Financial Results - The company announced its financial results for Q4 2024 and the fiscal year ended December 31, 2024, during a conference call on April 3, 2025[6]. - The earnings press release and presentation are attached as exhibits to the report, providing detailed financial results and insights[16]. Restatement and Accounting Adjustments - The company identified technical accounting deficiencies in previously issued unaudited financial statements for the quarters ended June 30, 2024, and September 30, 2024, leading to a restatement of those financials[7]. - The restatement does not impact the company's liquidity, cash flows, or operating expenses for the affected periods[13]. - The company recorded an accrual for legal expenses that was subsequently adjusted to reflect the actual amount due, indicating a proactive approach to financial accuracy[8]. - The company revised its accounting treatment for a convertible debt instrument to comply with ASC 815, ensuring proper accounting for embedded derivatives[9]. Internal Controls - The management concluded that a material weakness exists in the company's internal control over financial reporting, which will be addressed in the upcoming Restatement Filing[12]. - The company plans to provide further specifics on the deficiencies in internal controls and its remediation plan in the Restatement Filing[14]. Compliance and Risks - The company is classified as an emerging growth company, which may affect its reporting and compliance obligations[3]. - Forward-looking statements indicate potential risks related to the completion of the restatement and its impact on future financial performance[17].

Revenue Performance - Revenue for the three months ended March 31, 2025, was $1,224 thousand, a decrease of $594 thousand or 33% compared to $1,818 thousand for the same period in 2024[189]. - Subscription-based revenue represented 99% of total revenue for the three months ended March 31, 2025, up from 87% in the same period in 2024, indicating a 12% increase in revenue mix[190]. - The transition to a recurring revenue model has improved revenue predictability and supports long-term growth objectives[181]. Profitability and Expenses - Gross profit margin improved to 88% for the three months ended March 31, 2025, compared to 82% for the same period in 2024, driven by higher-margin AI-enabled services[191]. - Operating expenses decreased to $4,819 thousand for the three months ended March 31, 2025, down from $5,078 thousand in the same period in 2024, reflecting cost management initiatives[192]. - The company implemented cost optimization initiatives that reduced operating expenses by approximately 5% year-over-year[175]. Net Loss and Cash Flow - Net loss for the three months ended March 31, 2025, was $1,616 thousand, an improvement from a net loss of $5,170 thousand for the same period in 2024[187]. - Net cash used in operating activities for the three months ended March 31, 2025, was $979 thousand, with a net loss of $1,611 thousand[212]. - For the three months ended March 31, 2025, net cash used in operating activities was $979 thousand compared to $650 thousand for the same period in 2024[213]. - The company incurred a net loss of approximately $1,611 thousand for the three months ended March 31, 2025, compared to a net loss of $5,170 thousand for the same period in 2024[214]. Cash and Working Capital - Cash and cash equivalents were $3,893 thousand as of March 31, 2025, with an additional $3,990 thousand available from a Securities Purchase Agreement[179]. - The company has a working capital deficiency of approximately $4,017 thousand and cash of approximately $3,893 thousand as of March 31, 2025[212]. - The company believes that the funds from the Pre-Paid Purchase agreements are sufficient to satisfy its working capital needs for the next 12 months[202]. Other Income and Investments - Other income increased to $2,129 thousand for the three months ended March 31, 2025, compared to an expense of $1,790 thousand for the same period in 2024, primarily due to changes in fair value of derivative warrant liabilities[193]. - Cash flows used in investing activities during the three months ended March 31, 2025, were approximately $5 thousand, compared to $18 thousand in the same period in 2024[215]. - The company has no cash flows provided by or used in financing activities during the three months ended March 31, 2025[216]. Lease Obligations - Total obligation for operating leases as of March 31, 2025, is approximately $365 thousand, with $274 thousand expected to be paid in the next twelve months[218]. Accounting and Compliance - The company has not made any significant changes to critical accounting estimates during the three months ended March 31, 2025[223]. - CXApp is classified as an emerging growth company and has elected to take advantage of the extended transition period for complying with new or revised accounting standards[225]. - The financial statements of CXApp may not be comparable to those of companies that comply with new or revised accounting standards due to the extended transition period[225]. - The decision to not opt out of the extended transition period for accounting standards compliance is irrevocable[225].

