Cover
Cover | 3 Months Ended |
Mar. 31, 2023 | |
Entity Addresses [Line Items] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | AMENDMENT NO.1 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2022 |
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) |
City Area Code | 575-4456 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
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 |
City Area Code | 575-4456 |
Contact Personnel Name | Khurram P. Sheikh |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 224,489 | $ 406,126 |
Prepaid expenses | 3,536 | 126,667 |
Total current assets | 228,025 | 532,793 |
Cash and investments held in trust account | 3,923,804 | 278,836,080 |
TOTAL ASSETS | 4,151,829 | 279,368,873 |
Current liabilities | ||
Accrued expenses | 2,833,412 | 767,253 |
Income taxes payable | 49,175 | |
Promissory note – related party | 347,961 | |
Total current liabilities | 3,230,548 | 767,253 |
Derivative liabilities | 722,400 | 11,275,369 |
Deferred underwriting fee payable | 9,660,000 | |
TOTAL LIABILITIES | 3,952,948 | 21,702,622 |
Class A common stock subject to possible redemption, 387,551 and 27,600,000 shares at $10.10 per share redemption value as of December 31, 2022 and 2021, respectively | 3,914,265 | 278,760,000 |
Stockholders’ Deficit | ||
Preferred stock, $0.0001 par value; 2,000,000 shares authorized; none issued or outstanding | ||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding at December 31, 2022 and 2021 | 690 | 690 |
Additional paid-in capital | ||
Accumulated deficit | (3,716,074) | (21,094,439) |
Total Stockholders’ Deficit | (3,715,384) | (21,093,749) |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | $ 4,151,829 | $ 279,368,873 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock Subject to Redemption | ||
Class A common stock subject to possible redemption | 387,551 | 27,600,000 |
Purchase price, per unit (in dollars per share) | $ 10.10 | $ 10.10 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 20,000,000 | 20,000,000 |
Common shares, shares issued | 6,900,000 | 6,900,000 |
Common shares, shares outstanding | 6,900,000 | 6,900,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Operating and formation costs | $ 2,950,464 | $ 1,497,914 |
Loss from operations | (2,950,464) | (1,497,914) |
Other income: | ||
Interest earned on cash and investments held in Trust Account | 421,504 | 68,295 |
Interest income - bank | 76 | 72 |
Change in fair value of derivative liability | 10,552,969 | 10,637,431 |
Gain on forgiveness of deferred underwriting fee | 371,910 | |
Other income | 11,346,459 | 10,705,798 |
Income before provision for income taxes | 8,395,995 | 9,207,884 |
Provision for income taxes | (49,175) | |
Net income | $ 8,346,820 | $ 9,207,884 |
Basic and diluted weighted average shares outstanding, Class A common stock | 12,546,423 | 27,600,000 |
Basic and diluted net income per share, Class A common stock | $ 0.43 | $ 0.27 |
Basic and diluted weighted average shares outstanding, Class B common stock | 6,900,000 | 6,900,000 |
Basic and diluted net income per share, Class B common stock | $ 0.43 | $ 0.27 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Class A Common Stock [Member] | Class B Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance — December 31, 2021 at Dec. 31, 2020 | $ 690 | $ (30,302,323) | $ (30,301,633) | ||
Beginning balance, shares at Dec. 31, 2020 | 6,900,000 | ||||
Net income | 9,207,884 | 9,207,884 | |||
Balance — December 31, 2022 (As Restated) at Dec. 31, 2021 | $ 690 | (21,094,439) | (21,093,749) | ||
Ending balance, shares at Dec. 31, 2021 | 6,900,000 | ||||
Balance — December 31, 2021 at Dec. 31, 2021 | $ 690 | (21,094,439) | (21,093,749) | ||
Beginning balance, shares at Dec. 31, 2021 | 6,900,000 | ||||
Net income | 8,346,820 | 8,346,820 | |||
Change in value of common stock subject to redemption | 9,031,545 | 9,031,545 | |||
Balance — December 31, 2022 (As Restated) at Dec. 31, 2022 | $ 690 | $ (3,716,074) | $ (3,715,384) | ||
Ending balance, shares at Dec. 31, 2022 | 6,900,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating Activities: | ||
Net income | $ 8,346,820 | $ 9,207,884 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Interest earned on cash and investments held in Trust Account | (421,504) | (68,295) |
Change in fair value of derivative liability | (10,552,969) | (10,637,431) |
Gain on forgiveness of deferred underwriting fee | (371,910) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 123,131 | 329,967 |
Income tax payable | 49,175 | |
Accounts payable and accrued expenses | 2,066,159 | 572,554 |
Net cash used in operating activities | (761,098) | (595,321) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from trust account to pay franchise tax | 231,500 | |
Cash withdrawn from trust account in connection with redemptions | 275,102,280 | |
Net cash provided by investing activities | 275,333,780 | |
Cash Flows from Financing Activities: | ||
Redemptions of common stock | (275,102,280) | |
Borrowings under promissory note | 347,961 | |
Payment of offering costs | (17,579) | |
Net cash used in financing activities | (274,754,319) | (17,579) |
Net Change in Cash | (181,637) | (612,900) |
Cash – Beginning of period | 406,126 | 1,019,026 |
Cash – End of period | 224,489 | 406,126 |
Non-cash investing and financing activities: | ||
Change in value of Class A common stock subject to possible redemption | 256,545 | |
Forgiveness of deferred underwriting fee payable allocated to Class A common stock | (9,288,090) | |
Deferred underwriting fee payable | $ 9,660,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 224,489 | |
Total current assets | 228,025 | |
TOTAL ASSETS | 4,151,829 | |
Current Liabilities | ||
Total current liabilities | 3,230,548 | |
TOTAL LIABILITIES | 3,952,948 | |
Stockholders’ Equity | ||
Common Stock value | 690 | |
Additional paid-in capital | ||
Accumulated deficit | (3,716,074) | |
Total Stockholders’ Deficit | (3,715,384) | |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | 4,151,829 | |
Successor [Member] | ||
Current Assets | ||
Cash and cash equivalents | $ 6,724,000 | |
Accounts receivable | 2,671,000 | |
Notes and other receivables | 102,000 | |
Prepaid expenses and other current assets | 1,232,000 | |
Total current assets | 10,729,000 | |
Property and equipment, net | 153,000 | |
Intangible assets, net | 20,753,000 | |
Operating lease right-of-use asset, net | 549,000 | |
Software development costs, net | ||
Goodwill | 44,122,000 | |
Other assets | 78,000 | |
TOTAL ASSETS | 76,384,000 | |
Current Liabilities | ||
Accounts payable | 596,000 | |
Accrued liabilities | 3,233,000 | |
Deferred revenue | 2,690,000 | |
Acquisition liability | ||
Warrant liability | 963,000 | |
Operating lease obligation, current | 195,000 | |
Total current liabilities | 7,677,000 | |
Operating lease obligation, noncurrent | 376,000 | |
Other liabilities | ||
Deferred tax liability | 2,778,000 | |
TOTAL LIABILITIES | 10,831,000 | |
Stockholders’ Equity | ||
Additional paid-in capital | 71,536,000 | |
Accumulated deficit | (5,985,000) | |
Accumulated other comprehensive income | ||
Net parent investment | ||
Total Stockholders’ Deficit | 65,553,000 | |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | 76,384,000 | |
Successor [Member] | Common Class A [Member] | ||
Stockholders’ Equity | ||
Common Stock value | 1,000 | |
Successor [Member] | Common Class C [Member] | ||
Stockholders’ Equity | ||
Common Stock value | $ 1,000 | |
Predecessor [Member] | ||
Current Assets | ||
Cash and cash equivalents | 6,308,000 | |
Accounts receivable | 1,338,000 | |
Notes and other receivables | 273,000 | |
Prepaid expenses and other current assets | 650,000 | |
Total current assets | 8,569,000 | |
Property and equipment, net | 202,000 | |
Intangible assets, net | 19,289,000 | |
Operating lease right-of-use asset, net | 681,000 | |
Software development costs, net | 487,000 | |
Goodwill | 0 | |
Other assets | 52,000 | |
TOTAL ASSETS | 29,280,000 | |
Current Liabilities | ||
Accounts payable | 1,054,000 | |
Accrued liabilities | 1,736,000 | |
Deferred revenue | 2,162,000 | |
Acquisition liability | 197,000 | |
Warrant liability | ||
Operating lease obligation, current | 266,000 | |
Total current liabilities | 5,415,000 | |
Operating lease obligation, noncurrent | 444,000 | |
Other liabilities | 30,000 | |
Deferred tax liability | ||
TOTAL LIABILITIES | 5,889,000 | |
Stockholders’ Equity | ||
Additional paid-in capital | ||
Accumulated deficit | ||
Accumulated other comprehensive income | 1,155,000 | |
Net parent investment | 22,236,000 | |
Total Stockholders’ Deficit | 23,391,000 | |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | 29,280,000 | |
Predecessor [Member] | Common Class A [Member] | ||
Stockholders’ Equity | ||
Common Stock value | ||
Predecessor [Member] | Common Class C [Member] | ||
Stockholders’ Equity | ||
Common Stock value |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) | Dec. 31, 2022 $ / shares shares |
Common Class A [Member] | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 |
Predecessor [Member] | Common Class A [Member] | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 |
Common Stock, Shares, Outstanding | 8,582,699 |
Predecessor [Member] | Common Class C [Member] | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 |
Common Stock, Shares Authorized | 10,000,000 |
Common Stock, Shares, Outstanding | 5,487,300 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | |
Successor [Member] | |||
Revenues | $ 342,000 | ||
Cost of Revenues | 87,000 | ||
Gross Profit | 255,000 | ||
Operating Expenses | |||
Research and development | 211,000 | ||
Sales and marketing | 174,000 | ||
General and administrative | 241,000 | ||
Amortization of intangible assets | 116,000 | ||
Change in fair value of earnout | |||
Total Operating Expenses | 742,000 | ||
Loss from operations | (487,000) | ||
Other Income (Expense) | |||
Interest income (expense), net | (1,000) | ||
Change in fair value of derivative liability | 1,686,000 | ||
Other income | 1,685,000 | ||
Net Income (Loss), before tax | 1,198,000 | ||
Income tax benefit/(provision) | 1,560,000 | ||
Net income | 2,758,000 | ||
Unrealized foreign exchange loss from cumulative translation adjustments | |||
Comprehensive Income (Loss) | $ 2,758,000 | ||
Basic and dilutive weighted average shares outstanding, Class A common stock | 8,582,699 | ||
Basic and dilutive net income per share, Class A common stock | $ 0.20 | ||
Basic and dilutive weighted average shares outstanding, Class C common stock | 5,487,300 | ||
Basic and dilutive net income per share, Class C common stock | $ 0.20 | ||
Predecessor [Member] | |||
Revenues | $ 1,620,000 | $ 2,582,000 | |
Cost of Revenues | 483,000 | 589,000 | |
Gross Profit | 1,137,000 | 1,993,000 | |
Operating Expenses | |||
Research and development | 1,455,000 | 1,991,000 | |
Sales and marketing | 964,000 | 1,122,000 | |
General and administrative | 2,293,000 | 2,304,000 | |
Amortization of intangible assets | 806,000 | 975,000 | |
Change in fair value of earnout | (2,827,000) | ||
Total Operating Expenses | 5,518,000 | 3,565,000 | |
Loss from operations | (4,381,000) | (1,572,000) | |
Other Income (Expense) | |||
Interest income (expense), net | 1,000 | 1,000 | |
Change in fair value of derivative liability | |||
Other income | 1,000 | 1,000 | |
Net Income (Loss), before tax | (4,380,000) | (1,571,000) | |
Income tax benefit/(provision) | 0 | (100,000) | |
Net income | (4,380,000) | (1,671,000) | |
Unrealized foreign exchange loss from cumulative translation adjustments | (28,000) | (189,000) | |
Comprehensive Income (Loss) | $ (4,408,000) | $ (1,860,000) |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - 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] |
Balance — December 31, 2022 (As Restated) at Dec. 31, 2021 | $ 20,155 | $ 56 | $ 20,211 | ||||||
Net income | (1,671) | (1,671) | |||||||
Stock-based compensation | 647 | 647 | |||||||
Parent’s common shares issued for CXApp earnout | 3,697 | 3,697 | |||||||
Taxes paid related to net share settlement of restricted stock units | (104) | (104) | |||||||
Net investments from parent | 6,444 | 6,444 | |||||||
Cumulative translation adjustment | (189) | (189) | |||||||
Balance — December 31, 2022 (As Restated) at Mar. 31, 2022 | 29,168 | (133) | 29,035 | ||||||
Balance — December 31, 2021 at Dec. 31, 2021 | 20,155 | 56 | 20,211 | ||||||
Balance — December 31, 2022 (As Restated) at Dec. 31, 2022 | 22,236 | 1,155 | 23,391 | ||||||
Net income | (4,380) | (4,380) | |||||||
Stock-based compensation | 158 | 158 | |||||||
Net investments from parent | 8,680 | 8,680 | |||||||
Cumulative translation adjustment | (28) | (28) | |||||||
Balance — December 31, 2022 (As Restated) at Mar. 14, 2023 | $ 26,694 | $ 1,127 | $ 27,821 | $ (7,135) | $ 1 | $ 1,607 | $ (8,743) | ||
Ending balance, shares at Mar. 14, 2023 | 7,034,999 | ||||||||
Net income | 2,758 | 2,758 | |||||||
Stock-based compensation | 2 | 2 | |||||||
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 | |||||||
Balance — December 31, 2022 (As Restated) at Mar. 31, 2023 | $ 65,553 | $ 1 | $ 1 | $ 71,536 | $ (5,985) | ||||
Ending balance, shares at Mar. 31, 2023 | 8,582,699 | 5,487,300 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||||
Net income (loss) | $ 8,346,820 | $ 9,207,884 | |||
Change in assets and liabilities: | |||||
Accrued liabilities | 2,066,159 | 572,554 | |||
Net cash used in operating activities | (761,098) | (595,321) | |||
Investing activities | |||||
Net cash provided by investing activities | 275,333,780 | ||||
Financing activities | |||||
Net cash used in financing activities | (274,754,319) | (17,579) | |||
Net Change in Cash | (181,637) | (612,900) | |||
Cash – Beginning of period | $ 224,489 | $ 406,126 | 406,126 | 1,019,026 | |
Cash – End of period | 224,489 | 406,126 | |||
Successor [Member] | |||||
Operating activities | |||||
Net income (loss) | $ 2,758,000 | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||
Depreciation and amortization | 4,000 | ||||
Amortization of intangible assets | 116,000 | ||||
Amortization of right of use asset | 8,000 | ||||
Deferred income taxes | (1,560,000) | ||||
Stock-based compensation expense | 2,000 | ||||
Gain on earnout payment liability | |||||
(Gain) loss on foreign currency transactions | 3,000 | ||||
Gain on change in fair value of derivative liability | (1,686,000) | ||||
Change in assets and liabilities: | |||||
Accounts receivable and other receivables | (335,000) | ||||
Prepaid expenses and other current assets | (100,000) | ||||
Other assets | (37,000) | ||||
Accounts payable | 135,000 | ||||
Accrued liabilities | (3,888,000) | ||||
Income tax liabilities | |||||
Operating lease liabilities | (7,000) | ||||
Deferred revenue | 156,000 | ||||
Net cash used in operating activities | (4,431,000) | ||||
Investing activities | |||||
Purchases of property and equipment | (23,000) | ||||
Investment in capitalized software | |||||
Cash acquired in connection with Business Combination | 10,003,000 | ||||
Net cash provided by investing activities | 9,980,000 | ||||
Financing activities | |||||
Net equity investment from parent | |||||
Taxes paid related to stock based compensation | |||||
Repayment of CXApp acquisition liability | |||||
Repayment of related party promissory note | (328,000) | ||||
Net cash used in financing activities | (328,000) | ||||
Effect of exchange rate changes on cash and cash equivalents | |||||
Net Change in Cash | 5,221,000 | ||||
Cash – Beginning of period | 1,503,000 | ||||
Cash – End of period | 6,724,000 | 1,503,000 | |||
Supplemental disclosures of cash flow information | |||||
Cash paid for taxes | |||||
Cash paid for interest | |||||
Supplemental schedule of noncash investing and financing activities | |||||
Parent’s net equity issued for CX App earnout | |||||
Noncash distribution | |||||
Class A Common Stock and Class C Common Stock issued in connection with Business Combination | 69,928,000 | ||||
Financing of Director and Officer Insurance (see Note 9) | 537,000 | ||||
Predecessor [Member] | |||||
Operating activities | |||||
Net income (loss) | (4,380,000) | (1,671,000) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||
Depreciation and amortization | 228,000 | 145,000 | |||
Amortization of intangible assets | 806,000 | 975,000 | |||
Amortization of right of use asset | 40,000 | 56,000 | |||
Deferred income taxes | (2,000) | ||||
Stock-based compensation expense | 158,000 | 647,000 | |||
Gain on earnout payment liability | (2,827,000) | ||||
(Gain) loss on foreign currency transactions | (32,000) | (266,000) | |||
Gain on change in fair value of derivative liability | |||||
Change in assets and liabilities: | |||||
Accounts receivable and other receivables | (857,000) | (304,000) | |||
Prepaid expenses and other current assets | (20,000) | (521,000) | |||
Other assets | 42,000 | ||||
Accounts payable | (796,000) | (94,000) | |||
Accrued liabilities | (787,000) | 100,000 | |||
Income tax liabilities | 6,000 | ||||
Operating lease liabilities | (38,000) | (56,000) | |||
Deferred revenue | 534,000 | (370,000) | |||
Net cash used in operating activities | (5,144,000) | (4,140,000) | |||
Investing activities | |||||
Purchases of property and equipment | (9,000) | (12,000) | |||
Investment in capitalized software | (45,000) | (39,000) | |||
Cash acquired in connection with Business Combination | |||||
Net cash provided by investing activities | (54,000) | (51,000) | |||
Financing activities | |||||
Net equity investment from parent | 9,089,000 | 6,444,000 | |||
Taxes paid related to stock based compensation | (104,000) | ||||
Repayment of CXApp acquisition liability | (197,000) | (1,787,000) | |||
Repayment of related party promissory note | |||||
Net cash used in financing activities | 8,892,000 | 4,553,000 | |||
Effect of exchange rate changes on cash and cash equivalents | 1,000 | 4,000 | |||
Net Change in Cash | 3,695,000 | 366,000 | |||
Cash – Beginning of period | $ 10,003,000 | 6,308,000 | 5,028,000 | 5,028,000 | |
Cash – End of period | 10,003,000 | 5,394,000 | $ 6,308,000 | $ 5,028,000 | |
Supplemental disclosures of cash flow information | |||||
Cash paid for taxes | |||||
Cash paid for interest | |||||
Supplemental schedule of noncash investing and financing activities | |||||
Parent’s net equity issued for CX App earnout | 3,697,000 | ||||
Noncash distribution | 409,000 | ||||
Class A Common Stock and Class C Common Stock issued in connection with Business Combination | |||||
