FiscalNote Holdings, Inc.

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current report

None.

Previous report

Sales of a substantial number of our Class A Common Stock into the public market or the perception that such sales might occur, could cause the market price of our Class A Common Stock to decline. Additionally, the issuance of additional shares of our Class A Common Stock will dilute our other stockholders.

Previous report

Sales of a substantial number of shares of our Class A Common Stock into the public market or the perception that such sales might occur could cause the market price of our Class A Common Stock to decline and may make it more difficult for you to sell your Class A Common Stock at a time and price that you deem appropriate.

Previous report

Sales of our Class A Common Stock following the expiration of the lock-up periods or pursuant to exercise of registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales also could cause the trading price of our Class A Common Stock to fall and make it more difficult for you to sell shares of our Class A Common Stock at a time and price that you deem appropriate.

Previous report

As previously disclosed, we have issued to the Exchange Investor the Third ERA Convertible Note in the aggregate principal amount $5.8 million (the “Principal Amount”) which is convertible into shares of Class A Common Stock (the “Third ERA Convertible Note Underlying Shares”) and in connection therewith, we issued 2,596,050 Class A Common Stock to the Exchange Investor (the “Third ERA Convertible Note Fee Shares”) and issued 300,000 shares of Class A Common Stock to a broker (the “Broker Shares”) to facilitate the liquidation of the Third ERA Convertible Note Fee Shares and Third ERA Convertible Note Underlying Shares. If the sale of the Third ERA Convertible Note Underlying Shares and Third ERA Convertible Note Fee Shares do not generate cash proceeds equal to 145% of the Principal Amount, we will be required to issue additional shares of Class A Common Stock to the Exchange Investor (the “Third ERA Convertible Note Additional Shares”).

Previous report

On August 12, 2025, we issued the 2025 GPO Note which requires us (i) to satisfy the interest payable thereunder in cash or freely tradeable shares of our Class A Common Stock at our option and (ii) make quarterly installment payments of $2 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 ((i) and (ii) collectively, the “GPO Shares”).

Previous report

On August 12, 2025, the Company also issued the initial tranche of the Debentures in an aggregate principal amount of approximately $21 million to YA and the Company expects to issue the Second Tranche of the Debentures with an aggregate principal amount of $12 million upon pursuant to the Purchase Agreement. 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 “Debenture Conversion Shares”), subject to certain limitations.

Previous report

The issuance of the Third ERA Convertible Note Underlying Shares, Third ERA Convertible Note Fee Shares, Third ERA Convertible Note Additional Shares, Broker Shares, GPO Shares and Debenture Conversion Shares may cause stockholders to experience significant dilution of their ownership interests and cause the market price of our Class A Common Stock to decline.

Previous report

2025 Senior Term Loan

Previous report

As described in more detail under Note 17. Subsequent Events to the unaudited interim condensed consolidated financial statements appearing herein, on August 12, 2025 the Company closed on that certain 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 $75.0 million which matures on August 12, 2029 (the "2025 Senior Term Loan"), and received net proceeds of $72.9million. Proceeds from the 2025 Senior Term Loan, together with $18.9 million of net proceeds from the issuance of the initial tranche of the Debentures, were used to retire all obligations under the Prior Senior Term Loan, to retire the Amended Legacy Notes, to retire certain of its obligations under the GPO Convertible Note, and to fund estimated transaction expenses and for general corporate purposes. The remaining$12.3 million of Debentures will be issued following the date of the effectiveness of an initial resale registration statement with the Securities and Exchange Commission, with net proceeds used to retire the Company's obligations under the Third Era Convertible Note, to fund estimated transaction expenses and for general corporate purposes.

Previous report

At the closing, the Company issued the initial tranche of the Debentures in aggregate principal amount of $21.0 million; entered into a registration rights agreement with YA pursuant to which the Company agreed to file a registration statement with the SEC under the Securities Act covering YA’s resale of up to 85,000,000 Debenture Conversion Shares; and issued the 2025 GPO Note in aggregate principal amount of $20.4 million in exchange for, and the cancellation of, the Company’s obligations with respect to the previously existing GPO Convertible Note. Please refer to the Company’s Current Report on Form 8-K filed on August 6, 2025 which previously reported the terms of the agreements and instruments delivered by the Company at the closing.

Previous report

Departure of Directors or Certain Officers

Previous report

On August 13, 2025, Michael J. Callahan, a member of the Board of Directors (the “Board”) of FiscalNote Holdings, Inc. (the “Company”), notified the Company of his decision to resign as a director effective on August 27, 2025. He has decided to resign in order to focus on other professional commitments, and not due to any disagreement with the Company on any matter relating to its operations, policies or practices. Mr. Callahan joined the Board in 2017 and currently serves as its Lead Independent Director, Chair of the Corporate Governance Committee, and a member of the Compensation Committee of the Board. He has provided essential guidance to management throughout the Company’s evolution, and the Company is grateful for his service.

Previous report

Adoption, Modification or Termination of Rule 10-b-5-1 Plans and Certain Other Trading Arrangements

Previous report

(1) Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

Previous report

(2)“Non-Rule 10b-5-1 trading arrangement,"” as defined in Item 408(ac) of Regulation S-K, in order to permit the officer to satisfy the tax withholding obligations incurred upon the vesting of equity awards via "sell to cover" transactions under the Exchange Act.

Previous report

(3) Represents the maximum number of shares that may be sold pursuant to the 10b5-1 arrangement. The number of shares sold will be dependent on the satisfaction of certain conditions as set forth in the trading plan.

Previous report

(4) Rule 10b5-1 trading arrangement that is intended to provide for “eligible sell-to-cover transactions” (as described in Rule 10b5-1(c)(1)(ii)(D)(3) under the Exchange Act) to satisfy tax withholding obligations arising exclusively from vesting of restricted stock units (RSUs). The number of shares subject to covered RSUs that will be sold to satisfy applicable tax withholding obligations upon vesting is not currently determinable as the number will vary based on the market price of our Class A Common Stock and the extent to which vesting conditions are satisfied. This sell-to-cover arrangement provides solely for the automatic sale of shares that would otherwise be issuable in respect of a covered RSU in an amount sufficient to satisfy the applicable withholding obligation, with the proceeds of the sale delivered to us in satisfaction of the applicable withholding obligation.

Previous report

(5) Unless earlier terminated in accordance with the terms of the plan.