CXApp Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
CXAI$1.36+14.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001829126-24-005416
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001829126-24-007426
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 74 current paragraphs.
47 unchanged; 24 reworded; 3 added; 11 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Revenues for the three months ended September 30, 2024, increased to $1,897 thousand, reflecting a 7% quarter-over-quarter growth, driven by the successful onboarding of new enterprise clients and deeper integration of our platform solutions with existing customers. This sustained revenue increase highlights the growing demand for our hybrid workplace solutions, particularly with our strategic partnerships, such as our collaboration with Google Cloud Marketplace, which we anticipate will significantly accelerate adoption and customer retention. Looking ahead, we expect this momentum to continue as we expand our presence in key markets and leverage our unique AI-based workplace experience technologies.
Current report
Other Income/(Expense)
Current report
Operating Activities for the nine months ended September 30, 2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor)
Removed paragraphs (11)
Previous report
Recent Events
Previous report
The Business Combination
Previous report
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 (“KINS”), CXApp Holding Corp., a Delaware corporation and newly formed wholly-owned subsidiary of Inpixon (“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) (the “Enterprise Apps Business”) in exchange for the issuance of shares of KINS capital stock valued at $69,928 thousand (the “Business Combination”). The transaction closed on March 14, 2023.
Previous report
Immediately prior to the Merger and pursuant to a Separation and Distribution Agreement, dated as of September 25, 2022, among KINS, Inpixon, CXApp and Design Reactor, (the “Separation Agreement”), and other ancillary conveyance documents, Inpixon, among other things and on the terms and subject to the conditions of the Separation Agreement, transferred the Enterprise Apps Business, including certain related subsidiaries of Inpixon, including Design Reactor, to CXApp (the “Reorganization”). Following the Reorganization, Inpixon distributed 100% of the common stock of CXApp, par value $0.0001, to certain holders of Inpixon securities as of the record date (the “Spin-Off”).
Previous report
Immediately following the Spin-Off, in accordance with and subject to the terms and conditions of the Merger Agreement, Merger Sub merged with and into CXApp (the “Merger”), with CXApp continuing as the surviving company and as a wholly-owned subsidiary of KINS.
Previous report
The Merger Agreement, along with the Separation and Distribution Agreement and the other transaction documents entered into in connection therewith, provided for, among other things, the consummation of the following transactions: (i) Inpixon transferred the Enterprise Apps Business (the “Separation”) to its wholly-owned subsidiary, CXApp, and contributed approximately $4 million in additional cash so that CXApp would have a minimum of $10 million in cash and cash equivalents as of the closing of the Business Combination before deduction of expenses (the “Cash Contribution”), (ii) following the Separation, Inpixon distributed 100% of the shares of CXApp Common Stock to Inpixon securityholders by way of the Distribution and (iii) following the completion of the foregoing transactions and subject to the satisfaction or waiver of certain other conditions set forth in the Merger Agreement, the parties consummated the Merger. The Separation, Distribution and Merger were intended to qualify as “tax-free” transactions.
Previous report
At the time the Business Combination was effected (the “Closing”), the outstanding shares of CXApp Common Stock after the Distribution and immediately prior to the effective time of the Merger were converted into an aggregate of 7,035,000 shares of KINS Common Stock which was issued to Inpixon securityholders, subject to adjustment. Each holder’s aggregate merger consideration consisted of approximately 22% KINS Class A Common Stock and approximately 78% KINS Class C Common Stock.
Previous report
Tax Matters Agreement
Previous report
On March 14, 2023, in connection with the consummation of the Business Combination and as contemplated by the Separation Agreement, CXApp, Legacy CXApp and Inpixon entered into the Tax Matters Agreement (the “Tax Matters Agreement”) which governs each party’s respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes.
Previous report
Other Expense
Previous report
Operating Activities for the six months ended June 30, 2024 (Successor), for the period from March 15, 2023 to June 30, 2023 (Successor), and the period from January 1, 2023 to March 14, 2023 (Predecessor)
Reworded paragraphs (24)
Previous wording
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 experience in a hybrid workplace.
