FiscalNote Holdings, Inc.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
NOTE$0.11-2.7%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001193125-26-217061
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001193125-26-342638
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 167 current paragraphs.
120 unchanged; 31 reworded; 13 added; 3 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Subscription revenue of approximately $0.3 million for the three months ended June 30, 2025 and approximately $4.0 million for the six months ended June 30, 2025
Current report
Subscription revenue of $18.8 million for the three months ended June 30, 2026 decreased $2.6 million, or 12%, from $21.4 million for the three months ended June 30, 2025. Subscription revenue of $37.9 million for the six months ended June 30, 2026 decreased $8.8 million, or 19% from $46.6 million for the six months ended June 30, 2025.
Current report
Non-subscription revenue was $0.8 million for the three months ended June 30, 2026, as compared to $1.9 million for the three months ended June 30, 2025. The decrease of $1.1 million, or 59%, was primarily attributable to the lower advertising and events revenue, as well as customer retention challenges.
Current report
Non-subscription revenue of $1.8 million for the six months ended June 30, 2026 decreased $2.4 million, or 58% from $4.2 million for the six months ended June 30, 2025. $0.7 million of the decrease was from the impact of the business dispositions in 2025, with the remaining decrease primarily attributable to the lower advertising and events revenue, as well as customer retention challenges.
Current report
Cost of revenues, including amortization was $4.0 million for the three months ended June 30, 2026, as compared to $4.9 million for the three months ended June 30, 2025. The decrease of $1.0 million, or 20%, was primarily attributable to cost reduction measures.
Current report
Research and development expense was $3.6 million for the six months ended June 30, 2026 as compared to $5.4 million for the six months ended June 30, 2025. The decrease of $1.7 million, or 33%, was primarily attributable to the result of workforce planning actions.
Current report
Sales and marketing expense was $4.5 million for the three months ended June 30, 2026 as compared to $6.7 million for the three months ended June 30, 2025. The decrease of $2.2 million, or 33%, was primarily attributable to the result of workforce planning actions.
Current report
General and administrative expense was $9.2 million for the three months ended June 30, 2026 as compared to $11.4 million for the three months ended June 30, 2025. The decrease of $2.1 million, or 19%, was due to a reduction in stock based compensation of approximately $2.5 million as legacy awards were fully recognized in the first quarter of 2026, a reduction in transaction costs related to the sale of businesses in 2025 of approximately $0.9 million, partially offset by an increase of severance of $1.8 million from the resignation of our prior CEO on June 26, 2026. The remaining decrease is from our overall cost reduction efforts.
Current report
General and administrative expense was $18.7 million for the six months June 30, 2026 as compared to $27.7 million for the six months ended June 30, 2025. The decrease of $8.9 million, or 32%, was due to a reduction in stock based compensation of approximately $2.9 million as legacy awards were fully recognized in the first quarter of 2026, a reduction in transaction costs related to the sale of businesses in 2025 of approximately $5.6 million, partially offset by an increase of severance of $1.8 million from the resignation of our prior CEO on June 26, 2026. The remaining decrease is from our overall cost reduction efforts.
Current report
(f)
Current report
Reflects severance costs incurred related to the resignation of our prior CEO on June 26, 2026.
Current report
(g)
Current report
Reflects non-operating income from the Transition Services Agreement that was entered into with the acquirer of Dragonfly and Oxford Analytica on March 31, 2025.
Removed paragraphs (3)
Previous report
Subscription revenue of approximately $3.7 million for the three months ended March 31, 2025
Previous report
Subscription revenue of $19.1 million for the three months ended March 31, 2026 decreased $6.2 million, or 24%, from $25.2 million for the three months ended March 31, 2025.
Previous report
Non-subscription revenue was $1.0 million for the three months ended March 31, 2026, as compared to $2.3 million for the three months ended March 31, 2025. The decrease of $1.3 million, or 57%, was due to timing of advisory income and a decrease in book revenue partially offset by revenue for advocacy campaigns.