Financing of Director and Officer Insurance (see Note 9) |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS CXApp Inc. (the “Company”) was incorporated in Delaware on July 20, 2020 as KINS Technology Group Inc. (“KINS”). The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. The Company has one wholly-owned subsidiary, KINS Merger Sub Inc., which was incorporated in the State of Delaware on September 16, 2022 (“Merger Sub”). Merger Sub has no activity from date of incorporation, September 16, 2022 through December 31, 2022. As of December 31, 2022, the Company had not commenced any operations. All activity for the period from July 20, 2020 (inception) through December 31, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering became effective on December 14, 2020. On December 17, 2020, the Company consummated the Initial Public Offering of 27,600,000 3,600,000 10.00 276,000,000 Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 10,280,000 1.00 10,280,000 Transaction costs incurred amounted to $ 15,688,848 5,520,000 9,660,000 508,848 Following the closing of the Initial Public Offering on December 17, 2020, an amount of $ 278,760,000 10.10 The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% 50% The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 5,000,001 Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% The Company previously had until June 17, 2022 to consummate a business combination. On June 10, 2022, the Company held a special meeting of stockholders pursuant to which its stockholders approved amending the Company’s amended and restated certificate of incorporation (the “Initial Charter Amendment”) to extend the date by which the Company has to consummate a business combination from June 17, 2022 to December 16, 2022. The Company’s stockholders approved the Initial Charter Amendment and as such the Company had until December 16, 2022 to consummate a business combination. On December 9, 2022, the Company held a special meeting of the stockholders in which the stockholders approved the proposal to amend the Company’s amended and restated certificate of incorporation (the “Charter Amendment”) to (A) extend the date by which the Company must (1) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, (2) cease its operations except for the purpose of winding up if it fails to complete such initial business combination, and (3) redeem all of the shares of Class A common stock, par value $ 0.0001 5,000,001 If we have not completed a Business Combination by June 15, 2023 or during any extended time that we have to consummate a Business Combination beyond June 15, 2023 as a result of a stockholder vote to amend its certificate of incorporation, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to $ 100,000 The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Extended Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Extended Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Extended Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.10 per Unit. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Going Concern As of December 31, 2022, the Company had $ 224,489 3,002,523 Prior to the completion of the Initial Public Offering, the Company’s liquidity needs had been satisfied through a contribution of $ 25,000 300,000 In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until June 15, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these consolidated financial statements. If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 15, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by June 15, 2023. In addition, the Company may need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, the Company may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through the liquidation date of June 15, 2023. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS The Company had recognized a liability upon closing of their initial public offering in December 2020 for a portion of the underwriter’s commissions which was contingently payable upon closing of a future business combination, with the offsetting entry resulting in an initial discount to the securities sold in the initial public offering. The underwriter waived all claims to this deferred commission in June 2022. The Company previously recognized the waiver as an extinguishment, with a resulting non-operating gain recognized in its statement of operations for the three and six months ended June 30, 2022, nine months ended September 30, 2022 and the year ended December 31, 2022. Upon subsequent review and analysis, management concluded that the Company should have recognized the extinguishment of the contingent liability as a reversal in the same relative allocation applied at the initial public offering. Therefore, the Company’s management and the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) concluded that the Company’s previously issued audited financial statements as of December 31, 2022 (the “Annual Report”) should no longer be relied upon and that it is appropriate to restate the Annual Report. As such, the Company will restate its financial statements in this Form 10-K/A for the Company’s unaudited financial statements for three and six months ended June 30, 2022, nine months ended September 30, 2022, and the audited financial statements for the year ended December 31, 2022 included in the Annual Report on the Company’s Form 10-K, as filed with the Securities and Exchange Commission (“SEC”) on March 21, 2023 (the “Original Filing”). Impact of the Restatement The impact of the restatement on the consolidated statements of operations, statements of changes in stockholders’ deficit and statements of cash flows for the affected period is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities. Summary of impact of the restatement on the financial statements As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Three Months Ended June 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 10,396,046 (9,288,090 ) 1,107,956 Income (loss) before benefit from (provision for) income taxes 10,094,313 (9,288,090 ) 806,223 Net Income 10,071,447 (9,288,090 ) 783,357 Basic and diluted weighted average shares outstanding - Class A common stock 14,481,736 - 14,481,736 Basic and diluted earnings per share - Class A common stock $ 0.47 $ (0.43 ) $ 0.04 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.47 $ (0.43 ) $ 0.04 As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Six Months Ended June 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 18,587,467 (9,288,090 ) 9,299,377 Income (loss) before benefit from (provision for) income taxes 17,962,482 (9,288,090 ) 8,674,392 Net Income 17,939,616 (9,288,090 ) 8,651,526 Basic and diluted weighted average shares outstanding - Class A common stock 21,004,630 - 21,004,630 Basic and diluted earnings per share - Class A common stock $ 0.64 $ (0.33 ) $ 0.31 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.64 $ (0.33 ) $ 0.31 As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Nine Months Ended September 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 20,560,364 (9,288,090 ) 11,272,274 Income (loss) before benefit from (provision for) income taxes 18,838,653 (9,288,090 ) 9,550,563 Net Income 18,811,924 (9,288,090 ) 9,523,834 Basic and diluted weighted average shares outstanding – Class A common stock 16,466,455 - 16,466,455 Basic and diluted earnings per share – Class A common stock $ 0.81 $ (0.40 ) $ 0.41 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.81 $ (0.40 ) $ 0.41 As Previously Restatement Reported Adjustment As Restated Statement of Operations for the Year Ended December 31, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 20,634,549 (9,288,090 ) 11,346,459 Income (loss) before benefit from (provision for) income taxes 17,684,085 (9,288,090 ) 8,395,995 Net Income 17,634,910 (9,288,090 ) 8,346,820 Basic and diluted weighted average shares outstanding - Class A common stock 12,546,423 - 12,546,423 Basic and diluted earnings per share - Class A common stock $ 0.91 $ (0.48 ) $ 0.43 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.91 $ (0.48 ) $ 0.43 Unaudited Statement of Changes in Stockholders’ Deficit for the Three Months Ended June 30, 2022 Accumulated Deficit As Previously Reported Adjustment As Restated Balance – March 31, 2022 $ (13,226,270 ) $ - $ (13,225,580 ) Net income 10,071,447 (9,288,090 ) 783,357 Accretion of Class A common stock to redemption value (242,995 ) 9,288,090 9,045,095 Balance – June 30, 2022 $ (3,397,818 ) $ - $ (3,397,128 ) Statement of Changes in Stockholders’ Deficit for the Year Ended December 31, 2022 Accumulated Deficit As Previously Reported Adjustment As Restated Balance – December 31, 2021 $ (21,094,439 ) $ - $ (21,094,439 ) Net income 17,634,910 (9,288,090 ) 8,346,820 Accretion of Class A common stock to redemption value (256,545 ) 9,288,090 9,031,545 Balance – December 31, 2022 $ (3,716,074 ) $ - $ (3,716,074 ) As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Cash Flows for the Six Months Ended June 30, 2022 Net Income 17,939,616 (9,288,090 ) 8,651,526 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Cash Flows for the Nine Months Ended September 30, 2022 Net Income 18,811,924 (9,288,090 ) 9,523,834 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) As Previously Restatement Reported Adjustment As Restated Statement of Cash Flows for the Year Ended December 31, 2022 Net Income 17,634,910 (9,288,090 ) 8,346,820 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – Summary of Significant Accounting Policies SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liquidity As of March 31, 2023 (Successor), the Company has a working capital surplus of approximately $ 3,052 6,724 2,758 4,431 3,888 The Company cannot assure that it will ever earn revenues sufficient to support their operations, or that it will ever achieve profitable operations. The Company’s recurring losses and utilization of cash in its operations are indicators of substantial doubt that the entity can continue as a going concern however with the Company’s current liquidity position the Company has taken steps to reduce operating expenses and extend it’s runway. The Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities and may consider raising funds from equity financings. Management believes that the actions presently being taken to further implement its business plan and generate its revenues provide the opportunity for the Company to continue as a going concern for at least 12 months from the issuance of these condensed consolidated financial statements. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect for at least twelve months from the issuance of these condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“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, temporary investments and certificates of deposit with maturities of three months or less when purchased. As of March 31, 2023 (Successor), the Company had cash equivalents of approximately $2,000 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 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 un-collectability. Bad debt reserves 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 not significant as of March 31, 2023 (Successor) and at December 31, 2022 (Predecessor). 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 3 to 10 years. Leasehold improvements are amortized over the lesser of the useful life of the asset or the initial lease term. 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 of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. Intangible Assets Intangible assets primarily consist of developed technology, customer lists/relationships, non-compete agreements, intellectual property agreements, export licenses and trade names/trademarks. They are amortized ratably over a range of 1 10 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 a 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. 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. Leases and Right-of-Use Assets 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 their 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 their 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 Income (Loss) and Foreign Currency Translation The Company reports comprehensive income (loss) and its components in its unaudited 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 general and administrative expenses in the unaudited 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 losses were not material for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor). Revenue Recognition 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 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 differ mainly in the duration over which the customer benefits from the software. 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 by via electronic, 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’s professional services include milestone, fixed fee and time and materials contracts. 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 period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor), the Company did not incur any such losses. These amounts are based on known and estimated factors. 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 $ 2,690 thousand and $ 2,162 thousand as of March 31, 2023 (Successor) and December 31, 2022 (Predecessor), respectively, related to customer invoices rendered in advance for software licenses and professional services provided by the Company’s technical staff. The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with professional services, and recognize the deferred revenue related to licenses generally over the remaining contract term generally twelve months following the commencement of the license. The Company recognized revenue in the reporting period of $ 170 thousand, $ 865 thousand, and $ 1,328 thousand that was included in the contract liability balance at the beginning of the period, for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor), respectively. Costs to Obtain a Contract The Company recognizes eligible sales commissions as an asset 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. 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 nominal during each of the reporting periods. 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”), acting as the Chief Operating Decision Maker (“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 accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as an expense over the period during which the recipient is required to provide services in exchange for that award. Forfeitures of unvested stock options are recorded when they occur. The Company incurred stock-based compensation charges of approximately $ 2 158 647 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 of 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 of 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. 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 amounted to approximately $ 1,686 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. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net income per common share for period ended March 31, 2023 (Successor), which are excluded from the calculation because (i) the warrants were below their exercise price and (ii) the stock options were not vested : Schedule of antidilutive shares Successor Period from Stock options 1,377 Warrants 24,080 Total 25,457 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. Fair value measurements are applied, when applicable, to determine the fair value of the Company’s warrant liability at each reporting period. See Note 10. Fair Value of Financial Instruments Financial instruments consist of cash and cash equivalents, accounts receivable, notes and other receivable and accounts payable. The Company determines the estimated fair value of such financial instruments presented in these financial statements using available market information and appropriate methodologies. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company has adopted 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 Recently Issued and Adopted Accounting Standards In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which addresses diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. Under the new guidance, the acquirer is required to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The effective date of the standard is for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. CXApp adopted ASU 2021-08 on January 1, 2022. As a result of management’s evaluation, the adoption of ASU 2021-08 did not have a material impact on the consolidated financial statements. The Company evaluated recently issued FASB accounting pronouncements and noted that no recent announcements were applicable to the Company. | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). As described in Note 2—Restatement of Previously Issued Financial Statements, the Company’s financial statements for the year ended December 31, 2022 (collectively, the “Affected Period”), are restated in this Annual Report on Form 10-K/A (Amendment No. 1) (this “Annual Report”) to correct the misapplication of accounting guidance related to the liability extinguishment in the Company’s previously issued audited financial statements for such period. The restated financial statements are indicated as “Restated” in the audited financial statements and accompanying notes, as applicable. See Note 2—Restatement of Previously Issued Financial Statements for further discussion. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the warrant liabilities. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of six months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021. Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $ 250,000 Class A Common Stock Subject to Possible Redemption The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2022 and 2021, 387,551 27,600,000 The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital (to the extent available) and accumulated deficit. At December 31, 2022 and 2021, the Class A common stock reflected in the consolidated balance sheets are reconciled in the following table: Schedule of reconciliation of Class A common stock reflected in the condensed balance sheet Class A common stock subject to possible redemption, January 1, 2021 $ 278,760,000 Plus: Accretion of carrying value to redemption value - Class A common stock subject to possible redemption, December 31, 2021 278,760,000 Plus: Waiver of Class A common stock issuance costs 9,288,090 Less: Accretion of carrying value to redemption value (9,031,545 ) Redemption of Class A Common Stock (275,102,280 ) Class A common stock subject to redemption, December 31, 2022 $ 3,914,265 Offering Costs Offering costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred in the consolidated statements of operations. Offering costs associated with the Class A common stock issued were initially charged to temporary equity. Offering costs incurred amounted to $ 15,688,848 5,520,000 9,660,000 508,848 15,239,420 449,428 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 of 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. For issued or modified warrants that meet all of 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. 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, and 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 consolidated statements of operations. The Private Placement Warrants and the Public Warrants for periods where no observable traded price was available are valued using a binomial lattice model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value of the Warrants (as defined below) as of each relevant date. Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of December 31, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 0.3% 0.0% 21% ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no no The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income per share does not consider the effect of the Warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the Warrants is contingent upon the occurrence of future events. The Warrants are exercisable to purchase 24,080,000 The following table reflects the calculation of basic and diluted net income per common share (in dollars, except per share amounts): Schedule of Reconciliation of net income per common share Year Ended December 31, 2022 2021 Class A Class B Class A Class B Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ 5,385,193 $ 2,961,627 $ 7,366,307 $ 1,841,577 Denominator: Basic and diluted weighted average shares outstanding 12,546,423 6,900,000 27,600,000 6,900,000 Basic and diluted net income per common stock $ 0.43 $ 0.43 $ 0.27 $ 0.27 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximate the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except the derivative warrant liabilities (see Note 10). Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 as of January 1, 2021 and the adoption did not have an impact on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
