[10-Q] FiscalNote Holdings, Inc. Quarterly Earnings Report
FiscalNote Holdings (NOTE) filed its Q3 2025 report, showing total revenue of $22,429 and a net loss of $24,855. Operating loss was $9,739 as subscriptions remained the primary driver.
Liquidity and capital structure shifted meaningfully. Cash and cash equivalents were $26,682, with $4,511 in short-term investments and $646 in restricted cash. Gross debt stood at $135,259 (long‑term debt $125,160). The company completed 2025 Senior Term Loan financing and issued convertible debentures, while selling businesses: Oxford Analytica and Dragonfly for $40,000 cash and TimeBase for $7,414, recording gains and using proceeds to retire prior loans.
Management disclosed substantial doubt about continuing as a going concern within one year due to potential noncompliance with financial covenants on the 2025 Senior Term Loan. The company also executed a 1‑for‑12 reverse stock split effective September 2, 2025. Net cash used in operating activities was $11,164 for the nine months ended September 30, 2025.
- None.
- Going concern uncertainty disclosed due to potential covenant noncompliance on the 2025 Senior Term Loan
- Revenue decline with Q3 2025 revenue at $22,429 and a net loss of $24,855
- Operating cash outflow of $11,164 for the nine months ended September 30, 2025
Insights
Covenant risk and cash burn drive a negative outlook.
FiscalNote reported Q3 revenue of
The company refinanced into a 2025 Senior Term Loan with financial covenants and issued Convertible Debentures, while using proceeds from asset sales—
Management states substantial doubt about the ability to continue as a going concern due to potential covenant noncompliance. Actual impact depends on revenue, ARR, adjusted EBITDA, and collections versus covenant thresholds; subsequent filings may provide updates on compliance or amendments.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer |
(Address of principal executive offices, including zip code) |
||
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
|
|
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
|
☒ |
|
|
|
|
|
|||
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
|
|
|
|
|
|
|
|
Emerging growth company |
|
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 3, 2025, the registrant had
Table of Contents
FISCALNOTE HOLDINGS, INC. FORM 10-Q TABLE OF CONTENTS |
|
|
|
|
Page No. |
Cautionary Note Regarding Forward-Looking Statements |
1 |
|
|
PART I. Financial Information (Unaudited, except as noted below): |
|
Item 1. Financial Statements |
|
Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (Audited) |
3 |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
4 |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) |
5 |
Condensed Consolidated Statements of Cash Flows |
6 |
Notes to Condensed Consolidated Financial Statements |
7 |
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
27 |
Item 3. Quantitative and Qualitative Disclosures About Market Risks |
38 |
Item 4. Controls and Procedures |
38 |
|
|
Part II. OTHER INFORMATION |
40 |
|
|
Item 1. Legal Proceedings |
40 |
Item 1A. Risk Factors |
40 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
40 |
Item 3. Defaults upon Senior Securities |
40 |
Item 4. Mine Safety Disclosures |
40 |
Item 5. Other Information |
41 |
Item 6. Exhibits |
41 |
|
|
SIGNATURES |
43 |
Table of Contents
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors,” and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity; our prospects, growth, strategies and the markets in which FiscalNote operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting FiscalNote. Factors that may impact such forward-looking statements include:
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of this Quarterly Report on Form 10-Q and the other documents filed by us from
1
Table of Contents
time to time with the U.S. Securities and Exchange Commission ("SEC"). The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us and our business. There can be no assurance that future developments affecting us will be those that we have anticipated. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
2
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
FISCALNOTE HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except shares, and par value)
|
|
(Unaudited) |
|
|
|
|
||
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Short-term investments |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Costs capitalized to obtain revenue contracts, net |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Capitalized software costs, net |
|
|
|
|
|
|
||
Noncurrent costs capitalized to obtain revenue contracts, net |
|
|
|
|
|
|
||
Operating lease assets |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Customer relationships, net |
|
|
|
|
|
|
||
Database, net |
|
|
|
|
|
|
||
Other intangible assets, net |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Current maturities of long-term debt |
|
$ |
|
|
$ |
|
||
Accounts payable and accrued expenses |
|
|
|
|
|
|
||
Deferred revenue, current portion |
|
|
|
|
|
|
||
Customer deposits |
|
|
|
|
|
|
||
Operating lease liabilities, current portion |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Long-term debt, net of current maturities |
|
|
|
|
|
|
||
Deferred tax liabilities |
|
|
|
|
|
|
||
Deferred revenue, net of current portion |
|
|
|
|
|
|
||
Operating lease liabilities, net of current portion |
|
|
|
|
|
|
||
Public and private warrant liabilities |
|
|
|
|
|
|
||
Other non-current liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||
Temporary equity ( |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
||
Stockholders' equity: |
|
|
|
|
|
|
||
Class A Common stock ($ |
|
|
|
|
|
|
||
Class B Common stock ($ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated other comprehensive income (loss) |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total stockholders' equity |
|
|
|
|
|
|
||
Total liabilities, temporary equity and stockholders' equity |
|
$ |
|
|
$ |
|
||
See accompanying notes to unaudited condensed consolidated financial statements.
3
Table of Contents
FISCALNOTE HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except shares and per share data)
(Unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Advisory, advertising, and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues, including amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Editorial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction (gains) costs, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of businesses (Note 4) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on debt extinguishment |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Other (income) expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net (loss) income before income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
(Benefit) provision from income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Net (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share attributable to common shareholders (Note 13): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Weighted average shares used in computing earnings (loss) per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Cost of revenues, including amortization |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Editorial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
Table of Contents
FISCALNOTE HOLDINGS, INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(in thousands, except share data)
(Unaudited)
|
|
Temporary Equity |
|
|
Equity (Deficit) |
|
||||||||||||||||||||
|
|
Preferred Stock |
|
|
Common Stock |
|
Additional paid-in capital |
|
Accumulated other comprehensive income( loss) |
|
Accumulated deficit |
|
Total stockholders' equity (deficit) |
|
||||||||||||
|
|
Shares |
|
Amount |
|
|
Shares |
|
Amount |
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2023 (as adjusted for the reverse stock split) |
|
|
- |
|
$ |
- |
|
|
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||
Issuance of Class A common stock upon vesting of restricted share units |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Issuance of Class A common stock upon exercise of employee stock purchase plan |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Change in fair value of debt instruments (Note 15) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Net income |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
||
Foreign currency translation loss |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Balance at March 31, 2024 |
|
|
- |
|
$ |
- |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
Issuance of Class A common stock upon vesting of restricted share units |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Note conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
||||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Net loss |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
( |
) |
|
( |
) |
|
Foreign currency translation gain |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|||
Balance at June 30, 2024 |
|
|
- |
|
$ |
- |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
Issuance of Class A common stock upon vesting of restricted share units |
|
|
|
|
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||
Issuance of Class A common stock upon exercise of employee stock purchase plan |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||||
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||||
Shares issued to satisfy interest on Prior GPO Convertible Note |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||||
Stock-based compensation expense |
|
|
|
|
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
|
|
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||||
Net loss |
|
|
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
||
Foreign currency translation gain |
|
|
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||||
Balance at September 30, 2024 |
|
|
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2024 |
|
|
- |
|
$ |
- |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
Issuance of Class A common stock upon vesting of restricted stock units |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Issuance of Class A common stock upon exercise of employee stock purchase plan and exercise of stock options |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Dragonfly note conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Prior GPO Convertible Note interest conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Era Note (Note 8) |
|
|
|
|
|
|
|
( |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
Brokerage Shares issued |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Accretion of preferred stock to redemption value |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
Exercise of stock options |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Net loss |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Foreign currency translation gain |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Balance at March 31, 2025 |
|
|
|
$ |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||
Issuance of Class A common stock upon vesting of restricted stock units |
|
|
- |
|
$ |
- |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Prior GPO Convertible Note interest conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Note conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Net loss |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Foreign currency translation gain |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Balance at June 30, 2025 |
|
|
|
$ |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||
Issuance of Class A common stock upon exercise of employee stock purchase plan |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Issuance of Class A common stock upon vesting of restricted share units |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Prior GPO Convertible Note extinguishment (Note 8) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Era Note (Note 8) |
|
|
( |
) |
|
( |
) |
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|||||
Era Note Share Return (Note 8) |
|
|
( |
) |
|
( |
) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Convertible Debenture (Note 8) |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
|||
Dragonfly change in fair value |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Note conversion |
|
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|||||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Withholding taxes on net share settlement of stock-based compensation and option exercises |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Net loss |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Foreign currency translation gain |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Balance at September 30, 2025 |
|
|
- |
|
|
- |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
Table of Contents
FISCALNOTE HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Operating Activities: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Amortization of intangible assets and capitalized software development costs |
|
|
|
|
|
|
||
Amortization of deferred costs to obtain revenue contracts |
|
|
|
|
|
|
||
Gain on sale of businesses (Note 4) |
|
|
( |
) |
|
|
( |
) |
Non-cash operating lease expense |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Other non-cash expenses |
|
|
- |
|
|
|
|
|
Bad debt expense |
|
|
|
|
|
|
||
Change in fair value of acquisition contingent consideration |
|
|
- |
|
|
|
( |
) |
Unrealized loss on securities |
|
|
|
|
|
|
||
Change in fair value of financial instruments |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Paid-in-kind interest, net |
|
|
|
|
|
|
||
Non-cash interest expense |
|
|
|
|
|
|
||
Loss on debt extinguishment, net |
|
|
|
|
|
- |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Costs capitalized to obtain revenue contracts, net |
|
|
( |
) |
|
|
( |
) |
Other non-current assets |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
|
||
Customer deposits |
|
|
( |
) |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
|
|
|
|
Contingent liabilities from acquisitions, net of current portion |
|
|
- |
|
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Other non-current liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Investing Activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Cash proceeds from the sale of businesses, net (Note 4) |
|
|
|
|
|
|
||
Net cash provided by investing activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Financing Activities: |
|
|
|
|
|
|
||
Proceeds from long-term debt, net of issuance costs |
|
|
|
|
|
|
||
Principal payments of long-term debt |
|
|
( |
) |
|
|
( |
) |
Payment of deferred financing costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from exercise of stock options and employee stock purchase plan purchases |
|
|
|
|
|
|
||
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Effects of exchange rates on cash |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net change in cash, cash equivalents, and restricted cash |
|
|
( |
) |
|
|
|
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental Noncash Investing and Financing Activities: |
|
|
|
|
|
|
||
Issuance of common stock for conversion of debt and interest |
|
$ |
|
|
$ |
|
||
Amounts held in escrow related to the sale of businesses |
|
$ |
|
|
$ |
|
||
Property and equipment purchases included in accounts payable |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental Cash Flow Activities: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for taxes |
|
$ |
|
|
$ |
|
||
See accompanying notes to unaudited condensed consolidated financial statements.
6
FISCALNOTE HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(in thousands, except shares, par value, per share amounts, or as otherwise noted)
(Unaudited)
Note 1. Summary of Business and Significant Accounting Policies
Description of Business
FiscalNote Holdings, Inc. (“FiscalNote,” or the “Company”) is a leading provider of artificial intelligence ("AI") driven policy and regulatory intelligence solutions. By uniquely combining proprietary artificial intelligence technology, comprehensive data, and decades of trusted analysis, FiscalNote helps customers efficiently manage political and business risk. Since 2013, the Company has pioneered solutions that deliver critical insights, enabling effective decision making and giving organizations the competitive edge they need.
Home to PolicyNote, CQ, Roll Call, VoterVoice, and many other industry-leading products and brands, FiscalNote serves thousands of customers worldwide with its global offices in North America, Europe, Asia and Australia. The Company is headquartered in Washington, D.C.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit), and cash flows. All adjustments are of a normal recurring nature. The results for the nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2025. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
Reverse Stock Split
On August 22, 2025, the Board approved a 1-for-12 reverse stock split (the “Reverse Stock Split”) of the Company’s Common Stock. On August 28, 2025, the Company filed a certificate of amendment to its Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, and the Company’s Class A Common Stock began trading on a split-adjusted basis at market open on September 2, 2025 under the existing symbol “NOTE”.
