Company: CXAI
Filing Date: 2025-03-07
Form Type: 424B3
Source: 0001829126-25-001566
Chunk: 20

Company: CXApp Inc.
Filing Date: 2025-03-07
Form: 424B3
Chunk 20
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 prior to invoicing and the Company has an unconditional right to payment. Alternatively,
when invoicing a customer precedes the Company providing of the related services, the Company records deferred revenue until the performance
obligations are satisfied. The Company had deferred revenue of approximately $2,338 thousand and $2,878 thousand as of September 30, 2024 (Successor) and December 31, 2023 (Successor), respectively, related to customer invoices rendered in
advance for software licenses, professional services, and hardware provided by the Company’s technical staff.

The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with hardware, professional services,
and recognize the deferred revenue related to licenses generally over the remaining contract term which is generally twelve months following
the commencement of the license. The Company recognized revenue in the reporting period of $2,359 thousand, $893 thousand, and $865 thousand, that was included in the contract liability balance at the beginning of the period, for the nine months ended September 30,
2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and for the period from January 1, 2023 to March
14, 2023 (Predecessor), respectively.

Costs to Obtain a Contract

The Company recognizes eligible sales commissions as an asset within prepaid expenses and other current assets as the commissions are an incremental cost of obtaining a contract with the customer and the Company expects to recover these costs. The capitalized costs are amortized over the expected contract term.

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CXAPP INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</div>

Cost to Fulfill a Contract

The Company incurs costs to fulfill their obligations under a contract once it has obtained the contract. These costs are generally not significant and are recorded to expense as incurred.

Multiple Performance Obligations

The Company enters into contracts with customers for its technology that include multiple performance obligations. Each distinct performance obligation was determined by whether the customer could benefit from the good or service on its own or together with readily available resources. The Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company’s process for determining standalone selling price considers multiple factors including the Company’s internal pricing model and market trends that may vary depending upon the facts and circumstances related to each performance obligation.

Sales and Use Taxes