PUBLIC OFFERING
PUBLIC OFFERING | 12 Months Ended |
Dec. 31, 2022 | |
Public Offering | |
PUBLIC OFFERING | NOTE 4 — PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 27,600,000 3,600,000 10.00 11.50 |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 12 Months Ended |
Dec. 31, 2022 | |
Private Placement | |
PRIVATE PLACEMENT | NOTE 5 — PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor and the Direct Anchor Investors purchased an aggregate of 10,280,000 1.00 10,280,000 11.50 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 6 — RELATED PARTIES Founder Shares On July 27, 2020, the Sponsor paid $ 25,000 5,750,000 625,000 625,000 2,717 0.004 1.2 6,150,000 750,000 6,900,000 900,000 20% The initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one 1 12.00 20 30 150 Administrative Services Agreement The Company entered into an agreement, commencing on December 14, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of up to $ 20,000 240,000 Promissory Note — Related Party On August 10, 2022, KINS Capital LLC issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $ 400,000 347,961 Working Capital Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 1.00 no |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 17 – Commitments and Contingencies Litigation Certain conditions may exist as of the date the 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. | NOTE 7 — 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 consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. Registration Rights Pursuant to a registration rights agreement entered into on December 14, 2020, the holders of the Founder Shares, Private Placement Warrants and securities that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement. The holders of at least 30% 3 Underwriting Agreement The underwriters were entitled to a deferred fee of $ 0.35 9,660,000 On June 9, 2022, one of the underwriters waived its entitlement to the payment of any deferred fee to be paid under the terms of the underwriting agreement and is no longer serving in an advisor capacity. As a result, the Company recognized $ 9,660,000 Merger Agreement On September 25, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Inpixon, a Nevada corporation (“Inpixon”), CXApp Holding Corp., a Delaware corporation and wholly-owned subsidiary of Inpixon (“CXApp” and, together with Inpixon, collectively, the “Companies”), and Merger Sub, pursuant to which the Company will combine with 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”). Also on September 25, 2022, and in connection with the execution of the Merger Agreement, the Company, Inpixon, CXApp and the Sponsor entered into that certain sponsor support agreement (the “Sponsor Support Agreement”). Immediately prior to the Merger (as defined below) and pursuant to a Separation and Distribution Agreement, dated as of September 25, 2022, among the Company, Inpixon, CXApp and Design Reactor, Inc., a California corporation (“Design Reactor”) (the “Separation Agreement”), and other ancillary conveyance documents, Inpixon will, among other things and on the terms and subject to the conditions of the Separation Agreement, transfer the Enterprise Apps Business, including certain related subsidiaries of Inpixon, including Design Reactor, to CXApp (the “Reorganization”) and, in connection therewith, will distribute (the “Distribution”) to Inpixon stockholders and other security holders 100% of the common stock of CXApp, par value $ 0.00001 Immediately following the Distribution, in accordance with and subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into CXApp (the “Merger”), with CXApp continuing as the surviving company in the Merger and as a wholly-owned subsidiary of the Company. The Merger Agreement, along with the Separation Agreement and the other transaction documents to be entered into in connection therewith, provides for, among other things, the consummation of the following transactions (collectively, the “Business Combination”): (i) Inpixon will transfer the Enterprise Apps Business (the “Separation”) to its wholly-owned subsidiary, CXApp, and contribute $ 10 100% Upon consummation of the Business Combination, the Company will have two classes of common stock: Class A common stock, par value $ 0.0001 0.0001 180 12.00 20 30 Consideration Paid At the time the Business Combination is effected (the “Closing”), the outstanding shares of CXApp Common Stock after the Distribution and immediately prior to the effective time of the Merger will be converted into an aggregate of 6.9 10% 90% Representations and Warranties & Covenants Pursuant to the Merger Agreement, the Company, CXApp and Inpixon each made representations and warranties customary for transactions of this type regarding themselves and their respective businesses. The representations and warranties made pursuant to the Merger Agreement will not survive the Closing. In addition, the parties to the Merger Agreement agreed to be bound by certain covenants that are customary for transactions of this type. The covenants made under the Merger Agreement generally will not survive the Closing, with the exception of certain covenants and agreements that by their terms are to be performed in whole or in part after the Closing, which will survive in accordance with the terms of the Merger Agreement. Conditions to Closing The consummation of the Business Combination is subject to conditions customary for transactions involving special purpose acquisition companies, including, among others: (i) there is not in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority of competent jurisdiction, statute, rule or regulation enjoining or prohibiting the consummation of the Merger, (ii) the Company shall have at least $ 5,000,001 9.5 Termination The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including (i) by the mutual written consent of the Company and CXApp, (ii) by the Company or CXApp, if the Closing shall not have occurred on or before March 16, 2023, (iii) by the Company or CXApp, if there has been any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority that would make the Merger illegal or otherwise prevent or prohibit the Merger, (iv) by the Company or CXApp, if KINS has not obtained the requisite approval from its stockholders, (v) by KINS or CXApp if the other party breaches certain representations, warranties, or covenants, as specified in the Merger Agreement, and that breach is unable to be cured, or is not cured, within 30 2.0 Separation and Distribution Agreement On September 25, 2022, in connection with the execution of the Merger Agreement, the Company entered into the Separation Agreement with CXApp, Inpixon and Design Reactor, pursuant to which, among other things, (i) Inpixon will undertake a series of internal reorganization and restructuring transactions to effect the transfer of its (direct or indirect) ownership of the Enterprise Apps Business to CXApp in the Separation and (ii) immediately prior to the Merger and after the Separation, Inpixon will distribute 100% of the outstanding shares of CXApp Common Stock to Inpixon’s stockholders and certain other security holders in the Distribution. The Separation Agreement also sets forth other agreements among Inpixon and CXApp related to the Separation, including provisions concerning the termination and settlement of intercompany accounts and the obtaining of third-party consents. The Separation Agreement also sets forth agreements that will govern certain aspects of the relationship between Inpixon and CXApp after the Distribution, including provisions with respect to release of claims, indemnification, access to financial and other information and access to and provision of records. Consummation of the Distribution is subject to a number of conditions, including, among others, (i) the completion of the Reorganization and other related transactions, (ii) the execution of the ancillary agreements by the parties and (iii) the satisfaction or waiver of all conditions under the Merger Agreement (other than those conditions that are to be satisfied contemporaneously with the Distribution and/or the Merger, provided that such conditions are capable of being satisfied at such time). Sponsor Support Agreement On September 25, 2022, in connection with the execution of the Merger Agreement, the Company, Inpixon, CXApp and the Sponsor entered into the Sponsor Support Agreement, pursuant to which, among other things, the Sponsor agreed to vote any of the Company’s securities held by it to approve the Business Combination and the other of the Company’s stockholder matters required pursuant to the Merger Agreement, and not to seek redemption of any of the Company’s securities in connection with the consummation of the Business Combination. Pursuant to the Sponsor Support Agreement, the Sponsor and the Company also agreed to amend the letter agreement, dated as of December 14, 2020 between the Sponsor and the Company (the “Insider Letter”) to amend the Founder Shares Lock-Up Period (as defined in the Insider Letter) to provide for lock-up of its shares of the Company’s Class B common stock, par value $ 0.0001 180 20 30 22% 6,150,000 5,150,000 |
Commitments and Contingencies | NOTE 17 – Commitments and Contingencies Litigation Certain conditions may exist as of the date the 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. | NOTE 7 — 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 consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. Registration Rights Pursuant to a registration rights agreement entered into on December 14, 2020, the holders of the Founder Shares, Private Placement Warrants and securities that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement. The holders of at least 30% 3 Underwriting Agreement The underwriters were entitled to a deferred fee of $ 0.35 9,660,000 On June 9, 2022, one of the underwriters waived its entitlement to the payment of any deferred fee to be paid under the terms of the underwriting agreement and is no longer serving in an advisor capacity. As a result, the Company recognized $ 9,660,000 Merger Agreement On September 25, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Inpixon, a Nevada corporation (“Inpixon”), CXApp Holding Corp., a Delaware corporation and wholly-owned subsidiary of Inpixon (“CXApp” and, together with Inpixon, collectively, the “Companies”), and Merger Sub, pursuant to which the Company will combine with 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”). Also on September 25, 2022, and in connection with the execution of the Merger Agreement, the Company, Inpixon, CXApp and the Sponsor entered into that certain sponsor support agreement (the “Sponsor Support Agreement”). Immediately prior to the Merger (as defined below) and pursuant to a Separation and Distribution Agreement, dated as of September 25, 2022, among the Company, Inpixon, CXApp and Design Reactor, Inc., a California corporation (“Design Reactor”) (the “Separation Agreement”), and other ancillary conveyance documents, Inpixon will, among other things and on the terms and subject to the conditions of the Separation Agreement, transfer the Enterprise Apps Business, including certain related subsidiaries of Inpixon, including Design Reactor, to CXApp (the “Reorganization”) and, in connection therewith, will distribute (the “Distribution”) to Inpixon stockholders and other security holders 100% of the common stock of CXApp, par value $ 0.00001 Immediately following the Distribution, in accordance with and subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into CXApp (the “Merger”), with CXApp continuing as the surviving company in the Merger and as a wholly-owned subsidiary of the Company. The Merger Agreement, along with the Separation Agreement and the other transaction documents to be entered into in connection therewith, provides for, among other things, the consummation of the following transactions (collectively, the “Business Combination”): (i) Inpixon will transfer the Enterprise Apps Business (the “Separation”) to its wholly-owned subsidiary, CXApp, and contribute $ 10 100% Upon consummation of the Business Combination, the Company will have two classes of common stock: Class A common stock, par value $ 0.0001 0.0001 180 12.00 20 30 Consideration Paid At the time the Business Combination is effected (the “Closing”), the outstanding shares of CXApp Common Stock after the Distribution and immediately prior to the effective time of the Merger will be converted into an aggregate of 6.9 10% 90% Representations and Warranties & Covenants Pursuant to the Merger Agreement, the Company, CXApp and Inpixon each made representations and warranties customary for transactions of this type regarding themselves and their respective businesses. The representations and warranties made pursuant to the Merger Agreement will not survive the Closing. In addition, the parties to the Merger Agreement agreed to be bound by certain covenants that are customary for transactions of this type. The covenants made under the Merger Agreement generally will not survive the Closing, with the exception of certain covenants and agreements that by their terms are to be performed in whole or in part after the Closing, which will survive in accordance with the terms of the Merger Agreement. Conditions to Closing The consummation of the Business Combination is subject to conditions customary for transactions involving special purpose acquisition companies, including, among others: (i) there is not in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority of competent jurisdiction, statute, rule or regulation enjoining or prohibiting the consummation of the Merger, (ii) the Company shall have at least $ 5,000,001 9.5 Termination The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including (i) by the mutual written consent of the Company and CXApp, (ii) by the Company or CXApp, if the Closing shall not have occurred on or before March 16, 2023, (iii) by the Company or CXApp, if there has been any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority that would make the Merger illegal or otherwise prevent or prohibit the Merger, (iv) by the Company or CXApp, if KINS has not obtained the requisite approval from its stockholders, (v) by KINS or CXApp if the other party breaches certain representations, warranties, or covenants, as specified in the Merger Agreement, and that breach is unable to be cured, or is not cured, within 30 2.0 Separation and Distribution Agreement On September 25, 2022, in connection with the execution of the Merger Agreement, the Company entered into the Separation Agreement with CXApp, Inpixon and Design Reactor, pursuant to which, among other things, (i) Inpixon will undertake a series of internal reorganization and restructuring transactions to effect the transfer of its (direct or indirect) ownership of the Enterprise Apps Business to CXApp in the Separation and (ii) immediately prior to the Merger and after the Separation, Inpixon will distribute 100% of the outstanding shares of CXApp Common Stock to Inpixon’s stockholders and certain other security holders in the Distribution. The Separation Agreement also sets forth other agreements among Inpixon and CXApp related to the Separation, including provisions concerning the termination and settlement of intercompany accounts and the obtaining of third-party consents. The Separation Agreement also sets forth agreements that will govern certain aspects of the relationship between Inpixon and CXApp after the Distribution, including provisions with respect to release of claims, indemnification, access to financial and other information and access to and provision of records. Consummation of the Distribution is subject to a number of conditions, including, among others, (i) the completion of the Reorganization and other related transactions, (ii) the execution of the ancillary agreements by the parties and (iii) the satisfaction or waiver of all conditions under the Merger Agreement (other than those conditions that are to be satisfied contemporaneously with the Distribution and/or the Merger, provided that such conditions are capable of being satisfied at such time). Sponsor Support Agreement On September 25, 2022, in connection with the execution of the Merger Agreement, the Company, Inpixon, CXApp and the Sponsor entered into the Sponsor Support Agreement, pursuant to which, among other things, the Sponsor agreed to vote any of the Company’s securities held by it to approve the Business Combination and the other of the Company’s stockholder matters required pursuant to the Merger Agreement, and not to seek redemption of any of the Company’s securities in connection with the consummation of the Business Combination. Pursuant to the Sponsor Support Agreement, the Sponsor and the Company also agreed to amend the letter agreement, dated as of December 14, 2020 between the Sponsor and the Company (the “Insider Letter”) to amend the Founder Shares Lock-Up Period (as defined in the Insider Letter) to provide for lock-up of its shares of the Company’s Class B common stock, par value $ 0.0001 180 20 30 22% 6,150,000 5,150,000 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 8 — STOCKHOLDERS’ DEFICIT Preferred Stock — 2,000,000 0.0001 no Class A Common Stock — 100,000,000 0.0001 1 387,551 27,600,000 Class B Common Stock — 20,000,000 0.0001 1 6,900,000 Only holders of the Class B common stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by law. The shares of Class B common stock will automatically convert into Class A common stock at the time of a Business Combination, or earlier at the option of the holder (except for any Founder Shares held by the Direct Anchor Investors who have agreed not to effect a conversion with respect to such Founder Shares until the consummation of the initial Business Combination), on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination (including pursuant to a specified future issuance), the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the then-outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance, including pursuant to a specified future issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% |
DERIVATIVE WARRANT LIABILITIES
DERIVATIVE WARRANT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE WARRANT LIABILITIES | NOTE 9 — DERIVATIVE WARRANT LIABILITIES As of December 31, 2022 and 2021 there were 13,800,000 10,280,000 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 Public Warrants will become exercisable on the later of (a) 30 12 5 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. The Company has agreed that as soon as practicable, but in no event later than 20 60 Redemptions of warrants when the price of Class A common stock equals or exceeds $ 18.00 ● in whole and not in part; ● at a price of $ 0.01 ● upon not less than 30 days’ prior written notice of redemption, or the 30 ● if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $ 18.00 20 30 If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 10.00 ● in whole and not in part; ● at a price of $ 0.10 ● upon not less than 30 days’ prior written notice of redemption, or the 30 ● if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $ 10.00 ● if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto is available throughout the 30 In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $ 9.20 60% 115% 180% As of December 31, 2022 and 2021 there were 10,280,000 30 |
INCOME TAX
