0001829126-24-007426 | 10-Q | XBRL Viewer

Accrued Liabilities

9 Months Ended

Sep. 30, 2024

NOTE 8 – Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

Schedule of accrued liabilities
	September 30, 2024		December 31, 2023
Accrued expenses and reimbursements	$	1,019	$	858
Accrued compensation and benefits		311		387
Accrued bonus and commissions		166		108
Accrued insurance premium and interest		90		-
Income tax payables		59		74
Accrued transaction costs		13		13
Accrued sales and other indirect taxes payable		8		12
Accrued liabilities	$	1,666	$	1,452

Financed Director & Officers Insurance

The Company entered into a Directors & Officers (“D&O”) insurance agreement with Oakwood D&O Insurance, effective on March 14, 2024. The agreement states that the Company will pay a total of $310 thousand in premiums at an annual percentage rate of 9.5%. The first of ten monthly separate installment payments begin on April 14, 2024. The Company paid a down payment on the policy of $85 thousand. As of September 30, 2024 (Successor), the Company currently owes $91 thousand on the D&O insurance policy.

Commitments and Contingencies	9 Months Ended
Sep. 30, 2024
Commitments and Contingencies
Commitments and Contingencies	NOTE 17 – Commitments and Contingencies *Risks and Uncertainties* Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a Business Combination and the value of the Company’s securities. Management continues to evaluate the impact of these types of risks and has concluded that while it is reasonably possible that these risks and uncertainties could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. *Litigation* Certain conditions may exist as of the date the condensed consolidated 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.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

NOTE 17 – Commitments and Contingencies

Risks and Uncertainties

Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a Business Combination and the value of the Company’s securities.

Management continues to evaluate the impact of these types of risks and has concluded that while it is reasonably possible that these risks and uncertainties could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Litigation

Certain conditions may exist as of the date the condensed consolidated 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.

Accrued Liabilities (Details Narrative) - Successor [Member] - USD ($) $ in Thousands	Apr. 14, 2024	Sep. 30, 2024
Down Payment	$ 85
Due to related parties		$ 91

Stock Option Plan and Stock-Based Compensation (Details 2) - Successor [Member]	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Risk-free interest rate		3.67%
Expected life of option grants		5 years 9 months
Expected volatility of underlying stock	61.65%	61.65%
Dividends assumption
Minimum [Member]
Risk-free interest rate	3.58%
Expected life of option grants	6 years
Maximum [Member]
Risk-free interest rate	4.33%
Expected life of option grants	6 years 3 months

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	9 Months Ended
	Sep. 30, 2023	Mar. 14, 2023	Sep. 30, 2024
Successor [Member]
Operating activities
Net loss	$ (10,531)		$ (15,430)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	52		64
Amortization of intangible assets	1,510		2,049
Amortization of right-of-use asset	200		297
Deferred income taxes	(2,957)		(513)
Provision for credit loss expense	(11)
Amortization of debt discount and deferred financing cost			678
Accrued interest expense on promissory note and convertible debt			340
Accrued monitoring fee on promissory note			408
Stock-based compensation expense	857		2,345
Loss on debt extinguishment			535
(Gain) loss on foreign currency transactions	20		48
Change in fair value of derivative liability	5,134		3,575
Change in operating assets and liabilities:
Accounts receivable and other receivables	1,400		1,696
Prepaid expenses and other current assets	339		111
Other assets	(37)
Accounts payable	494		(200)
Accrued liabilities	(4,666)		214
Operating lease liabilities	(202)		(310)
Deferred revenue	(539)		(536)
Net cash used in operating activities	(8,937)		(4,629)
Investing activities
Purchases of property and equipment	(47)		(30)
Investment in capitalized software
Cash acquired in connection with Business Combination	10,003
Net cash provided by (used in) investing activities	9,956		(30)
Financing activities
Proceeds from issuance of convertible debt, net of issuance costs			3,480
Net equity investment from parent
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		3,480
Effect of exchange rate changes on cash and cash equivalents	(17)		(14)
Net increase (decrease) in cash and cash equivalents	5,676		(1,193)
Cash and cash equivalents, beginning of period	1,503		6,275
Cash and cash equivalents, end of period	7,179		5,082
Supplemental disclosures of cash flow information
Cash paid for taxes	1		25
Cash paid for interest	12		6
Supplemental schedule of noncash investing and financing activities
Right-of-use asset obtained in exchange for lease liability	230		393
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	671		225
Warrant exercise - cashless	549
Warrant exchange to Class A common stock	4,914
Common shares issued for extinguishment of debt			$ 1,935
Predecessor [Member]
Operating activities
Net loss		$ (4,380)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		228
Amortization of intangible assets		806
Amortization of right-of-use asset		40
Deferred income taxes
Amortization of debt discount and deferred financing cost
Accrued interest expense on promissory note and convertible debt
Accrued monitoring fee on promissory note
Stock-based compensation expense		158
Loss on debt extinguishment
(Gain) loss on foreign currency transactions		(32)
Change in fair value of derivative liability
Change in operating assets and liabilities:
Accounts receivable and other receivables		(857)
Prepaid expenses and other current assets		(20)
Other assets
Accounts payable		(796)
Accrued liabilities		(787)
Operating lease liabilities		(38)
Deferred revenue		534
Net cash used in operating activities		(5,144)
Investing activities
Purchases of property and equipment		(9)
Investment in capitalized software		(45)
Cash acquired in connection with Business Combination
Net cash provided by (used in) investing activities		(54)
Financing activities
Proceeds from issuance of convertible debt, net of issuance costs
Net equity investment from parent		9,089
Repayment of CXApp acquisition liability		(197)
Repayment of related party promissory note
Net cash provided by financing activities		8,892
Effect of exchange rate changes on cash and cash equivalents		1
Net increase (decrease) in cash and cash equivalents		3,695
Cash and cash equivalents, beginning of period		6,308
Cash and cash equivalents, end of period		10,003
Supplemental disclosures of cash flow information
Cash paid for taxes
Cash paid for interest
Supplemental schedule of noncash investing and financing activities
Right-of-use asset obtained in exchange for lease liability
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
Warrant exercise - cashless
Warrant exchange to Class A common stock
Common shares issued for extinguishment of debt

Credit Risk and Concentrations

9 Months Ended

Sep. 30, 2024

Risks and Uncertainties [Abstract]

Credit Risk and Concentrations

NOTE 14 – 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 Philippine subsidiaries. Cash in foreign financial institutions as of September 30, 2024 (Successor) was $31 thousand. Cash in foreign financial institutions as of December 31, 2023 (Successor) was $300 thousand.

The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash for the nine months ended September 30, 2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (Predecessor). However, any loss incurred or lack of access to such funds could have a significant impact on the Company’s financial condition, results of operations, and cash flows.

Promissory Note (Details) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Principal amount	$ 3,885	$ 3,885
Less: Unamortized original issue discount	181	834
Unamortized debt issuance cost	3	14
Note payable before accrued interest payable	3,701	3,037
Add: Accrued interest payable	311	16
Accrued monitoring fee	408
Note payable gross	4,420	3,053
Less: Extinguishment	1,400
Note payable	$ 3,020	$ 3,053

Promissory Note (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Promissory note

Promissory note
		September 30, 2024		December 31, 2023
Principal amount		$	3,885	$	3,885
Less:	Unamortized original issue discount		181		834
	Unamortized debt issuance cost		3		14
			3,701		3,037
Add:	Interest		311		16
	Accrued monitoring fee		408		-
			4,420		3,053
Less:	Extinguishment		1,400		-
		$	3,020	$	3,053

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, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Successor [Member]
Revenues by geographic area		$ 1,897	$ 1,770	$ 4,027	$ 5,481
Operating income (loss) by geographic area		(3,326)	(4,229)	(8,399)	(10,563)
Net income (loss) by geographic area		(5,004)	1,441	(10,531)	(15,430)
Identifiable assets by geographic area		31,575			31,575	$ 36,581
Long lived assets by geographic area		16,740			16,740	18,737
Goodwill by geographic area		8,737			8,737	8,737
Successor [Member] \| UNITED STATES
Revenues by geographic area		1,804	1,504	3,326	5,140
Operating income (loss) by geographic area		(2,634)	(3,470)	(6,882)	(8,714)
Net income (loss) by geographic area		(4,386)	2,224	(8,976)	(13,568)
Identifiable assets by geographic area		30,752			30,752	38,143
Long lived assets by geographic area		16,450			16,450	18,269
Goodwill by geographic area		8,737			8,737	8,737
Successor [Member] \| CANADA
Revenues by geographic area		93	266	701	341
Operating income (loss) by geographic area		(467)	(769)	(1,693)	(1,650)
Net income (loss) by geographic area		(388)	(795)	(1,714)	(1,658)
Identifiable assets by geographic area		337			337	627
Long lived assets by geographic area		217			217	320
Goodwill by geographic area
Successor [Member] \| PHILIPPINES
Revenues by geographic area		236	228	643	709
Operating income (loss) by geographic area		(225)	10	176	(199)
Net income (loss) by geographic area		(230)	12	180	(204)
Identifiable assets by geographic area		486			486	434
Long lived assets by geographic area		73			73	148
Goodwill by geographic area
Successor [Member] \| Eliminations [Member]
Revenues by geographic area		(236)	(228)	(643)	(709)
Operating income (loss) by geographic area
Net income (loss) by geographic area				$ (21)
Identifiable assets by geographic area						(2,623)
Long lived assets by geographic area
Goodwill by geographic area
Predecessor [Member]
Revenues by geographic area	$ 1,620
Operating income (loss) by geographic area	(4,381)
Net income (loss) by geographic area	(4,380)
Predecessor [Member] \| UNITED STATES
Revenues by geographic area	1,395
Operating income (loss) by geographic area	(3,479)
Net income (loss) by geographic area	(3,342)
Predecessor [Member] \| CANADA
Revenues by geographic area	285
Operating income (loss) by geographic area	(905)
Net income (loss) by geographic area	(1,041)
Predecessor [Member] \| PHILIPPINES
Revenues by geographic area	160
Operating income (loss) by geographic area	3
Net income (loss) by geographic area	3
Predecessor [Member] \| Eliminations [Member]
Revenues by geographic area	(220)
Operating income (loss) by geographic area
Net income (loss) by geographic area

Convertible Debt (Details) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	May 22, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Principal amount	$ 3,885		$ 3,885
Less: Unamortized original issue discount	181		834
Unamortized debt issuance cost	3		14
Add: Accrued interest payable	311		$ 16
Convertible Debt [Member]
Debt Instrument [Line Items]
Principal amount	3,675	$ 2,625
Less: Unamortized original issue discount	161
Unamortized debt issuance cost	18
Convertible Debt before accrued interest payable	3,496
Add: Accrued interest payable	43
Convertible Debt	$ 3,539

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Stock Option Plan and Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

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

On February 6, 2024, a total of 705,000 stock options to purchase the Company’s common stock were granted to employees and consultants of the Company. These options vest over a 4-year period. The options have a life of 10 years and an exercise price of $1.20 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 $0.74 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 $1.21 per share.