As a result of the Reverse Stock Split, every 12 shares of the Company’s Common Stock issued and outstanding as of the effective time of the Reverse Stock Split were automatically converted into one share of Common Stock. No fractional shares were issued in connection with the Reverse Stock Split. Instead, each stockholder received a cash payment in lieu thereof at a price equal to the fraction of one share to which the stockholder would otherwise be entitled multiplied by the closing price per share of Class A Common Stock (as adjusted for the Reverse Stock Split) on the New York Stock Exchange (“NYSE”) on August 29, 2025 the last trading day immediately preceding the effective time of the Reverse Stock Split.
Further, proportionate adjustments were made to the number of shares of Common Stock underlying the Company’s outstanding equity awards and the number of shares issuable under the Company’s equity incentive plans and existing agreements, as well as the exercise price and/or any stock price goals, as applicable. The Reverse Stock Split did not affect the number of authorized shares of Common Stock or the par value of the Common Stock. The Company’s publicly traded warrants continue to be traded on the NYSE under the symbol “NOTE.WS”. However, pursuant to the terms of the applicable warrant agreement, the number of shares of Class A Common Stock issuable on exercise of each warrant was proportionately decreased. Specifically, following effectiveness of the Reverse Stock Split, every warrant to purchase
All share and per share amounts in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.
Liquidity and Going Concern
In accordance with Accounting Standards Codification Topic 205-40, Going Concern, the Company evaluates whether there are certain conditions and events, considered in the aggregate, which raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s cash, cash equivalents, restricted cash, and short-term investments were $
Historically, the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company partially funded its operations through raising equity and debt and selling assets. The Company has implemented various cost saving
7
Table of Contents
measures throughout 2023, 2024 and 2025 to rationalize its cost structure. Accordingly, the Company has improved its cash used in operations by approximately $
On August 12, 2025 and September 11, 2025 the Company completed the refinancing of a substantial amount of our legacy indebtedness, including a refinance of its Prior Senior Term Loan (as defined herein) with the 2025 Senior Term Loan (as defined herein). The 2025 Senior Term Loan contains four financial covenants: a minimum cash balance requirement, a minimum ARR requirement, a minimum adjusted EBITDA requirement and a capital expenditure limitation. The Company’s ability to maintain compliance with these financial covenants is based on the Company’s current expectations regarding revenues, improved net retention,, collections, cost structure, current cash burn rate and other operating assumptions, which in part, depend on general economic, financial, competitive, legislative, regulatory, and other conditions. Within one year from the date of this filing, without any actions taken by management and lenders, it is probable that the Company may not be compliant with one, or all, of its financial covenants. At the time that the Company does not maintain compliance with all of its financial covenants, the lenders may declare the amounts outstanding due and payable at which time the Company would not be able to satisfy the lenders' rights. Accordingly, the Company has concluded that there is substantial doubt about its ability to continue as a going concern within one year from the date of this filing.
If the Company raises funds in the future by issuing equity securities, dilution to stockholders will occur and may be substantial. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If the Company raises funds in the future by issuing additional debt securities, these debt securities could have rights, preferences, and privileges senior to those of common stockholders. The terms of any additional debt securities, borrowings, and/or debt amendments could impose significant restrictions on the Company’s operations. The capital markets have experienced in the past, and may experience in the future, periods of upheaval that could impact the availability and cost of equity and debt financing. There can be no assurance that any necessary additional financing in the future will be available on terms acceptable to the Company, or at all.
The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Segments
The Company is a leading provider of artificial intelligence ("AI") driven policy and regulatory intelligence solutions and operates out of a single operating segment. The Company derives revenues from customers by delivering critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment.
The Company's chief operating decision making ("CODM") is the chief executive officer. The chief operating decision maker assesses performance for the single operating segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net (loss) income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company does not have intra-equity sales or transfers. The Company operates as a single operating segment as the chief operating decision maker manages the business activities on a consolidated basis.
The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company's ongoing operations and as part of the Company's internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statement of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statement of Operations.
The CODM does not evaluate performance or allocate resources based on assets of the single segment, and therefore such information is not presented in the notes to the financial statements.
Earnings per Share
Basic earnings per share ("EPS") is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements). For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
Fair Value of Financial Instruments
The Company has elected the fair value option for the 2025 GPO Convertible Note, GPO Convertible Note, Dragonfly Seller Convertible Notes, Convertible Debentures, and the Era Convertible Notes, refer to Note 8, Debt for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change
8
Table of Contents
in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.
Investments
The Company has invested in highly liquid investments that have investment-grade ratings. These investments are accounted for at fair value through the condensed consolidated statement of operations. The Company is able to easily liquidate these into cash; accordingly, the Company has presented these investments as available for current operations and are presented as short-term investments within current assets in the condensed consolidated balance sheets. Purchases and sales of short-term investments are classified in the investing section of our consolidated statement of cash flows.
Concentrations of Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At September 30, 2025, approximately
The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of September 30, 2025 and December 31, 2024, allowance for credit losses of $
No single customer accounted for more than
As of September 30, 2025 and December 31, 2024, two vendors accounted for more than
Recent Accounting Pronouncements Not Yet Effective
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. For public entities, ASU 2023-09 is required to be adopted for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on its income tax disclosures.
In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), as amended by ASU 2025-01, which requires public entities to disclose disaggregated information about certain income statement line items in the notes to the financial statements. For public entities, ASU 2024-03 is required to be adopted for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removed the language around project stages that was used to assess when costs could be capitalized for an internal-use software. The update also requires internal-use software to be disclosed under the ASC 360 Property, Plant, and Equipment guidance. The guidance is effective for annual periods beginning after December 15, 2027. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
Note 2. Business Combination with DSAC
On July 29, 2022, the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became
9
Table of Contents
the business of New FiscalNote and its subsidiaries following the closing on July 29, 2022. Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE.WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Note 3. Revenues
Disaggregation of Revenue
The following table depicts the Company's disaggregated revenue for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Subscription |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Advisory |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advertising |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Books |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Revenue by Geographic Locations
The following table depicts the Company’s revenue by geographic operations for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Australia |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Asia |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. North America revenue consists solely of revenue attributed to the United States. For the three months ended September 30, 2024, revenue attributed to the United Kingdom represented approximately
Contract Assets
The Company had contract assets of $
Deferred Revenue
Details of the Company’s deferred revenue for the periods presented are as follows:
Balance at December 31, 2023 |
|
$ |
|
|
Sale of Board.org |
|
|
( |
) |
Revenue recognized in the current period from amounts in the prior balance |
|
|
( |
) |
New deferrals, net of amounts recognized in the current period |
|
|
|
|
Effects of foreign currency |
|
|
|
|
Balance at September 30, 2024 |
|
$ |
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
$ |
|
|
Sale of businesses |
|
|
( |
) |
Revenue recognized in the current period from amounts in the prior balance |
|
|
( |
) |
New deferrals, net of amounts recognized in the current period |
|
|
|
|
Effects of foreign currency |
|
|
|
|
Balance at September 30, 2025 |
|
$ |
|
|
10
Table of Contents
Costs Capitalized to Obtain Revenue Contracts
During the nine months ended September 30, 2025 and 2024, the Company capitalized $
Unsatisfied Performance Obligations
At September 30, 2025, the Company had $
Note 4. Dispositions
2025 Dispositions
Sale of Oxford Analytica and Dragonfly
On February 21, 2025 (the "Signing Date"), the Company entered into an equity purchase agreement (the "Equity Purchase Agreement") with Factiva Ltd., ("Factiva") a limited company organized under the laws of England and Wales, providing for the sale of all of the outstanding equity interests in each of Dragonfly Eye Limited, a UK private limited company (“Dragonfly”), and The Oxford Analytica International Group, LLC, a Delaware limited liability company (“Oxford” and collectively with Dragonfly, the “Sold Businesses”). At closing of the sale on March 31, 2025, after adjustments based on the Sold Businesses estimated working capital, indebtedness, and transaction expenses, the Company received $
The proceeds from the sale were used in part to prepay and retire $
The Company determined that Oxford Analytica and Dragonfly were not significant subsidiaries, and their sale did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for the Sold Businesses were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Sale of TimeBase
On May 2, 2025, the Company entered into an agreement to sell the equity of the Company's Australian subsidiary, TimeBase Pty. Ltd. (“TimeBase”). On July 1, 2025 the Company closed the sale of TimeBase. Total consideration was $
The Company determined that Timbase was not a significant subsidiary, and the disposition of TimeBase did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for TimeBase were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
2024 Dispositions
Sale of Board.org
On March 11, 2024, the Company entered into an agreement (the "Purchase Agreement") to sell the equity of the Company's subsidiary owning and operating its Board.org business with Exec Connect Intermediate LLC (“Exec Connect”). On March 11, 2024, after adjustments based on Board.org’s working capital, indebtedness and transaction expenses, as well as retention payments payable to certain employees of Board.org, the Company received $
The proceeds from the sale of Board.org were used in part to prepay $
11
Table of Contents
Company for general corporate purposes. As part of the sale the Company recorded a current tax liability for federal and state income tax of $
The Company determined that Board.org was not a significant subsidiary, and the disposition of Board.org did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Board.org were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Sale of Aicel
On October 31, 2024, the Company entered into an agreement to sell the equity of the Company's subsidiary owning and operating its Aicel Technologies business ("Aicel") to a South Korean based-group. Total consideration was $
The Company determined that Aicel was not a significant subsidiary, and the disposition of Aicel did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Aicel were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Note 5. Leases
The Company has operating leases, principally for corporate offices under non-cancelable operating leases that expire at various dates through 2031. The non-cancellable base terms of these remaining leases typically range from to
The following table details the composition of lease expense for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Sublease income |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Cash payments related to operating lease liabilities were $
Note 6. Intangible Assets
The following table summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets by major class:
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
|
Weighted Average |
|
|||||||||||||||||||
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Remaining Useful Life (Years) September 30, 2025 |
|
|||||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||||
Developed technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Databases |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Tradenames |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Expert network |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
- |
|
||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Content library |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||||
Finite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. Amortization of intangible assets, excluding developed technology, was $
Amortization of developed technology was recorded as part of cost of revenues, including amortization in the amount of $
12
Table of Contents
The expected future amortization expense for intangible assets as of September 30, 2025 is as follows:
2025 (remainder) |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
Capitalized software development costs
Capitalized software development costs are as follows:
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
||||||
Capitalized software development costs |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
During the nine months ended September 30, 2025 and 2024, the Company capitalized interest on capitalized software development costs in the amount of $
Note 7. Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but are rather tested for impairment at least annually as of October 1 of each year.
The changes in the carrying amounts of goodwill, which are generally not deductible for tax purposes, are as follows:
Balance at December 31, 2024 |
|
$ |
|
|
Sale of Businesses |
|
|
( |
) |
Impact of foreign currency fluctuations |
|
|
|
|
Balance at September 30, 2025 |
|
$ |
|
On January 1, 2025, effective with the appointment of our new CEO, the Company reassessed its goodwill reporting units and determined that the Company now operates out of a single reporting unit. Accordingly, the Company performed a quantitative goodwill impairment assessment immediately prior to, and on, January 1, 2025, which resulted in
The fair value estimate of the Company's single reporting unit was derived based on an income approach. Under the income approach, the Company estimated the fair value of the single reporting unit based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows.
Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more of these impairment indicators could occur or intensify in the near term, which may result in an impairment of long-lived assets or goodwill.
13
Table of Contents
Note 8. Debt
The following presents the carrying value of the Company’s debt as of the respective period ends:
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
2025 Senior Term Loan |
|
$ |
|
|
$ |
- |
|
|
2025 GPO Convertible Note |
|
|
|
|
|
- |
|
|
Dragonfly Seller Convertible Notes |
|
|
|
|
|
|
||
Convertible Debentures |
|
|
|
|
|
- |
|
|
Prior Senior Term Loan |
|
|
- |
|
|
|
|
|
GPO Convertible Note |
|
|
- |
|
|
|
|
|
Amended Legacy Notes |
|
|
- |
|
|
|
|
|
PPP loan |
|
|
- |
|
|
|
|
|
Total gross debt |
|
|
|
|
|
|
||
Debt issuance costs and debt discount |
|
|
( |
) |
|
|
( |
) |
Total |
|
|
|
|
|
|
||
Less: Current maturities |
|
|
( |
) |
|
|
( |
) |
Total Long-term debt |
|
$ |
|
|
$ |
|
||
2025 Senior Term Loan / Prior Senior Term Loan
2025 Senior Term Loan
On August 5, 2025, the Company entered into a financing agreement (the "Financing Agreement"), by and among the Company, as parent guarantor, the Company's domestic subsidiaries party thereto as borrowers and guarantors, the lenders from time to time party thereto, and MGG Investment Group LP, as collateral agent and as administrative agent, pursuant to which the lenders agreed to advance $
The 2025 Senior Term Loan also contains four financial covenants: a minimum cash balance requirement, a minimum ARR requirement, a minimum adjusted EBITDA requirement, and a capital expenditure limitation.
The 2025 Senior Term Loan also includes covenants limiting the ability of the Company and its subsidiaries, subject to certain exceptions, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any transaction of merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business, (iv) dispose of any of their property, or, issue or sell any shares of a subsidiary’s stock, (v) make any payment or prepayment for any subordinated indebtedness, pay any earn-out payment, seller debt or deferred purchase price payments, or (vi) declare or pay any dividend or make any other distribution. The 2025 Senior Term Loan also contains certain events of default, including, among others, (i) failure to pay, (ii) breach of representations and warranties, (iii) breach of covenants, subject to any cure periods described therein, and (iv) failure to pay principal or interest on any other material debt.
On August 12, 2025 the Company closed on its 2025 Senior Term Loan and received net proceeds of $
The Company has elected to pay cash interest based on SOFR, which was
Upon maturity, the Company is required to pay in cash the greater of $
Because the Exit Fee is payable in certain redemption scenarios, the Company determined that pursuant to ASC 815 “Derivatives and Hedging” certain of the embedded redemption features meet the definition of a derivative that must be accounted for at fair value with changes in fair value reflected in the consolidated statement of operations and comprehensive income (loss). The fair value of the embedded redemption feature at inception on August 12, 2025 was $
14
Table of Contents
was $
Prior Senior Term Loan
On July 29, 2022, concurrent with the closing of the Company's Business Combination, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote Holdings, Inc., entered into a senior credit agreement (the "Prior Senior Term Loan") as amended from time to time.
In connection with the completion of the sale of Oxford Analytica and Dragonfly on March 31, 2025, the Company also entered into Amendment No. 5 to the Prior Senior Term Loan, pursuant to which, among other things, the lenders consented to releasing the liens on Oxford Analytica and Dragonfly's assets and permitting the consummation of the sale in exchange for the permanent retirement of $
In connection with the completion of the sale of TimeBase on July 1, 2025, the Company also entered into Amendment No. 6 to the Prior Senior Term Loan, pursuant to which, among other things, the lenders consented to releasing TimeBase as a guarantor under the Prior Senior Term Loan, along with the liens granted on the equity and assets of TimeBase and permitting the consummation of the sale in exchange for the permanent retirement of $
On August 12, 2025, with proceeds from the 2025 Senior Term Loan, the Company retired all of its then outstanding obligations under the Prior Senior Term Loan totaling $
For the nine months ended September 30, 2025 and 2024, the Company incurred $
Amortization of debt issuance costs on the Prior Senior Term Loan is recorded within interest expense in the condensed consolidated statements of operations and comprehensive income (loss) and totaled $
Convertible Debentures
In conjunction with the establishment of the 2025 Term Loan and in order to fund the GPO Redemption (defined below), on August 5, 2025 (the “Purchase Agreement Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”), with YA II PN, Ltd (“YA”), pursuant to which the Company would issue YA convertible debentures in an aggregate principal amount of up to $
On August 12, 2025, the initial tranche of Convertible Debentures comprising $
The Company’s obligations under the Purchase Agreement and the Convertible Debentures are guaranteed by FiscalNote, Inc., a wholly owned subsidiary of the Company, and are contractually subordinated to the Company’s obligations under its 2025 Senior Term Loan and the 2025 GPO Note. The First YA Debenture matures on
At any time prior to the maturity dates, and subject to certain ownership and conversion limitations, YA is entitled to convert any portion of the principal amount of the Convertible Debentures and accrued interest thereon into shares of the Company’s Class A Common Stock (the “Debenture Conversion Shares”) at a conversion price equal to
In the event (i) the daily VWAP is less than the Floor Price then in effect for any five trading days during a period of seven consecutive trading days, (ii) the Company has issued substantially all of shares of the Class A Common Stock available for issuance without violating applicable rules of the NYSE, or (iii) YA is unable to utilize a registration statement to resell Debenture Conversion Shares for a period of ten (10) consecutive trading days, then the Company will be required to make certain amortization payments to YA.
The Convertible Debentures provide for customary events of default, upon which repayment of the Convertible Debentures may be accelerated, including failure to pay any amounts due and owing under the Convertible Debentures, failure to timely deliver the Debenture Conversion Shares, an uncured breach of any terms of the Convertible Debentures and a default under certain of the Company’s other indebtedness.
15
Table of Contents
On September 12, 2025 YA converted $
The Company elected to account for the First YA Debenture and Second YA Debenture using the fair value option. The fair market value at August 12, 2025 and September 30, 2025 was $
2025 GPO Convertible Note / Prior GPO Convertible Note
On June 30, 2023 the Company issued to GPO FN Noteholder LLC (the “GPO Investor”) a subordinated convertible promissory note in an initial principal amount of $
In conjunction with the establishment of the 2025 Senior Term Loan, on August 5, 2025, the Company entered into a redemption and exchange agreement with the GPO Investor. Pursuant to the redemption and exchange with the GPO Investor, on August 12, 2025, the Company redeemed $
The 2025 GPO Convertible Note is guaranteed by the Company’s domestic subsidiaries, which are parties to the 2025 Senior Term Loan, and is contractually subordinated to the Company’s obligations under the 2025 Senior Term Loan. The 2025 GPO Convertible Note matures on
The 2025 GPO Convertible Note provides for customary events of default upon which repayment of the 2025 GPO Convertible Note may be accelerated, including failure to pay any amounts due and owing under the 2025 GPO Convertible Note, failure to deliver the shares upon a conversion of the 2025 GPO Convertible Note, an uncured breach of any terms of the 2025 GPO Convertible Note and a default under certain of the Company’s other indebtedness. The 2025 GPO Convertible Note includes certain negative covenants related to the Company’s ability to incur indebtedness.
The Company elected to account for the 2025 GPO Convertible Note using the fair value option. The fair market value at August 12, 2025 and September 30, 2025 was $
The Company accounted for the redemption and exchange with the GPO Investor as a debt extinguishment. Accordingly, the Company recognized a gain of $
The Company elected to account for the Prior GPO Convertible Note using the fair value option. The fair market value at August 12, 2025 and December 31, 2024 was $
16
Table of Contents
Convertible Notes
Purchased Original Notes
On March 17, 2025 and March 20, 2025, investors holding two convertible notes originally issued in 2020 and assumed by the Company in connection with the Business Combination, with a principal and accrued paid-in-kind interest balance of $
Amended Legacy Notes
On March 25, 2025 (the "Amendment Date"), the Company entered into a letter agreement (the “Amendment”) with the holders (the "Legacy Investors") of two convertible notes originally issued in 2020 and assumed by the Company in connection with the Business Combination (the "Legacy Notes") with a principal and accrued paid-in-kind interest balance of $
Pursuant to the terms of the amended Legacy Notes, during the nine months ended September 30, 2025 the Company converted $
The Company incurred total interest expense related to the amended Legacy Notes, including the amortization of the various discounts, of $
On July 30, 2025, the Company and the holders of the Amended Legacy Notes agreed to extend the original maturity date to
Dragonfly Seller Convertible Notes
In connection with the Company's acquisition of Dragonfly, the Company financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Notes were issued in a principal amount of £
In January 2025 one of the noteholders voluntarily elected to convert £
The Company elected to account for the Dragonfly Seller Convertible Notes using the fair value option. The fair market value at September 30, 2025 and at December 31, 2024 was $
Era Convertible Notes
First Era Convertible Note
In connection with the Company’s strategic commercial partnership, the Company issued a convertible note to EGT-East, LLC ("Era"), a third-party lender, for $
17
Table of Contents
Convertible Note"). The First Era Convertible Note was issued in aggregate principal amount of $
Pursuant to the copilot agreement (the "Co-Pilot Agreement") entered into by and among the Company, FiscalNote Inc., a subsidiary of the Company, and Era on December 8, 2023, the Company agreed to issue Era up to an additional $
On April 11, 2024, the Company entered into a letter agreement (the “Letter Agreement”) with Era modifying certain provisions of the First Era Convertible Note and the Co-Pilot Agreement. The Letter Agreement permitted and required the Company to convert approximately $
On June 12, 2024 and June 25, 2024 the Company issued the Investor an aggregate amount of
The Company elected to account for the First Era Convertible Note using the fair value option. The First Era Convertible Note dated December 8, 2023 was recorded at its acquisition date fair value of $
Second Era Convertible Note
The Company issued a senior subordinated convertible note to an affiliate of Era ("Era II"), for $
On December 18, 2024 and December 27, 2024 the Company converted all of the outstanding principal of the Second Era Convertible Note and issued Era II, in aggregate,
The Company elected to account for the Second Era Convertible Note using the fair value option. The Second Era Convertible Note was recorded at its acquisition date fair value of $
Third Era Convertible Note
The Third Era Convertible Note was issued in an aggregate principal amount of $
The Third Era Convertible Notes are contractually subordinated to the Company’s obligations under its senior secured indebtedness, and accordingly the Company’s right to make certain cash payments in connection therewith is limited by the terms of such subordination agreement. Beginning on the six-month anniversary of the issuance of the applicable Third Era Convertible Note, the Exchange Investor may convert such Third Era Convertible Notes into shares (the “Conversion Shares”) of the Company's Class A Common Stock, based on the volume weighted average market price of the Class A Common Stock for the 30 consecutive trading day period prior to the date of conversion (the "Conversion Price"). In addition, subject to certain limitations, the Company may elect to convert the Third Era Convertible Notes into Conversion Shares at the Conversion Price. The Exchange Notes provide for customary events of default, upon which repayment of the Exchange Notes may be accelerated.
Pursuant to the Exchange Agreement, the Company issued
As compensation for its brokerage services provided to the Exchange Investor, the Company also issued
On August 12, 2025, the Company retired all of its then outstanding obligations under the Third Era Convertible Note by paying the
18
Table of Contents
holders $
PPP Loan
As of September 30, 2025, the Company has
Total Debt
The following table summarizes the total estimated fair value of the Company's debt as of September 30, 2025 and December 31, 2024, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
2025 Senior Term Loan |
|
$ |
|
|
$ |
- |
|
|
2025 GPO Convertible Note |
|
|
|
|
|
- |
|
|
Dragonfly Seller Convertible Notes |
|
|
|
|
|
|
||
Convertible Debentures |
|
|
|
|
|
- |
|
|
Prior Senior Term Loan |
|
|
- |
|
|
|
|
|
GPO Convertible Note |
|
|
- |
|
|
|
|
|
Amended Legacy Notes |
|
|
- |
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
||
Note 9. Stockholders’ Equity and Temporary Equity
Authorized Capital Stock
The Company’s charter authorizes the issuance of
Class A Common Stock
Subsequent to the Closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE.WS,” respectively. Pursuant to the Company’s charter, the Company is authorized to issue
Additionally, the Company has outstanding warrants to purchase shares of New FiscalNote Class A common stock that became exercisable upon the Closing of the Business Combination. Refer to Note 11, "Warrant Liabilities."
Class B Common Stock
Pursuant to the Company’s charter, the Company is authorized to issue
In connection with the Closing of the Business Combination, the Co-Founders, or entities controlled by the Co-Founders, received Class B shares of New FiscalNote common stock as consideration (see further details in Note 2, "Business Combination with DSAC").
As of September 30, 2025, the Company had
Preferred Stock
Pursuant to the Company’s charter, the Company is authorized to issue
Dividends
The Company's Class A and Class B common stock are entitled to dividends if and when any dividend is declared by the Company's board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of the Company's business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of the Company's board of directors and will depend on, among other things, the Company's financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as the Company's board of directors may deem relevant.
