ACCESS Newswire Inc.

Previous wording

The discussion of the financial condition and results of operations of the Company set forth below should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Form10-Q. This Form10-Q contains forward-looking statements that involve risks and uncertainties. The statements contained in this Form10-Q that are not purely historical are forward-looking statements within the meaning of Section 27a of the Securities Act and Section 21e of the Exchange Act. When used in this Form10-Q, or in the documents incorporated by reference into this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “intend” and “expect” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding the Company’s strategy, future sales, future expenses, future liquidity, and capital resources. All forward-looking statements in this Form10-Q are based upon information available to the Company on the date of this Form10-Q, and the Company assumes no obligation to update any such forward-looking statements. The Company’s actual results could differ materially from those discussed in this Form10-Q for many reasons. Factors that could cause or contribute to such differences (“Cautionary Statements”) include, but are not limited to, those discussed in Item 1. Business — “Risk Factors” and elsewhere in the Company’s Annual Report on Form10-K for the year ended December 31, 2024, which are incorporated by reference into this Form 10-Q. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on the Company’s behalf, are expressly qualified in their entirety by the Cautionary Statements.

Current wording

The discussion of the financial condition and results of operations of the Company set forth below should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Form 10-Q. This Form 10-Q contains forward-looking statements that involve risks and uncertainties. The statements contained in this Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27a of the Securities Act and Section 21e of the Exchange Act. When used in this Form 10-Q, or in the documents incorporated by reference into this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “intend” and “expect” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding the Company’s strategy, future sales, future expenses, future liquidity, and capital resources. All forward-looking statements in this Form 10-Q are based upon information available to the Company on the date of this Form 10-Q, and the Company assumes no obligation to update any such forward-looking statements. The Company’s actual results could differ materially from those discussed in this Form 10-Q for many reasons. Factors that could cause or contribute to such differences (“Cautionary Statements”) include, but are not limited to, those discussed in Item 1. Business — “Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which are incorporated by reference into this Form 10-Q. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on the Company’s behalf, are expressly qualified in their entirety by the Cautionary Statements.

Previous wording

We focus on selling to small and mid-market private and public companies, which we define as companies that have between 2 and 2,000 employees. In late 2024, we launched our new subscription platform to existing customers only, and at the beginning of 2025, officially released it as part of our rebrand to ACCESS Newswire. As of June 30, 2025, we have 971 subscriptions with an annual recurring revenue (“ARR”) of approximately $10.7 million.

Current wording

We focus on selling to small and mid-market businesses companies, which we define as companies that have between 2 and 2,000 employees. In late 2024, we launched our new subscription platform to existing customers only, and at the beginning of 2025, officially released it as part of our rebrand to ACCESS Newswire. As of September 30, 2025, we have 972 subscriptions with an annual recurring revenue (“ARR”) of approximately $11.3 million.

Previous wording

On February 28, 2025, the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s Compliance business (the “Purchased Assets”). The Purchased Assets consisted of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services). Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings. Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “Compliance revenue” was retained by the Company. The Buyer only assumed certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue. As a result, assets associated with our Compliance business, and revenue and expenses associated with the assets, have been categorized as discontinued operations in our financial statements for the three and six months ended June 30, 2025 and 2024, while the remaining assets associated with our Communications business are included in continuing operations.

Current wording

On February 28, 2025, the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s Compliance business (the “Purchased Assets”). The Purchased Assets consisted of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services). Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in the “communications revenue” stream in previous SEC filings. Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “Compliance revenue” was retained by the Company. The Buyer only assumed certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue. As a result, assets associated with our Compliance business, and revenue and expenses associated with the assets, have been categorized as discontinued operations in our financial statements for the three and nine months ended September 30, 2025 and 2024, while the remaining assets associated with our Communications business are included in continuing operations.

Previous wording

**ACCESS IR –**a subscription that includes investor relations website, quarterly earnings call, and press release distribution to cover the announcement of your earnings date and actual earnings releases.

Current wording

**ACCESS IR –**a subscription that includes investor relations website, quarterly earnings calls, and press release distribution to cover the announcement of your earnings date and actual earnings releases.

Previous wording

Our platform also includes a seamless e-commerce experience, allowing customers toself-select distribution options, register, and upload their press releases for editorial review within minutes****.These innovations have contributed to historical growth of press release distribution products, a trend we anticipate will continue in the coming years.

Current wording

Our platform also includes a seamless e-commerce experience, allowing customers toself-select distribution options, register, and upload their press releases for editorial review within minutes.These innovations have contributed to thehistorical growth of press release distribution products, a trend we anticipate will continue in the coming years.

Previous wording

Comparison of results of operations for the three and six-months ended June 30, 2025 and 2024 (in thousands):

Current wording

Comparison of results of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

As of June 30, 2025, our deferred revenue balance was $4,741,000, which we expect to recognize over the next twelve months, as compared to $4,743,000 at December 31, 2024. Deferred revenue primarily consists of advance billings for pre-paid packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products.

Current wording

As of September 30, 2025, our deferred revenue balance was $5,020,000, which we expect to recognize over the next twelve months, compared to $4,743,000 at December 31, 2024, an increase of 6%. Deferred revenue primarily consists of advance billings for pre-paid packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products.

Previous wording

Cost of revenues consist primarily of direct labor costs, newswire distribution costs, teleconferencing costs, and third-party licensing costs. Cost of revenues decreased by $37,000, or 3%, and $222,000, or 8%, during the three and six months ended June 30, 2025, respectively, as compared to the same periods of 2024. The decreases were primarily due to a reduction in headcount and optimization of our operations teams, partially offset by increased press release distribution costs. Overall gross margin decreased $362,000, or 8%, and $273,000, or 3%, during the three and six months ended June 30, 2025, compared to the same periods of 2024. As a result, gross margin percentage was 76% and 77% during the three and six months ended June 30, 2025, respectively, as compared to 77% and 76% during the same periods of 2024.

Current wording

Cost of revenues consist primarily of direct labor costs, newswire distribution costs, teleconferencing costs, and third-party licensing costs. Cost of revenues increased $44,000, or 3%, and decreased $178,000, or 4%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024. The increase for the three months ended September 30, 2025 was primarily due to increases in distribution costs as we continue to improve our distribution network, partially offset by a reduction in headcount and optimization of our operations teams. Overall gross margin increased $40,000, or 1%, and decreased $233,000, or 2%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024. As a result, gross margin percentage remained consistent at 75% and 76% during the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024.

Previous wording

General and administrative expenses consist primarily of salaries, bonuses, stock-based compensation, insurance, professional service fees, general corporate expenses (including bad debt expense) and facility and equipment expenses. General and administrative expenses decreased $90,000 or 5%, during the three months ended June 30, 2025 as compared to the same period of 2024. During the six months ended June 30, 2025, general and administrative expenses increased $224,000, or 6% as compared to the same period of 2024. The decrease for the quarter compared to the prior year is primarily due to a reduction in employee related expenses and stock compensation. The increase for the six months ended June 30, 2025 compared to the same period of the prior year, is primarily driven by a benefit to stock compensation expense of $340,000 recorded during the six months ended June 31, 2024, as a result of the resignation of an executive officer, partially offset by decreases in other employee related expenses.

Current wording

General and administrative expenses consist primarily of salaries, bonuses, stock-based compensation, insurance, fees for professional services, general corporate expenses (including bad debt expense) and facility and equipment expenses. General and administrative expenses decreased $409,000 or 22%, and $185,000, or 3%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024. The decrease for the three months ended September 30, 2025, compared to the prior year is primarily due to a reduction in employee related expenses, provision for credit losses, as well as indirect costs associated with the Compliance business. For the nine months ended September 30, 2025, this is partially offset by a benefit to stock compensation expense of $340,000 recorded during the nine months ended September 30, 2024, as a result of the resignation of an executive officer.

Previous wording

As a percentage of revenue, general and administrative expenses were 31% and 33% for the three and six months ended June 30, 2025, respectively, as compared to 32% and 31% for the same periods of 2024.