In June 2024, the Company received a notice for a net exercise of 70,350 options to purchase shares of common stock resulting in the issuance of 12,570 shares of the Company’s Class A Common Stock with par value $0.0001 per share. In accordance with the terms of the Incentive Plan, 51,012 shares were withheld by the Company to cover the exercise price and 6,768 shares were withheld in satisfaction of the taxes required to be paid in connection with the exercise.

On August 26, 2024, the Board approved the award of 230,000 options to purchase common stock pursuant to the 2023 Equity Incentive Plan to Joy Mbanugo, the Chief Financial Officer of the Company. The option has an exercise price of $2.40 per share. The options expire on August 26, 2034. The stock options were valued using the Black-Scholes option valuation model and the fair value of the awards granted was determined to be $1.44 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 $2.40 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 January 1, 2024		984,900		$	1.53		9.25	$	0.90
Granted		935,000		$	1.50		9.49	$	0.91
Exercised		(70,350	)	$	1.53
Forfeited		-		$	-
Options outstanding at September 30, 2024		1,849,550		$	1.51		9.00	$	0.91
Options exercisable at September 30, 2024		422,100		$	1.53

Non-cash stock-based compensation expenses related to stock option were recorded in the financial statements as summarized below:

	Successor								Predecessor
	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023
Research and development	$	5	$	-	$	12	$	-	$	-
Sales and marketing		16		-		64		-		-
General and administrative		89		56		356		113		158
Total non-cash stock compensation	$	110	$	56	$	432	$	113	$	158

As of September 30, 2024 (Successor), the remaining unrecognized stock compensation expense totaled approximately $564 thousand. This amount will be recognized as expense over the weighted average remaining term of 3.02 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 for the nine months ended September 30, 2024 (Successor) and the period from March 15, 2023 to December 31, 2023 (Successor) were as follows:

Schedule of assumptions used	2024	2023
Risk-free interest rate	3.58% – 4.33%	3.67%
Expected life of option grants	6.00 – 6.25 years	5.75 years
Expected volatility of underlying stock	61.65%	61.65%
Dividends assumption	$-	$-

Restricted Stock Units

On January 2024, a total of 47,000 restricted stock units of the Company’s common stock were granted to employees of the Company under the Incentive Plan at various dates.

On August 29, 2024, a total of 473,935 restricted stock units of the Company’s common stock were granted to directors of the Company under the 2023 Equity Incentive Plan.

The fair value of the common stock as of the various grant dates was determined to be $1.25 to $2.11 per restricted stock unit, for a weighted average fair value of $2.04 per restricted stock unit. There was no other activity related to restricted stock units for the nine months ended September 30, 2024.

The following summarizes our RSUs transaction activity for nine months ended September 30, 2024:

Schedule of RSUs transaction activity
	Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024		486,165		$	7.80
Granted		520,935		$	2.04
Vested		(308,165	)	$	7.52
Forfeited		-
Outstanding at September 30, 2024		698,935

	Shares			Weighted Average Grant Date Fair Value
Outstanding at March 15, 2023		-		$
Granted		526,165		$	7.80
Forfeited		(40,000	)	$	7.13
Outstanding at December 31, 2023		486,165

The total fair value of RSUs vested during the three months ended September 30, 2024 was $2,318 thousand.

Non-cash stock-based compensation expenses related to restricted stock units recorded in the financial statements is summarized below:


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023
Research and development	$	100	$	-	$	504	$	-
Sales and marketing		51		-		257		-
General and administrative		648		597		1,152		638
Total non-cash stock compensation	$	799	$	597	$	1,913	$	638

As of September 30, 2024, the Company has approximately $1,376 thousand of unrecognized restricted stock unit compensation to be expensed over a weighted average period of 1.25 years.

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
	May 22, 2024	Sep. 30, 2023	Mar. 14, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Equity line financing agreement description	Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued two unsecured convertible Pre-Paid Purchases to Lender. The convertible Pre-Paid Purchase #1 has the original principal amount of $2,625 thousand. On June 3, 2024, the Company received net proceeds of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender’s transaction cost of $20 thousand. On September 30, 2024, the Company received net proceeds of $1,000 thousand, reflecting original issue discount of $50 thousand, pursuant to the convertible Pre-Paid Purchase #2 dated on the same day.
Successor [Member]
Property, Plant and Equipment [Line Items]
Working capital				$ 7,404			$ 7,404
Cash and cash equivalents				5,082			5,082	$ 6,275
Net income				5,004	$ (1,441)	$ 10,531	15,430
Cash for operating activities		$ 8,937					$ 4,629
Cash and cash equivalents, description							As of September 30, 2024 (Successor), the Company had cash equivalents of approximately $4,688 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, 2023 (Successor), the Company had approximately $5,584 thousand in cash equivalents.
Allowance for credit losses				0			$ 0	2
Impairment charge on goodwill				0	0	0	0
Foreign currency net transaction gain				42	31	8	34
Deferred revenue			$ 2,534	2,338			2,338	$ 2,878
Revenue recognized						893	2,359
Changes in estimated fair value of warrants				1,052	5,220	5,134	3,575
Change in FV of derivative instruments				1,052	5,220	5,134	3,575
Impairment charges of long-lived assets				$ 0	$ 0	$ 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]
Net income			4,380
Cash for operating activities			5,144
Impairment charge on goodwill			0
Foreign currency net transaction gain			28
Revenue recognized			865
Changes in estimated fair value of warrants			0
Change in FV of derivative instruments			0
Impairment charges of long-lived assets			$ 0

Convertible Debt (Details Narrative) - Successor [Member] - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	May 22, 2024	Dec. 31, 2023
Principal amount	$ 3,885		$ 3,885
Convertible Debt [Member]
Principal amount	3,675	$ 2,625
Consideration amount	1,000	2,480
Original issue discount	50	125
Transaction cost		$ 20
Amortization of debt discount	16
Convertible Debt [Member] \| Streeterville Capital L L C [Member]
Principal amount	$ 1,050

Deferred Revenue

9 Months Ended

Sep. 30, 2024

Deferred Revenue

Deferred Revenue

NOTE 7 – Deferred Revenue

Deferred revenue consisted of the following (in thousands):

Schedule of deferred revenue
	License Agreements			Professional Service Agreements			Hardware			Total
Deferred Revenue – January 1, 2024	$	2,404		$	474		$	-		$	2,878
Revenue recognized		(4,752	)		(594	)		(135	)		(5,481	)
Revenue deferred		4,459			323			159			4,941
Deferred Revenue – September 30, 2024	$	2,111		$	203		$	24		$	2,338

	License Agreements			Professional Service Agreements			Hardware		Total
Deferred Revenue – March 15, 2023	$	2,148		$	386		$	-	$	2,534
Revenue recognized		(4,560	)		(1,186	)		-		(5,746	)
Revenue deferred		4,816			1,274			-		6,090
Deferred Revenue – December 31, 2023	$	2,404		$	474		$	-	$	2,878

Deferred revenues were approximately $2,338 thousand and $2,878 thousand at September 30, 2024 (Successor) and December 31, 2023 (Successor), respectively.

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

Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued expenses and reimbursements	$ 1,019	$ 858
Accrued compensation and benefits	311	387
Accrued bonus and commissions	166	108
Accrued insurance premium and interest	90
Income tax payables	59	74
Accrued transaction costs	13	13
Accrued sales and other indirect taxes payable	8	12
Accrued liabilities	$ 1,666	$ 1,452

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	September 30, 2024			December 31, 2023
Computer and office equipment	$	199		$	179
Furniture and fixtures		13			12
Leasehold improvements		6			6
Software		1			1
Total		219			198
Less: accumulated depreciation and amortization		(139	)		(83	)
Total Property and Equipment, net	$	80		$	115

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of antidilutive shares

Schedule of antidilutive shares
(in thousands)	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023
Stock options		1,850		985		1,602		985
Restricted stock units		699		821		514		821
Warrants		21,032		21,032		21,032		21,032
Total		23,581		22,838		23,148		22,838

Schedule of changes in fair value of the liabilities


Warrant liability – January 1, 2024	$	1,683
Change in FV of derivative instruments		1,472
Warrant liability – March 31, 2024		3,155
Change in FV of derivative instruments		1,051
Warrant liability – June 30, 2024		4,206
Change in FV of derivative instruments		1,052
Warrant liability – September 30, 2024	$	5,258

Warrant liability – March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Warrant liability – March 31, 2023		963
Change in FV of derivative instruments		12,040
Warrant liability – June 30, 2023		13,003
Change in FV of derivative instruments		(5,220	)
FV of Warrants cash exercised and exchanged for Class A common stock (see Note 10 – Warrants)		(1,237	)
Loss on warrant extinguishment		(3,894	)
FV of Warrants cashless exercised for Class A common stock (see Note 10 – Warrants)		(549	)
Warrant liability – September 30, 2023	$	2,103

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – Summary of Significant Accounting Policies

Liquidity

As of September 30, 2024 (Successor), the Company had a working capital deficiency of approximately $7,404 thousand and cash and cash equivalents of approximately $5,082 thousand. For the three and nine months ended September 30, 2024 (Successor), the Company incurred net losses of approximately $5,004 thousand and $15,430 thousand, respectively. During the nine months ended September 30, 2024 (Successor), the Company used approximately $4,629 thousand of cash for operating activities.

