CXApp (CXAI)2024-05-31 20:58Revenue 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[167]. - Subscription-based revenue accounted for 87% of total revenue for the three months ended March 31, 2024, up from 74% in the same period of 2023, indicating a 13% increase in revenue mix[168]. Profitability - 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[169]. - The gross profit for the three months ended March 31, 2024, was $1,491 thousand, compared to $1,137 thousand for the period from January 1, 2023, to March 14, 2023[166]. - 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[165]. - Adjusted EBITDA for the same period was $(2,281) thousand, a decline from $(362) thousand in the prior year[178]. 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[171]. - 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[172]. Cash Flow and Liquidity - The company had cash of approximately $5,603 thousand and a working capital deficiency of $5,280 thousand as of March 31, 2024[185]. - Net cash used in operating activities was $650 thousand, a significant improvement from $4,431 thousand used in the same period last year[187]. - Cash flows used in investing activities were approximately $18 thousand, a decrease from $9,980 thousand in the same period last year[188]. - There were no cash flows provided by or used in financing activities during the three months ended March 31, 2024, compared to $328 thousand used in the prior year[189]. - The company believes its current liquidity position is sufficient to meet its working capital needs for at least the next 12 months[186]. Business Developments - The Business Combination with KINS Technology Group Inc. was completed on March 14, 2023, with a valuation of $69,928 thousand[159]. - The company transitioned to a full SaaS model, which contributed to the decline in professional services revenue[167]. - 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[183]. Accounting and Reporting - 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[197]. - 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[198]. - 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[196]. - The company has not yet decided whether to take advantage of exemptions from various reporting requirements that apply to non-emerging growth companies[197]. - The use of different judgments, estimates, and assumptions in accounting could have a material impact on the financial statements[195]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring assumptions and estimates about future events[193]. - The management regularly reviews accounting policies and estimates to ensure fair presentation in accordance with GAAP[193]. - The decision to not opt out of the extended transition period for accounting standards is irrevocable[198]. - The company’s stock may become less attractive to some investors if it takes advantage of certain exemptions, potentially leading to a less active trading market[197]. - The company’s financial statements may not be comparable to those of companies that comply with new or revised accounting standards due to the extended transition period[198].