Item 1.01 Entry Into a Material Agreement.
On September 25, 2022, Inpixon, a Nevada corporation ("Inpixon"), entered into
an Agreement and Plan of Merger (the "Merger Agreement"), by and among Inpixon,
KINS Technology Group Inc., a Delaware corporation ("KINS"), CXApp Holding
Corp., a Delaware corporation and newly formed wholly-owned subsidiary of
Inpixon ("CXApp" and, together with Inpixon, collectively, the "Companies"), and
KINS Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of
KINS ("Merger Sub"), pursuant to which KINS will acquire Inpixon's enterprise
apps business (including its workplace experience technologies, indoor mapping,
events platform, augmented reality and related business solutions) (the
"Enterprise Apps Business") in exchange for the issuance of shares of KINS
capital stock valued at $69 million (the "Business Combination").
Immediately prior to the Merger (as defined below) and pursuant to a Separation
and Distribution Agreement, dated as of September 25, 2022, among KINS, Inpixon,
CXApp and Design Reactor, Inc., a California corporation ("Design Reactor") (the
"Separation Agreement"), and other ancillary conveyance documents, Inpixon will,
among other things and on the terms and subject to the conditions of the
Separation Agreement, transfer the Enterprise Apps Business, including certain
related subsidiaries of Inpixon, including Design Reactor, to CXApp (the
"Reorganization") and, in connection therewith, will distribute (the
"Distribution") to Inpixon stockholders and other security holders 100% of the
common stock of CXApp, par value $0.00001 (the "CXApp Common Stock"), as further
described below.
Immediately following the Distribution, in accordance with and subject to the
terms and conditions of the Merger Agreement, Merger Sub will merge with and
into CXApp (the "Merger"), with CXApp continuing as the surviving company in the
Merger and as a wholly-owned subsidiary of KINS.
Transaction Documents
Agreement and Plan of Merger
The Merger Agreement, along with the Separation Agreement and the other
transaction documents to be entered into in connection therewith, provides for,
among other things, the consummation of the following transactions: (i) Inpixon
will transfer the Enterprise Apps Business (the "Separation") to its
wholly-owned subsidiary, CXApp, and contribute $10 million in cash (the "Cash
Contribution"), (ii) following the Separation, Inpixon will distribute 100% of
the shares of CXApp Common Stock to Inpixon stockholders and other security
holders by way of the Distribution and (iii) following the completion of the
foregoing transactions and subject to the satisfaction or waiver of certain
other conditions set forth in the Merger Agreement, the parties shall consummate
the Merger. The Separation, Distribution and Merger are intended to qualify as
"tax-free" transactions.
Upon consummation of the Business Combination, KINS will have two classes of
common stock: Class A common stock, par value $0.0001 per share (the "KINS Class
A Common Stock"), and Class C common stock, par value $0.0001 per share (the
"KINS Class C Common Stock" and together with the KINS Class A Common Stock, the
"KINS Common Stock"). The KINS Class A Common Stock and the KINS Class C Common
Stock will be identical in all respects, except that the KINS Class C Common
Stock will be subject to transfer restrictions and will automatically convert
into KINS Class A Common Stock on the earlier to occur of (i) the 180th day
following the closing of the Merger and (ii) the day that the last reported sale
price of the KINS Class A Common Stock equals or exceeds $12.00 per share for
any 20 trading days within any 30-trading day period following the closing of
the Merger.
Consideration Paid
At the time the Business Combination is effected (the "Closing"), the
outstanding shares of CXApp Common Stock after the Distribution and immediately
prior to the effective time of the Merger will be converted into an aggregate of
6.9 million shares of KINS Common Stock which shall be issued to Inpixon
shareholders, subject to adjustment. Each holder's aggregate merger
consideration will consist of 10% KINS Class A Common Stock and 90% KINS Class C
Common Stock (such percentages, in each case, subject to adjustment to comply
with the listing requirements set forth under Nasdaq Listing Rule 5505(b)(2)
with respect to KINS).
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Representations and Warranties & Covenants
Pursuant to the Merger Agreement, KINS, CXApp and Inpixon each made
representations and warranties customary for transactions of this type regarding
themselves and their respective businesses. The representations and warranties
made pursuant to the Merger Agreement will not survive the Closing. In addition,
the parties to the Merger Agreement agreed to be bound by certain covenants that
are customary for transactions of this type. The covenants made under the Merger
Agreement generally will not survive the Closing, with the exception of certain
covenants and agreements that by their terms are to be performed in whole or in
part after the Closing, which will survive in accordance with the terms of the
Merger Agreement.
