousand and $2,331 thousand, respectively.

Non-cash stock-based compensation expenses related to restricted stock units recorded in the financial statements is summarized below:

---

| | | |
|:---|:---|:---|
|  | **Year ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** |
| Research and development | $394 | $605 |
| Sales and marketing | 199 | 310 |
| General and administrative | 1662 | 1363 |
| **Total non-cash stock compensation** | $**2255** | $**2278** |

---

As of December 31, 2025, and December 31, 2024, the Company has approximately $528 thousand and $1,016 thousands of unrecognized restricted stock unit compensation to be expensed over a weighted average period of 0.47 year and 0.91 years, respectively.

**NOTE 11 – Convertible Debt**

**Securities Purchase Agreement with Avondale Capital, LLC**

On March 26, 2025, the Company entered into a Securities Purchase Agreement ("SPA") with Avondale Capital, LLC ("Avondale"), pursuant to which the Company may issue and sell up to $20,000 thousand of Pre-Paid Purchase agreements ("Pre-Paid Purchases") in tranches over time. The initial Pre-Paid Purchase ("Pre-Paid Purchase #1") included a $4,200 thousand Pre-Paid Purchase, structured with a $200 thousand original issue discount ("OID") and $10 thousand in transaction-related fees, resulting in net proceeds of $3,990 thousand, received on April 8, 2025.

In connection with the initial closing, the Company was required to issue 80,000 commitment shares to Avondale. On March 26, 2025, the Company recorded a liability of $69 thousand for the shares to be issued under the contract to issue common stock. On May 8, 2025, the Company issued the Class A Common Stock and recognized a loss of $20 thousand upon issuance.

The Avondale convertible Pre-Paid Purchase #1 accrues interest on the outstanding balance at 5% per annum. Avondale may redeem all or any part of the outstanding balance of the Avondale convertible Pre-Paid Purchase #1 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 $1.106 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 $0.1843, subject to certain adjustments and ownership limitations specified in the Avondale convertible Pre-Paid Purchase #1. For the year ended December 31, 2025, the Company recognized an unrealized loss on change in fair value of Pre-Paid Purchase #1 of $2,969 thousand.

On August 7, 2025, the Company issued an unsecured convertible Pre-Paid Purchase #2 to Avondale, pursuant to the SPA. The convertible Pre-Paid Purchase #2 has the original principal amount of $3,150 thousand and Avondale gave consideration of 3,000 thousand, reflecting original issue discount of $150 thousand. On August 7, 2025, the Company received the net proceeds from Avondale.

The Avondale convertible Pre-Paid Purchase #2 accrues interest on the outstanding balance at 5% per annum. Avondale may redeem all or any part of the outstanding balance of the Avondale 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 $1.0957 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 $0.1826, subject to certain adjustments and ownership limitations specified in the Avondale convertible Pre-Paid Purchase #2. For the year ended December 31, 2025, the Company recognized an unrealized gain on change in fair value of Pre-Paid Purchase #2 of $401 thousand.

On October 17, 2025, the Company issued an unsecured convertible Pre-Paid Purchase #3 to the Lender, pursuant to the SPA. The convertible Pre-Paid Purchase #3 has the original principal amount of $5,250 thousand and Lender gave consideration of $5,000 thousand, reflecting original issue discount of $250 thousand. On October 17, 2025, the Company received the net proceeds from the Lender.

The convertible Pre-Paid Purchase #3 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 #3, 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 $0.9142 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 $0.1524, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase. As of December 31, 2025, Pre-Paid Purchase #3 is recorded at fair value of $4,682 and is within convertible debt on the accompanying consolidated balance sheets. For the year ended December 31, 2025, the Company recognized an unrealized gain on change in fair value of Pre-Paid Purchase #3 of $568 thousand.

On December 30, 2025, the Company issued an unsecured convertible Pre-Paid Purchase #4 to the Lender, pursuant to the SPA. The convertible Pre-Paid Purchase #4 has the original principal amount of $4,200 thousand and Lender gave consideration of $4,000 thousand, reflecting original issue discount of $200 thousand. On December 31, 2025, the Company received the net proceeds from the Lender.

The convertible Pre-Paid Purchase #4 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 #4, 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 $0.3677 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 $0.0613, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase. As of December 31, 2025, Pre-Paid Purchase #4 is recorded at fair value of $3,996 thousand and is within convertible debt on the accompanying consolidated balance sheets. For the year ended December 31, 2025, the Company recognized an unrealized gain on change in fair value of Pre-Paid Purchase #4 of $203 thousand.

**Securities Purchase Agreement with Streeterville Capital, LLC**

On May 22, 2024, the Company entered into a Securities Purchase Agreement (the "SPA"), pursuant to which the Lender desires to purchase up to $10,000,000 shares of the Company's Common Stock and the Company issued an unsecured convertible Pre-Paid Purchase #1 to Streeterville Capital, LLC ("Lender"). The SPA required 40,000 common shares of the Company's Class A Common Stock to be issued as of closing date (May 22, 2024). The Company recorded a liability of $130,400 on May 22, 2024, for the shares to be issued within contract to issue common stock. The Company issued the Class A Common Stock on October 10, 2024, and recorded a gain of $68 thousand on settlement of the contract to issue common stock.

The convertible Pre-Paid Purchase #1 has the original principal amount of $2,625 thousand and Lender gave consideration of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender's transaction cost of $20 thousand. On June 3, 2024, the Company received the net proceeds from the Lender.

The convertible Pre-Paid Purchase #1 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 #1, 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 $3.996 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 $0.666, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase. The Pre-Paid Purchase #1 was recorded at its initial fair value of $2,562 thousand and the Company recognized an unrealized gain on change in fair value of convertible debt of $63 thousand. During the year 2025, the Company converted the entire outstanding balance of Pre- Paid Purchase #1 into equity. As of December 31, 2025 and December 31, 2024, Pre-Paid Purchase #1 is recorded at fair value of $0 and $543 thousand and is within convertible debt on the accompanying consolidated balance sheets. For the years ended December 31, 2025 and December 31, 2024, the Company recognized an unrealized loss on change in fair value of Pre-Paid Purchase #1 of $543 thousand and $18 thousand, respectively.

On September 30, 2024, the Company issued an unsecured convertible Pre-Paid Purchase #2 to the Lender, pursuant to the SPA. The convertible Pre-Paid Purchase #2 has the original principal amount of $1,050 thousand and Lender gave consideration of $1,000 thousand, reflecting original issue discount of $50 thousand. On September 30, 2024, the Company received the net proceeds from the Lender.

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. The Pre-Paid Purchase #2 was recorded at its initial fair value of $1,045 thousand and the Company recognized an unrealized gain on change in fair value of convertible debt of $5 thousand. During the year 2025, the Company converted the entire outstanding balance of Pre- Paid Purchase #2 into equity. As of December 31, 2025 and December 31, 2024, Pre-Paid Purchase #2 is recorded at fair value of $0 and $1,028 thousand and is within convertible debt on the accompanying consolidated balance sheets. For the years ended December 31, 2025 and December 31, 2024, the Company recognized an unrealized loss on change in fair value of Pre-Paid Purchase #2 of $1,028 thousand and unrealized gain of $23 thousand, respectively.

On December 9, 2024, the Company issued an unsecured convertible Pre-Paid Purchase #3 to the Lender, pursuant to the SPA. The convertible Pre-Paid Purchase #3 has the original principal amount of $3,150 thousand and Lender gave consideration of $3,000 thousand, reflecting original issue discount of $150 thousand. On December 9, 2024, the Company received the net proceeds from the Lender.

The convertible Pre-Paid Purchase #3 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 #3, 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 $1.987 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 $0.331, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase. The Pre-Paid Purchase #3 was recorded at its initial fair value of $2,986 thousand. The Company recognized an unrealized gain on change in fair value of Pre-Paid #3 of $164 thousand. During the year 2025, the Company converted the entire outstanding balance of Pre- Paid Purchase #3 into equity. As of December 31, 2025 and December 31, 2024, Pre-Paid Purchase #3 is recorded at fair value of $0 and $2,942 and is within convertible debt on the accompanying consolidated balance sheets. For the years ended December 31, 2025 and December 31, 2024, the Company recognized an unrealized loss on change in fair value of Pre-Paid Purchase #3 of $317 thousand and unrealized gain of $208 thousand, respectively.

The following table presents changes in convertible debt measured at fair value for the years ended December 31, 2025 and December 31, 2024.

---

| | |
|:---|:---|
|  | **Convertible debt** |
| **Balance as of December 31, 2024** | $**4512** |
| Additions | 16800 |
| Settlement<sup>(1)</sup> | (8102) |
| Fair value measurement adjustments | (551) |
| **Balance as of December 31, 2025** | $**12659** |

---

---

| | |
|:---|:---|
|  | **Convertible debt** |
| **Balance as of December 31, 2023** | $**-** |
| Additions | 6825 |
| Settlement<sup>(</sup><sup>1</sup><sup>)</sup> | (2100) |
| Fair value measurement adjustments | (213) |
| **Balance as of December 31, 2024** | $**4512** |

---

(1) During
the year ended December 31, 2025, the Company has issued 13,071,408 shares of the Company's Class A Common Stock pursuant
to multiple purchase notices related to entire Streeterville convertible debt and Avondale Pre-Paid Purchase #1. The shares issued have
a total exchange amount of $8,102 thousand with exchange prices ranging from $0.34 to $1.44. During the year ended December 31, 2024,
the Company has issued 1,683,104 shares of the Company's Class A Common Stock pursuant to multiple purchase notices related to
Streeterville Pre-Paid Purchase #1. The shares issued have a total exchange amount of $2,100 thousand with exchange prices ranging from
$1.18 to $1.41.

**NOTE 12 – Common Stock**

**Stock-Based Compensation and Equity Awards**

In June 2024, the Company received a notice for a net exercise of 70,350 options to purchase shares of common stock resulting in the issuance of 12,570 shares of the Company's Class A Common Stock with par value $0.0001 per share. In accordance with the terms of the Incentive Plan, 51,012 shares were withheld by the Company to cover the exercise price, and 6,768 shares were withheld in satisfaction of the taxes required to be paid in connection with the exercise.

On December 31, 2024, the Company issued 246,220 shares of Class A Common Stock, net of 69,445 shares of Class A Common Stock to cover the withholding tax, for the 315,665 vested Restricted Stock Units.

On December 31, 2025, the Company issued 280,013 shares of Class A Common Stock, net of 137,848 shares of Class A Common Stock to cover the withholding tax, for the 417,861 vested Restricted Stock Units.

**Issuances Related to Promissory Notes and Convertible Debt**

During the years ended December 31, 2025 and December 31, 2024, the Company issued total of 13,383,191 and 3,695,211 shares of Class A Common Stock for paying off the promissory note and the convertible debt. See *Note 8, Promissory Note and Note 11, Convertible Debt*, in the accompanying notes to the consolidated financial statements for further detail.

**NOTE 13 – Income Tax**

The Company's net deferred tax assets/(liabilities) consisted of the effects of temporary differences attributable to the following:

---

| | | |
|:---|:---|:---|
| *(In thousands)* | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Organizational costs/startup expenses | $1382 | $1432 |
| Deferred revenue | 10 | 23 |
| Section 174 - software development cost | 2409 | 2188 |
| Stock based compensation | 157 | 453 |
| Other accruals | 118 | 16 |
| ROU Liability | 57 |  |
| Other |  | 2 |
| Net operating loss carryforward | 6591 | 4894 |
| Total deferred tax asset | 10724 | 9008 |
| Less: Valuation allowance | (7649) | (5498) |
| **Deferred tax asset, net of valuation allowance** | $**3075** | $**3510** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Intangibles | $(3013) | $(3508) |
| Property, plant & equipment | (6) | (2) |
| Other | (56) | - |
| Total deferred tax liabilities | (3075) | (3510) |
| **Net Deferred Tax Asset (Liability)** | $**-** | $**-** |

---

The income tax provision consists of the following for the years ended December 31, 2025, and 2024:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Federal |  |  |
| &nbsp;&nbsp;&nbsp;Current | $- | $- |
| &nbsp;&nbsp;&nbsp;Deferred |  | (681) |
| State and Local |  |  |
| &nbsp;&nbsp;&nbsp;Current | (46) | 2 |
| &nbsp;&nbsp;&nbsp;Deferred | - | 44 |
| Income tax benefit | $(46) | $(635) |

---

As of December 31, 2025, the Company has U.S. federal and state net operating loss carryovers of approximately $16,418 thousand and $12,266 thousand respectively.

