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Table of Contents

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

img219658323_0.gif

FISCALNOTE HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

001-396972

88-3772307

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification No.)

1201 Pennsylvania Avenue NW, 6th Floor,

Washington, D.C. 20004

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (202) 793-5300

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

 N/A

N/A

N/A

 

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

 

☒

 

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 5, 2026, the registrant had 29,776,858 shares of Class A common stock, $0.0001 par value per share, outstanding, and 690,909 shares of Class B common Stock, $0.0001 par value per share, outstanding.

 

 

 

 


Table of Contents

 

 

FISCALNOTE HOLDINGS, INC.

FORM 10-Q TABLE OF CONTENTS

 

 

 

Page No.

Cautionary Note Regarding Forward-Looking Statements

1

 

 

PART I. Financial Information (Unaudited, except as noted below):

 

Item 1. Financial Statements

 

Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (Audited)

3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

4

Condensed Consolidated Statements of Changes in Stockholders' Equity

5

Condensed Consolidated Statements of Cash Flows

6

Notes to Condensed Consolidated Financial Statements

7

 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3. Quantitative and Qualitative Disclosures About Market Risks

36

Item 4. Controls and Procedures

36

 

 

Part II. OTHER INFORMATION

37

 

 

Item 1. Legal Proceedings

37

Item 1A. Risk Factors

37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3. Defaults upon Senior Securities

37

Item 4. Mine Safety Disclosures

37

Item 5. Other Information

37

Item 6. Exhibits

37

 

 

SIGNATURES

39

 

 

 

 


Table of Contents

 

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors,” and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity, our prospects, growth, strategies and the markets in which FiscalNote operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting FiscalNote. Factors that may impact such forward-looking statements include:

 

•
risk of our creditors enforcing their respective rights to call an event of default based on our Class A Common Stock no longer being listed on NYSE;
•
FiscalNote’s ability to successfully execute on its strategy to achieve and sustain organic growth through a focus on its core Policy business, including risks to FiscalNote’s ability to develop, enhance, and integrate its existing platforms, products, and services, bring highly useful, reliable, secure and innovative products, product features and services to market, attract new customers, retain existing customers, expand its products and service offerings with existing customers, expand into geographic markets or identify other opportunities for growth;
•
FiscalNote's ability to successfully launch new product and service offerings (e.g. relating to political and policy prediction markets or agentic APIs) or to achieve the expected benefits of such offerings, including new sources of revenue;
•
FiscalNote's future capital requirements, as well as its ability to service its repayment obligations and maintain compliance with covenants and restrictions under its existing debt agreements;
•
demand for FiscalNote's services and the drivers of that demand;
•
the impact of cost reduction initiatives undertaken by FiscalNote;
•
risks associated with past and future strategic transactions, including restructuring, divesting or selling our businesses, products or technologies;
•
risks associated with international operations, including compliance complexity and costs, increased exposure to fluctuations in currency exchange rates, political, social and economic instability, and supply chain disruptions;
•
FiscalNote's ability to introduce new features, integrations, capabilities and enhancements to its products and services, as well as obtain and maintain accurate, comprehensive and reliable data to support its products, and services;
•
FiscalNote's reliance on third-party systems and data, its ability to integrate such systems and data with its solutions and its potential inability to continue to support integration;
•
FiscalNote’s ability to maintain and improve its methods and technologies, and anticipate new methods or technologies, for data collection, organization, and analysis to support its products and services;
•
potential technical disruptions, cyberattacks, security, privacy or data breaches or other technical or security incidents that affect FiscalNote's networks or systems or those of its service providers;
•
competition and competitive pressures in the markets in which FiscalNote operates, including larger well-funded companies shifting their existing business models to become more competitive with FiscalNote;
•
the risk that general purpose generative AI platforms and agentic AI tools will directly compete with and reduce demand for custom-built SaaS tools and subscription products;
•
the risk that a future U.S. government shutdown could negatively affect FiscalNote's ability to enter into or renew public sector subscription contracts and generate advertising and events revenue as anticipated;
•
concentration of revenues from U.S. government agencies, changes in the U.S. government spending priorities, dependence on winning or renewing U.S. government contracts, delay, disruption or unavailability of funding on U.S. government contracts, and the U.S. government's right to modify, delay, curtail or terminate contracts;
•
FiscalNote's ability to comply with laws and regulations in connection with selling products and services to U.S. and foreign governments and other highly regulated industries;
•
FiscalNote's ability to retain or recruit key personnel;
•
FiscalNote's ability to adapt its products and services for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to artificial intelligence, machine learning, data privacy and government contracts;
•
adverse general economic and market conditions reducing spending on our products and services;
•
the outcome of any known and unknown litigation and regulatory proceedings;
•
FiscalNote's ability to maintain public company-quality internal control over financial reporting;
•
FiscalNote's ability to adequately protect and maintain its brands and other intellectual property rights; and

1


Table of Contents

 

•
the possibility any exploration of strategic alternatives does not result in any transaction or other outcome or that any outcome is disruptive to operations and impacts financial performance.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of this Quarterly Report on Form 10-Q and the other documents filed by us from time to time with the U.S. Securities and Exchange Commission ("SEC"). The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us and our business. There can be no assurance that future developments affecting us will be those that we have anticipated. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

2


Table of Contents

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FISCALNOTE HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except shares, and par value)

 

 

 

(Unaudited)

 

 

 

 

 

 

June 30, 2026

 

 

December 31, 2025

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,953

 

 

$

24,319

 

Restricted cash

 

 

635

 

 

 

633

 

Short-term investments

 

 

2,001

 

 

 

1,995

 

Accounts receivable, net

 

 

7,267

 

 

 

11,953

 

Costs capitalized to obtain revenue contracts, net

 

 

1,978

 

 

 

2,304

 

Prepaid expenses

 

 

1,900

 

 

 

2,456

 

Other current assets

 

 

2,155

 

 

 

1,890

 

Total current assets

 

 

33,889

 

 

 

45,550

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

3,783

 

 

 

4,177

 

Capitalized software costs, net

 

 

12,872

 

 

 

12,585

 

Noncurrent costs capitalized to obtain revenue contracts, net

 

 

1,956

 

 

 

2,479

 

Operating lease assets

 

 

12,641

 

 

 

13,646

 

Goodwill

 

 

68,251

 

 

 

122,984

 

Customer relationships, net

 

 

28,282

 

 

 

30,671

 

Database, net

 

 

13,042

 

 

 

14,077

 

Other intangible assets, net

 

 

7,530

 

 

 

8,208

 

Other non-current assets

 

 

-

 

 

 

761

 

Total assets

 

$

182,246

 

 

$

255,138

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current maturities of long-term debt

 

$

106,815

 

 

$

2,813

 

Accounts payable and accrued expenses

 

 

6,832

 

 

 

7,257

 

Deferred revenue, current portion

 

 

30,616

 

 

 

29,778

 

Customer deposits

 

 

539

 

 

 

1,067

 

Operating lease liabilities, current portion

 

 

3,369

 

 

 

3,320

 

Other current liabilities

 

 

130

 

 

 

191

 

Total current liabilities

 

 

148,301

 

 

 

44,426

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

 

12,432

 

 

 

125,635

 

Deferred tax liabilities

 

 

139

 

 

 

476

 

Deferred revenue, net of current portion

 

 

210

 

 

 

266

 

Operating lease liabilities, net of current portion

 

 

17,579

 

 

 

19,312

 

Public and private warrant liabilities

 

 

599

 

 

 

477

 

Other non-current liabilities

 

 

2,712

 

 

 

2,595

 

Total liabilities

 

 

181,972

 

 

 

193,187

 

Commitment and contingencies (Note 16)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Class A Common stock ($0.0001 par value, 1,700,000,000 authorized, 27,451,503 and 15,557,379 issued and outstanding at June 30, 2026 and December 31, 2025, respectively)

 

 

3

 

 

 

2

 

Class B Common stock ($0.0001 par value, 9,000,000 authorized, 690,909 issued and outstanding at June 30, 2026 and December 31, 2025, respectively)

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

942,787

 

 

 

933,905

 

Accumulated other comprehensive income

 

 

1,077

 

 

 

190

 

Accumulated deficit

 

 

(943,593

)

 

 

(872,146

)

Total stockholders' equity

 

 

274

 

 

 

61,951

 

Total liabilities and stockholders' equity

 

$

182,246

 

 

$

255,138

 

See accompanying notes to unaudited condensed consolidated financial statements.

3


Table of Contents

 

FISCALNOTE HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except shares and per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription

 

$

18,800

 

 

$

21,380

 

 

$

37,853

 

 

$

46,612

 

Non-subscription

 

 

781

 

 

 

1,884

 

 

 

1,753

 

 

 

4,163

 

Total revenues

 

 

19,581

 

 

 

23,264

 

 

 

39,606

 

 

 

50,775

 

Operating expenses: (1)

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, including amortization

 

 

3,976

 

 

 

4,948

 

 

 

8,129

 

 

 

11,932

 

Research and development

 

 

1,580

 

 

 

2,267

 

 

 

3,622

 

 

 

5,370

 

Sales and marketing

 

 

4,504

 

 

 

6,692

 

 

 

10,223

 

 

 

14,451

 

Editorial

 

 

3,391

 

 

 

3,472

 

 

 

7,011

 

 

 

8,270

 

General and administrative

 

 

9,231

 

 

 

11,378

 

 

 

18,735

 

 

 

27,676

 

Amortization of intangible assets

 

 

1,889

 

 

 

1,934

 

 

 

3,782

 

 

 

4,265

 

Impairment of goodwill

 

 

19,100

 

 

 

-

 

 

 

54,700

 

 

 

-

 

Total operating expenses

 

 

43,671

 

 

 

30,691

 

 

 

106,202

 

 

 

71,964

 

Operating loss

 

 

(24,090

)

 

 

(7,427

)

 

 

(66,596

)

 

 

(21,189

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on sale of business (Note 3)

 

 

-

 

 

 

319

 

 

 

-

 

 

 

(15,424

)

Interest expense, net

 

 

3,904

 

 

 

4,338

 

 

 

7,260

 

 

 

9,465

 

Change in fair value of financial instruments

 

 

(93

)

 

 

1,577

 

 

 

(1,955

)

 

 

906

 

Loss on debt extinguishment, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,784

 

Other (income) expense, net

 

 

21

 

 

 

405

 

 

 

(165

)

 

 

435

 

Net loss before income taxes

 

 

(27,922

)

 

 

(14,066

)

 

 

(71,736

)

 

 

(18,355

)

Benefit from income taxes

 

 

(88

)

 

 

(795

)

 

 

(289

)

 

 

(834

)

Net loss

 

 

(27,834

)

 

 

(13,271

)

 

 

(71,447

)

 

 

(17,521

)

Other comprehensive income

 

 

966

 

 

 

50

 

 

 

887

 

 

 

351

 

Total comprehensive loss

 

$

(26,868

)

 

$

(13,221

)

 

$

(70,560

)

 

$

(17,170

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss used to compute basic and diluted loss per share

 

$

(27,834

)

 

$

(13,271

)

 

$

(71,447

)

 

$

(17,521

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share attributable to common shareholders (Note 12):

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(1.06

)

 

$

(1.00

)

 

$

(3.22

)

 

$

(1.35

)

Weighted average shares used in computing loss per share attributable to common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

26,145,210

 

 

 

13,333,374

 

 

 

22,217,096

 

 

 

12,972,412

 

 

(1) Amounts include stock-based compensation expense, as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Cost of revenues, including amortization

 

$

28

 

 

$

45

 