The Company acknowledges that there are challenges in generating sufficient revenue to fully support its operations and achieving long-term profitability. The Company’s recurring losses and cash usage in operations have raised concerns about its ability to continue as a going concern. Given the current liquidity position, management has taken several strategic measures to improve operational efficiency and strengthen the financial outlook. These initiatives include streamlining operations through workforce reductions, renegotiating contractual agreements, adjusting professional service fees, and optimizing expenses such as software licenses and contractor-related costs. Additionally, the Company has made progress in forming strategic partnerships such as the addition of its platform to key marketplaces and has successfully negotiated cost reductions in areas such as insurance premiums. Management believes that these actions will contribute to improved operational efficiency and long-term financial stability. However with the current liquidity position, management has implemented the following strategic measures to improve operational efficiency and strengthen the financial outlook:

●

In January 2024, the Company streamlined its operations to conserve cash resources by laying off approximately 20% of the global employee headcount;

●

In March 2024, the Company successfully negotiated for a 50% reduction in D&O insurance premium; and

●

In August 2024, Google added the CXAI application platform to the Google Marketplace and signed a go-to-market partnership agreement. Google Cloud’s sales and marketing teams will work with CXAI on targeting key clients and providing them the best workplace platform experience. With this, the Management believes that this partnership would help boost the Company’s product capability revenue.

These steps, along with anticipated revenue growth from organic sales and other partnerships, provide the Company with the necessary resources to support operations mitigating liquidity risk.

On May 22, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued two unsecured convertible Pre-Paid Purchases to Lender. The convertible Pre-Paid Purchase #1 has the original principal amount of $2,625 thousand. On June 3, 2024, the Company received net proceeds of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender’s transaction cost of $20 thousand. On September 30, 2024, the Company received net proceeds of $1,000 thousand, reflecting original issue discount of $50 thousand, pursuant to the convertible Pre-Paid Purchase #2 dated on the same day.

Management believes that the recent funding initiatives provide sufficient capital to address any potential uncertainties regarding the Company’s ability to continue as a going concern. This funding ensures that the Company is well-positioned to meet its obligations and continue operations for at least the next twelve months from the issuance date of these condensed consolidated financial statements. If additional funding is required, the Management is confident in its ability to secure financing, as necessary. The Company has access to multiple funding sources and expects these to be sufficient for its strategic needs.

Looking beyond this period, the Company is focused on executing its business plan and exploring additional strategic initiatives to enhance liquidity and support long-term growth. While the ability to continue as a going concern depends on various factors, including the successful implementation of these plans and market conditions, management remains optimistic about the Company’s long-term prospects and its capacity to adapt and thrive in a dynamic market environment.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, reflecting the Company’s expectation to realize its assets and meet its liabilities in the ordinary course of business. No adjustments have been made to the financial statements regarding the recoverability or classification of recorded asset amounts or liabilities, as the Company believes it will effectively manage the uncertainties described above.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, since they are interim statements, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 (Successor) are not necessarily indicative of the results that may be expected for other quarters or the year ending December 31, 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements as of that date. For more complete financial information, these condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on May 23, 2024.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. 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, and certificates of deposit with maturities of three months or less when purchased. As of September 30, 2024 (Successor), the Company had cash equivalents of approximately $4,688 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, 2023 (Successor), the Company had approximately $5,584 thousand in 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 approximately $0 thousand and $2 thousand as of September 30, 2024 (Successor) and December 31, 2023 (Successor), respectively.

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 useful life of the asset or the initial lease term, whichever is shorter. 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, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized.

Intangible Assets, net

Intangible assets primarily consist of developed technology, customer lists/relationships, 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 and nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (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 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, including public company method, guideline transaction method, and market price method.

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 and nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor). See Note 6 for impairment that occurred during the period ended December 31, 2023.

Leases and Right-of-Use Assets and Liabilities

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 its 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 its 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 Loss and Foreign Currency Translation

The Company reports comprehensive loss and its components in its 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 other income (expenses) in the 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 gain or loss were approximately $42 thousand loss, $34 thousand gain, $31 thousand gain, $8 thousand loss, and $28 thousand loss for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor), respectively.

Convertible Debt

The Company issued convertible debt in May 2024, and evaluated to determine whether they contain features that qualify as embedded derivatives in accordance with ASC 815. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. In accounting for the issuance of the convertible debt, the Company treats the instrument wholly as a liability, in accordance with ASC 470, as the conversion features do not require bifurcation as a derivative in accordance with ASC 815 and the convertible debt was not issued at a substantial premium.

Costs directly associated with the borrowing have been capitalized and are netted against the corresponding debt liabilities in the Company’s Condensed Consolidated Balance Sheets at issuance and amortized over the contractual term of the convertible debt instrument using the effective interest rate method.

Debt Issuance Costs

The costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. The amendments to FASB ASC 835-30 require that debt issuance costs be presented in the Condensed Consolidated Balance Sheets as a direct deduction from the carrying amount of long-term debt, consistent with debt discounts or premiums.

Debt Extinguishment

The note exchanges are accounted for under ASC 470-50 on Modifications and Extinguishments. This standard requires the recognition of a gain or loss on the difference between the reacquisition price and the net carrying amount of the extinguished debt.

Revenue Recognition

The Company recognizes revenue, in accordance with ASC 606, when control of the promised products or services is transferred 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.

The Company recognizes revenue in accordance with ASC 606 – Revenue from Contracts with Customers. The standard’s core principle is that an entity will recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new standard is a principles-based standard intended to better match the accounting for the transaction with the economics of the transaction. This requires entities to use more judgment and make more estimates than under previous revenue standards.

The standard introduces a five-step model for revenue recognition that replaces the four criteria for revenue recognition under previous GAAP. The five steps are shown below:

Identify the contract with a customer;

Identify the performance obligations in the contract;

Determine the transaction price;

Allocate the transaction price to performance obligations; and

Recognize revenue when (or as) the entity satisfies a performance obligation

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 provides integration and software customization professional services to its customers.

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 and nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor), the Company did not incur any such losses. These amounts are based on known and estimated factors.

Hardware Revenue Recognition

For sales of hardware, the Company’s performance obligation is fulfilled when the products are shipped to the customer, transferring title and ownership risks. Deliveries occur via drop-shipment by a third-party vendor and the Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. The Company negotiates sale prices, pays suppliers directly, manages credit risk, and ensures product acceptability, acting as the principal in the transaction and recording revenue on a gross basis. Customers typically pay within 30 to 60 days of invoice receipt. The Company has elected the practical expedient to expense the costs of obtaining a contract when they are incurred because the amortization period of the asset that otherwise would have been recognized is less than a year.

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 $2,338 thousand and $2,878 thousand as of September 30, 2024 (Successor) and December 31, 2023 (Successor), respectively, related to customer invoices rendered in advance for software licenses, professional services, and hardware provided by the Company’s technical staff.

The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with hardware, 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 $2,359 thousand, $893 thousand, and $865 thousand, that was included in the contract liability balance at the beginning of the period, for the nine months ended September 30, 2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (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.

Research and Development

Research and development (“R&D”) costs are expensed when incurred. R&D expenses consist primarily of personnel and related headcount costs, costs of professional services associated with the ongoing development of the Company’s technology, and allocated overhead.

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”), and Chief Financial Officer (“CFO”), acting as the Chief Operating Decision Makers (“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 non-employee 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 non-employee 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 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 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 amounting to $1,052 thousand loss, $3,575 thousand loss, $5,220 thousand gain, $5,134 thousand loss, and $0 thousand for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor), respectively. 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 and nine months ended September 30, 2024 (Successor), basic and dilutive net 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. For the period from March 15, 2023 to September 30, 2023 (Successor), the common shares issuable were excluded from the calculation because (i) the warrants were below their exercise price and (ii) the stock options were not vested.

The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the three and nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), and for the period from March 15, 2023 to September 30, 2023 (Successor).

Schedule of antidilutive shares
(in thousands)	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023
Stock options		1,850		985		1,602		985
Restricted stock units		699		821		514		821
Warrants		21,032		21,032		21,032		21,032
Total		23,581		22,838		23,148		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 months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor), the Company recognized, in the consolidated statements of operations and comprehensive income, unrealized loss of $1,052 thousand, unrealized loss $3,575 thousand, unrealized gain $5,220 thousand, $5,134 thousand unrealized loss, and $0 thousand, respectively. 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:


Warrant liability – January 1, 2024	$	1,683
Change in FV of derivative instruments		1,472
Warrant liability – March 31, 2024		3,155
Change in FV of derivative instruments		1,051
Warrant liability – June 30, 2024		4,206
Change in FV of derivative instruments		1,052
Warrant liability – September 30, 2024	$	5,258

Warrant liability – March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Warrant liability – March 31, 2023		963
Change in FV of derivative instruments		12,040
Warrant liability – June 30, 2023		13,003
Change in FV of derivative instruments		(5,220	)
FV of Warrants cash exercised and exchanged for Class A common stock (see Note 10 – Warrants)		(1,237	)
Loss on warrant extinguishment		(3,894	)
FV of Warrants cashless exercised for Class A common stock (see Note 10 – Warrants)		(549	)
Warrant liability – September 30, 2023	$	2,103

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, unbilled and other receivables and accounts payable. The Company determines the estimated fair value of such financial instruments presented in the financial statements is equal to its carrying value due to their short-term nature.

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 and nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor).

Recently Issued Accounting Standards Not Yet Adopted

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 for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently assessing the potential impact of ASU 2023-06 and does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) that enhances transparency into income tax disclosures. Requires annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. Eliminates certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We are currently evaluating the impact of this standard on our condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01, “Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards,” which clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic 718, or is not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 adds an example with multiple fact patterns and illustrates how an entity evaluates common terms and characteristics of profits interests and similar awards to reach a conclusion about whether an award meets the conditions in Topic 718. It also amends certain language in the “Scope” and “Scope Exceptions” sections of Topic 718 to improve its clarity and operability without changing the guidance. ASU 2024-01 is effective for the Company for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Entities may apply the guidance either retrospectively to all periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. We are currently evaluating the impact of this standard on our condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02 “Codification Improvements—Amendments to Remove References to the Concept Statements”, which amends the Codification to remove references to various FASB Concepts Statements and impacts a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and are not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Entities may apply the guidance either retrospectively to the beginning of the earliest comparative period presented or prospectively to all new or modified transactions recognized on or after the date of adoption. We are currently evaluating the impact of this standard on our condensed consolidated financial statements.