Under the CARES Act, the federal net operating loss carryforwards that originated after 2017 will have an indefinite life and may be used to offset 100% of a future year's taxable income until 2020. For tax year beginning January 1, 2021, federal net operating losses may be used to offset 80% of a future year's taxable income. The state net operating losses carryforward for between 15-20 years and begin to expire in 2039.

The Company's federal and state income tax returns prior to December 31, 2021 and 2020, respectively, are closed. The Company's foreign subsidiary's tax returns prior to 2018 are also closed. Management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realization of deferred tax assets, management considers, whether it is "more likely than not", that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Deferred income tax is presented under noncurrent liabilities and in other assets in the consolidated balance sheets as of December 31, 2025, and 2024.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the projected future taxable income and availability of taxable temporary differences in making this assessment. After consideration of all the information available, management believes that positive evidence does not outweighs the negative evidence and thus it is more likely than not that the benefit from deferred tax asset may not be realized in foreseeable future. In view of this, valuation allowance has been created as at December 31, 2025 and December 31, 2024.

The Company's policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and penalties as interest expense and as a component of income tax expense. There were no amounts accrued for interest or penalties for the years ended December 31, 2025 and December 31, 2024. Management does not expect any material changes in its unrecognized tax benefits in the next year.

A reconciliation of the federal income tax rate to the Company's effective tax rate for the years ended December 31, 2025, and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** |
| Statutory federal income tax rate | 21.00% | 21.00% |
| Incentive stock options | -% | -% |
| Change in fair value of derivative warrant liabilities | -% | (3.52)% |
| Effects of changes in tax laws or rates enacted in the current period | (0.20)% | -% |
| Effects of cross-border tax laws | (4.42)% | -% |
| Permanent difference | -% | (2.04)% |
| Cancellation of debt income | -% | -% |
| Rate differential on foreign earnings | 4.42% | 0.44% |
| State taxes, net of federal tax benefit | (0.01)% | (0.24)% |
| Current federal tax true-up | -% | (1.27)% |
| Nontaxable or deductible items | (1.30)% | -% |
| Payable true-up | 0.35% | -% |
| Other | (0.76)% | -% |
| Valuation allowance | (18.74)% | (11.20)% |
| Income tax benefit | 0.34% | 3.17% |

---

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions as well as in foreign jurisdictions and is subject to examination by the various taxing authorities.

The Company recorded an income tax benefit/expense of approximately $46 thousand and $635 thousand for the years ended December 31, 2025 and December 31, 2024, respectively.

The effective tax rate for the years ended December 31, 2025 and December 31, 2024 was 0.34% and 3.17%, respectively. The income tax benefit for the year ended December 31, 2025 is a result of the reversal of deferred tax liability attributable to acquired intangible assets from the Business Combination. The company believes that positive evidence does not outweighs the negative evidence and thus it is more likely than not that the benefit from deferred tax asset may not be realized in foreseeable future. In view of this, valuation allowance has been created as of December 31, 2025.

***Uncertain Tax Positions***

The Company records tax positions as liabilities and adjusts these liabilities when its judgment changes because of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the recognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2025, and December 31, 2024 the Company has not recorded any liabilities for uncertain tax positions in its consolidated financial statements.

The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of December 31, 2025 and December 31, 2024, no accrued interest or penalties are recorded on the balance sheets, and the Company has not recorded any related expenses. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The Company's tax years currently open under statute range from 2021 to the present in the U.S. and from 2020 to the present in its foreign operations. To the extent the Company has tax attribute carryforwards, the tax years in which those attributes were generated may remain subject to adjustment upon examination by the Internal Revenue Service, state and local tax authorities, and non-U.S. tax authorities—including those in Canada and the Philippines—if and when the attributes are utilized in a future period.

Following the acquisition, the Company transitioned its Canadian operations from a client-facing business to a cost center. A formal transfer pricing study between the U.S. and Canada has not been performed, and as such, there may be a potential for a Canadian tax liability. However, based on currently available information, management believes that any such liability would not be material to the financial statements as a whole

On July 4, 2025, the One Big Beautiful Bill ("OBBB") was enacted into law. Among its provisions, the reinstatement of full expensing for research and development expenditures is applicable to the Company. While further regulatory guidance is anticipated regarding the treatment of prior periods, the Company expects that the previously recognized deferred tax asset related to Section 174 will be reversed, resulting in an increase in net operating loss carryforwards. The Company is currently evaluating potential other impacts of the passage of OBBB.

**NOTE 14 – Credit Risk and Concentrations**

Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for credit losses and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited.

The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows. Cash is also maintained at foreign financial institutions for its Canadian and Philippine subsidiaries. Cash in foreign financial institutions as of December 31, 2025 and December 31, 2024, was $51 thousand and $166 thousand, respectively.

The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash for the Years ended December 31, 2025 and December 31, 2024. However, any loss incurred or lack of access to such funds could have a significant impact on the Company's financial condition, results of operations, and cash flows.

**NOTE 15 – Segment Information**

The Company has determined that it operates as a single operating segment. The Company offers a vertical software-as-a-service (or SaaS) platform for the enterprise. The flagship product, the CXAI Platform (pronounced "Sky"), provides a comprehensive suite of tools designed to empower employees and enable organizations to create smarter workplaces. The Company's Chief Executive Officer is the Chief Operating Decision Maker ("CODM"). The CODM allocates resources and makes operating decisions based on consolidated net income.

The CODM does not assess profitability at a level below the consolidated entity. Net income (loss) is used as the Company's primary measure of overall financial performance. However, when evaluating operating results on a budget-to-actual basis, management places greater emphasis on cash-based operating expenses, including cost of revenue, professional services, marketing, research and development, and general and administrative expenses. Conversely, the Company does not consider stock-based compensation, amortization of intangible assets, changes in the fair value of warrant liabilities, losses on debt extinguishment, or other non-cash items to be significant factors in its internal analysis of period-over-period operating performance.

The following table presents selected financial information with respect to the Company's single operating segment:

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| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year Ended<br> December 31,<br> 2024** |
| Revenue - Licenses | $4480 | $6202 |
| Revenue - Professional Services | 73 | 798 |
| Revenue - Hardware | 30 | 142 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 578 | 1285 |
| &nbsp;&nbsp;&nbsp;Research and development | 6206 | 5744 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 1832 | 2870 |
| &nbsp;&nbsp;&nbsp;General and administrative | 5859 | 5489 |
| &nbsp;&nbsp;&nbsp;Impairment of goodwill | 2148 |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | 701 | 1756 |
| &nbsp;&nbsp;&nbsp;(Gain) loss on derivative liability fair value remeasurement | (4548) | 3152 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 48 | 1052 |
| &nbsp;&nbsp;&nbsp;Other (income) expense, net | (259) | 342 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;Income tax benefit (expense) | 46 | 635 |
| Total loss without non-cash | (7936) | (13913) |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Other noncash expenses<sup>(1)</sup> | 5537 | 5562 |
| Net loss | $(13473) | $(19408) |

---

(1) Other
 noncash expenses for the year ended December 31, 2025, includes mostly of $2,784 thousand of stock compensation and related
 expenses, $2,732 thousand of intangible amortization expense. Other noncash expenses for the year ended December 31, 2024, includes
 $2,831 thousand of stock compensation expenses, and $2,731 thousand of intangible amortization expense.

**NOTE 16 – Foreign Operations**

The Company's operations are located primarily in the United States, Canada, and the Philippines. Revenues by geographic area are attributed by country of domicile of the Company's subsidiaries. The financial data by geographic area are as follows (in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **United States** | **Canada** | **Philippines** | **Eliminations** | **Total** |
| **<u>For the Year Ended December 31, 2025</u>** |  |  |  |  |  |
| Revenues by geographic area | $4485 | $4275 | $695 | $(4872) | $4583 |
| Operating income (loss) by geographic area | $(20207) | $2634 | $(4) | $- | $(17577) |
| Net income (loss) by geographic area | $(16328) | $2866 | $(11) | $- | $(13473) |
| **<u>For the Year Ended December 31, 2024</u>** |  |  |  |  |  |
| Revenues by geographic area | $6729 | $413 | $917 | $(917) | $7142 |
| Operating income (loss) by geographic area | $(11732) | $(2054) | $45 | $- | $(13741) |
| Net income (loss) by geographic area | $(17081) | $(2368) | $41 | $- | $(19408) |
| **<u>As of December 31, 2025</u>** |  |  |  |  |  |
| Identifiable assets by geographic area | $32094 | $125 | $211 | $- | $32430 |
| Long lived assets by geographic area | $12775 | $57 | $103 | $- | $12935 |
| Goodwill by geographic area | $6589 | $- | $- | $- | $6589 |
| <u>**As of December 31, 2024**</u> |  |  |  |  |  |
| Identifiable assets by geographic area | $31087 | $272 | $444 | $- | $31803 |
| Long lived assets by geographic area | $15712 | $175 | $46 | $- | $15933 |
| Goodwill by geographic area | $8737 | $- | $- | $- | $8737 |

---

**NOTE 17 – Leases**

The Company has operating leases for administrative offices in Canada, the Philippines, and the United States. The lease for the Company's office in Manila, Philippines expired in May 2025. The Company elected not to renew the lease and has since entered into a new lease agreement within Philippines at a lower cost. The Canada lease expires in May 2026, the Philippines lease expires in June 9, 2027, and the United States office lease expires in April 2026. The Company has no other operating or financing leases with terms greater than 12 months.

Lease expense for operating leases recorded on the consolidated balance sheet is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in the Company's consolidated statement of operations for the years ended December 31, 2025 and December 31, 2024 was approximately $422 thousand, and $439 thousand, respectively.

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842 "Leases" ("ASC 842"). As of December 31, 2025, the weighted average remaining lease term is 0.7 years, and the weighted average discount rate used to determine the operating lease liabilities was 8.0%. As of December 31, 2024, the weighted average remaining lease term is 1.1 years, and the weighted average discount rate used to determine the operating lease liabilities was 8.0%.

---

| | |
|:---|:---|
| *(in thousand)* | **Operating Leases** |
| Year 2026 | 204 |
| Year 2027 | 32 |
| &nbsp;&nbsp;&nbsp;Total lease payments | 236 |
| Less: Imputed interest | (10) |
| Present value of lease liabilities | $226 |

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**NOTE 18 – Commitments and Contingencies**

***Risks and Uncertainties***

Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including trade tensions between the United States and China, the conflicts in the Middle East and between Russia and Ukraine, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic, tariffs, and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) maycontribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. The ongoing conflicts in the Middle East (including the conflict between Iran and Israel and the United States' military actions against Iran) has caused political, economic, and military instability in Israel and surrounding regions. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company and the value of the Company's securities.