 

$

67

 

 

$

60

 

Research and development

 

 

(113

)

 

 

258

 

 

 

63

 

 

 

584

 

Sales and marketing

 

 

202

 

 

 

366

 

 

 

398

 

 

 

451

 

Editorial

 

 

81

 

 

 

150

 

 

 

213

 

 

 

216

 

General and administrative

 

 

630

 

 

 

3,145

 

 

 

3,128

 

 

 

6,028

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

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Table of Contents

 

FISCALNOTE HOLDINGS, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(in thousands, except share data)

(Unaudited)

 

 

 

 

Temporary Equity

 

 

Equity (Deficit)

 

 

 

Temporary Equity

 

 

Common Stock

 

Additional paid-in capital

 

Accumulated other comprehensive income

 

Accumulated deficit

 

Total stockholders' equity (deficit)

 

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Balance at December 31, 2024

 

 

-

 

 

-

 

 

 

12,590,442

 

 

1

 

 

899,943

 

 

4,786

 

 

(806,899

)

 

97,831

 

Issuance of Class A common stock upon vesting of restricted share units

 

 

-

 

 

-

 

 

 

74,041

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Issuance of Class A common stock upon exercise of employee stock purchase plan and exercise of stock options

 

 

-

 

 

-

 

 

 

13,703

 

 

-

 

 

148

 

 

-

 

 

-

 

 

148

 

Prior GPO interest conversion

 

 

-

 

 

-

 

 

 

62,143

 

 

-

 

 

73

 

 

-

 

 

-

 

 

73

 

Dragonfly note conversion

 

 

-

 

 

-

 

 

 

5,613

 

 

-

 

 

946

 

 

-

 

 

-

 

 

946

 

Era Note (Note 7)

 

 

216,338

 

 

2,719

 

 

 

(100,334

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Brokerage Shares issued

 

 

-

 

 

-

 

 

 

25,000

 

 

-

 

 

315

 

 

-

 

 

-

 

 

315

 

Stock-based compensation expense

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

3,375

 

 

-

 

 

-

 

 

3,375

 

Withholding taxes on net share settlement of stock-based compensation and option exercises

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

(42

)

 

-

 

 

-

 

 

(42

)

Net loss

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,250

)

 

(4,250

)

Foreign currency translation gain

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

301

 

 

-

 

 

301

 

Balance at March 31, 2025

 

 

216,338

 

$

2,719

 

 

 

12,670,608

 

$

1

 

$

904,758

 

$

5,087

 

$

(811,149

)

$

98,697

 

Issuance of Class A common stock upon vesting of restricted share units

 

 

 

 

 

 

 

200,701

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Prior GPO convertible note interest conversion

 

 

 

 

 

 

 

140,975

 

 

 

 

956

 

 

 

 

 

 

956

 

Convertible Note conversion

 

 

 

 

 

 

 

599,429

 

 

1

 

 

4,781

 

 

 

 

-

 

 

4,782

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

-

 

 

3,965

 

 

-

 

 

-

 

 

3,965

 

Withholding taxes on net share settlement of stock-based compensation and option exercises

 

 

 

 

 

 

 

-

 

 

-

 

 

(84

)

 

-

 

 

-

 

 

(84

)

Net loss

 

 

 

 

 

 

 

-

 

 

-

 

 

 

 

-

 

 

(13,271

)

 

(13,271

)

Foreign currency translation gain

 

 

 

 

 

 

 

-

 

 

-

 

 

 

 

50

 

 

-

 

 

50

 

Balance at June 30, 2025

 

 

216,338

 

$

2,719

 

 

 

13,611,713

 

$

2

 

$

914,376

 

$

5,137

 

$

(824,420

)

$

95,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2025

 

 

-

 

 

-

 

 

 

16,248,288

 

 

2

 

 

933,905

 

 

190

 

 

(872,146

)

 

61,951

 

Issuance of Class A common stock upon vesting of restricted stock units

 

 

-

 

 

-

 

 

 

159,545

 

 

-

 

 

26

 

 

-

 

 

-

 

 

26

 

Issuance of Class A common stock upon employee stock purchase plan

 

 

-

 

 

-

 

 

 

36,285

 

 

-

 

 

45

 

 

-

 

 

-

 

 

45

 

Convertible Note conversion

 

 

-

 

 

-

 

 

 

2,736,978

 

 

-

 

 

3,083

 

 

-

 

 

-

 

 

3,083

 

GPO convertible note interest conversion

 

 

-

 

 

-

 

 

 

221,050

 

 

-

 

 

392

 

 

-

 

 

-

 

 

392

 

Stock-based compensation expense

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

3,041

 

 

-

 

 

-

 

 

3,041

 

Withholding taxes on net share settlement of stock-based compensation and option exercises

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

(51

)

 

-

 

 

-

 

 

(51

)

Net loss

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(43,613

)

 

(43,613

)

Foreign currency translation loss

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

(79

)

 

-

 

 

(79

)

Balance at March 31, 2026

 

 

-

 

$

-

 

 

 

19,402,146

 

$

2

 

$

940,441

 

$

111

 

$

(915,759

)

$

24,795

 

Issuance of Class A common stock upon vesting of restricted stock units

 

 

-

 

 

-

 

 

 

229,502

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Convertible Note conversion

 

 

-

 

 

-

 

 

 

4,196,829

 

 

-

 

 

831

 

 

-

 

 

-

 

 

831

 

GPO convertible note conversion

 

 

-

 

 

-

 

 

 

4,313,935

 

 

1

 

 

691

 

 

-

 

 

-

 

 

692

 

Stock-based compensation expense

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

828

 

 

-

 

 

-

 

 

828

 

Withholding taxes on net share settlement of stock-based compensation and option exercises

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

(4

)

 

-

 

 

-

 

 

(4

)

Change in fair value in debt instruments

 

 

 

 

 

 

 

-

 

 

-

 

 

-

 

 

997

 

 

-

 

 

997

 

Net loss

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(27,834

)

 

(27,834

)

Foreign currency translation gain

 

 

-

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

(31

)

 

-

 

 

(31

)

Balance at June 30, 2026

 

 

-

 

$

-

 

 

 

28,142,412

 

$

3

 

$

942,787

 

$

1,077

 

$

(943,593

)

$

274

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5


Table of Contents

 

FISCALNOTE HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

Operating Activities:

 

 

 

 

 

 

Net loss

 

$

(71,447

)

 

$

(17,521

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

471

 

 

 

502

 

Amortization of intangible assets and capitalized software development costs

 

 

7,032

 

 

 

9,576

 

Amortization of deferred costs to obtain revenue contracts

 

 

1,317

 

 

 

1,688

 

Impairment of goodwill

 

 

54,700

 

 

 

-

 

Gain on sale of business (Note 3)

 

 

-

 

 

 

(15,424

)

Non-cash operating lease expense

 

 

1,001

 

 

 

1,015

 

Stock-based compensation

 

 

3,869

 

 

 

7,339

 

Bad debt expense

 

 

40

 

 

 

190

 

Unrealized (gain) loss on securities

 

 

2

 

 

 

71

 

Change in fair value of financial instruments

 

 

(1,955

)

 

 

906

 

Deferred income tax benefit

 

 

(337

)

 

 

(61

)

Paid-in-kind interest, net

 

 

563

 

 

 

3,739

 

Non-cash interest expense

 

 

693

 

 

 

2,011

 

Loss on debt extinguishment, net

 

 

-

 

 

 

1,784

 

Other non-cash

 

 

14

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

4,659

 

 

 

1,622

 

Prepaid expenses and other current assets

 

 

1,017

 

 

 

(1,111

)

Costs capitalized to obtain revenue contracts, net

 

 

(464

)

 

 

(1,177

)

Other non-current assets

 

 

8

 

 

 

42

 

Accounts payable and accrued expenses

 

 

1,133

 

 

 

(6

)

Deferred revenue

 

 

730

 

 

 

5,298

 

Customer deposits

 

 

(529

)

 

 

(572

)

Other current liabilities

 

 

61

 

 

 

(1,072

)

Lease liabilities

 

 

(1,683

)

 

 

(1,541

)

Other non-current liabilities

 

 

-

 

 

 

(193

)

Net cash provided by (or used in) operating activities

 

 

895

 

 

 

(2,895

)

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(3,323

)

 

 

(3,474

)

Cash proceeds from the sale of business, net (Note 3)

 

 

-

 

 

 

40,269

 

Net cash (used in) provided by investing activities

 

 

(3,323

)

 

 

36,795

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Principal payments of long-term debt

 

 

(3,750

)

 

 

(27,172

)

Payment of deferred financing costs

 

 

-

 

 

 

(1,793

)

Proceeds from exercise of stock options and employee stock purchase plan purchases

 

 

45

 

 

 

148

 

Net cash used in financing activities

 

 

(3,705

)

 

 

(28,817

)

 

 

 

 

 

 

 

Effects of exchange rates on cash

 

 

(231

)

 

 

116

 

 

 

 

 

 

 

 

Net change in cash, cash equivalents, and restricted cash

 

 

(6,364

)

 

 

5,199

 

Cash, cash equivalents, and restricted cash, beginning of period

 

 

24,952

 

 

 

29,454

 

Cash, cash equivalents, and restricted cash, end of period

 

$

18,588

 

 

$

34,653

 

 

 

 

 

 

 

 

Supplemental Noncash Investing and Financing Activities:

 

 

 

 

 

 

Issuance of common stock for conversion of debt and interest

 

$

6,604

 

 

$

1,902

 

Amounts held in holdback/escrow related to the sale of businesses

 

$

738

 

 

$

400

 

Property and equipment purchases and capitalized software included in accounts payable

 

$

58

 

 

$

67

 

 

 

 

 

 

 

 

Supplemental Cash Flow Activities:

 

 

 

 

 

 

Cash paid for interest

 

$

4,596

 

 

$

4,911

 

Cash paid for taxes

 

$

316

 

 

$

834

 

See accompanying notes to unaudited condensed consolidated financial statements.

6


 

FISCALNOTE HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except shares, par value, per share amounts, or as otherwise noted)

(Unaudited)

Note 1. Summary of Business and Significant Accounting Policies

Description of Business

FiscalNote delivers deep expertise in legislative tracking, regulatory analysis, and stakeholder engagement through PolicyNote, our flagship platform. Built to ensure a complete, real-time view of the policy landscape, PolicyNote delivers extensive policy data integrated with AI-powered monitoring and expert analysis, fueled by the trusted reporting of CQ and Roll Call, and coupled with the grassroots mobilization power of VoterVoice. Our PolicyNote suite rapidly provides users with the clarity on the policy landscape needed to make an impact. In our core products, we ingest unstructured data on legislative and regulatory developments, and overlay that data with our sophisticated in-house AI and data science expertise to deliver structured, relevant and actionable information that facilitates and informs our customers’ key operational and strategic decisions. In addition, as the way organizations consume policy data and analysis changes, we are leveraging our policy domain expertise to expand into political prediction markets and enhancing our API offerings to enable organizations to incorporate our policy intelligence directly into their internally-developed systems.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit), and cash flows. All adjustments are of a normal recurring nature. The results for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for any subsequent quarters or for the fiscal year ending December 31, 2026. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Reverse Stock Split

On August 22, 2025, the Board approved a 1-for-12 reverse stock split (the “Reverse Stock Split”) of the Company’s Common Stock. On August 28, 2025, the Company filed a certificate of amendment to its Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, and the Company’s Class A Common Stock began trading on a split-adjusted basis at market open on September 2, 2025 under the existing symbol “NOTE”.

As a result of the Reverse Stock Split, every 12 shares of the Company’s Common Stock issued and outstanding as of the effective time of the Reverse Stock Split were automatically converted into one share of Common Stock. No fractional shares were issued in connection with the Reverse Stock Split. Instead, each stockholder received a cash payment in lieu thereof at a price equal to the fraction of one share to which the stockholder would otherwise be entitled multiplied by the closing price per share of Class A Common Stock (as adjusted for the Reverse Stock Split) on the New York Stock Exchange (“NYSE”) on August 29, 2025, the last trading day immediately preceding the effective time of the Reverse Stock Split.

Further, proportionate adjustments were made to the number of shares of Common Stock underlying the Company’s outstanding equity awards and the number of shares issuable under the Company’s equity incentive plans and existing agreements, as well as the exercise price and/or any stock price goals, as applicable. The Reverse Stock Split did not affect the number of authorized shares of Common Stock or the par value of the Common Stock. The Company’s publicly traded warrants are now traded on the OTCID Basic Market. However, pursuant to the terms of the applicable warrant agreement, the number of shares of Class A Common Stock issuable on exercise of each warrant was proportionately decreased. Specifically, following effectiveness of the Reverse Stock Split, every warrant to purchase 1.571428 shares of Class A Common Stock (the exchange ratio in place immediately prior to the Reverse Stock Split) now represents the right to purchase 0.130952 shares of Class A Common Stock. Accordingly, the effective per share exercise price is $87.82.

All share and per share amounts in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.

Liquidity and Going Concern

In accordance with Accounting Standards Codification Topic 205-40, Going Concern, the Company evaluates whether there are certain conditions and events, when considered in the aggregate, which raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s cash, cash equivalents, restricted cash, and short-term investments were $20,589 at June 30, 2026, compared with $26,947 at December 31, 2025. Further, the Company had a negative working capital balance of $135,001 (excluding cash and short-term investments) at June 30, 2026 and had an accumulated deficit of $943,593 and $872,146 as of June 30, 2026 and December 31, 2025, respectively, and incurred net losses of $71,447 and of $32,945 (excluding the effect of the gain on sale of businesses) for the six months ended June 30, 2026 and 2025, respectively. Historically, the Company’s cash flows from operations have not been sufficient to fund its

7

 


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current operating model and the Company partially funded its operations through raising equity and debt and selling assets (see Note 3, Dispositions).

On January 31, 2026 the Company did not meet its 2025 Senior Term Loan minimum annualized recurring revenue financial covenant requirement. On March 23, 2026, the Company entered into Amendment No. 1 of the 2025 Senior Term Loan, which among other things, (a) waived the event of default arising from the Company’s failure to satisfy the annualized recurring revenue covenant at January 31, 2026, (b) revised the minimum thresholds for annualized recurring revenue and consolidated adjusted EBITDA and reduced minimum liquidity requirements through March 31, 2027, (c) revised the Company’s interest and principal repayment requirements, and (d) require the Company to prepay $20,000 of principal no later than March 31, 2027. See Note 7, Debt for additional details). If the Company does not amend its financial covenants under the 2025 Senior Term Loan before April 1, 2027, it is probable the Company will not be able to meet its then required financial covenants.

On April 13, 2026, the Company’s Class A common stock and warrants to purchase 0.131 shares of Class A Common Stock, with an exercise price of $11.50 per share of Class A Common Stock were 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.

The Company did not meet its 2025 Senior Term Loan minimum Adjusted EBITDA covenant requirement for the twelve month period ending 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.

These conditions, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern and meet the Company’s obligations as they become due within one year after the date the financial statements are issued.

In response to the foregoing conditions, management has identified the following plans intended to alleviate the substantial doubt about the Company’s ability to continue as a going concern: (a) renegotiating or amending existing debt obligations, including the Subordinated Notes, to extend maturities, early convert, or otherwise restructure repayment terms; (b) pursuing the sale of assets or business units to generate liquidity and reduce outstanding indebtedness; and (c) conducting one or more equity offerings to raise additional capital to fund operations and satisfy obligations. Management’s plans must also generate sufficient cash to, among other things, fund the Company’s operations, while also maintaining compliance with its liquidity covenant, and fulfill the $20,000 principal prepayment required pursuant to Amendment No. 1 of the 2025 Senior Term Loan which is due no later than March 31, 2027; which at this time the Company has no ability to satisfy. If successful, management believes this plan will position the Company to have adequate cash and cash flows to support its future operations. However, at this time management concluded that its plans do not alleviate substantial doubt, as there can be no assurance that any of these plans will be successfully implemented on acceptable terms, or at all.

If the Company raises funds in the future by issuing equity securities, dilution to stockholders will occur and may be substantial. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If the Company raises funds in the future by issuing additional debt securities, these debt securities could have rights, preferences, and privileges senior to those of common stockholders. The terms of any additional debt securities, borrowings, and/or debt amendments could impose significant restrictions on the Company’s operations. The capital markets have experienced in the past, and may experience in the future, periods of upheaval that could impact the availability and cost of equity and debt financing. There can be no assurance that any necessary additional financing in the future will be available on terms acceptable to the Company, or at all.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Segments

The Company is a leading provider of artificial intelligence ("AI") driven global policy and regulatory intelligence solutions and operates out of a single operating segment. The Company derives revenues from customers by delivering critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment.

The Company's chief operating decision maker ("CODM") is the chief executive officer. The chief operating decision maker assesses performance for the single operating segment and decides how to allocate resources based on net (loss) income that also is reported on the income statement as consolidated net (loss) income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company does not have intra-equity sales or transfers. The Company operates as a single operating segment as the chief operating decision maker manages the business activities on a consolidated basis.

The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company's ongoing operations and as part of the Company's internal planning and forecasting processes. Information on net income (loss) and operating income (loss) is disclosed in the condensed consolidated statements of operations and comprehensive income (loss). Segment expenses and other

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segment items are provided to the CODM on the same basis as disclosed in the condensed consolidated statements of operations and comprehensive income (loss).

The CODM does not evaluate performance or allocate resources based on assets of the single segment, and therefore such information is not presented in the notes to the financial statements.

Earnings per Share

Basic earnings per share ("EPS") is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements). For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.

Fair Value of Financial Instruments

The Company has elected the fair value option for the 2025 GPO Convertible Note, GPO Convertible Note, Dragonfly Seller Convertible Notes, Convertible Debentures and the Era Convertible Notes, refer to Note 7, Debt for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.

Investments

The Company has invested in highly liquid investments that have investment-grade ratings. These investments are accounted for at fair value through the condensed consolidated statement of operations. The Company is able to easily liquidate these into cash; accordingly, the Company has presented these investments as available for current operations and they are presented as short-term investments within current assets in the condensed consolidated balance sheets. Purchases and sales of short-term investments are classified in the investing section of our consolidated statement of cash flows.

Concentrations of Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At June 30, 2026, approximately 62% of the Company’s cash and cash equivalents were held at JPMorgan Chase Bank, N.A.

The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations and comprehensive income (loss), included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of June 30, 2026 and December 31, 2025, allowance for credit losses of $1,393 and $1,454, respectively, was included in the accounts receivable, net balance.

No single customer accounted for more than 10% of the Company's accounts receivable balance as of June 30, 2026 and December 31, 2025. Revenues derived from the U.S. Federal Government were 19% and 18% of revenues for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, assets located in the United States were approximately 98% and 99% of total assets, respectively.

As of June 30, 2026, two vendors individually accounted for more than 10% of the Company's accounts payable balance. As of December 31, 2025, one vendor accounted for more than 10% of the Company's accounts payable balance. During the six months ended June 30, 2026 and 2025, one vendor represented more than 10% of the total purchases made.

Recent Accounting Pronouncements Not Yet Effective

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) as amended by ASU 2025-01, which requires public entities to disclose disaggregated information about certain income statement line items in the notes to the financial statements. For public entities, ASU 2024-03 is required to be adopted for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In September 2025, the FASB issued ASU No. 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removed the language around project stages that was used

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to assess when costs could be capitalized for an internal-use software. The update also requires internal-use software to be disclosed under the ASC 360 Property, Plant, and Equipment guidance. The guidance is effective for annual periods beginning after December 15, 2027. The Company is currently evaluating this ASU to determine its impact on the Company.

 

Note 2. Revenues

Disaggregation of Revenue

The following table depicts the Company's disaggregated revenue for the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Subscription

 

$

18,800

 

 

$

21,380

 

 

$

37,853

 

 

$

46,612

 

Advisory

 

 

201

 

 

 

313

 

 

 

530

 

 

 

1,376

 

Advertising

 

 

335

 

 

 

500

 

 

 

589

 

 

 

955

 

Other revenue

 

 

245

 

 

 

1,071

 

 

 

634

 

 

 

1,832

 

Total

 

$

19,581

 

 

$

23,264

 

 

$

39,606

 

 

$

50,775

 

Revenue by Geographic Locations

The following table depicts the Company’s revenue by geographic operations for the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

North America

 

$

18,348

 

 

$

21,699

 

 

$

37,123

 

 

$

43,609

 

Rest of the world

 

 

1,233

 

 

 

1,565

 

 

 

2,483

 

 

 

7,166

 

Total

 

$

19,581

 

 

$

23,264

 

 

$

39,606

 

 

$

50,775

 

Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. North America revenue consists solely of revenue attributed to the United States. For the three months ended June 30, 2026 and 2025, revenue attributed to Belgium (presented within the Rest of the world in the above table) represented approximately 6% and 5% of total revenues, respectively. For the six months ended June 30, 2026 and 2025, revenue attributed to the Belgium (presented within the Rest of the world in the above table) represented approximately 6% and 5% of total revenues, respectively. For the six months ended June 30, 2025, revenue attributed to the United Kingdom represented approximately 8% of total revenues. No other foreign country represented more than 5% of total revenue during the three and six months ended June 30, 2026 and 2025.

Contract Assets

The Company had contract assets of $365, $590, and $1,240 as of June 30, 2026, December 31, 2025, and December 31, 2024, respectively. Contract assets are generated when contractual billing schedules differ from the timing of revenue recognition or cash collections. They represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. They are recorded as part of other current assets on the condensed consolidated balance sheets.

Deferred Revenue

Details of the Company’s deferred revenue for the periods presented are as follows:

Balance at December 31, 2024

 

$

35,475

 

Sale of Dragonfly and Oxford Analytica

 

 

(7,342

)

Revenue recognized in the current period from amounts in the prior balance

 

 

(25,871

)

New deferrals, net of amounts recognized in the current period

 

 

30,453

 

Effects of foreign currency

 

 

468

 

Balance at June 30, 2025

 

$

33,183

 

 

 

 

 

Balance at December 31, 2025

 

$

30,044

 

Revenue recognized in the current period from amounts in the prior balance

 

 

(22,037

)

New deferrals, net of amounts recognized in the current period

 

 

22,887

 

Effects of foreign currency

 

 

(68

)

Balance at June 30, 2026

 

$

30,826

 

Costs to Obtain

During the six months ended June 30, 2026 and 2025, the Company capitalized $472 and $1,124 of costs to obtain revenue contracts. The Company amortized costs capitalized to obtain revenue contracts in the amount of $623 and $804 to sales and marketing expense during the three months ended June 30, 2026 and 2025, respectively, and $1,317 and $1,688 during the six months ended June 30, 2026 and 2025, respectively. There were no impairments of costs capitalized to obtain revenue contracts for the three and six months ended June 30, 2026 and 2025.

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Unsatisfied Performance Obligations

At June 30, 2026, the Company had $62,338 of remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations. The Company expects to recognize this over the next five years.