Conditions to Closing
The consummation of the Business Combination is subject to conditions customary
for transactions involving special purpose acquisition companies, including,
among others: (i) there is not in force any order, judgment, injunction,
decree, writ, stipulation, determination or award, in each case, entered by or
with any governmental authority of competent jurisdiction, statute, rule or
regulation enjoining or prohibiting the consummation of the Merger, (iii) KINS
shall have at least $5,000,001 of net tangible assets as of the Closing,
(iv) the KINS Class A Common Stock issuable pursuant to the Business Combination
shall have been approved for listing on Nasdaq, (v) CXApp and KINS shall each
have performed and complied in all material respects with the covenants required
by the Merger Agreement to be performed by it as of or prior to Closing,
(vi) customary bring down conditions related to the accuracy of the CXApp's and
KINS's respective representations and warranties in the Merger Agreement, (vii)
the consummation of the Distribution, the Reorganization and other transactions
contemplated by the Separation and Distribution Agreement, (viii) KINS's
registration statement to be filed with the Securities and Exchange Commission
("SEC") shall have become effective (and no stop order suspending effectiveness
have been issued and no proceedings for that purpose has been initiated or
threatened by the SEC), (ix) each of KINS's and CXApp's stockholder approvals
shall have been obtained and (x) the sum of (A) the aggregate amount of cash
available in KINS's trust account following KINS's stockholders' meeting, after
deducting the amount required to satisfy the Acquiror Share Redemption Amount
(as defined in the Merger Agreement) (but prior to payment of any transaction
expenses), (B) the aggregate gross purchase price of any other purchase of
shares of KINS Common Stock (or securities convertible or exchangeable for KINS
Common Stock) actually received by KINS prior to or substantially concurrently
with the closing of the Merger, and (C) the aggregate gross purchase price of
any other purchase of shares of CXApp Common Stock (or securities convertible or
exchangeable for CXApp Common Stock) actually received by CXApp prior to or
substantially concurrently with the closing of the Merger, shall be equal to or
greater than $9.5 million. KINS's obligation to consummate the Business
Combination is also conditioned on there having been no event that has had, or
would reasonably be expected to have, individually or in the aggregate, a
"Material Adverse Effect" on CXApp.
Termination
The Merger Agreement may be terminated under certain customary and limited
circumstances at any time prior to the Closing, including (i) by the mutual
written consent of KINS and CXApp, (ii) by KINS or CXApp, if the Closing shall
not have occurred on or before March 16, 2023, (iii) by KINS or CXApp, if there
has been any order, judgment, injunction, decree, writ, stipulation,
determination or award, in each case, entered by or with any governmental
authority that would make the Merger illegal or otherwise prevent or prohibit
the Merger, (iv) by KINS or CXApp, if KINS has not obtained the requisite
approval from its stockholders, (v) by KINS or CXApp if the other party breaches
certain representations, warranties, or covenants, as specified in the Merger
Agreement, and that breach is unable to be cured, or is not cured, within 30
days, or by CXApp if there has been an uncured breach by Sponsor of certain of
its obligations under the Sponsor Support Agreement (as defined below) or (vi)
by KINS if CXApp has not obtained the requisite approval from its stockholders
within one hour of the effective date of the KINS registration statement,
provided that CXApp or KINS pay a termination fee of $2.0 million to the other
party if the Merger Agreement is terminated pursuant to (v) or (vi) above.
A copy of the Merger Agreement is filed with this Current Report on Form 8-K
(this "Current Report") as Exhibit 2.1, and is incorporated herein by reference,
and the foregoing description of the Merger Agreement is qualified in its
entirety by reference thereto.
Separation and Distribution Agreement
On September 25, 2022, in connection with the execution of the Merger Agreement,
KINS entered into the Separation Agreement with CXApp, Inpixon and Design
Reactor, pursuant to which, among other things, (i) Inpixon will undertake a
. . .
Item 8.01 Other Events.
On September 26, 2022, Inpixon issued a press release (the "Press Release")
announcing the entry into the Merger Agreement. The Press Release is attached to
this Current Report as Exhibit 99.1 and incorporated by reference herein.
Important Information and Where to Find It
In connection with the Business Combination and the Distribution, CXApp will
file with the SEC a registration statement on Form S-1 (the "Form S-1")
registering shares of CXApp Common Stock and KINS will file with the SEC a
registration statement on Form S-4 (the "Form S-4") registering shares of KINS
Common Stock, warrants and certain equity awards. The Form S-4 to be filed by
KINS will include a proxy statement/prospectus in connection with the KINS
stockholder vote required in connection with the Business Combination. This
communication does not contain all the information that should be considered
concerning the Business Combination. The Form S-1 to be filed by CXApp will
include the Form S-4 filed by KINS, which will serve as an information
statement/prospectus in connection with the spin-off of CXApp. This
communication is not a substitute for the registration statements that CXApp and
KINS will file with the SEC or any other documents that KINS or CXApp may file
with the SEC, or that KINS, Inpixon or CXApp may send to stockholders in
connection with the Business Combination. It is not intended to form the basis
of any investment decision or any other decision in respect to the Business
Combination. KINS's stockholders and Inpixon's stockholders and other interested
persons are advised to read, when available, the preliminary and definitive
registration statements, and documents incorporated by reference therein, as
these materials will contain important information about KINS, CXApp and the
Business Combination. The proxy statement/prospectus contained in KINS's
registration statement will be mailed to KINS's stockholders as of a record date
to be established for voting on the Business Combination.