Management continues to evaluate the impact of these types of risks and has concluded that while it is reasonably possible that these risks and uncertainties could have a negative effect on the Company's financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**NOTE 19 – Supplementary Financial Information**

Quarterly Financial Information (unaudited)—The quarterly results for the years ended December 31, 2025, and 2024 are summarized below (in thousands, except per share amounts):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2025** | **Fourth<br> Quarter** | **Third<br> Quarter** | **Second<br> Quarter** | **First<br> Quarter** | **Year Ended<br> December 31,<br> 2025** |
| Net Revenue | 1022 | 1114 | 1223 | 1224 | 4583 |
| Gross Profit | 888 | 991 | 1052 | 1074 | 4005 |
| Net Loss | (5561) | (3157) | (3139) | (1616) | (13473) |
| Basic and diluted weighted average shares outstanding, Class A Common Stock | 27002655 | 23359850 | 20718170 | 19678147 | 23414190 |
| Basic and diluted net loss per share, Class A Common Stock | (0.21) | (0.13) | (0.16) | (0.08) | (0.58) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **2024** | **Fourth<br> Quarter** | **Third<br> Quarter<br> (restated)** | **Second<br> Quarter<br> (restated)** | **First<br> Quarter** | **Year Ended<br> December 31,<br> 2024** |
| Net Revenue | 1661 | 1897 | 1766 | 1818 | 7142 |
| Gross Profit | 1428 | 1525 | 1413 | 1491 | 5857 |
| Net Loss | (3978) | (5004) | (5256) | (5170) | (19408) |
| Basic and diluted weighted average shares outstanding, Class A Common Stock | 17234557 | 15699685 | 15255218 | 15254389 | 15907946 |
| Basic and diluted net loss per share, Class A Common Stock | (0.23) | (0.32) | (0.36) | (0.34) | (1.22) |

---

**NOTE 20 – Subsequent Events**

The Company evaluated subsequent events and transactions that occurred after December 31, 2025, through the date the consolidated financial statements were issued. Based upon this review, the Company identified the following subsequent events:

The Company commenced sales of its common stock pursuant to the shelf registration, facilitated through a third-party arrangement with Maxim Group LLC acting as the Company's agent under an equity distribution agreement. The Company received net proceeds of $2,300 thousand and issued 7,458,991 shares of class A Common Stock, which are intended to be used for general working capital and other corporate purposes.

Following the year ended December 31, 2025, the Company converted a portion of its outstanding Avondale Prepaid Purchase #1 and Prepaid Purchase #2 Convertible Notes into Class A common stock. These conversions were part of the Company's ongoing efforts to reduce debt and strengthen its equity structure.

As the transactions occurred after the reporting date, they are classified as non-recognized subsequent events. In total, the Company issued approximately 8,600,948 shares of Class A common stock in connection with these conversions.

In February 2026, the Company settled a legal matter that originated prior to December 31, 2025 for approximately $65,000. Because the underlying claim existed at year-end, the Company recorded the related accrual in the consolidated financial statements as of December 31, 2025.

On February 5, 2026, the Company announced a strategic partnership with TouchSource, a leading provider of digital directories and interactive experiences for commercial real estate, healthcare, and retail properties. Under the partnership, the Company's agentic AI and workplace intelligence platform will serve as the intelligence layer across TouchSource's nationwide digital directory network, which spans more than 11,000 deployments across U.S. commercial office, healthcare, retail, and mixed-use properties. The collaboration will focus on coordinated go-to-market efforts and product strategy, exploring how agentic AI can be embedded into workplace platforms, digital directories, and spatial interfaces to support modern enterprise operations and multi-tenant real estate environments.

On March 27, 2026, the Company entered into a Securities Purchase Agreement with Avondale Capital, LLC, pursuant to which the Company may issue and sell one or more Pre-Paid Purchases, in the aggregate purchase amount of up to $40,000,000, for the purchase of the Company's Common Stock and the Company issued an unsecured convertible Pre-Paid Purchase #1 to the Lender. The convertible Pre-Paid Purchase #1 has the original principal amount of $1,050,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report.

---

| | |
|:---|:---|
| 2.1<sup>(1)</sup> | [Agreement and Plan of Merger, dated as of September 25, 2022, by and among KINS Technology Group Inc., Inpixon, CXApp Holding Corp. and KINS Merger Sub Inc.](https://www.sec.gov/Archives/edgar/data/1820875/000110465922102856/tm2226567d1_ex2-1.htm) |
| 2.2<sup>(1)</sup> | [Separation and Distribution Agreement, dated as of September 25, 2022, by and among KINS Technology Group Inc., Inpixon, CXApp Holding Corp. and Design Reactor, Inc.](https://www.sec.gov/Archives/edgar/data/1820875/000110465922102856/tm2226567d1_ex2-2.htm) |
| 2.3<sup>(1)</sup> | [Sponsor Support Agreement, dated as of September 25, 2022, by and among KINS Capital LLC, KINS Technology Group Inc., Inpixon and CXApp Holding Corp.](https://www.sec.gov/Archives/edgar/data/1820875/000110465922102856/tm2226567d1_ex2-3.htm) |
| 3.1 | [Second Amended and Restated Certificate of Incorporation (incorporated by reference to the Company's Current Report on Form 8-K filed on August 4, 2025).](https://www.sec.gov/Archives/edgar/data/1820875/000182912625005771/cxapp_ex3-2.htm) |
| 3.2 | [Certificate of Amendment to the Restated Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on March 17, 2023 (incorporated by reference to the Company's Registration Statement on Form S-3 filed on August 11, 2025).](https://www.sec.gov/Archives/edgar/data/1820875/000182912625006018/cxapp_ex3-3.htm) |
| 3.3 | [Certificate of Validation, filed with the Delaware Secretary of State on August 4, 2025 (incorporated by reference to the Company's Current Report on Form 8-K filed on August 4, 2025).](https://www.sec.gov/Archives/edgar/data/1820875/000182912625005771/cxapp_ex3-1.htm) |
| 3.4<sup>(3)</sup> | [Amended and Restated Bylaws of the Company, effective as of November 8, 2024.](https://www.sec.gov/Archives/edgar/data/1820875/000182912624007426/cxappinc_ex3-2.htm) |
| 4.1 | [Warrant Agreement, dated as of December 14, 2020, by and between KINS and Continental Stock Transfer & Trust Company, as warrant agent (incorporated herein by reference from Exhibit 4.1 on KINS' Form 8-K, filed December 21, 2020).](https://www.sec.gov/Archives/edgar/data/1820875/000110465920138071/tm2038766d1ex4-1.htm) |
| 4.2<sup>(2)</sup> | [Specimen CXApp Inc. Class A Common Stock Certificate.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex4-2.htm) |
| 4.3<sup>(2)</sup> | [Specimen CXApp Inc. Class C Common Stock Certificate.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex4-3.htm) |
| 4.4<sup>(2)</sup> | [Specimen Warrant Certificate of the Company.](https://www.sec.gov/Archives/edgar/data/1820875/000110465923034553/tm239336d1_ex4-1.htm) |
| 4.5<sup>(5)</sup> | [Description of the Company's securities.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex4-5.htm) |
| 10.1<sup>(2)(#)</sup> | [Employee Matters Agreement, dated March 14, 2023, by and among KINS, KINS Merger Sub Inc., Inpixon, and Legacy CXApp.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex10-9.htm) |
| 10.2<sup>(2)</sup> | [Tax Matters Agreement, dated March 14, 2023, by and among KINS, Inpixon, and Legacy CXApp.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex10-10.htm) |
| 10.3<sup>(2)</sup> | [Transition Services Agreement, dated March 14, 2023, by and between Inpixon and Legacy CXApp.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex10-11.htm) |
| 10.4<sup>(2)(#)</sup> | [Consulting Agreement, dated March 14, 2023, by and between Design Reactor, Inc. and 3AM, LLC.](https://www.sec.gov/Archives/edgar/data/0001820875/000110465923034553/tm239336d1_ex10-12.htm) |
| 10.5<sup>(#)</sup> | [Employment Agreement, dated as of January 9, 2023, by and between Design Reactor, Inc. and Khurram Sheikh. (incorporated by reference to the Company's Current Report on Form 8-K filed on March 31, 2023).](https://www.sec.gov/Archives/edgar/data/1820875/000110465923040315/tm2311221d1_ex10-1.htm) |
| 10.6<sup>(#)</sup> | [Offer Letter, dated as of July 18, 2024, by and between Joy Mbanugo and CXApp Inc. (incorporated by reference to the Company's Current Report on Form 8-K filed on August 20, 2024).](https://www.sec.gov/Archives/edgar/data/1820875/000182912624005669/cxappinc_ex10-1.htm) |
| 10.7<sup>(2)(#)</sup> | [CXApp Inc. 2023 Equity Incentive Plan.](https://www.sec.gov/Archives/edgar/data/1820875/000110465923034553/tm239336d1_ex10-14.htm) |
| 10.8<sup>(4)</sup> | [Securities Purchase Agreement, dated as of May 22, 2024, by and between CXApp Inc. and Streeterville Capital, LLC.](https://www.sec.gov/Archives/edgar/data/1820875/000182912624003713/cxappinc_ex10-8.htm) |
| 10.9<sup>(5)</sup> | [Exchange Agreement, dated as of January 6, 2025, by and between CXApp Inc. and Streeterville Capital, LLC.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex10-18.htm) |
| 10.10<sup>(5)</sup> | [Exchange Agreement, dated as of January 17, 2025, by and between CXApp Inc. and Streeterville Capital, LLC.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex10-19.htm) |
| 10.11<sup>(5)</sup> | [Securities Purchase Agreement, dated as of March 26, 2025, by and between CXApp Inc. and Avondale Capital, LLC.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex10-20.htm) |
| 10.12<sup>(6)</sup> | [Pre-Paid Purchase #3, dated as of October 17, 2025, between CXApp Inc. and Avondale Capital, LLC.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625008390/cxapp_ex10-1.htm) |
| 10.13<sup>(\*)</sup> | [Securities Purchase Agreement, dated as of March 27, 2026, by and between CXApp Inc. and Avondale Capital, LLC.](cxappinc_ex10-13.htm) |
| 10.14<sup>(\*)</sup> | [Pre-Paid Purchase #1, dated as of March 27, 2026, between CXApp Inc. and Avondale Capital, LLC.](cxappinc_ex10-14.htm) |
| 19.1<sup>(5)</sup> | [Insider Trading Policy.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex19-1.htm) |
| 21.1<sup>(\*)</sup> | [List of Subsidiaries.](cxappinc_ex21-1.htm) |
| 23.1<sup>(\*)</sup> | [Consent of WithumSmith+Brown, PC.](cxappinc_ex23-1.htm) |

---

---

| | |
|:---|:---|
| 31.1<sup>(\*)</sup> | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](cxappinc_ex31-1.htm) |
| 31.2<sup>(\*)</sup> | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](cxappinc_ex31-2.htm) |
| 32.1<sup>(\*\*)</sup> | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](cxappinc_ex32-1.htm) |
| 32.2<sup>(\*\*)</sup> | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](cxappinc_ex32-2.htm) |
| 97.1<sup>(5)(#)</sup> | [Clawback Policy.](https://www.sec.gov/Archives/edgar/data/1820875/000182912625002438/cxappinc_ex97-1.htm) |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |

---

\* Filed herewith.

\*\* Furnished herewith.

(1) Incorporated by reference to the Company's Current Report on Form 8-K filed on September 26, 2022.

(2) Incorporated by reference to the Company's Current Report on Form 8-K filed on March 20, 2023.

(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed on November 12, 2024.

(4) Incorporated by reference to the Company's Annual Report on Form 10-K filed on May 24, 2024.

(5) Incorporated by reference to the Company's Annual Report on Form 10-K filed on April 7, 2025.

