Company: CXAI
Filing Date: 2025-03-07
Form Type: 424B3
Source: 0001829126-25-001566
Chunk: 15

Company: CXApp Inc.
Filing Date: 2025-03-07
Form: 424B3
Chunk 15
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-of-use assets related to the Company’s operating lease liabilities are measured at lease inception based on the initial measurement
of the lease liability, plus any prepaid lease payments and less any lease incentives. The Company’s lease terms that are used in
determining their operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably
certain that the Company will exercise such options. The Company amortizes its right-of-use assets as operating lease expense generally
on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The
Company does not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Income tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain.

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

Comprehensive Loss and Foreign Currency Translation

The Company reports comprehensive loss and its components in its condensed consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders’ equity that, under GAAP, are excluded from net loss.

Assets and liabilities related to the
Company’s foreign operations are calculated using the Philippine Peso and Canadian Dollar and are translated at end-of-period
exchange rates, while the related revenues and expenses are translated at average exchange rates prevailing during the period. Gains
or losses resulting from transactions denominated in foreign currencies are included in other income (expenses) in the condensed
consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers that operate
in functional currencies other than the U.S.