0001829126-23-007447 | 10-Q | XBRL Viewer

Disaggregation of Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of disaggregation of Revenue
	Successor				Predecessor
	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023		Three months ended September 30, 2022		Nine Months Ended September 30, 2022
Subscription revenue
Software	$	1,411	$	3,164	$	1,204	$	1,371	$	3,992
Total subscription revenue	$	1,411	$	3,164	$	1,204	$	1,371	$	3,992

Non-subscription revenue
Professional services	$	359	$	863	$	416	$	371	$	2,481
Total non-subscription revenue	$	359	$	863	$	416	$	371	$	2,481

Total Revenue	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473

	Successor				Predecessor
	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023		Three months ended September 30, 2022		Nine Months Ended September 30, 2022
Revenue recognized over time⁽¹⁾⁽²⁾	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473
Total	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473

(1)

Professional services are also contracted on the fixed fee and time and materials basis. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company has generally elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date.

(2)

Software As A Service Subscription Revenue’s performance obligation is satisfied evenly over the service period using a time-based measure because the Company is providing continuous access to its service and service is recognized over time.

Property and Equipment, net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

NOTE 5 – Property and Equipment, net

Property and equipment consisted of the following (in thousands):

Schedule of property and equipment
	Successor			Predecessor
	September 30, 2023			December 31, 2022
Computer and office equipment	$	159		$	992
Furniture and fixtures		11			185
Leasehold improvements		5			28
Software		1			8
Total		176			1,213
Less: accumulated depreciation and amortization		(50	)		(1,011	)
Total Property and Equipment, Net	$	126		$	202

Depreciation and amortization expense were approximately $24 thousand, $52 thousand, $19 thousand, $24 thousand, and $90 thousand for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor), respectively.

Income Taxes (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
Income Taxes (Details Narrative) - USD ($) $ in Thousands	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Successor [Member]
Income tax benefit/(provision)		$ 417		$ 2,958
Effective tax rate		41.00%		(22.74%)
Deferred tax liability		$ 4,354		$ 4,354
Predecessor [Member]
Income tax benefit/(provision)	$ 0		$ 0		$ 62
Deferred tax liability	$ 4,354

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 14, 2023
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-39642
Entity Registrant Name	CXApp Inc.
Entity Central Index Key	0001820875
Entity Tax Identification Number	85-2104918
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Four Palo Alto Square
Entity Address, Address Line Two	Suite 200
Entity Address, Address Line Three	3000 El Camino Real
Entity Address, City or Town	Palo Alto
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94306
City Area Code	(650)
Local Phone Number	575-4456
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,254,389
Class A common stock, $0.0001 par value per share [Member]
Title of 12(b) Security	Class A common stock, $0.0001 par value per share
Trading Symbol	CXAI
Security Exchange Name	NASDAQ
Warrants to purchase common stock [Member]
Title of 12(b) Security	Warrants to purchase common stock
Trading Symbol	CXAIW
Security Exchange Name	NASDAQ

Business Combination (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Predecessor [Member]
Business Acquisition [Line Items]
Share price	$ 9.94
Business combination goodwill	$ 44,200
Acquisition-related costs					$ 16
Predecessor [Member] \| KINS [Member]
Business Acquisition [Line Items]
Acquisition-related costs	3,000
Predecessor [Member] \| Merger Agreement [Member]
Business Acquisition [Line Items]
Aggregate purchase price assets and liabilities	$ 69,928
Predecessor [Member] \| Merger Agreement [Member] \| Common Class A [Member]
Business Acquisition [Line Items]
Consideration transferred in connection	1,547,700
Predecessor [Member] \| Merger Agreement [Member] \| Common Class C [Member]
Business Acquisition [Line Items]
Consideration transferred in connection	5,487,300
Successor [Member]
Business Acquisition [Line Items]
Acquisition-related costs		$ 30		$ 194

Stock Option Plan and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 10, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted				1,377,172
Fair value of common stock as of grant date				$ 0.61
Successor [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation				$ 857
Successor [Member] \| Employee Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation		$ 56		113
Unrecognized stock compensation expense		356		$ 356
Weighted average remaining term				1 year 5 months 26 days
Successor [Member] \| Employee Stock Options [Member] \| Employees And Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted				1,377,000
Vesting period				2 years
Weighted average fair value				$ 0.63
Fair value of common stock as of grant date				$ 1.53
Successor [Member] \| Employee Stock Options [Member] \| Employees And Directors [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Option life				5 years
Successor [Member] \| Employee Stock Options [Member] \| Employees And Directors [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Option life				10 years
Successor [Member] \| Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation		597		$ 638
Unrecognized stock compensation expense		$ 3,669		$ 3,669
Weighted average remaining term				1 year 8 months 1 day
Restricted stock units stock granted				821,000
Weighted average fair value restricted stock unit		$ 8.07		$ 8.07
Predecessor [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation	$ 158				$ 1,325
Predecessor [Member] \| Employee Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation	$ 158		$ 323		$ 1,325
2023 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares available for issuance						2,110,500

Business Combination (Details 1) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Business Combination (Details 1) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Revenues	$ 1,742	$ 5,647	$ 6,473
Net loss	$ (10,057)	$ (19,197)	$ (4,822)

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 7 – Goodwill and Intangible Assets

The Company reviews goodwill for impairment on a reporting unit basis on December 31 of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company noted that the carrying amount of Goodwill as of September 30, 2023 (Successor) was $44,200 thousand, which was entirely due to the business combination noted in Note 3. The Company noted that there were no qualitative or quantitative indicators of impairment present at the reporting date as of September 30, 2023.

As of September 30, 2022 (Predecessor), the Company’s goodwill balance and other assets with indefinite lives were evaluated for potential goodwill impairment as certain indications on a qualitative and a quantitative basis were identified that an impairment exists as of the reporting date primarily from a sustained decrease in the Parent’s stock price. During the three months ended September 30, 2022 (Predecessor) and for the nine months ended September 30, 2022 (Predecessor), the Company recognized approximately $0 and $5,540 thousand of goodwill impairment, respectively.

Goodwill consisted of the following (in thousands):

Schedule of goodwill
Acquisition	Amount
Balance as of March 15, 2023	$	-
Acquisition of Legacy CXApp		44,122
Measurement Period Adjustments		78
Balance as of September 30, 2023	$	44,200

Intangible assets consisted of the following (in thousands):

Schedule of intangible assets
	September 30, 2023 (Successor)								December 31, 2022 (Predecessor)
	Weighted Average Remaining Useful Life (Years)	Gross Amount		Accumulated Amortization			Net Carrying Amount		Gross Amount		Accumulated Amortization			Net Carrying Amount
Trade Name/Trademarks	6.4	$	3,294	$	(255	)	$	3,039	$	2,183	$	(725	)	$	1,458
Customer Relationships	4.4		5,604		(607	)		4,997		6,401		(1,765	)		4,636
Developed Technology	9.4		9,268		(502	)		8,766		15,179		(3,398	)		11,781
Non-compete Agreements	-		-		-			-		3,150		(1,736	)		1,414
Patents and Intellectual Property	9.4		2,703		(146	)		2,557		-		-			-
Totals		$	20,869	$	(1,510	)	$	19,359	$	26,913	$	(7,624	)	$	19,289

Future amortization expense on intangible assets as of September 30, 2023 is anticipated to be as follows (in thousands):

Schedule of future amortization expense
For the Years Ending December 31,	Amount
2023 (remainder of year)	$	697
2024		2,788
2025		2,788
2026		2,788
2027		2,788
2028 and thereafter		7,510
Total	$	19,359

Warrants

9 Months Ended

Sep. 30, 2023

Warrants

Warrants

NOTE 10 – Warrants

Public Warrants

As of September 30, 2023 (Successor) there were 10,752 10,751,862 thousand Public Warrants outstanding. Each whole warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustments described in the Company’s registration statement on Form S-1 (Registration No. 333-249177) filed in connection with its initial public offering.

Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) April 13, 2023 which is 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire on March 15, 2028 or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable, and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

On July 14, 2023, the Company entered into a Warrant Exchange Agreement (the “Agreement”) with an unaffiliated third party investor (the “Warrant Holder”) with respect to warrants to purchase an aggregate of 2,000 thousand shares of its common stock, par value $0.0001 per share (the “Common Stock”) initially issued by the Company in its initial public offering on December 15, 2020 (the “Public Warrants”). Pursuant to the Agreement, the Company issued an aggregate of 600 thousand shares of Common Stock to the Warrant Holder in exchange for the surrender and cancellation of the Public Warrants held by such holder. This resulted to an additional paid in capital of $4,914 thousand in a non-cash transaction and resulted in a $3.9 million loss on the warrant conversion, which is included in change in fair value of derivative liability in the statement of operations.

For the quarter ended September 30, 2023, about 613 thousand public warrants to purchase Class A common stock were exercised on a cashless basis for approximately 50 thousand shares of common stock and are no longer outstanding.

On July 13, 2023, warrant holders exercised 435 thousand public warrants at an exercise price of $11.50, for a total of $5,002 thousand of cash proceeds to the Company.

Private Warrants

As of September 30, 2023 (Successor), there were 10,280 thousand Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Public and private warrant exercise activity and underlying Common Stock issued or surrendered for the three months ended September 30, 2023, is:


	Public Warrants			Private Warrants		Total
June 30, 2023		13,800,000			10,280,000		24,080,000
Warrants exchanged		(2,000,000	)		-		(2,000,000	)
Warrants exercised – cash		(435,000	)		-		(435,000	)
Warrants exercised – cashless		(613,138	)		-		(613,138	)
September 30, 2023		10,751,862			10,280,000		21,031,862

Disaggregation of Revenue

9 Months Ended

Sep. 30, 2023

Disaggregation Of Revenue

Disaggregation of Revenue

NOTE 4 – Disaggregation of Revenue

Revenues consisted of the following (in thousands):

Schedule of disaggregation of Revenue
	Successor				Predecessor
	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023		Three months ended September 30, 2022		Nine Months Ended September 30, 2022
Subscription revenue
Software	$	1,411	$	3,164	$	1,204	$	1,371	$	3,992
Total subscription revenue	$	1,411	$	3,164	$	1,204	$	1,371	$	3,992

Non-subscription revenue
Professional services	$	359	$	863	$	416	$	371	$	2,481
Total non-subscription revenue	$	359	$	863	$	416	$	371	$	2,481

Total Revenue	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473

	Successor				Predecessor
	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023		Three months ended September 30, 2022		Nine Months Ended September 30, 2022
Revenue recognized over time⁽¹⁾⁽²⁾	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473
Total	$	1,770	$	4,027	$	1,620	$	1,742	$	6,473

(1)

(2)

Common Stock

9 Months Ended

Sep. 30, 2023

Common Stock

Common Stock

NOTE 17 – Common Stock

Following the Business Combination, the Company’s Class C Common Stock is subject to transfer restrictions and will automatically convert into the Company’s Class A Common Stock on the earlier to occur of (i) the 180th day following the closing of the Merger and (ii) the day that the last reported sale price of the New CXApp Class A Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period following the closing of the Merger.

On September 10, 2023, the Company’s 5,487,300 shares of Class C Common Stock were automatically converted into an aggregate of 5,487,300 shares of the Company’s Class A Common Stock, par value $0.0001 per share.