(6) Incorporated by reference to the Company's Current Report on Form 8-K filed on October 23, 2025

# Indicates a management contract or compensatory plan.

**Item 16. Form 10-K Summary.**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **CXAPP INC.** | **CXAPP INC.** |
| Date: March 30, 2026 |  |  |
|  | /s/ Khurram Sheikh | /s/ Khurram Sheikh |
|  | *By:* | *Khurram Sheikh* |
|  |  | Chairman, Chief Executive Officer and Director<br> (Principal Executive Officer) |

---

---

| | | |
|:---|:---|:---|
|  | **CXAPP INC.** | **CXAPP INC.** |
| Date: March 30, 2026 |  |  |
|  | /s/ Joy Mbanugo | /s/ Joy Mbanugo |
|  | *By:* | *Joy Mbanugo* |
|  |  | Chief Financial Officer<br> (Principal Financial Officer and Principal Accounting Officer) |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| /s/ Khurram Sheikh | /s/ Khurram Sheikh |
| Name: | Khurram Sheikh |
| Title: | *Chairman, Chief Executive Officer and Director* |
| Date: | March 30, 2026 |
| /s/ Joy Mbanugo | /s/ Joy Mbanugo |
| Name: | Joy Mbanugo |
| Title: | *Chief Financial Officer* |
| Date: | March 30, 2026 |
| /s/ Di-Ann Eisnor | /s/ Di-Ann Eisnor |
| Name: | Di-Ann Eisnor |
| Title: | *Director* |
| Date: | March 30, 2026 |
| /s/ Camillo Martino | /s/ Camillo Martino |
| Name: | Camillo Martino |
| Title: | *Director* |
| Date: | March 30, 2026 |
| /s/ George Mathai | /s/ George Mathai |
| Name: | George Mathai |
| Title: | *Director* |
| Date: | March 30, 2026 |
| /s/ Shanti Priya | /s/ Shanti Priya |
| Name: | Shanti Priya |
| Title: | *Director* |
| Date: | March 30, 2026 |

---

## Exhibit 10.13

**Exhibit 10.13**

Securities Purchase Agreement

This Securities Purchase Agreement (this "**Agreement**"), dated as of March 27, 2026, is entered into by and between CXApp Inc., a Delaware corporation ("**Company**"), and Avondale Capital, LLC, a Utah limited liability company, its successors and/or assigns ("**Investor**"). Capitalized terms used but not otherwise defined herein will have the meanings set forth in Section 11.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Company and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities Act of 1933, as amended (the "**1933 Act**"), and the rules and regulations promulgated thereunder by the United States Securities and Exchange Commission (the "**SEC**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement: (i) one or more Pre-Paid Purchases, in form substantially similar to that attached hereto as <u>Exhibit A</u> (each, a "**Pre-Paid Purchase**"), in the aggregate purchase amount of up to $40,000,000.00 (the "**Commitment Amount**"), for the purchase of common stock, $0.0001 par value per share, of Company (the "**Common Shares**"), upon the terms and subject to the limitations and conditions set forth in such Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. This Agreement, the Pre-Paid Purchase(s), and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the "**Transaction Documents**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. For purposes of this Agreement: "**Purchase Shares**" means all Common Shares issuable pursuant to the Pre-Paid Purchases; and "**Securities**" means the Pre-Paid Purchase(s) and the Purchase Shares.

**NOW, THEREFORE**, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Investor hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Purchase and Sale of Securities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. <u>Purchase of Initial Pre-Paid Purchase</u>. Company shall issue and sell to Investor and Investor shall purchase from Company the Initial Pre-Paid Purchase (as defined below). In consideration thereof, Investor shall pay the Initial Purchase Price (as defined below) to Company for the Initial Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. <u>Form of Payment</u>. On the Closing Date (as defined below), Investor shall pay the Initial Purchase Price to Company via wire transfer of immediately available funds against delivery of Pre-Paid Purchase #1 in the original principal amount of $1,050,000.00 (the "**Initial Pre-Paid Purchase**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. <u>Closing Date</u>. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 7 and Section 8 below, the date of the issuance and sale of the Initial Pre-Paid Purchase pursuant to this Agreement (the "**Closing Date**") shall be March 27, 2026, or another mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the "**Closing**") shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. <u>Collateral for Pre-Paid Purchases</u>. The Pre-Paid Purchases shall be unsecured.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. <u>Original Issue Discount; Transaction Expense Amount</u>. The Initial Pre-Paid Purchase carries an original issue discount of $50,000.00 ("**OID**"). In addition, Company agrees to pay $10,000.00 to Investor to cover Investor's legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Initial Pre-Paid Purchase ("**Transaction Expense Amount**"). The OID for the Initial Pre-Paid Purchase will be included in the initial principal balance of the Initial Pre-Paid Purchase, and the Transaction Expense Amount for the Initial Pre-Paid Purchase will be deducted from the amount funded at Closing. The "**Initial Purchase Price**", therefore, shall be $1,000,000.00, computed as follows: $1,050,000.00 initial principal balance, less the OID. The OID for subsequent Pre-Paid Purchases after the Initial Pre-Paid Purchase will be five percent (5%) of the amount set forth in the applicable Request (as defined below), and have no additional Transaction Expense Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. <u>Request for Pre-Paid Purchase</u>. The parties hereby agree that Company may, at its sole and absolute discretion, at any time beginning on the six (6) month anniversary of the Closing Date and from time to time thereafter through the remainder of the Commitment Period, subject to the satisfaction of the conditions set forth in **Annex I** attached hereto, request a Pre-Paid Purchase in an amount no less than the Minimum Purchase Amount and no greater than the Maximum Purchase Amount from Investor by providing a written notice of such request to Investor (each, a "**Request**"). The closing of each Pre-Paid Purchase shall take place on or before the tenth (10<sup>th</sup>) Trading Day (as defined in the Initial Pre-Paid Purchase) following the date of such Request, or such earlier date as may be agreed by Investor (the date of the closing of each Pre-Paid Purchase shall be referred to as the "**Pre-Paid Purchase Date**"). Subject to the satisfaction of the conditions set forth in **Annex I** attached hereto as of such Pre-Paid Purchase Date, Investor shall pay to Company the amount set forth in such Request (which amount shall serve as the purchase price of such Pre-Paid Purchase) in immediately available funds to an account designated by Company in writing on each Pre-Paid Purchase Date (except in respect of the Initial Pre-Paid Purchase, which shall be paid at Closing) immediately following delivery of the applicable fully executed Pre-Paid Purchase in a form substantially similar to the Initial Pre-Paid Purchase except as noted in this Section 1.6, and transmit notification to Company that such funds transfer has been requested, and Company will issue the applicable Pre-Paid Purchase using the same form as the Initial Pre-Paid Purchase. With respect to each Pre-Paid Purchase issued hereunder after the Initial Pre-Paid Purchase: (i) the Floor Price (as defined in the applicable Pre-Paid Purchase) of such Pre-Paid Purchase will be twenty percent (20%) of the Nasdaq Minimum Price on the Trading Day immediately prior to the Pre-Paid Purchase Date; and (ii) the Fixed Price (as defined in the applicable Pre-Paid Purchase) of such Pre-Paid Purchase will be one hundred twenty percent (120%) of the Nasdaq Minimum Price on the Trading Day immediately prior to Pre-Paid Purchase Date. Each Pre-Paid Purchase will be considered a separate instrument with a separate outstanding balance and holding period. Notwithstanding anything to the contrary contained herein, including but not limited to the stipulation under Section 11.2, Company may determine, at its sole and absolute discretion, that it no longer wishes to request a Pre-Paid Purchase. For avoidance of any doubt, Company shall be under no obligation whatsoever to request any Pre-Paid Purchases other than the Initial Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Investor's Representations and Warranties</u>. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with its terms; and (iii) Investor is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Company's Representations and Warranties</u>. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified to do business and is in good standing in each jurisdiction

where the nature of the business conducted or property owned by it makes such qualification necessary; (iii) Company has registered its Common Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "**1934 Act**"), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company and all necessary actions have been taken; (v) this Agreement, the Initial Pre-Paid Purchase, and the other Transaction Documents have been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of the Securities in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company's formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any listing agreement for the Common Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having jurisdiction over Company or any of Company's properties or assets; (vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents; (viii) none of Company's filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) with the exception of the 10-K annual report for the year ending December 31, 2023, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company before or by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12) months, a "Shell Company," as such type of "issuer" is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder's fees or similar payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the transactions contemplated hereby ("**Broker Fees**"), any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor's employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorneys' fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction Documents,

Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section 12.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company acknowledges that Investor is not registered as a 'dealer' under the 1934 Act; (xviii) Company has performed due diligence and background research on Investor and its affiliates and has received and reviewed the due diligence packet provided by Investor; and (xix) Company agrees that each Pre-Paid Purchase issued hereunder will be deemed to be a security under the 1933 Act for all purposes and agrees not to take a contrary position in any document, statement, setting, or situation. Company, being aware of the matters and legal issues described in subsections (xvii) and (xviii) above, acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Company Covenants</u>. Until all of Company's obligations under all of the Transaction Documents are paid and performed in full, or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so long as Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days thereafter, Company will remain in good standing with Nasdaq and timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination; (ii) when issued, the Purchase Shares will be duly authorized, validly issued, fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iii) the Common Shares shall be listed or quoted for trading on NYSE, NYSE American, or remain listed on Nasdaq; (iv) trading in Company's Common Shares will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease trading on Company's principal trading market; (v) Company will not make any Restricted Issuance (as defined below) without Investor's prior written consent, which consent may be granted or withheld in Investor's sole and absolute discretion; and (vi) Company shall not enter into any agreement or otherwise agree to any covenant, condition, or obligation that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Investor or any affiliate of Investor, or (b) from issuing Common Shares, preferred stock, warrants, convertible notes, other debt securities, or any other Company securities to Investor or any affiliate of Investor. For purposes hereof, the term "**Restricted Issuance**" means the issuance, incurrence or guaranty of any debt obligations other than trade payables or intercompany debt incurred in the ordinary course of business, or the issuance of any securities that (1) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Shares, (2) are or may become convertible into Common Shares (including without limitation convertible debt, warrants or convertible preferred shares), with a conversion price that varies with the market price of the Common Shares, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or condition; or (3) have a fixed conversion price, exercise price or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security (A) due to a change in the market price of Company's Common Shares since the date of the initial issuance or (B) upon the occurrence of specified or contingent events directly or indirectly related to the business of Company (including, without limitation, any "full ratchet" or "weighted average" anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). For the avoidance of doubt, the issuance of Common Shares under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted Issuance for purposes hereof if the number of Common Shares to be issued is based upon or related in any way to the market price of the Common Shares, including, but not limited to, Common Shares issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. For the further avoidance of doubt, Common Shares issued pursuant to any of the following will not be considered Restricted Issuances: (i) ATM facilities, (ii) primary offerings without variable price mechanics, or (iii) issuances of Common Shares in settlement of warrants issued by Company in its initial public offering on December 15, 2020.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Additional Covenants</u>. Company covenants with Investor as follows, which covenants are for the benefit of Investor during the Commitment Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. <u>Listing of Common Shares</u>. As of each Purchase Notice Date, Company will use its commercially reasonable efforts to cause the Shares to be listed on the Principal Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. <u>Market Activities</u>. Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the manipulation of the price of any security of Company under Regulation M of the 1934 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. <u>Current Report</u>. From and after the filing of a current report on Form 8-K or such other appropriate form as determined by counsel to Company (the "**Current Report**"), Company shall have publicly disclosed all material, nonpublic information delivered to Investor (or Investor's representatives or agents) by Company or any of its subsidiaries, or any of their respective officers, directors, employees, agents or representatives (if any) in connection with Company and any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. <u>Use of Proceeds</u>. The proceeds from Pre-Paid Purchases paid to Company by Investor or from the sale of the Purchase Shares by Company to Investor shall be used by Company for general corporate purposes, including working capital, capital expenditures, and potential strategic transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. <u>No Frustration</u>. Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of Company to perform its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation of Company to deliver the Purchase Shares to Investor in respect of a Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. <u>Material Non-Public Information</u>. Company covenants and agrees that, other than with Investor's prior consent, it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information (as determined under the 1933 Act, the 1934 Act, or the rules and regulations of the SEC) to Investor without also disseminating such information to the public within a reasonable time period thereafter, unless prior to disclosure of such information Company identifies such information as being material non-public information and provides Investor with the opportunity to accept or refuse to accept such material non-public information for review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9. <u>Exchange Cap</u>. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, Company and Investor agree that the total cumulative number of Common Shares issued to Investor under all Pre-Paid Purchases together with all other Transaction Documents may not exceed the requirements of Nasdaq Listing Rule 5635(d) (the "**Exchange Cap**"), except that such limitation will not apply following Approval (defined below). At Company's next annual meeting, but in no event later than May 31, 2026, Company will seek stockholder approval of all Pre-Paid Purchases that have been or may be issued hereunder covering the full Commitment Amount and the issuance of Purchase Shares under all Pre-Paid Purchases in excess of the Exchange Cap (the "**Approval**"). If Company is unable to obtain such Approval: (a) it will continue seeking Approval every 90 days until the Approval is obtained; and (b) any remaining Pre-Paid Purchase Outstanding Balance after reaching the Exchange Cap must be repaid in cash. For the avoidance of doubt, failure to obtain the Approval shall not be considered a breach of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Conditions to Company's Obligation to Sell</u>. The obligation of Company hereunder to issue and sell the Initial Pre-Paid Purchase to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. Investor shall have executed this Agreement and the Initial Pre-Paid Purchase and delivered the same to Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. Investor shall have delivered the Initial Purchase Price to Company in accordance with Section 1.2 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Conditions to Investor's Obligation to Purchase</u>. The obligation of Investor hereunder to purchase the Initial Pre-Paid Purchase at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor's sole benefit and may be waived by Investor at any time in its sole discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. Company shall have executed this Agreement and the Initial Pre-Paid Purchase and delivered the same to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the "**TA Letter**") substantially in the form attached hereto as <u>Exhibit B</u> acknowledged and agreed to in writing by Company's transfer agent (the "**Transfer Agent**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. Company shall have delivered to Investor a fully executed Officer's Certificate substantially in the form attached hereto as <u>Exhibit C</u> evidencing Company's approval of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as <u>Exhibit D</u> to be delivered to the Transfer Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5. Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company herein or therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Reservation of Shares</u>. On the date hereof, Company will reserve 17,500,000 Common Shares from its authorized and unissued Common Shares to provide for all issuances of Common Shares under this Agreement and all Pre-Paid Purchases (the "**Share Reserve**"). Company further agrees to add additional Common Shares to the Share Reserve in increments of 100,000 shares as and when requested by Investor if as of the date of any such request the number of shares being held in the Share Reserve is less than three (3) times the number of Common Shares equal to the Pre-Paid Purchase Outstanding Balance divided by the Purchase Share Purchase Price (as defined in the Pre-Paid Purchases). Company shall further require the Transfer Agent to hold the Common Shares reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to issue such shares to Investor promptly upon Investor's delivery of a Purchase Notice under the Pre-Paid Purchase. Finally, Company shall require the Transfer Agent to issue Common Shares pursuant to the Pre-Paid Purchase to Investor out of its authorized and unissued shares, and not the Share Reserve, to the extent Common Shares have been authorized, but not issued, and are not included in the Share Reserve. The Transfer Agent shall only issue Common Shares out of the Share Reserve to the extent there are no other authorized shares available for issuance and then only with Investor's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Most Favored Nation</u>. So long as any Pre-Paid Purchase is outstanding, upon any issuance by Company of any security (including Pre-Paid Purchases issued after the Initial Pre-Paid Purchase) with any term or condition more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more favorable term and such term, at Investor's option, shall become a part of the Transaction Documents for the benefit of Investor. Additionally, if Company fails to notify Investor of any such additional or more favorable term, but Investor becomes aware that Company has granted such a term to any third party, Investor may notify Company of such additional or more favorable term and such term shall become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable third party. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing floor prices, fixed purchase prices, conversion discounts, conversion lookback periods, interest rates, original issue discounts, stock sale price, conversion price per share, warrant coverage, warrant exercise price, and anti-dilution/conversion and exercise price resets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Certain Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1. "**Applicable Laws**" means all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any sanctions laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2. "**Commitment Period**" means the period beginning on the Closing Date and ending on the earlier of: (i) the date that is three (3) years from the Closing Date, and (ii) the date Company has sold $40,000,000.00 in Pre-Paid Purchases hereunder. Notwithstanding the foregoing, in the event that a definitive agreement that contemplates a Change of Control is entered into after the Closing, the Commitment Period for any Pre-Paid Purchases shall automatically terminate immediately prior to the consummation of such Change of Control. The Company may waive this condition subsequent, at its sole discretion. For the purposes of this section, the term "**Change of Control**" shall mean the transfer (whether by tender offer, merger, stock purchase, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons of the Company's securities if, after such transfer, such person or group of affiliated persons would hold more than 50% of outstanding voting securities of the Company, or would otherwise have the power to control the Company or to direct the operations of the Company. For the avoidance of doubt, the termination of the Commitment Period will not effect Company's obligations with respect to Pre-Paid Purchases issued prior to the termination of the Commitment Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3. "**Maximum Purchase Amount**" means $2,000,000.00 less the Pre-Paid Purchase Outstanding Balance, rounded down to the nearest $1,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4. "**Minimum Purchase Amount**" means $250,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5. "**Nasdaq Minimum Price**" means the lower of: (i) the Closing Trade Price (as defined in the Initial Pre-Paid Purchase) on the Trading Day immediately preceding the applicable measurement date; or (ii) the average Closing Trade Price for the five (5) Trading Days immediately preceding the applicable measurement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6. "**Periodic Reports**" shall mean the Company's (i) Annual Reports on Form 10-K, (ii) any current report to be filed on Form 10-Q and (iii) all other reports required to be filed by the Company with the SEC under applicable laws and regulations (including, without limitation, Regulation S-K); *provided* that all such Periodic Reports shall include, when filed, all information, financial statements, audit reports (when applicable) and other information required to be included in such Periodic Reports in compliance with all applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7. **"Pre-Paid Purchase Outstanding Balance**" means the aggregate outstanding balance of all outstanding Pre-Paid Purchases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8. **"Principal Market**" means the Nasdaq Capital Market; provided however, that in the event Company's Common Shares are ever listed or traded on the New York Stock Exchange, the NYSE American, the Nasdaq Global Market, or the Nasdaq Global Select Market, then the "Principal Market" shall mean such other market or exchange on which Company's Common Shares are then listed or traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9. "**Purchase Notice**" means a written notice in the form of Exhibit A to the Pre-Paid Purchase delivered by Investor to Company requiring Company to sell Purchase Shares to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10. **"Purchase Notice Date**" means each date Investor delivers to Company a Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>. The provisions set forth in this Section 12 shall apply to this Agreement, as well as all other Transaction Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section 12 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. <u>Arbitration of Claims</u>. The parties shall submit all Claims (as defined in <u>Exhibit E</u>) arising under this Agreement or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in <u>Exhibit E</u> attached hereto (the "**Arbitration Provisions**"). For the avoidance of doubt, the parties agree that the injunction described in Section 12.3 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. <u>Governing Law; Venue</u>. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties' obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Transfer Agent and Company, such litigation specifically includes, without limitation any action between or involving Company and the Transfer Agent under the TA Letter or otherwise related to Investor in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Common Shares to Investor for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Common Shares to Investor for any reason) outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 12.10 below prior to bringing or filing, any action (including without limitation any filing or action against any person or entity that is not a party to this Agreement, including without limitation the Transfer Agent) that is related in any way to the Transaction Documents or any transaction contemplated herein or therein, including without limitation any action brought by Company to enjoin or prevent the issuance of any Common Shares to Investor by the Transfer Agent, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing law and venue provisions set forth in this Section 12.2 are material terms to induce Investor to enter into the Transaction Documents and that but for Company's agreements set forth in this Section 12.2 Investor would not have entered into the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3. <u>Specific Performance</u>. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that: (a) following an Event of Default (as defined in the Initial Pre-Paid Purchase) under any Pre-Paid Purchase, Investor shall have the right to seek and receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its Common Shares or preferred stock to any party unless the Pre-Paid Purchase Outstanding Balance is being paid in full simultaneously with such issuance; and (b) following a breach of Section 4(vi) above, Investor shall have the right to seek and receive injunctive relief from a court or arbitrator invalidating such lock-up. Company specifically acknowledges that Investor's right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall Investor's pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4. <u>Calculation Disputes</u>. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic calculation under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Market Price, VWAP (each, as defined in the Initial Pre-Paid Purchase) or the number of Purchase Shares (each, a "**Calculation**"), Company or Investor (as the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such Calculation within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor (as the case may be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. ("**Unkar Systems**"). Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems' determination of the disputed Calculation shall be binding upon all parties absent demonstrable error. Unkar Systems' fee for performing such Calculation shall be paid by the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems. In the event Company is the losing party, no extension of the Delivery Date (as defined in the Initial Pre-Paid Purchase) shall be granted and Company shall incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents. Notwithstanding the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting firm other than Unkar Systems to resolve any such dispute and in such event, all references to "Unkar Systems" herein will be replaced with references to such independent, reputable investment bank or accounting firm so designated by Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5. <u>Counterparts</u>. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6. <u>Headings</u>. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7. <u>Severability</u>. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8. <u>Entire Agreement</u>. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction Documents (collectively, "**Prior Agreements**"), that may have been entered into between Company and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9. <u>Amendments</u>. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10. <u>Notices</u>. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer named below or such officer's successor, or by facsimile (with successful transmission confirmation which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage Pre-Paid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees Pre-Paid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days' advance written notice similarly given to each of the other parties hereto):

If to Company:

CXApp Inc.

Attn: Khurram Sheikh

Four Palo Alto Square, Suite 200

Palo Alto, California 94306

If to Investor:

Avondale Capital, LLC

Attn: John M. Fife

297 Auto Mall Drive #4

St. George, Utah 84770

With a copy to (which copy shall not constitute notice):

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan Hansen

3051 West Maple Loop Drive, Suite 325

Lehi, Utah 84043

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11. <u>Successors and Assigns</u>. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company's consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12. <u>Survival</u>. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.13. <u>Further Assurances</u>. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.14. <u>Investor's Rights and Remedies Cumulative</u>. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.15. <u>Attorneys' Fees and Cost of Collection</u>. In the event any suit, action or arbitration is filed by either party against the other to interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and expenses, including attorneys' fees incurred therein, including the same with respect to an appeal. The "prevailing party" shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against both parties, then the arbitrator shall determine the "prevailing party" by taking into account the relative dollar amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein shall restrict or impair an arbitrator's or a court's power to award fees and expenses for frivolous or bad faith pleading. If (i) any Pre-Paid Purchase is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under the Pre-Paid Purchases or to enforce the provisions of the Pre-Paid Purchases, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or other proceedings affecting Company's creditors' rights and involving a claim under the Pre-Paid Purchases; then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys' fees, expenses, deposition costs, and disbursements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.16. <u>Waiver</u>. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.17. <u>Waiver of Jury Trial</u>. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY'S RIGHT TO DEMAND TRIAL BY JURY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.18. <u>Time is of the Essence</u>. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.19. <u>Voluntary Agreement</u>. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company's choosing, or has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue influence by Investor or anyone else.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.20. <u>Document Imaging</u>. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments, documents, and items and records governing, arising from or relating to any of Company's loans, including, without limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of the same force and effect as the original manually executed document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.21. <u>Participation Right</u>. Beginning on the Closing Date and for the following thirty-six (36) months, Company hereby grants to Investor a participation right, whereby Investor shall have the right to participate at Investor's discretion in up to ten percent (10%) of the amount sold in any Restricted Issuance (the "**Participation Right**"). Within two (2) Trading Days following the consummation of a Restricted Issuance, Company will provide Investor with written notice of the consummation of such Restricted Issuance, along with copies of the transaction documents. Investor will then have up to five (5) Trading Days to elect to purchase up to ten percent (10%) of the amount of debt or equity securities issued in such transaction on the most favorable terms and conditions offered to any other purchaser of the same securities. The parties agree that in the event Company breaches its obligations with respect to the Participation Right, Investor's sole and exclusive remedy shall be to receive, as liquidated damages, an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under the Participation Right. For the avoidance of doubt, Company's breach of its obligations with respect to the Participation Right will not be considered an Event of Default (as defined in the Initial Pre-Paid Purchase) under the Initial Pre-Paid Purchase.