Product and Market Overview - CXApp's flagship product, the CXAI Platform, integrates AI-driven tools to enhance employee productivity and engagement[24] - The digital workplace market size was valued at $27.4 billion in 2022 and is projected to grow to $90.5 billion by 2030, reflecting a compound annual growth rate (CAGR) of 21.4%[39] - The occupancy analytics market in commercial office space is expected to rise from $2.17 billion in 2019 to $5.73 billion by 2024, growing at a CAGR of 21.5%[42] - The global virtual events market was valued at $114.12 billion in 2021 and is expected to expand at a CAGR of 21.4% from 2022 to 2030[40] - The digital workplace market is projected to grow from $22.7 billion in 2020 to $72.2 billion by 2026, with a CAGR of 21.3%[41] - The global employee experience market is projected to grow at a 20% CAGR, presenting strong tailwinds for CXApp's expansion[217] Financial Performance - The company reported net losses of approximately $19.4 million and $53.6 million for the fiscal years ended 2024 and 2023, respectively[79] - The company generated gross proceeds of $276 million from its Initial Public Offering of 27,600,000 units at $10.00 per unit on December 17, 2020[60] - Fiscal year 2024 recurring revenue increased to 87% from 78%[213] - Total operating expenses decreased to $19,598 thousand compared to $58,204 thousand during the year ended December 31, 2023[213] - Cash and cash equivalents at year-end was $4,880 thousand, with access to an additional $3,500 thousand from a Securities Purchase Agreement[212] Customer Base and Revenue Dependence - CXApp's customer base includes Fortune 1000 enterprises across various industries, enhancing its market presence and revenue potential[49] - The top three customers accounted for approximately 25% and 22% of gross revenue during the years ended December 31, 2024, and the period from March 15, 2023, to December 31, 2023, respectively[76] - The company relies on a limited number of key customers, with one customer accounting for 10% of gross revenue in 2024, highlighting the risk of revenue loss from key clients[152] - The company’s revenue depends on maintaining existing customer relationships and expanding its customer base, with potential delays in customer budget processes impacting purchases[75] Competition and Market Risks - The company faces competition from both established software vendors and emerging niche providers in the AI-driven employee experience market[37] - The company operates in a rapidly evolving sector, facing risks related to technological advances and competition, which could affect its market position[77] - The company's competitiveness is significantly affected by its ability to keep pace with rapid technological changes and customer needs, which could adversely impact growth prospects[153] - The company faces significant price competition, which may force it to reduce product prices, adversely affecting operational results[155] Research and Development - CXApp has filed 37 patents, with 17 granted, to protect its innovative technologies in employee experience solutions[35] - Research and development (R&D) expenses are anticipated to grow at a slower rate than revenue, although additional funding may be needed to support planned activities[43] - Significant investments in research and development are planned, but expected revenue from these investments may not materialize soon[94] - The company’s research and development efforts may not yield successful products or significant revenue in the near future, potentially affecting business results[93] Operational Challenges and Future Outlook - The company has incurred recurring net losses, indicating a need for additional capital to support operations and potential future acquisitions[80] - Future acquisitions may disrupt business operations and could lead to dilution for stockholders, with no assurance of achieving anticipated sales levels or profitability post-acquisition[85] - The company may require additional cash financing to support growth plans, and failure to secure such financing could limit operational capabilities[89] - Delays in collecting receivables could adversely affect cash flow and working capital, impacting overall business operations[90] - Growth depends on increasing sales to existing customers and acquiring new customers, with potential limitations on financial performance if these efforts are unsuccessful[87] Regulatory and Compliance Issues - The company is required to comply with SEC and Nasdaq regulations, which increases operational costs and may affect management's focus on core business activities[128] - Compliance with evolving legal and regulatory requirements is costly and could result in significant fines or reputational damage if violated[162] - The company is subject to various data protection regulations, including the GDPR and CCPA, which could impose fines of up to $7,500 per violation[175] - The uncertain regulatory environment regarding data privacy may inhibit customer data sharing, potentially affecting sales and service adoption[177] Cybersecurity and Risk Management - The company is subject to risks from cybersecurity threats, which could disrupt operations and harm revenues and profitability[143] - The company has implemented a risk