Warrants (Details) - Successor [Member]	3 Months Ended
Warrants (Details) - Successor [Member]	Sep. 30, 2023 shares
Warrants outstanding at beginning	24,080,000
Warrants exchanged	(2,000,000)
Warrants exercised - cash	(435,000)
Warrants exercised - cashless	(613,138)
Warrants outstanding at ending	21,031,862
Public Warrants [Member]
Warrants outstanding at beginning	13,800,000
Warrants exchanged	(2,000,000)
Warrants exercised - cash	(435,000)
Warrants exercised - cashless	(613,138)
Warrants outstanding at ending	10,751,862
Private Warrants [Member]
Warrants outstanding at beginning	10,280,000
Warrants exchanged
Warrants exercised - cash
Warrants exercised - cashless
Warrants outstanding at ending	10,280,000

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended			7 Months Ended	9 Months Ended
	Mar. 31, 2023	Mar. 14, 2023	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Successor [Member]
Property, Plant and Equipment [Line Items]
Working capital			$ 1,216			$ 1,216
Cash and cash equivalents			7,179			7,179
Net income			1,441			10,531
Cash for operating activities						8,937
Reduction in accrued liabilities			4,666			$ 4,666
Cash and cash equivalents, description						As of September 30, 2023 (Successor), the Company had cash equivalents of approximately $6,362 thousand of certificates of deposit held by a number of banks limited to $250 thousand per bank with a duration of 90 days or less. As of December 31, 2022 (Predecessor), the Company had no cash equivalents.
Impairment charge on goodwill			(0)			$ (0)
Deferred Revenue		$ 2,534	1,973			1,973
Revenue Recognized						893
Changes in estimated fair value of warrants			5,220			5,134
Change in FV of derivative instruments	$ 1,686		5,220	$ (12,040)
Impairment charges of long-lived assets			$ 0			$ 0
Successor [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, net useful life			5 years			5 years
Intangible assets useful life			5 years			5 years
Successor [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, net useful life			10 years			10 years
Intangible assets useful life			10 years			10 years
Predecessor [Member]
Property, Plant and Equipment [Line Items]
Cash and cash equivalents								$ 6,308
Cash for operating activities		5,144					$ 15,481
Impairment charge on goodwill		(0)			$ (0)		5,540
Deferred Revenue					2,576		2,576	$ 2,162	$ 3,146
Revenue Recognized		865					2,747
Impairment charges of long-lived assets		$ 0			$ 0		$ 0

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Net Parent Investment [Member] Predecessor [Member]	AOCI Attributable to Parent [Member] Predecessor [Member]	AOCI Attributable to Parent [Member] Successor [Member]	Total [Member] Predecessor [Member]	Total [Member] Successor [Member]	Class A Common Stock [Member] Successor [Member]	Class C Common Stock [Member] Successor [Member]	Additional Paid-in Capital [Member] Successor [Member]	Retained Earnings [Member] Successor [Member]
Beginning balance, value at Dec. 31, 2021	$ 20,155	$ 56		$ 20,211
Net income	(1,671)			(1,671)
Stock-based compensation allocated from parent	647			647
Parent’s common shares issued for CXApp earnout	3,697			3,697
Taxes paid related to net share settlement of restricted stock units	(104)			(104)
Net investments from parent	6,444			6,444
Cumulative translation adjustment		(189)		(189)
Ending balance, value at Mar. 31, 2022	29,168	(133)		29,035
Beginning balance, value at Dec. 31, 2021	20,155	56		20,211
Ending balance, value at Sep. 30, 2022	20,406	1,371		21,777
Beginning balance, value at Mar. 31, 2022	29,168	(133)		29,035
Net income	(11,034)			(11,034)
Stock-based compensation allocated from parent	355			355
Net investments from parent	4,057			4,057
Cumulative translation adjustment		394		394
Ending balance, value at Jun. 30, 2022	22,546	261		22,807
Net income	(10,929)			(10,929)
Stock-based compensation allocated from parent	323			323
Net investments from parent	8,466			8,466
Cumulative translation adjustment		1,110		1,110
Ending balance, value at Sep. 30, 2022	20,406	1,371		21,777
Beginning balance, value at Dec. 31, 2022	22,236	1,155		23,391
Net income	(4,380)			(4,380)
Stock-based compensation allocated from parent	158			158
Net investments from parent	8,680			8,680
Cumulative translation adjustment		(28)		(28)
Ending balance, value at Mar. 14, 2023	26,694	1,127		27,821	$ (7,135)	$ 1		$ 1,607	$ (8,743)
Ending balance, shares at Mar. 14, 2023						7,034,999
Net income					2,758				2,758
Shares issued in connection with Business Combination					69,928		$ 1	69,927
Shares issued in connection with Business Combination, shares						1,547,700	5,487,300
Stock-based compensation					2			2
Ending balance, value at Mar. 31, 2023					65,553	$ 1	$ 1	71,536	(5,985)
Ending balance, shares at Mar. 31, 2023						8,582,699	5,487,300
Beginning balance, value at Mar. 14, 2023	$ 26,694	$ 1,127		$ 27,821	(7,135)	$ 1		1,607	(8,743)
Beginning balance, shares at Mar. 14, 2023						7,034,999
Ending balance, value at Sep. 30, 2023			(8)		63,882	$ 2		83,162	(19,274)
Ending balance, shares at Sep. 30, 2023						15,254,389
Beginning balance, value at Mar. 31, 2023					65,553	$ 1	$ 1	71,536	(5,985)
Beginning balance, shares at Mar. 31, 2023						8,582,699	5,487,300
Net income					(14,730)				(14,730)
Cumulative translation adjustment			(39)		(39)
Stock-based compensation					96			96
Ending balance, value at Jun. 30, 2023			(39)		50,880	$ 1	$ 1	71,632	(20,715)
Ending balance, shares at Jun. 30, 2023						8,582,699	5,487,300
Net income					1,441				1,441
Cumulative translation adjustment			31		31
Stock-based compensation					653			653
Warrant exchange to Class A common stock					4,914			4,914
Warrant exchange to Class A common stock, shares						600,000
Warrant exercise – cash and cashless					5,768			5,768
Warrant exercise - cash and cashless, shares						484,608
Mandatory conversion from Class C common stock to Class A common stock						$ 1	$ (1)
Mandatory conversion from Class C common stock to Class A common stock, shares						5,487,300	(5,487,300)
Common stock issuance					195			195
Common stock issuance, shares						99,782
Ending balance, value at Sep. 30, 2023			$ (8)		$ 63,882	$ 2		$ 83,162	$ (19,274)
Ending balance, shares at Sep. 30, 2023						15,254,389

Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Revenue

Schedule of deferred revenue

Schedule of deferred revenue
	Successor
	License Agreements			Professional Service Agreements			Total
Deferred Revenue - March 15, 2023	$	2,148		$	386		$	2,534
Revenue recognized		(3,164	)		(863	)		(4,027	)
Revenue deferred		2,568			898			3,466
Deferred Revenue - September 30, 2023	$	1,552		$	421		$	1,973

Business Combination (Details) - Predecessor [Member] $ in Thousands	2 Months Ended
	Mar. 14, 2023 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Purchase Price	$ 69,928
Assets acquired:
Cash and cash equivalents	10,003
Accounts receivable	2,226
Notes and other receivables	209
Prepaid assets and other current assets	588
Operating lease right of use asset	557
Property and equipment, net	133
Other assets	42
Total assets acquired	34,627
Liabilities assumed:
Accounts payable	461
Accrued liabilities	972
Deferred revenues	2,534
Operating lease obligation, current	194
Operating lease obligation, noncurrent	384
Deferred tax liability	4,354
Total liabilities assumed	8,899
Goodwill	$ 44,200
Developed Technology Rights [Member]
Assets acquired:
Weighted Average Useful Life	10 years
Intangible assets	$ 9,268
Patents [Member]
Assets acquired:
Weighted Average Useful Life	10 years
Intangible assets	$ 2,703
Customer Relationships [Member]
Assets acquired:
Weighted Average Useful Life	5 years
Intangible assets	$ 5,604
Trademarks and Trade Names [Member]
Assets acquired:
Weighted Average Useful Life	7 years
Intangible assets	$ 3,294
Property Subject to Operating Lease [Member]
Assets acquired:
Weighted Average Useful Life	3 years
Property, Plant and Equipment [Member]
Assets acquired:
Weighted Average Useful Life	3 years

Goodwill and Intangible Assets (Details) - Successor [Member] $ in Thousands	7 Months Ended
	Sep. 30, 2023 USD ($)
Beginning balance
Acquisition of Legacy CXApp	44,122
Measurement Period Adjustments	78
Ending balance	$ 44,200

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – Summary of Significant Accounting Policies

Liquidity

As of September 30, 2023 (Successor) the Company had a working capital of approximately $1,216 thousand and cash and cash equivalents of approximately $7,179 thousand. For the three months ended September 30, 2023 (Successor), and for the period from March 15, 2023 to September 30, 2023 (Successor) the Company generated net income of approximately $1,441 thousand and incurred $10,531 thousand of net loss, respectively. For the period from March 15, 2023 to September 30, 2023 (Successor) the Company used approximately $8,937 thousand of cash for operating activities, of which $4,666 thousand was from a reduction in accrued liabilities, primarily paying merger related transaction liabilities.

The Company cannot assure that it will ever earn revenues sufficient to support their operations, or that it will ever achieve profitable operations. The Company’s recurring losses and utilization of cash in its operations are indicators of substantial doubt that the entity can continue as a going concern however with the Company’s current liquidity position the Company has taken steps to reduce operating expenses resulting in a more efficient cost structure. The Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities and may consider raising funds from equity financings. Management believes that these actions when implemented will result to operational efficiencies, cost savings to the company, and access to funds when and if needed. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect for the twelve months from the issuance of these condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of:

	●	the valuation of stock-based compensation;

	●	the valuation of warrant liabilities;

	●	the allowance for credit losses;

	●	the valuation allowance for deferred tax assets; and

	●	impairment of long-lived assets and goodwill.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash, checking accounts, money market accounts, temporary investments and certificates of deposit with maturities of three months or less when purchased. As of September 30, 2023 (Successor), the Company had cash equivalents of approximately $6,362 thousand of certificates of deposit held by a number of banks limited to $250 thousand per bank with a duration of 90 days or less. As of December 31, 2022 (Predecessor), the Company had no cash equivalents.

Accounts Receivable, net and Allowance for Credit Losses

Accounts receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for credit losses to ensure accounts receivables are not overstated due to uncollectability. Allowance for credit losses are maintained for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in such customer’s operating results or financial position. If circumstances related to a customer change, estimates of the recoverability of receivables would be further adjusted. The Company’s allowance for credit losses is not significant as of September 30, 2023 (Successor) and December 31, 2022 (Predecessor).

Property and Equipment, net

Property and equipment are recorded at cost, less accumulated depreciation and amortization. The Company depreciates its property and equipment for financial reporting purposes using the straight-line method over the estimated useful lives of the assets, which range from 5 to 10 years. Leasehold improvements are amortized over the lesser of the useful life of the asset or the initial lease term. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life, are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized.

Intangible Assets

Intangible assets primarily consist of developed technology, customer lists/relationships, non-compete agreements, intellectual property agreements, export licenses and trade names/trademarks. They are amortized ratably over a range of 5 to 10 years, which approximates customer attrition rate and technology obsolescence. The Company assesses the carrying value of its intangible assets for impairment annually, or more frequently if an event or other circumstances indicates that the Company may not be able to recover the carrying amount of the assets. Based on its assessments, the Company did not incur any impairment charges for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor).

