Company: CXAI
Filing Date: 2025-05-09
Form Type: S-1
Source: 0001829126-25-003532
Chunk: 73

Company: CXApp Inc.
Filing Date: 2025-05-09
Form: S-1
Chunk 73
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 the year ended December 31, 2024, the Company recorded an income tax benefit of approximately $637 thousand, compared to an income tax benefit of $3,572 thousand for the period March 15, 2023 to December 31, 2023 (on a Non-GAAP combined basis).

The income tax benefit for 2024 (Successor) primarily resulted from the partial release of the valuation allowance associated with deferred tax assets recognized on intangible assets acquired in the Business Combination completed on March 14, 2023. Specifically, the benefit reflects the reversal of deferred tax liabilities attributable to those acquired intangible assets.

However, the Company has concluded that the negative evidence outweighs the positive evidence regarding the realization of its deferred tax assets. As a result, it is more likely than not that the benefits of certain deferred tax assets will not be realized in the foreseeable future. Accordingly, a valuation allowance has been recorded as of December 31, 2024.

Net Loss

Net loss for the year ended December 31, 2024, was $19,408 thousand compared to the $53,618 thousand non-GAAP combined net loss for the year ended December 31, 2023. This decrease in loss of approximately $34,210 thousand was primarily attributable to the decrease in operating expenses of $38,606 thousand, change in fair value of derivative liability of $1,562 thousand and increase in interest expense of $1,822 thousand, loss on extinguishment of $1,052 thousand and other income of $389 thousand plus higher gross margin of $242 thousand offset by a lower income tax benefit of approximately $2,937 thousand.

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Non-GAAP Financial information

EBITDA

This prospectus includes a non-GAAP measure that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as earnings before interest and other income, tax and depreciation and amortization. Adjusted EBITDA is used by our management as the matrix in which it manages the business. It is defined as EBITDA plus adjustments for other income or expense items, non-recurring items and non-cash stock-based compensation. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods.

Adjusted EBITDA is not a recognized measure under U.S. GAAP and is