INCOME TAX | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAX | NOTE 13 – Income Taxes The Company recorded an income tax benefit of approximately $ 1,560 0 100 The effective tax rate for period ended March 31, 2023 (Successor) was approximately ( 164.0% 4,337 | NOTE 10 — INCOME TAX The Company’s net deferred tax assets are as follows as of December 31, 2022 and 2021: Schedule of Company's net deferred tax assets December 31, December 31, 2022 2021 Deferred tax asset Organizational costs/startup expenses $ 924,537 $ 322,963 Net operating loss carryforward - 28,689 Total deferred tax asset 924,537 351,652 Valuation allowance (924,537 ) (351,652 ) Deferred tax asset, net of allowance $ - $ - The income tax provision consists of the following for the years ended December 31, 2022 and 2021: Schedule of income tax provision December 31, December 31, 2022 2021 Federal Current $ 49,175 $ - Deferred (572,885 ) (300,205 ) State and Local Current - - Deferred - - Change in valuation allowance 572,885 300,205 Income tax provision $ 49,175 $ - As of December 31, 2022 and 2021, the Company had U.S. federal net operating loss carryover of approximately $ 0 137,000 In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2022 and 2021, the change in the valuation allowance was $ 572,885 300,205 A reconciliation of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2022 and 2021 are as follows: Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate December 31, December 31, 2022 2021 Statutory federal income tax rate 21 % 21 % State taxes, net of federal tax benefit 0.0 % 0.0 % Transaction costs allocated to derivative warrant liabilities 0.0 % 0.0 % Change in fair value of derivative warrant liabilities (23.9 )% (24.3 )% Valuation allowance 3.2 % 3.3 % Income tax provision 0.3 % 0.0 % The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE MEASUREMENTS | NOTE 12 – Fair Value of Financial Instruments The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in ASC 820. The Company noted that the only financial asset or financial liability that is subject to the fair value framework established in ASC 820 are the Warrant Liabilities (Note 10). The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the ASC 820 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The Company classified the public placement warrants recorded at fair value of on a recurring basis of $ 552 411 | NOTE 11 — FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. On December 31 2022, assets held in the Trust Account consisted of $ 3,923,804 231,500 275,102,280 At December 31, 2021, assets held in the Trust Account were comprised of $ 898 278,835,182 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022 and 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Schedule of company's assets and liabilities that are measured at fair value on a recurring basis December 31, December 31, 2022 2021 Description Level Fair Value Level Fair Value Assets: Money Market Funds 1 - 1 $ 278,835,182 Liabilities: Warrant liabilities – public warrants 1 $ 414,000 1 $ 6,461,798 Warrant liabilities – private placement warrants 2 $ 308,400 2 $ 4,813,571 The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying December 31, 2022 and 2021 consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations. The Warrants are measured at fair value on a recurring basis. The Public Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the binomial lattice methodology. As of December 31, 2022, the Public Warrants were valued using the instrument’s publicly listed trading price as of the balance sheet date, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market. The Private Placement Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the binomial lattice methodology, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of our common stock. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The subsequent measurements of the Private Placement Warrants after the detachment of the Public Warrants from the Units is classified as Level 2 due to the use of an observable market quote for a similar asset in an active market, as the transfer of Private Placement Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants. The following table presents the changes in the fair value of Level 3 warrant liabilities: Schedule of change in the fair value of the Level 3 warrant liabilities Private Placement Public Warrant Liabilities Fair value as of December 31, 2020 $ 9,354,800 $ 12,558,000 $ 21,912,800 Change in fair value (2,672,800 ) (3,588,000 ) (6,260,800 ) Transfer to Level 1 - (8,970,000 ) (8,970,000 ) Transfer to Level 2 (6,682,000 ) - (6,682,000 ) Fair value as of December 31, 2021 $ - $ - $ - Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during the period ended December 31, 2021 was approximately $ 9.0 6.7 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 9, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) stating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company had 45 calendar days (or until February 23, 2023) to submit a plan to regain compliance and, if Nasdaq accepts the plan, Nasdaq may grant the Company up to 180 calendar days from its fiscal year end, or until June 29, 2023, to regain compliance. The Company submitted a compliance plan within the specified period. While the plan is pending, the Company’s securities will continue to trade on Nasdaq. On January 21, 2023, the Company received a written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company is not in compliance with Listing Rule 5550(a)(4), due to the Company’s failure to meet the minimum 500,000 publicly held shares requirement for continued listing on the Nasdaq Capital Market. The Notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on the Nasdaq Capital Market. The Notice stated that the Company had until March 9, 2023 to submit a plan to regain compliance with Listing Rule 5550(a)(4). The Company believes that the issue identified in the Notice will be resolved upon completion of the previously announced proposed business combination with CXApp Holding Corp. The Company submitted a compliance plan within the specified period. If Nasdaq accepts the Company’s plan, Nasdaq may grant the Company an extension of up to 180 calendar days from the date of the Notice to evidence compliance with Listing Rule 5550(a)(4). If Nasdaq does not accept the Company’s plan, the Company will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel. |
Organization, Nature of Busines
Organization, Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
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 offers a suite of leading-edge technology workplace experience solutions including an enterprise employee application, indoor mapping, on-device positioning, augmented reality technologies and an AI-based analytics platform, targeting the emerging hybrid workplace market to provide enhanced experiences across people, places, and things. 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 experiences in a hybrid workplace. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, CXApp does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of CXApp, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year ending December 31, 2023. These interim unaudited condensed consolidated financial statement should be read in conjunction with KINS Technology Group Inc.’s (“KINS”) audited consolidated financial statements and notes for the year ended December 31, 2022 and 2021 included in the annual report on Form 10-K/A for the year ended December 31, 2022, filed with the SEC on April 19, 2023, and the annual report of Legacy CXApp for the year ended December 31, 2022 and 2021 included as an exhibit to Form 8-K filed with the SEC on March 20, 2023. All material inter-company balances and transactions have been eliminated. On September 25, 2022, an Agreement and Plan of Merger (the “Merger Agreement”), was entered into by and among Inpixon, KINS Technology Group Inc., a Delaware corporation, 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. (“New 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”), the Company 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. The unaudited condensed consolidated financial statements of Successor and Predecessor are not comparable due to a new basis of accounting that was created from the business combination that occurred on the Closing Date (Note 3). Therefore, the reporting period has been separated by a black line in the condensed consolidated financial statements with the Predecessor representing the pre-Closing Date period (January 1, 2023 through March 14, 2023) and the Successor representing the post-Closing Date period (March 15, 2023 through March 31, 2023). The Company noted that the “Predecessor” includes financial information related to the Enterprise Apps Business (as defined in Note 3), while the “Successor” includes financial information related to the newly formed company after the business combination. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [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 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 agreed upon aggregate purchase price of approximately $ 69,928 1,547,700 5,487,300 9.94 44,122 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 180th day following the closing of the Merger 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 Combinations. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Business Combinations. These values are subject to change as we perform additional reviews of our assumptions utilized. The Company has made a provisional allocation of 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 preliminary purchase price allocations relating to the Business Combination (in thousands): Schedule of assets acquired Description Fair Value Weighted 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 588 Operating lease right of use asset 557 Property and equipment, net 133 Other assets 42 Developed technology 9,268 10 Patents 2,703 10 Customer relationships 5,604 5 Tradenames and trademarks 3,294 7 Total assets acquired $ 34,627 Liabilities assumed: Accounts payable $ 461 Accrued liabilities 911 Deferred revenues 2,534 Operating lease obligation, current 194 Operating lease obligation, noncurrent 384 Deferred tax liability 4,337 Total liabilities assumed 8,821 Goodwill $ 44,122 The value of the intangible assets and goodwill 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 tax deductible for tax purposes. Total acquisition-related costs for the Business Combination were approximately $ 3,000 thousand, which 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. Measurement Period The preliminary 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 continues 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. CXApp Proforma Financial Information The following unaudited proforma financial information presents the condensed consolidated results of operations of the Company for the three month periods ended March 31, 2023 and March 31, 2022, as if the acquisition had occurred as of the beginning of the first period presented (January 1, 2022) 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): Schedule of proforma financial information For the For the Revenues $ 1,962 $ 2,582 Net income (loss) $ (6,365 ) $ 6,197 |
Disaggregation of Revenue
Disaggregation of Revenue | 3 Months Ended |
Mar. 31, 2023 | |
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 Period from Period from Three months ended March 31, Subscription revenue Software 240 1,204 1,259 Total subscription revenue $ 240 $ 1,204 $ 1,259 Non-subscription revenue Professional services 102 416 1,323 Total non-subscription revenue $ 102 $ 416 $ 1,323 Total Revenue $ 342 $ 1,620 $ 2,582 Successor Predecessor Period from Period from Three months ended March 31, Revenue recognized over time (1)(2) 342 1,620 2,582 Total $ 342 $ 1,620 $ 2,582 (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, in which revenue is recognized over time. (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 overtime. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2023 | |
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 Successor Predecessor March 31, December 31, Computer and office equipment $ 139 $ 992 Furniture and fixtures 11 185 Leasehold improvements 6 28 Software 1 8 Total 157 1,213 Less: accumulated depreciation and amortization (4 ) (1,011 ) Total Property and Equipment, Net $ 153 $ 202 Depreciation and amortization expense were approximately $ 4 thousand, $ 19 thousand and $ 36 thousand for the period ended March 31, 2023 (Successor), the period ended March 14, 2023 (Predecessor), and three months ended March 31, 2022 (Predecessor), respectively. |
Software Development Costs, net
Software Development Costs, net | 3 Months Ended |
Mar. 31, 2023 | |
Software Development Costs Net | |
Software Development Costs, net | NOTE 6 – Software Development Costs, net Capitalized software development costs consisted of the following (in thousands): Schedule of capitalized software development Successor Predecessor March 31, December 31, Capitalized software development costs $ - $ 2,680 Accumulated amortization - (2,193 ) Software development costs, net - 487 Amortization expense for capitalized software development costs was approximately $ 209 113 no |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 7 – Goodwill and Intangible Assets The Company reviews goodwill 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 for the period ended March 31, 2023 (Successor) was $ 44,122 no Goodwill consisted of the following (in thousands): Schedule of goodwill Acquisition Amount Balance as of March 14, 2023 $ - Acquisition of Legacy CXApp 44,122 Balance as of March 31, 2023 $ 44,122 Intangible assets consisted of the following (in thousands): Schedule of intangible assets March 31, 2023 (Successor) December 31, 2022 (Predecessor) Weighted Average Remaining Gross Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Amortization Net Carrying Trade Name/Trademarks 7 $ 3,294 $ (20 ) $ 3,274 $ 2,183 $ (725 ) $ 1,458 Customer Relationships 5 5,604 (47 ) 5,557 6,401 (1,765 ) 4,636 Developed Technology 10 9,268 (38 ) 9,230 15,179 (3,398 ) 11,781 Non-compete Agreements - - - 3,150 (1,736 ) 1,414 Patents and Intellectual Property 10 2,703 (11 ) 2,692 - - - Totals $ 20,869 $ (116 ) $ 20,753 $ 26,913 $ (7,624 ) $ 19,289 Aggregate Amortization Expense Aggregate amortization expense for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor) was $ 116 806 975 Future amortization expense on intangible assets is anticipated to be as follows (in thousands): Schedule of future amortization expense For the Years Ending December 31, Amount 2023 $ 2,091 2024 2,788 2025 2,788 2026 2,788 2027 2,788 2028 and thereafter 7,510 Total $ 20,753 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Revenue | |
Deferred Revenue | NOTE 8 – Deferred Revenue Deferred revenue consisted of the following (in thousands): Schedule of deferred revenue Successor Predecessor March 31, December 31, License agreements $ 2,388 $ 1,937 Professional Service agreements 302 225 Total Deferred Revenue $ 2,690 $ 2,162 The fair value of the deferred revenue approximates the services to be rendered. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | NOTE 9 – Accrued Liabilities Accrued liabilities consisted of the following (in thousands): Schedule of accrued Liabilities Successor Predecessor March 31, December 31, Insurance premiums and accrued interest $ 538 $ - Related party promissory note 20 - Income tax payables 57 - Related party payable 1,155 - Accrued compensation and benefits 650 586 Accrued bonus and commissions 192 422 Accrued rent 3 559 Accrued other 561 83 Accrued sales and other indirect taxes payable 6 86 Accrued liabilities $ 3,182 $ 1,736 Financed Director & Officers Insurance The Company entered into a Directors & Officers (“D&O”) insurance agreement with Oakwood D&O Insurance, effective on March 14, 2023. The agreement states that the Company will pay a total of $ 671 8% 134 538 Related Party Liabilities As of March 31, 2023, the Company’s related party liabilities consisted of a promissory note payable to the KINS sponsor in the amount of $20 thousand for working capital. As of March 31, 2023, accrued liabilities include an estimate of approximately $1,045 thousand due to Inpixon by CXApp resulting from an agreement to reimburse Inpixon (subject to review and acceptance by the Company) for certain transaction related costs incurred by Inpixon on behalf of KINS prior to March 14, 2023. This amount is subject to an ongoing review and evaluation by the Company. Additionally, as of March 31, 2023, accrued liabilities include (i) $30 thousand for estimated costs related to transition services provided by Inpixon to CXApp and (ii) $80 thousand of reimbursable expenses incurred by Inpixon on behalf of CXApp during the period from March 15, 2023 to March 31, 2023. In connection with a distribution of CXApp securities by KINS Capital LLC, Inpixon is entitled to acquire 2,500,000 CXApp Private Placement Warrants, which reflects Inpixon’s existing indirect interests in CXApp. |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Warrant Liabilities | |
Warrant Liabilities | NOTE 10 - Warrant Liabilities As of March 31, 2023 (Successor) there were 13,800 11.50 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 Public Warrants will become exercisable on the later of (a) 30 12 5 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. The Company has filed a registration statement on Form S-1 (Registration No. 333-271340) under the Securities Act on April 19, 2023 covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants, and will use its commercially reasonable efforts to have it declared effective by the SEC within 60 business days following a Business Combination. The Company will use its commercially reasonable efforts to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Redemptions of warrants when the price of Class A common stock equals or exceeds $ 18.00 ● In whole and not in part; ● At a price of $ 0.01 ● Upon not less than 30 30 ● If, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $ 18.00 20 30 third trading day If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 10.00 ● In whole and not in part; ● At a price of $ 0.10 ● upon not less than 30 30 ● if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $ 10.00 ● if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto is available throughout the 30-day period after the written notice of redemption is given. As of March 31, 2023 (Successor), there were 10,280 30 |
Stock Option Plan and Stock-Bas
Stock Option Plan and Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