[*Remainder of page intentionally left blank; signature page follows*]

IN WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.

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| | |
|:---|:---|
| INVESTOR: | INVESTOR: |
| **Avondale Capital** **, LLC** | **Avondale Capital** **, LLC** |
| By: | /s/ John M. Fife |
|  | John M. Fife, President |
| COMPANY: | COMPANY: |
| **CXApp Inc** **.** | **CXApp Inc** **.** |
| By: | /s/ Khurram Sheikh |
|  | Khurram P. Sheikh, Chief Executive Officer |

---

*[Signature Page to Securities Purchase Agreement]*

ATTACHED EXHIBITS:

---

| | |
|:---|:---|
| Exhibit A | Initial Pre-Paid Purchase |
| Exhibit B | Irrevocable Transfer Agent Instructions |
| Exhibit C | Officer's Certificate |
| Exhibit D | Share Issuance Resolution |
| Exhibit E | Arbitration Provisions |

---

**<u>annex I</u>**

**CONDITIONS PRECEDENT TO INVESTOR'S OBLGATION TO PURCHASE A PRE-PAID PURCHASE**

The obligation of Investor to purchase from Company a Pre-Paid Purchase hereunder on each Pre-Paid Purchase Date is subject to the satisfaction, as of the date of each Request for a Pre-Paid Purchase and each Pre-Paid Purchase Date, of each of the following conditions, provided that these conditions are for Investor's sole benefit and may be waived by Investor at any time in its sole discretion by providing Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Company shall have duly executed and delivered to Investor each of the Transaction Documents to which it is a party.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Investor shall have received an opinion of counsel to Company, dated as of the Pre-Paid Purchase Date, in the form reasonably acceptable to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Company has received the Approval to issue Purchase Shares in excess of the Exchange Cap, and the Approval remains effective as of each applicable Pre-Paid Purchase Date.

&nbsp;&nbsp;&nbsp;&nbsp;(d) The 20-day and 60-day median and average trading volume must be greater than or equal to $500,000.00, as reported by Bloomberg, L.P.

&nbsp;&nbsp;&nbsp;&nbsp;(e) Company shall be in full compliance with the Share Reserve requirements in Section 9 of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;(f) All of the Purchase Shares issuable pursuant to the applicable Pre-Paid Purchase shall have been duly authorized by all necessary corporate action of Company. All Purchase Shares relating to all prior Pre-Paid Purchases required to have been received by Investor under each Pre-Paid Purchase shall have been delivered to Investor in accordance with such Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;(g) Company shall have delivered to Investor a certificate evidencing the incorporation and good standing of Company as of a date within ten (10) days of the Pre-Paid Purchase Date.

&nbsp;&nbsp;&nbsp;&nbsp;(h) The board of directors of Company has approved the transactions contemplated by the Transaction Documents and the applicable Pre-Paid Purchase; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof, and a true, correct and complete copy of such resolutions duly adopted by the board of directors of Company shall have been provided to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;(i) Each and every representation and warranty of Company shall be true and correct in all material respects (other than representations and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of the date of the Pre-Paid Purchase Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions set forth in each Transaction Document required to be performed, satisfied or complied with by Company at or prior to the applicable Pre-Paid Purchase Date.

Annex I-1

&nbsp;&nbsp;&nbsp;&nbsp;(j) Trading in the Common Shares shall not have been suspended by the SEC, the Principal Market or FINRA, Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Shares on the Principal Market shall be terminated on a date certain (unless, prior to such date certain, the Common Shares is listed or quoted on any subsequent Principal Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Shares, electronic trading or book-entry services by DTC with respect to the Common Shares that is continuing, Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Shares, electronic trading or book-entry services by DTC with respect to the Common Shares is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified Company in writing that DTC has determined not to impose any such suspension or restriction).

&nbsp;&nbsp;&nbsp;&nbsp;(k) Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the Purchase Shares.

&nbsp;&nbsp;&nbsp;&nbsp;(l) To Company's knowledge, no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;(m) Since the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably be expected to result in a material adverse effect, or an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;(n) The Pre-Paid Purchase Outstanding Balance shall be less than $2,000,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;(o) The market capitalization of Company must be greater than or equal to $10,000,000.00

&nbsp;&nbsp;&nbsp;&nbsp;(p) Company shall have notified the Principal Market of the issuance of all of the Purchase Shares hereunder, the Principal Market shall have completed its review of the related Listing of Additional Share form and Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the maximum number of Common Shares issuable pursuant to such Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;(q) Company shall have delivered to Investor a compliance certificate executed by the chief executive officer of Company certifying that Company has complied with all of the conditions precedent to the applicable Pre-Purchase Purchase set forth herein and which may be relied upon by Investor as evidence of satisfaction of such conditions without any obligation to independently verify.

&nbsp;&nbsp;&nbsp;&nbsp;(r) Company and its subsidiaries shall have delivered to Investor such other documents, instruments or certificates relating to the transactions contemplated by this Agreement or the Pre-Paid Purchases as Investor or its counsel may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;(s) The Purchase Shares would be available for immediate resale by Investor in Investor's brokerage account.

&nbsp;&nbsp;&nbsp;&nbsp;(t) Company's stockholder equity as reported in its most recent Form 10-Q or Form 10-K must be at least $5,000,000.00.

(u) Company is not in a noncompliant period with Nasdaq continued listing requirements.

Annex I-2

**<u>Exhibit E</u>**

**ARBITRATION PROVISIONS**

1. <u>Dispute Resolution</u>. For purposes of these arbitration provisions (the "**Arbitration Provisions**"), the term "**Claims**" means any disputes, claims, demands, causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor's pursuit of an injunction or other Claim pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the doctrines of claim preclusion, issue preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate arbitration in the future. The parties to the Agreement (the "**parties**") hereby agree that the Claims may be arbitrated in one or more arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The term "Claims" specifically excludes a dispute over Calculations. The parties to the Agreement hereby agree that these Arbitration Provisions are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable for any reason is subject to these Arbitration Provisions. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.

2. <u>Arbitration</u>. Except as otherwise provided herein, all Claims must be submitted to arbitration ("**Arbitration**") to be conducted exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right provided for in Paragraph 5 below (the "**Appeal Right**"), the parties agree that the award of the arbitrator rendered pursuant to Paragraph 4 below (the "**Arbitration Award**") shall be (a) final and binding upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys' fees, incurred in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for in the Pre-Paid Purchase, "**Default Interest**") (with respect to monetary awards) at the rate specified in the Pre-Paid Purchase for Default Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.

3. <u>The Arbitration Act</u>. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act, U.C.A. § 78B-11-101 *et seq.* (as amended or superseded from time to time, the "**Arbitration Act**"). Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.

4. <u>Arbitration Proceedings</u>. Arbitration between the parties will be subject to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 *Initiation of Arbitration*. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party ("**Arbitration Notice**") in the same manner that notice is permitted under Section 12.10 of the Agreement (the "**Notice Provision**"); *provided, however*, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under the Notice Provision (the "**Service Date**"). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to the Notice Provision or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 *Selection and Payment of Arbitrator*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as "neutrals" or qualified arbitrators by Utah ADR Services (<u>http://www.utahadrservices.com</u>) (such three (3) designated persons hereunder are referred to herein as the "**Proposed Arbitrators**"). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a "neutral" with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that are designated as "neutrals" or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve as the arbitrator hereunder is referred to herein as the "**Arbitration Commencement Date**". If an arbitrator resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 *Applicability of Certain Utah Rules*. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties' intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 *Answer and Default*. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 *Related Litigation*. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal proceedings with any state or federal court sitting in Salt Lake County, Utah ("**Litigation Proceedings**"), subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act. In the event either party successfully petitions a court to compel arbitration, the losing party in such action shall be required to pay the prevailing party's attorneys' fees and costs incurred in connection with such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 *Discovery*. Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To facts directly connected with the transactions contemplated by the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less expensive than in the manner requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated attorneys' fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition fails to submit an estimate of attorneys' fees within five (5) calendar days of its receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys' fees. The party taking the deposition must pay the party defending the deposition the estimated attorneys' fees prior to taking the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys' fees are unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate of the attorneys' fees and costs associated with responding to such written discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys' fees and costs and/or challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys' fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay the attorneys' fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator's finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys' fees and costs and/or a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys' fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator's finding with respect to such discovery requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys' fees and costs, before the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert's name and qualifications, including a list of all the expert's publications within the preceding ten (10) years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid for the expert's report and testimony. The parties are entitled to depose any other party's expert witness one (1) time for no more than four (4) hours. An expert may not testify in a party's case-in-chief concerning any matter not fairly disclosed in the expert report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 *Dispositive Motions*. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure (a "**Dispositive Motion**"). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator and to the other party a memorandum in support (the "**Memorandum in Support**") of the Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the "**Memorandum in Opposition**"). Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition ("**Reply Memorandum**"). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 *Confidentiality*. All information disclosed by either party (or such party's agents) during the Arbitration process (including without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party's agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information upon the written request of either party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 *Authorization; Timing; Scheduling Order*. Subject to all other sections of these Arbitration Provisions, the parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties' intent for the Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 *Relief*. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary or punitive damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 *Fees and Costs*. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys' fees, arbitrator costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 *Motion to Vacate*. Following the entry of the Arbitration Award, if either party desires to file a Motion to Vacate the Arbitration Award with a court in Salt Lake County, Utah, it must do so within the earlier of: (a) thirty (30) days of entry of the Arbitration; and (b) in response to the prevailing party's Motion of Confirm the Arbitration Award.

5. <u>Arbitration Appeal</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 *Initiation of Appeal.* Following the entry of the Arbitration Award, either party (the "**Appellant**") shall have a period of thirty (30) calendar days in which to notify the other party (the "**Appellee**"), in writing, that the Appellant elects to appeal (the "**Appeal**") the Arbitration Award (such notice, an "**Appeal Notice**") to a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the "**Appeal Date**". The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. The Arbitration Award will be considered final until the Appeal Notice has been properly delivered and the applicable appeal bond has been posted (along with proof of payment of the applicable bond). The parties acknowledge and agree that any Appeal shall be deemed part of the parties' agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 *Selection and Payment of Appeal Panel.* In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration panel (the "**Appeal Panel**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are designated as "neutrals" or qualified arbitrators by Utah ADR Services (<u>http://www.utahadrservices.com</u>) (such five (5) designated persons hereunder are referred to herein as the "**Proposed Appeal Arbitrators**"). For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a "neutral" with Utah ADR Services, and shall not be the arbitrator who rendered the Arbitration Award being appealed (the "**Original Arbitrator**"). Within five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as "neutrals" or qualified arbitrators by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from the Appellant's list of five (5) arbitrators by providing written notice of such selection to the Appellee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process shall begin again in accordance with this Paragraph 5.2; *provided, however*, that any Proposed Appeal Arbitrators who have already agreed to serve shall remain on the Appeal Panel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the "**Appeal Commencement Date**". No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 *Appeal Procedure.* The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator's findings or the Arbitration Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 *Timing.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant's arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7) calendar days of the Appellant's delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee's delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 *Appeal Panel Award.* The Appeal Panel shall issue its decision (the "**Appeal Panel Award**") through the lead arbitrator on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation attorneys' fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the Pre-Paid Purchase for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 *Relief.* The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may not award exemplary or punitive damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 *Fees and Costs.* As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any part) the reasonable attorneys' fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation in connection with the Appeal).

6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 *Severability.* If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions shall remain unaffected and in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 *Governing Law*. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 *Interpretation*. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation of, these Arbitration Provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 *Waiver*. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party granting the waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 *Time is of the Essence*. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.