Goodwill

The Company tests goodwill for potential impairment at least annually, or more frequently if an event or other circumstance indicates that the Company may not be able to recover the carrying amount of the net assets of the reporting unit. The Company has determined that the reporting unit is the entire company, due to the integration of all of the Company’s activities. In evaluating goodwill for impairment, the Company may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If the Company bypasses the qualitative assessment, or if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount.

The Company calculates the estimated fair value of a reporting unit using a weighting of the income and market approaches. For the income approach, the Company uses internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. For the market approach, the Company uses internal analyses based primarily on market comparables. The Company bases these assumptions on its historical data and experience, third party appraisals, industry projections, micro and macro general economic condition projections, and its expectations. Based on its assessments, the Company did not incur any impairment charges for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), and for the three months ended September 30, 2022 (Predecessor). The Company incurred an impairment charge of approximately $5,540 thousand for the nine months ended September 30, 2022 (Predecessor).

Leases and Right-of-Use Assets

The Company determines if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company generally uses their incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use assets related to the Company’s operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. The Company’s lease terms that are used in determining their operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that the Company will exercise such options. The Company amortizes their right-of-use assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The Company does not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Income tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain.

Comprehensive Income (Loss) and Foreign Currency Translation

The Company reports comprehensive income (loss) and its components in its unaudited condensed consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders’ equity that, under GAAP, are excluded from net loss.

Assets and liabilities related to the Company’s foreign operations are calculated using the Philippine Peso and Canadian Dollar, and are translated at end-of-period exchange rates, while the related revenues and expenses are translated at average exchange rates prevailing during the period. Gains or losses resulting from transactions denominated in foreign currencies are included in general and administrative expenses in the unaudited condensed consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers that operate in functional currencies other than the U.S. dollar. Aggregate foreign currency net transaction losses were not material for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor).

Revenue Recognition

The Company recognizes revenue when control is transferred of the promised products or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. The Company derives revenue from its software as a service for cloud based software, as well as design, implementation and other professional services for work performed in conjunction with its cloud based software. The Company enters into contracts with its customers whereby it grants a non-exclusive cloud-based license for the use of its proprietary software and for professional services. The contracts may also provide for on-going services for a specified price, which may include maintenance services, designated support, and enhancements, upgrades and improvements to the software, depending on the contract. Licenses for cloud software provide the customer with a right to use the software as it exists when made available to the customer. All software provides customers with the same functionality and differs mainly in the duration over which the customer benefits from the software.

License Subscription Revenue Recognition (Software As A Service)

With respect to sales of the Company’s license agreements, customers generally pay fixed annual fees in advance in exchange for the Company’s software service provided via electronic means, which are generally recognized ratably over the license term. Some agreements allow the customer to terminate their subscription contracts before the end of the applicable term, and in such cases the customer is generally entitled to a refund pro-rata but only for the elapsed time remaining at the point of termination, which would approximate the deferred revenue at such time. The Company’s performance obligation is satisfied over time as the electronic services are provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous access to its service. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer approved invoice.

The timing of the Company’s revenue recognition related to the licensing revenue stream is dependent on whether the software licensing agreement entered into represents a service. Software that relies on an entity’s IP and is delivered only through a hosting arrangement, where the customer cannot take possession of the software, is a service. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software.

Renewals or extensions of licenses are evaluated as distinct licenses and revenue attributed to the distinct service is not recognized until (1) the entity provides the distinct license (or makes the license available) to the customer and (2) the customer is able to use and benefit from the distinct license. Renewal contracts are not combined with original contracts, and, as a result, the renewal right is evaluated in the same manner as all other additional rights granted after the initial contract. The revenue is not recognized until the customer can begin to use and benefit from the license, which is typically at the beginning of the license renewal period. The Company recognizes revenue resulting from renewal of licensed software over time.

Professional Services Revenue Recognition

The Company’s professional services include milestone, fixed fee and time and materials contracts.

Professional services under milestone contracts are accounted for using the percentage of completion method. As soon as the outcome of a contract can be estimated reliably, contract revenue is recognized in the statement of operations in proportion to the stage of completion of the contract. Contract costs are expensed as incurred. Contract costs include all amounts that relate directly to the specific contract, are attributable to contract activity, and are specifically chargeable to the customer under the terms of the contract.

Professional services are also contracted on the fixed fee and in some cases on a time and materials basis. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts provided by in house personnel, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), three months ended September 30, 2022 (Predecessor), and nine months ended September 30, 2022 (Predecessor), the Company did not incur any such losses. These amounts are based on known and estimated factors.

Contract Balances

The timing of the Company’s revenue recognition may differ from the timing of invoicing to and payment by its customers. The Company records an unbilled receivable when revenue is recognized prior to invoicing and the Company has an unconditional right to payment. Alternatively, when invoicing a customer precedes the Company providing of the related services, the Company records deferred revenue until the performance obligations are satisfied. The Company had deferred revenue of approximately $1,973 thousand and $2,162 thousand as of September 30, 2023 (Successor) and December 31, 2022 (Predecessor), respectively, related to customer invoices rendered in advance for software licenses and professional services provided by the Company’s technical staff. The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with professional services, and recognize the deferred revenue related to licenses generally over the remaining contract term which is generally twelve months following the commencement of the license. The Company recognized revenue in the reporting period of $893 thousand, $865 thousand, and $2,747 thousand, that was included in the contract liability balance at the beginning of the period, for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor), respectively.

Costs to Obtain a Contract

The Company recognizes eligible sales commissions as an asset within prepaid expenses and other current assets as the commissions are an incremental cost of obtaining a contract with the customer and the Company expects to recover these costs. The capitalized costs are amortized over the expected contract term.

Cost to Fulfill a Contract

The Company incurs costs to fulfill their obligations under a contract once it has obtained the contract. These costs are generally not significant and are recorded to expense as incurred.

Multiple Performance Obligations

The Company enters into contracts with customers for its technology that include multiple performance obligations. Each distinct performance obligation was determined by whether the customer could benefit from the good or service on its own or together with readily available resources. The Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company’s process for determining standalone selling price considers multiple factors including the Company’s internal pricing model and market trends that may vary depending upon the facts and circumstances related to each performance obligation.

Sales and Use Taxes

The Company presents transactional taxes such as sales and use tax collected from customers and remitted to government authorities on a net basis.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred as part of cost of revenues. These costs were deemed to be de minimis during each of the reporting periods.

Business Combinations

The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are included as of and subsequent to the acquisition date.

Segments

The Company and its Chief Executive Officer (“CEO”), acting as the Chief Operating Decision Maker (“CODM”) determines its reporting units in accordance with FASB ASC 280, “Segment Reporting” (“ASC 280”). The Company evaluates a reporting unit by first identifying its operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. The Company has one operating segment and reporting unit. The Company is organized and operated as one business. Management reviews its business as a single operating segment, using financial and other information rendered meaningful only by the fact that such information is presented and reviewed in the aggregate.

Stock-Based Compensation

The Company measures the cost of employee and nonemployee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company has issued stock-based compensation awards in the form of options and restricted stock units. Fair value for options and restricted stock units are valued using the closing price of the Company’s common stock on the date of grant. The grant date fair value is recognized over the requisite service period during which an employee and nonemployee is required to provide service in exchange for the award.

The grant date fair value of options is estimated using the Black-Scholes option pricing model based on the average of the high and low stock prices at the grant date for awards under the CXApp Inc. 2023 Equity Incentive Plan (the “Incentive Plan”). The risk-free interest rate assumptions were based upon the observed interest rates appropriate for the expected term of the equity instruments. The expected dividend yield is assumed to be zero as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The Company uses the simplified method to estimate the expected term.

The Company estimates forfeitures at the time of grant and revises these estimates in subsequent periods if actual forfeitures differ from those estimates.

Derivative Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. The Company currently has two sets of warrants outstanding, known as the Private Placement Warrants and the Public Warrants, which are both classified as a liability.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance or modification. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance as a warrant liability, and adjusted to the then fair value in each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations and amounted to approximately $5,220 thousand of a gain for the three months ended September 30, 2023 (Successor) and $5,134 thousand of a loss for the period from March 15, 2023 to September 30, 2023 (Successor). The Company utilized the Public Warrant quoted market price as the fair value of the Warrants as of each relevant date.

Earnings Per Share

The Company computes basic and diluted earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share are similarly calculated with the inclusion of dilutive common stock equivalents. For the three months ended September 30, 2023 (Successor) and for the period from March 15, 2023 to September 30, 2023 (Successor) basic and dilutive net income (loss) per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options, warrants, and vesting of restricted units in the calculation of diluted net loss per common shares would have been anti-dilutive.

The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net income per common share for the three months ended September 30, 2023 (Successor) and net loss for the period from March 15, 2023 to September 30, 2023 (Successor).

Schedule of antidilutive shares
	Successor
(in thousands)	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023
Stock options		985		985
Restricted stock units		821		821
Warrants		21,032		21,032
Total		22,838		22,838

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” (“ASC 820”), provides guidance on the development and disclosure of fair value measurements. The Company follows this authoritative guidance for fair value measurements, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States, and expands disclosures about fair value measurements. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

	●	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

	●	Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

	●	Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management. The fair value of the warrants has been measured based on the listed market price of such warrants, a Level 1 measurement. For the three month ended September 30, 2023 (Successor), the Company recognized an unrealized gain in the Statements of Operations and Comprehensive Income of $5,220 thousand which is presented as change in fair value of derivative liability. See Note 10.

The Company accounts for its public and private warrants as a derivative liability initially measured at its fair values and remeasured in the condensed consolidated statements of operations at the end of each reporting period. When the warrants are exercised, the corresponding derivative liability is de-recognized at the underlying fair value of the Class A common stock that is issued to the warrant holder less any cash paid in accordance with the warrant agreement. Upon either cash or cashless exercise, the de-recognized derivative liability results in an increase in additional paid in capital equal to the difference between the fair value of the underlying Class A common stock and its par value. A cashless exercise results in the warrant holder surrendering Class A common stock equal to the stated warrant exercise price based on the contractual terms in the warrant agreement that governs the cashless conversion.

The following table shows the changes in fair value of the liabilities during the three months ended September 30, 2023:


Balance at March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Balance at March 31, 2023		963
Change in FV of derivative instruments		12,040
Balance at June 30, 2023	$	13,003
Change in FV of derivative instruments		(5,220	)
Warrants exchanged for Class A common stock (see Note 10 - Warrants)		(4,914	)
Warrants exercised for Class A common stock (see Note 10 - Warrants)		(766	)
Balance at September 30, 2023	$	2,103

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, notes and other receivables and accounts payable. The Company determines the estimated fair value of such financial instruments presented in these financial statements using available market information and appropriate methodologies.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company follows FASB ASC 360 “Property, Plant, and Equipment” (“ASC 360”) for its long-lived assets. Pursuant to ASC 360-10-35-17, an impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. Pursuant to ASC 360-10-35-20 if an impairment loss is recognized, the adjusted carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated (amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited.

Pursuant to ASC 360-10-35-21, the Company’s long-lived asset (asset group) is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The Company considers the following to be some examples of such events or changes in circumstances that may trigger an impairment review: (a) significant decrease in the market price of a long-lived asset (asset group); (b) a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition; (c) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator; (d) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group); (e) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group); and (f) a current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company tests its long-lived assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

Based on its assessments, the Company recorded no impairment charges on long-lived assets for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor).

