Company: CXAI
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001829126-25-002438
Chunk: 310

Company: CXApp Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 1A
Chunk 310
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 and when the attributes are utilized in a future period.

Following the acquisition, the Company transitioned its Canadian operations
from a client-facing business to a cost center. A formal transfer pricing study between the U.S. and Canada has not been performed, and
as such, there may be a potential for a Canadian tax liability. However, based on currently available information, management believes that
any such liability would not be material to the financial statements as a whole.

NOTE 15 – 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 Philippines subsidiaries. Cash in foreign financial institutions as of December 31, 2024, was $166 thousand. Cash in foreign financial institutions as of December 31, 2023, was $300 thousand.

The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. However, any loss incurred or lack of access to such funds could have a significant impact on the Company’s financial condition, results of operations, and cash flows.

Our top three customers accounted for approximately 24% and 22% of our gross revenue during the years ended December 31, 2024 and the period March 15, 2023 to December 31, 2023 (Successor). One customer accounted for 10% of our gross revenue in 2024, and a separate customer accounted for 12% of our gross revenue in 2023; however, each of these customers may or may not continue to be a significant contributor to revenue in 2023. The loss of a significant amount of business from one of our major customers would materially and adversely affect our results of operations until such time, if ever, as we are