Company: CXAI
Filing Date: 2025-11-12
Form Type: 424B3
Source: 0001829126-25-009079
Chunk: 14

Company: CXApp Inc.
Filing Date: 2025-11-12
Form: 424B3
Chunk 14
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 as the probability weighting of the various scenarios that can impact settlement of the arrangement. The Company recognized a net gain on changes in the estimated fair value of the convertible debt of approximately $887 thousand and $387 thousand for the three and nine months ended September 30, 2025, respectively, and loss of $67 thousand and $17 thousand for the three and nine months ended September 30, 2024.

Debt Issuance Costs

Under the fair value option election, costs directly associated with the borrowing are expensed as incurred.

Note Conversion

Convertible notes that are exchanged for equity
pursuant to their original contractual terms are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options.
Upon conversion, the carrying amount of the convertible debt is reclassified to equity. No gain or loss is recognized in earnings, as
the conversion is executed under the original terms of the instrument.

If the debt is settled under modified terms,
the transaction is accounted for in accordance with ASC 470-50, “Debt - Modifications and Extinguishments” (“ASC 470-50”).
In such cases, a gain or loss is recognized equal to the difference between the reacquisition price and the net carrying amount of the
extinguished debt.

Revenue Recognition

The Company recognizes revenue, in accordance
with ASC 606 “Revenue from Contracts with Customers” (“ASC 606”), when control is transferred of the promised products
or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those
products or services. The Company derives revenue from its software as a service for cloud-based software, as well as design, implementation
and other professional services for work performed in conjunction with its cloud-based software. The Company enters into contracts with
its customers whereby it grants a non-exclusive cloud-based license for the use of its proprietary software and for professional services.
The contracts may also provide for on-going services for a specified price, which may include maintenance services, designated support,
and enhancements, upgrades and improvements to the software, depending on the contract. Licenses for cloud software provide the customer
with a right to use the software as it exists when made available to the customer. All software provides customers with the same functionality
and differs mainly in the duration over which the customer benefits from the software.

The Company recognizes revenue in accordance with
ASC 606. The standard’s core principle is that an entity will recognize revenue when it transfers goods or services