Reworded paragraphs (31)
Previous wording
On April 13, 2026, the Company’s Class A common stock was delisted from the New York Stock Exchange (the “NYSE”). The NYSE delisting caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note (together, the “Subordinated Notes”). On April 21, 2026, the Company entered into forbearance agreements with each of GPO FN Noteholder, LLC (“GPO”) and YA II PN, Ltd (together with GPO, the “Subordinated Creditors”), pursuant to which the Subordinated Creditors have agreed to waive defaults under the terms of subordinated convertible debt instruments issued to the Subordinated Creditors arising from the NYSE delisting, and to forbear from exercising any rights relating to such defaults, until May 21, 2026. If no action is taken, and the forebearance agreements with the Subordinated Creditors are not extended, on May 22, 2026 the Company will also be in default of its 2025 Senior Term Loan due to the cross-default provision within the 2025 Senior Term Loan, at which point the 2025 Senior Term Loan lenders may exercise rights, which could include the immediate repayment of the amount outstanding under the 2025 Senior Term Loan.
Current wording
On April 13, 2026, the Company’s Class A common stock was delisted from the New York Stock Exchange (the “NYSE”). The NYSE delisting caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note (together, the “Subordinated Notes”). On April 21, 2026, the Company entered into forbearance agreements with each of GPO FN Noteholder, LLC (“GPO”) and YA II PN, Ltd (together with GPO, the “Subordinated Creditors”), pursuant to which the Subordinated Creditors have agreed to waive defaults under the terms of subordinated convertible debt instruments issued to the Subordinated Creditors arising from the NYSE delisting, and to forbear from exercising any rights relating to such defaults, until August 21, 2026. If no action is taken, and the forbearance agreements with the Subordinated Creditors are not extended, on August 22, 2026 the Company will also be in default of its 2025 Senior Term Loan due to the cross-default provision within the 2025 Senior Term Loan. Additionally, the Company did not meet its 2025 Senior Term Loan minimum Adjusted EBITDA covenant requirement for the twelve months ended June 30, 2026, which has not been waived, and as of the date of this filing the 2025 Senior Term Loan lenders have not exercised their default rights, which could include the immediate repayment of the amount outstanding under the 2025 Senior Term Loan.
Previous wording
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 $15.7 million during the three months ended March 31, 2025.
Current wording
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 $15.4 million during the six months ended June 30, 2025.
Previous wording
Non-subscription revenue of approximately $0.7 million for the three months ended March 31, 2025
Current wording
Non-subscription revenue of approximately $0.7 million for the six months ended June 30, 2025
Previous wording
From time to time, management reviews the Company’s existing products and services based on their financial profile and other strategic factors. In connection with such reviews, management decided to cease actively selling and therefore sunset certain non-core products representing, in aggregate, subscription revenue of approximately $0.1 million during the three months ended March 31, 2026 and 2025.
Current wording
From time to time, management reviews the Company’s existing products and services based on their financial profile and other strategic factors. In connection with such reviews, management decided to cease actively selling and therefore sunset certain non-core products representing, in aggregate, subscription revenue of approximately $0.1 million during the three months ended June 30, 2026 and 2025, and approximately $0.1 and $0.2 million during the six months ended June 30, 2026 and 2025.
Previous wording
At December 31, 2025, the Company had approximately 407 employees and at March 31, 2026 we had approximately 370 employees. The net reduction in headcount is the result of our previously announced plan to streamline operations and drive cash generation in the core business through a combination of rapid AI deployment, insourcing third party spend, headcount reductions and other cost savings initiatives. As a result, the Company will experience 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.
Current wording
At December 31, 2025, the Company had approximately 407 employees and at June 30, 2026 we had approximately 343 employees. The net reduction in headcount is the result of our previously announced plan to streamline operations and drive cash generation in the core business through a combination of rapid AI deployment, insourcing third party spend, headcount reductions and other cost savings initiatives. As a result, the Company will experience 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.
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 96% 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 March 31, 2026 and December 31, 2025, was $75.7 million and $84.1 million, respectively.
Current wording
Our ARR at June 30, 2026 and December 31, 2025, was $74.9 million and $84.1 million, respectively.
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. 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 was 89% and 93% (excluding the impact of Oxford Analytica and Dragonfly) for the three months ended March 31, 2026 and 2025, respectively.
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 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 was 98% and 96% (excluding the impact of Oxford Analytica and Dragonfly) for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues accounted for approximately 95% and 92% of our total revenues for the three months ended March 31, 2026 and 2025, respectively.
Current wording
We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues accounted for approximately 96% and 92% of our total revenues for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
Comparison of the Consolidated Results for the Three Months Ended March 31, 2026 and March 31, 2025
Current wording
Comparison of the Consolidated Results for the Three and Six Months Ended June 30, 2026 and June 30, 2025
Previous wording
Cost of revenues, including amortization was $4.2 million for the three months ended March 31, 2026, as compared to $7.0 million for the three months ended March 31, 2025. The decrease of $2.8 million, or 41%, was primarily attributable to a $1.8 million reduction in capitalized software amortization as previously capitalized software development costs were fully amortized in the first quarter of 2025, with the remaining decrease resulting from the impact of the business dispositions.