Current wording
CXApp creates a connected workplace by reducing app overload, data fragmentation, and complex workflows and streamlines all capabilities through our application platform. All features, services, and integrations are housed in one easy-to-access platform allowing businesses to deliver a more holistic employee experience in a hybrid workplace.
Previous wording
Our subscription-based revenue was 85% of the total revenue for the three months ended June 30, 2024 (Successor) and 79% for the three months ended June 30, 2023 (Successor), which is a 6% increase in the revenue mix.
Current wording
Our subscription-based revenue was 87% of the total revenue for the three months ended September 30, 2024 (Successor) and 80% for the three months ended September 30, 2023 (Successor), which is a 7% increase in the revenue mix because the Company has moved to a full SaaS model versus one-time professional fees.
Previous wording
Cost of revenues includes the direct costs to deliver the services including labor and overhead. Cost of revenues were $353 thousand for the three months ended June 30, 2024 (Successor), compared to $480 thousand for the three months ended June 30, 2023 (Successor). The gross profit margin was 80% for the three months ended June 30, 2024 (Successor), compared to 75% for the three months ended June 30, 2023 (Successor). This decrease in cost of revenues of approximately $127 thousand, or approximately 26%, for the comparative periods ended June 30, 2024 and June 30, 2023, was attributable to the decrease in professional services revenue related costs.
Current wording
Cost of revenues includes the direct costs to deliver the services including labor and overhead. Cost of revenues were $372 thousand for the three months ended September 30, 2024 (Successor), compared to $358 thousand for the three months ended September 30, 2023 (Successor). The gross profit margin was 80% for the three months ended September 30, 2024 (Successor), compared to 80% for the three months ended September 30, 2023 (Successor).
Previous wording
Operating expenses consist primarily of research and development costs, sales and marketing costs, and general and administrative costs. These operating expenses were $5,063 thousand for the three months ended June 30, 2024 (Successor), compared to $5,118 thousand for the three months ended June 30, 2023 (Successor). The decrease in operating expenses of $55 thousand for the same comparative period was attributable to decrease in sales and marketing expenses of $303 thousand, acquisition related costs of $164 thousand, amortization of intangibles of $14 thousand and increase in stock based compensation of approximately $426 thousand.
Current wording
Operating expenses consist primarily of research and development costs, sales and marketing costs, and general and administrative costs. These operating expenses were $4,851 thousand for the three months ended September 30, 2024 (Successor), compared to $5,641 thousand for the three months ended September 30, 2023 (Successor). The decrease in operating expenses of $790 thousand for the same comparative period was attributable to decrease in sales and marketing expenses of $446 thousand, other general and administrative expenses of $329 thousand, research and development expenses of $121 thousand, professional fees through issuance of the Company’s Class A Common Stock amounting to $106 thousand, acquisition related costs of $30 thousand, amortization of intangibles of $14 thousand, and increase in stock-based compensation expense of $256 thousand.
Previous wording
Other expense was a $1,765 thousand expense, and a $12,028 thousand expense for the three months ended June 30, 2024 (Successor) and the three months ended June 30, 2023 (Successor), respectively. This decrease of $10,263 thousand in other expense for the same comparative periods was attributable to the decrease in changes in fair value of derivative warrant liabilities of approximately $10,989 thousand and increase in interest expense of approximately $689 thousand and increase in foreign exchange loss of approximately $37 thousand.
Current wording
Other income/expense was $1,825 thousand expense, and $5,253 thousand income for the three months ended September 30, 2024 (Successor) and the three months ended September 30, 2023 (Successor), respectively. This decrease of $7,078 thousand in other expense for the same comparative periods was attributable to the decrease in changes in fair value of derivative warrant liabilities of approximately $6,272 thousand, loss on debt extinguishment of approximately $535 thousand and increase in interest expense of approximately $369 thousand and increase in other income of approximately $98 thousand.
Previous wording
There was an income tax benefit of approximately $159 thousand for the three months ended June 30, 2024 (Successor), compared to $981 thousand tax benefit for the three months ended June 30, 2023 (Successor). The income tax benefit for the three months ended June 30, 2024 (Successor) is primarily a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination recorded in the first quarter of 2023.
