FiscalNote Holdings, Inc.

Previous wording

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. Monetary amounts are presented in thousands, unless otherwise presented. 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 consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.

Current wording

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 consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.

Previous wording

On the Closing Date, we consummated the transactions contemplated by the Merger Agreement, by and among Old FiscalNote, DSAC, and Merger Sub. Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC. On the Closing Date, and in connection with the Closing, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc."

Current wording

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 Annual Report on Form 10-K 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.

Previous wording

On March 11, 2024, we completed the sale of Board.org for a total value of up to $98.9 million, consisting of $90.9 million in cash at closing and a potential earnout opportunity of up to $8.0 million. The Company recorded a gain on of $71.5 million from the sale of Board.org in the first quarter of 2024.

Current wording

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 year ended December 31, 2024.

Previous wording

ARR of approximately $14.2 million and $12.5 million at December 31, 2024 and 2023.

Current wording

ARR of approximately $15.5 million at December 31, 2024, respectively.

Previous wording

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, and continuing to execute on our acquisition strategy. 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.

Current wording

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, such as the political prediction markets, and enhancing and productizing policy data agentic APIs. 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.

Previous wording

We plan to invest a portion of the available capital resources in building innovative products, attracting new customers and expanding our leadership role in the legal and regulatory information market which will allow us to drive growth organically. We 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.

Current wording

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 investment and commercial partnership opportunities to supplement our existing offerings, enabling us to enter new markets and potentially create new sources of revenue. We may also continue to divest non-core business lines or products consistent with our strategic policy focus and streamlining initiatives.

Previous wording

Over 90% of our revenues are subscription based, which leads to high revenue predictability. 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.

Current wording

Over 93% of our revenues are subscription based, which leads to high revenue predictability. 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.

Previous wording

Our ARR at December 31, 2024 and December 31, 2023 was $107.5 million and $126.1 million, respectively. ARR at December 31, 2024 and December 31, 2023, excluding products we discontinued in 2023, and the impact of the sale of Board.org, Aicel, Oxford Analytica, and Dragonfly, was $93.3 million and $96.5 million, respectively.

Current wording

Our ARR at December 31, 2025 and December 31, 2024 was $84.1 million and $107.5 million, respectively. ARR at December 31, 2024, excluding the impact of the sale of Oxford Analytica, Dragonfly, and TimeBase was $91.9 million.

Previous wording

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. Customers from acquisitions are not included in NRR until they have been part of our condensed consolidated results for 12 months. Accordingly, the 2023 Acquisition was not included in our NRR for the year ended December 31, 2023. 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 growing 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. Our quarterly NRR for the last eight quarters follows:

Current wording

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 growing 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. Our quarterly NRR for the last eight quarters follows:

Previous wording

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 and deferred revenue, which are non-cash impacts that may fluctuate for reasons unrelated to overall operating performance.

Current wording

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, which is a non-cash impact that may fluctuate for reasons unrelated to overall operating performance.

Previous wording

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 Revenue.

Current wording

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.

Previous wording

We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Annual Report on Form 10-K because these non-GAAP measures are certain key measures used in conjunction with GAAP measures used by the Chief Operating Decision Maker in making decisions to assist management in evaluating our business, measuring our operating performance and making 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 loss, net 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 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.

Current wording

We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Annual Report on Form 10-K 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.

Previous wording

We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues account for approximately 92% and 90% of our total revenues for the years ended December 31, 2024 and 2023.

Current wording

We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues account for approximately 93% and 92% of our total revenues for the years ended December 31, 2025 and 2024, respectively.

Previous wording

Cost of revenues 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 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.

Current wording

Cost of revenues 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 are our costs related to the preparation of contracted advisory deliverables.

Previous wording

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. During the year ended December 31, 2024 no impairment of intangible assets has been identified in our accompanying audited consolidated financial statements. During the year ended December 31, 2023 an impairment of intangible assets of $6,223 has been identified and recorded.

Current wording

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. During the years ended December 31, 2025 and 2024, no impairment of intangible assets has been identified in our accompanying audited consolidated financial statements.

Previous wording

Editorial expense was relatively flat at $18.5 million for the year ended December 31, 2024 as compared to $17.9 million for the year ended December 31, 2023.

Current wording

Editorial expense was $14.9 million for the year ended December 31, 2025 as compared to $18.5 million for the year ended December 31, 2024. The decrease of $3.6 million, or 19% was primarily attributable to the impact from business dispositions.