Business Combination (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended	10 Months Ended
	Mar. 14, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Measurement period adjustment description					The Company continued 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 through March 14, 2024, when the purchase price allocation was finalized.
Predecessor [Member]
Business Acquisition [Line Items]
Share price	$ 9.94
Business combination goodwill	$ 44,200
Acquisition-related costs
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		$ 543

Stock Option Plan and Stock-Based Compensation (Details 3) - $ / shares	9 Months Ended	10 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2023
Number of options outstanding, beginning	984,900
Number of options, Granted	935,000
Weighted-average fair value at grant date, granted	$ 0.91		$ 0.90
Number of options outstanding, ending	1,849,550	984,900	984,900
Successor [Member] \| Restricted Stock Units (RSUs) [Member]
Number of options outstanding, beginning	486,165
Weighted-average fair value at grant date, beginning	$ 7.80
Number of options, Granted	520,935	526,165
Weighted-average fair value at grant date, granted	$ 2.04	$ 7.80
Number of options, Vested	(308,165)
Weighted-average fair value at grant date, Vested	$ 7.52
Number of options, Forfeited		(40,000)
Weighted-average fair value at grant date, forfeited		$ 7.13
Number of options outstanding, ending	698,935	486,165	486,165

Stock Option Plan and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

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 January 1, 2024		984,900		$	1.53		9.25	$	0.90
Granted		935,000		$	1.50		9.49	$	0.91
Exercised		(70,350	)	$	1.53
Forfeited		-		$	-
Options outstanding at September 30, 2024		1,849,550		$	1.51		9.00	$	0.91
Options exercisable at September 30, 2024		422,100		$	1.53

Schedule of non-cash stock-based compensation expenses

	Successor								Predecessor
	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023
Research and development	$	5	$	-	$	12	$	-	$	-
Sales and marketing		16		-		64		-		-
General and administrative		89		56		356		113		158
Total non-cash stock compensation	$	110	$	56	$	432	$	113	$	158

Schedule of assumptions used

Schedule of assumptions used	2024	2023
Risk-free interest rate	3.58% – 4.33%	3.67%
Expected life of option grants	6.00 – 6.25 years	5.75 years
Expected volatility of underlying stock	61.65%	61.65%
Dividends assumption	$-	$-

Schedule of RSUs transaction activity

Schedule of RSUs transaction activity
	Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2024		486,165		$	7.80
Granted		520,935		$	2.04
Vested		(308,165	)	$	7.52
Forfeited		-
Outstanding at September 30, 2024		698,935

	Shares			Weighted Average Grant Date Fair Value
Outstanding at March 15, 2023		-		$
Granted		526,165		$	7.80
Forfeited		(40,000	)	$	7.13
Outstanding at December 31, 2023		486,165

Schedule of non-cash stock-based compensation expenses related to restricted stock units


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023
Research and development	$	100	$	-	$	504	$	-
Sales and marketing		51		-		257		-
General and administrative		648		597		1,152		638
Total non-cash stock compensation	$	799	$	597	$	1,913	$	638

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
Cash and cash equivalents	10,003
Accounts receivable	2,226
Notes and other receivables	209
Prepaid assets and other current assets	408
Operating lease right of use asset	557
Property and equipment, net	133
Other assets	42
Total assets acquired	33,876
Accounts payable	443
Accrued liabilities	969
Deferred revenues	2,534
Operating lease obligation, current	194
Operating lease obligation, noncurrent	384
Deferred tax liability	4,217
Total liabilities assumed	8,741
Goodwill	$ 44,793
Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	10 years
Intangible assets	$ 8,697
Patents [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	10 years
Intangible assets	$ 2,703
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	5 years
Intangible assets	$ 5,604
Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	7 years
Intangible assets	$ 3,294
Property Subject to Operating Lease [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	3 years
Property, Plant and Equipment [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life	3 years

Business Combination (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [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		408
Operating lease right-of-use asset		557	3 years
Property and equipment, net		133	3 years
Other assets		42
Developed technology		8,697	10 years
Patents		2,703	10 years
Customer relationships		5,604	5 years
Trade names and trademarks		3,294	7 years
Total assets acquired	$	33,876

Liabilities assumed:
Accounts payable	$	443
Accrued liabilities		969
Deferred revenues		2,534
Operating lease obligation, current		194
Operating lease obligation, noncurrent		384
Deferred tax liability		4,217
Total liabilities assumed		8,741
Goodwill	$	44,793

Schedule of proforma financial information


	For the Nine Months Ended September 30, 2023
Revenues	$	5,647
Net income (loss)		(19,197	)

Property and Equipment, net

9 Months Ended

Sep. 30, 2024

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
	September 30, 2024			December 31, 2023
Computer and office equipment	$	199		$	179
Furniture and fixtures		13			12
Leasehold improvements		6			6
Software		1			1
Total		219			198
Less: accumulated depreciation and amortization		(139	)		(83	)
Total Property and Equipment, net	$	80		$	115

Depreciation and amortization expense were approximately $20 thousand, $64 thousand, $24 thousand, $52 thousand, and $19 thousand, for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor), respectively.

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Schedule of intangible assets
	September 30, 2024								December 31, 2023
	Weighted Average Remaining Useful Life (Years)	Gross Amount		Accumulated Amortization			Net Carrying Amount		Gross Amount		Accumulated Amortization			Net Carrying Amount
Trade Name/Trademarks	5.4	$	3,294	$	(725	)	$	2,569	$	3,294	$	(373	)	$	2,921
Customer Relationships	3.4		5,604		(1,728	)		3,876		5,604		(887	)		4,717
Developed Technology	8.4		8,697		(1,341	)		7,356		8,697		(688	)		8,009
Patents and Intellectual Property	8.4		2,703		(417	)		2,286		2,703		(214	)		2,489
Totals		$	20,298	$	(4,211	)	$	16,087	$	20,298	$	(2,162	)	$	18,136

Schedule of amortization expense on intangible assets


For the Years Ending December 31,	Amount
2024 (remainder of year)	$	683
2025		2,731
2026		2,731
2027		2,731
2028		1,844
2029		1,611
Thereafter		3,756
Total	$	16,087

Goodwill and Intangible Assets (Details) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 20,298	$ 20,298
Accumulated Amortization	(4,211)	(2,162)
Net carrying amount	$ 16,087	18,136
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	5 years 4 months 24 days
Gross carrying amount	$ 3,294	3,294
Accumulated Amortization	(725)	(373)
Net carrying amount	$ 2,569	2,921
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	3 years 4 months 24 days
Gross carrying amount	$ 5,604	5,604
Accumulated Amortization	(1,728)	(887)
Net carrying amount	$ 3,876	4,717
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	8 years 4 months 24 days
Gross carrying amount	$ 8,697	8,697
Accumulated Amortization	(1,341)	(688)
Net carrying amount	$ 7,356	8,009
Patents And Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average useful life	8 years 4 months 24 days
Gross carrying amount	$ 2,703	2,703
Accumulated Amortization	(417)	(214)
Net carrying amount	$ 2,286	$ 2,489

Stock Option Plan and Stock-Based Compensation (Details 1) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2024
Successor [Member]
Stock-based compensation		$ 110	$ 56	$ 113	$ 432
Successor [Member] \| Research and Development Expense [Member]
Stock-based compensation		5			12
Successor [Member] \| Selling and Marketing Expense [Member]
Stock-based compensation		16			64
Successor [Member] \| General and Administrative Expense [Member]
Stock-based compensation		$ 89	$ 56	$ 113	$ 356
Predecessor [Member]
Stock-based compensation	$ 158
Predecessor [Member] \| Research and Development Expense [Member]
Stock-based compensation
Predecessor [Member] \| Selling and Marketing Expense [Member]
Stock-based compensation
Predecessor [Member] \| General and Administrative Expense [Member]
Stock-based compensation	$ 158

Foreign Operations

9 Months Ended

Sep. 30, 2024

Foreign Operations

Foreign Operations

NOTE 15 – 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			Philippines			Eliminations			Total
For the Three Months Ended September 30, 2024 (Successor):
Revenues by geographic area	$	1,804		$	93		$	236		$	(236	)	$	1,897
Operating loss by geographic area	$	(2,634	)	$	(467	)	$	(225	)	$	-		$	(3,326	)
Net loss by geographic area	$	(4,386	)	$	(388	)	$	(230	)	$	-		$	(5,004	)

For the Nine Months Ended September 30, 2024 (Successor):
Revenues by geographic area	$	5,140		$	341		$	709		$	(709	)	$	5,481
Operating loss by geographic area	$	(8,714	)	$	(1,650	)	$	(199	)	$	-		$	(10,563	)
Net loss by geographic area	$	(13,568	)	$	(1,658	)	$	(204	)	$	-		$	(15,430	)


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 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 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	)

As of September 30, 2024 (Successor)
Identifiable assets by geographic area	$	30,752		$	337		$	486	$	-		$	31,575
Long lived assets by geographic area	$	16,450		$	217		$	73	$	-		$	16,740
Goodwill by geographic area	$	8,737		$	-		$	-	$	-		$	8,737


As of December 31, 2023 (Successor)
Identifiable assets by geographic area	$	38,143		$	627		$	434	$	(2,623	)	$	36,581
Long lived assets by geographic area	$	18,269		$	320		$	148	$	-		$	18,737
Goodwill by geographic area	$	8,737		$	-		$	-	$	-		$	8,737

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Allowance for credit losses	$ 0	$ 2
Common Class A [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	16,065,257	15,254,389
Common stock, shares outstanding	16,065,257	15,254,389