Current wording
There was an income tax benefit of approximately $147 thousand for the three months ended September 30, 2024 (Successor), compared to $417 thousand tax benefit for the three months ended September 30, 2023 (Successor). The income tax benefit for the three months ended September 30, 2024 (Successor) is primarily a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination recorded in the first quarter of 2023.
Previous wording
Comparison of the results of operations for the six months ended June 30, 2024 (Successor), period ended June 30, 2023 (Successor), and period ended March 14, 2023 (Predecessor)
Current wording
Comparison of the results of operations for the nine months ended September 30, 2024 (Successor), period ended September 30, 2023 (Successor), and period ended March 14, 2023 (Predecessor)
Previous wording
The Company derives revenue from subscription software as a service (SaaS), design, deployment and implementation services for its enterprise apps business. Revenue was $3,584 thousand for the six months ended June 30, 2024 (Successor), compared to $2,257 thousand and $1,620 thousand for the period ended June 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. The decrease in revenue of $293 thousand, for the comparative periods ended June 30, 2024 and June 30, 2023, was due to a decline in Professional Services revenue. Professional services are related to integration works and other services that may be requested by the customer and as such the decline in revenue is attributable to the professional services revenue because the Company has moved to a full SaaS model versus one-time professional fees.
Current wording
The Company derives revenue from subscription software as a service (SaaS), design, deployment and implementation services for its enterprise apps business. Revenue was $5,481 thousand for the nine months ended September 30, 2024 (Successor), compared to $4,027 thousand and $1,620 thousand for the period ended September 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. The decrease in revenue of $166 thousand, for the comparative periods ended September 30, 2024 and September 30, 2023, was due to a decline in Professional Services revenue. Professional services are related to integration works and other services that may be requested by the customer and as such the decline in revenue is attributable to the professional services revenue because the Company has moved to a full SaaS model versus one-time professional fees.
Previous wording
Our subscription-based revenue was 86% of the total revenue for the six months ended June 30, 2024 (Successor), 78% for the period ended June 30, 2023 (Successor), and 74% for the period ended March 14, 2023 (Predecessor), which is a 8% increase in the revenue mix.
Current wording
Our subscription-based revenue was 87% of the total revenue for the nine months ended September 30, 2024 (Successor), 79% for the period ended September 30, 2023 (Successor), and 74% for the period ended March 14, 2023 (Predecessor), which is an 8% increase in the revenue mix.
Previous wording
Cost of revenues includes the direct costs to deliver the services including labor and overhead. Cost of revenues was $680 thousand for the six months ended June 30, 2024 (Successor), compared to $567 thousand and $483 thousand for the period ended June 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. The gross profit margin was 81% for the six months ended June 30, 2024 (Successor), compared to 75% and 70% for the period ended June 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor). This decrease in cost of revenues of approximately $370 thousand, or approximately 35%, for the comparative periods ended June 30, 2024 and June 30, 2023, was attributable to the decrease in professional services revenue related costs.
Current wording
Cost of revenues includes the direct costs to deliver the services including labor and overhead. Cost of revenues was $1,052 thousand for the nine months ended September 30, 2024 (Successor), compared to $925 thousand and $483 thousand for the period ended September 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. The gross profit margin was 81% for the nine months ended September 30, 2024 (Successor), compared to 77% and 70% for the period ended September 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor). This decrease in cost of revenues of approximately $356 thousand, or approximately 25%, for the comparative periods ended September 30, 2024 and September 30, 2023, was attributable to the decrease in professional services revenue related costs.
Previous wording
Operating expenses consist primarily of research and development costs, sales and marketing costs, and general and administrative costs. These operating expenses were $10,141 thousand for the six months ended June 30, 2024 (Successor), compared to $5,860 thousand and $5,518 thousand for the period ended June 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively.
Current wording
Operating expenses consist primarily of research and development costs, sales and marketing costs, and general and administrative costs. These operating expenses were $14,992 thousand for the nine months ended September 30, 2024 (Successor), compared to $11,501 thousand and $5,518 thousand for the period ended September 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively.
