Company: CXAI
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001829126-25-003841
Chunk: 19

Company: CXApp Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 of $2,196 thousand and an unrealized loss of $1,472 thousand for the three months ended March 31, 2025 and March 31, 2024 respectively.

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 for the three months ended March 31, 2025 and March 31, 2024:

    Schedule of changes in fair value of the liabilities

    Warrant liability – January 1, 2025
     
    $
    5,048

    Change in FV of derivative instruments

    (2,314
    )
  
    Warrant liability – March 31, 2025
     
    $
    2,734

    Warrant liability – January 1, 2024
     
    $
    1,683

    Change in FV of derivative instruments

    1,472

    Warrant liability – March 31, 2024
     
    $
    3,155

    14

The Company accounts for convertible debt under the fair value option election using Level 3 inputs. For the three months ended March 31, 2025 and March 31, 2024, the Company recognized an unrealized loss in the Consolidated Statements of Operations and Comprehensive Loss of $118 thousand and $0 respectively, which are presented as change in fair value of derivative liability. See additional details within Note 11, Convertible debt.

The significant inputs in the valuation models for each of the three issuances were as follows:

Pre-Paid Purchase #1

    Schedule of valuation models

    Inputs
     
    March 31, 2025