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].
KINS TECHNOLOGY(KINZ) - 2023 Q2 - Quarterly Report