Current wording
Cost of revenues, including amortization was $8.1 million for the six months ended June 30, 2026, as compared to $11.9 million for the six months ended June 30, 2025. The decrease of $3.8 million, or 32%, was primarily attributable to a $2 million reduction in capitalized software amortization as previously capitalized software development costs were fully amortized in the first quarter of 2025, $1.2 million to cost reduction measures, and $0.6 million resulting from the impact of business dispositions.
Previous wording
Research and development expense was $2.0 million for the three months ended March 31, 2026 as compared to $3.1 million for the three months ended March 31, 2025. The decrease of $1.1 million, or 34%, was primarily attributable to a decrease of $0.2 million due to the impact from the business dispositions and a result of workforce planning actions.
Current wording
Research and development expense was $1.6 million for the three months ended June 30, 2026 as compared to $2.3 million for the three months ended June 30, 2025. The decrease of $0.7 million, or 30%, was primarily attributable to the result of workforce planning actions.
Previous wording
Sales and marketing expense was $5.7 million for the three months ended March 31, 2026 as compared to $7.7 million for the three months ended March 31, 2025. The decrease of $2.0 million, or 26%, was primarily attributable to a decrease attributable to the impact from the business dispositions and a result of workforce planning actions.
Current wording
Sales and marketing expense was $10.2 million for the six months ended June 30, 2026 as compared to $14.5 million for the six months ended June 30, 2025. The decrease of $4.2 million, or 29%, was primarily attributable to a result of workforce planning actions, with $0.8 million attributable to the impact from the business dispositions.
Previous wording
Editorial expense was $3.6 million for the three months ended March 31, 2026 as compared to $4.8 million for the three months ended March 31, 2025. The decrease of $1.2 million, or 25%, was primarily attributable to the impact from business dispositions.
Current wording
Editorial expense was $3.4 million for the three months ended June 30, 2026, as compared to $3.5 million for the three months ended June 30, 2025. The decrease of $0.1 million, or 3% was primarily attributable to the impact from business dispositions.
Previous wording
General and administrative expense was $9.5 million for the three months ended March 31, 2026 as compared to $16.3 million for the three months ended March 31, 2025. The decrease of $6.8 million, or 42%, was primarily attributable to a decrease in payroll expenses primarily due to cost reduction measures combined with decreased transaction costs attributable to the sale of businesses and the impact from business dispositions.
Current wording
Editorial expense was $7.0 million for the six months ended June 30, 2026 as compared to $8.3 million for the six months ended June 30, 2025. The decrease of $1.3 million, or 15%, was primarily attributable to the impact from business dispositions.
Previous wording
Amortization of intangibles was $1.9 million for the three months ended March 31, 2026 as compared to $2.3 million for the three months ended March 31, 2025. The decrease of $0.4 million, or 19% was primarily attributable to the impact of business dispositions.
Current wording
Amortization of intangibles was $3.8 million for the six months ended June 30, 2026 as compared to $4.3 million for the six months ended June 30, 2025. The decrease of $0.5 million, or 11% was primarily attributable to the impact of business dispositions.
Previous wording
Interest expense was $3.4 million for the three months ended March 31, 2026 as compared to $5.1 million for the three months ended March 31, 2025. The decrease in interest expense of $1.8 million was primarily due to the overall reduction of our indebtedness, as a result of our debt repayments from the proceeds from our sale of Oxford Analytica, Dragonfly and TimeBase, as well as our debt refinance on August 12, 2025.
Current wording
Interest expense was $7.3 million for the six months ended June 30, 2026 as compared to $9.5 million for the six months ended June 30, 2025. The decrease in interest expense of $2.2 million, or 23%, was primarily due to the overall reduction of our indebtedness, as a result of our debt repayments from the proceeds from 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 $1.9 million gain for the three months ended March 31, 2026 as compared to a $0.7 million gain for the three months ended March 31, 2025. The change is the result of the change in the fair value of the warrant liabilities offset by changes in the Dragonfly Seller Convertible Notes, Convertible Debentures, Prior GPO Convertible Note, the 2025 GPO Convertible Note, the Third Era Convertible Note, and the changes in warrant liabilities.