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 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 CXApp Inc. 2023 Equity Incentive Plan (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 Employee Stock Options During the period ended March 31, 2023 (Successor), a total of 1,377 2 5 7 688 1.53 During the period ended March 31, 2023 (Successor), the Company recorded a charge of approximately $ 2 As of March 31, 2023 (Successor), the fair value of non-vested options totalled approximately $ 686 2 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 during the period ended March 31, 2023 (Successor) were as follows: Schedule of assumptions used Risk-free interest rate 3.62 % – 3.67 % Expected life of option grants 5 – 7 years Expected volatility of underlying stock 37.35 Dividends assumption 0% |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | NOTE 12 – Fair Value of Financial Instruments The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in ASC 820. The Company noted that the only financial asset or financial liability that is subject to the fair value framework established in ASC 820 are the Warrant Liabilities (Note 10). The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the ASC 820 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The Company classified the public placement warrants recorded at fair value of on a recurring basis of $ 552 411 | NOTE 11 — FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. On December 31 2022, assets held in the Trust Account consisted of $ 3,923,804 231,500 275,102,280 At December 31, 2021, assets held in the Trust Account were comprised of $ 898 278,835,182 The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022 and 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Schedule of company's assets and liabilities that are measured at fair value on a recurring basis December 31, December 31, 2022 2021 Description Level Fair Value Level Fair Value Assets: Money Market Funds 1 - 1 $ 278,835,182 Liabilities: Warrant liabilities – public warrants 1 $ 414,000 1 $ 6,461,798 Warrant liabilities – private placement warrants 2 $ 308,400 2 $ 4,813,571 The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying December 31, 2022 and 2021 consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations. The Warrants are measured at fair value on a recurring basis. The Public Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the binomial lattice methodology. As of December 31, 2022, the Public Warrants were valued using the instrument’s publicly listed trading price as of the balance sheet date, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market. The Private Placement Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the binomial lattice methodology, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of our common stock. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The subsequent measurements of the Private Placement Warrants after the detachment of the Public Warrants from the Units is classified as Level 2 due to the use of an observable market quote for a similar asset in an active market, as the transfer of Private Placement Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants. The following table presents the changes in the fair value of Level 3 warrant liabilities: Schedule of change in the fair value of the Level 3 warrant liabilities Private Placement Public Warrant Liabilities Fair value as of December 31, 2020 $ 9,354,800 $ 12,558,000 $ 21,912,800 Change in fair value (2,672,800 ) (3,588,000 ) (6,260,800 ) Transfer to Level 1 - (8,970,000 ) (8,970,000 ) Transfer to Level 2 (6,682,000 ) - (6,682,000 ) Fair value as of December 31, 2021 $ - $ - $ - Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during the period ended December 31, 2021 was approximately $ 9.0 6.7 |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE 13 – Income Taxes The Company recorded an income tax benefit of approximately $ 1,560 0 100 The effective tax rate for period ended March 31, 2023 (Successor) was approximately ( 164.0% 4,337 | NOTE 10 — INCOME TAX The Company’s net deferred tax assets are as follows as of December 31, 2022 and 2021: Schedule of Company's net deferred tax assets December 31, December 31, 2022 2021 Deferred tax asset Organizational costs/startup expenses $ 924,537 $ 322,963 Net operating loss carryforward - 28,689 Total deferred tax asset 924,537 351,652 Valuation allowance (924,537 ) (351,652 ) Deferred tax asset, net of allowance $ - $ - The income tax provision consists of the following for the years ended December 31, 2022 and 2021: Schedule of income tax provision December 31, December 31, 2022 2021 Federal Current $ 49,175 $ - Deferred (572,885 ) (300,205 ) State and Local Current - - Deferred - - Change in valuation allowance 572,885 300,205 Income tax provision $ 49,175 $ - As of December 31, 2022 and 2021, the Company had U.S. federal net operating loss carryover of approximately $ 0 137,000 In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2022 and 2021, the change in the valuation allowance was $ 572,885 300,205 A reconciliation of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2022 and 2021 are as follows: Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate December 31, December 31, 2022 2021 Statutory federal income tax rate 21 % 21 % State taxes, net of federal tax benefit 0.0 % 0.0 % Transaction costs allocated to derivative warrant liabilities 0.0 % 0.0 % Change in fair value of derivative warrant liabilities (23.9 )% (24.3 )% Valuation allowance 3.2 % 3.3 % Income tax provision 0.3 % 0.0 % The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. |
Credit Risk and Concentrations
Credit Risk and Concentrations | 3 Months Ended |
Mar. 31, 2023 | |
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. Cash is also maintained at foreign financial institutions for its Canadian and Philippines subsidiaries and its majority-owned India subsidiary. Cash in foreign financial institutions as of March 31, 2023 (Successor) and December 31, 2022 (Predecessor) was immaterial. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. |
Foreign Operations
Foreign Operations | 3 Months Ended |
Mar. 31, 2023 | |
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): Schedule of financial data by geographic area United States Canada India Philippines Eliminations Total For the Period Ended March 31, 2023 (Successor) Revenues by geographic area $ 272 $ 70 $ - $ 196 $ (196 ) $ 342 Operating income (loss) by geographic area $ (486 ) $ (158 ) $ - $ 157 $ - $ (487 ) Net income (loss) by geographic area $ 2,780 $ (158 ) $ - $ 157 $ (21 ) $ 2,758 For the Period Ended 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 Three Months Ended March 31, 2022 (Predecessor) Revenues by geographic area $ 2,167 $ 601 $ 270 $ - $ (456 ) $ 2,582 Operating income (loss) by geographic area $ (650 ) $ (1,008 ) $ 72 $ - $ 14 $ (1,572 ) Net income (loss) by geographic area $ (519 ) $ (1,139 ) $ (27 ) $ - $ 14 $ (1,671 ) As of March 31, 2023 (Successor) Identifiable assets by geographic area $ 75,059 $ 991 $ - $ 405 $ (71 ) $ 76,384 Long lived assets by geographic area $ 20,817 $ 417 $ - $ 222 $ - $ 21,455 Goodwill by geographic area $ 44,122 $ - $ - $ - $ - $ 44,122 As of December 31, 2022 (Predecessor) Identifiable assets by geographic area $ 24,591 $ 5,484 $ 228 $ 415 $ (1,438 ) $ 29,280 Long lived assets by geographic area $ 15,558 $ 4,788 $ 98 $ 215 $ - $ 20,659 Goodwill by geographic area $ - $ - $ - $ - $ - $ - |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | NOTE 16 – Leases The Company has operating leases for administrative offices in Canada and the Philippines. The Manila, Philippines office lease expires in May 2025 and the Canada lease expires in June 2026. The Company entered into a 13-month lease for administrative offices in California on April 1, 2023 with lease payments of approximately $19 Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and 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 condensed consolidated statement of operations for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor), and three months ended March 31, 2022 (Predecessor) was approximately $ 9 57 97 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 March 31, 2023 (Successor), the weighted average remaining lease term is 2.7 8.0 2.8 8.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). As described in Note 2—Restatement of Previously Issued Financial Statements, the Company’s financial statements for the year ended December 31, 2022 (collectively, the “Affected Period”), are restated in this Annual Report on Form 10-K/A (Amendment No. 1) (this “Annual Report”) to correct the misapplication of accounting guidance related to the liability extinguishment in the Company’s previously issued audited financial statements for such period. The restated financial statements are indicated as “Restated” in the audited financial statements and accompanying notes, as applicable. See Note 2—Restatement of Previously Issued Financial Statements for further discussion. | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. | |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“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. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these consolidated financial statements is the determination of the fair value of the warrant liabilities. Accordingly, the actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash, checking accounts, money market accounts, temporary investments and certificates of deposit with maturities of three months or less when purchased. As of March 31, 2023 (Successor), the Company had cash equivalents of approximately $2,000 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 | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of six months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021. |
Concentration of Credit Risk | Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $ 250,000 | |
Class A Common Stock Subject to Possible Redemption | Class A Common Stock Subject to Possible Redemption The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2022 and 2021, 387,551 27,600,000 The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital (to the extent available) and accumulated deficit. At December 31, 2022 and 2021, the Class A common stock reflected in the consolidated balance sheets are reconciled in the following table: Schedule of reconciliation of Class A common stock reflected in the condensed balance sheet Class A common stock subject to possible redemption, January 1, 2021 $ 278,760,000 Plus: Accretion of carrying value to redemption value - Class A common stock subject to possible redemption, December 31, 2021 278,760,000 Plus: Waiver of Class A common stock issuance costs 9,288,090 Less: Accretion of carrying value to redemption value (9,031,545 ) Redemption of Class A Common Stock (275,102,280 ) Class A common stock subject to redemption, December 31, 2022 $ 3,914,265 | |
Offering Costs | Offering Costs Offering costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred in the consolidated statements of operations. Offering costs associated with the Class A common stock issued were initially charged to temporary equity. Offering costs incurred amounted to $ 15,688,848 5,520,000 9,660,000 508,848 15,239,420 449,428 | |
Derivative Warrant Liabilities | 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 of 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. For issued or modified warrants that meet all of 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. 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, and 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 consolidated statements of operations. The Private Placement Warrants and the Public Warrants for periods where no observable traded price was available are valued using a binomial lattice model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value of the Warrants (as defined below) as of each relevant date. | |
Income Taxes | 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. | Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of December 31, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 0.3% 0.0% 21% ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no no The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Earnings Per Share | 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. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net income per common share for period ended March 31, 2023 (Successor), which are excluded from the calculation because (i) the warrants were below their exercise price and (ii) the stock options were not vested : Schedule of antidilutive shares Successor Period from Stock options 1,377 Warrants 24,080 Total 25,457 | Net Income per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income per share does not consider the effect of the Warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the Warrants is contingent upon the occurrence of future events. The Warrants are exercisable to purchase 24,080,000 The following table reflects the calculation of basic and diluted net income per common share (in dollars, except per share amounts): Schedule of Reconciliation of net income per common share Year Ended December 31, 2022 2021 Class A Class B Class A Class B Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ 5,385,193 $ 2,961,627 $ 7,366,307 $ 1,841,577 Denominator: Basic and diluted weighted average shares outstanding 12,546,423 6,900,000 27,600,000 6,900,000 Basic and diluted net income per common stock $ 0.43 $ 0.43 $ 0.27 $ 0.27 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments consist of cash and cash equivalents, accounts receivable, notes and other receivable and accounts payable. The Company determines the estimated fair value of such financial instruments presented in these financial statements using available market information and appropriate methodologies. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximate the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except the derivative warrant liabilities (see Note 10). |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which addresses diversity in practice related to the accounting for revenue contracts with customers acquired in a business combination. Under the new guidance, the acquirer is required to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The effective date of the standard is for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. CXApp adopted ASU 2021-08 on January 1, 2022. As a result of management’s evaluation, the adoption of ASU 2021-08 did not have a material impact on the consolidated financial statements. The Company evaluated recently issued FASB accounting pronouncements and noted that no recent announcements were applicable to the Company. | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 as of January 1, 2021 and the adoption did not have an impact on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Liquidity | Liquidity As of March 31, 2023 (Successor), the Company has a working capital surplus of approximately $ 3,052 6,724 2,758 4,431 3,888 The Company cannot assure that it will ever earn revenues sufficient to support their operations, or that it will ever achieve profitable operations. The Company’s recurring losses and utilization of cash in its operations are indicators of substantial doubt that the entity can continue as a going concern however with the Company’s current liquidity position the Company has taken steps to reduce operating expenses and extend it’s runway. The Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities and may consider raising funds from equity financings. Management believes that the actions presently being taken to further implement its business plan and generate its revenues provide the opportunity for the Company to continue as a going concern for at least 12 months from the issuance of these condensed consolidated financial statements. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect for at least twelve months from the issuance of these condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. | |
Accounts Receivable, net and Allowance for Credit Losses | 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 un-collectability. Bad debt reserves 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 not significant as of March 31, 2023 (Successor) and at December 31, 2022 (Predecessor). | |
Property and Equipment, net | 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 3 to 10 years. Leasehold improvements are amortized over the lesser of the useful life of the asset or the initial lease term. 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 of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. | |
Intangible Assets | Intangible Assets Intangible assets primarily consist of developed technology, customer lists/relationships, non-compete agreements, intellectual property agreements, export licenses and trade names/trademarks. They are amortized ratably over a range of 1 10 | |
Goodwill | 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 a 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. 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. | |
Leases and Right-of-Use Assets | Leases and Right-of-Use Assets 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 their 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 their 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. | |
Comprehensive Income (Loss) and Foreign Currency Translation | Comprehensive Income (Loss) and Foreign Currency Translation The Company reports comprehensive income (loss) and its components in its unaudited 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 general and administrative expenses in the unaudited 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 losses were not material for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor). | |
Revenue Recognition | Revenue Recognition 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 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 differ mainly in the duration over which the customer benefits from the software. 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 by via electronic, 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’s professional services include milestone, fixed fee and time and materials contracts. 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 period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor), the Company did not incur any such losses. These amounts are based on known and estimated factors. 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 $ 2,690 thousand and $ 2,162 thousand as of March 31, 2023 (Successor) and December 31, 2022 (Predecessor), respectively, related to customer invoices rendered in advance for software licenses and professional services provided by the Company’s technical staff. The Company expects to satisfy its remaining performance obligations for the deferred revenue associated with professional services, and recognize the deferred revenue related to licenses generally over the remaining contract term generally twelve months following the commencement of the license. The Company recognized revenue in the reporting period of $ 170 thousand, $ 865 thousand, and $ 1,328 thousand that was included in the contract liability balance at the beginning of the period, for the period ended March 31, 2023 (Successor), period ended March 14, 2023 (Predecessor) and three months ended March 31, 2022 (Predecessor), respectively. Costs to Obtain a Contract The Company recognizes eligible sales commissions as an asset 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. 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 nominal during each of the reporting periods. | |
Business Combinations | 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 | Segments The Company and its Chief Executive Officer (“CEO”), acting as the Chief Operating Decision Maker (“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 | Stock-Based Compensation The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as an expense over the period during which the recipient is required to provide services in exchange for that award. Forfeitures of unvested stock options are recorded when they occur. The Company incurred stock-based compensation charges of approximately $ 2 158 647 | |
Derivative Warrant Liabilities | 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 of 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 of 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. 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 amounted to approximately $ 1,686 | |
Fair Value Measurements | 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. Fair value measurements are applied, when applicable, to determine the fair value of the Company’s warrant liability at each reporting period. See Note 10. | |