Note 3. Dispositions

2025 Dispositions

Sale of Oxford Analytica and Dragonfly

On February 21, 2025 (the "Signing Date"), the Company entered into an equity purchase agreement (the "Equity Purchase Agreement") with Factiva Ltd. ("Factiva"), a limited company organized under the laws of England and Wales, providing for the sale of all of the outstanding equity interests in each of Dragonfly Eye Limited, a UK private limited company (“Dragonfly”), and The Oxford Analytica International Group, LLC, a Delaware limited liability company (“Oxford” and collectively with Dragonfly, the “Sold Businesses”). At closing of the sale on March 31, 2025, after adjustments based on the Sold Businesses' estimated working capital, indebtedness, and transaction expenses, the Company received $40,000 in cash (excluding $400 of the purchase price that was deposited into escrow to satisfy certain potential post-closing purchase price adjustments and indemnification claims and including $813 of cash acquired by Factiva). As a result of the sale, the Company recorded a pre-tax gain on disposal of $15,424 for the six months ended June 30, 2025. The purchase price is subject to adjustment pursuant to the Equity Purchase Agreement; accordingly, the gain on sale may increase, or decrease, as the case may be, upon finalization of the purchase price.

The proceeds from the sale were used in part to prepay and retire $27,136 of term loans under the Prior Senior Term Loan, and pay $1,793 of related prepayment and exit fees associated with the retired amount. The remaining $11,071 of net proceeds were retained by the Company to pay for related transaction costs, cash taxes that may result from the sale, and general corporate purposes. As part of the sale, the Company recorded a current tax receivable for federal and state income tax of $281.

The Company determined that Oxford Analytica and Dragonfly were not significant subsidiaries, and their sale did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for the Sold Businesses were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."

Sale of TimeBase

On May 2, 2025, the Company entered into an agreement to sell the equity of the Company's Australian subsidiary, TimeBase Pty. Ltd. (“TimeBase”). On July 1, 2025, the Company closed the sale of TimeBase. Total consideration was $7,414 comprising a cash payment to the Company of $6,676 and a buyer holdback of $738 (included in Other current assets as the buyer holdback is expected to be repaid in the first quarter of 2027). The proceeds from the sale were used in part to prepay and retire $2,978 of term loans under the Prior Senior Term Loan, and pay $197 of related prepayment and exit fees associated with the retired amount. The remaining $3,501 of net proceeds were retained by the Company to pay for related transaction costs, cash taxes that may result from the sale, and general corporate purposes. As a result of the sale of TimeBase, the Company recorded a gain on disposal of $1,325 during the third quarter of 2025.

The Company determined that TimeBase was not a significant subsidiary, and the disposition of TimeBase did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for TimeBase were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."

 

Note 4. Leases

The Company has operating leases, principally for corporate offices under non-cancelable operating leases that expire at various dates through 2031. The non-cancellable base terms of these remaining leases typically range from one to five years. Certain lease agreements include options to renew or terminate the lease, which are not factored into the determination of lease payments if they are not reasonably certain to be exercised.

The following table details the composition of lease expense for the periods presented:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Operating lease cost

 

$

961

 

 

$

1,036

 

 

$

1,929

 

 

$

2,111

 

Variable lease cost

 

 

134

 

 

 

58

 

 

 

227

 

 

 

114

 

Short-term lease cost

 

 

5

 

 

 

5

 

 

 

10

 

 

 

45

 

Total lease costs

 

$

1,100

 

 

$

1,099

 

 

$

2,166

 

 

$

2,270

 

Sublease income

 

$

(58

)

 

$

(27

)

 

$

(93

)

 

$

(54

)

 

Cash payments related to operating lease liabilities were $1,311 and $1,318 for the three months ended June 30, 2026 and 2025, respectively and $2,594 and $2,682 for the six months ended June 30, 2026 and 2025, respectively.

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Note 5. Intangible Assets

The following table summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets by major class:

 

 

June 30, 2026

 

 

December 31, 2025

 

 

Weighted Average

 

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net
Carrying Amount

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net
Carrying Amount

 

 

Remaining Useful Life (Years) June 30, 2026

 

Customer relationships

 

$

66,554

 

 

$

(38,272

)

 

$

28,282

 

 

$

66,570

 

 

$

(35,899

)

 

$

30,671

 

 

 

6.5

 

Developed technology

 

 

21,724

 

 

 

(19,030

)

 

 

2,694

 

 

 

21,738

 

 

 

(18,738

)

 

 

3,000

 

 

 

4.6

 

Databases

 

 

29,142

 

 

 

(16,100

)

 

 

13,042

 

 

 

29,145

 

 

 

(15,068

)

 

 

14,077

 

 

 

6.4

 

Tradenames

 

 

9,325

 

 

 

(5,409

)

 

 

3,916

 

 

 

9,325

 

 

 

(5,090

)

 

 

4,235

 

 

 

6.1

 

Patents

 

 

857

 

 

 

(258

)

 

 

599

 

 

 

871

 

 

 

(248

)

 

 

623

 

 

 

17.0

 

Content library

 

 

592

 

 

 

(271

)

 

 

321

 

 

 

592

 

 

 

(242

)

 

 

350

 

 

 

5.4

 

Total

 

$

128,194

 

 

$

(79,340

)

 

$

48,854

 

 

$

128,241

 

 

$

(75,285

)

 

$

52,956

 

 

 

 

Finite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. Amortization of intangible assets, excluding developed technology, was $1,889 and $1,934 for the three months ended June 30, 2026 and 2025, respectively, and $3,782 and $4,265 for the six months ended June 30, 2026 and 2025, respectively.

Amortization of developed technology was recorded as part of cost of revenues, including amortization in the amount of $152 and $160 for the three months ended June 30, 2026 and 2025, respectively, and $305 and $366 for the six months ended June 30, 2026 and 2025, respectively.

The expected future amortization expense for intangible assets as of June 30, 2026 is as follows:

2026 (remainder)

 

$

4,093

 

2027

 

 

8,186

 

2028

 

 

7,965

 

2029

 

 

7,696

 

2030

 

 

7,226

 

Thereafter

 

 

13,688

 

Total

 

$

48,854

 

Capitalized software development costs

Capitalized software development costs are as follows:

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net
Carrying Amount

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net
Carrying Amount

 

Capitalized software development costs

 

$

41,516

 

 

$

(28,644

)

 

$

12,872

 

 

$

38,284

 

 

$

(25,699

)

 

$

12,585

 

During the six months ended June 30, 2026 and 2025, the Company capitalized interest on capitalized software development costs in the amount of $196 and $85, respectively. Amortization of capitalized software development costs was recorded as part of cost of revenues, including amortization in the amount of $1,509 and $1,619 for the three months ended June 30, 2026 and 2025, respectively, and $2,945 and $4,945 for the six months ended June 30, 2026 and 2025, respectively. The estimated useful life is determined at the time each project is placed in service.

Impairment of long-lived assets

We periodically assess whether any indicators of impairment existed related to our intangible assets. We identified triggering events during the first and second quarters of 2026, as discussed in Note 6, "Goodwill". These triggering events indicated we should test the related long-lived assets for impairment in certain of our asset groups. We tested each applicable asset group by first performing a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of each asset group to its carrying value. This test indicated that the undiscounted cash flows were sufficient to recover the carrying value of certain asset groups. As a result, we concluded that no impairment charge was to be recorded for long-lived assets during the first and second quarters of 2026.

 

 

 

 

 

 

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Note 6. Goodwill

Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but are rather tested for impairment at least annually as of October 1 of each year.

The changes in the carrying amounts of goodwill, which are generally not deductible for tax purposes, are as follows:

Balance at December 31, 2025

 

$

122,984

 

Impairment

 

 

(54,700

)

Impact of foreign currency

 

 

(33

)

Balance at June 30, 2026

 

$

68,251

 

 

During the first quarter of 2026, the Company experienced a decline in its market capitalization based upon its publicly quoted share price, the Company failed to satisfy its annualized recurring revenue covenant for the month ended January 31, 2026, reflecting continued pressure on customer retention and organic revenue, and the Company began trading on the OTCID Basic Market. During the second quarter of 2026, the Company experienced a further decline in its market capitalization based upon its publicly quoted share price, the Company failed to satisfy its minimum adjusted EBITDA requirement pursuant to its 2025 Senior Term Loan, and the Company reset its long-range projections. The Company evaluated these factors and in combination, determined that they constituted triggering events requiring interim goodwill impairment assessments under ASC 350. Accordingly, the Company recorded a goodwill impairment of $35,600 in the first quarter of 2026 and a goodwill impairment of $19,100 in the second quarter of 2026 in the condensed consolidated statement of operations. Prior to the quantitative goodwill impairment test performed at June 30, 2026, the Company tested the recoverability of its long-lived assets, and concluded that none of its intangibles were impaired. See Note 5, Intangible Assets.

On January 1, 2025, effective with the appointment of our then new CEO, the Company reassessed its goodwill reporting unit and determined that the Company now operates out of a single reporting unit. Accordingly, the Company performed a quantitative goodwill impairment assessment immediately prior to, and on, January 1, 2025, which resulted in no impairment of goodwill.

The Company performed its annual goodwill impairment test on October 1, 2025 which indicated no impairment. However, due to the sustained decline in the Company's stock price and market capitalization toward the end of the fourth quarter of 2025, as well as the decline in organic revenue and customer retention, the Company performed a quantitative goodwill impairment assessment as of December 31, 2025. This quantitative assessment resulted in a goodwill impairment charge of $12,378 recognized in the fourth quarter of 2025. Prior to the quantitative goodwill impairment test performed at December 31, 2025, the Company tested the recoverability of its long-lived assets, and concluded that none of its intangibles were impaired. See Note 5, Intangible Assets.

The fair value estimate of the Company's single reporting unit was derived based on an income approach. Under the income approach, the Company estimated the fair value of its single reporting unit based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The cash flows used are consistent with those the Company uses in its internal planning, which reflects actual business trends experienced and our long-term business strategy. As such, key assumptions and factors used in this method include, but are not limited to, revenue, margin, operating expense growth rates, realization of net operating losses, tax rates and policies in place as of the date of impairment testing, as well as a discount rate, and a terminal growth rate. In order to further validate the reasonableness of fair value as determined by the income approach, differences between estimated reporting unit fair value and market capitalization primarily reflect an implied control premium and differences between minority and controlling interests.

Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more of these impairment indicators could occur or intensify in the near term, which may result in an impairment of long-lived assets or further impairment of goodwill.

Note 7. Debt

The following presents the carrying value of the Company’s debt as of the respective period ends:

 

 

June 30, 2026

 

 

December 31, 2025

 

2025 Senior Term Loan

 

$

70,313

 

 

$

74,063

 

2025 GPO Convertible Note

 

 

17,562

 

 

 

19,235

 

Convertible Debentures

 

 

21,822

 

 

 

26,663

 

Dragonfly Seller Convertible Notes

 

 

12,432

 

 

 

11,982

 

Total gross debt

 

 

122,129

 

 

 

131,943

 

Debt issuance costs

 

 

(2,882

)

 

 

(3,495

)

Total

 

 

119,247

 

 

 

128,448

 

Less: Current maturities

 

 

(106,815

)

 

 

(2,813

)

Total long-term debt

 

$

12,432

 

 

$

125,635

 

 

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2025 Senior Term Loan/ Prior Senior Term Loan

2025 Senior Term Loan

On August 5, 2025, the Company entered into a financing agreement (the "Financing Agreement"), as amended, by and among the Company, as parent guarantor, the Company's domestic subsidiaries party thereto as borrowers and guarantors, the lenders from time to time party thereto, and MGG Investment Group LP, as collateral agent and as administrative agent, pursuant to which the lenders agreed to advance $75,000 which matures on August 12, 2029 (the "2025 Senior Term Loan"). The 2025 Senior Term Loan ranks senior to all other debt and is secured by a first priority lien on substantially all of the Company's assets. Obligations under the 2025 Senior Term Loan bear interest at variable rates, set at the Company’s option, based on a reference rate plus 8.50%, or the secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) plus 9.50%. Interest is payable in cash monthly in arrears. 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 (as amended). The Company must also pay a quarterly fee, in an amount equal to (i) $138 through March 31, 2026 and (ii) $38 with respect to each quarterly payment due thereafter.