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## Exhibit 10.14

**Exhibit 10.14**

**PRE-PAID PURCHASE #1**

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| | |
|:---|:---|
| March 27, 2026 | U.S. $1,050,000.00 |

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FOR VALUE RECEIVED, CXApp Inc., a Delaware corporation ("**Company**"), promises to pay to Avondale Capital, LLC, a Utah limited liability company, or its successors or assigns ("**Investor**"), $1,050,000.00 and any interest, fees, charges, and late fees accrued hereunder in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of five percent (5%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Pre-Paid Purchase #1 (this "**Pre-Paid Purchase**"), which is issued and made effective as of the date set forth above (the "**Effective Date**"). This Pre-Paid Purchase is issued pursuant to that certain Securities Purchase Agreement dated March 27, 2026, as the same may be amended from time to time, by and between Company and Investor (the "**Purchase Agreement**"). Certain capitalized terms used herein are defined in <u>Attachment 1</u> attached hereto and incorporated herein by this reference.

This Pre-Paid Purchase carries an original issue discount of $50,000.00 ("**OID**"). In addition, Company agrees to pay $10,000.00 to Investor to cover Investor's legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Pre-Paid Purchase (the "**Transaction Expense Amount**"). The OID is included in the initial principal balance of this Pre-Paid Purchase and is deemed to be fully earned and non-refundable as of the Purchase Price Date. The Initial Purchase Price (as defined in the Purchase Agreement) shall be payable as set forth in the Purchase Agreement. The Transaction Expense Amount will be deducted from the amount funded at issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Payment; Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. <u>Payment</u>. All payments owing hereunder shall be in lawful money of the United States of America or Purchase Shares, as provided for herein, and delivered to Investor at the address or bank account furnished to Company for that purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and unpaid interest, and thereafter, to (d) principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. <u>Prepayment</u>. So long as no Event of Default (as defined below) has occurred, Company shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to Investor to prepay the Outstanding Balance (less such portion of the Outstanding Balance for which Company has received a Purchase Notice (as defined below) from Investor where the applicable Purchase Shares have not yet been delivered) of this Pre-Paid Purchase, in part or in full, in accordance with this Section 1.2. Any notice of prepayment hereunder (an "**Optional Prepayment Notice**") shall be delivered to Investor in accordance with the notice provisions set forth in the Purchase Agreement and shall state: (i) that Company is exercising its right to prepay this Pre-Paid Purchase, and (ii) the date of prepayment, which shall be not less than twenty (20) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the "**Optional Prepayment Date**"), Company shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Investor as may be specified by Investor in writing to Company. For the avoidance of doubt, Investor shall be entitled to exercise its purchase rights in Section 3 until the Optional Prepayment Date. If Company exercises its right to prepay this Pre-Paid Purchase, Company shall make payment to Investor of an amount in cash equal to 115% multiplied by the then Outstanding Balance of this Pre-Paid Purchase being prepaid (the "**Optional Prepayment Amount**"). In the event Company delivers the Optional Prepayment Amount to Investor prior to the Optional Prepayment Date, the Optional Prepayment Amount shall not be deemed to have been paid to Investor until the Optional Prepayment Date. In the event Company delivers the Optional Prepayment Amount without an Optional Prepayment Notice, then the Optional Prepayment Date will be deemed to be the date that is twenty (20) Trading Days from the date that the Optional Prepayment Amount was delivered to Investor and Investor shall be entitled to exercise its purchase rights set forth herein during such twenty (20) Trading Day period. In addition, if Company delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to Investor within twenty (20) Trading Days following the Optional Prepayment Date, Company shall forever forfeit its right to prepay this Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. <u>Security</u>. This Pre-Paid Purchase is unsecured.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. <u>Investor Purchases</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. <u>Purchases; Mechanics</u>. Upon the terms and subject to the conditions of this Pre-Paid Purchase, Investor, at its sole discretion, shall have the right, but not the obligation, to purchase from Company, and Company shall issue and sell to Investor, Purchase Shares by the delivery to Company of Purchase Notices as provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Notice</u>. At any time on or after the date that is six (6) months from the Purchase Price Date, Investor may, by providing written notice to Company in the form set forth on <u>Exhibit A</u> attached hereto (each, a "**Purchase Notice**"), require Company to issue and sell Purchase Shares to Investor, in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Investor shall, in each Purchase Notice, indicate the portion of the Outstanding Balance that Investor elects to apply to the purchase of Purchase Shares pursuant to this Pre-Paid Purchase (each, a "**Purchase**", and such amount, the "**Purchase Amount**"), in its sole discretion, and the timing of delivery; *provided* that the Purchase Amount shall not exceed the Outstanding Balance, or result in Investor exceeding the limitation set forth in Section 3.1(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Purchase Notice shall be delivered to Company in accordance with the notice provisions set forth in the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each Purchase Notice shall set forth the Purchase Amount, the Purchase Share Purchase Price, the number of Purchase Shares to be issued by Company and purchased by Investor, and the remaining Outstanding Balance following the Closing (as defined below) of the Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any Purchase Shares issued hereunder must be issued free trading to Investor pursuant to: (1) an effective registration statement; or (2) an applicable exemption from registration (e.g., Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Ownership Limitation</u>. Notwithstanding anything to the contrary contained in this Pre-Paid Purchase or the other Transaction Documents (as defined in the Purchase Agreement), Company shall not effect any issuance of Purchase Shares pursuant to this Pre-Paid Purchase to the extent that after giving effect to such issuance would cause Investor (together with its affiliates) to beneficially own a number of Common Shares exceeding 9.99% of the number of Common Shares outstanding on such date (including for such purpose the Common Shares issuable upon such issuance) (the "**Maximum Percentage**"). For purposes of this section, beneficial ownership of Common Shares will be determined pursuant to Section 13(d) of the 1934 Act (as defined in the Purchase Agreement). The Maximum Percentage is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. <u>Closings</u>. The closing of each Purchase and each sale and purchase of Purchase Shares (each, a "**Closing**") shall take place as soon as practicable on or after each Purchase Notice Date in accordance with the procedures set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Promptly after receipt of a Purchase Notice with respect to each Purchase and, in any event, not later than one Trading Day after such receipt, Company will, or will cause its transfer agent to, electronically transfer such number of Purchase Shares to be purchased by Investor (as set forth in the Purchase Notice) by crediting Investor's account or its designee's account at DTC through its DWAC system or by such other means of delivery as may be mutually agreed upon by the parties hereto, and transmit notification to Investor that such share transfer has been requested. Promptly upon receipt of such notification, Investor shall pay to Company the aggregate purchase price for the Purchase Shares (as set forth in the Purchase Notice) by offsetting the Purchase Amount against an equal amount outstanding under this Pre-Paid Purchase (first towards accrued and unpaid interest, if any, and then towards outstanding principal as shown in such Purchase Notice). No fractional shares shall be issued, and any fractional amounts shall be rounded to the nearest whole number of shares. To facilitate the transfer of the Purchase Shares by Investor, the Purchase Shares will not bear any restrictive legends so long as there is an effective registration statement or an available exemption from registration covering such Purchase Shares (it being understood and agreed by Investor that notwithstanding the lack of restrictive legends, Investor may only sell such Purchase Shares in compliance with the requirements of the Securities Act (including any applicable prospectus delivery requirements)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with each Closing, each of Company and Investor shall deliver to the other all documents, instruments and writings expressly required to be delivered by either of them pursuant to this Pre-Paid Purchase in order to implement and effect the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. <u>Triggering Events; Events of Default and Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Triggering Event</u>. If, at any time prior to this Pre-Paid Purchase being paid in full: (i) the VWAP is less than the Floor Price for at least five (5) Trading Days during a period of seven (7) consecutive Trading Days (a "**Floor Price Trigger**"), or (ii) Company has issued ninety percent (90%) or more of the Common Shares available under the Exchange Cap (as defined in the Purchase Agreement) (an "**Exchange Cap Trigger**;" and together with the Floor Price Trigger, each a "**Trigger**") (the last such day of each such occurrence, a "**Trigger Date**"), then Company shall make monthly repayments of amounts outstanding under this Pre-Paid Purchase beginning on the third (3<sup>rd</sup>) Trading Day after the Trigger Date and continuing on the same day of each successive calendar month until the entire Outstanding Balance shall have been paid or until the payment obligation ceases in accordance with this section. Each monthly payment shall be in an amount equal to the sum of (i) $150,000.00, and (ii) all outstanding accrued and unpaid interest in respect of this Pre-Paid Purchase as of each payment date. The obligation of Company to make monthly payments hereunder shall cease (with respect to any payment that has not yet come due) if at any time after the Trigger Date (i) the VWAP is greater than 120% of the Floor Price for a period of five (5) consecutive Trading Days, in the case of a Floor Price Tigger, or (ii) the Exchange Cap no longer applies, in the case of an Exchange Cap Trigger, unless a subsequent Trigger occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. <u>Event of Default</u>. The following are events of default under this Pre-Paid Purchase (each, "**Event of Default**"): (a) Company fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) a receiver, trustee or other similar official shall be appointed over Company or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; (c) Company becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (d) Company makes a general assignment for the benefit of creditors; (e) Company files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced or filed against Company; (g) Company fails to observe or perform any covenant set forth in Section 4 or Section 5 of the Purchase Agreement; (h) the occurrence of a Fundamental Transaction without Investor's prior written consent; (i) Company fails to timely establish and maintain the Share Reserve (as defined in the Purchase Agreement); (j) Company fails to deliver any Purchase Shares in accordance with the terms hereof; (k) any money judgment, writ or similar process is entered or filed against Company or any subsidiary of Company or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Investor; (l) Company fails to be DWAC Eligible; (m) Company or any subsidiary of Company, breaches any covenant or other term or condition contained in any Other Agreement in any material respect; (n) Company defaults or otherwise fails to observe or perform any covenant, obligation, condition or agreement of Company contained herein or in any other Transaction Document (as defined in the Purchase Agreement) in any material respect, other than those specifically set forth in this Section 4.2 and Section 4 and Section 5 of the Purchase Agreement; (o) any representation, warranty or other statement made or furnished by or on behalf of Company to Investor herein, in any Transaction Document, or otherwise in connection with the issuance of this Pre-Paid Purchase is false, incorrect, incomplete or misleading in any material respect when made or furnished; or (p) Company effectuates a reverse split of its Common Shares without twenty (20) Trading Days prior written notice to Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. <u>Default Remedies</u>. At any time and from time to time following the occurrence of any Event of Default, Investor may accelerate this Pre-Paid Purchase by written notice to Company, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, upon the occurrence of any Event of Default described in clauses (b) – (f) of Section 4.2, an Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Event of Default shall become immediately and automatically due and payable in cash at the Mandatory Default Amount. At any time following the occurrence of any Event of Default, upon written notice given by Investor to Company, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law ("**Default Interest**"). Notwithstanding the foregoing, and for the avoidance of doubt, Investor may continue making Purchases pursuant to Section 3 at any time following an Event of Default until such time as the Outstanding Balance is paid in full. In connection with acceleration described herein, Investor need not provide, and Company hereby waives, any presentment, demand, protest or other notice of any kind, and Investor may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Investor at any time prior to payment hereunder and Investor shall have all rights as a holder of the Pre-Paid Purchase until such time, if any, as Investor receives full payment pursuant to this Section 4.3. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Nothing herein shall limit Investor's right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Company's failure to timely deliver Purchase Shares pursuant to a Purchase as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Unconditional Obligation; No Offset</u>. Company acknowledges that this Pre-Paid Purchase is an unconditional, valid, binding and enforceable obligation of Company not subject to offset, deduction or counterclaim of any kind. Company hereby waives any rights of offset it now has or may have hereafter against Investor, its successors and assigns, and agrees to make the payments or Purchases called for herein in accordance with the terms of this Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Waiver</u>. No waiver of any provision of this Pre-Paid Purchase shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7. <u>Rights Upon Issuance of Securities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. <u>Subsequent Equity Sales</u>. If Company or any subsidiary thereof, as applicable, at any time this Pre-Paid Purchase is outstanding, shall sell, issue or grant any Common Shares, option to purchase Common Shares, right to reprice, preferred shares convertible into Common Shares, debt, warrants, options or other instruments or securities which are convertible into or exercisable or exchangeable for Common Shares to any party other than Investor (collectively, the "**Equity Securities**") other than Exempt Issuances at an effective price per share less than the then effective Fixed Price (such issuance is referred to herein as a "**Dilutive Issuance**"), then, the Fixed Price shall be automatically reduced and only reduced to equal such lower effective price per share. If the holder of any Equity Securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options, or rights per share which are issued in connection with such Dilutive Issuance, be entitled to receive Common Shares at an effective price per share that is less than the Fixed Price, such issuance shall be deemed to have occurred for less than the Fixed Price on the date of such Dilutive Issuance, and the then effective Fixed Price shall be reduced and only reduced to equal such lower effective price per share. Such adjustments described above to the Fixed Price shall be permanent (subject to additional adjustments under this section), and shall be made whenever such Equity Securities are issued. Company shall notify Investor, in writing, no later than the Trading Day following the issuance of any Equity Securities subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price, or other pricing terms (such notice, the "**Dilutive Issuance Notice**"). For purposes of clarity, whether or not Company provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive Issuance, on the date of such Dilutive Issuance the Fixed Price shall be lowered to equal the applicable effective price per share regardless of whether Company or Investor accurately refers to such lower effective price per share in any subsequent Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. <u>Adjustment of Fixed Price upon Subdivision or Combination of Common Shares</u>. Without limiting any provision hereof, if Company at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding Common Shares into a greater number of shares, the Fixed Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Company at any time on or after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding Common Shares into a smaller number of shares, the Fixed Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs during the period that a Market Price is calculated hereunder, then the calculation of such Market Price shall be adjusted appropriately to reflect such event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. <u>Other Events</u>. In the event that Company (or any subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect Investor from dilution or if any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then Company's board of directors shall in good faith determine and implement an appropriate adjustment in the Fixed Price so as to protect the rights of Investor, provided that no such adjustment pursuant to this Section 7.3 will increase the Fixed Price as otherwise determined pursuant to this Section 7, provided further that if Investor does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then Company's board of directors and Investor shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall be borne by Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Opinion of Counsel</u>. In the event that an opinion of counsel is needed for Purchases under this Pre-Paid Purchase, Investor has the right to have any such opinion provided by its counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Governing Law; Venue</u>. This Pre-Paid Purchase shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Pre-Paid Purchase shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Arbitration of Disputes</u>. By its issuance or acceptance of this Pre-Paid Purchase, each party agrees to be bound by the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Cancellation</u>. After repayment of the entire Outstanding Balance, this Pre-Paid Purchase shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Amendments</u>. The prior written consent of both parties hereto shall be required for any change or amendment to this Pre-Paid Purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Assignments</u>. Company may not assign this Pre-Paid Purchase without the prior written consent of Investor. This Pre-Paid Purchase and any Purchase Shares issued upon Purchase of this Pre-Paid Purchase may be offered, sold, assigned or transferred by Investor without the consent of Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Notices</u>. Whenever notice is required to be given under this Pre-Paid Purchase, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Purchase Agreement titled "Notices."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Liquidated Damages</u>. Investor and Company agree that in the event Company fails to comply with any of the terms or provisions of this Pre-Paid Purchase, Investor's damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties' inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Investor and Company agree that any fees, balance adjustments, Default Interest or other charges assessed under this Pre-Paid Purchase are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Investor's and Company's expectations that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Severability</u>. If any part of this Pre-Paid Purchase is construed to be in violation of any law, such part shall be modified to achieve the objective of Company and Investor to the fullest extent permitted by law and the balance of this Pre-Paid Purchase shall remain in full force and effect.