Carrying Value, Recoverability and Impairment of Long-Lived Assets | Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company has adopted 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 |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of impact of the restatement on the financial statements | Summary of impact of the restatement on the financial statements As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Three Months Ended June 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 10,396,046 (9,288,090 ) 1,107,956 Income (loss) before benefit from (provision for) income taxes 10,094,313 (9,288,090 ) 806,223 Net Income 10,071,447 (9,288,090 ) 783,357 Basic and diluted weighted average shares outstanding - Class A common stock 14,481,736 - 14,481,736 Basic and diluted earnings per share - Class A common stock $ 0.47 $ (0.43 ) $ 0.04 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.47 $ (0.43 ) $ 0.04 As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Six Months Ended June 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 18,587,467 (9,288,090 ) 9,299,377 Income (loss) before benefit from (provision for) income taxes 17,962,482 (9,288,090 ) 8,674,392 Net Income 17,939,616 (9,288,090 ) 8,651,526 Basic and diluted weighted average shares outstanding - Class A common stock 21,004,630 - 21,004,630 Basic and diluted earnings per share - Class A common stock $ 0.64 $ (0.33 ) $ 0.31 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.64 $ (0.33 ) $ 0.31 As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Operations for the Nine Months Ended September 30, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 20,560,364 (9,288,090 ) 11,272,274 Income (loss) before benefit from (provision for) income taxes 18,838,653 (9,288,090 ) 9,550,563 Net Income 18,811,924 (9,288,090 ) 9,523,834 Basic and diluted weighted average shares outstanding – Class A common stock 16,466,455 - 16,466,455 Basic and diluted earnings per share – Class A common stock $ 0.81 $ (0.40 ) $ 0.41 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.81 $ (0.40 ) $ 0.41 As Previously Restatement Reported Adjustment As Restated Statement of Operations for the Year Ended December 31, 2022 Gain on forgiveness of deferred underwriting fee payable 9,660,000 (9,288,090 ) 371,910 Total other income (expenses) 20,634,549 (9,288,090 ) 11,346,459 Income (loss) before benefit from (provision for) income taxes 17,684,085 (9,288,090 ) 8,395,995 Net Income 17,634,910 (9,288,090 ) 8,346,820 Basic and diluted weighted average shares outstanding - Class A common stock 12,546,423 - 12,546,423 Basic and diluted earnings per share - Class A common stock $ 0.91 $ (0.48 ) $ 0.43 Basic and diluted weighted average shares outstanding - Class B common stock 6,900,000 - 6,900,000 Basic and diluted earnings per share - Class B common stock $ 0.91 $ (0.48 ) $ 0.43 Unaudited Statement of Changes in Stockholders’ Deficit for the Three Months Ended June 30, 2022 Accumulated Deficit As Previously Reported Adjustment As Restated Balance – March 31, 2022 $ (13,226,270 ) $ - $ (13,225,580 ) Net income 10,071,447 (9,288,090 ) 783,357 Accretion of Class A common stock to redemption value (242,995 ) 9,288,090 9,045,095 Balance – June 30, 2022 $ (3,397,818 ) $ - $ (3,397,128 ) Statement of Changes in Stockholders’ Deficit for the Year Ended December 31, 2022 Accumulated Deficit As Previously Reported Adjustment As Restated Balance – December 31, 2021 $ (21,094,439 ) $ - $ (21,094,439 ) Net income 17,634,910 (9,288,090 ) 8,346,820 Accretion of Class A common stock to redemption value (256,545 ) 9,288,090 9,031,545 Balance – December 31, 2022 $ (3,716,074 ) $ - $ (3,716,074 ) As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Cash Flows for the Six Months Ended June 30, 2022 Net Income 17,939,616 (9,288,090 ) 8,651,526 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) As Previously Restatement Reported Adjustment As Restated Unaudited Statement of Cash Flows for the Nine Months Ended September 30, 2022 Net Income 18,811,924 (9,288,090 ) 9,523,834 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) As Previously Restatement Reported Adjustment As Restated Statement of Cash Flows for the Year Ended December 31, 2022 Net Income 17,634,910 (9,288,090 ) 8,346,820 Gain on forgiveness of deferred underwriting fee payable (9,660,000 ) 9,288,090 (371,910 ) Non-Cash Investing and Financing Activities Extinguishment of deferred underwriting fee payable allocated to public shares - (9,288,090 ) (9,288,090 ) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Schedule of reconciliation of Class A common stock reflected in the condensed balance sheet | Schedule of reconciliation of Class A common stock reflected in the condensed balance sheet Class A common stock subject to possible redemption, January 1, 2021 $ 278,760,000 Plus: Accretion of carrying value to redemption value - Class A common stock subject to possible redemption, December 31, 2021 278,760,000 Plus: Waiver of Class A common stock issuance costs 9,288,090 Less: Accretion of carrying value to redemption value (9,031,545 ) Redemption of Class A Common Stock (275,102,280 ) Class A common stock subject to redemption, December 31, 2022 $ 3,914,265 | |
Schedule of Reconciliation of net income per common share | Schedule of Reconciliation of net income per common share Year Ended December 31, 2022 2021 Class A Class B Class A Class B Basic and diluted net income per common stock Numerator: Allocation of net income, as adjusted $ 5,385,193 $ 2,961,627 $ 7,366,307 $ 1,841,577 Denominator: Basic and diluted weighted average shares outstanding 12,546,423 6,900,000 27,600,000 6,900,000 Basic and diluted net income per common stock $ 0.43 $ 0.43 $ 0.27 $ 0.27 | |
Schedule of antidilutive shares | Schedule of antidilutive shares Successor Period from Stock options 1,377 Warrants 24,080 Total 25,457 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Company's net deferred tax assets | Schedule of Company's net deferred tax assets December 31, December 31, 2022 2021 Deferred tax asset Organizational costs/startup expenses $ 924,537 $ 322,963 Net operating loss carryforward - 28,689 Total deferred tax asset 924,537 351,652 Valuation allowance (924,537 ) (351,652 ) Deferred tax asset, net of allowance $ - $ - |
Schedule of income tax provision | Schedule of income tax provision December 31, December 31, 2022 2021 Federal Current $ 49,175 $ - Deferred (572,885 ) (300,205 ) State and Local Current - - Deferred - - Change in valuation allowance 572,885 300,205 Income tax provision $ 49,175 $ - |
Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate | Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate December 31, December 31, 2022 2021 Statutory federal income tax rate 21 % 21 % State taxes, net of federal tax benefit 0.0 % 0.0 % Transaction costs allocated to derivative warrant liabilities 0.0 % 0.0 % Change in fair value of derivative warrant liabilities (23.9 )% (24.3 )% Valuation allowance 3.2 % 3.3 % Income tax provision 0.3 % 0.0 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of company's assets and liabilities that are measured at fair value on a recurring basis | Schedule of company's assets and liabilities that are measured at fair value on a recurring basis December 31, December 31, 2022 2021 Description Level Fair Value Level Fair Value Assets: Money Market Funds 1 - 1 $ 278,835,182 Liabilities: Warrant liabilities – public warrants 1 $ 414,000 1 $ 6,461,798 Warrant liabilities – private placement warrants 2 $ 308,400 2 $ 4,813,571 |
Schedule of change in the fair value of the Level 3 warrant liabilities | Schedule of change in the fair value of the Level 3 warrant liabilities Private Placement Public Warrant Liabilities Fair value as of December 31, 2020 $ 9,354,800 $ 12,558,000 $ 21,912,800 Change in fair value (2,672,800 ) (3,588,000 ) (6,260,800 ) Transfer to Level 1 - (8,970,000 ) (8,970,000 ) Transfer to Level 2 (6,682,000 ) - (6,682,000 ) Fair value as of December 31, 2021 $ - $ - $ - |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of assets acquired | Schedule of assets acquired Description Fair Value Weighted 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 588 Operating lease right of use asset 557 Property and equipment, net 133 Other assets 42 Developed technology 9,268 10 Patents 2,703 10 Customer relationships 5,604 5 Tradenames and trademarks 3,294 7 Total assets acquired $ 34,627 Liabilities assumed: Accounts payable $ 461 Accrued liabilities 911 Deferred revenues 2,534 Operating lease obligation, current 194 Operating lease obligation, noncurrent 384 Deferred tax liability 4,337 Total liabilities assumed 8,821 Goodwill $ 44,122 |
Schedule of proforma financial information | Schedule of proforma financial information For the For the Revenues $ 1,962 $ 2,582 Net income (loss) $ (6,365 ) $ 6,197 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disaggregation Of Revenue | |
Schedule of disaggregation of Revenue | Schedule of disaggregation of Revenue Successor Predecessor Period from Period from Three months ended March 31, Subscription revenue Software 240 1,204 1,259 Total subscription revenue $ 240 $ 1,204 $ 1,259 Non-subscription revenue Professional services 102 416 1,323 Total non-subscription revenue $ 102 $ 416 $ 1,323 Total Revenue $ 342 $ 1,620 $ 2,582 Successor Predecessor Period from Period from Three months ended March 31, Revenue recognized over time (1)(2) 342 1,620 2,582 Total $ 342 $ 1,620 $ 2,582 (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, in which revenue is recognized over time. (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 overtime. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment Successor Predecessor March 31, December 31, Computer and office equipment $ 139 $ 992 Furniture and fixtures 11 185 Leasehold improvements 6 28 Software 1 8 Total 157 1,213 Less: accumulated depreciation and amortization (4 ) (1,011 ) Total Property and Equipment, Net $ 153 $ 202 |
Software Development Costs, n_2
Software Development Costs, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Software Development Costs Net | |
Schedule of capitalized software development | Schedule of capitalized software development Successor Predecessor March 31, December 31, Capitalized software development costs $ - $ 2,680 Accumulated amortization - (2,193 ) Software development costs, net - 487 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Schedule of goodwill Acquisition Amount Balance as of March 14, 2023 $ - Acquisition of Legacy CXApp 44,122 Balance as of March 31, 2023 $ 44,122 |
Schedule of intangible assets | Schedule of intangible assets March 31, 2023 (Successor) December 31, 2022 (Predecessor) Weighted Average Remaining Gross Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Amortization Net Carrying Trade Name/Trademarks 7 $ 3,294 $ (20 ) $ 3,274 $ 2,183 $ (725 ) $ 1,458 Customer Relationships 5 5,604 (47 ) 5,557 6,401 (1,765 ) 4,636 Developed Technology 10 9,268 (38 ) 9,230 15,179 (3,398 ) 11,781 Non-compete Agreements - - - 3,150 (1,736 ) 1,414 Patents and Intellectual Property 10 2,703 (11 ) 2,692 - - - Totals $ 20,869 $ (116 ) $ 20,753 $ 26,913 $ (7,624 ) $ 19,289 |
Schedule of future amortization expense | Schedule of future amortization expense For the Years Ending December 31, Amount 2023 $ 2,091 2024 2,788 2025 2,788 2026 2,788 2027 2,788 2028 and thereafter 7,510 Total $ 20,753 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Revenue | |
Schedule of deferred revenue | Schedule of deferred revenue Successor Predecessor March 31, December 31, License agreements $ 2,388 $ 1,937 Professional Service agreements 302 225 Total Deferred Revenue $ 2,690 $ 2,162 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued Liabilities | Schedule of accrued Liabilities Successor Predecessor March 31, December 31, Insurance premiums and accrued interest $ 538 $ - Related party promissory note 20 - Income tax payables 57 - Related party payable 1,155 - Accrued compensation and benefits 650 586 Accrued bonus and commissions 192 422 Accrued rent 3 559 Accrued other 561 83 Accrued sales and other indirect taxes payable 6 86 Accrued liabilities $ 3,182 $ 1,736 |
Stock Option Plan and Stock-B_2
Stock Option Plan and Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stock Option Plan And Stock-based Compensation | |
Schedule of assumptions used | Schedule of assumptions used Risk-free interest rate 3.62 % – 3.67 % Expected life of option grants 5 – 7 years Expected volatility of underlying stock 37.35 Dividends assumption 0% |
Foreign Operations (Tables)
Foreign Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Foreign Operations | |
Schedule of financial data by geographic area | Schedule of financial data by geographic area United States Canada India Philippines Eliminations Total For the Period Ended March 31, 2023 (Successor) Revenues by geographic area $ 272 $ 70 $ - $ 196 $ (196 ) $ 342 Operating income (loss) by geographic area $ (486 ) $ (158 ) $ - $ 157 $ - $ (487 ) Net income (loss) by geographic area $ 2,780 $ (158 ) $ - $ 157 $ (21 ) $ 2,758 For the Period Ended 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 Three Months Ended March 31, 2022 (Predecessor) Revenues by geographic area $ 2,167 $ 601 $ 270 $ - $ (456 ) $ 2,582 Operating income (loss) by geographic area $ (650 ) $ (1,008 ) $ 72 $ - $ 14 $ (1,572 ) Net income (loss) by geographic area $ (519 ) $ (1,139 ) $ (27 ) $ - $ 14 $ (1,671 ) As of March 31, 2023 (Successor) Identifiable assets by geographic area $ 75,059 $ 991 $ - $ 405 $ (71 ) $ 76,384 Long lived assets by geographic area $ 20,817 $ 417 $ - $ 222 $ - $ 21,455 Goodwill by geographic area $ 44,122 $ - $ - $ - $ - $ 44,122 As of December 31, 2022 (Predecessor) Identifiable assets by geographic area $ 24,591 $ 5,484 $ 228 $ 415 $ (1,438 ) $ 29,280 Long lived assets by geographic area $ 15,558 $ 4,788 $ 98 $ 215 $ - $ 20,659 Goodwill by geographic area $ - $ - $ - $ - $ - $ - |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 17, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 09, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Transaction costs | $ 15,688,848 | |||
Underwriting fees | 5,520,000 | |||
Deferred underwriting fee payable | 9,660,000 | $ 9,660,000 | ||
Other offering costs | $ 508,848 | |||
Threshold minimum aggregate fair market value as a percentage of the assets held in the trust account | 80% | |||
Threshold percentage of outstanding voting securities of the target to be acquired by post-transaction company to complete business combination | 50% | |||
Minimum net tangible assets upon consummation of the business combination | $ 5,000,001 | |||
Threshold percentage of public shares subject to redemption without the company's prior written consent | 20% | |||
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | |||
Maximum net interest to pay dissolution expenses | $ 100,000 | |||
Cash operating bank account | 224,489 | |||
Working capital | 3,002,523 | |||
Proceeds from related Party debt | $ 347,961 | |||
Class A Common Stock Subject to Redemption | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Purchase price, per unit (in dollars per share) | $ 10.10 | $ 10.10 | ||
Minimum net tangible assets upon consummation of the business combination | $ 5,000,001 | |||
Common stock, par value | $ 0.0001 | |||
IPO [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of units issued | 27,600,000 | |||
Purchase price, per unit (in dollars per share) | $ 10.10 | |||
Proceeds from issuance initial public offering | $ 276,000,000 | |||
Investment of cash into trust account | $ 278,760,000 | |||
Over-Allotment Option [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of units issued | 3,600,000 | |||
Purchase price, per unit (in dollars per share) | $ 10 | |||
Private Placement [Member] | Private Placement Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants issued | 10,280,000 | 10,280,000 | 10,280,000 | |
Price of warrant | $ 1 | |||
Proceeds from issuance of warrants | $ 10,280,000 | |||
Sponsor [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from related party | $ 25,000 | |||
Proceeds from related Party debt | $ 300,000 |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gain on forgiveness of deferred underwriting fee payable | $ 371,910 | $ 371,910 | $ 371,910 | $ 371,910 | ||
Total other income (expenses) | 1,107,956 | 9,299,377 | 11,272,274 | 11,346,459 | $ 10,705,798 | |
Income (loss) before benefit from (provision for) income taxes | 806,223 | 8,674,392 | 9,550,563 | 8,395,995 | 9,207,884 | |
Net Income | 783,357 | 8,651,526 | 9,523,834 | 8,346,820 | 9,207,884 | |
Accretion of Class A common stock to redemption | 9,031,545 | |||||
Gain on forgiveness of deferred underwriting fee payable | (371,910) | (371,910) | (371,910) | (371,910) | ||
Non-Cash Investing and Financing Activities | ||||||
Extinguishment of deferred underwriting fee payable allocated to public shares | (9,288,090) | (9,288,090) | (9,288,090) | |||
Retained Earnings [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net Income | 783,357 | 8,346,820 | ||||
Balance at the beginning | (13,225,580) | $ (21,094,439) | (21,094,439) | $ (21,094,439) | (21,094,439) | |
Accretion of Class A common stock to redemption | 9,045,095 | 9,031,545 | ||||
Balance at the end | $ (3,397,128) | (13,225,580) | $ (3,397,128) | $ (3,716,074) | (21,094,439) | |
Common Class A [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | 14,481,736 | 21,004,630 | 16,466,455 | 12,546,423 | ||
Basic and diluted earnings per share (in dollars per share) | $ 0.04 | $ 0.31 | $ 0.41 | $ 0.43 | ||
Common Class B [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | 6,900,000 | 6,900,000 | 6,900,000 | 6,900,000 | ||
Basic and diluted earnings per share (in dollars per share) | $ 0.04 | $ 0.31 | $ 0.41 | $ 0.43 | ||
Previously Reported [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gain on forgiveness of deferred underwriting fee payable | $ 9,660,000 | $ 9,660,000 | $ 9,660,000 | $ 9,660,000 | ||
Total other income (expenses) | 10,396,046 | 18,587,467 | 20,560,364 | 20,634,549 | ||
Income (loss) before benefit from (provision for) income taxes | 10,094,313 | 17,962,482 | 18,838,653 | 17,684,085 | ||
Net Income | 10,071,447 | 17,939,616 | 18,811,924 | 17,634,910 | ||
Gain on forgiveness of deferred underwriting fee payable | (9,660,000) | (9,660,000) | (9,660,000) | (9,660,000) | ||
Non-Cash Investing and Financing Activities | ||||||
Extinguishment of deferred underwriting fee payable allocated to public shares | ||||||
Previously Reported [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net Income | 10,071,447 | 17,634,910 | ||||
Balance at the beginning | (13,226,270) | (21,094,439) | (21,094,439) | $ (21,094,439) | (21,094,439) | |
Accretion of Class A common stock to redemption | (242,995) | (256,545) | ||||
Balance at the end | $ (3,397,818) | (13,226,270) | $ (3,397,818) | $ (3,716,074) | (21,094,439) | |
Previously Reported [Member] | Common Class A [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | 14,481,736 | 21,004,630 | 16,466,455 | 12,546,423 | ||
Basic and diluted earnings per share (in dollars per share) | $ 0.47 | $ 0.64 | $ 0.81 | $ 0.91 | ||
Previously Reported [Member] | Common Class B [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | 6,900,000 | 6,900,000 | 6,900,000 | 6,900,000 | ||
Basic and diluted earnings per share (in dollars per share) | $ 0.47 | $ 0.64 | $ 0.81 | $ 0.91 | ||
Revision of Prior Period, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gain on forgiveness of deferred underwriting fee payable | $ (9,288,090) | $ (9,288,090) | $ (9,288,090) | $ (9,288,090) | ||
Total other income (expenses) | (9,288,090) | (9,288,090) | (9,288,090) | (9,288,090) | ||
Income (loss) before benefit from (provision for) income taxes | (9,288,090) | (9,288,090) | (9,288,090) | (9,288,090) | ||