Recently Issued Accounting Standards Not Yet Adopted

In July 2023, the FASB issued ASU 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718)”, which updates codification on how an entity would apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718, Compensation—Stock Compensation. The effective date of this update is for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU will have on the Company's consolidated financial position and results of operations.

In October 2023, the FASB issued ASU 2023-06 “Disclosure Improvements”, which amends the codification in response to the SEC’s Disclosure Update and Simplification Initiative. The effective date of this update is for fiscal years beginning after June 30, 2027, including interim periods within those fiscal years. The Company is currently assessing potential impacts of ASU 2023-03 and ASU 2023-06 and does not expect the adoption of this guidance will have a material impact on its condensed consolidated financial statements and disclosures.

Accrued Liabilities (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	7 Months Ended
	Mar. 14, 2023	Sep. 30, 2023
Predecessor [Member]
Interest rate	8.00%
Predecessor [Member] \| Director And Officers [Member]
Debt payment	$ 671
Successor [Member]
Payment of premiums		$ 492
Debt owed balance		$ 179

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12 – Income Taxes

The Company recorded an income tax benefit of approximately $417 thousand, $2,958 thousand, and $0 for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor) and for the three months ended September 30, 2022 (Predecessor), respectively. The Company recorded an income tax benefit of approximately $62 thousand for the nine months ended September 30, 2022 (Predecessor). The Company did not incur income tax expense for the period from January 1, 2023 to March 14, 2023 (Predecessor).

The effective tax rate for three months ended September 30, 2023 (Successor) and for the period from March 15, 2023 to September 30, 2023 (Successor) was 41% and (22.74)%, respectively. The income tax benefit for the period from March 15, 2023 to September 30, 2023 (Successor) is a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination. The effective tax rate differs from the U.S. Federal statutory rate primarily due to reversal of a valuation allowance on deferred tax assets and disallowance of losses relating to change in fair value of warrant liabilities. The Company acquired approximately $4,354 thousand of deferred tax liability associated with the Business Combination. As a result the Company released its valuation allowance as deferred tax assets become realizable.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Successor [Member]
Revenues		$ 1,770		$ 4,027
Cost of Revenues		358		925
Gross Profit		1,412		3,102
Operating Expenses
Research and development		1,568		3,447
Sales and marketing		1,068		2,419
General and administrative		2,278		3,931
Acquisition related costs		30		194
Amortization of intangible assets		697		1,510
Impairment of Goodwill		(0)		(0)
Total Operating Expenses		5,641		11,501
Loss from Operations		(4,229)		(8,399)
Other Income (Expense)
Interest income (expense), net		57		61
Change in fair value of derivative liability		5,220		(5,134)
Other expense, net		(24)		(17)
Total Other Income (Expense)		5,253		(5,090)
Net Income (Loss), before tax		1,024		(13,489)
Income tax benefit/(provision)		417		2,958
Net Income (Loss)		1,441		(10,531)
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments		31		(8)
Comprehensive Income (Loss)		$ 1,472		$ (10,539)
Successor [Member] \| Common Class A [Member]
Other Income (Expense)
Basic weighted average shares outstanding		10,818		9,675
Diluted weighted average shares outstanding		10,818		9,675
Basic net income (loss) per share		$ 0.13		$ (1.09)
Diluted net income (loss) per share		$ 0.13		$ (1.09)
Predecessor [Member]
Revenues	$ 1,620		$ 1,742		$ 6,473
Cost of Revenues	483		499		1,628
Gross Profit	1,137		1,243		4,845
Operating Expenses
Research and development	1,455		2,508		6,929
Sales and marketing	964		1,146		3,872
General and administrative	2,293		6,134		7,503
Acquisition related costs					16
Amortization of intangible assets	806		971		2,919
Impairment of Goodwill	(0)		(0)		5,540
Total Operating Expenses	5,518		10,759		26,779
Loss from Operations	(4,381)		(9,516)		(21,934)
Other Income (Expense)
Interest income (expense), net	1		(6)		3
Change in fair value of derivative liability
Other expense, net			(1,407)		(1,641)
Total Other Income (Expense)	1		(1,413)		(1,638)
Net Income (Loss), before tax	(4,380)		(10,929)		(23,572)
Income tax benefit/(provision)					(62)
Net Income (Loss)	(4,380)		(10,929)		(23,634)
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments	(28)		1,110		1,315
Comprehensive Income (Loss)	$ (4,408)		$ (9,819)		$ (22,319)

Stock Option Plan and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Stock Option Plan And Stock-based Compensation

Schedule of stock options

Schedule of stock options
	Number of Options			Weighted-average exercise price		Weighted average remaining contractual term (years)		Weighted-Average Fair Value at Grant Date
Options outstanding at March 15, 2023		-		$	-		-	$	-
Granted		1,377,172			1.53
Forfeited		(392,272	)		1.53
Options outstanding at September 30, 2023		984,900		$	1.53		5.21	$	0.61
Options exercisable at September 30, 2023		-		$	-		-

Schedule of assumptions used

Schedule of assumptions used
Risk-free interest rate		3.62% - 3.67%
Expected life of option grants		5 - 7 years
Expected volatility of underlying stock		37.35%
Dividends assumption		$-

Deferred Revenue

9 Months Ended

Sep. 30, 2023

Deferred Revenue

Deferred Revenue

NOTE 8 – Deferred Revenue

Deferred revenue consisted of the following (in thousands):

Schedule of deferred revenue
	Successor
	License Agreements			Professional Service Agreements			Total
Deferred Revenue - March 15, 2023	$	2,148		$	386		$	2,534
Revenue recognized		(3,164	)		(863	)		(4,027	)
Revenue deferred		2,568			898			3,466
Deferred Revenue - September 30, 2023	$	1,552		$	421		$	1,973

	Predecessor
	License Agreements			Professional Service Agreements			Total
Deferred Revenue - January 1, 2022	$	2,524		$	622		$	3,146
Revenue recognized		(2,328	)		(419	)		(2,747	)
Revenue deferred		2,177			-			2,177
Deferred Revenue - September 30, 2022	$	2,373		$	203		$	2,576

The fair value of the deferred revenue approximates the services to be rendered.

Stock Option Plan and Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Stock Option Plan And Stock-based Compensation

Stock Option Plan and Stock-Based Compensation

NOTE 11 – Stock Option Plan and Stock-Based Compensation

To calculate the stock-based compensation resulting from the issuance of options the Company uses the Black-Scholes option pricing model, which is affected by the Company’s fair value of its stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

2023 Equity Incentive Plan

At the special meeting held on March 10, 2023, the KINS stockholders considered and approved, among other things, the Incentive Plan. The Incentive Plan was previously approved, subject to stockholder approval, by KINS’ board of directors. The Incentive Plan became effective immediately upon the closing of the Business Combination. Pursuant to the terms of the Incentive Plan, there are 2,110,500 shares of CXApp Class A Common Stock available for issuance under the Incentive Plan, which is equal to 15% of the aggregate number of shares of CXApp common stock issued and outstanding immediately after the closing of the Business Combination (giving effect to the redemptions).

Employee Stock Options

During the period from March 15, 2023 to September 30, 2023 (Successor), a total of 1,377 thousand stock options for the purchase of the Company’s common stock were granted to employees and directors of the Company. These options vest over a 2-year period, with 50% vested at the end of year one and 50% vested at the end of year two. The options have a life of 5 to 10 years and an exercise price of $1.53 per option. The stock options were valued using the Black-Scholes option valuation model and the weighted average fair value of the awards granted during the period was determined to be $0.63 per option on the grant date. The fair value of the common stock as of the grant date utilized in the Black-Scholes option valuation model was $1.53 per share.

See below for a summary of the stock options granted under the Incentive Plan:

Schedule of stock options
	Number of Options			Weighted-average exercise price		Weighted average remaining contractual term (years)		Weighted-Average Fair Value at Grant Date
Options outstanding at March 15, 2023		-		$	-		-	$	-
Granted		1,377,172			1.53
Forfeited		(392,272	)		1.53
Options outstanding at September 30, 2023		984,900		$	1.53		5.21	$	0.61
Options exercisable at September 30, 2023		-		$	-		-

The Company incurred stock-based compensation expenses associated with options of approximately $56 thousand, $113 thousand, $158 thousand, $323 thousand, and $1,325 thousand for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor), respectively, which is included in general and administrative expenses of the condensed consolidated statement of operations.

As of September 30, 2023 (Successor), the remaining unrecognized stock compensation expense totaled approximately $356 thousand. This amount will be recognized as expense over the weighted average remaining term of 1.49 years.

The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. Key weighted-average assumptions used to apply this pricing model during the period from March 15, 2023 to September 30, 2023 (Successor) were as follows:

Schedule of assumptions used
Risk-free interest rate		3.62% - 3.67%
Expected life of option grants		5 - 7 years
Expected volatility of underlying stock		37.35%
Dividends assumption		$-

Restricted Stock Units

During the period from March 15, 2023 to September 30, 2023 (Successor), a total of 821 thousand restricted stock units of the Company’s common stock were granted to employees and nonemployees of the Company under the Incentive Plan at various dates.

The fair value of the common stock as of the various grant dates was determined to be $6.13 to $11.80 per restricted stock unit, for a weighted average fair value of $8.07 per restricted stock unit. There was no other activity related to restricted stock units during the period from March 15, 2023 to September 30, 2023 (Successor).

Restricted stock unit compensation expense was $597 thousand for the three months ended September 30, 2023 (Successor) and $638 thousand for the period from March 15, 2023 to September 30, 2023 (Successor), which is included in general and administrative expenses of the condensed consolidated statement of operations.

As of September 30, 2023 (Successor), the Company has approximately $3,669 thousand of unrecognized restricted stock unit compensation to be expensed over a weighted average period of 1.67 years.

Software Development Costs, net (Tables)

9 Months Ended

Sep. 30, 2023

Software Development Costs Net

Schedule of capitalized software development


	Successor		Predecessor
	September 30, 2023		December 31, 2022
Capitalized software development costs	$	-	$	2,680
Accumulated amortization		-		(2,193	)
Software development costs, net		-		487

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Liquidity

Liquidity

Use of Estimates

Use of Estimates

	●	the valuation of stock-based compensation;

	●	the valuation of warrant liabilities;

	●	the allowance for credit losses;

	●	the valuation allowance for deferred tax assets; and

	●	impairment of long-lived assets and goodwill.

Cash and Cash Equivalents

Cash and Cash Equivalents

Accounts Receivable, net and Allowance for Credit Losses

Accounts Receivable, net and Allowance for Credit Losses

Property and Equipment, net

Property and Equipment, net

Intangible Assets

Intangible Assets

Goodwill

Goodwill

Leases and Right-of-Use Assets

Leases and Right-of-Use Assets

Income Taxes

Income Taxes

Comprehensive Income (Loss) and Foreign Currency Translation

Comprehensive Income (Loss) and Foreign Currency Translation

Revenue Recognition

Revenue Recognition

License Subscription Revenue Recognition (Software As A Service)

Professional Services Revenue Recognition

The Company’s professional services include milestone, fixed fee and time and materials contracts.

Contract Balances

Costs to Obtain a Contract

Cost to Fulfill a Contract

The Company incurs costs to fulfill their obligations under a contract once it has obtained the contract. These costs are generally not significant and are recorded to expense as incurred.

Multiple Performance Obligations

Sales and Use Taxes

The Company presents transactional taxes such as sales and use tax collected from customers and remitted to government authorities on a net basis.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred as part of cost of revenues. These costs were deemed to be de minimis during each of the reporting periods.

Business Combinations

Business Combinations

Segments

Segments

Stock-Based Compensation

Stock-Based Compensation

The Company estimates forfeitures at the time of grant and revises these estimates in subsequent periods if actual forfeitures differ from those estimates.

Derivative Warrant Liabilities

Derivative Warrant Liabilities

Earnings Per Share

Earnings Per Share

Schedule of antidilutive shares
	Successor
(in thousands)	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023
Stock options		985		985
Restricted stock units		821		821
Warrants		21,032		21,032
Total		22,838		22,838

Fair Value Measurements

Fair Value Measurements

	●	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

	●	Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

	●	Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The following table shows the changes in fair value of the liabilities during the three months ended September 30, 2023:


Balance at March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Balance at March 31, 2023		963
Change in FV of derivative instruments		12,040
Balance at June 30, 2023	$	13,003
Change in FV of derivative instruments		(5,220	)
Warrants exchanged for Class A common stock (see Note 10 - Warrants)		(4,914	)
Warrants exercised for Class A common stock (see Note 10 - Warrants)		(766	)
Balance at September 30, 2023	$	2,103

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Carrying Value, Recoverability and Impairment of Long-Lived Assets

Carrying Value, Recoverability and Impairment of Long-Lived Assets

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

Deferred Revenue (Details) - USD ($) $ in Thousands	7 Months Ended	9 Months Ended
Deferred Revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Successor [Member]
Deferred revenue, beginning balance	$ 2,534
Revenue recognized	(4,027)
Revenue deferred	3,466
Deferred revenue, ending balance	1,973
Successor [Member] \| Licensing Agreements [Member]
Deferred revenue, beginning balance	2,148
Revenue recognized	(3,164)
Revenue deferred	2,568
Deferred revenue, ending balance	1,552
Successor [Member] \| Professional Service Agreements [Member]
Deferred revenue, beginning balance	386
Revenue recognized	(863)
Revenue deferred	898
Deferred revenue, ending balance	$ 421
Predecessor [Member]
Deferred revenue, beginning balance		$ 3,146
Revenue recognized		(2,747)
Revenue deferred		2,177
Deferred revenue, ending balance		2,576
Predecessor [Member] \| Licensing Agreements [Member]
Deferred revenue, beginning balance		2,524
Revenue recognized		(2,328)
Revenue deferred		2,177
Deferred revenue, ending balance		2,373
Predecessor [Member] \| Professional Service Agreements [Member]
Deferred revenue, beginning balance		622
Revenue recognized		(419)
Revenue deferred
Deferred revenue, ending balance		$ 203

Disaggregation of Revenue (Details) - USD ($)
$ in Thousands

2 Months Ended

3 Months Ended

7 Months Ended

9 Months Ended

Mar. 14, 2023

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Successor [Member]

Total Revenue

$ 1,770

$ 4,027

Successor [Member] | Transferred over Time [Member]

Total Revenue

1,770

4,027

^[1],[2]

Successor [Member] | Warrant Exercise Period Condition One

Total Revenue

1,411

3,164

Successor [Member] | Warrant Exercise Period Condition One | Software [Member]

Total Revenue

1,411

3,164

Successor [Member] | Non Subscription Revenue [Member]

Total Revenue

359

863

Successor [Member] | Non Subscription Revenue [Member] | Professional Services [Member]

Total Revenue

$ 359

$ 863

Predecessor [Member]

Total Revenue

$ 1,620

$ 1,742

$ 6,473

Predecessor [Member] | Transferred over Time [Member]

Total Revenue

^[1],[2]

1,620

1,742

6,473

Predecessor [Member] | Warrant Exercise Period Condition One

Total Revenue

1,204

1,371

3,992

Predecessor [Member] | Warrant Exercise Period Condition One | Software [Member]

Total Revenue

1,204

1,371

3,992

Predecessor [Member] | Non Subscription Revenue [Member]

Total Revenue

416

371

2,481

Predecessor [Member] | Non Subscription Revenue [Member] | Professional Services [Member]

Total Revenue

$ 416

$ 371

$ 2,481

[1]

[2]

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-01(a)(4)(ii))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-01(a)(4)(iv))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SX 210.13-01(a)(5))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

+ Details

Summary of Significant Accounting Policies (Details) - Successor [Member] - shares shares in Thousands	3 Months Ended	7 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Total	22,838	22,838
Stock Options [Member]
Total	985	985
Restricted Stock Units (RSUs) [Member]
Total	821	821
Warrant [Member]
Total	21,032	21,032

Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Successor [Member]
Goodwill		$ 44,200		$ 44,200
Impairment charge on goodwill		$ (0)		$ (0)
Predecessor [Member]
Goodwill
Impairment charge on goodwill	$ (0)		$ (0)		$ 5,540

- Definition

+ References + Details

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of antidilutive shares

Schedule of antidilutive shares
	Successor
(in thousands)	Three Months Ended September 30, 2023		Period from March 15, 2023 to September 30, 2023
Stock options		985		985
Restricted stock units		821		821
Warrants		21,032		21,032
Total		22,838		22,838

Schedule of changes in fair value of the liabilities


Balance at March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Balance at March 31, 2023		963
Change in FV of derivative instruments		12,040
Balance at June 30, 2023	$	13,003
Change in FV of derivative instruments		(5,220	)
Warrants exchanged for Class A common stock (see Note 10 - Warrants)		(4,914	)
Warrants exercised for Class A common stock (see Note 10 - Warrants)		(766	)
Balance at September 30, 2023	$	2,103

Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Successor [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 20,869
Finite-Lived Intangible Assets, Accumulated Amortization	(1,510)
Net carrying amount	$ 19,359
Successor [Member] \| Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	6 years 4 months 24 days
Gross carrying amount	$ 3,294
Finite-Lived Intangible Assets, Accumulated Amortization	(255)
Net carrying amount	$ 3,039
Successor [Member] \| Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	4 years 4 months 24 days
Gross carrying amount	$ 5,604
Finite-Lived Intangible Assets, Accumulated Amortization	(607)
Net carrying amount	$ 4,997
Successor [Member] \| Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	9 years 4 months 24 days
Gross carrying amount	$ 9,268
Finite-Lived Intangible Assets, Accumulated Amortization	(502)
Net carrying amount	8,766
Successor [Member] \| Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount
Finite-Lived Intangible Assets, Accumulated Amortization
Net carrying amount
Successor [Member] \| Patents And Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	9 years 4 months 24 days
Gross carrying amount	$ 2,703
Finite-Lived Intangible Assets, Accumulated Amortization	(146)
Net carrying amount	$ 2,557
Predecessor [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount		$ 26,913
Finite-Lived Intangible Assets, Accumulated Amortization		(7,624)
Net carrying amount		19,289
Predecessor [Member] \| Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount		2,183
Finite-Lived Intangible Assets, Accumulated Amortization		(725)
Net carrying amount		1,458
Predecessor [Member] \| Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount		6,401
Finite-Lived Intangible Assets, Accumulated Amortization		(1,765)
Net carrying amount		4,636
Predecessor [Member] \| Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount		15,179
Finite-Lived Intangible Assets, Accumulated Amortization		(3,398)
Net carrying amount		11,781
Predecessor [Member] \| Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount		3,150
Finite-Lived Intangible Assets, Accumulated Amortization		(1,736)
Net carrying amount		1,414
Predecessor [Member] \| Patents And Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount
Finite-Lived Intangible Assets, Accumulated Amortization
Net carrying amount

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	Successor			Predecessor
	September 30, 2023			December 31, 2022
Computer and office equipment	$	159		$	992
Furniture and fixtures		11			185
Leasehold improvements		5			28
Software		1			8
Total		176			1,213
Less: accumulated depreciation and amortization		(50	)		(1,011	)
Total Property and Equipment, Net	$	126		$	202

Common Stock (Details Narrative) - Successor [Member] - Common Class C [Member] - $ / shares	Sep. 10, 2023	Sep. 30, 2023
Number of shares converted	5,487,300
Number of shares issued	5,487,300
Common stock, par value	$ 0.0001	$ 0.0001

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of accrued Liabilities

Schedule of accrued Liabilities
	Successor		Predecessor
	September 30, 2023		December 31, 2022
Insurance premiums and accrued interest	$	180	$	-
Income tax payables		64		-
Accrued services		40		-
Accrued compensation and benefits		449		586
Accrued bonus and commissions		318		422
Accrued rent		-		559
Accrued transaction costs		765		-
Accrued other		845		83
Accrued sales and other indirect taxes payable		7		86
Accrued liabilities	$	2,668	$	1,736

Business Combination (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of assets acquired

Schedule of assets acquired
Description	Fair Value		Weighted Average Useful Life (in years)
Purchase Price	$	69,928

Assets acquired:
Cash and cash equivalents	$	10,003
Accounts receivable		2,226
Notes and other receivables		209
Prepaid assets and other current assets		588
Operating lease right of use asset		557	3 years
Property and equipment, net		133	3 years
Other assets		42
Developed technology		9,268	10 years
Patents		2,703	10 years
Customer relationships		5,604	5 years
Tradenames and trademarks		3,294	7 years
Total assets acquired	$	34,627

Liabilities assumed:
Accounts payable	$	461
Accrued liabilities		972
Deferred revenues		2,534
Operating lease obligation, current		194
Operating lease obligation, noncurrent		384
Deferred tax liability		4,354
Total liabilities assumed		8,899
Goodwill	$	44,200

Schedule of proforma financial information


	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022			For the Three Months Ended September 30, 2022
Revenues	$	5,647		$	6,473		$	1,742
Net loss	$	(19,197	)	$	(4,822	)	$	(10,057	)

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 16 – Commitments and Contingencies

Litigation

Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Subsequent Event

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Event

NOTE 18 – Subsequent Event

The Company evaluated subsequent events and transactions that occurred after September 30, 2023 up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	2 Months Ended	7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022
Successor [Member]
Operating activities
Net loss		$ (10,531)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		52
Amortization of intangible assets		1,510
Amortization of right of use asset		200
Deferred income taxes		(2,957)
Provision for bad debt expense		(11)
Stock-based compensation expense		857
Gain on change in fair value of earnout payable
(Gain) loss on foreign currency transactions		20
Change in fair value of derivative liability		5,134
Impairment of goodwill		(0)
Other
Change in operating assets and liabilities:
Accounts receivable and other receivables		1,400
Prepaid expenses and other current assets		339
Other assets		(37)
Accounts payable		494
Accrued liabilities		(4,666)
Income tax liabilities
Operating lease liabilities		(202)
Deferred revenue		(539)
Net cash used in operating activities		(8,937)
Investing activities
Purchases of property and equipment		(47)
Investment in capitalized software
Cash acquired in connection with Business Combination		10,003
Net cash provided by (used in) investing activities		9,956
Financing activities
Net equity investment from parent
Taxes paid related to stock-based compensation
Repayment of CXApp acquisition liability
Warrant exercise - net		5,002
Repayment of related party promissory note		(328)
Net cash provided by financing activities		4,674
Effect of exchange rate changes on cash and cash equivalents		(17)
Net increase in cash and cash equivalents		5,676
Cash and cash equivalents, beginning of period		1,503
Cash and cash equivalents, end of period	$ 1,503	7,179
Supplemental disclosures of cash flow information
Cash paid for taxes		1
Cash paid for interest		12
Supplemental schedule of noncash investing and financing activities
Right of use asset obtained in exchange for lease liability		230
Parent’s common shares issued for CXApp earnout
Noncash investment from parent
Class A Common Stock and Class C Common Stock issued in connection with Business Combination		69,928
Financing of Director and Officer Insurance (see Note 9)		671
Warrant exercise - cashless		549
Warrant exchange to Class A common stock		4,914
Predecessor [Member]
Operating activities
Net loss	(4,380)		$ (23,634)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	228		484
Amortization of intangible assets	806		2,919
Amortization of right of use asset	40		206
Deferred income taxes
Provision for bad debt expense			5
Stock-based compensation expense	158		1,325
Gain on change in fair value of earnout payable			(2,827)
(Gain) loss on foreign currency transactions	(32)		1,546
Change in fair value of derivative liability
Impairment of goodwill	(0)		5,540
Other			(391)
Change in operating assets and liabilities:
Accounts receivable and other receivables	(857)		280
Prepaid expenses and other current assets	(20)		(1,155)
Other assets			13
Accounts payable	(796)		131
Accrued liabilities	(787)		1,301
Income tax liabilities			(517)
Operating lease liabilities	(38)		(197)
Deferred revenue	534		(510)
Net cash used in operating activities	(5,144)		(15,481)
Investing activities
Purchases of property and equipment	(9)		(72)
Investment in capitalized software	(45)		(287)
Cash acquired in connection with Business Combination
Net cash provided by (used in) investing activities	(54)		(359)
Financing activities
Net equity investment from parent	9,089		18,967
Taxes paid related to stock-based compensation			(104)
Repayment of CXApp acquisition liability	(197)		(1,957)
Repayment of related party promissory note
Net cash provided by financing activities	8,892		16,906
Effect of exchange rate changes on cash and cash equivalents	1		(75)
Net increase in cash and cash equivalents	3,695		991
Cash and cash equivalents, beginning of period	6,308	$ 10,003	5,028
Cash and cash equivalents, end of period	10,003		6,019
Supplemental disclosures of cash flow information
Cash paid for taxes			100
Cash paid for interest			1
Supplemental schedule of noncash investing and financing activities
Right of use asset obtained in exchange for lease liability			284
Parent’s common shares issued for CXApp earnout			3,697
Noncash investment from parent	409
Class A Common Stock and Class C Common Stock issued in connection with Business Combination
Financing of Director and Officer Insurance (see Note 9)
Warrant exercise - cashless
Warrant exchange to Class A common stock

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Successor [Member] \| Common Class A [Member]
Common stock, par value	$ 0.0001
Common stock, shares authorized	200,000,000
Common stock, shares issued	15,254,389
Common stock, shares outstanding	15,254,389
Successor [Member] \| Common Class C [Member]
Common stock, par value	$ 0.0001
Common stock, shares authorized	10,000,000
Common stock, shares issued	0
Common stock, shares outstanding	0
Predecessor [Member] \| Common Class A [Member]
Common stock, par value		$ 0.0001
Common stock, shares authorized		200,000,000
Common stock, shares issued		15,254,389
Common stock, shares outstanding		15,254,389
Predecessor [Member] \| Common Class C [Member]
Common stock, par value		$ 0.0001
Common stock, shares authorized		10,000,000
Common stock, shares issued		0
Common stock, shares outstanding		0

Credit Risk and Concentrations

9 Months Ended

Sep. 30, 2023

Risks and Uncertainties [Abstract]

Credit Risk and Concentrations

NOTE 13 – Credit Risk and Concentrations

Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for credit losses and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited.

The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Cash is also maintained at foreign financial institutions for its Canadian and Philippines subsidiaries and its majority-owned India subsidiary. Cash in foreign financial institutions as of September 30, 2023 (Successor) was $206 thousand. Cash in foreign financial institutions as of December 31, 2022 (Predecessor) was not significant. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash.

Accrued Liabilities

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Liabilities

NOTE 9 – Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

Schedule of accrued Liabilities
	Successor		Predecessor
	September 30, 2023		December 31, 2022
Insurance premiums and accrued interest	$	180	$	-
Income tax payables		64		-
Accrued services		40		-
Accrued compensation and benefits		449		586
Accrued bonus and commissions		318		422
Accrued rent		-		559
Accrued transaction costs		765		-
Accrued other		845		83
Accrued sales and other indirect taxes payable		7		86
Accrued liabilities	$	2,668	$	1,736

Financed Director & Officers Insurance

The Company entered into a Directors & Officers (“D&O”) insurance agreement with Oakwood D&O Insurance, effective on March 14, 2023. The agreement states that the Company will pay a total of $671 thousand in premiums at an annual percentage rate of 8%. The first of nine monthly separate installment payments began on April 14, 2023. As of September 30, 2023 (Successor) the Company has paid $492 thousand in premiums and currently owes $179 thousand on the D&O insurance policy.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Successor [Member]
Current Assets
Cash and cash equivalents	$ 7,179
Accounts receivable	839
Notes and other receivables	230
Prepaid expenses and other current assets	1,016
Total current assets	9,264
Property and equipment, net	126
Intangible assets, net	19,359
Operating lease right-of-use asset, net	574
Software development costs, net
Goodwill	44,200
Other assets	77
Total Assets	73,600
Current Liabilities
Accounts payable	983
Accrued liabilities	2,668
Deferred revenue	1,973
Acquisition liability
Warrant liability	2,103
Operating lease obligation, current	321
Total current liabilities	8,048
Operating lease obligation, noncurrent	273
Other liabilities
Deferred tax liability	1,397
Total Liabilities	9,718
Stockholders’ Equity
Additional paid-in capital	83,162
Accumulated deficit	(19,274)
Accumulated other comprehensive income (loss)	(8)
Net parent investment
Total Stockholders’ Equity	63,882
Total Liabilities and Stockholders’ Equity	73,600
Successor [Member] \| Common Class A [Member]
Stockholders’ Equity
Common Stock value	2
Successor [Member] \| Common Class C [Member]
Stockholders’ Equity
Common Stock value
Predecessor [Member]
Current Assets
Cash and cash equivalents		$ 6,308
Accounts receivable		1,338
Notes and other receivables		273
Prepaid expenses and other current assets		650
Total current assets		8,569
Property and equipment, net		202
Intangible assets, net		19,289
Operating lease right-of-use asset, net		681
Software development costs, net		487
Goodwill
Other assets		52
Total Assets		29,280
Current Liabilities
Accounts payable		1,054
Accrued liabilities		1,736
Deferred revenue		2,162
Acquisition liability		197
Warrant liability
Operating lease obligation, current		266
Total current liabilities		5,415
Operating lease obligation, noncurrent		444
Other liabilities		30
Deferred tax liability
Total Liabilities		5,889
Stockholders’ Equity
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income (loss)		1,155
Net parent investment		22,236
Total Stockholders’ Equity		23,391
Total Liabilities and Stockholders’ Equity		29,280
Predecessor [Member] \| Common Class A [Member]
Stockholders’ Equity
Common Stock value
Predecessor [Member] \| Common Class C [Member]
Stockholders’ Equity
Common Stock value

Goodwill and Intangible Assets (Details 2) $ in Thousands	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (remainder of year)	$ 697
2024	2,788
2025	2,788
2026	2,788
2027	2,788
2028 and thereafter	7,510
Total	$ 19,359

Warrants (Details Narrative) - Successor [Member] - USD ($)			3 Months Ended	7 Months Ended
	Jul. 14, 2023	Jul. 13, 2023	Sep. 30, 2023	Sep. 30, 2023	Jun. 30, 2023
Warrants outstanding			21,031,862	21,031,862	24,080,000
Non-cash transaction				$ 4,914
Loss on the warrant conversion				3,900,000
Proceeds from public warrants exercised				$ 5,002,000
Warrant Holder [Member]
Number of warrant purchase	2,000,000
Common stock par value	$ 0.0001
Number of Warrant exchange	600,000
Public Warrants [Member]
Warrants outstanding			10,751,862	10,751,862	13,800,000
Number of public warrants exercised		435,000	613,000
Number public warrants exercised			50,000
Proceeds from public warrants exercised		$ 5,002,000
Private Warrants [Member]
Warrants outstanding			10,280,000	10,280,000	10,280,000
Warrant Price				$ 11.50
Exercise Price per share		$ 11.50

Software Development Costs, net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Successor [Member]
Capitalized software development costs
Accumulated amortization
Software development costs, net
Predecessor [Member]
Capitalized software development costs		$ 2,680
Accumulated amortization		(2,193)
Software development costs, net		$ 487

Software Development Costs, net

9 Months Ended

Sep. 30, 2023

Software Development Costs Net

Software Development Costs, net

NOTE 6 – Software Development Costs, net

Capitalized software development costs consisted of the following (in thousands):


	Successor		Predecessor
	September 30, 2023		December 31, 2022
Capitalized software development costs	$	-	$	2,680
Accumulated amortization		-		(2,193	)
Software development costs, net		-		487

Amortization expense for capitalized software development costs was approximately $209 thousand, $150 thousand, and $394 thousand for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor), respectively. There was no amortization expense for capitalized software development costs for the three months ended September 30, 2023 (Successor) and for the period from March 15, 2023 to September 30, 2023 (Successor).

Business Combination

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combination

NOTE 3 – Business Combination

On March 14, 2023, the Company completed the Agreement and Plan of Merger (the “Merger Agreement”), by and among KINS, Inpixon, CXApp, and KINS Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of KINS (“Merger Sub”), pursuant to which KINS combined with Legacy CXApp, Inpixon’s enterprise apps business (including its workplace experience technologies, indoor mapping, events platform, augmented reality and related business solutions) (the “Enterprise Apps Business”). In exchange for the aggregate purchase price of approximately $69,928 thousand, the Company acquired all of the related assets and liabilities of Legacy CXApp. The consideration transferred in connection with the Business Combination consisted of 1,547,700 shares of the Company’s Class A Common Stock and 5,487,300 shares of the Company’s Class C Common Stock valued at a price of $9.94 per share. The preliminary estimated goodwill of approximately $44,200 thousand arising from the Business Combination consists of an acquired workforce, as well as synergies expected from combined operations of KINS and the CXApp.

The Company has authorized Class A and Class C common stock. Class A common stock and New CXApp Class C common stock are identical in all respects, except that New CXApp Class C common stock is not listed and will automatically convert into New CXApp Class A common stock on the earlier to occur of (i) the 180th day following the closing of the Merger which has expired and (ii) the day that the last reported sale price of New CXApp Class A common stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period following the closing of the Merger.

The Business Combination is being accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Business Combination. These values are subject to change as we perform additional reviews of our assumptions utilized.

The Company has made a provisional allocation of the purchase price of the Business Combination to the assets acquired and the liabilities assumed as of the closing date. The following table summarizes the preliminary purchase price allocations relating to the Business Combination (in thousands):

Schedule of assets acquired
Description	Fair Value		Weighted Average Useful Life (in years)
Purchase Price	$	69,928

Assets acquired:
Cash and cash equivalents	$	10,003
Accounts receivable		2,226
Notes and other receivables		209
Prepaid assets and other current assets		588
Operating lease right of use asset		557	3 years
Property and equipment, net		133	3 years
Other assets		42
Developed technology		9,268	10 years
Patents		2,703	10 years
Customer relationships		5,604	5 years
Tradenames and trademarks		3,294	7 years
Total assets acquired	$	34,627

Liabilities assumed:
Accounts payable	$	461
Accrued liabilities		972
Deferred revenues		2,534
Operating lease obligation, current		194
Operating lease obligation, noncurrent		384
Deferred tax liability		4,354
Total liabilities assumed		8,899
Goodwill	$	44,200

The value of the intangible assets were calculated by a third party valuation firm based on projections and financial data provided by management of the Company. Goodwill represents the excess fair value after allocation to the intangible assets. The calculated goodwill is not deductible for tax purposes.

