Company: CXAI
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001829126-25-002456
Chunk: 68

Company: CXApp Inc.
Filing Date: 2025-04-08
Form: 424B3
Chunk 68
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 the year ended December 31, 2023 (Non-GAAP combined).

Operating Expenses

Operating expenses consist primarily of research and development costs, sales and marketing costs, and general and administrative costs. Operating expenses for the year ended December 31, 2024, were $19,598 thousand and non-GAAP combined $58,204 thousand for the comparable period ended December 31, 2023. This decrease of $38,606 thousand is primarily attributable to impairment of goodwill of $36,056 thousand and a decrease of $2,550 thousand in other operating expenses as an effect of management reduction effort post-business combination.

Loss From Operations

Loss from operations for the year ended December 31, 2024, was $13,741 thousand compared to the non-GAAP combined loss from operations of $52,589 thousand for the year ended December 31, 2023. This decrease in loss of $38,848 thousand is primarily attributable to impairment of goodwill, decreased operating expenses as detailed above plus the increased gross profit margin of approximately $242 thousand.

Other Income (Expense)

Other income (expense) for the year ended December 31, 2024, was $6,302 thousand expense compared to $4,601 thousand expense for the year ended December 31, 2023. The increase in other expense of $1,701 thousand is primarily attributable to change in fair value of derivative liabilities of approximately $1,562 thousand plus the increase in interest expense of $1,822 thousand, loss on debt extinguishment of $1,052 thousand and other expenses of $389 thousand.

Provision for Income Taxes

For 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