CXApp Inc. secures $20 million financing agreement

PALO ALTO, CA - CXApp Inc., a prepackaged software services company, has entered into a significant financing agreement with Avondale Capital, LLC. On March 26, 2025, the company secured a Securities Purchase Agreement, which could lead to a total funding of up to $20 million through the issuance of pre-paid purchase agreements and common stock. According to InvestingPro data, the company, currently valued at $13.93 million, shows impressive gross profit margins of 80.62% but faces significant financial challenges with a weak overall health score.

The initial transaction includes a pre-paid purchase agreement for $4.2 million, with a $200,000 original issue discount and a $10,000 transaction expense amount, resulting in a net funding of $4 million. In addition, CXApp issued 80,000 commitment shares to Avondale. The financing comes at a crucial time, as InvestingPro analysis reveals the company is quickly burning through cash, with short-term obligations exceeding liquid assets and a concerning current ratio of 0.45.

This financing mechanism allows Avondale to require the company to issue shares of common stock at a predetermined purchase price, subject to certain conditions such as a defined floor price. The purchase price for these shares will be the lower of 120% of the Nasdaq-defined "Minimum Price" or 91% of the lowest daily volume weighted average price in the ten days preceding the purchase notice, with a floor set at 20% of the Nasdaq Minimum Price.

CXApp Inc. may request additional pre-paid purchases under the agreement, provided that certain conditions are met, including shareholder approval to exceed Nasdaq’s share issuance limits. Each additional pre-paid purchase will have a 5% original issue discount and is subject to a floor price and a fixed price cap.

The company is obligated to file a registration statement covering the resale of at least 18.5 million shares, including the commitment shares and those potentially issuable under the initial pre-paid purchase, within 30 days of the initial closing. Future pre-paid purchases will trigger additional registration obligations.

The net proceeds from the financing are intended for working capital and general corporate purposes. However, the issuance of shares under this agreement is subject to the Nasdaq Listing Rule 5635(d) limitation, which restricts the number of shares issued without stockholder approval.

This agreement could lead to substantial dilution for existing shareholders, depending on the number of shares issued and the purchase price at the time of conversion. CXApp has committed to seeking the required shareholder approval by May 31, 2025, or every 90 days thereafter until approval is secured or the outstanding balance is otherwise satisfied.

The information provided in this article is based on a press release statement from CXApp Inc. and the related SEC filing.

In other recent news, CXApp Inc. has announced the appointment of Terry Blanchard as Senior Vice President of Engineering. Blanchard, who has extensive experience with companies like Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), will lead the global engineering team to enhance AI technologies for workplace interaction. In another development, CXApp Inc. reported the issuance of 1,213,809 new equity shares in exchange for promissory notes, as detailed in a Form 8-K filing with the SEC. This transaction involved a partition of promissory notes amounting to approximately $2,027,500. The shares were issued at a price between $1.57 and $1.83 per share, adhering to Nasdaq Listing Rule 5635(d). This action increased the company’s outstanding common stock shares to 18,641,170. The equity issuance was conducted under Section 3(a)(9) of the Securities Act of 1933, allowing the exchange without registration under specific conditions. These recent developments reflect CXApp Inc.’s strategic moves in both leadership and financial structuring.

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