The 2025 Senior Term Loan also contains four financial covenants: a minimum cash balance requirement, a minimum ARR requirement, a minimum adjusted EBITDA requirement, and a capital expenditure limitation.

The 2025 Senior Term Loan also includes covenants limiting the ability of the Company and its subsidiaries, subject to certain exceptions, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any transaction of merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business, (iv) dispose of any of their property, or, issue or sell any shares of a subsidiary’s stock, (v) make any payment or prepayment for any subordinated indebtedness, pay any earn-out payment, seller debt or deferred purchase price payments, or (vi) declare or pay any dividend or make any other distribution. The 2025 Senior Term Loan also contains certain events of default, including, among others, (i) failure to pay, (ii) breach of representations and warranties, (iii) breach of covenants, subject to any cure periods described therein, and (iv) failure to pay principal or interest on any other material debt.

On August 12, 2025 the Company closed on its 2025 Senior Term Loan and received net proceeds of $72,937 after original issue discount (“OID”) of $2,063, or 2.75%. The Company incurred $960 of lender fees and $962 of fees paid to third parties. OID and capitalized debt issuance costs totaled $3,985 and is treated as a debt discount and will be amortized over the term of the 2025 Senior Term Loan using the effective interest method. Amortization expense for the three and six months ended June 30, 2026 was $356 and $628, and is included within Interest expense, net in the condensed consolidated statements of operations and comprehensive income (loss). The remaining unamortized debt discount at June 30, 2026 is $2,948, and is reflected net within debt on the condensed consolidated balance sheet.

On March 23, 2026, the Company entered into Amendment No. 1 and Waiver to the 2025 Senior Term Loan ("Amendment No. 1"). Pursuant to Amendment No. 1, the lenders waived a specified event of default arising from the Company's failure to satisfy the annualized recurring revenue covenant for the month ended January 31, 2026. Amendment No. 1, amends and restates the financial covenant schedule, including revised minimum thresholds for annualized recurring revenue and consolidated adjusted EBITDA and reduced minimum liquidity requirements through March 31, 2027, after which the minimum liquidity requirement returns to $20,000. Amendment No. 1 increases the quarterly principal repayment to (i) $1,875 for payment on each March 31, 2026, June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027 and (ii) $938 for each payment thereafter. Amendment No. 1 also requires the Company to make a mandatory prepayment of $20,000 no later than March 31, 2027, together with any applicable premium and related fees.

On April 13, 2026 the Company's Class A common stock was delisted from the NYSE, which caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note. On April 21, 2026, the Company entered into forbearance agreements, which were extended on each of May 18, 2026, June 24, 2026 and July 22, 2026, with the Subordinated Creditors who agreed to waive defaults under the terms of their subordinated convertible debt instruments 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. Accordingly, amounts outstanding under the Company's 2025 Senior Term Loan are presented as a current liability at June 30, 2026.

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.

The Company has elected to pay cash interest based on SOFR, which was 13.14% at June 30, 2026. For the three and six months ended June 30, 2026, the Company recognized $2,398 and $4,596 of cash interest on the 2025 Senior Term Loan.

Upon maturity, the Company is required to pay in cash the greater of $500 or the fair market value of 60,416 shares of Class A Common Stock of the Company (the “Exit Fee”). The Company will record non-cash interest expense over the life of the 2025 Senior Term Loan to accrete to the minimum Exit Fee due upon maturity. Accordingly, during the three and six months ended June 30, 2026, the Company recognized $45 and $79 of interest expense related to the Exit Fee. At June 30, 2026, $130 of the minimum Exit Fee has been accrued and is included within Other current liabilities on the condensed consolidated balance sheet.

Because the Exit Fee is payable in certain redemption scenarios, the Company determined that pursuant to ASC 815 “Derivatives and Hedging” certain of the embedded redemption features meet the definition of a derivative that must be accounted for at fair value with changes in fair value reflected in the condensed consolidated statement of operations and comprehensive income (loss). The fair value of the embedded redemption feature at inception on August 12, 2025 was $90 and was accounted for as a debt premium and will be amortized over the term of the 2025 Senior Term Loan using the effective interest method. Amortization expense for the three and six months ended June 30, 2026 was $8 and $14, and is included within Interest expense, net in the condensed consolidated statements of operations and

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comprehensive income (loss). The remaining unamortized debt premium at June 30, 2026 is $67, and is reflected net within debt on the condensed consolidated balance sheet. The fair value of the embedded redemption features at June 30, 2026 was $345 and is included as a contra-liability in Accounts payable and accrued expenses on the condensed consolidated balance sheet. The $65 and $180 change in fair value of the embedded redemption features for the three and six months ended June 30, 2026, respectively, is included within Change in fair value of financial instruments on the condensed consolidated statement of operations and comprehensive income (loss). As of June 30, 2026, the unpaid principal balance of the 2025 Senior Term Loan is $70,313.

As part of Amendment No. 1, the Company is accruing a make-whole amount ("Make-Whole Premium"), which equals all interest the Lenders would have earned from the trigger date until the second anniversary of the effective date. The Company recognized $401 and $436 of interest expense related to the Make-Whole Premium during the three and six months ended June 30, 2026, respectively. At June 30, 2026, $436 of the Make-Whole Premium has been accrued and is included within Accounts payable and accrued expenses on the condensed consolidated balance sheet.

Prior Senior Term Loan

On July 29, 2022, concurrent with the closing of the Company's Business Combination, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote Holdings, Inc., entered into a senior credit agreement (the "Prior Senior Term Loan") as amended from time to time. The annual interest of the Prior Senior Term Loan consisted of two components: (a) a cash interest component of the greater of (i) Prime Rate plus 5.0% per annum or (ii) 9.0% payable monthly, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly.

In connection with the completion of the sale of Oxford Analytica and Dragonfly on March 31, 2025, the Company also entered into Amendment No. 5 to the Prior Senior Term Loan, pursuant to which, among other things, the lenders consented to releasing the liens on Oxford Analytica and Dragonfly's assets and permitting the consummation of the sale in exchange for the permanent retirement of $27,136 of term loans under the Senior Term Loan and payment of $1,793 of related prepayment and exit fees.

On May 2, 2025, the Company also entered into Amendment No. 6 to the Prior Senior Term Loan (“Amendment No. 6”), pursuant to which, among other things, the lenders consented to the sale of TimeBase and agreed that, automatically upon receipt by the lenders of $3,175 from the proceeds of the sale of TimeBase, the lenders released TimeBase as a guarantor under the Prior Senior Term Loan, along with the liens granted on the equity and assets of TimeBase.

For the six months ended June 30, 2025, the Company incurred $4,731 and $378 of cash interest and paid-in-kind interest, respectively, on the Prior Senior Term Loan. Paid-in-kind interest is reflected as a component of the carrying value of the Prior Senior Term Loan.

Amortization of debt issuance costs on the Prior Senior Term Loan is recorded within Interest expense, net in the condensed consolidated statements of operations and comprehensive income (loss) and totaled $889 and $1,638 for the three and six months ended June 30, 2025.

2025 GPO Convertible Note/Prior GPO Convertible Note

On June 30, 2023, the Company issued to GPO FN Noteholder LLC (the “GPO Investor”) a subordinated convertible promissory note in an initial principal amount of $46,794 (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 pursuant to the terms of the Prior GPO Convertible Note.

In conjunction with the establishment of the 2025 Senior Term Loan, on August 5, 2025, the Company entered into a redemption and exchange agreement with the GPO Investor. Pursuant to the redemption and exchange with the GPO Investor, on August 12, 2025, the Company redeemed $30,000 of the Prior GPO Convertible Note (which at the time had balance outstanding of $50,434) in exchange for a cash payment of $27,000 to the GPO Investor (the "GPO Redemption"). The Company also issued a new senior subordinated promissory note to the GPO Investor in the aggregate amount of $20,434 (the "2025 GPO Convertible Note") in exchange for, and the cancellation of, the remaining obligations under the existing Prior GPO Convertible Note.

The 2025 GPO Convertible Note is guaranteed by the Company’s domestic subsidiaries, which are parties to the 2025 Senior Term Loan, and is contractually subordinated to the Company’s obligations under the 2025 Senior Term Loan. The 2025 GPO Convertible Note matures on November 13, 2029 and bears interest at a rate of 7.50% per annum payable quarterly in arrears, in cash or, provided no event of default is then occurring under the 2025 GPO Convertible Note, freely tradeable shares of the Company's Class A Common Stock, at the Company’s option, with the value per share determined with reference to the VWAP of the Class A Common Stock over the trading days occurring within the thirty calendar days prior to the applicable interest payment date. At any time prior to November 13, 2029, the GPO Investor is entitled to convert all or any portion of the principal amount of the 2025 GPO Convertible Note and accrued interest thereon into shares of the Company's Class A Common Stock at an initial conversion price of $82.92 per share (subject to customary anti-dilution adjustments). Under the terms of the 2025 GPO Convertible Note, the Company is required to make quarterly installment payments of $2,000 of the outstanding principal beginning April 1, 2026 in the form of freely tradeable shares of the Company's Class A Common Stock, cash, or a combination thereof, solely at the determination of the Company. Class A Common Stock issued to satisfy quarterly interest and principal repayments will be issued at a price equal to the lowest of (i) the then-effective Conversion Price under the 2025 GPO Convertible Note, (ii) 95% of the VWAP of the Class A Common Stock over the ten trading days immediately preceding the applicable Installment Date and (iii) 95% of the VWAP of the Class A Common Stock over the trading days occurring within the ninety calendar day period immediately preceding the applicable payment date. In connection with the April 1, 2026 interest and principal payment made in shares of the Company's Common Stock, the Company and the GPO Investor agreed to a one-time modification to the applicable conversion price of $0.85 per share (in lieu of the contractual formula) for the April 1, 2026 payment only. Accordingly, in April 2026 the Company issued 2,803,698 shares of

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Class A Common Stock to satisfy (a) its quarterly interest payment for the first quarter of 2026 due on April 1, 2026, and (b) its $2,000 principal repayment requirement, also due on April 1, 2026. The non-cash gain of $1,692 recognized upon these conversions was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and six months ended June 30, 2026.