Current wording

As a percentage of revenue, general and administrative expenses were 26% and 31% for the three and nine months ended September 30, 2025, respectively, as compared to 34% and 31% for the same periods of 2024.

Previous wording

Sales and marketing expenses consist primarily of salaries, stock-based compensation, sales commissions, advertising expenses, tradeshow expenses and other marketing expenses. Sales and marketing expenses decreased $481,000, or 25%, and $958,000, or 24%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods of 2024. This decrease is primarily due to lower employee-related and advertising expenses.

Current wording

Sales and marketing expenses consist primarily of salaries, stock-based compensation, sales commissions, advertising expenses, tradeshow expenses and other marketing expenses. Sales and marketing expenses increased $34,000, or 2%, and decreased $924,000, or 16%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024. The decrease for the nine months ended September 30, 2025 is primarily due to lower employee-related expenses and headcount during the first six months of the year, however, for the three months ended September 30, 2025, is more comparable to the prior year.

Previous wording

As a percentage of revenue, sales and marketing expenses were 26% and 28% for the three and six months ended June 30, 2025, respectively, as compared to 32% and 35% for the same periods of 2024.

Current wording

As a percentage of revenue, sales and marketing expenses were 28% for the three and nine months ended September 30, 2025, as compared to 28% and 33% for the same periods of 2024.

Previous wording

Product development expenses consist primarily of salaries, stock-based compensation, bonuses, and licenses to develop new products and technology to complement and/or enhance our platform. Product development expenses decreased $64,000, or 9%, during the three months ended June 30, 2025, as compared to the same period of 2024 and remained consistent for the six months ended June 30, 2025, as compared to the same period of the prior year. The decrease for the three months ended June 30, 2025 was due to lower headcount and consulting costs. This decrease was offset by a decrease in capitalized software for the six months ended June 30, 2025, as the Company only capitalized $23,000 of software, compared to $400,000 during the same period of the prior year. The Company did not capitalize any costs for software development during the three months ended June 30, 2025, compared to $155,000 during the same period of the prior year

Current wording

Product development expenses consist primarily of salaries, stock-based compensation, bonuses, and licenses to develop new products and technology to complement and/or enhance our platform. Product development expenses increased $13,000, or 2%, and 28,000, or 1%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024. The increase is primarily due to a reduction in capitalized software development, partially offset by decreases in headcount and consultants. No costs were capitalized during the three months ended September 30, 2025, while $23,000 was capitalized during the nine months ended September 30, 2025. During the three and nine months ended September 30, 2024, we capitalized $137,000 and $537,000, respectively.

Previous wording

As a percentage of revenue, product development expenses were 12% and 13% for the three and six months ended June 30, 2025 compared to 12% for the same periods of 2024.

Current wording

As a percentage of revenue, product development expenses were 12% for the three and nine months ended September 30, 2025 and 2024.

Previous wording

We recognized interest expense of $54,000 and $268,000 for the three and six-month period ended June 30, 2025, respectively, as compared to $315,000 and $623,000 during the same periods of 2024, which is all related to our long-term credit agreement. The decrease in interest expense for the three and six months ended June 30, 2025 is due to the reduction in debt as a result of the pay down from the sale of the compliance business. These amounts are offset by interest income on deposit and money market accounts of $65,000 and $83,000 for the three and six months ended June 30, 2025 and 2024, respectively, compared to $21,000 and $53,000 for the same periods of the prior year.

Current wording

We recognized interest expense of $57,000 and $325,000 for the three and nine months ended September 30, 2025, respectively, compared to $280,000 and $1,183,000 during the same periods of 2024, which is all related to our long-term credit agreement. The decrease in interest expense for the three and nine months ended September 30, 2025, is due to the reduction in debt as a result of the pay down from the sale of the compliance business. These amounts are offset by interest income on deposit and money market accounts of $264,000 and $347,000 for the three and nine months ended September 30, 2025, respectively, compared to $15,000 and $83,000 for the same periods of the prior year.