Current wording
Change in fair value of financial instruments was a $0.1 million gain for the three months ended June 30, 2026 as compared to a $1.6 million loss for the three months ended June 30, 2025. The change is the result of an increase in the fair value of the warrant liabilities of $0.6 million, offset by changes in the Dragonfly Seller Convertible Notes, Convertible Debentures, Prior GPO Convertible Note, the 2025 GPO Convertible Note, and the Third Era Convertible Note.
Previous wording
Reflects the non-cash impact of the following: (i) gain of $177 in the first quarter of 2026 related to foreign currency exchange, (ii) impairment of goodwill of $35,600 in the first quarter of 2026, (iii) charge of $40 in the first quarter of 2025 related to the unrealized loss on investments; (iv) charge of $315 in the first quarter of 2025 for fees satisfied with Common Stock of the Company; and (v) charge of $1,784 from the loss on debt extinguishment.
Current wording
Reflects the non-cash impact of the following: (i) gain of $177 in the first quarter of 2026 and a charge of $21 in the second quarter of 2026 related to foreign currency exchange principally arising from converting a GBP denominated convertible note into USD, (ii) goodwill impairment charge of $35,600 in the first quarter of 2026 and $19,100 in the second quarter of 2026, (iii) charge of $40 in the first quarter of 2025 and $30 in the second quarter of 2025 related to the unrealized loss on investments; (iv) charge of $315 for fees satisfied with Common Stock of the Company during the first quarter of 2025; (v) charge of $1,784 from the loss on debt extinguishment during the first quarter of 2025; and (vi) charge of $632 in the second quarter of 2025 related to foreign currency translation losses, principally arising from converting a GBP denominated convertible note into USD.
Previous wording
Historically the Company has partially funded its operations through raising equity and debt. At March 31, 2026, the Company’s cash, cash equivalents, restricted cash, and short-term investments were $26.5 million compared to $26.9 million at December 31, 2025.
Current wording
Historically the Company has partially funded its operations through raising equity and debt. At June 30, 2026, the Company’s cash, cash equivalents, restricted cash, and short-term investments were $20.6 million compared to $26.9 million at December 31, 2025.
Previous wording
The Company had a negative working capital balance of $139.0 million (excluding cash and short-term investments) at March 31, 2026 and had an accumulated deficit of $915.8 million and $872.1 million as of March 31, 2026 and December 31, 2025, respectively, and incurred net losses (excluding the gain on sale of businesses) of $43.6 million for the three months ended March 31, 2026 and $20.0 million for the three months ended March 31, 2025, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets and investing in infrastructure and product development.
Current wording
The Company had a negative working capital balance of $135.0 million (excluding cash and short-term investments) at June 30, 2026 and had an accumulated deficit of $943.6 million and $872.1 million as of June 30, 2026 and December 31, 2025, respectively, and incurred net losses (excluding the gain on sale of businesses) of $71.4 million for the six months ended June 30, 2026 and $32.9 million for the six months ended June 30, 2025, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets and investing in infrastructure and product development.
Previous wording
On April 13, 2026, the Company’s Class A common stock was delisted from the New York Stock Exchange (the “NYSE”). The NYSE delisting caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note (together, the “Subordinated Notes”). On April 21, 2026, the Company entered into forbearance agreements with each of GPO FN Noteholder, LLC (“GPO”) and YA II PN, Ltd (together with GPO, the “Subordinated Creditors”), pursuant to which the Subordinated Creditors have agreed to waive defaults under the terms of subordinated convertible debt instruments issued to the Subordinated Creditors arising from the NYSE delisting, and to forbear from exercising any rights relating to such defaults, until May 21, 2026. If no action is taken, and the forbearance agreements with the
Current wording
On April 13, 2026, the Company’s Class A common stock was delisted from the New York Stock Exchange (the “NYSE”). The NYSE delisting caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note (together, the “Subordinated Notes”). On April 21, 2026, the Company entered into forbearance agreements with each of GPO FN Noteholder, LLC (“GPO”) and YA II PN, Ltd (together with GPO, the “Subordinated Creditors”), which were extended on each of May 18, 2026, June 24, 2026 and July 22, 2026, pursuant to which the Subordinated Creditors have agreed to waive defaults under the terms of subordinated convertible debt instruments issued to the Subordinated Creditors arising from the NYSE delisting, and to forbear from exercising any rights relating to such defaults, until August 21, 2026. If no action is taken, and the forbearance agreements with the Subordinated Creditors are not extended, on August 22, 2026 the Company will also be in default of its 2025 Senior Term Loan due to the cross-default provision within the 2025 Senior Term Loan. Additionally, the Company did not meet its 2025 Senior Term Loan minimum Adjusted EBITDA covenant requirement for the twelve months ended June 30, 2026, which has not been waived, and as of the date of this filing the 2025 Senior Term Loan lenders have not exercised their default rights, which could include the immediate repayment of the amount outstanding under the 2025 Senior Term Loan.