The 2025 GPO Convertible Note provides for customary events of default upon which repayment of the 2025 GPO Convertible Note may be accelerated, including failure to pay any amounts due and owing under the 2025 GPO Convertible Note, failure to deliver the shares upon a conversion of the 2025 GPO Convertible Note, an uncured breach of any terms of the 2025 GPO Convertible Note and a default under certain of the Company’s other indebtedness. The 2025 GPO Convertible Note includes certain negative covenants related to the Company’s ability to incur indebtedness. On April 13, 2026, the Company’s Class A common stock was delisted from the NYSE. The NYSE delisting caused an event of default under the 2025 GPO Convertible Note. On April 21, 2026, the Company entered into a forbearance agreement with the holder of the 2025 GPO Convertible Note, which was extended on each of May 18, 2026, June 24, 2026 and July 22, 2026, pursuant to which the holder agreed to waive defaults under the terms of the subordinated convertible debt instrument, and to forbear from exercising any rights relating to such defaults, until August 21, 2026. Accordingly, amounts outstanding under the Company's 2025 GPO Convertible Note are presented as a current liability at June 30, 2026. Additionally, on June 16, 2026, the Company entered into a letter agreement with the GPO Investor pursuant to which the GPO Investor waived its right to receive the $2,000 installment amount otherwise payable on July 1, 2026, with such amount instead payable on the maturity date of the 2025 GPO Convertible Note. In June 2026, the Company issued 1,510,237 shares which was credited towards the Company’s July 1, 2026 quarterly interest payment.

The Company elected to account for the 2025 GPO Convertible Note using the fair value option. The fair market value at June 30, 2026, March 31, 2026, and December 31, 2025 was $17,562, $19,649, and $19,235, respectively. The unrealized change in the fair value of the GPO Convertible Note of $634, as a result of the change in the Company's specific credit risk, is recorded in accumulated other comprehensive income for the three months ended June 30, 2026 and the unrealized change in the fair value of the 2025 GPO Convertible Note was recorded in the Change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) in the amount of a loss of $547 and $961 during the three and six months ended June 30, 2026. The Company incurred total interest expense related to the 2025 GPO Convertible Note of $350 and $733 for the three and six months ended June 30, 2026. As of June 30, 2026, the unpaid principal balance of the 2025 GPO Convertible Note is $18,434.

The Company elected to account for the Prior GPO Convertible Note using the fair value option. The unrealized change in the fair value of the Prior GPO Convertible Note was recorded in the Change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) in the amount of a loss of $742 and non-cash gain of $78 for the three and six months ended June 30, 2025. The Company incurred total interest expense related to the Prior GPO Convertible Note of $956 and $1,902 for the three and six months ended June 30, 2025.

Convertible Debentures

In conjunction with the establishment of the 2025 Senior Term Loan and in order to fund the GPO Redemption, on August 5, 2025 (the “Purchase Agreement Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”), with YA II PN, Ltd (“YA”), pursuant to which the Company would issue YA convertible debentures in an aggregate principal amount of up to $33,300 (the “Convertible Debentures”) for a total cash purchase price of $30,000, subject to satisfaction of certain closing conditions.

On August 12, 2025, the initial tranche of Convertible Debentures comprising $21,000 in stated principal amount were issued to YA, in accordance with the Purchase Agreement, with the Company receiving net proceeds of $18,900 (the "First YA Debenture"). On September 11, 2025, the second and final tranche of Convertible Debentures comprising $12,300 in stated principal amount were issued to YA, in accordance with the Purchase Agreement with the Company receiving net proceeds of $11,000 (the "Second YA Debenture").

The Company’s obligations under the Purchase Agreement and the Convertible Debentures are guaranteed by FiscalNote, Inc., a wholly owned subsidiary of the Company, and are contractually subordinated to the Company’s obligations under its 2025 Senior Term Loan and the 2025 GPO Note. The First YA Debenture matures on February 12, 2027 and the Second YA Debenture matures on March 11, 2027 and both bear interest at a rate of 5% per annum or 18% per annum in the event of an event of default. The maturity dates of the First YA Debenture and the Second YA Debenture will automatically extend to the first day subsequent to the maturity date of the 2025 Senior Term Loan if one, or both, of the notes have a balance outstanding on February 12, 2027.

At any time prior to the maturity dates, and subject to certain ownership and conversion limitations, YA is entitled to convert any portion of the principal amount of the Convertible Debentures and accrued interest thereon into shares of the Company’s Class A Common Stock (the “Debenture Conversion Shares”) at a conversion price equal to 94% of the lowest daily volume weighted average trading price (“VWAP”) during the five trading days prior to the conversion date, subject to a floor price of $0.8884 (the “Floor Price”).

In the event (i) the daily VWAP is less than the Floor Price then in effect for any five trading days during a period of seven consecutive trading days, (ii) the Company has issued substantially all of the shares of the Class A Common Stock available for issuance without violating applicable rules of the NYSE, or (iii) YA is unable to utilize a registration statement to resell Debenture Conversion Shares for a period of ten (10) consecutive trading days, then the Company will be required to make certain amortization payments to YA.

The Convertible Debentures provide for customary events of default, upon which repayment of the Convertible Debentures may be accelerated, including failure to pay any amounts due and owing under the Convertible Debentures, failure to timely deliver the Debenture Conversion Shares, an uncured breach of any terms of the Convertible Debentures and a default under certain of the Company’s other indebtedness. On April 13, 2026, the Company’s Class A common stock was delisted from the NYSE. The NYSE delisting constituted an event of default under the Convertible Debentures. On April 21, 2026, the Company entered into a forbearance agreement with the holder of the Convertible Debentures, which was extended on each of May 18, 2026, June 24, 2026 and July 22, 2026, pursuant to which the holder agreed to waive defaults under the terms of the subordinated convertible debt instrument, and to forbear from exercising any rights relating

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to such defaults, until August 21, 2026. Accordingly, amounts outstanding under the Company's Convertible Debentures are presented as a current liability at June 30, 2026.

During the three months ended June 30, 2026, YA converted $789 of principal and $79 of accrued interest in exchange for 4,196,829 shares of the Company’s Class A common stock with a fair value of $831. During the six months ended June 30, 2026, YA converted $3,159 of principal and $670 of accrued interest in exchange for 6,933,807 shares of the Company’s Class A common stock with a fair value of $3,914. The non-cash charge of $27 and $213 recognized upon these conversions was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and six months ended June 30, 2026.

The Company elected to account for the First YA Debenture and Second YA Debenture using the fair value option. The fair market value at June 30, 2026 and December 31, 2025 was $21,822 and $26,663, respectively. The unrealized change in the fair value of the First YA Debenture and Second YA Debenture was recorded in the Change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) in the amount of a gain of $458 and $1,810 for the three and six months ended June 30, 2026. The Company incurred total interest expense related to the First YA Debenture and Second YA Debenture of $305 and $627 for the three and six months ended June 30, 2026. As of June 30, 2026, the unpaid principal balance of the First YA Debenture and Second YA Debenture is $19,630 and $4,611, respectively.

Convertible Notes

Purchased Original Notes

On March 17, 2025 and March 20, 2025, investors holding two convertible notes originally issued in 2020 and assumed by the Company in connection with the Business Combination, with a principal and accrued paid-in-kind interest balance of $5,769 (the "Purchased Original Notes"), sold their convertible notes to EGT 11 LLC (the "Exchange Investor"). In connection with the acquisition of the Purchased Original Notes by the Exchange Investor, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement”) on March 17, 2025, pursuant to which the Company cancelled the Purchased Original Notes and in exchange (i) issued a convertible note to the Exchange Investor, for $5,500 on March 17, 2025 and (ii) issued a second convertible note for $269 on March 20, 2025 (collectively, the "Third Era Convertible Note"). The acquisition of the Purchased Original Notes by the Exchange Investor and the Exchange Agreement resulted in the extinguishments of the Purchased Original Notes. Accordingly, the Company recognized a loss on debt extinguishment of $1,784 during the six months ended June 30, 2025. The Company incurred total interest expense related to the Purchased Original Notes, including the amortization of the various discounts, of $202 during the six months ended June 30, 2025.

Amended Legacy Notes

On March 25, 2025 (the "Amendment Date"), the Company entered into a letter agreement (the “First Amendment”) with the holders (the "Legacy Investors") of two convertible notes originally issued in 2020 and assumed by the Company in connection with the Business Combination (the "Legacy Notes" and, as amended, the "Amended Legacy Notes") with a principal and accrued paid-in-kind interest balance of $10,961 modifying certain provisions in favor of each of the Legacy Investors. The Legacy Notes were unsecured and earned payable in kind interest of 15% per annum, payable annually in arrears.

Pursuant to the terms of the amended Legacy Notes, during the three months ended June 30, 2025, the Company converted $4,812 of the Legacy Notes into 599,429 Common Shares. At June 30, 2025, the Company recognized a non-current liability of $700 reflecting the difference between the amount of the cash raised and the Applicable Amount converted. The resulting non-cash charge of $669 is recognized in the Change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025.

On July 30, 2025, the Company and the holders of the Amended Legacy Notes agreed to extend the Original Maturity Date from July 31, 2025 to August 15, 2025. On August 12, 2025, the Company retired all of its then outstanding obligations under the Amended Legacy Notes by paying the holders $3,600 in cash.

The Company incurred total interest expense related to the Amended Legacy Notes, including the amortization of the various discounts, of $454 and $902 during the three and six months ended June 30, 2025.

Dragonfly Seller Convertible Notes

In connection with the Company's acquisition of Dragonfly, the Company financed part of the purchase with the issuance of convertible notes (the "Dragonfly Seller Convertible Notes"). The Dragonfly Convertible Notes were issued in a principal amount of £8,929 pounds sterling (approximately $11,050 on January 27, 2023, the closing date of the acquisition of Dragonfly by the Company), with interest at an annual rate of 8%, which can be paid in cash or paid-in-kind. The paid-in-kind interest will be annually credited to the principal amount. All principal and accrued interest are due upon maturity on January 27, 2028. The Company can convert any portion of the principal and accrued interest at the VWAP for the five consecutive trading day period ending on the last trading day of the calendar month preceding the date the Company provides notice of conversion to the Sellers. The lender has the right to convert the outstanding principal and accrued interest for FiscalNote common stock at $120.00 per share, subject to adjustment in the event of any stock dividend, stock split, reverse stock split, combination or other similar recapitalization with respect to common stock.

In January 2025, one of the noteholders voluntarily elected to convert £547 pounds sterling (approximately $702 as of the date of conversion) pursuant to the lender conversion right of $10.00 per share; accordingly, the Company issued the holder 5,613 shares of the Company's common stock with a fair value of $67. The non-cash gain of $635 recognized upon this conversion was recorded in the change

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in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2025.

The Company elected to account for the Dragonfly Seller Convertible Notes using the fair value option. The fair market value of the Dragonfly Seller Convertible Notes outstanding at June 30, 2026, March 31, 2026, and at December 31, 2025 was $12,432, $11,540, and $11,982, respectively. The unrealized change in the fair value of the Dragonfly Seller Convertible Notes of $363, as a result of the change in the Company's specific credit risk, is recorded in accumulated other comprehensive income for the three months ended June 30, 2026 and the non-cash loss of $949 and $430 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and six months ended June 30, 2026, respectively. As of June 30, 2026, the unpaid principal and Paid in kind balance of the Dragonfly Seller Convertible Notes is £11,058 pounds sterling (approximately $14,637). The non-cash loss of $91 and $63 was recorded in the Change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and six months ended June 30, 2025, respectively. The Company incurred total interest expense related to the Dragonfly Seller Convertible Notes of $287 and $277 during the three months ended June 30, 2026 and 2025, respectively, and $563 and $528 for the six months ended June 30, 2026, and 2025, respectively.

Era Convertible Notes

Second Era Convertible Note

The Company issued a senior subordinated convertible note to an affiliate of Era ("Era II"), for $5,500 on November 12, 2024 (the "Second Era Convertible Note"). The Second Era Convertible Note had a maturity date of November 12, 2027 and a cash interest rate equal to the applicable federal rate published by the Internal Revenue Service beginning on May 12, 2025. The Company issued 212,427 shares of common stock to Era II (the "Second Era Convertible Note Success Fee Shares") as a success fee and 54,166 shares of common stock to Northland Securities, Inc. to cover brokerage fees incurred by Era II in connection with its liquidating (i) any shares of common stock underlying the Second Era Convertible Note and the Second Era Convertible Note Success Fee Shares and (ii) the shares of common stock underlying the First Era Convertible Note as well as shares of common stock issued pursuant to the Co-Pilot Agreement.

On December 18, 2024 and December 27, 2024 the Company converted all of the outstanding principal of the Second Era Convertible Note and issued Era II, in aggregate, 448,106 shares of common stock. Accordingly, the Company had no obligations outstanding related to the Second Era Convertible Note at December 31, 2024 or any time thereafter.

The Company elected to account for the Second Era Convertible Note using the fair value option. The Second Era Convertible Note was recorded at its acquisition date fair value of $5,500. The non-cash loss of $2,973 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the fourth quarter of 2024. In January 2025, Era II returned 89,288 shares of common stock pursuant to the terms of the Second Era Convertible Note.

Third Era Convertible Note

The Third Era Convertible Note was issued in an aggregate principal amount of $5,769, with cash interest accruing at a rate equal to the applicable federal rate published by the Internal Revenue Service beginning on September 17, 2025. All principal and unpaid interest mature on March 17, 2028. The Company received no cash from the Third Era Convertible Note because it was exchanged for the Purchased Original Notes.

The Third Era Convertible Note is contractually subordinated to the Company’s obligations under its senior secured indebtedness, and accordingly the Company’s right to make certain cash payments in connection therewith is limited by the terms of such subordination agreement. Beginning on the six-month anniversary of the issuance of the applicable Third Era Convertible Note, the Exchange Investor may convert such Third Era Convertible Note into shares (the “Conversion Shares”) of the Company's Class A Common Stock, based on the volume weighted average market price of the Class A Common Stock for the 30 consecutive trading day period prior to the date of conversion (the "Conversion Price"). In addition, subject to certain limitations, the Company may elect to convert the Third Era Convertible Note into Conversion Shares at the Conversion Price. The Exchange Notes provide for customary events of default, upon which repayment of the Exchange Notes may be accelerated.

Pursuant to the Exchange Agreement, the Company issued 216,338 shares of Common Stock (the “Third Era Convertible Note Fee Shares") to the Exchange Investor as an inducement for the Exchange Investor to exchange the Purchased Original Notes for the Third Era Convertible Note. The Third Era Convertible Note Fee Shares are presented as temporary equity in the condensed consolidated balance sheet at their grant date fair value of $2,719.

As compensation for its brokerage services provided to the Exchange Investor, the Company also issued 25,000 shares of Common Stock to Northland Securities, Inc. (the “Brokerage Fee Shares”) with a fair value of $315 that was reflected as a non-cash charge within general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss) during the six months ended June 30, 2025

The Company elected to account for the Third Era Convertible Note using the fair value option. The Third Era Convertible Note was recorded at its acquisition date fair value of $4,728. The fair market value of the Third Era Convertible Note was $5,209 at June 30, 2025. The non-cash loss of $295 and $481 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three and six months ended June 30, 2025.

On August 12, 2025, the Company retired all of the outstanding obligations under the Third Era Convertible Note by paying the holders $8,176 in cash. In the third quarter of 2025, the Exchange Investor returned, and the Company subsequently cancelled, 182,580 shares of

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Class A Common Stock. Accordingly, the Company has no obligations outstanding related to the Third Era Convertible Note at December 31, 2025 or any time thereafter.

Total Debt

The following table summarizes the total estimated fair value of the Company's debt as of June 30, 2026 and December 31, 2025, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.

 

 

June 30, 2026

 

 

December 31, 2025

 

2025 Senior Term Loan

 

$

70,827

 

 

$

70,985

 

2025 GPO Convertible Note

 

 

17,562

 

 

 

19,235

 

Convertible Debentures

 

 

21,822

 

 

 

26,663

 

Dragonfly Seller Convertible Notes

 

 

12,432

 

 

 

11,982

 

Total

 

$

122,643

 

 

$

128,865

 

 

Note 8. Stockholders’ Equity and Temporary Equity

Authorized Capital Stock

The Company's Class A common stock and public warrants are traded on the OTCID Basic Market under the symbols “NOTE” and “NOTE WS,” respectively. The Company’s charter authorizes the issuance of 1,809,000,000 shares, which includes Class A common stock, Class B common stock, and preferred stock.

Class A Common Stock

Pursuant to the Company’s charter, the Company is authorized to issue 1,700,000,000 shares of Class A common stock, par value $0.0001 per share. As of June 30, 2026, the Company had 27,451,503 shares of Class A common stock issued and outstanding.

Additionally, the Company has outstanding warrants to purchase shares of New FiscalNote Class A common stock that became exercisable upon the Closing of the Business Combination. See Note 10, Warrant Liabilities.

Class B Common Stock

Pursuant to the Company’s charter, the Company is authorized to issue 9,000,000 shares of Class B common stock, par value $0.0001 per share. As of June 30, 2026, the Company had 690,909 shares of Class B common stock issued and outstanding.

Preferred Stock

Pursuant to the Company’s charter, the Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. No preferred stock has been issued to date.

Dividends

The Company's Class A and Class B common stock are entitled to dividends if and when any dividend is declared by the Company's board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of the Company's business and has no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of the Company's board of directors and will depend on, among other things, the Company's financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as the Company's board of directors may deem relevant.

Temporary Equity

As discussed in Note 7, Debt, the Company issued 216,338 shares of common stock to the Exchange Investor as an inducement for the Exchange Investor to exchange the Purchased Original Notes for the Third Era Convertible Note. Pursuant to ASC 480, “Distinguishing Liabilities from Equity”, the Company has presented the Third Era Convertible Note Fee Shares as temporary equity as they are not mandatorily redeemable on the issuance date but they are redeemable at an unknown time in the future upon an event that is outside of the control of the Company. In the third quarter of 2025, the Exchange Investor returned, and the Company subsequently cancelled, 182,580 shares of Class A Common Stock.

Note 9. Earnout Shares and RSUs

The shareholders and other equity holders of Old FiscalNote as described below are entitled to receive up to 1,599,591 additional shares of Class A Common Stock of New FiscalNote (the “Earnout Awards”) in the form of Earnout Shares or as shares reserved for issuances upon settlement of Earnout RSUs, as described below. The Earnout Awards are split into five tranches each consisting of 319,918 shares of Class A Common Stock in New FiscalNote. Certain Old FiscalNote equity holders will receive Earnout Restricted Stock Units (the “Earnout RSUs”), which are settled in Class A common stock. The right to receive Earnout Awards will expire on July 29, 2027 (the “Earnout

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Period”). Each tranche of the Earnout Awards will be issued only when the dollar volume-weighted average price of one share of New FiscalNote Class A common stock is greater than or equal to $126.00, $150.00, $180.00, $240.00, or $300.00, respectively, for any 10 trading days within any period of 20 consecutive trading days during the Earnout Period (collectively, the “Triggering Events”).

A portion of the Earnout Shares that may be issued to Old FiscalNote common stockholders, Old FiscalNote vested option holders and Old FiscalNote warrant holders and all of the Earnout RSUs were determined to represent additional compensation for accounting purposes pursuant to ASC 718, “Compensation-Stock Compensation”. The Company recognizes stock-compensation expense based on the fair value of the Earnout Awards over the requisite service period for each tranche. The Company recognized $23 and $65 of share-based compensation expense during the three and six months ended June 30, 2025, respectively. The remaining Earnout Shares were determined to represent an equity transaction in conjunction with the reverse recapitalization and were evaluated pursuant to ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. These remaining Earnout Shares are accounted for as a liability as the arrangement is indexed to something other than the Company’s stock. The liability is revalued at each reporting period with changes being recorded as a non-operating gain or loss in the condensed consolidated statements of operations and comprehensive income (loss). The liability of $68 was recorded in other non-current liabilities on the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025.

As of June 30, 2026, there was no unrecognized compensation expense related to the Earnout Awards. As of June 30, 2026, no Earnout Shares and no Earnout RSUs have been issued as no Triggering Events have occurred.

Note 10. Warrant Liabilities

As a result of the Reverse Stock Split, and pursuant to the terms of the applicable warrant agreement, at June 30, 2026, the Company had 8,358,964 public warrants outstanding to purchase a total of 1,094,625 shares of Class A common stock and 7,000,000 private placement warrants outstanding to purchase a total of 916,666 shares of Class A common stock, with each whole warrant being exercisable to purchase 0.130952 shares of Class A common stock at an effective price per share of $87.82 per whole share.

During the six months ended June 30, 2026, no public warrants were exercised into shares of Class A common stock. No private placement warrants have been exercised to date. Accordingly, as of June 30, 2026, the Company had 8,358,964 public warrants and 7,000,000 private placement warrants outstanding with a per share fair value of $0.04. These warrants are accounted for as a liability and have a fair value of $599 and $477 at June 30, 2026 and December 31, 2025, respectively.

Note 11. Stock-Based Compensation

2022 Long-Term Incentive Plan

In connection with the Business Combination, the Company's board of directors adopted, and its stockholders approved, the 2022 Long-Term Incentive Plan (the “2022 Plan”) under which 1,690,466 shares of Class A common stock were initially reserved for issuance. Effective December 31, 2024, the 2022 Plan was amended to (i) effectuate a one-time increase of 333,333 shares authorized for issuance under the 2022 Plan and (ii) revise the “evergreen” provision of the 2022 Plan such that the number of shares of Class A common stock that are automatically added to the 2022 Plan on January 1st of each year will be increased up to the lesser of (a) five percent (5%) of the total number of shares of Class A common stock outstanding on December 31st of the preceding calendar year or (b) 1,126,977 shares of Class A Common Stock (the “2022 Plan Amendment”). The 2022 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, other stock-based awards and cash-based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2022 Plan increases on the first day of each calendar year, continuing through and including January 1, 2027, by the lesser of (a) 1,126,977, (b) three percent (3%) prior to the 2022 Plan Amendment and five percent (5%) after the 2022 Plan Amendment, in each case, of the total number of shares of Class A Common Stock outstanding on December 31st of the immediately preceding fiscal year or (c) a lesser number determined by the Company’s board of directors prior to January 1 of a given year. In accordance with this provision, on January 1, 2025, the number of shares authorized for issuance under the 2022 Plan increased by 928,309. There was no increase on January 1, 2026 in the number of shares authorized for issuance under the 2022 Plan as the Company has hit its limit.

During the six months ended June 30, 2026, the Company issued 182,631 restricted stock units. At June 30, 2026, 558,218 stock options, 100,895 performance stock options, 706,029 restricted stock units, and 10,416 performance based restricted stock units remain outstanding. As of June 30, 2026, the Company had 251,666 shares of Class A common stock available for issuance under the 2022 Plan.

The Company recognized $793 and $3,864 of stock-based compensation expense for all long term incentive plans in effect during the three months ended June 30, 2026 and 2025, respectively, and $3,800 and $7,118 during the six months ended June 30, 2026 and 2025, respectively.

2022 Employee Stock Purchase Plan

In connection with the Business Combination, the Company’s board of directors adopted, and its stockholders approved, the 2022 Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may authorize payroll deductions of up to 15% of their regular base salary to purchase shares at the lower of 85% of the fair market value of the common stock on the date of commencement of the offering period or on the last day of the six-month offering period. The plan is defined as compensatory, and accordingly, a stock-based compensation charge of $43 was recorded as the difference between the fair market value and the discounted purchase price of the Company's common stock for the three months ended June 30, 2025 and $87 for the six months ended June 30, 2025. There was no stock-based compensation charge recorded for the three and six months ended June 30, 2026. As of June 30, 2026, 124,571 shares have been issued under the ESPP and the Company had 484,558 shares of Class A common stock available for issuance under the ESPP.