Previous wording

General and administrative expense was $50.2 million for the year ended December 31, 2024 as compared to $65.6 million for the year ended December 31, 2023. The decrease of $15.3 million, or 23%, was primarily attributable to a $9.2 million decrease in stock-based compensation expense for vested awards and workforce planning actions made throughout the second half of 2023.

Current wording

General and administrative expense was $52.1 million for the year ended December 31, 2025 as compared to $50.2 million for the year ended December 31, 2024. The increase of $1.9 million, or 4%, was primarily attributable to overall legal and accounting costs associated with debt transactions discussed in "Significant Events - Debt Refinance" partially offset by decreases from the business dispositions and a $1.9 million decrease in stock-based compensation expense for vested awards.

Previous wording

Amortization of intangibles was $9.9 million for the year ended December 31, 2024 as compared to $11.5 million for the year ended December 31, 2023. The decrease of $1.6 million, or 14%, is due to the revision of useful lives of certain developed technologies that resulted in additional amortization in 2023.

Current wording

Amortization of intangibles was $8.1 million for the year ended December 31, 2025 as compared to $9.9 million for the year ended December 31, 2024. The decrease of $1.9 million, or 19%, was primarily attributable to the impact from the business dispositions.

Previous wording

Interest expense was $23.6 million for the year ended December 31, 2024 as compared to $29.9 million for the year ended December 31, 2023. The decrease in interest expense of $6.4 million was primarily due to the repayment of the Senior Term Loan.

Current wording

Interest expense was $16.5 million for the year ended December 31, 2025 as compared to $23.6 million for the year ended December 31, 2024. The decrease in interest expense of $7.1 million was primarily due to the overall reduction of our indebtedness, as a result of our debt repayments from the proceeds of our sale of Oxford Analytica, Dragonfly, and TimeBase, as well as our debt refinance on August 12, 2025.

Previous wording

Change in fair value of financial instruments was a $6.4 million loss for the year ended December 31, 2024 as compared to a $16.0 million gain for the year ended December 31, 2023. The change of $22.4 million primarily represents a primarily related to the change in the fair value adjustment of the warrant liabilities that were assumed in connection with the Business Combination combined with the changes in the Dragonfly Seller Convertible Notes, GPO Convertible Note, and the Era Convertible Notes.

Current wording

Change in fair value of financial instruments was a $9.2 million loss for the year ended December 31, 2025 as compared to a $6.4 million loss for the year ended December 31, 2024. The change of $2.8 million is primarily related to the changes in the Dragonfly Seller Convertible Notes (as defined below), Third Era Convertible Note (as defined and discussed in Note 9, Debt, to consolidated financial statements included elsewhere in this Form 10-K), Convertible Debentures, Prior GPO Convertible Note (as defined below), and the 2025 GPO Convertible Note partially offset by the change in the fair value adjustment of the warrant liabilities.

Previous wording

Reflects the gain on disposal from the sale of Board.org on March 11, 2024 and the sale of Aicel on October 31, 2024.

Current wording

Reflects the gain on disposal from the sale of TimeBase on July 1, 2025, Dragonfly and Oxford Analytica on March 31, 2025, and the gain on sale of Board.org on March 11, 2024 and the sale of Aicel on October 31, 2024.

Previous wording

Reflects the non-cash impact of the following for fiscal year 2024: (i) unrealized loss of $49 in the first quarter, $31 in the second quarter, $17 in the third quarter, and $78 in the fourth quarter from our investments; (ii) gain of $4 in the first quarter of 2024 and $113 in the fourth quarter of 2024 from the change in fair value related to the contingent consideration and contingent compensation related to the 2021, 2022, and 2023 Acquisition, (iii) gain of $530 from the release of the COSM grant, and (iv) charge of $572 for fees satisfied with Common Stock of the Company. Reflects the non-cash impact of the following for fiscal year 2023: (i) impairment of goodwill of $5,837 in the first quarter of 2023 and $20,004 in the fourth quarter, (ii) impairment of other long-lived assets of $6,223 in the fourth quarter of 2023, (iii) loss of $34 in the first quarter, loss of $56 in the second quarter, gain of $147 in the third quarter, and gain of $9 in the fourth quarter from our equity method investment, (iv) charge of $2 in the first quarter, charge of $2 in the second quarter, gain of $672 in the third quarter, and gain of $1,905 in the fourth quarter from the change in fair value related to the contingent consideration and contingent compensation related to the Acquisitions; and (v) unrealized loss of $115 in the third quarter and unrealized gain of $18 in the fourth quarter from our investments, respectively.

Current wording

Reflects the non-cash impact of the following: (i) charge of $40 in the first quarter of 2025, charge of $30 in the second quarter of 2025, a charge of $9 in the third quarter of 2025, and a benefit of $30 in the fourth quarter of 2025 related to the unrealized loss on investments; (ii) charge of $315 for fees satisfied with Common Stock of the Company during the first quarter of 2025; (iii) charge of $1,784 during the first quarter of 2025 and a charge of $6,174 in the third quarter of 2025 from the loss on debt extinguishment; (iv) gain of $170 from the release of the 2021 District of Columbia Creative And Open Space Modernization grant; (v) charge of $632 in the second quarter of 2025, a gain of $167 in the third quarter of 2025, and a charge of $2 in the fourth quarter of 2025 related to foreign currency translation losses, principally arising from converting a GBP denominated convertible note into USD, (v) impairment of goodwill of $12,378 in the fourth quarter of 2025, (vi) charge of $49 in the first quarter of 2024, charge of $31 in the second quarter of 2024, a charge of $17 in the third quarter of 2024, and a charge of $78 in the fourth quarter of 2024 related to the unrealized loss on investments; (vii) gain of $4 in the first quarter of 2024 and $113 in the fourth quarter of 2024 from the change in fair value related to the contingent consideration and contingent compensation related to the 2021, 2022, and 2023 Acquisitions; (viii) gain of $530 from the release of the 2020 District of Columbia Creative And Open Space Modernization grant; and (ix) charge of $572 for fees satisfied with Common Stock of the Company.

Previous wording

Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company funded operations through raising equity and debt, including the receipt of approximately $98.1 million of net cash proceeds from the sale of Board.org and Aicel. At December 31, 2024, the Company’s cash, cash equivalents, restricted cash, and short-term investments was $35.3 million compared to $24.4 million at December 31, 2023.

Current wording

Historically the Company has partially funded its operations through raising equity and debt. At December 31, 2025, the Company’s cash, cash equivalents, restricted cash, and short-term investments was $26.9 million compared to $35.3 million at December 31, 2024.

Previous wording

The Company had a negative working capital balance of $29.3 million (excluding cash and short-term investments) at December 31, 2024 and had an accumulated deficit of $806.9 million and $816.4 million as of December 31, 2024 and December 31, 2023, and has incurred net losses of $62.5 million (excluding the gain on sale of businesses) and $115.5 million for the years ended December 31, 2024 and 2023, respectively. Management expects that on-going operating and capital expenditures may be necessary to continue to implement the Company’s business plan of entering new markets, acquiring new business and technologies, and investing in infrastructure and product development.

Current wording

The Company had a negative working capital balance of $25.8 million (excluding cash and short-term investments) at December 31, 2025 and had an accumulated deficit of $872.1 million and $806.9 million as of December 31, 2025 and December 31, 2024, and has incurred net losses (excluding the gain on sale of businesses) of $81.8 million and $62.5 million for the years ended December 31, 2025 and 2024, respectively.

Previous wording

Our ability to maintain our minimum cash requirement, fund our future cash interest requirements under our senior term loan and fund our operating expenses and capital expenditure requirements will depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond our control. The Company has implemented various cost saving measures throughout 2023, 2024 and into 2025 and is actively seeking additional sources of capital. Volatility in the credit markets may have an adverse effect on our ability to obtain debt financing. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

Current wording

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, financial, competitive, legislative, regulatory and other conditions that may be beyond our control. The Company has implemented various cost saving measures throughout 2024, 2025, and 2026 that we believe provides us the flexibility to fund future operations and provide a path toward generating positive cash flows from operations. In addition, we will consider opportunities for divestitures of non-core businesses which could help fund our future cash requirements.

Previous wording

Our historical financing activities included borrowings under senior secured credit facilities, senior secured promissory notes, convertible debt, and preferred share issuances. Our principal debt outstanding at December 31, 2024 and December 31, 2023 consisted of the following (excluding any debt discounts and fair value adjustments, as applicable):

Current wording

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, at December 31, 2025 and December 31, 2024 consisted of the following (excluding any fair value adjustments and debt discounts, as applicable):

Previous wording

The Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The 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 were four financial covenants in place at December 31, 2024: a minimum cash balance requirement, annual recurring revenue requirement, an adjusted EBITDA requirement and a capital expenditure limitation. At December 31, 2024 the Company was in compliance with the minimum cash balance requirement, capital expenditure limitation, an adjusted EBITDA requirement. The Company's annual recurring revenue was below the minimum annual recurring revenue for the period. On March 31, 2025 the Senior Term Loan lenders waived their rights upon default retroactive to December 31, 2024. See Note 19, Subsequent Events, in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.