management program aligned with ISO 27001 and SOC 2 frameworks to address cybersecurity risks[185] - The Board of Directors actively oversees the company's information security program and evaluates management's cybersecurity policies[194] Corporate Governance and Stockholder Considerations - The company’s stock price can be volatile, and there are no current plans to pay dividends, which may affect market liquidity[72] - The company does not intend to pay dividends on its common stock, with future earnings expected to be retained for business development and expansion[114] - Anti-takeover provisions in the company's organizational documents could delay or prevent beneficial changes in control, limiting stockholder options[123] - The trading market for the company's common stock may rely heavily on the research and reports published by financial analysts, affecting stock price and trading volume[115]

Revenue Performance - Revenues for the three months ended September 30, 2024, increased to $1,897 thousand, reflecting a 7% quarter-over-quarter growth driven by new enterprise client onboarding and deeper platform integration [178]. - For the nine months ended September 30, 2024, revenues reached $5,481 thousand, compared to $4,027 thousand for the same period in 2023, driven by a transition to a full SaaS model [186]. Subscription Revenue - Subscription-based revenue constituted 87% of total revenue for the three months ended September 30, 2024, up from 80% in the same period of 2023, indicating a shift to a full SaaS model [179]. - Subscription-based revenue for the nine months ended September 30, 2024, was 87%, up from 79% in 2023, indicating an 8% increase in the revenue mix [187]. Profitability and Margins - Gross profit margin remained stable at 80% for both the three months ended September 30, 2024, and 2023, despite an increase in cost of revenues to $372 thousand from $358 thousand [180]. - Gross profit margin improved to 81% for the nine months ended September 30, 2024, compared to 77% in 2023, despite an increase in cost of revenues to $1,052 thousand from $925 thousand [188]. Operating Expenses - Operating expenses decreased to $4,851 thousand for the three months ended September 30, 2024, down from $5,641 thousand in 2023, primarily due to reductions in sales and marketing expenses [181]. - Operating expenses for the nine months ended September 30, 2024, were $14,992 thousand, up from $11,501 thousand in 2023, reflecting increased costs in various operational areas [189]. Net Loss - The net loss for the nine months ended September 30, 2024, was $15,430 thousand, compared to a net loss of $10,531 thousand for the same period in 2023 [186]. - The company reported a net loss of approximately $15,430 thousand for the nine months ended September 30, 2024, compared to a net loss of $10,531 thousand for the same period in 2023 [203]. Cash Flow and Liquidity - Net cash used in operating activities during the nine months ended September 30, 2024, was $(4,629) thousand, compared to $(8,937) thousand for the same period in 2023 [205]. - The company has a working capital deficiency of approximately $7,404 thousand as of September 30, 2024 [203]. - Cash flows used in investing activities during the nine months ended September 30, 2024, were approximately $(30) thousand, compared to $9,956 thousand for the same period in 2023 [206]. - Net cash provided by financing activities during the nine months ended September 30, 2024, was approximately $3,480 thousand, compared to $4,674 thousand for the same period in 2023 [207]. - The company believes its current liquidity position is sufficient to meet its working capital needs for the next 12 months [204]. Debt and Obligations - As of November 12, 2024, the company owed approximately $2,731 thousand in principal and accrued interest related to the December 2023 Note [199]. - As of September 30, 2024, the total obligation for operating leases is approximately $585 thousand, with about $377 thousand expected to be paid in the next twelve months [209]. Accounting and Compliance - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions [215]. - The company has elected to utilize the extended transition period for complying with new or revised accounting standards, which may affect comparability with other companies [216]. - There have been no significant changes to critical accounting estimates during the nine months ended September 30, 2024, compared to the previous annual report [214]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring assumptions and estimates that could materially impact reported amounts [211]. - The company has not yet decided whether to take advantage of all exemptions available under the JOBS Act, which could affect stock attractiveness and trading activity [215]. - The management regularly reviews accounting policies and estimates to ensure fair presentation in accordance with GAAP [211]. - The company’s significant accounting policies are detailed in Note 2 of the unaudited condensed consolidated financial statements [212]. - Critical accounting estimates are considered complex and may have a material impact on financial statements [213]. - The company’s decision regarding the extended transition period for accounting standards compliance is irrevocable [216].

Revenue Performance - Revenue for the three months ended June 30, 2024, was $1,766 thousand, a decrease of $149 thousand (approximately 7.8%) compared to $1,915 thousand for the same period in 2023[166]. - For the six months ended June 30, 2024, revenue was $3,584 thousand, an increase from $2,257 thousand for the same period in 2023, reflecting growth in the subscription model[174]. Subscription Revenue - Subscription-based revenue accounted for 85% of total revenue for the three months ended June 30, 2024, up from 79% in the same period of 2023, indicating a 6% increase in the revenue mix[167]. - Subscription-based revenue represented 86% of total revenue for the six months ended June 30, 2024, compared to 78% for the same period in 2023, marking an 8% increase in the revenue mix[175]. Profitability and Margins - Gross profit margin improved to 80% for the three months ended June 30, 2024, compared to 75% for the same period in 2023, reflecting a decrease in cost of revenues by approximately 26%[168]. - Gross profit margin increased to 81% for the six months ended June 30, 2024, compared to 75% for the same period in 2023, reflecting a decrease in cost of revenues by approximately 35%[176]. Operating Expenses - Operating expenses for the three months ended June 30, 2024, were $5,063 thousand, a slight decrease of $55 thousand (approximately 1.1%) from $5,118 thousand in the same period of 2023[169]. - Operating expenses rose to $10,141 thousand for the six months ended June 30, 2024, up from $5,860 thousand in the same period of 2023[177]. Other Expenses - Other expenses decreased significantly to $1,765 thousand for the three months ended June 30, 2024, from $12,028 thousand in the same period of 2023, a reduction of $10,263 thousand (approximately 85.3%)[170]. - Other expenses decreased by $6,787 thousand for the six months ended June 30, 2024, primarily due to a reduction in changes in fair value of derivative warrant liabilities[179]. Net Loss - The net loss for the three months ended June 30, 2024, was $5,256 thousand, significantly reduced from a net loss of $14,730 thousand in the same period of 2023[165]. - The company reported a net loss of $10,426 thousand for the six months ended June 30, 2024, compared to a net loss of $11,972 thousand for the same period in 2023[191]. Income Tax Benefit - The income tax benefit for the three months ended June 30, 2024, was approximately $159 thousand, down from $981 thousand in the same period of 2023, primarily due to the release of valuation allowance[171]. - The company incurred an income tax benefit of approximately $366 thousand for the six months ended June 30, 2024, down from a benefit of $2,541 thousand in the same period of 2023[180]. Cash Flow and Liquidity - As of June 30, 2024, the company had a working capital deficiency of approximately $6,807 thousand and cash of approximately $6,160 thousand[191]. - The company used $2,560 thousand in net cash for operating activities during the six months ended June 30, 2024[188]. - The company entered into a Securities Purchase Agreement to raise up to $10,000 thousand in shares of common stock, which is expected to support liquidity needs[188]. - Net cash flows provided by financing activities during the six months ended June 30, 2024, was approximately $2,480 thousand, compared to $328 thousand and $8,892 thousand in the previous periods[195]. Business Combination - The company completed a Business Combination on March 14, 2023, valued at approximately $69,928 thousand, which included the transfer of the Enterprise Apps Business[158]. Accounting and Compliance - The Company has elected to take advantage of the extended transition period for complying with new accounting standards as an emerging growth company[204]. - There have been no significant changes to critical accounting estimates during the six months ended June 30, 2024[202].

