Company: CXAI
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001829126-25-002456
Chunk: 152

Company: CXApp Inc.
Filing Date: 2025-04-08
Form: 424B3
Chunk 152
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, 2023 (Successor), no accrued interest or penalties are recorded on the balance sheets, and the Company
has not recorded any related expenses. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it
operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local
jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years currently open under
statute range from 2021 to the present in the U.S. and from 2020 to the present in its foreign operations. To the extent the Company has tax attribute carryforwards, the tax years in which those attributes were generated may remain subject to
adjustment upon examination by the Internal Revenue Service, state and local tax authorities, and non-U.S. tax authorities—including
those in Canada and the Philippines—if 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