Company: CXAI
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001829126-25-002438
Chunk: 147

Company: CXApp Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 1
Chunk 147
---
    Deferred

    -

    -

    4,054

    Federal

    Current

    -

    (7
    )

    -

    Deferred

    (5,824
    )

    (2,154
    )

    (637
    )

    State and Local

    Current

    2

    19

    -

    Deferred

    (164
    )

    (506
    )

    (273
    )

    (5,986
    )

    (2,648
    )

    3,144

    Change in valuation allowance

    5,350

    (924
    )

    (3,144
    )
  
    Income tax expense/(benefit)
     
    $
    (637
    )
     
    $
    (3,572
    )
     
    $
    -

As of December
31, 2024, the Company has U.S. federal and state net operating loss carryover of approximately $7,494
thousand and $4,424
thousand respectively and Canada net operating loss carryover of approximately $11,353
thousand. The federal NOLs generated through 2017 which if unutilized will expire by the year 2037 and the federal NOLs generated
after 2017 will be carried forward indefinitely whereas the state NOLs if unutilized will expire based on the state statutes.

The Canada NOLs which if able
to be utilized will be carried forward through 2042. The Income Tax Act (Canada), or the “Canadian Tax Act”, and equivalent
provincial income tax legislation may restrict the Company’s ability to carry forward non-capital losses from preceding tax years
upon an acquisition of control.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realization of deferred tax assets, management considers, whether it is “more likely than not”, that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Deferred income tax is presented under noncurrent liabilities and in other assets in the consolidated balance sheet as of December 31, 2024, and 2023, respectively.

In assessing the realization of the deferred tax assets, management considers whether it is more likely