Temporary Equity
19
Table of Contents
As discussed in Note 8, Debt, the Company issued
Note 10. Earnout Shares and RSUs
The shareholders and other equity holders of Old FiscalNote as described below are entitled to receive up to
A portion of the Earnout Shares that may be issued to Old FiscalNote common stockholders, Old FiscalNote vested option holders and Old FiscalNote warrant holders and all of the Earnout RSUs were determined to represent additional compensation for accounting purposes pursuant to ASC 718, “Compensation-Stock Compensation”. The Company recognizes stock-compensation expense based on the fair value of the Earnout Awards over the requisite service period for each tranche. The Company recognized $
As of September 30, 2025, there was
Note 11. Warrant Liabilities
As a result of the Reverse Stock Split, and pursuant to the terms of the applicable warrant agreement, at September 30, 2025 the Company has
During the nine months ended September 30, 2025,
Note 12. Stock-Based Compensation
2022 Long-Term Incentive Plan
In connection with the Business Combination, the Company's board of directors adopted, and its stockholders approved, the 2022 Long-Term Incentive Plan (the “2022 Plan”) under which
During the nine months ended September 30, 2025, the Company issued
20
Table of Contents
The Company recognized $
2022 Employee Stock Purchase Plan
In connection with the Business Combination, the Company’s board of directors adopted, and its stockholders approved, the 2022 Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may authorize payroll deductions of up to
2024 Inducement Plan Grants
The Company's board of directors adopted the 2024 Inducement Equity Incentive Plan (the “Plan”). The plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, other stock-based awards and cash-based awards. Under the Plan,
During 2024, the Company issued
Withholding Taxes on Equity Awards
In connection with the settlement of equity awards, the Company records a non-cash liability and corresponding APIC adjustment for the withholding taxes on net share settlement of stock-based compensation and option exercises until such time as those taxes have been remitted to the respective taxing authorities.
Note 13. Earnings (Loss) Per Share
The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to
Earnings (loss) per share is computed by dividing net earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period on a basic and diluted basis. The Company's net (loss) income used in computing basic and diluted earnings per share. Diluted (loss) earnings per share considers the impact of potentially dilutive securities.
The following is a calculation of the basic and diluted earnings per share for the Company's common stock, including a reconciliation between net income attributable to common stockholders used for Basic EPS and Diluted EPS for the three and nine months ended September 30, 2025 and 2024:
(in thousands, except share and per share data) |
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Basic Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income used to compute basic and diluted EPS |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common stock outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings Per Share, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Since the Company was in a net loss position during the three months ended September 30, 2024 and the three and nine months ended September 30, 2025, basic net loss per share attributable to common stockholders is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive.
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
21
Table of Contents
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
Anti-dilutive securities excluded from diluted loss per share: |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Earnout Awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2025 GPO Convertible Note/GPO Convertible Note |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dragonfly Seller Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible Debentures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total anti-dilutive securities excluded from diluted loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Note 14. Provision (Benefit) from Income Taxes
Effective Tax Rate
The Company computes its quarterly and year-to-date provisions for income taxes by applying the estimated effective tax rates to the quarterly and year-to-date pre-tax income or losses and adjusting the provisions for discrete tax items recorded in the periods. For the three months ended September 30, 2025 the Company reported a tax benefit of $
For the three months ended September 30, 2024, the Company reported a tax provision of $
Unrecognized Tax Benefits and Other Considerations
The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company's tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future. As of September 30, 2025, the Company reported an uncertain tax position totaling $
Tax law changes
On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“The Act”) was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Company has recorded an income tax benefit of $
Note 15. Fair Value Measurements and Disclosures
Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:
liability
22
Table of Contents
The carrying value of cash and cash equivalents (including investments with an original maturity of
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2025 by level within the fair value hierarchy:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Short-term investments |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Public warrants |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Private placement warrants |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
2025 GPO Note |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Dragonfly Seller Convertible Notes |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Convertible Debentures |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2024 by level within the fair value hierarchy:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Short-term investments |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Public warrants |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Private placement warrants |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Prior GPO Convertible Note |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Dragonfly Seller Convertible Notes |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:
|
|
GPO Convertible Note |
|
|
Dragonfly Seller Convertible Notes |
|
|
Era Convertible Note |
|
|
2025 GPO Note |
|
|
Convertible Debentures |
|
|||||
Balance at December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
||
Fair value at issuance date |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
included in the determination of net (income) loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Change in fair value included in accumulated other comprehensive income |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Paid in kind interest |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
||
Note and interest conversion |
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Note extinguishment |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Note settlement |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
Foreign exchange |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Balance at September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Short-Term Investments
The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of September 30, 2025, the estimated fair value of the short-term investments was $
Public Warrants
The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of September 30, 2025 and December 31, 2024, the estimated fair value of the public warrants was $
Private Placement Warrants
As of September 30, 2025 and December 31, 2024, the estimated fair value of the private warrants was $
23
Table of Contents
resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).
2025 GPO Note / Prior GPO Convertible Note
The Prior GPO Convertible Note was recognized as a liability on June 30, 2023 issuance date at its estimated fair value of $
|
|
2025 GPO Note |
|
|
2025 GPO Note |
|
|
Prior GPO Convertible Note |
|
|
Prior GPO Convertible Note |
|
||||
|
|
September 30, 2025 |
|
|
August 12, 2025 |
|
|
August 12, 2025 |
|
|
December 31, 2024 |
|
||||
Common stock share price |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Risk free rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Yield |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Expected volatility |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Expected term (years) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dragonfly Seller Convertible Notes
The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Common stock share price |
|
$ |
|
|
$ |
|
||
Risk free rate |
|
|
% |
|
|
% |
||
Yield |
|
|
% |
|
|
% |
||
Expected volatility |
|
|
% |
|
|
% |
||
Expected term (years) |
|
|
|
|
|
|
||
Convertible Debentures
The initial tranche of the Convertible Debentures were recognized as a liability on the August 12, 2025 issuance date at its estimated fair value of $
|
|
September 30, 2025 |
|
|
September 11, 2025 |
|
|
August 12, 2025 |
|
|||
Common stock share price |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Risk free rate |
|
|
|
|
% |
|
|
% |
||||
Yield |
|
|
% |
|
|
% |
|
|
% |
|||
Expected volatility |
|
|
% |
|
|
% |
|
|
% |
|||
Expected term (years) |
|
|
|
|
|
|
|
|
||||
(a) - Includes both the First and Second YA Debenture
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. The Company has not identified any impairments to be recorded during the three and nine months ended September 30, 2025 and 2024.
There were
24
Table of Contents
Note
Legal Proceedings
From time to time the Company is a party to various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.
Legal fees are recognized as incurred when the legal services are provided, and therefore are not recognized as part of the loss contingency.
25
Table of Contents
Note 17. Subsequent Events
The Company has evaluated subsequent events through November 10, 2025, the date that the financial statements were available to be issued.
26
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion provides information that FiscalNote’s management believes is relevant to an assessment and understanding of FiscalNote’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Certain monetary amounts, percentages and other figures included below have been subject to rounding adjustments as amounts are presented in thousands or millions, as the context describes. Percentage amounts included below have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the Closing.
Overview
FiscalNote is a leading provider of artificial intelligence (AI) driven policy and regulatory intelligence solutions. It delivers critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining AI technology, other technologies with analytics, workflow tools, and expert peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products, coupled with expert research and analysis of markets and geopolitical events, as well as powerful tools to manage workflows, advocacy campaigns and constituent relationships.
Business Combination
On July 29, 2022, the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the closing on July 29, 2022. Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE.WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Significant Events
Debt Refinance
As described in Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein, on August 12, 2025, the Company closed a series of transactions whereby the Company (a) retired all of its then outstanding obligations under the senior term loan consummated pursuant to the Credit Agreement with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC entered into concurrent with the Business Combination (the "Prior Senior Term Loan") totaling approximately $62.7 million (including accrued and unpaid interest and deferred finance costs) and replaced it with a $75.0 million new senior term loan maturing in August 2029; (b) issued $21,9 million of Convertible Debentures in exchange for $18.9 million of cash; (c) paid the holder of the GPO Convertible Note $27.0 million to redeem $30.0 million of aggregate principal under the GPO Convertible Note and exchanged the GPO Convertible Note for a new convertible note with a principal balance of $20.4 million maturing in November 2029 (the "2025 GPO Convertible Note"), and (d) retired all of its then outstanding obligations under the Amended Legacy Notes by paying the holders $3.6 million in cash. On September 11, 2025, the Company issued another $12.3 million of Convertible Debentures whereby the net proceeds of approximately $11.1 million was used to repay the outstanding obligations under the Third Era Convertible Note totaling $8.2 million.
As a result of these series of transactions, beginning August 12, 2025, the Company's annualized cash interest payments will be approximately $9.0 million (based on current SOFR interest rates), and its principal repayments will be approximately $1.9 million during year one, and approximately $3.8 million thereafter.
27
Table of Contents
Factors Impacting the Comparability of Our Operating Results
Dispositions
On July 1, 2025, we completed the sale of TimeBase for $7.4 million comprised of a cash payment to the Company of $6.7 million and a buyer holdback of $0.7 million. The Company recorded a gain of $1.3 million from the sale of TimeBase during the nine months ended September 30, 2025.
On March 31, 2025, we completed the sale of Dragonfly and Oxford Analytica for $40.3 million in cash. The Company recorded a gain of $15.3 million from the sale of Dragonfly and Oxford Analytica during the nine months ended September 30, 2025.
On October 31, 2024, we completed the sale of Aicel Technologies business ("Aicel") for $9.7 million comprising of $8.5 million of cash and the assumption of an existing convertible note issued by Aicel in 2022, with an outstanding total principal and accrued paid-in-kind interest amount of $1.2 million. The Company recorded a gain of $0.5 million from the sale of Aicel in the fourth quarter of 2024.
On March 11, 2024, we completed the sale of Board.org for $90.9 million in cash at closing. The Company recorded a gain on sale of business of $71.5 million during the nine months ended September 30, 2024.
These businesses contributed the following:
At the beginning of the third quarter of 2025 the Company had approximately 439 employees. As a result of the Company's business dispositions, product rationalization, business simplification, and cost takeout actions, the Company's full-time equivalent headcount reduced by approximately 27 from the beginning of the third quarter of 2025 through September 30, 2025. As a result, the Company has seen a reduction in overall cash costs across all operating expenses. Management will continue evaluating for additional rationalization opportunities to further reduce the complexity of the business and reduce ongoing operating expenses.
We continue to invest for future growth. We are focused on several key growth levers, including cross-selling and upselling opportunities at existing clients, expanding our client base with a focus on enterprise and government customers, expansion into adjacent markets and deepening our offerings for regulated industries or sectors. Several of these growth drivers require investment in and refinement of our go-to-market approach and, as a result, we may continue to incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses specific to subscription revenue.
We plan to invest a portion of our available capital resources in building innovative products, attracting new customers and expanding our leadership role in the legal and regulatory information market to drive growth organically. We may also evaluate acquisitions and investment opportunities in complementary businesses to supplement our existing platform, enable us to enter new markets and ensure that we are well positioned to provide critical insights to the regulated sectors of the future. Past acquisitions have enabled us to deliver innovative solutions in new categories and enhance the functionality of our existing products. Strategic acquisitions may be a component of our growth strategy in the future.
Key Performance Indicators
In addition to our GAAP results further described and discussed below in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we monitor the following key performance indicators to evaluate growth trends, prepare financial projections, make strategic decisions, and measure the effectiveness of our sales and marketing efforts. Our management team assesses our performance based on these key performance indicators because it believes they reflect the underlying trends of our business and serve as meaningful measures of our ongoing operational performance.
Annual Recurring Revenue (“ARR”)
Approximately 93% of our revenues are subscription based. Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for subsequent periods. We use ARR as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring subscription customer contracts. We calculate ARR on a parent account level by annualizing the contracted subscription revenue, and our total ARR as of the end of a period is the aggregate thereof. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades, or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to timing of the revenue bookings during the period, cancellations, upgrades, or downgrades and pending renewals. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.
Our ARR at September 30, 2025 and December 31, 2024, was $84.8 million and $107.5 million, respectively. ARR at September 30, 2024 and December 31, 2024, excluding products we discontinued in 2023, and the impact of the sale of Board.org, Aicel, Oxford Analytica, Dragonfly, and TimeBase was $92.2 million and $91.9 million, respectively.
28
Table of Contents
Net Revenue Retention (“NRR”)
Our NRR, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our NRR for a given period as ARR at the end of the period minus ARR contracted from new clients for which there is no historical revenue booked during the period, divided by the beginning ARR for the period. We calculate NRR at our parent account level. Our calculation of NRR for any fiscal period includes the positive recurring revenue impacts of selling additional licenses and services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our NRR may fluctuate as a result of a number of factors, including the level of our revenue base, the level of penetration within our customer base, expansion of products and features, the timing of renewals, and our ability to retain our customers. Our calculation of NRR may differ from similarly titled metrics presented by other companies. NRR, excluding the impact of Board.org, Aicel, Oxford Analytica, Dragonfly, and TimeBase was 98% for the three months ended September 30, 2025 and 2024, respectively.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. While we believe that these non-GAAP financial measures provide useful supplemental information, non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in their financing and accounting methods, the book value of their assets, their capital structures, the method by which their assets were acquired and the manner in which they define non-GAAP measures.
Adjusted Gross Profit and Adjusted Gross Profit Margin
We define Adjusted Gross Profit as Total revenues minus cost of revenues, including amortization of capitalized software development costs and acquired developed technology, before amortization of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Total revenues.
We use Adjusted Gross Profit and Adjusted Gross Profit Margin to understand and evaluate our core operating performance and trends. We believe these metrics are useful measures to us and to our investors to assist in evaluating our core operating performance because they provide consistency and direct comparability with our past financial performance and between fiscal periods, as the metrics eliminate the non-cash effects of amortization of intangible assets that may fluctuate for reasons unrelated to overall operating performance.
Adjusted Gross Profit and Adjusted Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. They should not be considered as replacements for gross profit and gross profit margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes. Adjusted Gross Profit and Adjusted Gross Profit Margin as presented herein are not necessarily comparable to similarly titled measures presented by other companies.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items that management believes are not indicative of ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Total revenues.
We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Quarterly Report on Form 10-Q because these non-GAAP measures are key measures used by management to evaluate our business, measure our operating performance and make strategic decisions. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful for investors and others in understanding and evaluating our operating results in the same manner as management. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for net income (loss), net income (loss) before income taxes, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may otherwise find significant. In addition, although other companies in our industry may report measures titled EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate non-GAAP financial measures, which reduces their comparability. Because of these limitations, you should consider EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP.
29
Table of Contents
Key Components of Results of Operations
Revenues
We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues accounted for approximately 93% of our total revenues for the nine months ended September 30, 2025 and 2024.
Subscription revenue
Subscription revenues consist of revenue earned from subscription-based arrangements that provide customers the right to use the Company’s software and products in a cloud-based infrastructure. Subscription revenues are driven primarily by the number of active licenses, the types of products and the price of the subscriptions. The Company also earns subscription revenues by licensing to customers its digital content, including transcripts, news and analysis, images, video and podcast data.
Our subscription arrangements generally have contractual terms of 12 months or more and are non-refundable regardless of the actual use of the service. Subscription revenues are recognized ratably over the non-cancellable contract terms beginning on the commencement date of each contract, which is the date our service is first made available to customers.
Advisory, advertising, and other revenues
Advisory revenues are typically earned under contracts for specific deliverables and are non-recurring in nature, although we regularly sell different advisory services to repeat customers. One-time advisory revenues are invoiced according to the terms of the contract, usually delivered to the customer over a short period of time, during which revenues are recognized.
Advertising revenues are primarily generated by delivering advertising in our own publications (Roll Call and CQ) in both print and digital formats. Revenues for print advertising are recognized upon publication of the advertisement. Revenues for digital advertising are recognized over the period of the advertisement or, if the contract contains impression guarantees, based on delivered impressions.
Cost of revenues, including amortization
Cost of revenues, including amortization primarily consists of expenses related to hosting our service, the costs of data center capacity, amortization of developed technology and capitalized software development costs, certain fees paid to various third parties for the use of their technology, services, or data, costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with providing professional services and other direct costs of production. Also included in cost of revenues, including amortization are our costs related to the preparation of contracted advisory deliverables, as well as costs to develop, publish, print and deliver our publications underlying our books revenue.
Research and development
Research and development expenses include the costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with the creation and testing of the products we offer, related software subscriptions, consulting and contractor fees and allocated overhead.
Sales and marketing
Sales and marketing expenses consist primarily of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for our sales and marketing staff, including commissions, related software subscriptions, consulting fees, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities.
Editorial
Editorial expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for the editorial team involved in acquiring, creating, and distributing content and allocated overhead.
General and administrative
General and administrative expenses are primarily related to our executive offices, finance and accounting, human resources, legal, internal operations and other corporate functions. These expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses, along with professional fees, depreciation and other allocated overhead.
Amortization of intangible assets
Amortization expense relates to our finite-lived intangible assets, including developed technology, customer relationship, databases and tradenames. These assets are amortized over periods of between three and twenty years. Finite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value. No impairment of intangible assets has been identified during any financial period included in our accompanying condensed consolidated financial statements.
Interest expense, net
Interest expense, net, consists of expense related to interest on our borrowings, the amortization and write off of debt issuance costs and original discount, and interest related to certain derivative instruments.
30
Table of Contents
Change in fair value of financial instruments
The fair value of financial instruments are accounted for in accordance with ASC 815 and ASC 480. The warrant and derivative liabilities are marked to market each reporting period in accordance with ASC 820 with all gains and losses being recorded within the consolidated statement of operations and comprehensive income (loss).
Income taxes
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence.
Results of Operations
The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our condensed consolidated financial statements. The following discussion should be read in conjunction with those condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
Comparison of the Consolidated Results for the Three and Nine Months Ended September 30, 2025 and September 30, 2024
The following table presents our results of operations for the periods indicated:
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription |
|
$ |
21,182 |
|
|
$ |
27,238 |
|
|
$ |
(6,056 |
) |
|
|
(22.2 |
)% |
|
$ |
67,794 |
|
|
$ |
84,015 |
|
|
$ |
(16,221 |
) |
|
|
(19.3 |
)% |
Advisory, advertising, and other |
|
|
1,247 |
|
|
|
2,201 |
|
|
|
(954 |
) |
|
|
(43.3 |
)% |
|
|
5,410 |
|
|
|
6,782 |
|
|
|
(1,372 |
) |
|
|
(20.2 |
)% |
Total revenues |
|
|
22,429 |
|
|
|
29,439 |
|
|
|
(7,010 |
) |
|
|
(23.8 |
)% |
|
|
73,204 |
|
|
|
90,797 |
|
|
|
(17,593 |
) |
|
|
(19.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, including amortization |
|
|
4,774 |
|
|
|
6,235 |
|
|
|
(1,461 |
) |
|
|
(23.4 |
)% |
|
|
16,706 |
|
|
|
20,342 |
|
|
|
(3,636 |
) |
|
|
(17.9 |
)% |
Research and development |
|
|
2,081 |
|
|
|
3,250 |
|
|
|
(1,169 |
) |
|
|
(36.0 |
)% |
|
|
7,451 |
|
|
|
9,935 |
|
|
|
(2,484 |
) |
|
|
(25.0 |
)% |
Sales and marketing |
|
|
6,262 |
|
|
|
9,068 |
|
|
|
(2,806 |
) |
|
|
(30.9 |
)% |
|
|
20,713 |
|
|
|
27,484 |
|
|
|
(6,771 |
) |
|
|
(24.6 |
)% |
Editorial |
|
|
3,247 |
|
|
|
4,639 |
|
|
|
(1,392 |
) |
|
|
(30.0 |
)% |
|
|
11,517 |
|
|
|
13,752 |
|
|
|
(2,235 |
) |
|
|
(16.3 |
)% |
General and administrative |
|
|
13,900 |
|
|
|
10,622 |
|
|
|
3,278 |
|
|
|
30.9 |
% |
|
|
41,576 |
|
|
|
37,958 |
|
|
|
3,618 |
|
|
|
9.5 |
% |
Amortization of intangible assets |
|
|
1,904 |
|
|
|
2,436 |
|
|
|
(532 |
) |
|
|
(21.8 |
)% |
|
|
6,169 |
|
|
|
7,541 |
|
|
|
(1,372 |
) |
|
|
(18.2 |
)% |
Transaction (gains) costs, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
(4 |
) |
|
|
4 |
|
|
|
(100.0 |
)% |
|
Total operating expenses |
|
|
32,168 |
|
|
|
36,250 |
|
|
|
(4,082 |
) |
|
|
(11.3 |
)% |
|
|
104,132 |
|
|
|
117,008 |
|
|
|
(12,876 |
) |
|
|
(11.0 |
)% |
Operating loss |
|
|
(9,739 |
) |
|
|
(6,811 |
) |
|
|
(2,928 |
) |
|
|
43.0 |
% |
|
|
(30,928 |
) |
|
|
(26,211 |
) |
|
|
(4,717 |
) |
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain on sale of business |
|
|
(1,161 |
) |
|
|
- |
|
|
|
(1,161 |
) |
|
100% |
|
|
|
(16,585 |
) |
|
|
(71,599 |
) |
|
|
55,014 |
|
|
|
(76.8 |
)% |
|
Interest expense, net |
|
|
3,695 |
|
|
|
5,585 |
|
|
|
(1,890 |
) |
|
|
(33.8 |
)% |
|
|
13,160 |
|
|
|
18,267 |
|
|
|
(5,107 |
) |
|
|
(28.0 |
)% |
Change in fair value of financial instruments |
|
|
6,994 |
|
|
|
3,501 |
|
|
|
3,493 |
|
|
|
99.8 |
% |
|
|
7,900 |
|
|
|
3,174 |
|
|
|
4,726 |
|
|
NM |
|
|
Loss on debt extinguishment |
|
|
6,174 |
|
|
|
- |
|
|
|
6,174 |
|
|
100% |
|
|
|
7,958 |
|
|
|
- |
|
|
|
7,958 |
|
|
|
100.0 |
% |
|
Other (income) expense, net |
|
|
(349 |
) |
|
|
(341 |
) |
|
|
(8 |
) |
|
|
2.3 |
% |
|
|
86 |
|
|
|
(82 |
) |
|
|
168 |
|
|
NM |
|
|
Net (loss) income before income taxes |
|
|
(25,092 |
) |
|
|
(15,556 |
) |
|
|
(9,536 |
) |
|
|
61.3 |
% |
|
|
(43,447 |
) |
|
|
24,029 |
|
|
|
(67,476 |
) |
|
NM |
|
|
(Benefit) provision from income taxes |
|
|
(237 |
) |
|
|
(621 |
) |
|
|
384 |
|
|
|
(61.8 |
)% |
|
|
(1,071 |
) |
|
|
1,129 |
|
|
|
(2,200 |
) |
|
NM |
|
|
Net (loss) income |
|
$ |
(24,855 |
) |
|
$ |
(14,935 |
) |
|
$ |
(9,920 |
) |
|
|
66.4 |
% |
|
$ |
(42,376 |
) |
|
$ |
22,900 |
|
|
$ |
(65,276 |
) |
|
NM |
|
|
NM - Not meaningful
Revenue:
Subscription revenue
Subscription revenue of $21.2 million for the three months ended September 30, 2025 decreased $6.1 million, or 22%, from $27.2 million for the three months ended September 30, 2024. Subscription revenue of $67.8 million for the nine months ended September 30, 2025 decreased $16.2 million for the nine months ended September 30, 2024.
The comparability of our revenues between periods was impacted by the sales of the businesses of Dragonfly, Oxford Analytica, TimeBase, Board.org, and Aicel, described under “Factors Impacting the Comparability of Our Results of Operations” above. The table below presents the primary items that impacted the comparability of our subscription revenues between periods.
31
Table of Contents
|
|
Change for the Three Months Ended |
|
|
Change for the Nine Months Ended |
|
||||||||||
|
|
September 30, 2025 vs September 30, 2024 |
|
|
September 30, 2025 vs September 30, 2024 |
|
||||||||||
(In thousands) |
|
$ |
|
|
% |
|
|
$ |
|
|
% |
|
||||
Revenue change driver: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Decrease from sale of businesses |
|
|
(4,274 |
) |
|
|
(100.0 |
)% |
|
|
(11,409 |
) |
|
|
(73.8 |
)% |
Decrease from discontinued products |
|
|
(32 |
) |
|
|
(31.4 |
)% |
|
|
(173 |
) |
|
|
(43.8 |
)% |
Decrease from organic business |
|
|
(1,750 |
) |
|
|
(7.7 |
)% |
|
|
(4,639 |
) |
|
|
(6.0 |
)% |
Revenues, net (total change) |
|
$ |
(6,056 |
) |
|
|
(22.2 |
)% |
|
$ |
(16,221 |
) |
|
|
(19.3 |
)% |
The decrease in subscription revenue during the three and nine month periods is largely due to the impact from the sale of businesses of Dragonfly and Oxford Analytica on March 31, 2025 and TimeBase on July 1, 2025. The decrease in organic subscription revenue is primarily the result of customer retention challenges combined with the impact of Federal government cuts.
Advisory, advertising, and other revenue
Advisory, advertising, and other revenue was $1.2 million for the three months ended September 30, 2025, as compared to $2.2 million for the three months ended September 30, 2024. The decrease of $1.0 million, or 43%, was primarily the result of the reduction of revenue from the sale of businesses in 2024 and 2025.
Advisory, advertising, and other revenue was $5.4 million for the nine months ended September 30, 2025, as compared to $6.8 million for the three months ended September 30, 2024. The decrease of $1.4 million, or 20%, was the result of the reduction of revenue from the sales of businesses of $1.7 million partially offset by increases in revenue for advocacy campaigns.
Revenue by Geography
The below tables present our revenues split by geographic region for the periods presented:
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
North America |
|
$ |
21,083 |
|
|
$ |
23,073 |
|
|
$ |
(1,990 |
) |
|
|
(8.6 |
)% |
Europe |
|
|
1,346 |
|
|
|
5,527 |
|
|
|
(4,181 |
) |
|
|
(75.6 |
)% |
Australia |
|
|
- |
|
|
|
328 |
|
|
|
(328 |
) |
|
|
(100.0 |
)% |
Asia |
|
|
- |
|
|
|
511 |
|
|
|
(511 |
) |
|
|
(100.0 |
)% |
Total revenues |
|
$ |
22,429 |
|
|
$ |
29,439 |
|
|
$ |
(7,010 |
) |
|
|
(23.8 |
)% |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
North America |
|
$ |
64,692 |
|
|
$ |
72,134 |
|
|
$ |
(7,442 |
) |
|
|
(10.3 |
)% |
Europe |
|
|
7,898 |
|
|
|
16,178 |
|
|
|
(8,280 |
) |
|
|
(51.2 |
)% |
Australia |
|
|
614 |
|
|
|
950 |
|
|
|
(336 |
) |
|
|
(35.4 |
)% |
Asia |
|
|
- |
|
|
|
1,535 |
|
|
|
(1,535 |
) |
|
|
(100.0 |
)% |
Total revenues |
|
$ |
73,204 |
|
|
$ |
90,797 |
|
|
$ |
(17,593 |
) |
|
|
(19.4 |
)% |
Revenues by geography are determined based on the region of the FiscalNote contracting entity, which may be different than the region of the customer. North America revenues decreased primarily for the reasons stated above. Asia revenues decreased primarily due to the sale of Aicel in October 2024. Europe revenues decreased primarily due to the sales of Dragonfly and Oxford Analytica on March 31, 2025. Australia revenues decreased primarily due to sales of TimeBase on July 1, 2025.
Cost of revenues, including amortization
Cost of revenues, including amortization, was $4.8 million for the three months ended September 30, 2025, as compared to $6.2 million for the three months ended September 30, 2024. The decrease of $1.5 million, or 23%, was primarily attributable to the impact from the business dispositions totaling approximately $1.0 million combined with a decrease in amortization expense of $0.4 million, which related to the introduction of PolicyNote.
Cost of revenues, including amortization, was $16.7 million for the nine months ended September 30, 2025, as compared to $20.3 million for the nine months ended September 30, 2024. The decrease of $3.6 million, or 18%, was primarily attributable to the impact from the business dispositions totaling approximately $2.9 million and other decreases in third party costs.
Research and development
Research and development expense was $2.1 million for the three months ended September 30, 2025 as compared to $3.3 million for the three months ended September 30, 2024. The decrease of $1.2 million, or 36%, was primarily attributable to the impact from the business dispositions totaling approximately $0.3 million and a result of workforce planning actions.
Research and development expense was $7.5 million for the nine months ended September 30, 2025 as compared to $9.9 million for the nine months ended September 30, 2024. The decrease of $2.5 million, or 25%, was primarily attributable to the impact from the business dispositions totaling approximately $0.6 million and a result of workforce planning actions.
32
Table of Contents
Sales and marketing
Sales and marketing expense was $6.3 million for the three months ended September 30, 2025 as compared to $9.1 million for the three months ended September 30, 2024. The decrease of $2.8 million, or 31%, was primarily attributable to the impact from the business dispositions totaling approximately $1.7 million and a result of workforce planning actions.
Sales and marketing expense was $20.7 million for the nine months ended September 30, 2025 as compared to $27.5 million for the nine months ended September 30, 2024. The decrease of $6.8 million, or 25%, was primarily attributable to the impact from the business dispositions totaling approximately $4.3 million and a result of workforce planning actions.
Editorial expense
Editorial expense was $3.2 million for the three months ended September 30, 2025 as compared to $4.6 million for the three months ended September 30, 2024. The decrease of $1.4 million, or 30%, was primarily attributable to the impact from the business dispositions.
Editorial expense was $11.5 million for the nine months ended September 30, 2025 as compared to $13.8 million for the nine months ended September 30, 2024. The decrease of $2.2 million, or 16%, was primarily attributable to the impact from the business dispositions.
General and administrative
General and administrative expense was $13.9 million for the three months ended September 30, 2025 as compared to $10.6 million for the three months ended September 30, 2024. The increase of $3.3 million, or 31%, was primarily attributable to an increase related to overall legal and accounting costs associated with the debt transaction discussed in "Significant Events-Debt Refinance" partially offset by decreases from the business dispositions.
General and administrative expense was $41.6 million for the nine months ended September 30, 2025 as compared to $38.0 million for the nine months ended September 30, 2024. The increase of $3.6 million, or 10%, was primarily attributable to an increase related to overall legal and accounting costs associated with the debt transaction discussed in "Significant Events-Debt Refinance" partially offset by a decrease in stock compensation expense and decreases from the business dispositions.
Amortization of intangibles
Amortization of intangibles was $1.9 million for the three months ended September 30, 2025 as compared to $2.4 million for the three months ended September 30, 2024. The decrease was primarily attributable to the impact from the business dispositions.
Amortization of intangibles was $6.2 million for the nine months ended September 30, 2025 as compared to $7.5 million for the nine months ended September 30, 2024. The decrease was primarily attributable to the impact from the business dispositions.
Interest expense, net
Interest expense was $3.7 million for the three months ended September 30, 2025 as compared to $5.6 million for the three months ended September 30, 2024. The decrease in interest expense of $1.9 million was primarily due to the principal repayments made on the Prior Senior Term Loan made throughout 2024 and the first half of 2025 as part of the business dispositions.
Interest expense was $13.2 million for the nine months ended September 30, 2025 as compared to $18.3 million for the nine months ended September 30, 2024. The decrease in interest expense of $5.1 million was primarily due to the principal repayments made on the Prior Senior Term Loan made throughout 2024 and the first half of 2025 as part of the business dispositions.
Change in fair value of financial instruments
Change in fair value of financial instruments was a $7.0 million loss for the three months ended September 30, 2025 as compared to a $3.5 million loss for the three months ended September 30, 2024. The change in financial instruments of $3.5 million is primarily related to the changes in the Dragonfly Seller Convertible Notes, Era Note, Convertible Debentures, Prior GPO Convertible Note, and the 2025 GPO Convertible Note partially offset by the change in the fair value adjustment of the warrant liabilities.
Change in fair value of financial instruments was a $7.9 million loss for the nine months ended September 30, 2025 as compared to a $3.2 million loss for the nine months ended September 30, 2024. The change in financial instruments of $4.7 million is primarily related to the changes in the Dragonfly Seller Convertible Notes, Era Note, Convertible Debentures, Prior GPO Convertible Note, and the 2025 GPO Convertible Note partially offset by the change in the fair value adjustment of the warrant liabilities.
Certain Non-GAAP Measures
We present certain non-GAAP financial measures including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA. Our management team assesses our performance based on these non-GAAP measures because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance. We believe these measures are useful for investors for the same reasons. Investors should be aware that these measures are not a substitute for GAAP financial measures or disclosures. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure.
33
Table of Contents
Adjusted Gross Profit and Adjusted Gross Profit Margin
The following table presents our calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total revenues |
|
$ |
22,429 |
|
|
$ |
29,439 |
|
|
$ |
73,204 |
|
|
$ |
90,797 |
|
Costs of revenue, including amortization of capitalized software development costs and acquired developed technology |
|
|
(4,774 |
) |
|
|
(6,235 |
) |
|
|
(16,706 |
) |
|
|
(20,342 |
) |
Gross Profit |
|
$ |
17,655 |
|
|
$ |
23,204 |
|
|
$ |
56,498 |
|
|
$ |
70,455 |
|
Gross Profit Margin |
|
|
79 |
% |
|
|
79 |
% |
|
|
77 |
% |
|
|
78 |
% |
Gross Profit |
|
|
17,655 |
|
|
|
23,204 |
|
|
|
56,498 |
|
|
|
70,455 |
|
Amortization of intangible assets |
|
|
1,770 |
|
|
|
2,224 |
|
|
|
7,081 |
|
|
|
7,159 |
|
Adjusted Gross Profit |
|
$ |
19,425 |
|
|
$ |
25,428 |
|
|
$ |
63,579 |
|
|
$ |
77,614 |
|
Adjusted Gross Profit Margin |
|
|
87 |
% |
|
|
86 |
% |
|
|
87 |
% |
|
|
85 |
% |
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
The following table presents our calculation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income |
|
$ |
(24,855 |
) |
|
$ |
(14,935 |
) |
|
$ |
(42,376 |
) |
|
$ |
22,900 |
|
Income tax (benefit) provision |
|
|
(237 |
) |
|
|
(621 |
) |
|
|
(1,071 |
) |
|
|
1,129 |
|
Depreciation and amortization |
|
|
3,962 |
|
|
|
4,961 |
|
|
|
14,040 |
|
|
|
15,604 |
|
Interest expense, net |
|
|
3,695 |
|
|
|
5,585 |
|
|
|
13,160 |
|
|
|
18,267 |
|
EBITDA |
|
|
(17,435 |
) |
|
|
(5,010 |
) |
|
|
(16,247 |
) |
|
|
57,900 |
|
Gain on sale of businesses (a) |
|
|
(1,161 |
) |
|
|
- |
|
|
|
(16,585 |
) |
|
|
(71,599 |
) |
Stock-based compensation |
|
|
3,636 |
|
|
|
4,181 |
|
|
|
10,975 |
|
|
|
13,885 |
|
Change in fair value of financial instruments (b) |
|
|
6,994 |
|
|
|
3,501 |
|
|
|
7,900 |
|
|
|
3,174 |
|
Other non-cash charges (c) |
|
|
6,016 |
|
|
|
17 |
|
|
|
8,817 |
|
|
|
93 |
|
Disposal related costs (d) |
|
|
1,423 |
|
|
|
40 |
|
|
|
7,368 |
|
|
|
1,138 |
|
Employee severance costs (e) |
|
|
211 |
|
|
|
437 |
|
|
|
2,355 |
|
|
|
635 |
|
Non-capitalizable debt costs |
|
|
2,506 |
|
|
|
49 |
|
|
|
3,250 |
|
|
|
527 |
|
Costs incurred related to the Special Committee (f) |
|
|
171 |
|
|
|
229 |
|
|
|
338 |
|
|
|
682 |
|
Non-operating income (g) |
|
|
(181 |
) |
|
|
- |
|
|
|
(409 |
) |
|
|
- |
|
Adjusted EBITDA |
|
$ |
2,180 |
|
|
$ |
3,444 |
|
|
$ |
7,762 |
|
|
$ |
6,435 |
|
Adjusted EBITDA Margin |
|
|
9.7 |
% |
|
|
11.7 |
% |
|
|
10.6 |
% |
|
|
7.1 |
% |
Liquidity and Capital Resources
Historically the Company has partially funded its operations through raising equity and debt. At September 30, 2025, the Company’s cash, cash equivalents, restricted cash, and short-term investments was $31.8 million compared to $35.3 million at December 31, 2024.
