Company: CXAI
Filing Date: 2025-11-12
Form Type: 424B3
Source: 0001829126-25-009079
Chunk: 43

Company: CXApp Inc.
Filing Date: 2025-11-12
Form: 424B3
Chunk 43
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 months ended
and for the nine months ended September 30, 2025 were 0.00% and 0.01%, respectively. The effective tax rate for the three months ended
and for the nine months ended September 30, 2024 were (2.86)% and (3.22)%, respectively. The effective tax rate differs from the U.S.
Federal statutory rate primarily due to recording a valuation allowance against deferred tax assets in the foreign jurisdictions and the
significant permanent differences including impairment of goodwill and change in fair value of derivative warrant liabilities.

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The Company continues to evaluate the realizability
of its deferred tax assets and has maintained a valuation allowance on its deferred tax assets as of September 30, 2025.

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 September 30, 2025 and December 31, 2024, was $73 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 nine months ended September