Total acquisition-related costs for the Business Combination were approximately $3,194 thousand. Of the total acquisition-related costs, approximately $3,000 thousand were incurred by KINS prior to the close of the Business Combination. These costs are included in the opening retained earnings of the Company on March 15, 2023. The remaining $194 thousand of acquisition-related costs were recorded as expense in the successor period and are included in acquisition related costs on the statements of operations for the three months ended September 30, 2023 (Successor) and the period from March 15, 2023 to September 30, 2023 (Successor).

Measurement Period

The preliminary purchase price allocations for the acquisitions described above are based on initial estimates and provisional amounts. In accordance with ASC 805-10-25-13, if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, acquirer shall adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. The Company continues to refine its inputs and estimates inherent in (i) the valuation of intangible assets, (ii) deferred income taxes, (iii) realization of tangible assets and (iv) the accuracy and completeness of liabilities. For the three months ended September 30, 2023 (Successor), there was no measurement period adjustment.

CXApp Proforma Financial Information

The following unaudited proforma financial information presents the condensed consolidated results of operations of the Company for the nine-month period ended September 30, 2023, the nine months ended September 30, 2022, and the three months ended September 30, 2022, as if the acquisition had occurred as of the beginning of the first period presented (January 1, 2022) instead of on March 14, 2023. The proforma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during those periods.

The proforma financial information for the Company, including the predecessor information of KINS, and the acquired CXApp is as follows (in thousands):


	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022			For the Three Months Ended September 30, 2022
Revenues	$	5,647		$	6,473		$	1,742
Net loss	$	(19,197	)	$	(4,822	)	$	(10,057	)

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

NOTE 15 – Leases

The Company has operating leases for administrative offices in Canada, the Philippines, and the United States. The Manila, Philippines office lease expires in May 2025, the Canada lease expires in June 2026, and the United States office lease expires in May 2024. The Company has no other operating or financing leases with terms greater than 12 months.

Lease expense for operating leases recorded on the balance sheet is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in the Company’s condensed consolidated statement of operations for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), for the period from January 1, 2023 to March 14, 2023 (Predecessor), for the three months ended September 30, 2022 (Predecessor), and for the nine months ended September 30, 2022 (Predecessor) was approximately $56 thousand, $121 thousand, $57 thousand, $200 thousand, and $500 thousand, respectively.

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842 “Leases” (“ASC 842”). As of September 30, 2023 (Successor), the weighted average remaining lease term is 1.6 years and the weighted average discount rate used to determine the operating lease liabilities was 8.0%. As of December 31, 2022 (Predecessor), the weighted average remaining lease term is 2.8 years and the weighted average discount rate used to determine the operating lease liabilities was 8.0%.

Property and Equipment, net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Successor [Member]
Property, Plant and Equipment [Line Items]
Total	$ 176
Less: accumulated depreciation and amortization	(50)
Total Property and Equipment, Net	126
Successor [Member] \| Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	159
Successor [Member] \| Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total	11
Successor [Member] \| Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total	5
Successor [Member] \| Software [Member]
Property, Plant and Equipment [Line Items]
Total	$ 1
Predecessor [Member]
Property, Plant and Equipment [Line Items]
Total		$ 1,213
Less: accumulated depreciation and amortization		(1,011)
Total Property and Equipment, Net		202
Predecessor [Member] \| Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total		992
Predecessor [Member] \| Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total		185
Predecessor [Member] \| Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total		28
Predecessor [Member] \| Software [Member]
Property, Plant and Equipment [Line Items]
Total		$ 8

Software Development Costs, net (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Predecessor [Member]
Amortization expense	$ 209		$ 150		$ 394
Successor [Member]
Amortization expense		$ 0		$ 0

Organization, Nature of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Organization, Nature of Business and Basis of Presentation

NOTE 1 – Organization, Nature of Business and Basis of Presentation

CXApp Inc. and its subsidiaries (“CXApp” or the “Company”) is in the business of delivering intelligent enterprise workplace experiences. The CXApp SaaS platform is anchored on the intersection of customer experience (CX) and artificial intelligence (AI) providing digital transformation for the physical workplace for enhanced experiences across people, places and things.

The CXApp SaaS platform offers a suite of leading-edge technology workplace experience solutions including an enterprise employee application, indoor mapping, on-device positioning, augmented reality technologies, generative AI applications and an AI-based analytics platform, targeting the emerging hybrid workplace market. CXApp creates a connected workplace by reducing app overload, data fragmentation, and complex workflows and streamlines all capabilities through The Workplace SuperApp. All features, services and integrations are housed in one easy-to-access platform allowing businesses to deliver a more holistic employee experience in a hybrid workplace.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, CXApp does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of CXApp, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results for the periods presented are not necessarily indicative of the results for the full year ending December 31, 2023 or any other period. These interim unaudited condensed consolidated financial statement should be read in conjunction with KINS Technology Group Inc.’s (“KINS”) audited consolidated financial statements and notes for the years ended December 31, 2022 and 2021 included in the annual report on Form 10-K/A for the years ended December 31, 2022, filed with the SEC on April 19, 2023, and the annual report of Legacy CXApp (as defined below) for the year ended December 31, 2022 and 2021 included as an exhibit to Form 8-K filed with the SEC on March 20, 2023. Inter-company balances and transactions have been eliminated.

On September 25, 2022, an Agreement and Plan of Merger (the “Merger Agreement”), was entered into by and among Inpixon, KINS, CXApp, and KINS Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of KINS (“Merger Sub”), pursuant to which KINS acquired Inpixon’s enterprise apps business (including its workplace experience technologies, indoor mapping, events platform, augmented reality and related business solutions) (“Legacy CXApp”) in exchange for the issuance of shares of KINS capital stock (the “Business Combination”). As a result of the Business Combination, KINS changed their name to CXApp Inc. (“CXApp”). The shares are now trading on the Nasdaq using the ticker CXAI. The transaction closed on March 14, 2023. See Note 3 for more details.

Unless the context otherwise requires, “we,” “us,” “our,” “CXApp” and the “Company” refer to CXApp Inc., a Delaware corporation, and its consolidated subsidiaries following the Business Combination (as defined below). Unless the context otherwise requires, references to “KINS” refer to KINS Technology Group Inc., a Delaware corporation (“KINS”), prior to the Business Combination. All references herein to the “Board” refer to the board of directors of the Company. “Legacy CXApp” refers to CXApp Holding Corp., a Delaware corporation and a wholly owned subsidiary of the Company, which the Company acquired through the Business Combination. Prior to the Separation (as defined below), Legacy CXApp was a wholly owned subsidiary of Inpixon, a Nevada corporation (“Inpixon”).

The Business Combination was accounted for using the acquisition method (as a forward merger), with goodwill and other identifiable intangible assets recorded in accordance with GAAP, as applicable. Under this method of accounting, the “Enterprise Apps Business” (formerly known as CXApp) is treated as the “acquired” company for financial reporting purposes. KINS (now known as CXApp Inc.) has been determined to be the accounting acquirer because KINS maintains control of the Board of Directors and management of the combined company.

The unaudited condensed consolidated financial statements of Successor and Predecessor are not comparable due to a new basis of accounting that was created from the business combination that occurred on the Closing Date (see Note 3). Therefore, the reporting period has been separated by a black line in the condensed consolidated financial statements with the Predecessor representing the pre-Closing Date period (January 1, 2023 through March 14, 2023) and the Successor representing the post-Closing Date period (March 15, 2023 through September 30, 2023). The Company noted that the “Predecessor” includes financial information related to the Enterprise Apps Business (as defined in Note 3), while the “Successor” includes financial information related to the newly formed company after the business combination.

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

Schedule of goodwill
Acquisition	Amount
Balance as of March 15, 2023	$	-
Acquisition of Legacy CXApp		44,122
Measurement Period Adjustments		78
Balance as of September 30, 2023	$	44,200

Schedule of intangible assets

Schedule of intangible assets
	September 30, 2023 (Successor)								December 31, 2022 (Predecessor)
	Weighted Average Remaining Useful Life (Years)	Gross Amount		Accumulated Amortization			Net Carrying Amount		Gross Amount		Accumulated Amortization			Net Carrying Amount
Trade Name/Trademarks	6.4	$	3,294	$	(255	)	$	3,039	$	2,183	$	(725	)	$	1,458
Customer Relationships	4.4		5,604		(607	)		4,997		6,401		(1,765	)		4,636
Developed Technology	9.4		9,268		(502	)		8,766		15,179		(3,398	)		11,781
Non-compete Agreements	-		-		-			-		3,150		(1,736	)		1,414
Patents and Intellectual Property	9.4		2,703		(146	)		2,557		-		-			-
Totals		$	20,869	$	(1,510	)	$	19,359	$	26,913	$	(7,624	)	$	19,289

Schedule of future amortization expense

Schedule of future amortization expense
For the Years Ending December 31,	Amount
2023 (remainder of year)	$	697
2024		2,788
2025		2,788
2026		2,788
2027		2,788
2028 and thereafter		7,510
Total	$	19,359

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Foreign Operations (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
Foreign Operations (Details) - USD ($) $ in Thousands	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Successor [Member]
Revenues by geographic area		$ 1,770		$ 4,027
Operating income (loss) by geographic area		(4,229)		(8,399)
Net income (loss) by geographic area		1,441		(10,531)
Identifiable assets by geographic area		73,600		73,600
Long lived assets by geographic area		20,059		20,059
Goodwill by geographic area		44,200		44,200
Successor [Member] \| UNITED STATES
Revenues by geographic area		1,504		3,326
Operating income (loss) by geographic area		(3,470)		(6,882)
Net income (loss) by geographic area		2,224		(8,976)
Identifiable assets by geographic area		74,236		74,236
Long lived assets by geographic area		19,551		19,551
Goodwill by geographic area		44,200		44,200
Successor [Member] \| CANADA
Revenues by geographic area		266		701
Operating income (loss) by geographic area		(769)		(1,693)
Net income (loss) by geographic area		(795)		(1,714)
Identifiable assets by geographic area		724		724
Long lived assets by geographic area		340		340
Goodwill by geographic area
Successor [Member] \| INDIA
Revenues by geographic area
Operating income (loss) by geographic area
Net income (loss) by geographic area
Identifiable assets by geographic area
Long lived assets by geographic area
Goodwill by geographic area
Successor [Member] \| PHILIPPINES
Revenues by geographic area		228		643
Operating income (loss) by geographic area		10		176
Net income (loss) by geographic area		12		180
Identifiable assets by geographic area		445		445
Long lived assets by geographic area		168		168
Goodwill by geographic area
Successor [Member] \| Eliminations [Member]
Revenues by geographic area		(228)		(643)
Operating income (loss) by geographic area
Net income (loss) by geographic area				(21)
Identifiable assets by geographic area		(1,805)		(1,805)
Long lived assets by geographic area
Goodwill by geographic area
Predecessor [Member]
Revenues by geographic area	1,620		$ 1,742		$ 6,473
Operating income (loss) by geographic area	(4,381)		(9,516)		(21,934)
Net income (loss) by geographic area	(4,380)		(10,929)		(23,634)
Identifiable assets by geographic area						$ 29,280
Long lived assets by geographic area						20,659
Goodwill by geographic area
Predecessor [Member] \| UNITED STATES
Revenues by geographic area	1,395		1,426		5,311
Operating income (loss) by geographic area	(3,479)		(8,173)		(17,532)
Net income (loss) by geographic area	(3,342)		(8,053)		(17,135)
Identifiable assets by geographic area						24,591
Long lived assets by geographic area						15,558
Goodwill by geographic area
Predecessor [Member] \| CANADA
Revenues by geographic area	285		485		1,701
Operating income (loss) by geographic area	(905)		(1,401)		(4,476)
Net income (loss) by geographic area	(1,041)		(2,950)		(6,549)
Identifiable assets by geographic area						5,484
Long lived assets by geographic area						4,788
Goodwill by geographic area
Predecessor [Member] \| INDIA
Revenues by geographic area			404		819
Operating income (loss) by geographic area			96		138
Net income (loss) by geographic area			138		142
Identifiable assets by geographic area						228
Long lived assets by geographic area						98
Goodwill by geographic area
Predecessor [Member] \| PHILIPPINES
Revenues by geographic area	160
Operating income (loss) by geographic area	3		(60)		(86)
Net income (loss) by geographic area	3		(64)		(92)
Identifiable assets by geographic area						415
Long lived assets by geographic area						215
Goodwill by geographic area
Predecessor [Member] \| Eliminations [Member]
Revenues by geographic area	(220)		(573)		(1,358)
Operating income (loss) by geographic area			22		22
Net income (loss) by geographic area
Identifiable assets by geographic area						(1,438)
Long lived assets by geographic area
Goodwill by geographic area