The Company had a negative working capital balance of $31.3 million (excluding cash and short-term investments) at September 30, 2025 and had an accumulated deficit of $849.3 million and $806.9 million as of September 30, 2025 and December 31, 2024, respectively, and has incurred net losses (excluding the gain on sale of businesses) of $59.0 million for the nine months ended September 30, 2025 and $48.7 million for the nine months ended September 30, 2024, respectively.
As described in Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein, we refinanced a substantial amount of our legacy indebtedness. We believe the impact of these actions provides us the flexibility to fund future operations and provide a path toward generating positive cash flows from operations.
Our ability to maintain our minimum cash requirement, fund our future cash interest and principal repayment requirements under our 2025 Senior Term Loan and fund our operating expenses and capital expenditure requirements will depend in part on general economic,
34
Table of Contents
financial, competitive, legislative, regulatory and other conditions that may be beyond our control. The Company has implemented various cost saving measures throughout 2024 and 2025 that have also contributed toward our overall improvement in cash flows used in operations.
Our historical financing activities included borrowings under senior secured credit facilities, senior secured promissory notes, and convertible debt. Our principal debt outstanding, including paid-in kind interest as applicable, as of September 30, 2025 and December 31, 2024 consisted of the following (excluding any fair value adjustments and debt discounts, as applicable):
(In thousands) |
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
2025 Senior Term Loan |
|
$ |
74,531 |
|
|
$ |
- |
|
2025 GPO Convertible Note |
|
|
20,434 |
|
|
|
- |
|
Dragonfly Seller Convertible Notes |
|
|
14,024 |
|
|
|
13,030 |
|
Convertible Debentures |
|
|
31,500 |
|
|
|
- |
|
Prior Senior Term Loan |
|
|
- |
|
|
|
88,595 |
|
Prior GPO Convertible Note |
|
|
- |
|
|
|
50,434 |
|
Amended Legacy Notes |
|
|
- |
|
|
|
16,165 |
|
PPP Loan |
|
|
- |
|
|
|
36 |
|
Total Principal plus PIK Outstanding |
|
$ |
140,489 |
|
|
$ |
168,260 |
|
2025 Senior Term Loan
On August 12, 2025 the Company closed on its new $75.0 million senior term loan that matures on August 12, 2029 (the "2025 Senior Term Loan") and received net proceeds of $72.9 million after original issue discount (“OID”) of $2.1 million, or 2.75%. The Company incurred approximately $1.9 million of lender fees and fees paid to third parties. OID and capitalized debt issuance costs totaled $3,985 and is treated as a debt discount and will be amortized over the term of the 2025 Senior Term Loan using the effective interest method.
Obligations under the 2025 Senior Term Loan bear interest at variable rates, set at the Company’s option, based on a reference rate plus 7%, or the secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) plus 8%. Interest is payable in cash monthly in arrears. The Company has elected to pay cash interest based on SOFR, which was 12.23% at September 30, 2025. For the three months ended September 30, 2025, the Company recognized $1,248 of cash interest on the 2025 Senior Term Loan, representing the cash interest on the 2025 Senior Term Loan from August 12, 2025 to September 30, 2025. Going forward, the Company expects to incur approximately $2.2 million of quarterly cash interest based on current SOFR rates and expected outstanding principal balances.
The 2025 Senior Term Loan is repayable in consecutive quarterly installments on the last business day of each March, June, September and December of each fiscal year commencing September 30, 2025, in an amount equal to (i) $0.5 million with respect to each payment due on September 30, 2025, December 31, 2025, March 31, 2026 and June 30, 2026 and (ii) $0.9 million with respect to each payment due thereafter, with the remaining principal amount due at the maturity of the 2025 Senior Term Loan, or such earlier time as it may become payable. The Company must also pay a quarterly fee commencing on September 30, 2025, in an amount equal to (i) $0.1 million due on September 30, 2025, December 31, 2025, and March 31, 2026 and (ii) $38 with respect to each quarterly payment due thereafter.
The 2025 Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The 2025 Senior Term Loan contains customary negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. In addition to the negative covenants, there are four financial covenants in place at August 12, 2025: a minimum cash balance requirement, minimum annual recurring revenue requirement, an adjusted EBITDA requirement (as defined in the 2025 Senior Term Loan) and a capital expenditure limitation. The Company believes it will maintain future compliance with all of its covenants.
On August 12, 2025 the Prior Senior Term Loan was replaced with the 2025 Senior Term Loan and the Company retired all of its then outstanding obligations with a cash payment of approximately $62.7 million.
Convertible Debentures
In conjunction with the establishment of the 2025 Senior Term Loan and in order to fund the GPO Redemption (defined below), on August 5, 2025 (the “Purchase Agreement Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”), with YA II PN, Ltd (“YA”), pursuant to which the Company issued YA convertible debentures in an aggregate principal amount of $33.3 million (the “Convertible Debentures”) for a total cash purchase price of approximately $30.0 million, subject to satisfaction of certain closing conditions.
On August 12, 2025, the initial tranche of Convertible Debentures comprising $21.0 million in stated principal amount were issued to YA, in accordance with the Purchase Agreement, with the Company receiving net proceeds of $18.9 million (the "First YA Debenture"). On September 11, 2025, the second, and final tranche of Debentures comprising $12.3 million in stated principal amount were issued to YA, in accordance with the Purchase Agreement with the Company receiving net proceeds of $11.0 million (the "Second YA Debenture").
The Company’s obligations under the Purchase Agreement and the Debentures are guaranteed by FiscalNote, Inc., a wholly owned subsidiary of the Company, and are contractually subordinated to the Company’s obligations under its 2025 Senior Term Loan and the 2025 GPO Convertible Note. The First YA Debenture matures on February 12, 2027 and the Second YA Debenture matures on March 11, 2027 and both bear interest at a rate of 5% per annum or 18% per annum in the event of an event of default.
At any time prior to the maturity dates, and subject to certain ownership and conversion limitations, YA is entitled to convert any portion of the principal amount of the Debentures and accrued interest thereon into shares of the Company’s Class A Common Stock (the
35
Table of Contents
“Debenture Conversion Shares”) at a conversion price equal to 94% of the lowest daily volume weighted average trading price (“VWAP”) during the five trading days prior to the conversion date, subject to a floor price of $0.8884 (the “Floor Price”).
2025 GPO Convertible Note / Prior GPO Convertible Note
On June 30, 2023 the Company issued to GPO FN Noteholder LLC (the “GPO Investor”) a subordinated convertible promissory note in an initial principal amount of $46.8 million(the “Prior GPO Convertible Note”). Pursuant to the terms of the Prior GPO Convertible Note, paid-in-kind interest accrued from the date of issuance through June 30, 2024. Beginning on July 1, 2024 the Company was required to pay interest with either cash or shares, solely at the discretion of the Company. Accordingly, since September 30, 2024 and through September 30, 2025, the Company issued the GPO Investor 346,059 Class A Common Shares, in the aggregate, in satisfaction of quarterly interest.
In conjunction with the establishment of the 2025 Senior Term Loan, on August 5, 2025, the Company entered into a redemption and exchange agreement with the GPO Investor.
Pursuant to the redemption and exchange with the GPO Investor, on August 12, 2025, the Company redeemed $30,000 of the Prior GPO Convertible Note in exchange for a cash payment of $27,000 to the GPO Investor (the "GPO Redemption"). The Company also issued a new senior subordinated promissory note to the GPO Investor in the aggregate principal amount of $20,434 (the "2025 GPO Convertible Note") in exchange for, and the cancellation of, the remaining obligations under the existing Prior GPO Convertible Note.
The 2025 GPO Convertible Note is guaranteed by the Company’s domestic subsidiaries, which are parties to the 2025 Senior Term Loan, and is contractually subordinated to the Company’s obligations under the 2025 Senior Term Loan. The 2025 GPO Convertible Note matures on November 13, 2029 and bears interest at a rate of 7.50% per annum payable quarterly in arrears, in cash or, provided no event of default is then occurring under the 2025 GPO Convertible Note, freely tradeable shares of the Company's Class A Common Stock, at the Company’s option, with the value per share determined with reference to the VWAP of the Class A Common Stock over the trading days occurring within the thirty calendar days prior to the applicable interest payment date. At any time prior to November 13, 2029, the GPO Investor is entitled to convert all or any portion of the principal amount of the 2025 GPO Convertible Note and accrued interest thereon into shares of the Company's Class A Common Stock at an initial conversion price of $82.92 per share (subject to customary anti-dilution adjustments). Under the terms of the 2025 GPO Convertible Note, the Company is required to make quarterly installment payments of $2.0 million of the outstanding principal beginning April 1, 2026 in the form of freely tradeable shares of the Company's Class A Common Stock, cash, or a combination thereof, solely at the determination of the Company. Class A Common Stock issued to satisfy quarterly interest and principal repayments will be issued at a price equal to the lowest of (i) the then-effective Conversion Price under the 2025 GPO Convertible Note, (ii) 95% of the VWAP of the Class A Common Stock over the ten trading days immediately preceding the applicable Installment Date and (iii) 95% of the VWAP of the Class A Common Stock over the trading days occurring within the ninety calendar day period immediately preceding the applicable payment date..
Dragonfly Seller Convertible Note
On January 27, 2023, we acquired Dragonfly and financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Note is subordinate to our 2025 Senior Term Loan, accrues interest of 8% per annum, payable in kind or in cash, and matures in January 2028.
Capital expenditures
Capital expenditures primarily consist of purchases of capitalized software costs and property and equipment. Our capital expenditures program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment to grow our business. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. Our total capital expenditures were $5.6 million and $6.9 million for the nine months ended September 30, 2025 and 2024, respectively.
Cash Flow Summary
The following tables summarizes our cash flows for the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net cash (used in) provided by: |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(11,164 |
) |
|
$ |
(3,950 |
) |
Investing activities |
|
$ |
41,352 |
|
|
$ |
84,509 |
|
Financing activities |
|
$ |
(32,366 |
) |
|
$ |
(71,574 |
) |
Effect of exchange rates on cash |
|
$ |
52 |
|
|
$ |
86 |
|
Net change in cash and cash equivalents |
|
$ |
(2,126 |
) |
|
$ |
9,071 |
|
Operating activities
Cash used in operating activities consists of net loss adjusted for certain non-cash items including depreciation and amortization, stock-based compensation, changes in fair value of warrant liabilities, non-cash interest expense, and loss on debt extinguishment, as well as the effect of changes in working capital and other activities.
Cash used in operating activities in the nine months ended September 30, 2025 was $11.2 million, an increase of $7.2 million compared to the nine months ended September 30, 2024. The primary factors affecting our net operating cash flows during this period was our net loss of $42.4 million, which includes non-cash expense items totaling $34.1 million, including a gain on disposal of business of $16.6 million, non-cash and paid-in kind interest expense of $6.8 million, loss on debt extinguishment of $8.0 million, stock-based compensation expense
36
Table of Contents
of $11.0 million, a change in fair value of financial instruments of $7.9 million, non-cash lease expense of $1.5 million, amortization and depreciation of $16.5 million, other non-cash items of $1.0 million and the effect of changes in operating assets and liabilities that resulted in cash outflows of $2.9 million.
Cash used in operating activities in the nine months ended September 30, 2024 was $4.0 million, a decrease of $28.0 million compared to the nine months ended September 30, 2023. The primary factors affecting our net operating cash flows during this period was our net income of $22.9 million, which includes non-cash expense items totaling $26.9 million, including a gain on disposal of business of $71.6 million, non-cash and paid-in kind interest expense of $8.2 million, stock-based compensation expense of $13.9 million, a gain due to the change in fair value of financial instruments of $3.2 million, non-cash lease expense of $1.6 million, amortization and depreciation of $18.4 million, and other non-cash items of $0.6 million.
Investing activities
Net cash provided by investing activities in the nine months ended September 30, 2025 was $41.4 million compared to $84.5 million in the nine months ended September 30, 2024. Net cash provided by investing activities in the nine months ended September 30, 2025 primarily consisted of cash proceeds from the sale of a business of $46.9 million partially offset by cash paid of $5.6 million of capital expenditures primarily related to software development costs. Net cash provided by investing activities in the nine months ended September 30, 2024 was $84.5 million, which primarily consisted of cash paid for acquisitions, net of cash acquired of $91.4 million partially offset by cash paid of $6.9 million of capital expenditures primarily related to software development costs.