Previous wording

We recognized an income tax benefit of $9,000 and $194,000 for the three and six-month periods ended June 30, 2025, respectively, compared to $137,000 and $295,000 for the three and six-month periods ended June 30, 2024. For the three and six-month periods ended June 30, 2025 and 2024, the variance between our effective tax rate and the U.S. statutory rate of 21% is primarily attributable to state income tax, a benefit related to the Foreign Derived Intangible Income ("FDII") deduction and a lower statutory tax rate applied to the Company's Canadian income. This is partially offset by additional expense associated with vesting of stock-based compensation awards

Current wording

We recognized an income tax expense of $67,000 and a benefit of $127,000 for the three and nine-month periods ended September 30, 2025, respectively, compared to income tax benefit of $347,000 and $642,000 for the three and nine-month periods ended September 30, 2024. For the three and nine-month periods ended September 30, 2025 and 2024, the variance between our effective tax rate and the U.S. statutory rate of 21% is primarily attributable to state income tax, a benefit related to the Foreign Derived Intangible Income ("FDII") deduction and a lower statutory tax rate applied to the Company's Canadian income. This is partially offset by additional expense associated with vesting of stock-based compensation awards

Previous wording

As of June 30, 2025, we had $4,111,000 in cash and cash equivalents and $3,731,000 in net accounts receivable. Current liabilities from continuing operations as of June 30, 2025, totaled $12,167,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

Current wording

As of September 30, 2025, we had $3,261,000 in cash and cash equivalents and $4,137,000 in net accounts receivable. Current liabilities from continuing operations as of September 30, 2025, totaled $10,847,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

Previous wording

As of June 30, 2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $2,609,000. While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement and ability to continue to generate cash will benefit us in the future.

Current wording

As of September 30, 2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $1,846,000. While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement and ability to continue to generate cash will benefit us in the future.

Previous wording

As of June 30, 2025, the aggregate principal amount of our Revolving LOC was $1,500,000 and is set to expire June 30, 2026. We currently have no plans to utilize the Revolving LOC but may do so in the future. If the Company does utilize any funds under the Revolving LOC, the funds will bear interest at a per annum rate equal to the then current SOFR plus 2.05%. As of June 30, 2025, there was no outstanding balance under the Revolving LOC and the interest rate was 6.37%.

Current wording

As of September 30, 2025, the aggregate principal amount of our Revolving LOC was $1,500,000 and is set to expire June 30, 2026. We currently have no plans to utilize the Revolving LOC but may do so in the future. If the Company does utilize any funds under the Revolving LOC, the funds will bear interest at a per annum rate equal to the then current SOFRplus 2.05%. As of September 30, 2025, there was no outstanding balance under the Revolving LOCand the interest rate was 6.36%.

Previous wording

A reconciliation of net income to adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 is presented in the following table (in thousands):

Current wording

A reconciliation of net income to adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 is presented in the following table (in thousands):

Previous wording

For the three and six months ended June 30, 2025 and 2024, free cash flow and adjusted free cash flow were as follows (in thousands):

Current wording

For the three and nine months ended September 30, 2025 and 2024, free cash flow and adjusted free cash flow were as follows (in thousands):

Previous wording

Market factors like the current military conflicts in Ukraine, Israel and the Middle East, tariff wars, instability in global energy markets, global inflation and the increase of interest rates have contributed to significant global economic and political uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets. Overall, despite many uncertainties in the market regarding the economic and political outlook, we believe the demand for our platforms and services is stable in a majority of the markets we serve.

Current wording

Market factors like the current military conflicts in Ukraine, Israel and the Middle East, tariff wars, instability in global energy markets, global inflation and fluctuations in interest rates have contributed to significant global economic and political uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets. Overall, despite many uncertainties in the market regarding the economic and political outlook, we believe the demand for our platforms and services is stable in a majority of the markets we serve.

Previous wording

We also believe the continued transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth. We will also continue to focus on the following key strategic initiatives during the remainder of 2025:

Current wording

We also believe the continued transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth. We will also continue to focus on the following key strategic initiatives during the remainder of 2025 and into 2026: