Company: CXAI
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001829126-25-009077
Chunk: 60

Company: CXApp Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of
September 30, 2025. The material weakness and remediation activities were discussed in Part II, Item 9A “Controls and Procedures”
of the Company’s 2024 Annual Report filed on April 7, 2025.

46

Changes
in Internal Control over Financial Reporting

There
have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the
three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Management
has developed and is implementing a comprehensive remediation plan to address the material weaknesses identified in internal control over
financial reporting.

For
Tax Accounting Controls, the Company has enhanced review procedures and implemented automated reconciliation processes to improve the
completeness and accuracy of income tax accruals, with a particular focus on state tax liabilities. The Company has also engaged external
tax specialists to assist in refining accrual methodologies and strengthening related documentation and review processes.

With
respect to the Expense Accrual Process, the Company has revised its period-end close procedures to include standardized accrual checklists,
earlier cut-off timelines, and enhanced management review controls. These measures are designed to improve the timeliness and accuracy
of expense recognition, including legal and professional fees. The accounting team now performs monthly and quarterly analyses of recurring
expenses to validate the completeness of accruals. For material and ad hoc contracts, targeted outreach is conducted to confirm expected
accruals for the reporting period, further reinforcing the completeness and accuracy of expense recognition. Significant modifications
to agreements and disputes are jointly reviewed by legal counsel and senior leadership, including the CEO and CFO, to ensure appropriate
recognition and disclosure.

For
Fair Value Election and Embedded Derivatives, the Company has enhanced its accounting policy framework to ensure appropriate identification,
bifurcation, and fair value measurement of financial instruments. A valuation specialist has been engaged to perform independent fair
value assessments, and management performs quarterly reviews to validate the reasonableness and accuracy of those valuations. Management
has implemented a structured contract review protocol that requires both the finance and legal teams to assess new and existing agreements