Company: CXAI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001829126-25-006141
Chunk: 68

Company: CXApp Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 68
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 AI infrastructure alignment
designed to optimize data analytics and employee experience features across joint enterprise deployments.

The increase in R&D was partially offset by
a $279 thousand decrease in sales and marketing expenses, as the Company reallocated go-to-market resources toward high-ROI enterprise
accounts and strategic channel partnerships. Additionally, G&A expenses decreased by $83 thousand, reflecting ongoing cost control
measures in administrative functions.

Management believes that these investments in
innovation and platform interoperability position the Company to scale its AI-native offerings while driving long-term operating leverage.

Other Income/Expense

Other income/expense was an income of $973 thousand
and an expense of $1,765 thousand for the three months ended June 30, 2025, and the three months ended June 30, 2024, respectively.
This increase of $2,738 thousand in other income for the comparative periods was attributable to an increase in the change in fair value
of derivative warrant liabilities of approximately $1,931 thousand, an increase in other income of approximately $286 thousand, and a
decrease in interest expense of approximately $521 thousand.

Provision for Income Taxes

There was $1 thousand income tax expenses for the three months ended June 30, 2025, compared to $159 thousand tax benefit for the six months ended June 30, 2024. The income tax benefit for the three months ended June 30, 2024 is primarily a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination recorded in the first quarter of 2023.

37

Non-GAAP Financial information

EBITDA

The Company 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, taxes, 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 not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable