Company: CXAI
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001829126-25-002455
Chunk: 4

Company: CXApp Inc.
Filing Date: 2025-04-08
Form: 424B3
Chunk 4
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 Company recorded an accrual for legal expenses based on estimates available at the time. In the quarter ended December 31, 2024, upon receipt of the final invoice from legal counsel for services rendered throughout the year, management identified that the previously recorded accrual was understated and subsequently made an adjustment to reflect the actual amount due.

Accounting for Convertible Debt Instrument

The Company identified a deficiency in the accounting methodology for its convertible debt instrument. Specifically, the Company did not account for embedded derivatives in its convertible note in accordance with ASC 815, “Derivatives and Hedging.” The Company revised its accounting treatment at the inception of the convertible debt instrument by electing the fair value option under ASC 825, “Financial Instruments,” thereby accounting for the instrument at fair value.

Restatement of Unaudited Condensed Financial Statements

The Company’s management and the Audit Committee of the Company’s Board of Directors have concluded that the previously issued unaudited condensed consolidated financial statements as of and for the periods ended June 30, 2024 and September 30, 2024, as included in the Company’s Quarterly Reports on Form 10-Q for such periods should no longer be relied upon and that it is appropriate to restate such financial information. Accordingly, the Company has restated the unaudited condensed consolidated financial statements for the periods ended June 30, 2024 and September 30, 2024 (collectively, the “Restated Financial Statements”). The unaudited consolidated financial statements for the period from March 15, 2023 through December 31, 2023 and for the period from January 1, 2023 through March 14, 2023 were not affected by these adjustments. As such, the Company will incorporate the impact of the Restated Financial Statements into its Form 10-K for the fiscal year ended December 31, 2024 (the “Restatement Filing”).

The Company’s management and the Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the Company’s independent registered public accounting firm.

Controls and Procedures

The Company’s management has concluded that a material weakness exists in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective.

The Restated Financial Statements did not have any impact on the Company’s liquidity, cash flows, costs of operations in the period included in Item 8, Financial