Company: CXAI
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001829126-25-002438
Chunk: 1042

Company: CXApp Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 8
Chunk 1042
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This information appears following Item 15 of this Report and is included herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

56

Item 9.A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024. Based on this evaluation, management concluded that our disclosure controls and procedures were not effective as of that date due to the material weaknesses in internal control over financial reporting described below.

Material Weaknesses Identified

During the year ended December 31, 2024, management identified the following material weaknesses:

    ●
    Tax Accounting Controls: The Company did not maintain effective controls to ensure the completeness and accuracy of income tax accruals, particularly related to state tax liabilities.

    ●
    Expense Accrual Process: A significant year-end adjustment for legal fees revealed deficiencies in our period-end accrual processes and related management review controls.

    ●
    Fair
    Value Election for Financial Instruments: Managements lack of identification of the embedded derivatives requirement bifurcation
    and measurement at fair value. The Company did not appropriately assess or document the fair value option for a financial instrument, resulting in an adjustment to the
financial statements

As
a result of these material weaknesses, the Company concluded that previously issued interim financial statements for the quarters
ended June 30, 2024 and September 30, 2024 required restatement. These issues reflect deficiencies in internal control over
financial reporting that impacted our disclosure controls and procedures. The material weakness as of
December 31, 2023 related to the impairment of goodwill has been remediated. 

Despite the identified weaknesses, management believes that the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations, and cash flows in accordance with U.S. generally accepted accounting principles.

Remediation Plan

To address these material weaknesses, the Company has developed and implemented the following remediation initiatives:

    ●
    Tax Provision Process:

    ○
    Partnered with third-party tax advisors to assist with state and local income tax reporting and nexus evaluations.

    ●
    Legal Expense Accrual Process:

    ○