Financing activities
Net cash used in financing activities in the nine months ended September 30, 2025 was $32.4 million, compared to $71.6 million for the nine months ended September 30, 2024. Net cash used in financing activities during the nine months ended September 30, 2025 primarily consisted of payments of long-term debt and deferred financing costs primarily related to the repayments of debt obligations of $133.6 million partially offset by cash proceeds from the issuance of debt of $101.0 million and $0.3 million from the proceeds of the exercise of stock options and ESPP purchases. Net cash used in financing activities in the nine months ended September 30, 2024 was $71.6 million, which primarily consisted of payments of long-term debt and deferred financing costs primarily related to Amendment 4 to the Credit Agreement and the sale of Board.org of $72.8 million partially offset by the proceeds from the issuance of Era Convertible Notes of $0.8 million and proceeds from the issuance of stock options and ESPP purchases of $0.5 million.
Commitments and Contingencies
Our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 5 “Leases” to the condensed consolidated financial statements included elsewhere herein. For more information regarding our debt service obligations, see Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein.
Off-Balance Sheet Arrangements
During the periods presented, we did not engage in any off-balance sheet financing activities or other arrangements that have or are reasonably likely to have a current or future material effect on our financial condition or results of operations.
Recently Issued Accounting Pronouncements and Tax Reform
For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, if any, refer to Note 1 of the notes to our financial statements included in this Quarterly Report on Form 10-Q.
On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“The Act”) was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. Adoption of The Act has not had a material impact on the Company.
Critical Accounting Estimates and Policies
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that involve a significant level of estimation uncertainty and are reasonably likely to have a material impact on the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
There were no significant and material changes in our critical accounting policies and use of estimates during the nine months ended September 30, 2025, as compared to those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates and Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 1, 2025.
37
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risks.
We are exposed to market risks in the ordinary course of our business. These risks primarily consist of inflation risk and fluctuations in interest rates and foreign currency exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.
Foreign Currency Exchange Risk
We use the U.S. Dollar ("USD") as our reporting currency. Our local subsidiaries transact generally in their local currency, considered the functional currency for that subsidiary. Our foreign currency exchange rate risk is related to translation of our assets and liabilities from the subsidiaries' functional currencies to USD. These adjustments are recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro and British Pound Sterling. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States as well as the European Union, United Kingdom, and India. Our results of operations and cash flows in the future may be adversely affected due to an expansion of non-U.S. dollar denominated contracts, growth of our international entities and changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our cash denominated in foreign currency. To date, we have not engaged in any hedging strategies. We will continue to reassess our approach to manage the risk relating to fluctuations in currency rates.
Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenue for the three and nine months ended September 30, 2025, was impacted by approximately 1.0% compared to the three and nine months ended September 30, 2024.
Interest Rate Risk
We are subject to market risk associated with changing interest rates within our variable rate 2025 Senior Term Loan. Our exposure to changes in interest rates in the future is currently associated with the secured overnight financing rate as determined by the Federal Reserve Bank of New York ("SOFR").
As of September 30, 2025, we had outstanding borrowings on our 2025 Senior Term Loan of $74.5 million, which bear interest at variable rates, set at the Company’s option, based on a reference rate plus 7%, or SOFR plus 8%. At September 30, 2025, the interest rate on our 2025 Senior Term Loan was 12.23% determined based on SOFR plus 8%%. Assuming no change in the outstanding borrowings on our 2025 Senior Term Loan, we estimate that a one percentage point increase in SOFR would increase our annual cash interest expense by approximately $0.7 million.
Inflation Risk
Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our business.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.
Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective as of September 30, 2025 due to the material weakness in internal control over financial reporting described below.
Material Weakness in Internal Control over Financial Reporting
During the third quarter of 2025, management identified a deficiency in the design of the Company’s internal controls over financial reporting. The deficiency related to the failure to ensure that all manual journal entries throughout fiscal year 2025 were independently reviewed and approved prior to posting, which could impact all financial statement accounts. This deficiency represents a material weakness in the design of certain controls intended to prevent or detect potential misstatements in the financial statements on a timely basis. As of the date of this Form 10-Q, management does not believe this design deficiency resulted in any identified misstatements in the Company’s financial statements and management has concluded that the consolidated financial statements included in this Form 10-Q are fairly stated in all material respects, although the control design deficiency represents a material weakness in the Company’s internal control over financial reporting.
Remediation Plan
Subsequent to the identification of this design deficiency management has implemented and is continuing to implement remediation measures designed to address the underlying control deficiency. Specifically, management implemented a review process to ensure that all manual journal entries are subject to an independent review and approval process prior to posting. The Company is also enhancing documentation and monitoring procedures to ensure the consistent operation of these controls.
38
Table of Contents
Limitations on Effectiveness of Disclosure Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
39
Table of Contents
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal or regulatory proceedings, including intellectual property claims, commercial contract matters or employment-related disputes. Such cases may raise complex factual and legal issues, may subject us to material risks and uncertainties, could require significant management time and corporate resources to defend, could result in significant media coverage and negative publicity, and could be harmful to our reputation and our brand. We are not currently a party to any litigation or regulatory proceeding that we expect to have a material adverse effect on our business, results of operations, financial conditions or cash flows.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on April 1, 2025, except as set forth below.
The protracted U.S. government shutdown has had a negative impact on our revenues, profitability and cash flows, and we expect that such effects will worsen to the extent that the shutdown continues.
In years when the U.S. government fails to complete its budget process or to provide for a continuing resolution, a federal government shutdown may result, as is the case as of the filing of this quarterly report. A protracted government shutdown can result in the non-renewal, delay or cancellation of public sector subscription contracts, which negatively affects our revenues, annual recurring revenues and cash flows, as well as our future results. In addition, we may be unable to generate revenue to the extent anticipated from our CQ-Roll Call advertising and events business during a federal government shutdown. We expect the negative impacts of a government shutdown on our results of operations to worsen as the shutdown becomes increasingly protracted, and the Company may be required to reduce costs or take other near-term operational measures that may adversely affect our results in future periods.
We have identified a material weakness in our internal control over financial reporting. If we are unable to develop and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us; materially and adversely affect our business and operating results; and expose us to potential litigation.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected and corrected on a timely basis.
During the third quarter of 2025, management identified a deficiency in the design of the Company’s internal controls over financial reporting related to the failure to ensure that all manual journal entries were independently reviewed and approved prior to posting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
If we are not able to remediate the material weakness, or if we identify any new material weaknesses in the future, we may be unable to maintain compliance with the requirements of securities laws, stock exchange listing rules, or debt instrument covenants regarding timely filing of information; we could lose access to sources of capital or liquidity; and investors may lose confidence in our financial reporting and our stock price may decline as a result. Though we are evaluating steps to remediate the material weakness, we cannot assure you that any measures we may take in the future will be sufficient to remediate the material weakness or avoid potential future material weaknesses.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
Other than as reported on each of our Current Reports on Form 8-K, we did not have any unregistered sales of equity securities during the three months ended September 30, 2025.
Use of Proceeds
Not applicable
Purchase of Equity Securities
We did not repurchase shares of our common stock during the three months ended September 30, 2025.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
40
Table of Contents
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).
Exhibit Number |
|
Description |
Incorporation by Reference (where a report is indicated below, that document has been previously filed with the SEC and the applicable exhibit is incorporated by reference thereto) |
2.1 |
|
Agreement and Plan of Merger, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”). |
Annex A to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483). |
2.2 |
|
First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”). |
Annex A-2 to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483). |
3.1 |
|
Certificate of Incorporation of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.). |
Exhibit 3.1 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972) |
3.2 |
|
Certificate of Amendment to Certificate of Incorporation of FiscalNote Holdings, Inc. |
Exhibit 3.1 to the Current Report on Form 8-K filed on August 29, 2025 (File No. 001-396972)
|
3.3 |
|
Bylaws of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.). |
Exhibit 3.2 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972) |
4.1 |
|
Warrant Agreement, dated as of October 28, 2020, by and among Duddell Street Acquisition Corp ad Continental Stock Transfer & Trust Company, as warrant agent. |
Exhibit 4.1 of DSAC’s Current Report on Form 8-K filed with the SEC on November 2, 2020 (File No. 333-249207). |
4.2 |
|
Form of Warrant |
Exhibit 10.2 to the Current Report on Form 8-K filed on March 20, 2023 (File No. 001-39672). |
10.1+ |
|
Financing Agreement, dated as of August 5, 2025, by and among the Company, as Parent Guarantor, the Company's domestic subsidiaries party thereto as borrowers and guarantors the lenders from time to time party thereto, and MGG Investment Group LP, as collateral agent and as administrative agent |
Exhibit 10.1 to the Current Report on Form 8-K filed on August 6, 2025 (File No. 001-39672).
|
10.2+
|
|
Securities Purchase Agreement, dated as of August 5, 2025, by and between the Company and YA II PN, Ltd. |
Exhibit 10.2 to the Current Report on Form 8-K filed on August 6, 2025 (File No. 001-39672).
|
10.3+
|
|
Convertible Debenture, issued on August 12, 2025. |
Exhibit 10.4 to the Quarterly Report on Form 10-Q filed on August 15, 2025 (File No. 001-39672).
|
10.4 |
|
Registration Rights Agreement, dated as of August 12, 2025, by and between the Company and YA II PN, Ltd. |
Exhibit 10.5 to the Quarterly Report on Form 10-Q filed on August 15, 2025 (File No. 001-39672).
|
10.5+ |
|
Redemption and Exchange Agreement, dated as of August 5, 2025, by and between the Company and GPO FN Noteholder, LLC. |
Exhibit 10.5 to the Current Report on Form 8-K filed on August 6, 2025 (File No. 001-39672).
|
10.6 |
|
Subordinated Convertible Promissory Note Due 2029. |
Exhibit 10.7 to the Quarterly Report on Form 10-Q filed on August 15, 2025 (File No. 001-39672).
|
10.7 |
|
Convertible Debenture, issued on September 11, 2025 |
Filed with this report. |
10.8 |
|
Form of Amendment, dated July 30, 2025, to Letter Agreement dated March 25, 2025. |
Exhibit 10.1 to the Current Report on Form 8-K filed on August 5, 2025 (File No. 001-39672).
|
10.9 |
|
Second Amended and Restated Employment between FiscalNote Holdings, Inc. and Josh Resnik, entered into as of October 31, 2025. |
Exhibit 10.1 to the Current Report on Form 8-K filed on October 31, 2025 (File No. 001-39672).
|
10.10 |
|
Amended and Restated Employment between FiscalNote Holdings, Inc. and Jon Slabaugh, entered into as of October 31, 2025. |
Exhibit 10.2 to the Current Report on Form 8-K filed on October 31, 2025 (File No. 001-39672).
|
10.11 |
|
Form of Retention Award Agreement. |
Exhibit 10.3 to the Current Report on Form 8-K filed on October 31, 2025 (File No. 001-39672).
|
31.1 |
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a). |
Filed with this report. |
31.2 |
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a). |
Filed with this report. |
32 |
|
Section 1350 Certifications. |
Furnished with this report. |
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
Submitted electronically with this report. |
41
Table of Contents
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. |
Submitted electronically with this report. |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Submitted electronically with this report. |
* All schedules have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish a copy of all omitted schedules to the SEC upon its request.
+ Certain portions of this exhibit have been omitted in accordance with Regulation S-K Item 601. The Company agrees to furnish an unredacted copy of the exhibit to the SEC upon request.
42
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
FISCALNOTE HOLDINGS, INC. |
|
|
|
|
|
Date: November 10, 2025 |
|
By: |
/s/ Jon Slabaugh |
|
|
|
Name: Jon Slabaugh |
|
|
|
Title: Chief Financial Officer |
|
|
|
|
Date: November 10, 2025 |
|
By: |
/s/ Josh Resnik |
|
|
|
Name: Josh Resnik |
|
|
|
Title: Chief Executive Officer |
43
FAQ
What were FiscalNote (NOTE) Q3 2025 revenue and net loss?
What liquidity did FiscalNote report for Q3 2025?
Did FiscalNote disclose a going concern risk?
What changes occurred in debt and financing?
What assets did FiscalNote sell in 2025 and for how much?
How did operating cash flow trend in 2025?
Did FiscalNote execute a reverse stock split?