Revenue Performance - Revenue for the three months ended March 31, 2024, was $1,818 thousand, a decrease of $144 thousand compared to $1,620 thousand for the period from January 1, 2023, to March 14, 2023[161]. - Subscription-based revenue constituted 87% of total revenue for the three months ended March 31, 2024, up from 74% for the same period in 2023, indicating a 13% increase in revenue mix[162]. Profitability and Loss - Gross profit margin improved to 82% for the three months ended March 31, 2024, compared to 70% for the period from January 1, 2023, to March 14, 2023[163]. - The net loss for the three months ended March 31, 2024, was $5,170 thousand, compared to a net income of $2,758 thousand for the period from March 15, 2023, to March 31, 2023[159]. - Adjusted EBITDA for the same period was $(2,281) thousand, a decline from $(362) thousand in the prior year[171]. Operating Expenses - Operating expenses were $5,078 thousand for the three months ended March 31, 2024, a decrease of $1,182 thousand compared to $5,518 thousand for the period from January 1, 2023, to March 14, 2023[164]. Other Income and Tax - Other income/expense was a $1,790 thousand expense for the three months ended March 31, 2024, primarily due to changes in fair value of derivative warrant liabilities[165]. - The income tax benefit for the three months ended March 31, 2024, was approximately $207 thousand, down from $1,560 thousand for the same period in 2023[166]. Cash Flow and Liquidity - The company had a working capital deficiency of approximately $5,280 thousand and cash of approximately $5,603 thousand as of March 31, 2024[179]. - Net cash used in operating activities during the three months ended March 31, 2024 was $650 thousand, an improvement from $4,431 thousand in the same period of 2023[181]. - Cash flows used in investing activities were approximately $18 thousand for the three months ended March 31, 2024, compared to $9,980 thousand in the same period of 2023[182]. - There were no cash flows provided by or used in financing activities during the three months ended March 31, 2024, contrasting with $328 thousand used in the same period of 2023[183]. - The company believes its current liquidity position is sufficient to meet its working capital needs for the next 12 months[180]. Business Operations - CXApp's SaaS platform targets the emerging hybrid workplace market, offering solutions such as indoor mapping and AI-based analytics[149]. - The company aims to enhance employee experiences by reducing app overload and streamlining workflows through The Workplace SuperApp[150]. Financing and Obligations - The company entered into an equity line financing agreement for up to $10,000 thousand, with an initial draw of $2,500 thousand expected in Q2 2024[176]. - The company has total obligations for operating leases of approximately $391 thousand, with $231 thousand expected to be paid in the next twelve months[185]. Accounting and Compliance - CXApp is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of certain accounting standards until they apply to private companies[191]. - The company has elected to take advantage of the extended transition period for complying with new or revised accounting standards, which may affect the comparability of its financial statements[192]. - There have been no significant changes to critical accounting estimates during the three-month period ended March 31, 2024, compared to the previous annual report[190].

Market Growth and Trends - The digital workplace market size was valued at $27.4 billion in 2022 and is projected to grow to $90.5 billion by 2030, reflecting a significant increase in demand for workplace technology solutions [47]. - The global virtual events market was valued at $114.12 billion in 2021 and is expected to expand at a CAGR of 21.4% from 2022 to 2030, driven by the increasing use of collaboration tools [48]. - The occupancy analytics market in commercial office space was estimated at $2.17 billion in 2019 and is expected to rise to $5.73 billion by 2024, growing at a CAGR of 21.5% [50]. - The workplace experience apps market is estimated to be around 15% of the overall occupancy analytics market, indicating a growing niche within the sector [50]. Company Strategy and Product Development - CXApp's platform integrates various technologies to enhance employee engagement and workplace experience, targeting the emerging hybrid workplace market [28]. - The company has a multi-year product roadmap focusing on augmented reality, 3D mapping, and enhanced analytics capabilities to improve workplace decision-making [33]. - CXApp's analytics dashboard provides insights into real estate, technology, and employee interactions, enabling data-driven decisions for optimizing workplace services [34]. - The company aims to expand its direct sales team into new verticals and grow its foundational channel partner program to enhance market presence [57]. - The CXApp platform is designed to streamline operations in a single mobile app, providing real-time communications and collaboration for employees across various locations [58]. - The company plans to further integrate AI capabilities into its product offerings, which may incur substantial costs and potential delays in software releases [146]. Financial Performance and Projections - CXApp incurred recurring net losses of approximately $53.6 million and $29.2 million for the fiscal years ended 2023 and 2022, respectively [79]. - The company may need additional capital to support operations, which could be satisfied by additional debt or equity financings, potentially diluting existing stockholders [80]. - Revenue forecasting remains uncertain, with potential adverse effects on profitability if forecasts are not met [132]. - The company faces significant price competition, which may force it to reduce prices and adversely affect results of operations [153]. Compliance and Regulatory Challenges - The company faces increased costs and management distraction due to compliance with SEC