Deferred Revenue (Details) - Successor [Member] - USD ($) $ in Thousands	9 Months Ended	10 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Deferred revenue, beginning balance	$ 2,878	$ 2,534
Revenue recognized	(5,481)	(5,746)
Revenue deferred	4,941	6,090
Deferred revenue, ending balance	2,338	2,878
Licensing Agreements [Member]
Deferred revenue, beginning balance	2,404	2,148
Revenue recognized	(4,752)	(4,560)
Revenue deferred	4,459	4,816
Deferred revenue, ending balance	2,111	2,404
Professional Service Agreements [Member]
Deferred revenue, beginning balance	474	386
Revenue recognized	(594)	(1,186)
Revenue deferred	323	1,274
Deferred revenue, ending balance	203	474
Hardware [Member]
Deferred revenue, beginning balance
Revenue recognized	(135)
Revenue deferred	159
Deferred revenue, ending balance	$ 24

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME LOSS (Unaudited) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Mar. 14, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024
Successor [Member]
Revenues		$ 1,897	$ 1,770	$ 4,027	$ 5,481
Cost of Revenues		372	358	925	1,052
Gross Profit		1,525	1,412	3,102	4,429
Operating Expenses
Research and development		1,552	1,568	3,447	4,882
Sales and marketing		689	1,068	2,419	2,677
General and administrative		1,927	2,278	3,931	5,384
Acquisition related costs			30	194
Amortization of intangible assets		683	697	1,510	2,049
Total Operating Expenses		4,851	5,641	11,501	14,992
Loss from Operations		(3,326)	(4,229)	(8,399)	(10,563)
Other Income (Expense)
Interest income (expense), net		(312)	57	61	(1,258)
Change in fair value of derivative liability		(1,052)	5,220	(5,134)	(3,575)
Loss on debt extinguishment		(535)			(535)
Other income (expense), net		74	(24)	(17)	(12)
Total Other Income (Expense)		(1,825)	5,253	(5,090)	(5,380)
Net Income (Loss), before tax		(5,151)	1,024	(13,489)	(15,943)
Income tax benefit		147	417	2,958	513
Net Income (Loss)		(5,004)	1,441	(10,531)	(15,430)
Unrealized foreign exchange gain (loss) from cumulative translation adjustments		(42)	31	(8)	34
Comprehensive Income (Loss)		$ (5,046)	$ 1,472	$ (10,539)	$ (15,396)
Successor [Member] \| Common Class A [Member]
Other Income (Expense)
Basic weighted average shares outstanding		15,699,685	15,407,007	9,675,000	10,818,000
Diluted weighted average shares outstanding		15,699,685	15,407,007	9,675,000	10,818,000
Basic net income (loss) per share		$ (0.32)		$ 1.09
Diluted net income (loss) per share		$ (0.32)	$ 1.00	$ 1.09	$ 0.13
Predecessor [Member]
Revenues	$ 1,620
Cost of Revenues	483
Gross Profit	1,137
Operating Expenses
Research and development	1,455
Sales and marketing	964
General and administrative	2,293
Acquisition related costs
Amortization of intangible assets	806
Total Operating Expenses	5,518
Loss from Operations	(4,381)
Other Income (Expense)
Interest income (expense), net	1
Change in fair value of derivative liability
Loss on debt extinguishment
Other income (expense), net
Total Other Income (Expense)	1
Net Income (Loss), before tax	(4,380)
Income tax benefit
Net Income (Loss)	(4,380)
Unrealized foreign exchange gain (loss) from cumulative translation adjustments	(28)
Comprehensive Income (Loss)	$ (4,408)

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, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024
Successor [Member]
Depreciation and amortization expense		$ 20	$ 24	$ 52	$ 64
Predecessor [Member]
Depreciation and amortization expense	$ 19

Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Deferred Revenue

Schedule of deferred revenue

Schedule of deferred revenue
	License Agreements			Professional Service Agreements			Hardware			Total
Deferred Revenue – January 1, 2024	$	2,404		$	474		$	-		$	2,878
Revenue recognized		(4,752	)		(594	)		(135	)		(5,481	)
Revenue deferred		4,459			323			159			4,941
Deferred Revenue – September 30, 2024	$	2,111		$	203		$	24		$	2,338

	License Agreements			Professional Service Agreements			Hardware		Total
Deferred Revenue – March 15, 2023	$	2,148		$	386		$	-	$	2,534
Revenue recognized		(4,560	)		(1,186	)		-		(5,746	)
Revenue deferred		4,816			1,274			-		6,090
Deferred Revenue – December 31, 2023	$	2,404		$	474		$	-	$	2,878

Stock Option Plan and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended			9 Months Ended	10 Months Ended	12 Months Ended
	Feb. 06, 2024	Jan. 03, 2024	Aug. 29, 2024	Aug. 26, 2024	Jun. 30, 2024	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2023	Mar. 10, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted						935,000
Fair value of common stock as of grant date						$ 0.91		$ 0.90
Weighted average remaining term						9 years 5 months 26 days
Successor [Member] \| Employee Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Employee stock options, description					Company received a notice for a net exercise of 70,350 options to purchase shares of common stock resulting in the issuance of 12,570 shares of the Company’s Class A Common Stock with par value $0.0001 per share. In accordance with the terms of the Incentive Plan, 51,012 shares were withheld by the Company to cover the exercise price and 6,768 shares were withheld in satisfaction of the taxes required to be paid in connection with the exercise.
Unrecognized stock compensation expense						$ 564
Weighted average remaining term						3 years 7 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	705,000
Vesting period	4 years
Option life	10 years
Weighted average fair value	$ 1.20
Fair value of common stock as of grant date	$ 1.21
Successor [Member] \| Employee Stock Options [Member] \| Chief Financial Officer [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted				230,000
Weighted average fair value				$ 1.44
Fair value of common stock as of grant date				$ 2.40
Successor [Member] \| Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted						520,935	526,165
Fair value of common stock as of grant date						$ 2.04	$ 7.80
Unrecognized stock compensation expense						$ 1,376
Weighted average remaining term						1 year 3 months
Fair value of RSUs vested						$ 2,318
Successor [Member] \| Restricted Stock Units (RSUs) [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Fair value of common stock as of grant date						$ 1.25
Successor [Member] \| Restricted Stock Units (RSUs) [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Fair value of common stock as of grant date						$ 2.11
Successor [Member] \| Restricted Stock Units (RSUs) [Member] \| Employees And Nonemployees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Restricted stock units stock granted		47,000
2023 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares available for issuance									2,110,500
2023 Equity Incentive Plan [Member] \| Successor [Member] \| Restricted Stock Units (RSUs) [Member] \| Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Restricted stock units stock granted			473,935

Foreign Operations (Tables)

9 Months Ended

Sep. 30, 2024

Foreign Operations

Schedule of financial data by geographic area


	United States			Canada			Philippines			Eliminations			Total
For the Three Months Ended September 30, 2024 (Successor):
Revenues by geographic area	$	1,804		$	93		$	236		$	(236	)	$	1,897
Operating loss by geographic area	$	(2,634	)	$	(467	)	$	(225	)	$	-		$	(3,326	)
Net loss by geographic area	$	(4,386	)	$	(388	)	$	(230	)	$	-		$	(5,004	)

For the Nine Months Ended September 30, 2024 (Successor):
Revenues by geographic area	$	5,140		$	341		$	709		$	(709	)	$	5,481
Operating loss by geographic area	$	(8,714	)	$	(1,650	)	$	(199	)	$	-		$	(10,563	)
Net loss by geographic area	$	(13,568	)	$	(1,658	)	$	(204	)	$	-		$	(15,430	)


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 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 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	)

As of September 30, 2024 (Successor)
Identifiable assets by geographic area	$	30,752		$	337		$	486	$	-		$	31,575
Long lived assets by geographic area	$	16,450		$	217		$	73	$	-		$	16,740
Goodwill by geographic area	$	8,737		$	-		$	-	$	-		$	8,737


As of December 31, 2023 (Successor)
Identifiable assets by geographic area	$	38,143		$	627		$	434	$	(2,623	)	$	36,581
Long lived assets by geographic area	$	18,269		$	320		$	148	$	-		$	18,737
Goodwill by geographic area	$	8,737		$	-		$	-	$	-		$	8,737

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, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Successor [Member]
Operating lease expenses		$ 109	$ 56	$ 121	$ 331
Weighted average remaining lease term		1 year 3 months 18 days			1 year 3 months 18 days	1 year 4 months 24 days
Weighted average discount rate used to determine operating lease		8.00%			8.00%	8.00%
Predecessor [Member]
Operating lease expenses	$ 57

Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2023	Sep. 30, 2024
Goodwill, Impairment Loss	$ 36,056
Successor [Member]
Goodwill	$ 8,737	$ 8,737

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 49
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-49

Reference 2: 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 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481372/852-10-55-10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(15))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482598/350-20-45-1

Reference 7: 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 8: 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 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(10)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 12, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
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	785-7171
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		16,460,126
Class A common stock, $0.0001 par value per share
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
Title of 12(b) Security	Warrants to purchase common stock
Trading Symbol	CXAIW
Security Exchange Name	NASDAQ

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 13 – Income Taxes

The Company recorded an income tax benefit of approximately $147 thousand, $513 thousand, $417 thousand, and $2,958 thousand for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), and for the period from March 15, 2023 to September 30, 2023 (Successor), respectively. 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, 2024 (Successor) and for the nine months ended September 30, 2024 (Successor) was (2.86)% and (3.22)%, respectively. The effective tax rate differs from the U.S. Federal statutory rate primarily due to recording a valuation allowance against deferred tax assets in the foreign jurisdictions and the significant permanent differences including impairment of goodwill and change in fair value of derivative warrant liabilities.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Subsequent Events (Details Narrative) - USD ($) $ in Thousands	1 Months Ended		9 Months Ended
	Oct. 31, 2024	Aug. 19, 2024	Sep. 30, 2024
Stockholder quorum requirement, description			Board acted by unanimous consent to amend and restate our bylaws and reduce our quorum requirement, effective immediately. Following the amendment, our quorum requirement was reduced from stockholders holding at least fifty percent (50%) of the issued and outstanding shares to stockholders holding at least thirty-three and one third percent (33.3%) of the issued and outstanding shares. A 33.3% quorum is the lowest quorum requirement permitted under Delaware law and Nasdaq.
Successor [Member]
Conversion of stock, shares issued		798,298
Conversion of stock, amount converted		$ 1,400
Successor [Member] \| Convertible Debt [Member] \| Common Class A [Member]
Conversion of stock, shares issued	394,869
Conversion of stock, amount converted	$ 500

Promissory Note

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Promissory Note

NOTE 9 – Promissory Note

Note payable consisted of the following (in thousands):

Promissory note
		September 30, 2024		December 31, 2023
Principal amount		$	3,885	$	3,885
Less:	Unamortized original issue discount		181		834
	Unamortized debt issuance cost		3		14
			3,701		3,037
Add:	Interest		311		16
	Accrued monitoring fee		408		-
			4,420		3,053
Less:	Extinguishment		1,400		-
		$	3,020	$	3,053

December 2023 Note Purchase Agreement and Promissory Note

On December 15, 2023, we entered into a note purchase agreement with Streeterville Capital, LLC (the “Lender”), pursuant to which we agreed to issue and sell to the Lender an unsecured promissory note (the “Note”) in an aggregate initial principal amount of $3,885 thousand, which is payable on or before the date that is 12 months from the issuance date. The initial principal amount includes an original issue discount of $870 thousand and $15 thousand that we agreed to pay to the Lender to cover the Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs. The net proceeds of the Note is $3,000 thousand.