Previous wording
The decrease in operating expenses of $1,237 thousand for the same comparative period was attributable to decrease in acquisition cost of approximately $164 thousand, general and administrative expenses of $489 thousand due to non-renewal of contract with contractors and reduction of D&O insurance premium, sales and marketing expenses of $327 thousand due to change in commission plan and employee restructuring effective in January 2024, research and development of approximately $4 thousand and amortization of intangibles of $253 thousand.
Current wording
The decrease in operating expenses of $2,027 thousand for the same comparative period was attributable to decrease in acquisition cost of approximately $194 thousand, general and administrative expenses of $840 thousand due to non-renewal of contract with contractors and reduction of D&O insurance premium, sales and marketing expenses of $706 thousand due to change in commission plan and employee restructuring effective in January 2024, research and development of approximately $20 thousand and amortization of intangibles of $267 thousand.
Previous wording
Other expense was a $3,555 thousand expense for the six months ended June 30, 2024 (Successor), and $10,343 thousand expense and $1 thousand income for the period ended June 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. This decrease in other expense of $6,787 thousand for the same comparative period was attributable to decrease in changes in fair value of derivative warrant liabilities of $7,831 thousand and the increase in interest expense of approximately $951 thousand was primarily attributable to the one-time monitoring fee relating to the Promissory Note issued on December 15, 2023 and increase in foreign exchange loss of approximately $93 thousand.
Current wording
Other income/expense was $5,380 thousand expense for the nine months ended September 30, 2024 (Successor), and $5,090 thousand expense and $1 thousand income for the period ended September 30, 2023 (Successor) and the period ended March 14, 2023 (Predecessor), respectively. This increase in other expense of $291 thousand for the same comparative period was attributable to decrease in changes in fair value of derivative warrant liabilities of $1,559 thousand and the increase in interest expense of approximately $1,320 thousand was primarily attributable to the one-time monitoring fee relating to the Promissory Note issued on December 15, 2023 and convertible debt, loss on debt extinguishment of $535 thousand and decrease in foreign exchange loss of approximately $5 thousand.
Previous wording
There was an income tax benefit of approximately $366 thousand for the six months ended June 30, 2024 (Successor), compared to $2,541 thousand tax benefit for the period ended June 30, 2023 (Successor). The income tax benefit for the six months ended June 30, 2024 (Successor) is primarily a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination recorded in the first quarter of 2023.
Current wording
There was an income tax benefit of approximately $513 thousand for the nine months ended September 30, 2024 (Successor), compared to $2,958 thousand tax benefit for the period ended September 30, 2023 (Successor). The income tax benefit for the nine months ended September 30, 2024 (Successor) is primarily a result of the release of valuation allowance attributable to acquired intangible assets from the Business Combination recorded in the first quarter of 2023.
Previous wording
As of August 10, 2024, the Company owed approximately $3,885 thousand in principal and accrued interest payable of $261 thousand payable within the next six months. The interest rate is 10%. See Note 9 of the Notes to Unaudited Condensed Consolidated Financial Statements.
Current wording
As of November 12, 2024, the Company owed approximately $2,731 thousand in principal and accrued interest payable of $20 thousand payable within the next three months related to the December 2023 Note. The interest rate is 10%. See Note 9 of the Notes to Unaudited Condensed Consolidated Financial Statements.
Previous wording
Net cash used in operating activities during the six months ended June 30, 2024 (Successor) of $2,560 thousand consists of net loss of $10,426 thousand offset by non-cash adjustments of approximately $6,351 thousand and net cash changes in operating assets and liabilities of approximately $1,515 thousand. On May 22, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued an unsecured convertible Pre-Paid Purchase to Lender. The convertible Pre-Paid Purchase has the original principal amount of $2,650 thousand. On June 3, 2024, the Company received net proceeds of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender’s transaction cost of $20 thousand. Given our current cash balances and budgeted cash flow requirements, the Company believes such funds are sufficient to satisfy its working capital needs, capital asset purchases, debt repayments and other liquidity requirements associated with its existing operations for the next 12 months from the issuance date of the financial statements. The Company may continue to pursue strategic transactions and may raise additional capital as needed, using our equity securities and/or cash and debt financings in combinations appropriate for each acquisition.