Previous wording
As a result of the 2025 Senior Term Loan Amendment, 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 that was due on September 30, 2025 and December 31, 2025, (ii) $1.9 million with respect to each payment that will be due on March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026, and March 31, 2027, and (iii) $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 which was due on September 30, 2025 and December 31, 2025, and will be due on March 31, 2026 and (ii) $0.04 million with respect to each quarterly payment due thereafter.
Current wording
As a result of the 2025 Senior Term Loan Amendment, 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 that was due on September 30, 2025 and December 31, 2025, (ii) $1.9 million with respect to each payment that will be due on March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026, and March 31, 2027, and (iii) $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 is subject to a quarterly administration fee of $.04 million. The Company was also required to pay a quarterly fee commencing on September 30, 2025, in an amount equal to $0.1 million which was paid on September 30, 2025, December 31, 2025, and March 31, 2026.
Previous wording
The Company has elected to pay cash interest based on SOFR, which was 13.14% at March 31, 2026. For the three months ended March 31, 2026, the Company recognized $2.2 million of cash interest on the 2025 Senior Term Loan. 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.
Current wording
The Company has elected to pay cash interest based on SOFR (plus an applicable margin), which was 13.14% at June 30, 2026. For the three and six months ended June 30, 2026, the Company recognized $2.4 million of cash interest on the 2025 Senior Term Loan. Going forward, the Company expects to incur approximately $2.4 million of quarterly cash interest based on current SOFR rates and expected outstanding principal balances.
Previous 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.
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 346,058 Class A Common Shares, in the aggregate, in satisfaction of quarterly interest.
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 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 $1.7 million and $1.9 million for the three months ended March 31, 2026 and 2025, 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 $3.3 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
Cash provided by operating activities in the three months ended March 31, 2026 was $3.0 million, a decrease of $0.3 million compared to the three months ended March 31, 2025. The primary factors affecting our net operating cash flows during this period were our net loss of $43.6 million, which includes non-cash income and expense items totaling $42.1 million, including impairment of goodwill of $35.6 million, non-cash and paid-in-kind interest expense of $0.6 million, stock-based compensation expense of $3.0 million, a gain due to the change in fair value of financial instruments of $1.9 million, non-cash lease expense of $0.5 million, amortization and depreciation of $4.4 million, other non-cash items of $0.1 million, and the effect of changes in operating assets and liabilities that resulted in cash inflows of $4.5 million.
Current wording
Cash provided by operating activities in the six months ended June 30, 2026 was $0.9 million, an increase of $3.8 million compared to the six months ended June 30, 2025. The primary factors affecting our net operating cash flows during this period were our net loss of $71.4 million, which includes non-cash net charges totaling $67.4 million, including impairment of goodwill of $54.7 million, non-cash and paid-in-kind interest expense of $1.3 million, stock-based compensation expense of $3.9 million, a gain due to the change in fair value of financial instruments of $2.0 million, amortization and depreciation of $8.8 million, other non-cash charges of $0.7 million, and the effect of changes in operating assets and liabilities that resulted in cash inflows of $4.9 million.
Previous wording
Cash provided by operating activities in the three months ended March 31, 2025 was $3.3 million, an increase of $0.5 million compared to the three months ended March 31, 2024. The primary factors affecting our net operating cash flows during this period were our net loss of $4.3 million, which includes non-cash income and expense items totaling $0.5 million, including a gain on disposal of business of $15.7 million, non-cash and paid-in kind interest expense of $3.0 million, stock-based compensation expense of $3.4 million, loss on debt extinguishment of $1.8 million, a gain due to the change in fair value of financial instruments of $0.7 million, non-cash lease expense of $0.5 million, amortization and depreciation of $7.0 million, other non-cash items of $0.2 million, and the effect of changes in operating assets and liabilities that resulted in cash inflows of $8.1 million.