Interest on the Note accrues at a rate of 10% per annum and is payable on the maturity date.

A monitoring fee of 10% of the outstanding balance will be charged on the sixth (6th) month from the issuance date of the Note to cover Lender’s accounting, legal and other costs incurred in monitoring the Note based on the then-current outstanding balance of the Note. The foregoing fee shall automatically be added to the outstanding balance on the applicable date without any further action by either party.

The Lender shall have the right to redeem up to an aggregate of 1/6th of the initial principal balance of the Note plus any interest accrued thereunder each month by providing written notice delivered to us; provided, however, that if the Lender does not exercise any monthly redemption amount in its corresponding month then such monthly redemption amount shall be available for the Lender to redeem in any further month in addition to such future month’s monthly redemption amount.

Upon receipt of any monthly redemption notice, we shall pay the applicable monthly redemption amount in cash to the Lender within five (5) business days of the Company’s receipt of such monthly redemption notice.

The Note includes customary event of default provisions, subject to certain cure periods, and provides for a default interest rate of 22%. Upon the occurrence of an event of default, interest would accrue on the outstanding balance beginning on the date the applicable event of default occurred at an interest rate equal to the lesser of twenty-two percent (22%) or the maximum rate permitted under applicable law.

Note Exchanges

During the period from July 15, 2024 to August 19, 2024, the Company exchanged $1,400 thousand of the outstanding balance of the Note for approximately 798,298 shares of the Company’s Class A Common Stock at exchange prices between $1.47 and $2.23 per share.

The Company analyzed the exchange of principal under the note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and recorded an approximately $535 thousand loss on the exchange of debt for equity as a separate item in the other income (expense) section of the consolidated statements of operations for the three months ended September 30, 2024.

As of November 12, 2024, there is an aggregate outstanding principal and interest balance of approximately $2,633 thousand underlying the December 2023 Note.

Interest expense for the December 2023 Note recognized on the condensed consolidated statement of operations and comprehensive loss were approximately $317 thousand, $958 thousand, and $0 thousand for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), and the period from March 15, 2023 to September 30, 2023 (Successor), respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Leases

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Leases

NOTE 16 – 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 May 2026, and the United States office lease expires in April 2026. 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 unaudited condensed consolidated statement of operations for the three months ended September 30, 2024 (Successor), for the nine months ended September 30, 2024 (Successor), for the three months ended September 30, 2023 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor) was approximately $109 thousand, $331 thousand, $56 thousand, $121 thousand, and $57 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, 2024 (Successor), the weighted average remaining lease term is 1.3 years and the weighted average discount rate used to determine the operating lease liabilities was 8.0%. As of December 31, 2023 (Successor), the weighted average remaining lease term is 1.4 years and the weighted average discount rate used to determine the operating lease liabilities was 8.0%.

Schedule of operating leases
(in thousands)	Operating Leases
Year 2024	$	113
Year 2025		386
Year 2026		130
Total lease payments		629
Less: Imputed interest		(44	)
Present value of lease liabilities	$	585

Promissory Note (Details Narrative) - Successor [Member] - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 19, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Nov. 12, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Principal amount		$ 3,885		$ 3,885		$ 3,885
Proceeds from note payable				$ 3,000
Interest rate				10.00%
Conversion of stock, amount converted	$ 1,400
Conversion of stock, shares issued	798,298
Aggregate outstanding principal and interest balance					$ 2,633
Interest expense		$ 317	$ 0	$ 958
Minimum [Member]
Debt Instrument [Line Items]
Conversion price	$ 1.47
Maximum [Member]
Debt Instrument [Line Items]
Conversion price	$ 2.23

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, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024
Successor [Member]
Income tax benefit/(provision)		$ 147	$ 417	$ 2,958	$ 513
Effective tax rate		(2.86%)			(3.22%)
Predecessor [Member]
Income tax benefit/(provision)	$ 0

Insider Trading Arrangements	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Goodwill and Intangible Assets (Details 1) - Successor [Member] $ in Thousands	Sep. 30, 2024 USD ($)
2024 (remainder of year)	$ 683
2025	2,731
2026	2,731
2027	2,731
2028	1,844
2029	1,611
Thereafter	3,756
Total	$ 16,087

Warrants (Details Narrative) - Successor [Member] - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	Jul. 14, 2023	Jul. 13, 2023	Sep. 30, 2023	Sep. 30, 2024
Non-cash transaction				$ 4,914
Fair value of derivative liability				$ 3,900
Warrant Holder [Member]
Number of Warrant exercised		435,000
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
Warrant Price				$ 11.50
Proceeds from public warrants exercised		$ 5,002
Number of public warrants exercised			613,138,000
Number public warrants exercised			50,000
Private Warrants [Member]
Exercise Price per share		$ 11.50
Private Placements Warrants [Member]
Warrants outstanding				10,280,000

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

2 Months Ended

3 Months Ended

7 Months Ended

9 Months Ended

Mar. 14, 2023

Sep. 30, 2024

Sep. 30, 2023

Sep. 30, 2024

Successor [Member]

Total Revenue

$ 1,897

$ 1,770

$ 4,027

$ 5,481

Successor [Member] | Transferred over Time [Member]

Total Revenue

^[1],[2]

1,762

1,770

4,027

5,346

Successor [Member] | Transferred at Point in Time [Member]

Total Revenue

^[3]

135

Successor [Member] | Warrant Exercise Period Condition One

Total Revenue

1,660

1,411

3,164

4,752

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

Total Revenue

1,660

1,411

3,164

4,752

Successor [Member] | Non Subscription Revenue [Member]

Total Revenue

237

359

863

729

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

Total Revenue

102

359

863

594

Successor [Member] | Non Subscription Revenue [Member] | Hardware [Member]

Total Revenue

$ 135

Predecessor [Member]

Total Revenue

$ 1,620

Predecessor [Member] | Transferred over Time [Member]

Total Revenue

^[1],[2]

1,620

Predecessor [Member] | Transferred at Point in Time [Member]

Total Revenue

^[3]

Predecessor [Member] | Warrant Exercise Period Condition One

Total Revenue

1,204

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

Total Revenue

1,204

Predecessor [Member] | Non Subscription Revenue [Member]

Total Revenue

416

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

Total Revenue

416

Predecessor [Member] | Non Subscription Revenue [Member] | Hardware [Member]

Total Revenue

[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.
[3]	Hardware revenue is recognized at a point in time when the control over the goods transfers to the customer - upon delivery to the customers.

Convertible Debt (Tables)

9 Months Ended

Sep. 30, 2024

Convertible Debt

Schedule of convertible debt

Schedule of convertible debt
Principal amount		$	3,675
Less:	Unamortized original issue discount		161
	Unamortized debt issuance cost		18
			3,496
Add:	Accrued interest payable		43
		$	3,539

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Schedule of accrued liabilities
	September 30, 2024		December 31, 2023
Accrued expenses and reimbursements	$	1,019	$	858
Accrued compensation and benefits		311		387
Accrued bonus and commissions		166		108
Accrued insurance premium and interest		90		-
Income tax payables		59		74
Accrued transaction costs		13		13
Accrued sales and other indirect taxes payable		8		12
Accrued liabilities	$	1,666	$	1,452

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 5,082	$ 6,275
Accounts receivable, net of allowance for credit losses of $0 and $2, respectively	316	1,956
Unbilled and other receivables	145	211
Prepaid expenses and other current assets	477	587
Total current assets	6,020	9,029
Property and equipment, net	80	115
Intangible assets, net	16,087	18,136
Operating lease right-of-use asset, net	573	486
Goodwill	8,737	8,737
Other assets	78	78
Total Assets	31,575	36,581
Current Liabilities
Accounts payable	765	975
Accrued liabilities	1,666	1,452
Deferred revenue	2,338	2,878
Warrant liability	5,258	1,683
Operating lease obligation, current	377	275
Note payable	3,020	3,053
Total current liabilities	13,424	10,316
Operating lease obligation, noncurrent	208	230
Deferred tax liability	122	637
Convertible debt	3,539
Other noncurrent liabilities	7
Total Liabilities	17,300	11,183
Stockholders’ Equity
Common Stock value	2	2
Additional paid-in capital	87,555	83,282
Accumulated deficit	(73,231)	(57,801)
Accumulated other comprehensive loss	(51)	(85)
Total Stockholders’ Equity	14,275	25,398
Total Liabilities and Stockholders’ Equity	$ 31,575	$ 36,581

Business Combination (Details1) $ in Thousands	9 Months Ended
Business Combination (Details1) $ in Thousands	Sep. 30, 2024 USD ($)
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Revenues	$ 5,647
Net loss	$ (19,197)

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of operating leases

Schedule of operating leases
(in thousands)	Operating Leases
Year 2024	$	113
Year 2025		386
Year 2026		130
Total lease payments		629
Less: Imputed interest		(44	)
Present value of lease liabilities	$	585

Credit Risk and Concentrations (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Successor [Member]
Cash	$ 31	$ 300

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

Property and Equipment, net (Details) - Successor [Member] - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total	$ 219	$ 198
Less: accumulated depreciation and amortization	(139)	(83)
Total Property and Equipment, Net	80	115
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	199	179
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total	13	12
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total	6	6
Software [Member]
Property, Plant and Equipment [Line Items]
Total	$ 1	$ 1

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 6 – Goodwill and Intangible Assets

The Company reviews goodwill and intangible assets 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, 2024 and December 31, 2023 (Successor) was $8,737 thousand, which was entirely due to the business combination noted in Note 3.

Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill or amortizable intangible assets may not be recoverable include a decline in industry and market considerations, technological advancements, and the Company’s financial performance.

We completed our annual goodwill impairment evaluation as of December 31, 2023. As a result, the Company incurred an impairment loss of $36,056 thousand.

The Company determined that there was no impairment present at the reporting date as of September 30, 2024 (Successor).

Intangible assets consisted of the following (in thousands):

Schedule of intangible assets
	September 30, 2024								December 31, 2023
	Weighted Average Remaining Useful Life (Years)	Gross Amount		Accumulated Amortization			Net Carrying Amount		Gross Amount		Accumulated Amortization			Net Carrying Amount
Trade Name/Trademarks	5.4	$	3,294	$	(725	)	$	2,569	$	3,294	$	(373	)	$	2,921
Customer Relationships	3.4		5,604		(1,728	)		3,876		5,604		(887	)		4,717
Developed Technology	8.4		8,697		(1,341	)		7,356		8,697		(688	)		8,009
Patents and Intellectual Property	8.4		2,703		(417	)		2,286		2,703		(214	)		2,489
Totals		$	20,298	$	(4,211	)	$	16,087	$	20,298	$	(2,162	)	$	18,136

Future amortization expense on intangible assets as of September 2024 is anticipated to be as follows (in thousands):


For the Years Ending December 31,	Amount
2024 (remainder of year)	$	683
2025		2,731
2026		2,731
2027		2,731
2028		1,844
2029		1,611
Thereafter		3,756
Total	$	16,087

Deferred Revenue (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Mar. 14, 2023
Successor [Member]
Deferred revenue, ending balance	$ 2,338	$ 2,878	$ 2,534

Stock Option Plan and Stock-Based Compensation (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Stock Option Plan And Stock-based Compensation
Number of options outstanding, beginning	984,900
Weighted-average exercise price, beginning	$ 1.53
Weighted average remaining contractual term (years)	9 years	9 years 3 months
Weighted-Average Fair Value at Grant Date	$ 0.91	$ 0.90
Number of options, Granted	935,000
Weighted-average exercise price, Granted	$ 1.50
Weighted average remaining contractual term, Granted	9 years 5 months 26 days
Weighted-Average Fair Value at Grant Date, Granted	$ 0.91
Number of options, Exercised	(70,350,000)
Weighted-average exercise price, Exercised	$ 1.53
Number of options, Forfeited
Weighted-average exercise price, Forfeited
Number of options outstanding, ending	1,849,550	984,900
Weighted-average exercise price, Ending	$ 1.51	$ 1.53
Number of options exercisable	422,100
Weighted-average exercise price, options exercisable	$ 1.53

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Liquidity

Liquidity

●

In January 2024, the Company streamlined its operations to conserve cash resources by laying off approximately 20% of the global employee headcount;

●

In March 2024, the Company successfully negotiated for a 50% reduction in D&O insurance premium; and

●

These steps, along with anticipated revenue growth from organic sales and other partnerships, provide the Company with the necessary resources to support operations mitigating liquidity risk.

Basis of Presentation

Basis of Presentation

Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation.

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, net

Intangible Assets, net

Goodwill

Goodwill

Leases and Right-of-Use Assets and Liabilities

Leases and Right-of-Use Assets and Liabilities

Income Taxes

Income Taxes

Comprehensive Loss and Foreign Currency Translation

Comprehensive Loss and Foreign Currency Translation

Convertible Debt

Convertible Debt

Debt Issuance Costs

Debt Issuance Costs

Debt Extinguishment

Debt Extinguishment

Revenue Recognition

Revenue Recognition

The standard introduces a five-step model for revenue recognition that replaces the four criteria for revenue recognition under previous GAAP. The five steps are shown below:

Identify the contract with a customer;

Identify the performance obligations in the contract;

Determine the transaction price;

Allocate the transaction price to performance obligations; and

Recognize revenue when (or as) the entity satisfies a performance obligation

License Subscription Revenue Recognition (Software As A Service)

Professional Services Revenue Recognition

The Company provides integration and software customization professional services to its customers.

Hardware Revenue Recognition

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.

Research and Development

Research and Development

Business Combinations

Business Combinations

Segments

Segments

Stock-based Compensation

Stock-based Compensation

Derivative Warrant Liabilities

Derivative Warrant Liabilities

Earnings Per Share

Earnings Per Share

Schedule of antidilutive shares
(in thousands)	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023
Stock options		1,850		985		1,602		985
Restricted stock units		699		821		514		821
Warrants		21,032		21,032		21,032		21,032
Total		23,581		22,838		23,148		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.

●

The following table shows the changes in fair value of the liabilities:


Warrant liability – January 1, 2024	$	1,683
Change in FV of derivative instruments		1,472
Warrant liability – March 31, 2024		3,155
Change in FV of derivative instruments		1,051
Warrant liability – June 30, 2024		4,206
Change in FV of derivative instruments		1,052
Warrant liability – September 30, 2024	$	5,258

Warrant liability – March 15, 2023	$	2,649
Change in FV of derivative instruments		(1,686	)
Warrant liability – March 31, 2023		963
Change in FV of derivative instruments		12,040
Warrant liability – June 30, 2023		13,003
Change in FV of derivative instruments		(5,220	)
FV of Warrants cash exercised and exchanged for Class A common stock (see Note 10 – Warrants)		(1,237	)
Loss on warrant extinguishment		(3,894	)
FV of Warrants cashless exercised for Class A common stock (see Note 10 – Warrants)		(549	)
Warrant liability – 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

Summary of Significant Accounting Policies (Details) - Successor [Member] - shares shares in Thousands	3 Months Ended		7 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2024
Total	23,581	22,838	22,838	23,148
Stock Options [Member]
Total	1,850	985	985	1,602
Restricted Stock Units (RSUs) [Member]
Total	699	821	821	514
Warrant [Member]
Total	21,032	21,032	21,032	21,032

Summary of Significant Accounting Policies (Details 1) - Successor [Member] - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2023	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023
Warrant liability at beginning	$ 2,649	$ 4,206	$ 3,155	$ 1,683	$ 13,003	$ 963
Change in FV of derivative instruments	(1,686)	1,052	1,051	1,472	(5,220)	12,040
FV of Warrants cash exercised and exchanged for Class A common stock					(1,237)
Loss on warrant extinguishment					(3,894)
FV of Warrants cashless exercised for Class A common stock					549
Warrant liability at ending	$ 963	$ 5,258	$ 4,206	$ 3,155	$ 2,103	$ 13,003

Organization, Nature of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2024

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.

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.

Stock Option Plan and Stock-Based Compensation (Details 4) - Successor [Member] - USD ($) $ in Thousands	3 Months Ended		7 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024
Stock-based compensation	$ 110	$ 56	$ 113		$ 432
Research and Development Expense [Member]
Stock-based compensation	5				12
Selling and Marketing Expense [Member]
Stock-based compensation	16				64
General and Administrative Expense [Member]
Stock-based compensation	89	56	$ 113		356
Restricted Stock Units (RSUs) [Member]
Stock-based compensation	799	597		$ 638	1,913
Restricted Stock Units (RSUs) [Member] \| Research and Development Expense [Member]
Stock-based compensation	100				504
Restricted Stock Units (RSUs) [Member] \| Selling and Marketing Expense [Member]
Stock-based compensation	51				257
Restricted Stock Units (RSUs) [Member] \| General and Administrative Expense [Member]
Stock-based compensation	$ 648	$ 597		$ 638	$ 1,152

Leases (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases [Abstract]
Year 2024	$ 113
Year 2025	386
Year 2026	130
Total lease payments	629
Less: Imputed interest	(44)
Present value of lease liabilities	$ 585

Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

NOTE 18 – Subsequent Events

During October 2024, the Company issued a total of 394,869 shares of the Company’s Class A Common Stock in exchange for $500 thousand of convertible debt related to convertible Pre-Paid Purchase #1, and none for convertible Pre-Paid Purchase #2. Shares issued are valued at a price disclosed in Note 12 – Convertible Debt.

Stockholder Quorum Requirement

On November 8, 2024, the Board acted by unanimous consent to amend and restate our bylaws and reduce our quorum requirement, effective immediately. Following the amendment, our quorum requirement was reduced from stockholders holding at least fifty percent (50%) of the issued and outstanding shares to stockholders holding at least thirty-three and one third percent (33.3%) of the issued and outstanding shares. A 33.3% quorum is the lowest quorum requirement permitted under Delaware law and Nasdaq. The Board approved the reduction because it had found it exceedingly difficult to satisfy our former quorum requirement, which is necessary to constitute a valid and duly called meeting of our stockholders. The foregoing description of the Amended and Restated Bylaws of the Company does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Bylaws, a copy of which are attached hereto as Exhibit 3.2 and incorporated herein by reference.

Convertible Debt

9 Months Ended

Sep. 30, 2024

Convertible Debt

Convertible Debt

NOTE 12 – Convertible Debt

Convertible debt as of September 30, 2024 consisted of the following (in thousands):

Schedule of convertible debt
Principal amount		$	3,675
Less:	Unamortized original issue discount		161
	Unamortized debt issuance cost		18
			3,496
Add:	Accrued interest payable		43
		$	3,539

On May 22, 2024, the Company entered into a Securities Purchase Agreement which the Lender desires to purchase up to $10,000 thousand shares of the Company’s Common Stock, pursuant to which the Company issued an unsecured convertible Pre-Paid Purchase #1 to Streeterville Capital, LLC (“Lender”). The convertible Pre-Paid Purchase #1 has the original principal amount of $2,625 thousand and Lender gave consideration of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender’s transaction cost of $20 thousand.

