Company: CXAI
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001829126-25-002456
Chunk: 38

Company: CXApp Inc.
Filing Date: 2025-04-08
Form: 424B3
Chunk 38
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angible assets become impaired, we have been and may be required to record a significant charge to earnings.

We review our goodwill for impairment at least annually and when events or changes in circumstances indicate that the carrying value may not be recoverable. As discussed in Note 6 – “Goodwill and Intangible Assets, net” in the Notes to the Consolidated Financial Statements under Item 15 of this Annual Report, we incurred a goodwill impairment loss of $36,056 thousand, resulting in a negative impact on our results of operations for the year ended December 31, 2023.

As required by current accounting standards, we review intangible assets for impairment either annually or whenever changes in circumstances indicate that the carrying value may not be recoverable. The risk of impairment to goodwill is higher during the early years following an acquisition. This is because the fair values of these assets align very closely with what we paid to acquire the reporting units to which these assets are assigned. When impairment charges are triggered, they tend to be material due to the size of the assets involved. Our business could be adversely affected, and impairment of goodwill could be triggered, if any of the following were to occur: higher attrition rates than planned as a result of the competitive environment or our inability to provide products and services that are competitive in the marketplace, lower-than-planned adoption rates by customers, higher-than-expected expense levels to provide services to customers, sustained declines in our stock price and related market capitalization and changes in our business model that may impact one or more of these variables.

Management identified material weaknesses in the Company’s internal control over financial reporting for the years ended December 31, 2024, and for the period March 15, 2023 to December 31, 2023. If the Company identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect the Company’s business and share price.

The Company’s
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rule 13a-15(f) under the Exchange Act. Under the direction of the Company’s Chief Executive Officer and Chief Financial
Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting
for the years ended December 31, 2024, and for the period from March 15, 2023 to December 31, 2023. A