and Nasdaq regulations as a public entity [125]. - The company received a notice from Nasdaq on April 18, 2024, for failing to file its 2023 Form 10-K, affecting its compliance with listing rules [128]. - The company plans to implement enhancements to its internal control over financial reporting starting in Q2 2024 [137]. - Compliance with diverse and changing legal requirements is costly and time-consuming, and violations could result in significant fines and reputational damage [161]. Intellectual Property and Legal Risks - The company has filed 37 patents, with 17 already granted, establishing its position as a technological frontrunner in the workplace experience sector [45]. - The company has not registered copyrights on any of the software developed, which may lead to difficulties in enforcing intellectual property rights and potential revenue loss [101]. - The company may face claims of infringing on third-party intellectual property rights, which could result in significant litigation costs and impact its financial condition [105]. - Legal claims related to trade secrets or intellectual property could result in substantial costs and distract management [99]. Operational and Market Risks - The company’s growth is dependent on increasing sales to existing customers and obtaining new customers, which may be limited by competition and market conditions [86]. - The ongoing military conflict between Russia and Ukraine has negatively impacted the global economy, potentially affecting the company's business indirectly [163]. - The company relies on a limited number of key customers, and the loss of significant business from any of these customers could materially affect results of operations [149]. - The company may face challenges in attracting and retaining skilled personnel, which is critical for managing growth and completing contracts [96]. Capital Structure and Stockholder Considerations - The company does not intend to pay dividends on its common stock, limiting returns to stockholders to potential stock price appreciation [112]. - The company may issue additional securities in connection with investments or acquisitions, potentially resulting in dilution for existing stockholders [118]. - Anti-takeover provisions in the company's organizational documents may delay or prevent beneficial changes of control, limiting stockholder options [120]. - A sustained depression in the market price of the company's common stock could lead to impairment losses, negatively affecting financial condition and results of operations [119]. Risk Management and Security - The company's information security program is aligned with ISO 27001 and SOC 2 frameworks, focusing on risk management and compliance [186]. - Annual risk assessments are conducted to identify and mitigate security risks related to corporate operations and services [187]. - The risk management framework includes guidelines for identifying and estimating the costs of protective measures against security risks [189]. - The IT Department is responsible for prioritizing and implementing risk-reduction measures as defined in the risk assessment process [192].

Financial Performance - Revenue for the three months ended September 30, 2023, was $1,770 thousand, a slight increase of $28 thousand compared to $1,742 thousand for the same period in 2022[161] - Gross profit margin improved to 80% for the three months ended September 30, 2023, up from 71% in the same period of 2022, due to a more efficient cost structure[162] - Operating expenses decreased significantly to $5,641 thousand for the three months ended September 30, 2023, down from $10,759 thousand in the same period of 2022, reflecting reduced administrative costs[163] - Other income for the three months ended September 30, 2023, was $5,253 thousand, a substantial increase from an expense of $1,413 thousand in the same period of 2022, primarily due to changes in fair value of derivative warrant liabilities[164] - For the three months ended September 30, 2023, the Company reported a net income of approximately $1,441 thousand, while for the period from March 15, 2023 to September 30, 2023, it incurred a net loss of approximately $10,531 thousand[179] - The Company incurred a net loss of approximately $10,531 thousand for the three months ended September 30, 2023, compared to a net loss of $4,380 thousand for the same period in the previous year[184] Revenue Recognition - The company recognizes revenue when control is transferred to customers, primarily from software as a service and professional services for enterprise apps[192] - Revenue from subscription software as a service contracts is recognized over time using the output method, reflecting continuous access to the service[194] - Professional services revenue is accounted for using the percentage of completion method, recognizing revenue in proportion to the stage of completion of the contract[199] - The company utilizes a five-step process for revenue recognition, requiring significant judgment and estimates regarding distinct performance obligations[194] Operating Expenses and Cash Flow - Operating expenses for the period from March 15, 2023, to September 30, 2023, were $11,501 thousand, a decrease from $26,779 thousand for the nine months ended September 30, 2022[169] - The Company used approximately $8,937 thousand in cash for operating activities during the period from March 15, 2023 to September 30, 2023[179] - Net cash provided by investing activities was approximately $9,956 thousand for the period from March 15, 2023 to September 30, 2023, primarily due to cash acquired in connection with the Business Combination[185] - Net cash provided by financing activities was approximately $4,674 thousand for the period from March 15, 2023 to September 30, 2023[186] Tax and Valuation - The company has established a full valuation allowance for deferred tax assets as of September 30, 2023, due to historical losses and insufficient future profit projections[202] - No interest or penalties on