The convertible Pre-Paid Purchase #1 accrues interest on the outstanding balance at 5% per annum. The Lender may redeem all or any part of the outstanding balance of the convertible Pre-Paid Purchase #1, at any time following earlier of six months from the purchase price date and the effectiveness of the Initial Registration Statement by providing a written notice, in cash or converting into shares of the Company’s common stock at a price equal to the lower of (a) Fixed Price of $3.996 and (b) Market Price which is 91% multiplied by the lowest daily volume weighted average price (“VWAP”) during the ten (10) consecutive trading days immediately prior to the written notice date, but in any event not lower than the Floor Price of $0.666, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase.

On June 3, 2024, the Company received the net proceeds from the Lender. For the period ended September 30, 2024, amortization of debt discount and transaction cost of approximately $16 thousand was recorded on the condensed consolidated statements of operations.

On September 30, 2024, the Company issued an unsecured convertible Pre-Paid Purchase #2 to Streeterville Capital, LLC (“Lender”), pursuant to the Securities Purchase Agreement. The convertible Pre-Paid Purchase #2 has the original principal amount of $1,050 thousand and Lender gave consideration of $1,000 thousand, reflecting original issue discount of $50 thousand.

The convertible Pre-Paid Purchase #2 accrues interest on the outstanding balance at 5% per annum. The Lender may redeem all or any part of the outstanding balance of the convertible Pre-Paid Purchase #2, at any time following earlier of six months from the purchase price date and the effectiveness of the Initial Registration Statement by providing a written notice, in cash or converting into shares of the Company’s common stock at a price equal to the lower of (a) Fixed Price of $1.992 and (b) Market Price which is 91% multiplied by the lowest daily volume weighted average price (“VWAP”) during the ten (10) consecutive trading days immediately prior to the written notice date, but in any event not lower than the Floor Price of $0.332, subject to certain adjustments and ownership limitations specified in the convertible Pre-Paid Purchase.

On September 30, 2024, the Company received the net proceeds from the Lender.

During the period ended September 30, 2024, the Company has issued no shares related to the convertible Pre-Paid Purchases.

Disaggregation of Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Disaggregation Of Revenue

Schedule of disaggregation of revenue

Schedule of disaggregation of revenue
	Successor								Predecessor
	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023
Subscription revenue
Software	$	1,660	$	1,411	$	4,752	$	3,164	$	1,204
Total subscription revenue	$	1,660	$	1,411	$	4,752	$	3,164	$	1,204

Non-subscription revenue
Professional services	$	102	$	359	$	594	$	863	$	416
Hardware		135		-		135		-		-
Total non-subscription revenue	$	237	$	359	$	729	$	863	$	416

Total Revenue	$	1,897	$	1,770	$	5,481	$	4,027	$	1,620

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - 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, 2022	$ 22,236	$ 1,155		$ 23,391
Net loss	(4,380)			(4,380)
Stock-based compensation allocated from parent	158			158
Net investment from parent	8,680			8,680
Cumulative translation adjustment		(28)		(28)
Ending balance, value at Mar. 14, 2023	26,694	1,127		27,821	$ (6,955)	$ 1		$ 1,607	$ (8,563)
Ending balance, shares at Mar. 14, 2023						7,034,999
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
Net loss					2,758				2,758
Stock-based compensation					2			2
Ending balance, value at Mar. 31, 2023					65,733	$ 1	$ 1	71,536	(5,805)
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	(6,955)	$ 1		1,607	(8,563)
Beginning balance, shares at Mar. 14, 2023						7,034,999
Ending balance, value at Sep. 30, 2023			(8)		64,062	$ 2		83,162	(19,094)
Ending balance, shares at Sep. 30, 2023						15,254,389
Beginning balance, value at Mar. 31, 2023					65,733	$ 1	$ 1	71,536	(5,805)
Beginning balance, shares at Mar. 31, 2023						8,582,699	5,487,300
Net loss					(14,730)				(14,730)
Stock-based compensation					96			96
Cumulative translation adjustment			(39)		(39)
Ending balance, value at Jun. 30, 2023			(39)		51,060	$ 1	$ 1	71,632	(20,535)
Ending balance, shares at Jun. 30, 2023						8,582,699	5,487,300
Net loss					1,441				1,441
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 to Class A common stock						$ 1	$ (1)
Mandatory conversion from Class C to Class A common stock, shares						5,487,300	(5,487,300)
Common stock issuance					195			195
Common stock issuance, shares						99,782
Cumulative translation adjustment			31		31
Ending balance, value at Sep. 30, 2023			(8)		64,062	$ 2		83,162	(19,094)
Ending balance, shares at Sep. 30, 2023						15,254,389
Beginning balance, value at Dec. 31, 2023			(85)		25,398	$ 2		83,282	(57,801)
Beginning balance, shares at Dec. 31, 2023						15,254,389
Net loss					(5,170)				(5,170)
Stock-based compensation					599			599
Cumulative translation adjustment			54		54
Ending balance, value at Mar. 31, 2024			(31)		20,881	$ 2		83,881	(62,971)
Ending balance, shares at Mar. 31, 2024						15,254,389
Beginning balance, value at Dec. 31, 2023			(85)		25,398	$ 2		83,282	(57,801)
Beginning balance, shares at Dec. 31, 2023						15,254,389
Ending balance, value at Sep. 30, 2024			(51)		14,275	$ 2		87,555	(73,231)
Ending balance, shares at Sep. 30, 2024						16,065,257
Beginning balance, value at Mar. 31, 2024			(31)		20,881	$ 2		83,881	(62,971)
Beginning balance, shares at Mar. 31, 2024						15,254,389
Net loss					(5,256)				(5,256)
Stock-based compensation					833			833
Net exercise of options
Net exercise of options, shares						12,570
Cumulative translation adjustment			22		22
Ending balance, value at Jun. 30, 2024			(9)		16,480	$ 2		84,714	(68,227)
Ending balance, shares at Jun. 30, 2024						15,266,959
Net loss					(5,004)				(5,004)
Stock-based compensation					$ 906			$ 906
Issuance of common stock to reduce notes payable					1,935,000			1,935,000
Issuance of common stock to reduce notes payable, shares						798,298
Cumulative translation adjustment			$ (42)		$ (42)
Ending balance, value at Sep. 30, 2024			$ (51)		$ 14,275	$ 2		$ 87,555	$ (73,231)
Ending balance, shares at Sep. 30, 2024						16,065,257

Business Combination

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [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 180^th 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 fair values of the assets acquired and liabilities assumed in the Business Combination.

The Company allocated 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 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		408
Operating lease right-of-use asset		557	3 years
Property and equipment, net		133	3 years
Other assets		42
Developed technology		8,697	10 years
Patents		2,703	10 years
Customer relationships		5,604	5 years
Trade names and trademarks		3,294	7 years
Total assets acquired	$	33,876

Liabilities assumed:
Accounts payable	$	443
Accrued liabilities		969
Deferred revenues		2,534
Operating lease obligation, current		194
Operating lease obligation, noncurrent		384
Deferred tax liability		4,217
Total liabilities assumed		8,741
Goodwill	$	44,793

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 $3,543 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 $543 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 year ended December 31, 2023.

Measurement Period

The 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 continued 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 through March 14, 2024, when the purchase price allocation was finalized.

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, as if the acquisition had occurred as of the beginning of the first period presented (January 1, 2023) 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 and the acquired CXApp is as follows (in thousands):


	For the Nine Months Ended September 30, 2023
Revenues	$	5,647
Net income (loss)		(19,197	)

Warrants

9 Months Ended

Sep. 30, 2024

Warrants

Warrants

NOTE 10 – Warrants

Public Warrants

As of September 30, 2024 (Successor) and December 31, 2023 (Successor), there were 10,751,862 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.

The Public Warrants is exercisable and will expire on March 15, 2028 or earlier upon redemption or liquidation. 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 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 13, 2023, warrant holders exercised 435,000 public warrants at an exercise price of $11.50, for a total of $5,002 thousand of cash proceeds to the Company.

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 $3,900 thousand loss on the warrant conversion, which is included in change in fair value of derivative liability in the statement of operations.

For the three months ended September 30, 2023, approximately 613,138 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.

Private Warrants

As of September 30, 2024 (Successor) and December 31, 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 were not transferable, assignable or salable until April 14, 2023, 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.

Disaggregation of Revenue

9 Months Ended

Sep. 30, 2024

Disaggregation Of Revenue

Disaggregation of Revenue

NOTE 4 – Disaggregation of Revenue

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 software as a service, design and implementation services for its enterprise apps solutions systems, and professional services for work performed in conjunction with its systems.

Revenues consisted of the following (in thousands):

Schedule of disaggregation of revenue
	Successor								Predecessor
	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023
Subscription revenue
Software	$	1,660	$	1,411	$	4,752	$	3,164	$	1,204
Total subscription revenue	$	1,660	$	1,411	$	4,752	$	3,164	$	1,204

Non-subscription revenue
Professional services	$	102	$	359	$	594	$	863	$	416
Hardware		135		-		135		-		-
Total non-subscription revenue	$	237	$	359	$	729	$	863	$	416

Total Revenue	$	1,897	$	1,770	$	5,481	$	4,027	$	1,620

	Successor								Predecessor
	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Period from March 15, 2023 to September 30, 2023		Period from January 1, 2023 to March 14, 2023
Revenue recognized over time⁽¹⁾⁽²⁾	$	1,762	$	1,770	$	5,346	$	4,027	$	1,620
Revenue recognized at a point in time⁽³⁾		135		-		135		-		-
Total	$	1,897	$	1,770	$	5,481	$	4,027	$	1,620

	(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.
	(3)	Hardware revenue is recognized at a point in time when the control over the goods transfers to the customer - upon delivery to the customers.