Current wording
Net cash used in operating activities during the nine months ended September 30, 2024 (Successor) of $4,629 thousand consists of net loss of $15,430 thousand offset by non-cash adjustments of approximately $9,826 thousand and net cash changes in operating assets and liabilities of approximately $975 thousand. On May 22, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued two unsecured convertible Pre-Paid Purchases to Lender. The convertible Pre-Paid Purchases has the original principal amount of $3,675 thousand. For the period ended September 30, 2024, the Company received net proceeds of $3,480 thousand, reflecting original issue discount of $175 and Lender’s transaction cost of $20 thousand. Given our current cash balances and budgeted cash flow requirements, the Company believes such funds are sufficient to satisfy its working capital needs, capital asset purchases, debt repayments and other liquidity requirements associated with its existing operations for the next 12 months from the issuance date of the financial statements. The Company may continue to pursue strategic transactions and may raise additional capital as needed, using our equity securities and/or cash and debt financings in combinations appropriate for each acquisition.
Previous wording
Liquidity and Capital Resources as of June 30, 2024 Compared With June 30, 2023
Current wording
Liquidity and Capital Resources as of September 30, 2024
Previous wording
As of June 30, 2024 (Successor), the Company has a working capital deficiency of approximately $6,807 thousand and cash of approximately $6,160 thousand. For the period ended June 30, 2024 (Successor), the Company incurred net loss of approximately $10,426 thousand and used approximately $2,560 thousand of cash for operating activities.
Current wording
As of September 30, 2024 (Successor), the Company has a working capital deficiency of approximately $7,404 thousand and cash of approximately $5,082 thousand. For the period ended September 30, 2024 (Successor), the Company incurred net loss of approximately $15,430 thousand and used approximately $4,629 thousand of cash for operating activities.
Previous wording
Cash Flows from Investing Activities for the six months ended June 30, 2024 (Successor), for the period from March 15, 2023 to June 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (Predecessor)
Current wording
Cash Flows from Investing Activities for the nine months ended September 30, 2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (Predecessor)
Previous wording
Net cash flows used in investing activities during the six months ended June 30, 2024 (Successor) was approximately $26 thousand compared to net cash flows provided in and used in investing activities for the period from March 15, 2023 to June 30, 2023 (Successor) and during the period from January 1, 2023 to March 14, 2023 (Predecessor) of approximately $9,977 thousand and $54 thousand, respectively. Cash flows related to investing activities during the six months ended June 30, 2024 (Successor) include $26 thousand for the purchase of property and equipment. Cash flows related to investing activities during the period from March 15, 2023 to June 30, 2023 (Successor) include $26 thousand for the purchase of property and equipment, and $10,003 thousand for cash acquired in connection with the Business Combination. Cash flows related to investing activities during the period from January 1, 2023 to March 14, 2023 (Predecessor) include $9 thousand for the purchase of property and equipment, and $45 thousand for the investment in capitalized software.
Current wording
Net cash flows used in investing activities during the nine months ended September 30, 2024 (Successor) was approximately $30 thousand compared to net cash flows provided by and used in investing activities for the period from March 15, 2023 to September 30, 2023 (Successor) and during the period from January 1, 2023 to March 14, 2023 (Predecessor) of approximately $9,956 thousand and $54 thousand, respectively. Cash flows related to investing activities during the nine months ended September 30, 2024 (Successor) include $30 thousand for the purchase of property and equipment. Cash flows related to investing activities during the period from March 15, 2023 to September 30, 2023 (Successor) include $47 thousand for the purchase of property and equipment, and $10,003 thousand for cash acquired in connection with the Business Combination. Cash flows related to investing activities during the period from January 1, 2023 to March 14, 2023 (Predecessor) include $9 thousand for the purchase of property and equipment, and $45 thousand for the investment in capitalized software.