uncertain tax positions were recorded during the three months ended September 30, 2023[203] - The company has not recorded any impairment charges for long-lived assets for the three months ended September 30, 2023[197] - Goodwill and other indefinite-lived assets are evaluated for impairment at least annually, with no indicators of impairment noted as of September 30, 2023[200] Business Operations - The business combination completed on March 14, 2023, involved the spin-off of Legacy CXApp to Inpixon's shareholders, enhancing the company's operational focus[156] - The Company implemented a headcount reduction in North America, resulting in cost savings of approximately $300 thousand per quarter[180] - The total obligation for operating leases as of September 30, 2023, was approximately $594 thousand, with $321 thousand expected to be paid in the next twelve months[188] - The company believes it has mitigated going concern issues for at least one year from the date the financial statements were issued, despite recurring losses and cash utilization[182] Accounting Policies - The company accounts for business combinations using the acquisition method, recording assets and liabilities at fair value at the date of acquisition[205] - The company has elected to take advantage of the extended transition period for complying with new accounting standards as an emerging growth company[209] - The company evaluates the remaining useful lives of long-lived assets and has determined no revisions are necessary as of the latest reporting periods[198] - The company monitors and evaluates estimates related to discounts and rebates, although historically these have not been significant[195]

Revenue and Profitability - Revenue for the three months ended June 30, 2023, was $1,915 thousand, a decrease of $234 thousand compared to $2,149 thousand for the same period in 2022[155]. - Gross profit margin remained stable at 75% for both the three months ended June 30, 2023, and June 30, 2022[156]. - For the period from March 15, 2023, to June 30, 2023, revenue was $2,257 thousand, compared to $1,620 thousand for the period ended March 14, 2023[161]. - Gross profit margin for the period from March 15, 2023, to June 30, 2023, was 75%, up from 70% for the period ended March 14, 2023[162]. Operating Expenses - Operating expenses decreased significantly to $5,118 thousand for the three months ended June 30, 2023, from $12,455 thousand in the same period of 2022, primarily due to a prior goodwill impairment[157]. - Operating expenses for the period from March 15, 2023, to June 30, 2023, were $5,860 thousand, a decrease from $16,020 thousand for the six months ended June 30, 2022[163]. Net Loss - The net loss for the three months ended June 30, 2023, was $14,730 thousand, compared to a net loss of $11,034 thousand for the same period in 2022[154]. - The company incurred a net loss of approximately $14,730 thousand for the three months ended June 30, 2023, and $11,972 thousand for the period from March 15, 2023 to June 30, 2023[173]. Cash Flow and Working Capital - Cash flows provided by investing activities during the period from March 15, 2023 to June 30, 2023 were approximately $9,977 thousand, compared to net cash flows used in investing activities of $54 thousand for the predecessor period[179]. - As of June 30, 2023, the company had a working capital deficit of approximately $12,126 thousand and cash of approximately $4,543 thousand[173]. - The company used approximately $6,598 thousand of cash for operating activities during the period from March 15, 2023 to June 30, 2023[173]. - The company reported net cash used in operating activities of $(6,598) thousand for the period from March 15, 2023 to June 30, 2023, compared to $(5,144) thousand for the predecessor period[177]. Financing Activities - Net cash flows used in financing activities from March 15, 2023, to June 30, 2023, amounted to $328 thousand, a significant decrease compared to net cash flows provided of approximately $8,892 thousand for the period from January 1, 2023, to March 14, 2023[180]. - From July 1, 2023 to August 14, 2023, warrant holders exercised approximately 435 thousand warrants at an exercise price of $11.50, resulting in total cash proceeds of $5,000 thousand[173]. Tax and Valuation - The income tax benefit for the period from March 15, 2023 to June 30, 2023 was approximately $2,541 thousand, compared to an income tax expense of $62 thousand for the six months ended June 30, 2022[165]. - The company has established a full valuation allowance for deferred tax assets as of June 30, 2023, due to historical losses and insufficient future profit generation[195]. Business Combinations and Goodwill - The company completed a business combination valued at approximately $70,000 thousand on September 25, 2022, acquiring Inpixon's enterprise apps business[146]. - Goodwill and other indefinite-lived assets are evaluated for impairment at least annually, with no indicators of impairment noted as of June 30, 2023[193]. - Business combinations are accounted for using the acquisition method, with goodwill recorded as the excess of purchase price over fair value of net assets acquired[197]. Revenue Recognition - Revenue from subscription software as a service contracts is recognized over time using the output method, reflecting continuous access to the service[191]. - Professional services revenue is recognized using the percentage of completion method, with estimates determining total contract costs[191]. - Revenue recognition involves significant estimates and judgments, particularly in determining distinct performance obligations[188]. Derivative Liabilities and Accounting Standards - The company utilizes ASC 815-40 guidance for derivative warrant liabilities, classifying them as liabilities at fair value, subject to re-measurement at each reporting period[199]. - The company has elected to take advantage of the extended transition period for complying with new accounting standards as an emerging growth company[201].

