UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry Into a Material Definitive Agreement.
On December 15, 2023, CXApp Inc. (the “Company”, “we”, “us” or “our”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC (the “Investor”) and consummated the sale to such Investor of an unsecured Promissory Note (the “Note”) with an original principal amount of $3,885,000 in a private placement (the “Private Placement”) that closed on December 15, 2023.
The Note carries an original issuance discount of $870,000 and the Company agreed to pay $15,000 to the Investor to cover the Investor’s legal and administrative transaction costs, each of which were deducted from the proceeds of the Note received by the Company which resulted in a purchase price received by the Company of $3,000,000.
The Note bears interest at ten percent (10%) per annum compounded daily. The maturity date of the Note is 12 months from the date of its issuance (the “Maturity Date”).
We may prepay any or all of the outstanding balance under the Note prior to the Maturity Date, provided that if such prepayment covers less than the entire principal, fees and interest of the Note, the Company will remain subject to the remaining obligations under the Note.
The Note provides for customary events of default, including, among other things, the event of non-payment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants within a specified period of time, a cross-default to certain other indebtedness of the Company, the bankruptcy or insolvency of the Company or of all or a substantial part of its property, monetary judgment defaults of a specified amount and other defaults resulting in liability of a specified amount. Upon the occurrence of an Event of Default, as defined in Section 7 of the Note, 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.
Beginning on June 15, 2024 and on the same day of each month thereafter until the Note is paid in full, the Investor may redeem up to an aggregate of one-sixth (1/6) of the initial principal balance of the Note each month (each monthly exercise, a “Monthly Redemption Amount”) by providing written notice (each, a “Monthly Redemption Notice”) delivered to the Company; provided, however, that if the Investor does not exercise any Monthly Redemption Amount in its corresponding month then such Monthly Redemption Amount shall be available for the Investor to redeem in any future month in addition to such future month’s Monthly Redemption Amount. Upon receipt of any Monthly Redemption Notice, the Company shall pay the applicable Monthly Redemption Amount in cash to the Investor within five (5) business days of the Company’s receipt of such Monthly Redemption Notice.
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The foregoing is only a summary of the material terms of the Note Purchase Agreement and the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder. Furthermore, the foregoing is qualified in its entirety by reference to such documents, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 2.03 to the extent required.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Exhibit Title | |
| 10.1+ | Note Purchase Agreement dated December 15, 2023, between CXApp Inc. and Streeterville Capital, LLC | |
| 10.2+ | Promissory Note dated December 15, 2023, between CXApp Inc. and Streeterville Capital, LLC | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
| + | The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC uon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: December 21, 2023 | CXApp Inc. | |
| By: | /s/ Khurram P. Sheikh | |
| Name: | Khurram P. Sheikh | |
| Title: | Chairman and Chief Executive Officer | |
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