Previous wording
Cash Flows from Financing Activities for the six months ended June 30, 2024 (Successor), for the period from March 15, 2023 to June 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (Predecessor)
Current wording
Cash Flows from Financing Activities for the nine months ended September 30, 2024 (Successor), for the period from March 15, 2023 to September 30, 2023 (Successor), and for the period from January 1, 2023 to March 14, 2023 (Predecessor)
Previous wording
Net cash flows provided by financing activities during the six months ended June 30, 2024 (Successor) was approximately $2,480 thousand compared to net cash flows used in and provided by financing activities for the period from March 15, 2023 to June 30, 2023 (Successor) and during the period from January 1, 2023 to March 14, 2023 (Predecessor) of approximately $328 thousand and $8,892 thousand, respectively. On May 22, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued an unsecured convertible Pre-Paid Purchase to Lender. The convertible Pre-Paid Purchase has the original principal amount of $2,650 thousand. On June 3, 2024, the Company received net proceeds of $2,480 thousand, reflecting original issue discount of $125 thousand and Lender’s transaction cost of $20 thousand. During the period from March 15, 2023 to June 30, 2023 (Successor), the Company paid $328 thousand in cash outflows from a repayment of a related party promissory note. During the period from January 1, 2023 to March 14, 2023 (Predecessor), the Company received $9,089 thousand in incoming cash flows from parent, and paid $197 thousand in cash outflows from a payment of an acquisition liability.
Current wording
Net cash flows provided by financing activities during the nine months ended September 30, 2024 (Successor) was approximately $3,480 thousand compared to net cash flows provided by financing activities for the period from March 15, 2023 to September 30, 2023 (Successor) and during the period from January 1, 2023 to March 14, 2023 (Predecessor) of approximately $4,674 thousand and $8,892 thousand, respectively. On May 22, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with Streeterville Capital, LLC (“Lender”), pursuant to which the Lender desires to purchase up to $10,000 thousand in shares of the Company’s Common Stock, par value $0.0001. Pursuant to the SPA, the Company issued two unsecured convertible Pre-Paid Purchases to Lender. The convertible Pre-Paid Purchase has the original principal amount of $3,675 thousand. For the nine months ended, the Company received net proceeds of $3,480 thousand, reflecting original issue discount of $175 thousand and Lender’s transaction cost of $20 thousand. During the period from March 15, 2023 to September 30, 2023 (Successor), the Company paid $328 thousand in cash outflows from a repayment of a related party promissory note, Company received $5,002 thousand in cash inflows from warrant exercises. During the period from January 1, 2023 to March 14, 2023 (Predecessor), the Company received $9,089 thousand in incoming cash flows from parent, and paid $197 thousand in cash outflows from a payment of an acquisition liability.
Previous wording
Contractual obligations are cash that we are obligated to pay as part of certain contracts that we have entered during our course of business. Our contractual obligations consist of operating lease liabilities that are included in our balance sheet. As of June 30, 2024 (Successor), the total obligation for operating leases is approximately $677 thousand, of which approximately $389 thousand is expected to be paid in the next twelve months.
Current wording
Contractual obligations are cash that we are obligated to pay as part of certain contracts that we have entered during our course of business. Our contractual obligations consist of operating lease liabilities that are included in our balance sheet. As of September 30, 2024 (Successor), the total obligation for operating leases is approximately $585 thousand, of which approximately $377 thousand is expected to be paid in the next twelve months.
Previous wording
The Management believes there have been no significant changes during the six months ended June 30, 2024, to the items disclosed as critical accounting estimates in management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on May 24, 2024.
Current wording
The Management believes there have been no significant changes during the nine months ended September 30, 2024, to the items disclosed as critical accounting estimates in management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on May 24, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Company derives revenue from subscription software as a service (SaaS), design, deployment and implementation services for its enterprise apps business. Revenue was $1,766 thousand for the three months ended June 30, 2024 (Successor), compared to $1,915 thousand for the three months ended June 30, 2023 (Successor). The decrease in revenue of $149 thousand, for the comparative quarters ended June 30, 2024 and June 30, 2023, was due to a decline in Professional Services revenue. Professional services are related to integration works and other services that may be requested by the customer and as such the decline in revenue is attributable to the professional services revenue because the Company has moved to a full SaaS model versus one-time professional fees.