Financial Performance - For the period ended March 31, 2023, the company reported revenues of $342 thousand, a decrease of $620 thousand from $2,582 thousand for the same period in 2022[131]. - Gross profit margin for the period ended March 31, 2023, was 75%, compared to 77% for the same period in 2022[133]. - Operating expenses for the period ended March 31, 2023, were $742 thousand, significantly lower than $3,565 thousand for the same period in 2022[134]. - The company achieved a net income of $2,758 thousand for the period ended March 31, 2023, compared to a net loss of $1,671 thousand for the same period in 2022[131]. - The gross profit for the period ended March 31, 2023, was $255 thousand, down from $1,993 thousand for the same period in 2022[131]. - Adjusted EBITDA for the period ended March 31, 2023, was $(362) thousand, compared to $(2,898) thousand for the same period in 2022[139]. Cash Flow and Financial Position - As of March 31, 2023, the company reported cash and cash equivalents of approximately $6,724 thousand and a working capital surplus of approximately $3,052 thousand[143][144]. - For the period ended March 31, 2023, the company had a net income of approximately $2,758 thousand, while net cash used in operating activities was approximately $4,431 thousand[144][148]. - Net cash flows provided by investing activities during the period ended March 31, 2023, was approximately $9,980 thousand, significantly higher than the previous periods[149]. - The company experienced net cash flows used in financing activities of $328 thousand for the period ended March 31, 2023, compared to inflows of approximately $8,892 thousand in the prior period[150]. - The company utilized approximately $4,431 thousand of cash for operating activities during the period ended March 31, 2023, compared to $5,144 thousand in the prior period[148]. Tax and Valuation - The income tax benefit for the period ended March 31, 2023, was approximately $1,560 thousand, resulting from the release of valuation allowance attributable to acquired intangible assets[136]. - The company has established a full valuation allowance for deferred tax assets as of March 31, 2023, due to historical losses and insufficient future profit generation[167]. - No interest or penalties on uncertain tax positions were recorded during the periods ended March 31, 2023, March 14, 2023, or March 31, 2022[168]. Business Operations and Strategy - The company completed a business combination valued at approximately $70 million on September 25, 2022, acquiring Inpixon's enterprise apps business[125]. - The company’s SaaS platform targets the emerging hybrid workplace market, offering solutions such as indoor mapping and AI-based analytics[123]. - The company acknowledges that the impact of COVID-19 and macroeconomic conditions on its operations remains uncertain, affecting demand and project timelines[145][146]. - The company does not have any off-balance sheet guarantees or trading activities involving non-exchange traded contracts[151]. Revenue Recognition - The company recognizes revenue from software as a service and professional services, with specific methods for revenue recognition based on contract terms[157][161]. - Revenue from subscription software as a service contracts is recognized over time using the output method, while professional services revenue is accounted for using the percentage of completion method[161]. - The company recognizes revenue when control of promised products or services is transferred to customers, reflecting the expected consideration[157]. Accounting and Reporting - Adjusted EBITDA is presented as a supplemental metric, but it has limitations and should not be considered a substitute for net income or GAAP results[142][147]. - The company accounts for business combinations using the acquisition method, recording acquired assets and liabilities at fair value, with any excess purchase price recognized as goodwill[169]. - All acquisition costs related to business combinations are expensed as incurred, and any changes in estimated fair values of net assets recorded for acquisitions will adjust the goodwill amount[169]. - The company has elected to utilize the extended transition period for complying with new accounting standards, which may affect comparability with other companies[173]. Goodwill and Assets - Goodwill and other indefinite-lived assets were recorded in connection with the Business Combination, with goodwill not being amortized and evaluated for recoverability at least annually[165]. - The company did not record any impairment charges related to long-lived assets for the periods ended March 31, 2023, or December 31, 2022[163]. - The company evaluates the remaining useful lives of long-lived assets and intangible assets, determining that no revisions were warranted during the reporting periods[164]. Other Financial Instruments - Warrants are classified as liabilities at fair value and are subject to re-measurement at each reporting period until exercised[171]. - CXApp qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions[172].