Net Income | (9,288,090) | (9,288,090) | (9,288,090) | (9,288,090) | ||
Gain on forgiveness of deferred underwriting fee payable | 9,288,090 | 9,288,090 | 9,288,090 | 9,288,090 | ||
Non-Cash Investing and Financing Activities | ||||||
Extinguishment of deferred underwriting fee payable allocated to public shares | (9,288,090) | (9,288,090) | (9,288,090) | |||
Revision of Prior Period, Adjustment [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net Income | (9,288,090) | (9,288,090) | ||||
Balance at the beginning | ||||||
Accretion of Class A common stock to redemption | 9,288,090 | 9,288,090 | ||||
Balance at the end | ||||||
Revision of Prior Period, Adjustment [Member] | Common Class A [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | ||||||
Basic and diluted earnings per share (in dollars per share) | $ (0.43) | $ (0.33) | $ (0.40) | $ (0.48) | ||
Revision of Prior Period, Adjustment [Member] | Common Class B [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Basic and diluted weighted average shares outstanding (in shares) | ||||||
Basic and diluted earnings per share (in dollars per share) | $ (0.43) | $ (0.33) | $ (0.40) | $ (0.48) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Class A common stock subject to possible redemption, at beginning of year | $ 278,760,000 | $ 278,760,000 | |
Accretion of carrying value to redemption value | 9,031,545 | ||
Waiver of Class A common stock issuance costs | 9,288,090 | ||
Accretion of carrying value to redemption value | (9,031,545) | ||
Redemption of Class A Common Stock | (275,102,280) | ||
Class A common stock subject to possible redemption, at end of year | $ 3,914,265 | $ 278,760,000 | |
Successor [Member] | |||
Total | 25,457 | ||
Successor [Member] | Stock Options [Member] | |||
Total | 1,377,000 | ||
Successor [Member] | Warrant [Member] | |||
Total | 24,080 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common Class A [Member] | ||
Numerator: | ||
Allocation of net income, as adjusted | $ 5,385,193 | $ 7,366,307 |
Denominator: | ||
Basic and diluted weighted average shares outstanding | 12,546,423 | 27,600,000 |
Basic and diluted net income per common stock | $ 0.43 | $ 0.27 |
Common Class B [Member] | ||
Numerator: | ||
Allocation of net income, as adjusted | $ 2,961,627 | $ 1,841,577 |
Denominator: | ||
Basic and diluted weighted average shares outstanding | 6,900,000 | 6,900,000 |
Basic and diluted net income per common stock | $ 0.43 | $ 0.27 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Dec. 17, 2020 | Mar. 14, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||||
Insured amount | $ 250,000 | ||||||
Transaction costs | $ 15,688,848 | ||||||
Underwriting fees | 5,520,000 | ||||||
Deferred underwriting fee payable | 9,660,000 | $ 9,660,000 | |||||
Other offering costs | 508,848 | ||||||
Charged to temporary equity | 15,239,420 | ||||||
Offering cost expense | $ 449,428 | ||||||
Effective tax rate (in percent) | 0.30% | 0% | |||||
Statutory tax rate | 21% | 21% | |||||
Unrecognized tax benefits | $ 0 | $ 0 | |||||
Unrecognized tax benefits accrued for interest and penalties | 0 | 0 | |||||
Working capital | 3,002,523 | ||||||
Cash | 224,489 | 406,126 | |||||
Net income | 8,346,820 | 9,207,884 | |||||
Cash for operating activities | 761,098 | $ 595,321 | |||||
Successor [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Effective tax rate (in percent) | 164% | ||||||
Working capital | $ 3,052,000 | $ 3,052,000 | |||||
Cash | 6,724,000 | 6,724,000 | |||||
Net income | 2,758,000 | ||||||
Cash for operating activities | 4,431,000 | ||||||
Reduction in accrued liabilities | $ 3,888,000 | 3,888,000 | |||||
Cash and cash equivalents, description | As of March 31, 2023 (Successor), the Company had cash equivalents of approximately $2,000 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 | ||||||
Deferred Revenue | $ 2,690,000 | $ 2,690,000 | |||||
Revenue Recognized | 170,000 | ||||||
Stock-based compensation | 2,000 | ||||||
Changes in estimated fair value of warrants | 1,686,000 | ||||||
Impairment charges of long-lived assets | $ 0 | ||||||
Successor [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Intangible assets useful life | 1 year | ||||||
Successor [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Intangible assets useful life | 10 years | ||||||
Predecessor [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Net income | $ (4,380,000) | $ (1,671,000) | |||||
Cash for operating activities | 5,144,000 | 4,140,000 | |||||
Deferred Revenue | $ 2,162,000 | ||||||
Revenue Recognized | 865,000 | 1,328,000 | |||||
Stock-based compensation | 158,000 | 647,000 | |||||
Impairment charges of long-lived assets | $ 0 | $ 0 | |||||
Common stock subject to redemption | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Class A common stock subject to possible redemption, outstanding (in shares) | 387,551 | 27,600,000 | |||||
Common Class A [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Number of warrants to purchase shares issued | 24,080,000 |
PUBLIC OFFERING (Details Narrat
PUBLIC OFFERING (Details Narrative) | 1 Months Ended |
Dec. 17, 2020 $ / shares shares | |
IPO [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Number of units sold | shares | 27,600,000 |
Purchase price, per unit (in dollars per share) | $ 10.10 |
IPO [Member] | Common Class A [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Exercise price of warrants | $ 11.50 |
Over-Allotment Option [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Number of units sold | shares | 3,600,000 |
Purchase price, per unit (in dollars per share) | $ 10 |
PRIVATE PLACEMENT (Details Narr
PRIVATE PLACEMENT (Details Narrative) - USD ($) | 1 Months Ended | |
Dec. 17, 2020 | Dec. 31, 2022 | |
Common Class A [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants to purchase shares issued | 24,080,000 | |
Private Placement Warrants [Member] | Private Placement [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants to purchase shares issued | 10,280,000 | |
Price of warrants | $ 1 | |
Aggregate purchase price | $ 10,280,000 | |
Private Placement Warrants [Member] | Private Placement [Member] | Common Class A [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise price of warrant | $ 11.50 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 14, 2020 USD ($) | Oct. 31, 2020 USD ($) $ / shares shares | Jul. 27, 2020 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 shares | Mar. 14, 2023 $ / shares | Aug. 10, 2022 USD ($) | |
Related Party Transaction [Line Items] | ||||||||
Share price | $ / shares | $ 9.94 | |||||||
Expenses incurred and paid | $ 240,000 | $ 240,000 | ||||||
Founder Shares [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Aggregate purchase price | $ 2,717 | |||||||
Share price | $ / shares | $ 0.004 | |||||||
Aggregate number of shares owned | shares | 6,900,000 | |||||||
Percentage of issued and outstanding shares after the initial public offering collectively held by initial stockholders | 20% | |||||||
Founder Shares [Member] | Sponsor [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares subject to forfeiture | shares | 625,000 | |||||||
Aggregate number of shares owned | shares | 6,150,000 | |||||||
Restrictions on transfer period of time after business combination completion | 1 year | |||||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | |||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | |||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | |||||||
Founder Shares [Member] | Sponsor [Member] | Over-Allotment Option [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares subject to forfeiture | shares | 900,000 | |||||||
Founder Shares [Member] | Sponsor [Member] | Common Class B [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Aggregate purchase price | $ 25,000 | |||||||
Number of shares issued | shares | 5,750,000 | |||||||
Stock split | 1.2 | |||||||
Founder Shares [Member] | Sponsor [Member] | Common Class A [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | |||||||
Founder Shares [Member] | Direct Anchor [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | shares | 625,000 | |||||||
Aggregate number of shares owned | shares | 750,000 | |||||||
Administrative Services Agreement [Member] | Sponsor [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses per month | $ 20,000 | |||||||
Promissory Note With Related Party [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Aggregate principal amount | $ 400,000 | |||||||
Amount outstanding under promissory note | $ 347,961 | |||||||
Working Capital Loans | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loan conversion agreement warrant | $ 1,500,000 | |||||||
Price of warrant | $ / shares | $ 1 | |||||||
Working Capital Loans | Working capital loans warrant [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum borrowing capacity of related party promissory note | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | |||||
Jun. 09, 2022 USD ($) | Dec. 14, 2020 Integer $ / shares shares | Sep. 25, 2022 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 17, 2020 USD ($) | |
Minimum percentage of founder share holders entitled to make demands | 30% | |||||
Maximum number of demands for registration of securities | Integer | 3 | |||||
Deferred fee per unit | $ 0.35 | |||||
Deferred underwriting fee payable | $ | $ 9,660,000 | $ 9,660,000 | ||||
Income recognized from reduction of deferred underwriter fee | $ | $ 9,660,000 | |||||
Common Class A [Member] | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Class C [Member] | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||||
Common Class B [Member] | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||
Common Class B [Member] | Merger Agreement | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||||
Merger Agreement | ||||||
Percentage of common stock distributed | 100% | |||||
Maximum term for automatic conversion of stock following the closing of the Merger | 180 days | |||||
Stock price trigger | $ 12 | |||||
Threshold trading days | 20 days | 20 days | ||||
Threshold consecutive trading days | 30 days | 30 days | ||||
Threshold net tangible assets | $ | $ 5,000,001 | |||||
Threshold aggregate gross purchase price of any other purchase of shares | $ | $ 9,500,000 | |||||
Lock-up period | 180 days | |||||
Merger Agreement | CXApp | ||||||
Number of shares issuable upon merger | shares | 6,900,000 | |||||
Term of breach unable to be cured, or is not cured | 30 days | |||||
Termination fee | $ | $ 2,000,000 | |||||
Percentage of shares not be subject to foregoing lock-up | 22% | |||||
Merger Agreement | CXApp | Common Class A [Member] | ||||||
Percentage of stock as merger consideration | 10% | |||||
Merger Agreement | CXApp | Common Class C [Member] | ||||||
Percentage of stock as merger consideration | 90% | |||||
Sponsor Support Agreement | Common Class A [Member] | ||||||
Minimum number of shares issuable to sponsor | shares | 5,150,000 | |||||
Sponsor Support Agreement | Common Class B [Member] | ||||||
Number of shares exchanged | shares | 6,150,000 | |||||
Inpixon | Separation Agreement | CXApp | ||||||
Cash Contribution upon seperation | $ | $ 10,000,000 | |||||
C X App Common Stock [Member] | ||||||
Common stock, par value (in dollars per share) | $ 0.00001 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2022 Integer $ / shares shares | Sep. 25, 2022 $ / shares | Dec. 31, 2021 $ / shares shares | |
Class of Stock [Line Items] | |||
Preferred shares, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Preferred shares, shares issued | 0 | 0 | |
Preferred shares, shares outstanding | 0 | 0 | |
Ratio to be applied to the stock in the conversion | 20% | ||
Common Class A [Member] | |||
Class of Stock [Line Items] | |||
Common shares, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common shares, votes per share | Integer | 1 | ||
Common stock subject to redemption | |||
Class of Stock [Line Items] | |||
Common shares, shares issued (in shares) | 387,551 | 27,600,000 | |
Common shares, shares outstanding (in shares) | 387,551 | 27,600,000 | |
Common Class B [Member] | |||
Class of Stock [Line Items] | |||
Common shares, shares authorized (in shares) | 20,000,000 | 20,000,000 | |
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | Integer | 1 | ||
Common shares, shares issued (in shares) | 6,900,000 | 6,900,000 | |
Common shares, shares outstanding (in shares) | 6,900,000 | 6,900,000 |
DERIVATIVE WARRANT LIABILITIES
DERIVATIVE WARRANT LIABILITIES (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Dec. 17, 2020 shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 shares | |
Class of Warrant or Right [Line Items] | |||
Warrants outstanding | shares | 13,800,000 | 13,800,000 | |
Share PriceTrigger Used To Measure Dilution Of Warrant | $ 9.20 | ||
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 0.60 | ||
Warrant exercise price adjustment multiple | 1.15 | ||
Warrant redemption price adjustment multiple | 1.80 | ||
Redemption Of Warrants When The Price per Class A Ordinary Share Equals Or Exceeds $18.00 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrant redemption condition minimum share price | $ 18 | ||
Redemption Of Warrants When The Price Per Class A Ordinary Share Equals Or Exceeds $10.00 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Redemption price per public warrant (in dollars per share) | 0.10 | ||
Warrant redemption condition minimum share price scenario two | $ 10 | ||
Private Placement Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding | shares | 10,280,000 | 10,280,000 | |
Private Placement Warrants [Member] | Private Placement [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants issued | shares | 10,280,000 | 10,280,000 | 10,280,000 |
Public Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrant exercise period condition one | 30 days | ||
Warrant exercise period condition two | 12 months | ||
Public Warrants expiration term | 5 years | ||
Restrictions on transfer period of time after business combination completion | 30 days | ||
Public Warrants [Member] | Redemption Of Warrants When The Price per Class A Ordinary Share Equals Or Exceeds $18.00 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrant redemption condition minimum share price | $ 18 | ||
Redemption price per public warrant (in dollars per share) | $ 0.01 | ||
Threshold consecutive trading days for redemption of public warrants | 30 days | ||
Threshold trading days for redemption of public warrants | 20 days | ||
Redemption period | 30 days | ||
Warrant [Member] | |||
Class of Warrant or Right [Line Items] | |||
Maximum period after business combination in which to file registration statement | 20 days | ||
Period of time within which registration statement is expected to become effective | 60 days | ||
Warrant [Member] | Redemption Of Warrants When The Price Per Class A Ordinary Share Equals Or Exceeds $10.00 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Threshold consecutive trading days for redemption of public warrants | 30 days | ||
Redemption period | 30 days | ||
Warrant redemption condition minimum share price scenario two | $ 10 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax asset | ||
Organizational costs/startup expenses | $ 924,537 | $ 322,963 |
Net operating loss carryforward | 28,689 | |
Total deferred tax asset | 924,537 | 351,652 |
Valuation allowance | (924,537) | (351,652) |
Deferred tax asset, net of allowance |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal | ||
Current | $ 49,175 | |
Deferred | (572,885) | (300,205) |
State and Local | ||
Current | ||
Deferred | ||
Change in valuation allowance | 572,885 | 300,205 |
Income tax provision | $ 49,175 |
INCOME TAX (Details 2)
INCOME TAX (Details 2) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 21% | 21% |
State taxes, net of federal tax benefit | 0% | 0% |
Transaction costs allocated to derivative warrant liabilities | 0% | 0% |
Change in fair value of derivative warrant liabilities | (23.90%) | (24.30%) |
Valuation allowance | 3.20% | 3.30% |
Income tax provision | 0.30% | 0% |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Change in valuation allowance | $ 924,537 | $ 351,652 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 0 | 137,000 |
Change in valuation allowance | $ 572,885 | $ 300,205 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in the Trust Account | $ 3,923,804 | $ 278,836,080 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Public Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 414,000 | 6,461,798 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Private Placement Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 308,400 | 4,813,571 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in the Trust Account | 278,835,182 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held in the Trust Account | $ 278,835,182 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details 1) - Fair Value, Inputs, Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfer to Level 1 | $ 9,000,000 | |
Transfer to Level 2 | 6,700,000 | |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at beginning | $ 21,912,800 | |
Change in fair value | (6,260,800) | |
Transfer to Level 1 | (8,970,000) | |
Transfer to Level 2 | (6,682,000) | |
Fair value at ending | ||
Private Placement Warrants [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at beginning | 9,354,800 | |
Change in fair value | (2,672,800) | |
Transfer to Level 1 | ||
Transfer to Level 2 | (6,682,000) | |
Fair value at ending | ||
Public Warrants [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at beginning | 12,558,000 | |
Change in fair value | (3,588,000) | |
Transfer to Level 1 | (8,970,000) | |
Transfer to Level 2 | ||
Fair value at ending |
FAIR VALUE MEASUREMENTS (Deta_3
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Assets held in the Trust Account | $ 3,923,804 | $ 278,836,080 |
Cash withdrawn from trust account to pay franchise tax | 231,500 | |
Cash withdrawn from trust account in connection with redemption | 275,102,280 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Transfer to Level 1 | 9,000,000 | |
Transfer to Level 2 | 6,700,000 | |
Cash [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Assets held in the Trust Account | $ 3,923,804 | 898 |
Money Market Funds [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Assets held in the Trust Account | $ 278,835,182 |
Business Combination (Details)
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 |
Assets acquired: | |
Cash and cash equivalents | 10,003 |
Accounts receivable | 2,226 |
Notes and other receivables | 209 |
Prepaid assets and other current assets | 588 |
Operating lease right of use asset | 557 |
Property and equipment, net | 133 |
Other assets | 42 |
Total assets acquired | 34,627 |
Liabilities assumed: | |
Accounts payable | 461 |
Accrued liabilities | 911 |
Deferred revenues | 2,534 |
Operating lease obligation, current | 194 |
Operating lease obligation, noncurrent | 384 |
Deferred tax liability | 4,337 |
Total liabilities assumed | 8,821 |
Goodwill | 44,122 |
Developed Technology Rights [Member] | |
Assets acquired: | |
Intangible assets | $ 9,268 |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 10 years |
Patents [Member] | |
Assets acquired: | |
Intangible assets | $ 2,703 |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 10 years |
Customer Relationships [Member] | |
Assets acquired: | |
Intangible assets | $ 5,604 |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 5 years |
Trademarks and Trade Names [Member] | |
Assets acquired: | |
Intangible assets | $ 3,294 |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 7 years |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenues | $ 1,962 | $ 2,582 |