Current wording

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 which we are required to meet: 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. At December 31, 2025 the Company was in compliance with all of its financial covenants set forth in the 2025 Senior Term Loan. On January 31, 2026, the Company's annual recurring revenue was below the minimum annual recurring revenue required pursuant to the terms of the 2025 Senior Term Loan. On March 23, 2026, the 2025 Senior Term Loan lenders waived their rights upon default retroactive to January 31, 2026. See Note 19, Subsequent Events, to the consolidated financial statements included elsewhere herein in this Form 10-K. Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.

Previous wording

The GPO Convertible Note is subordinate to the Company’s obligations under its Senior Term Loan which limits certain actions that the Company and the GPO Investor may take under the GPO Convertible Note. At any time prior to July 3, 2028, the GPO Investor is entitled to convert all or any portion of the principal and accrued interest thereon into shares of Class A Common Stock based on a conversion price of $7.56 (subject to future adjustment pursuant to the terms of the GPO Convertible Note). The GPO Convertible Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, is redeemable by the Company in whole or in part based on certain conditions as defined in the GPO Convertible Note. Pursuant to the terms of the 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, during the year ended December 31, 2024, the Company issued 1,715,292 Class A Common Shares in satisfaction of interest of $1.9 million that accrued from July 1, 2024 through December 31, 2024. The Company expects to satisfy future quarterly interest payments in shares.

Current wording

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 December 31, 2025, the Company issued the GPO Investor 346,059 Class A Common Shares, in the aggregate, in satisfaction of quarterly interest.

Previous wording

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 Senior Credit Facility, accrues interest of 8% per annum, payable in kind or in cash, and matures in January 2028.

Current wording

On January 27, 2023, we acquired Dragonfly and financed part of the purchase with the issuance of convertible notes (the "Dragonfly Seller Convertible Notes"). The Dragonfly Seller Convertible Notes are subordinate to our 2025 Senior Term Loan, accrues interest at 8% per annum, payable in kind or in cash (solely at the Company's election), and matures in January 2028.

Previous wording

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 $8.9 million and $7.9 million for the years ended December 31, 2024 and 2023, respectively.

Current wording

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 on hand. 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 $7.2 million and $8.9 million for the years ended December 31, 2025 and 2024, respectively.

Previous wording

Cash used in operating activities consists of net income (loss) adjusted for certain non-cash items including depreciation and amortization, gain on sale of businesses, stock-based compensation, changes in fair value of financial instruments, non-cash interest expense, and loss on settlement, as well as the effect of changes in working capital and other activities.

Current wording

Cash used in operating activities consists of net (loss) income adjusted for certain non-cash items including depreciation and amortization, gain on sale of businesses, stock-based compensation, impairment of goodwill, changes in fair value of financial instruments, non-cash interest expense, and loss on settlement, as well as the effect of changes in working capital and other activities.

Previous wording

Cash used in operating activities in the year ended December 31, 2024 was $5.3 million, an increase of $30.2 million compared to the year ended December 31, 2023.

Current wording

Cash used in operating activities in the year ended December 31, 2025 was $11.4 million, an increase of $6.1 million compared to the year ended December 31, 2024.

Previous wording

Cash used in operating activities in 2023 was driven by a net loss of $115.5 million, which is adjusted for the exclusion of non-cash expenses and other adjustments totaling $90.1 million, primarily including impairment of goodwill and other long-lived assets of $32.1 million, non-cash and paid-in kind interest expense of $10.0 million, stock-based compensation expense of $27.1 million, loss on settlement with GPO of $3.5 million, a gain due to the change in fair value of financial instruments of $16.0 million, amortization and depreciation of $32.3 million (including the non-cash amortization from deferred costs to obtain revenue contracts), and other non-cash expenses of $1.1 million and the effect of changes in operating assets and liabilities that resulted in cash outflows of $10.2 million. Cash used by operating activities can be impacted by factors such as new acquisitions, timing of cash receipts from customers, vendor payment terms, and timing of payments to vendors.

Current wording

Cash used in operating activities in 2025 was driven by net loss of $65.2 million, which is adjusted for the exclusion of non-cash expenses and other adjustments totaling $58.4 million, primarily including the gain on sale of businesses of $16.6 million, impairment of goodwill of $12.4 million, loss on debt extinguishment of $8.0 million, non-cash and paid-in kind interest expense of $7.4 million, stock-based compensation expense of $14.8 million, a loss due to the change in fair value of financial instruments of $9.2 million, amortization and depreciation of $21.2 million (including the non-cash amortization from deferred costs to obtain revenue contracts), and other non-cash expenses of $2.0 million and the effect of changes in operating assets and liabilities that resulted in cash outflows of $4.6 million. Cash used by operating activities can be impacted by factors such as timing of cash receipts from customers, vendor payment terms, and timing of payments to vendors.

Previous wording

Net cash provided by investing activities in the year ended December 31, 2024 was $89.2 million compared to net cash used by investing activities was $20.3 million in the year ended December 31, 2023. Net cash provided by investing activities in the year ended December 31, 2024 primarily consisted of $98.1 million of cash proceeds for the sale of Board.org and Aicel, offset by cash paid for capital expenditures of $8.9 million primarily related to software development costs. Net cash used in investing activities in the year ended December 31, 2023 primarily consisted of cash paid for acquisitions, net of cash acquired of $5.0 million, cash paid for $7.9 million of capital expenditures primarily related to software development costs and purchases of short-term investments of $7.2 million.

Current wording

Net cash provided by investing activities in the year ended December 31, 2025 was $39.7 million compared to $89.2 million in the year ended December 31, 2024. Net cash provided by investing activities in the year ended December 31, 2025 primarily consisted of $46.9 million of cash proceeds from the sale of businesses partially offset by cash paid for capital expenditures of $7.2 million primarily related to software development costs expenditures. Net cash provided by investing activities in the year ended December 31, 2024 primarily consisted of $98.1 million of cash proceeds for the sale of Board.org and Aicel, offset by cash paid for capital expenditures of $8.9 million primarily related to software development costs.

Previous wording

Net cash used in financing activities in the year ended December 31, 2024 was $71.4 million, compared to net cash provided by financing activities was $12.1 million for the year ended December 31, 2023. Net cash used in financing activities during the year ended December 31, 2024 primarily consisted of $70.8 million from the principal payments of long-term debt and payment of deferred financing costs of $7.4 million primarily related to repayments on the Senior Term Loan, partially offset by $6.3 million from the issuance of the Era Notes and proceeds of $0.5 million from exercise of stock options and employee stock plan purchases. Net cash provided by financing activities during the year ended December 31, 2023 primarily consisted of $6.0 million from Amendment No. 1 to the Senior Term Loan and $5.5 million from the issuance of the Era Note partially offset by the payments on long-term debt of $0.1 million combined with $0.7 million from the proceeds from the exercise of stock options.

Current wording

2025 primarily consisted of payments of long-term debt of $128.8 million and $5.3 million from payment of deferred financing costs partially offset by $101.0 million from the proceeds from long-term debt, net of issuance costs and $0.3 million from exercise of stock options and employee stock plan purchases. Net cash used in financing activities during the year ended December 31, 2024 primarily consisted of $70.8 million from the principal payments of long-term debt and payment of deferred financing costs of $7.4 million primarily related to repayments on the Senior Term Loan, partially offset by $6.3 million from the issuance of a portion of the First Era Convertible Note and the full Second Era Convertible Note (each, as defined and discussed in Note 9, Debt, in our consolidated financial statements included elsewhere in this Form 10-K) and proceeds of $0.5 million from exercise of stock options and employee stock plan purchases.

Previous wording

Our principal commitments consist of our debt service obligations and leases for office space. For more information regarding our lease obligations, see Note 5, Leases in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. For more information regarding our debt service obligations, see Note 9, Debt, in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Current wording

Our principal commitments consist of our debt service obligations and leases for office space. For more information regarding our lease obligations, see Note 5, Leases in our consolidated financial statements included elsewhere in this Form 10-K. For more information regarding our debt service obligations, see Note 9, Debt, in our consolidated financial statements included elsewhere in this Form 10-K.

Previous wording

Recently Issued Accounting Pronouncements

Current wording

Recently Issued Accounting Pronouncements and Tax Reform

Previous wording

For information regarding new accounting pronouncements, and the impact of these pronouncements on our consolidated financial statements, if any, refer to Note 1, Summary of Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Current wording

For information regarding new accounting pronouncements, and the impact of these pronouncements on our consolidated financial statements, if any, refer to Note 1, Summary of Business and Significant Accounting Policies in our consolidated financial statements included elsewhere in this Form 10-K.

Previous wording

We believe that of our significant accounting policies, which are described in Note 1, Summary of Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.

Current wording

We believe that of our significant accounting policies, which are described in Note 1, Summary of Business and Significant Accounting Policies in our consolidated financial statements included elsewhere in this Form 10-K, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.

Previous wording

See Note 8, Goodwill to the Consolidated Financial Statements for additional discussion on goodwill and goodwill impairment in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Current wording

See Note 8, Goodwill in our consolidated financial statements included elsewhere in this Form 10-K for additional discussion on goodwill and goodwill impairment.