CXApp (CXAI) - 2024 Q3 - Quarterly Report

Revenue Performance - Revenues for the three months ended September 30, 2024, increased to $1,897 thousand, reflecting a 7$5,481 thousand, compared to $4,027 thousand for the same period in 2023, reflecting a continued growth trajectory [194]. Subscription Revenue - Subscription-based revenue constituted 87$5,004 thousand, compared to a net income of $1,441 thousand for the same period in 2023 [182]. - 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 $10,531 thousand for the same period in 2023 [216]. - Adjusted EBITDA for the nine months ended September 30, 2024, was$(6,105) thousand, compared to $(5,977) thousand for the period from March 15, 2023, to September 30, 2023 [205]. Operating Expenses - Operating expenses decreased to$4,851 thousand for the three months ended September 30, 2024, down from $5,641 thousand in the same period of 2023, primarily due to reductions in sales and marketing expenses [188]. - Operating expenses for the nine months ended September 30, 2024, were$14,992 thousand, compared to $11,501 thousand for the same period in 2023, reflecting increased investment in operations [197]. Cash Flow and Liquidity - Net cash used in operating activities during the nine months ended September 30, 2024, was$(4,629) thousand, compared to $(8,937) thousand for the period from March 15, 2023, to September 30, 2023 [215]. - Net cash flows provided by financing activities during the nine months ended September 30, 2024, were approximately$3,480 thousand, compared to $4,674 thousand for the same period in 2023 [219]. - Cash flows used in investing activities during the nine months ended September 30, 2024, were approximately$(30) thousand, compared to $9,956 thousand for the period from March 15, 2023, to September 30, 2023 [218]. - The company believes its current liquidity position is sufficient to meet its working capital needs for the next 12 months [214]. - As of September 30, 2024, the company had a working capital deficiency of approximately$7,404 thousand and cash of approximately $5,082 thousand [213]. Other Financial Information - Other income/expense for the nine months ended September 30, 2024, was a loss of$5,380 thousand, compared to a loss of $5,090 thousand for the same period in 2023 [199]. - The income tax benefit for the nine months ended September 30, 2024, was approximately$513 thousand, down from $2,958 thousand for the same period in 2023, primarily due to the release of valuation allowance [200]. - The company incurred interest expense and other income of$274 thousand for the three months ended September 30, 2024 [205]. - The company reported non-cash adjustments of approximately $9,826 thousand for the nine months ended September 30, 2024 [216]. 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 [227]. - The company has elected to utilize the extended transition period for complying with new or revised accounting standards, which may affect the comparability of its financial statements [228]. - There have been no significant changes to critical accounting estimates during the nine months ended September 30, 2024, compared to the previous year [226]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring assumptions and estimates that could materially impact reported amounts [224]. - The company has not yet decided whether to take advantage of all exemptions available under the JOBS Act, which may affect investor perception of its common stock [227]. - The company’s significant accounting policies are detailed in Note 2 of the unaudited condensed consolidated financial statements [225]. - The management regularly reviews accounting policies and estimates to ensure fair presentation in accordance with GAAP [224]. - The company’s decision regarding the extended transition period for accounting standards compliance is irrevocable [228]. - The company’s critical accounting estimates are considered complex and may significantly impact financial statements [225].