Stock Option Plan and Stock-Based Compensation (Details 1) - Successor [Member]	7 Months Ended
	Sep. 30, 2023
Expected volatility of underlying stock	37.35%
Dividends assumption
Minimum [Member]
Risk-free interest rate	3.62%
Expected life of option grants	5 years
Maximum [Member]
Risk-free interest rate	3.67%
Expected life of option grants	7 years

Foreign Operations

9 Months Ended

Sep. 30, 2023

Foreign Operations

Foreign Operations

NOTE 14 – Foreign Operations

The Company’s operations are located primarily in the United States, Canada, and the Philippines. Revenues by geographic area are attributed by country of domicile of the Company’s subsidiaries. The financial data by geographic area are as follows (in thousands):


	United States			Canada			India		Philippines			Eliminations			Total
For the Three Months Ended September 30, 2023 (Successor):
Revenues by geographic area	$	1,504		$	266		$	-	$	228		$	(228	)	$	1,770
Operating income (loss) by geographic area	$	(3,470	)	$	(769	)	$	-	$	10		$	-		$	(4,229	)
Net income (loss) by geographic area	$	2,224		$	(795	)	$	-	$	12		$	-		$	1,441

For the Period from March 15, 2023 to September 30, 2023 (Successor):
Revenues by geographic area	$	3,326		$	701		$	-	$	643		$	(643	)	$	4,027
Operating income (loss) by geographic area	$	(6,882	)	$	(1,693	)	$	-	$	176		$	-		$	(8,399	)
Net income (loss) by geographic area	$	(8,976	)	$	(1,714	)	$	-	$	180		$	(21	)	$	(10,531	)


For the Period from January 1, 2023 to March 14, 2023 (Predecessor):
Revenues by geographic area	$	1,395		$	285		$	-	$	160		$	(220	)	$	1,620
Operating income (loss) by geographic area	$	(3,479	)	$	(905	)	$	-	$	3		$	-		$	(4,381	)
Net income (loss) by geographic area	$	(3,342	)	$	(1,041	)	$	-	$	3		$	-		$	(4,380	)

For the Three Months Ended September 30, 2022 (Predecessor):
Revenues by geographic area	$	1,426		$	485		$	404	$	-		$	(573	)	$	1,742
Operating income (loss) by geographic area	$	(8,173	)	$	(1,401	)	$	96	$	(60	)	$	22		$	(9,516	)
Net income (loss) by geographic area	$	(8,053	)	$	(2,950	)	$	138	$	(64	)	$	-		$	(10,929	)

For the Nine Months Ended September 30, 2022 (Predecessor):
Revenues by geographic area	$	5,311		$	1,701		$	819	$	-		$	(1,358	)	$	6,473
Operating income (loss) by geographic area	$	(17,532	)	$	(4,476	)	$	138	$	(86	)	$	22		$	(21,934	)
Net income (loss) by geographic area	$	(17,135	)	$	(6,549	)	$	142	$	(92	)	$	-		$	(23,634	)

As of September 30, 2023 (Successor)
Identifiable assets by geographic area	$	74,236		$	724		$	-	$	445		$	(1,805	)	$	73,600
Long lived assets by geographic area	$	19,551		$	340		$	-	$	168		$	-		$	20,059
Goodwill by geographic area	$	44,200		$	-		$	-	$	-		$	-		$	44,200


As of December 31, 2022 (Predecessor)
Identifiable assets by geographic area	$	24,591		$	5,484		$	228	$	415		$	(1,438	)	$	29,280
Long lived assets by geographic area	$	15,558		$	4,788		$	98	$	215		$	-		$	20,659
Goodwill by geographic area	$	-		$	-		$	-	$	-		$	-		$	-

Stock Option Plan and Stock-Based Compensation (Details)	7 Months Ended
	Sep. 30, 2023 $ / shares shares
Stock Option Plan And Stock-based Compensation
Number of options outstanding, beginning \| shares
Weighted-average exercise price, beginning
Number of options, Granted \| shares	1,377,172
Weighted-average exercise price, Granted	$ 1.53
Number of options, Forfeited \| shares	(392,272)
Weighted-average exercise price, Forfeited	$ 1.53
Number of options outstanding, ending \| shares	984,900
Weighted-average exercise price, ending	$ 1.53
Weighted average remaining contractual term (years)	5 years 2 months 15 days
Weighted-Average Fair Value at Grant Date	$ 0.61
Number of options exercisable \| shares
Weighted-average exercise price, options exercisable

Summary of Significant Accounting Policies (Details 1) - Successor [Member] - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Balance at beginning	$ 2,649	$ 13,003	$ 963
Change in FV of derivative instruments	(1,686)	(5,220)	12,040
Warrants exchanged for Class A common stock (see Note 10 - Warrants)		(4,914)
Warrants exercised for Class A common stock (see Note 10 - Warrants)		(766)
Balance at ending	$ 963	$ 2,103	$ 13,003

Leases (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
Leases (Details Narrative) - USD ($) $ in Thousands	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Successor [Member]
Operating lease expenses		$ 56		$ 121
Weighted average remaining lease term		1 year 7 months 6 days		1 year 7 months 6 days
Weighted average discount rate used to determine operating lease		8.00%		8.00%
Predecessor [Member]
Operating lease expenses	$ 57		$ 200		$ 500
Weighted average remaining lease term						2 years 9 months 18 days
Weighted average discount rate used to determine operating lease						8.00%

Foreign Operations (Tables)

9 Months Ended

Sep. 30, 2023

Foreign Operations

Schedule of financial data by geographic area


	United States			Canada			India		Philippines			Eliminations			Total
For the Three Months Ended September 30, 2023 (Successor):
Revenues by geographic area	$	1,504		$	266		$	-	$	228		$	(228	)	$	1,770
Operating income (loss) by geographic area	$	(3,470	)	$	(769	)	$	-	$	10		$	-		$	(4,229	)
Net income (loss) by geographic area	$	2,224		$	(795	)	$	-	$	12		$	-		$	1,441

For the Period from March 15, 2023 to September 30, 2023 (Successor):
Revenues by geographic area	$	3,326		$	701		$	-	$	643		$	(643	)	$	4,027
Operating income (loss) by geographic area	$	(6,882	)	$	(1,693	)	$	-	$	176		$	-		$	(8,399	)
Net income (loss) by geographic area	$	(8,976	)	$	(1,714	)	$	-	$	180		$	(21	)	$	(10,531	)


For the Period from January 1, 2023 to March 14, 2023 (Predecessor):
Revenues by geographic area	$	1,395		$	285		$	-	$	160		$	(220	)	$	1,620
Operating income (loss) by geographic area	$	(3,479	)	$	(905	)	$	-	$	3		$	-		$	(4,381	)
Net income (loss) by geographic area	$	(3,342	)	$	(1,041	)	$	-	$	3		$	-		$	(4,380	)

For the Three Months Ended September 30, 2022 (Predecessor):
Revenues by geographic area	$	1,426		$	485		$	404	$	-		$	(573	)	$	1,742
Operating income (loss) by geographic area	$	(8,173	)	$	(1,401	)	$	96	$	(60	)	$	22		$	(9,516	)
Net income (loss) by geographic area	$	(8,053	)	$	(2,950	)	$	138	$	(64	)	$	-		$	(10,929	)

For the Nine Months Ended September 30, 2022 (Predecessor):
Revenues by geographic area	$	5,311		$	1,701		$	819	$	-		$	(1,358	)	$	6,473
Operating income (loss) by geographic area	$	(17,532	)	$	(4,476	)	$	138	$	(86	)	$	22		$	(21,934	)
Net income (loss) by geographic area	$	(17,135	)	$	(6,549	)	$	142	$	(92	)	$	-		$	(23,634	)

As of September 30, 2023 (Successor)
Identifiable assets by geographic area	$	74,236		$	724		$	-	$	445		$	(1,805	)	$	73,600
Long lived assets by geographic area	$	19,551		$	340		$	-	$	168		$	-		$	20,059
Goodwill by geographic area	$	44,200		$	-		$	-	$	-		$	-		$	44,200


As of December 31, 2022 (Predecessor)
Identifiable assets by geographic area	$	24,591		$	5,484		$	228	$	415		$	(1,438	)	$	29,280
Long lived assets by geographic area	$	15,558		$	4,788		$	98	$	215		$	-		$	20,659
Goodwill by geographic area	$	-		$	-		$	-	$	-		$	-		$	-

Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Successor [Member]
Insurance premiums and accrued interest	$ 180
Income tax payables	64
Accrued services	40
Accrued compensation and benefits	449
Accrued bonus and commissions	318
Accrued rent
Accrued transaction costs	765
Accrued other	845
Accrued sales and other indirect taxes payable	7
Accrued liabilities	$ 2,668
Predecessor [Member]
Insurance premiums and accrued interest
Income tax payables
Accrued services
Accrued compensation and benefits		586
Accrued bonus and commissions		422
Accrued rent		559
Accrued transaction costs
Accrued other		83
Accrued sales and other indirect taxes payable		86
Accrued liabilities		$ 1,736

Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Warrants

Schedule of public and private warrant exercise activity


	Public Warrants			Private Warrants		Total
June 30, 2023		13,800,000			10,280,000		24,080,000
Warrants exchanged		(2,000,000	)		-		(2,000,000	)
Warrants exercised – cash		(435,000	)		-		(435,000	)
Warrants exercised – cashless		(613,138	)		-		(613,138	)
September 30, 2023		10,751,862			10,280,000		21,031,862

Property and Equipment, net (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Successor [Member]
Depreciation and amortization expense		$ 24		$ 52
Predecessor [Member]
Depreciation and amortization expense	$ 19		$ 24		$ 90