*[Remainder of page intentionally left blank; signature page follows]*

IN WITNESS WHEREOF, Company has caused this Pre-Paid Purchase to be duly executed as of the Effective Date.

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| | |
|:---|:---|
| COMPANY: | COMPANY: |
| **CXApp Inc.** | **CXApp Inc.** |
| By: | /s/ Khurram P. Sheikh |
|  | Khurram P. Sheikh, Chief Executive Officer |

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<u>ACKNOWLEDGED, ACCEPTED AND AGREED</u>:

INVESTOR:

**Avondale Capital, LLC**

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| | |
|:---|:---|
| By: | /s/ John M. Fife |
|  | John M. Fife, President |

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*[Signature Page to Pre-Paid Purchase #1]*

**ATTACHMENT 1**

**DEFINITIONS**

For purposes of this Pre-Paid Purchase, the following terms shall have the following meanings:

A1. "**Common Shares**" means shares of Company's common stock, par value $0.0001.

A2. "**DTC**" means the Depository Trust Company or any successor thereto.

A3. "**DTC/FAST Program**" means the DTC's Fast Automated Securities Transfer program.

A4. "**DWAC**" means the DTC's Deposit/Withdrawal at Custodian system.

A5. "**DWAC Eligible**" means that (a) Company's Common Shares is eligible at DTC for full services pursuant to DTC's operational arrangements, including without limitation transfer through DTC's DWAC system; (b) Company has been approved (without revocation) by DTC's underwriting department; (c) Company's transfer agent is approved as an agent in the DTC/FAST Program; (d) the Purchase Shares are otherwise eligible for delivery via DWAC; and (e) Company's transfer agent does not have a policy prohibiting or limiting delivery of the Purchase Shares via DWAC.

A6. "**Default Effect**" means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by ten percent (10%) and then adding the resulting product to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming the Outstanding Balance under this Pre-Paid Purchase as of the date the applicable Event of Default occurred.

A7. "**Exempt Issuance**" means (i) Common Shares or options issued to employees, consultants, officers or directors of Company pursuant to Company's equity incentive plan or pursuant to the compensation agreements previously authorized by the Board of Directors; and (ii) securities issued pursuant to acquisitions or strategic transactions and the payment of contractor invoices in the ordinary course of business approved by a majority of the disinterested directors of Company, provided that such securities are issued as "restricted securities" (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith and provided that any such issuance shall only be to a person (or to the equityholders of a person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of Company and shall provide to Company additional benefits in addition to the investment of funds, but shall not include a transaction in which Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

A8. "**Fixed Price**" means $0.2614.

A9. "**Floor Price**" means $0.0436, which may be subject to change in the future to the extent permitted by stock exchange rules in effect at the time of such change.

A10. "**Fundamental Transaction**" means that (a) (i) Company or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Company or any of its subsidiaries is the surviving corporation) any other person or entity, or (ii) Company or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other person or entity, or (iii) Company or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Company (not including any shares of voting stock of Company held by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase, tender or exchange offer),

Attachment 1 to Pre-Paid Purchase #1, Page 1

or (iv) Company or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Company (not including any shares of voting stock of Company held by the other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Company or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify the Common Shares, other than an increase in the number of authorized shares of Company's Common Shares, or (b) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Company. For the avoidance of doubt, Company or any if its subsidiaries entering into a definitive agreement that contemplates a Fundamental Transaction will be deemed to be a Fundamental Transaction.

A11. "**Mandatory Default Amount**" means the Outstanding Balance following the application of the Default Effect.

A12. "**Market Price**" means 91% of the lowest daily VWAP during the ten (10) consecutive Trading Days immediately prior to the Purchase Notice Date, but in any event not lower than the Floor Price.

A13. "**Other Agreements**" means, collectively, all existing and future agreements and instruments between, among or by Company (or it subsidiary), on the one hand, and Investor (or an affiliate), on the other hand.

A14. "**Outstanding Balance**" means as of any date of determination, the initial principal balance, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, Purchases, offset, or otherwise, accrued but unpaid interest, collection and enforcements costs (including attorneys' fees) incurred by Investor, transfer, stamp, issuance and similar taxes and fees related to Purchases, and any other fees or charges incurred under this Pre-Paid Purchase.

A15. "**Purchase Notice Date**" means the date the applicable Purchase Notice is delivered by Investor to Company.

A16. "**Purchase Price Date**" means the date the Initial Purchase Price is delivered by Investor to Company.

A17. "**Purchase Shares**" Common Shares purchased pursuant to this Pre-Paid Purchase.

A18. "**Purchase Share Purchase Price**" means a price per share equal to the lower of (a) the Fixed Price, and (b) the Market Price.

A19. "**Trading Day**" means any day on which Company's principal market is open for trading.

A20. "**VWAP**" means the volume weighted average price of the Common Shares on the principal market for a particular Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.

*[Remainder of page intentionally left blank]*

Attachment 1 to Pre-Paid Purchase #1, Page 2

**<u>EXHIBIT A</u>**

Avondale Capital, LLC

**PURCHASE NOTICE**

On behalf of Avondale Capital, LLC ("**Investor**"), the undersigned hereby certifies, with respect to the purchase of Common Shares of CXApp Inc. ("**Company**") issuable in connection with this Purchase Notice, delivered pursuant to that certain Pre-Paid Purchase #1, dated as of March __, 2026 (as amended and supplemented from time to time), as follows:

&nbsp;&nbsp;&nbsp;&nbsp;A. Purchase Notice Date: ____________

&nbsp;&nbsp;&nbsp;&nbsp;B. Purchase Amount: ____________

&nbsp;&nbsp;&nbsp;&nbsp;C. Fixed Price: ____________

&nbsp;&nbsp;&nbsp;&nbsp;D. Market Price: ____________

&nbsp;&nbsp;&nbsp;&nbsp;E. Purchase Share Purchase Price (lower of C and D): ____________

&nbsp;&nbsp;&nbsp;&nbsp;F. Number of Purchase Shares Due to Investor: ____________

&nbsp;&nbsp;&nbsp;&nbsp;G. Outstanding Balance Following Purchase: ____________

**INVESTOR'S DTC PARTICIPANT #:**

ACCOUNT NAME:

ACCOUNT NUMBER:

ADDRESS:

CITY:

COUNTRY:

CONTACT PERSON:

NUMBER AND/OR EMAIL:

---

| | |
|:---|:---|
| INVESTOR: | INVESTOR: |
| **Avondale Capital, LLC** | **Avondale Capital, LLC** |
| By: |  |
|  | John M. Fife, President |

---

## Exhibit 21.1

**Exhibit 21.1**

**LIST OF SUBSIDIARIES**

---

| | |
|:---|:---|
| **Name** | **Jurisdiction** |
| CXApp Holding Corp. | Delaware |
| CXApp US, Inc. | California |
| CXApp Canada, Inc. | British Columbia |
| CXApp Philippines, Inc. | Philippines |

---

## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation by reference in the Registration Statements on Form S-1 (Nos. 333-271340, 333-281452 and 333-287170), Form S-3 (No. 333-289460) and Form S-8 (Nos. 333-272067 and 333-287725) of CXApp Inc. of our report dated March 30, 2026, relating to the consolidated financial statements of CXApp Inc. as of and for years ended December 31, 2025 and 2024, which appears in this Form 10-K.

/s/ WithumSmith+Brown, PC

San Francisco, CA

March 30, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Khurram Sheikh, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 10-K of CXApp Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: March 30, 2026 |  |
|  | /s/ Khurram Sheikh |
|  | Khurram Sheikh |
|  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Joy Mbanugo, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 10-K of CXApp Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: March 30, 2026 |  |
|  | /s/ Joy Mbanugo |
|  | Joy Mbanugo |
|  | Chief Financial Officer |
|  | (Principal Financial Officer and Principal Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of CXApp Inc. (the "Company") on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: March 30, 2026 |  |
|  | /s/ Khurram Sheikh |
|  | Khurram Sheikh |
|  | Chairman, Chief Executive Officer and Director |
|  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of CXApp Inc. (the "Company") on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: March 30, 2026 |  |
|  | /s/ Joy Mbanugo |
|  | Joy Mbanugo |
|  | Chief Financial Officer |
|  | (Principal Financial Officer and Principal Accounting Officer) |

---