CXApp Inc. Goodwill & Intangibles Disclosure

NOTE 5 – Goodwill and Intangible Assets, net

 

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company operates as one reporting unit for purposes of assessing goodwill. The carrying amount of goodwill was $8,737 thousand as of both December 31, 2025 and December 31, 2024. During the fourth quarter of 2025, the Company identified indicators of potential impairment, including a decline in the Company’s market capitalization, macroeconomic conditions, decline in share price and continued operating losses. These indicators required the Company to perform a quantitative goodwill impairment test as of December 31, 2025.

 

The Company estimated the fair value of the reporting unit using a weighted average of an income approach and market approach. Under the income approach, the Company prepared a discounted cash flow model (DCF) that incorporated updated revenue growth expectations, projected operating margins, long‑term cash flow forecasts, and a discount rate of approximately 40% reflecting the Company’s risk profile and market conditions. This approach was assigned lower weighting due to limited comparability and volatility in market‑based multiples. After weighting the approaches, the Company determined that the estimated equity fair value of the reporting unit was approximately $13,964 thousand compared to a carrying amount of $16,112 thousand, resulting in a shortfall of $2,148 thousand. As a result, the Company recorded a goodwill impairment charge of $2,148 thousand for the year ended December 31, 2025. No goodwill impairment was recognized for the year ended December 31, 2024. Following recognition of the impairment charge, goodwill totaled $6,589 thousand as of December 31, 2025 and $8,737 thousand as of December 31, 2024.

 

The Company evaluated and determined that changes in certain valuation inputs could have materially affected the impairment outcome. A one to two percentage point increase in the discount rate or a reduction of approximately five to ten percent in projected cash flows would have resulted in additional impairment as of the testing date. Future changes in macroeconomic conditions, discount rate assumptions or forecasted cash flows could result in further impairment of goodwill.

 

Intangible assets consisted of the following (in thousands):

 

Schedule of intangible assets
		December 31, 2025															December 31, 2024
		Weighted Average Remaining Useful Life (Years)			Gross Amount				Accumulated Amortization				Net Carrying Amount				Gross Amount				Accumulated Amortization			Net Carrying Amount
Trade Name/Trademarks		4.17			$	3,294			$	(1,314	)		$	1,980			$	3,294			$	(843)		$	2,451
Customer Relationships		2.17				5,604				(3,129	)			2,475				5,604				(2,008)			3,596
Developed Technology		7.17				8,697				(2,428	)			6,269				8,697				(1,558)			7,139
Patents and Intellectual Property		7.17				2,703				(755	)			1,948				2,703				(485)			2,218
Totals					$	20,298			$	(7,626	)		$	12,672			$	20,298			$	(4,894)		$	15,404

 

Future amortization expense on intangible assets as of December 31, 2025, is anticipated to be as follows (in thousands):

 

Schedule of future amortization expense
For the Years Ending December 31,		Amount
2026		$	2,731
2027			2,731
2028			1,844
2029			1,611
2030			1,238
2031 and thereafter			2,517
Total		$	12,672