Net income (loss) | $ (6,365) | $ 6,197 |
Business Combination (Details N
Business Combination (Details Narrative) $ / shares in Units, $ in Thousands | 2 Months Ended |
Mar. 14, 2023 USD ($) $ / shares shares | |
Business Acquisition [Line Items] | |
Share price | $ / shares | $ 9.94 |
Predecessor [Member] | |
Business Acquisition [Line Items] | |
Business combination goodwill | $ 44,122 |
Business Combination, Acquisition Related Costs | 3,000 |
Predecessor [Member] | Merger Agreement | |
Business Acquisition [Line Items] | |
Aggregate purchase price assets and liabilities | 69,928 |
Business combination goodwill | $ 44,122 |
Predecessor [Member] | Merger Agreement | Common Class A [Member] | |
Business Acquisition [Line Items] | |
Consideration transferred in connection | shares | 1,547,700 |
Predecessor [Member] | Merger Agreement | Common Class C [Member] | |
Business Acquisition [Line Items] | |
Consideration transferred in connection | shares | 5,487,300 |
Disaggregation of Revenue (Deta
Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | ||
Successor [Member] | ||||
Total Revenue | $ 342 | |||
Successor [Member] | Transferred over Time [Member] | ||||
Total Revenue | [1],[2] | 342 | ||
Successor [Member] | Subscription Revenue [Member] | ||||
Total Revenue | 240 | |||
Successor [Member] | Subscription Revenue [Member] | Software [Member] | ||||
Total Revenue | 240 | |||
Successor [Member] | Non Subscription Revenue [Member] | ||||
Total Revenue | 102 | |||
Successor [Member] | Non Subscription Revenue [Member] | Professional Services [Member] | ||||
Total Revenue | $ 102 | |||
Predecessor [Member] | ||||
Total Revenue | $ 1,620 | $ 2,582 | ||
Predecessor [Member] | Transferred over Time [Member] | ||||
Total Revenue | [1],[2] | 1,620 | 2,582 | |
Predecessor [Member] | Subscription Revenue [Member] | ||||
Total Revenue | 1,204 | 1,259 | ||
Predecessor [Member] | Subscription Revenue [Member] | Software [Member] | ||||
Total Revenue | 1,204 | 1,259 | ||
Predecessor [Member] | Non Subscription Revenue [Member] | ||||
Total Revenue | 416 | 1,323 | ||
Predecessor [Member] | Non Subscription Revenue [Member] | Professional Services [Member] | ||||
Total Revenue | $ 416 | $ 1,323 | ||
[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, in which revenue is recognized over time.[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 overtime. |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Successor [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 157 | |
Less: accumulated depreciation and amortization | (4) | |
Total Property and Equipment, Net | 153 | |
Successor [Member] | Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 139 | |
Successor [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 11 | |
Successor [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6 | |
Successor [Member] | Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1 | |
Predecessor [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,213 | |
Less: accumulated depreciation and amortization | (1,011) | |
Total Property and Equipment, Net | 202 | |
Predecessor [Member] | Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 992 | |
Predecessor [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 185 | |
Predecessor [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 28 | |
Predecessor [Member] | Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 8 |
Property and Equipment, net (_2
Property and Equipment, net (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | |
Successor [Member] | |||
Depreciation, Depletion and Amortization, Nonproduction | $ 4 | ||
Predecessor [Member] | |||
Depreciation, Depletion and Amortization, Nonproduction | $ 19 | $ 36 |
Software Development Costs, n_3
Software Development Costs, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Successor [Member] | ||
Capitalized software development costs | ||
Accumulated amortization | ||
Software development costs, net | ||
Predecessor [Member] | ||
Capitalized software development costs | $ 2,680 | |
Accumulated amortization | (2,193) | |
Software development costs, net | $ 487 |
Software Development Costs, n_4
Software Development Costs, net (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | |
Predecessor [Member] | |||
Amortization expense | $ 209 | $ 113 | |
Successor [Member] | |||
Amortization expense | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - Successor [Member] $ in Thousands | 1 Months Ended |
Mar. 31, 2023 USD ($) | |
Beginning balance | |
Acquisition of Legacy CXApp | 44,122 |
Ending balance | $ 44,122 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 20,869 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (116) | |
Net carrying amount | $ 20,753 | |
Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 26,913 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (7,624) | |
Net carrying amount | 19,289 | |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Trademarks and Trade Names [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 3,294 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (20) | |
Net carrying amount | $ 3,274 | |
Trademarks and Trade Names [Member] | Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 2,183 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (725) | |
Net carrying amount | 1,458 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Customer Relationships [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 5,604 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (47) | |
Net carrying amount | $ 5,557 | |
Customer Relationships [Member] | Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 6,401 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,765) | |
Net carrying amount | 4,636 | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Developed Technology Rights [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 9,268 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (38) | |
Net carrying amount | 9,230 | |
Developed Technology Rights [Member] | Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 15,179 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,398) | |
Net carrying amount | 11,781 | |
Noncompete Agreements [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | ||
Finite-Lived Intangible Assets, Accumulated Amortization | ||
Net carrying amount | ||
Noncompete Agreements [Member] | Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 3,150 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,736) | |
Net carrying amount | 1,414 | |
Patents And Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Patents And Intellectual Property [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,703 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (11) | |
Net carrying amount | $ 2,692 | |
Patents And Intellectual Property [Member] | Predecessor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | ||
Finite-Lived Intangible Assets, Accumulated Amortization | ||
Net carrying amount |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details 2) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 2,091 |
2024 | 2,788 |
2025 | 2,788 |
2026 | 2,788 |
2027 | 2,788 |
2028 and thereafter | 7,510 |
Total | $ 20,753 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Successor [Member] | ||||
Goodwill | $ 44,122 | |||
Aggregate amortization expense | $ 116 | |||
Predecessor [Member] | ||||
Goodwill | 0 | $ 0 | ||
Aggregate amortization expense | $ 806 | $ 975 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Successor [Member] | ||
Total Deferred Revenue | $ 2,690 | |
Successor [Member] | Licensing Agreements [Member] | ||
Total Deferred Revenue | 2,388 | |
Successor [Member] | Professional Service Agreements [Member] | ||
Total Deferred Revenue | $ 302 | |
Predecessor [Member] | ||
Total Deferred Revenue | $ 2,162 | |
Predecessor [Member] | Licensing Agreements [Member] | ||
Total Deferred Revenue | 1,937 | |
Predecessor [Member] | Professional Service Agreements [Member] | ||
Total Deferred Revenue | $ 225 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Successor [Member] | ||
Insurance premiums and accrued interest | $ 538 | |
Related party promissory note | 20 | |
Income tax payables | 57 | |
Related party payable | 1,155 | |
Accrued compensation and benefits | 650 | |
Accrued bonus and commissions | 192 | |
Accrued rent | 3 | |
Accrued other | 561 | |
Accrued sales and other indirect taxes payable | 6 | |
Accrued liabilities | $ 3,182 | |
Predecessor [Member] | ||
Insurance premiums and accrued interest | ||
Related party promissory note | ||
Income tax payables | ||
Related party payable | ||
Accrued compensation and benefits | 586 | |
Accrued bonus and commissions | 422 | |
Accrued rent | 559 | |
Accrued other | 83 | |
Accrued sales and other indirect taxes payable | 86 | |
Accrued liabilities | $ 1,736 |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended |
Mar. 14, 2023 | Mar. 31, 2023 | |
Related party description | As of March 31, 2023, the Company’s related party liabilities consisted of a promissory note payable to the KINS sponsor in the amount of $20 thousand for working capital. As of March 31, 2023, accrued liabilities include an estimate of approximately $1,045 thousand due to Inpixon by CXApp resulting from an agreement to reimburse Inpixon (subject to review and acceptance by the Company) for certain transaction related costs incurred by Inpixon on behalf of KINS prior to March 14, 2023. This amount is subject to an ongoing review and evaluation by the Company. Additionally, as of March 31, 2023, accrued liabilities include (i) $30 thousand for estimated costs related to transition services provided by Inpixon to CXApp and (ii) $80 thousand of reimbursable expenses incurred by Inpixon on behalf of CXApp during the period from March 15, 2023 to March 31, 2023. | |
Predecessor [Member] | ||
Interest rate | 8% | |
Predecessor [Member] | Director And Officers [Member] | ||
Debt payment | $ 671 | |
Debt issuance cost | $ 134 | |
Successor [Member] | ||
Debt owed balance | $ 538 |
Warrant Liabilities (Details Na
Warrant Liabilities (Details Narrative) - $ / shares | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warrants outstanding | 13,800,000 | 13,800,000 | |
Public Warrants [Member] | |||
Warrant exercise period condition one | 30 days | ||
Warrant exercise period condition two | 12 months | ||
Public Warrants expiration term | 5 years | ||
Restrictions on transfer period of time after business combination completion | 30 days | ||
Private Placement Warrants [Member] | |||
Warrants outstanding | 10,280,000 | 10,280,000 | |
Successor [Member] | |||
Warrants outstanding | 13,800,000 | ||
Warrant Price | $ 11.50 | ||
Successor [Member] | Redemption Of Warrants When The Price per Class A Ordinary Share Equals Or Exceeds $18.00 [Member] | |||
Warrant redemption condition minimum share price | 18 | ||
Successor [Member] | Redemption Of Warrants When The Price Per Class A Ordinary Share Equals Or Exceeds $10.00 [Member] | |||
Redemption price per public warrant (in dollars per share) | 0.10 | ||
Warrant redemption condition minimum share price scenario two | $ 10 | ||
Successor [Member] | Public Warrants [Member] | |||
Warrant exercise period condition one | 30 days | ||
Warrant exercise period condition two | 12 months | ||
Public Warrants expiration term | 5 years | ||
Restrictions on transfer period of time after business combination completion | 30 days | ||
Successor [Member] | Public Warrants [Member] | Redemption Of Warrants When The Price per Class A Ordinary Share Equals Or Exceeds $18.00 [Member] | |||
Warrant redemption condition minimum share price | $ 18 | ||
Redemption price per public warrant (in dollars per share) | $ 0.01 | ||
Redemption period | 30 days | ||
Threshold trading days for redemption of public warrants | 20 days | ||
Threshold consecutive trading days for redemption of public warrants | 30 days | ||
Threshold number of business days before sending notice of redemption to warrant holders | third trading day | ||
Successor [Member] | Warrant [Member] | Redemption Of Warrants When The Price Per Class A Ordinary Share Equals Or Exceeds $10.00 [Member] | |||
Redemption period | 30 days | ||
Threshold consecutive trading days for redemption of public warrants | 30 days | ||
Warrant redemption condition minimum share price scenario two | $ 10 | ||
Successor [Member] | Private Placement Warrants [Member] | |||
Warrants outstanding | 10,280 |
Stock Award Plans and Stock-Bas
Stock Award Plans and Stock-Based Compensation (Details) - Successor [Member] | 1 Months Ended |
Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 37.35% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% |
Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.62% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.67% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 7 years |
Stock Option Plan and Stock-B_3
Stock Option Plan and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |
Mar. 31, 2023 | Mar. 10, 2023 | |
Successor [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value of non-vested options | $ 686 | |
Weighted average remaining term of non-vested options | 2 years | |
Successor [Member] | Employee Stock Options [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Amortization of employee stock options | $ 2 | |
Successor [Member] | Employee Stock Options [Member] | Employees And Directors [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock option granted | 1,377,000 | |
Vesting period | 2 years | |
Fair value of options | $ 688 | |
Fair value of common stock as of grant date | $ 1.53 | |
Successor [Member] | Employee Stock Options [Member] | Employees And Directors [Member] | Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Option life | 5 years | |
Successor [Member] | Employee Stock Options [Member] | Employees And Directors [Member] | Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Option life | 7 years | |
N 2023 Equity Incentive Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares available for issuance | 2,110,500 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrants | $ (10,552,969) | $ (10,637,431) | |
Successor [Member] | Public Placement Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrants | $ 552,000 | ||
Successor [Member] | Private Placement Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrants | $ 411,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Effective tax rate | 0.30% | 0% | |||
Successor [Member] | |||||
Income tax benefit/(provision) | $ 1,560 | ||||
Effective tax rate | 164% | ||||
Predecessor [Member] | |||||
Income tax benefit/(provision) | $ 0 | $ 100 | |||
Deferred tax liability | $ 4,337 |
Foreign Operations (Details)
Foreign Operations (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating income (loss) by geographic area | $ (2,950,464) | $ (1,497,914) | |||
Net income (loss) by geographic area | 8,346,820 | $ 9,207,884 | |||
Successor [Member] | |||||
Revenues by geographic area | $ 342,000 | ||||
Operating income (loss) by geographic area | (487,000) | ||||
Net income (loss) by geographic area | 2,758,000 | ||||
Identifiable assets by geographic area | 76,384,000 | ||||
Long lived assets by geographic area | 21,455,000 | ||||
Goodwill by geographic area | 44,122,000 | ||||
Successor [Member] | UNITED STATES | |||||
Revenues by geographic area | 272,000 | ||||
Operating income (loss) by geographic area | (486,000) | ||||
Net income (loss) by geographic area | 2,780,000 | ||||
Identifiable assets by geographic area | 75,059,000 | ||||
Long lived assets by geographic area | 20,817,000 | ||||
Goodwill by geographic area | 44,122,000 | ||||
Successor [Member] | CANADA | |||||
Revenues by geographic area | 70,000 | ||||
Operating income (loss) by geographic area | (158,000) | ||||
Net income (loss) by geographic area | (158,000) | ||||
Identifiable assets by geographic area | 991,000 | ||||
Long lived assets by geographic area | 417,000 | ||||
Goodwill by geographic area | |||||
Successor [Member] | INDIA | |||||
Revenues by geographic area | |||||
Operating income (loss) by geographic area | |||||
Net income (loss) by geographic area | |||||
Identifiable assets by geographic area | |||||
Long lived assets by geographic area | |||||
Goodwill by geographic area | |||||
Successor [Member] | PHILIPPINES | |||||
Revenues by geographic area | 196,000 | ||||
Operating income (loss) by geographic area | 157,000 | ||||
Net income (loss) by geographic area | 157,000 | ||||
Identifiable assets by geographic area | 405,000 | ||||
Long lived assets by geographic area | 222,000 | ||||
Goodwill by geographic area | |||||
Successor [Member] | Eliminations [Member] | |||||
Revenues by geographic area | (196,000) | ||||
Operating income (loss) by geographic area | |||||
Net income (loss) by geographic area | (21,000) | ||||
Identifiable assets by geographic area | (71,000) | ||||
Long lived assets by geographic area | |||||
Goodwill by geographic area | |||||
Predecessor [Member] | |||||
Revenues by geographic area | 1,620,000 | $ 2,582,000 | |||
Operating income (loss) by geographic area | (4,381,000) | (1,572,000) | |||
Net income (loss) by geographic area | (4,380,000) | (1,671,000) | |||
Identifiable assets by geographic area | 29,280,000 | ||||
Long lived assets by geographic area | 20,659,000 | ||||
Goodwill by geographic area | 0 | 0 | |||
Predecessor [Member] | UNITED STATES | |||||
Revenues by geographic area | 1,395,000 | 2,167,000 | |||
Operating income (loss) by geographic area | (3,479,000) | (650,000) | |||
Net income (loss) by geographic area | (3,342,000) | (519,000) | |||
Identifiable assets by geographic area | 24,591,000 | ||||
Long lived assets by geographic area | 15,558,000 | ||||
Goodwill by geographic area | |||||
Predecessor [Member] | CANADA | |||||
Revenues by geographic area | 285,000 | 601,000 | |||
Operating income (loss) by geographic area | (905,000) | (1,008,000) | |||
Net income (loss) by geographic area | (1,041,000) | (1,139,000) | |||
Identifiable assets by geographic area | 5,484,000 | ||||
Long lived assets by geographic area | 4,788,000 | ||||
Goodwill by geographic area | |||||
Predecessor [Member] | INDIA | |||||
Revenues by geographic area | 270,000 | ||||
Operating income (loss) by geographic area | 72,000 | ||||
Net income (loss) by geographic area | (27,000) | ||||
Identifiable assets by geographic area | 228,000 | ||||
Long lived assets by geographic area | 98,000 | ||||
Goodwill by geographic area | |||||
Predecessor [Member] | PHILIPPINES | |||||
Revenues by geographic area | 160,000 | ||||
Operating income (loss) by geographic area | 3,000 | ||||
Net income (loss) by geographic area | 3,000 | ||||
Identifiable assets by geographic area | 415,000 | ||||
Long lived assets by geographic area | 215,000 | ||||
Goodwill by geographic area | |||||
Predecessor [Member] | Eliminations [Member] | |||||
Revenues by geographic area | (220,000) | (456,000) | |||
Operating income (loss) by geographic area | 14,000 | ||||
Net income (loss) by geographic area | $ 14,000 | ||||
Identifiable assets by geographic area | (1,438,000) | ||||
Long lived assets by geographic area | |||||
Goodwill by geographic area |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 14, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Lease periodic payments | $ 19 | ||||
Successor [Member] | |||||
Operating lease expenses | $ 9 | ||||
Weighted average remaining lease term | 2 years 8 months 12 days | 2 years 8 months 12 days | |||
Weighted average discount rate used to determine operating lease | 8% | 8% | |||
Predecessor [Member] | |||||
Operating lease expenses | $ 57 | $ 97 | |||
Weighted average remaining lease term | 2 years 9 months 18 days | ||||
Weighted average discount rate used to determine operating lease | 8% |