Current wording
Cash used in operating activities in the six months ended June 30, 2025 was $2.9 million, an increase of $1.9 million compared to the six months ended June 30, 2024. The primary factors affecting our net operating cash flows during this period was our net loss of $17.5 million, which includes non-cash expense items totaling $13.3 million, including a gain on disposal of business of $15.4 million, non-cash and paid-in kind interest expense of $5.7 million, loss on debt extinguishment of $1.8 million, stock-based compensation expense of $7.3 million, a change in fair value of financial instruments of $0.9 million, non-cash lease expense of $1.0 million, amortization and depreciation of $11.8 million, other non-cash items of $0.2 million and the effect of changes in operating assets and liabilities that resulted in cash inflows of 1.3 million.
Previous wording
Net cash used by investing activities in the three months ended March 31, 2026 was $1.7 million compared to net cash provided by investing activities of $38.3 million in the three months ended March 31, 2025. Net cash used in investing activities in the three months ended March 31, 2026 consisted of cash paid of $1.7 million for capital expenditures primarily related to software development costs. Net cash provided by investing activities in the three months ended March 31, 2025 primarily consisted of cash proceeds from the sale of a business of $40.3 million partially offset by cash paid of $2.0 million of capital expenditures primarily related to software development costs.
Current wording
Net cash used by investing activities in the six months ended June 30, 2026 was $3.3 million compared to net cash provided by investing activities of $36.8 million in the six months ended June 30, 2025. Net cash used in investing activities in the six months ended June 30, 2026 consisted of cash paid of $3.3 million for capital expenditures primarily related to software development costs. Net cash provided by investing activities in the six months ended June 30, 2025 primarily consisted of cash proceeds from the sale of a business of $40.3 million partially offset by cash paid of $3.5 million of capital expenditures primarily related to software development costs.
Previous wording
Net cash used in financing activities in the three months ended March 31, 2026 was $1.8 million, compared to $28.8 million for the three months ended March 31, 2025. Net cash used in financing activities during the three months ended March 31, 2026 primarily consisted of payments of long-term debt and deferred financing costs primarily related to 2025 Senior Term Loan payments of $1.9 million partially offset by the proceeds from the issuance of shares from the ESPP purchases of $0.1 million. Net cash used in financing activities during the three months ended March 31, 2025 primarily consisted of payments of long-term debt and deferred financing costs primarily related to Amendment 5 to the Credit Agreement of $27.2 million and payments of deferred financing costs of $1.8 million offset by the proceeds from the issuance of stock options and ESPP purchases of $0.1 million.
Current wording
Net cash used in financing activities in the six months ended June 30, 2026 was $3.7 million, compared to $28.8 million for the six months ended June 30, 2025. Net cash used in financing activities during the six months ended June 30, 2026 primarily consisted of payments of long-term debt and deferred financing costs primarily related to 2025 Senior Term Loan payments of $3.7 million partially offset by the proceeds from the issuance of shares from the ESPP purchases of $0.1 million. Net cash used in financing activities during the six months ended June 30, 2025 primarily consisted of payments of long-term debt and deferred financing costs primarily related to the Amendments to the Credit Agreement of $29.0 million partially offset by cash proceeds from $0.1 million from the proceeds of the exercise of stock options and ESPP purchases.
Previous wording
There were no significant and material changes in our critical accounting policies and use of estimates during the three months ended March 31, 2026, 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, 2025, filed with the SEC on March 24, 2026.
Current wording
There were no significant and material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2026, 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, 2025, filed with the SEC on March 24, 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Amortization of intangibles was $1.9 million for the three months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Interest expense was $3.9 million for the three months ended June 30, 2026 as compared to $4.3 million for the three months ended June 30, 2025. The decrease in interest expense of $0.4 million, or 10%, was primarily due to the overall reduction of our indebtedness, as a result of our debt repayments from the proceeds from our sale of TimeBase, as well as our debt refinance on August 12, 2025.
Current report — wording carried from elsewhere
Change in fair value of financial instruments was a $2.0 million gain for the six months ended June 30, 2026 as compared to a $0.9 million loss for the six months ended June 30, 2025. The change is the result of an increase in the fair value of the warrant liabilities of $0.6 million, offset by changes in the Dragonfly Seller Convertible Notes, Convertible Debentures, Prior GPO Convertible Note, the 2025 GPO Convertible Note, and the Third Era Convertible Note.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Subordinated Creditors are not extended, on May 22, 2026 the Company will also be in default of its 2025 Senior Term Loan due to the cross-default provision within the 2025 Senior Term Loan, at which point the 2025 Senior Term Loan lenders may exercise rights, which could include the immediate repayment of the amount outstanding under the 2025 Senior Term Loan.