The registration statements, proxy statement/prospectus and other documents
(when they are available) will also be available free of charge, at the SEC's
website at www.sec.gov, or by directing a request to: KINS Technology Group,
Inc., Four Palo Alto Square, Suite 200, 3000 El Camino Real, Palo Alto, CA
94306.
Participants in the Solicitation
Inpixon, KINS and CXApp, and each of their respective directors, executive
officers and other members of their management and employees may be deemed to be
participants in the solicitation of proxies from KINS's stockholders in
connection with the Business Combination. Stockholders are urged to carefully
read the proxy statement/prospectus regarding the Business Combination when it
becomes available, because it will contain important information. Information
regarding the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of KINS's stockholders in connection with the
Business Combination will be set forth in the registration statement when it is
filed with the SEC. Information about KINS's executive officers and directors
and CXApp's management and directors also will be set forth in the registration
statement relating to the Business Combination when it becomes available.
No Solicitation or Offer
This communication shall neither constitute an offer to sell nor the
solicitation of an offer to buy any securities, or the solicitation of any
proxy, vote, consent or approval in any jurisdiction in connection with the
Business Combination, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be unlawful prior to
any registration or qualification under the securities laws of any such
jurisdictions. This communication is restricted by law; it is not intended for
distribution to, or use by any person in, any jurisdiction where such
distribution or use would be contrary to local law or regulation.
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Forward-Looking Statements
This communication contains forward-looking statements. The words "anticipate,"
"believe," "continue," "could," "estimate," "expect," "intend," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should," "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. All
statements other than statements of historical facts contained in this
communication, including statements regarding the expected timing and structure
of the Business Combination, the ability of the parties to complete the Business
Combination, the expected benefits of the Business Combination, the tax
consequences of the Business Combination, the amount of gross proceeds expected
to be available to CXApp after the Closing and giving effect to any redemptions
by KINS stockholders, CXApp's future results of operations and financial
position, business strategy and its expectations regarding the application of,
and the rate and degree of market acceptance of, the CXApp technology platform
and other technologies, CXApp's expectations regarding the addressable markets
for our technologies, including the growth rate of the markets in which it
operates, and the potential for and timing of receipt of payments under CXApp's
agreements with customers are forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties, assumptions and
other important factors, many of which are outside the control of Inpixon, CXApp
and KINS, that could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important factors, among
others, that may affect actual results or outcomes include, but are not limited
to: the risk that the transactions may not be completed in a timely manner or at
all, which may adversely affect the price of Inpixon's or KINS's securities; the
risk that KINS stockholder approval of the Business Combination is not obtained;
the inability to recognize the anticipated benefits of the Business Combination,
which may be affected by, among other things, the amount of funds available in
KINS's trust account following any redemptions by KINS's stockholders; the
failure to receive certain governmental and regulatory approvals; the occurrence
of any event, change or other circumstance that could give rise to the
termination of the merger agreement; changes in general economic conditions,
including as a result of the COVID 19 pandemic or the conflict between Russia
and Ukraine; the outcome of litigation related to or arising out of the Business
Combination, or any adverse developments therein or delays or costs resulting
therefrom; the effect of the announcement or pendency of the transactions on
Inpixon's, CXApp's or KINS's business relationships, operating results, and
businesses generally; the ability to continue to meet Nasdaq's listing standards
following the consummation of the Business Combination; costs related to the
Business Combination; that the price of KINS's or Inpixon's securities may be
volatile due to a variety of factors, including Inpixon's, KINS's or CXApp's
inability to implement their business plans or meet or exceed their financial
projections and changes in the combined capital structure; the ability to
implement business plans, forecasts, and other expectations after the completion
of the Business Combination, and identify and realize additional opportunities;
and the ability of CXApp to implement its strategic initiatives.
The foregoing list of factors is not exhaustive. You should carefully consider
the foregoing factors and the other risks and uncertainties described in the
"Risk Factors" section of Inpixon's most recent annual report on Form 10-K,
KINS's registration statement on Form S-1 (File No. 333-249177) and the
Form S-4, the Form S-1, the proxy statement/prospectus and certain other
documents filed or that may be filed by Inpixon, KINS or CXApp from time to time
with the SEC following the date hereof. These filings identify and address other
important risks and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements, and Inpixon,
CXApp and KINS assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise.
None of Inpixon, CXApp or KINS gives any assurance that Inpixon, CXApp or KINS
will achieve their expectations.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
2.1* 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.
2.2* 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.
2.3 Sponsor Support Agreement, dated as of September 25, 2022, by and
among KINS Capital LLC, KINS Technology Group Inc., Inpixon and CXApp
Holding Corp.
99.1 Press Release dated September 26, 2022.
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document).
* Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K.
Inpixon agrees to furnish supplementally a copy of any omitted schedule to
the Securities and Exchange Commission upon request.
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