2024 Inducement Plan Grants

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In 2024, the Company's board of directors adopted the 2024 Inducement Equity Incentive Plan (the “Plan”). The plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, other stock-based awards and cash-based awards. Under the Plan, 41,666 shares of Class A common stock were initially reserved for issuance.

During 2024, the Company issued 16,666 stock options and 25,000 restricted stock units. At June 30, 2026, 16,666 stock options and 9,555 restricted stock units remain outstanding. The Company recognized $35 of stock-based compensation expense for this plan in effect during the three months ended June 30, 2026 and 2025, respectively. The Company recognized $69 of stock-based compensation expense for this plan in effect during the six months ended June 30, 2026 and 2025, respectively.

Withholding Taxes on Equity Awards

In connection with the settlement of equity awards, the Company records a non-cash liability and corresponding APIC adjustment for the withholding taxes on net share settlement of stock-based compensation and option exercises until such time as those taxes have been remitted to the respective taxing authorities.

Note 12. Earnings (Loss) Per Share

The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty-five votes per share. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one-to-one basis when computing net loss per share. As a result, basic and diluted net income (loss) per share of Class A common stock and Class B common stock are equivalent.

Earnings (loss) per share is computed by dividing net earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period on a basic and diluted basis. The Company's net (loss) income used in computing basic and diluted earnings per share. Diluted (loss) earnings per share considers the impact of potentially dilutive securities.

The following is a calculation of the basic and diluted loss per share for the Company's common stock, including a reconciliation between net loss attributable to common stockholders used for Basic EPS and Diluted EPS for the three and six months ended June 30, 2026 and 2025:

(in thousands, except share and per share data)

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Basic and Diluted Loss Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss used to compute basic and diluted loss per share

 

$

(27,834

)

 

$

(13,271

)

 

$

(71,447

)

 

$

(17,521

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common stock outstanding used in basic and diluted EPS computations

 

 

26,145,210

 

 

 

13,333,374

 

 

 

22,217,096

 

 

 

12,972,412

 

Loss per share, basic and diluted

 

$

(1.06

)

 

$

(1.00

)

 

$

(3.22

)

 

$

(1.35

)

Since the Company was in a net loss position during the three and six months ended June 30, 2026 and 2025, basic net loss per share attributable to common stockholders is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potential common shares excluded from the diluted net loss per share calculation included convertible debentures, earnout awards, restricted stock units, stock options, employee stock purchase plan shares, and convertible notes (including the GPO convertible note and Dragonfly convertible note) outstanding during the period, as described in Note 7, Debt, Note 9, Earnout Shares and RSUs, and Note 11, Stock-Based Compensation.

Note 13. Provision (Benefit) from Income Taxes

Effective Tax Rate

The Company computes its quarterly and year-to-date provisions for income taxes by applying the estimated effective tax rates to the quarterly and year-to-date pre-tax income or losses and adjusting the provisions for discrete tax items recorded in the periods. For the three months ended June 30, 2026 the Company reported a tax benefit of $88 on a pre-tax loss of $27,922, which resulted in an effective tax rate of 0.32 percent. For the six months ended June 30, 2026, the Company reported a tax benefit of $289 on a pre-tax loss of $71,736, which resulted in an effective tax rate of 0.40 percent. The Company’s effective tax rate differed from the U.S. statutory rate of 21% primarily due to the impact of a valuation allowance on the Company’s deferred tax assets.

For the three months ended June 30, 2025, the Company reported a tax benefit of $795 on a pre-tax loss of $14,066, which resulted in an effective tax rate of (5.65) percent. For the six months ended June 30, 2025, the Company reported a tax benefit of $834 on a pre-tax loss of $18,355, which resulted in an effective tax rate of (4.54) percent. The Company’s effective tax rate differed from the U.S. statutory rate of 21% due to the impact of a valuation allowance on the Company’s deferred tax assets and the sale of businesses discussed in Note 3, Dispositions. During the six months ended June 30, 2025, the Company recorded a discrete tax charge for the impact of the sale of Dragonfly and Oxford Analytica of $281. During the second quarter ended June 30, 2025, the Company filed a tax accounting method change that created an additional discrete tax benefit of $689.

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Unrecognized Tax Benefits and Other Considerations

The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company's tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future. As of June 30, 2025, the Company reported an uncertain tax position totaling $832, relating to a deduction for shares distributed for services associated with the payment of convertible debt. At June 30, 2026, the Company has no uncertain tax positions.

Note 14. Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

•
Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets
•
Level 2 – Observable inputs other than quoted prices that are either directly or indirectly observable for the asset or

liability

•
Level 3 – Unobservable inputs that are supported by little or no market activity

The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximates fair value because of the short-term nature of the instruments.

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of June 30, 2026 by level within the fair value hierarchy:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

5,602

 

 

$

-

 

 

$

-

 

 

$

5,602

 

Short-term investments

 

 

-

 

 

 

2,001

 

 

 

-

 

 

 

2,001

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public warrants

 

$

326

 

 

$

-

 

 

$

-

 

 

$

326

 

Private placement warrants

 

 

-

 

 

 

273

 

 

 

-

 

 

 

273

 

2025 GPO Convertible Note

 

 

-

 

 

 

-

 

 

 

17,562

 

 

 

17,562

 

Dragonfly Seller Convertible Notes

 

 

-

 

 

 

-

 

 

 

12,432

 

 

 

12,432

 

Convertible Debentures

 

 

-

 

 

 

-

 

 

 

21,822

 

 

 

21,822

 

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2025 by level within the fair value hierarchy:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

9,208

 

 

$

-

 

 

$

-

 

 

$

9,208

 

Short-term investments

 

 

-

 

 

 

1,995

 

 

 

-

 

 

 

1,995

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public warrants

 

$

260

 

 

$

-

 

 

$

-

 

 

$

260

 

Private placement warrants

 

 

-

 

 

 

217

 

 

 

-

 

 

 

217

 

2025 GPO Convertible Note

 

 

-

 

 

 

-

 

 

 

19,235

 

 

 

19,235

 

Dragonfly Seller Convertible Notes

 

 

-

 

 

 

-

 

 

 

11,982

 

 

 

11,982

 

Convertible Debentures

 

 

-

 

 

 

-

 

 

 

26,663

 

 

 

26,663

 

The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:

 

 

2025 GPO Convertible Note

 

 

Dragonfly Seller Convertible Notes

 

 

Convertible Debentures

 

Balance at December 31, 2025

 

$

19,235

 

 

$

11,982

 

 

$

26,663

 

Change in fair value included in the determination of net loss (income)

 

 

961

 

 

 

430

 

 

 

(1,810

)

Change in fair value included in accumulated other comprehensive income (a)

 

 

(634

)

 

 

(363

)

 

 

 

Paid in kind interest

 

 

-

 

 

 

563

 

 

 

-

 

Note conversion

 

 

(2,000

)

 

 

-

 

 

 

(3,031

)

Foreign exchange

 

 

-

 

 

 

(180

)

 

 

-

 

Balance at June 30, 2026

 

$

17,562

 

 

$

12,432

 

 

$

21,822

 

(a) - The unrealized change in fair value, as a result of the change in in the Company's specific credit risk, is recorded in accumulated other comprehensive income.

Short-Term Investments

The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of June 30, 2026, the estimated fair value of the short-term investments was $2,001. The Company recognized a non-cash loss of $3 and $19 for the three month's ended June 30, 2026 and 2025, respectively. The Company recognized a non-cash gain of $6 and non-cash loss of $71 for the

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six months ended June 30, 2026 and 2025, respectively, resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).

Public Warrants

The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of June 30, 2026 and December 31, 2025, the estimated fair value of the public warrants was $326 and $260, respectively. The Company recognized a non-cash charge of $326 during the three months ended June 30, 2026, a non-cash gain of $593 during the three months ended June 30, 2025, a non-cash charge of $66 during the six months ended June 30, 2026, and a non-cash gain of $509 during the six months ended June 30, 2025, resulting from the change in fair value of the public warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

Private Placement Warrants

As of June 30, 2026 and December 31, 2025, the estimated fair value of the private warrants was $273 and $217, respectively. The Company recognized a non-cash charge of $273 during the three months ended June 30, 2026, a non-cash gain of $497 during the three months ended June 30, 2025, a non-cash charge of $56 during the six months ended June 30, 2026, and a non-cash gain of $427 during the six months ended June 30, 2025, resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

2025 GPO Note / Prior GPO Convertible Note

The Prior GPO Convertible Note was recognized as a liability on its June 30, 2023 issuance date at its estimated fair value of $36,583. The Prior GPO Convertible Note estimated fair value at June 30, 2025 was $36,446 and was determined based on lattice models. On August 12, 2025, the Company extinguished $30,000 of the Prior GPO Convertible Note with a $27,000 cash payment and issued the 2025 GPO Note. The 2025 GPO Note was recognized as a liability at its estimated fair value of $18,865 at its issuance date of August 12, 2025, $19,235 at December 31, 2025, and $17,562 at June 30, 2026, respectively. The unrealized change in the fair value of the 2025 GPO Note of $634 is recorded in accumulated other comprehensive income for the three and six months ended June 30, 2026. The non-cash loss of $547 and $742 for the three months ended June 30, 2026, and 2025, respectively, and non-cash loss of $961 and non-cash gain of $78 for the six months ended June 30, 2026 and 2025, respectively, was recorded in the change in the fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).

The estimated fair value of the 2025 GPO Convertible Note was determined based on a trinomial lattice model. The following table presents the assumptions used to determine the fair value of the 2025 GPO Convertible Note at June 30, 2026 and at December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

Common stock share price

 

$

0.12

 

 

$

1.47

 

Risk free rate

 

 

4.2

%

 

 

3.6

%

Yield

 

 

17.6

%

 

 

16.2

%

Expected volatility

 

 

50.0

%

 

 

50.0

%

Expected term (years)

 

 

3.4

 

 

 

3.9

 

 

Dragonfly Seller Convertible Notes

The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of June 30, 2026 and December 31, 2025, the estimated fair value of the Dragonfly Seller Convertible Notes were $12,432 and $11,982. The non-cash loss of $949 and $91 (excluding the non-cash gain recognized from the January 2025 conversion) was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended June 30, 2026 and 2025, respectively. The unrealized change in the fair value of the Dragonfly Seller Convertible Notes of $363 is recorded in accumulated other comprehensive income for the three and six months ended June 30, 2026. The non-cash loss of $430 and $63 (excluding the non-cash gain recognized from the January 2025 conversion) was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the six months ended June 30, 2026 and 2025, respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

Common stock share price

 

$

0.12

 

 

$

1.47

 

Risk free rate

 

 

4.1

%

 

 

3.5

%

Yield

 

 

19.0

%

 

 

16.6

%

Expected volatility

 

 

50.0

%

 

 

50.0

%

Expected term (years)

 

 

1.6

 

 

 

2.1

 

 

Convertible Debentures

The initial tranche of the Convertible Debentures was recognized as a liability on the August 12, 2025 issuance date at its estimated fair value of $18,900 using a Monte Carlo simulation. The second tranche of the Convertible Debentures was recognized as a liability on

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September 11, 2025 at its estimated fair value of $11,000, using a Monte Carlo simulation. At June 30, 2026 and December 31, 2025, the estimated fair value of the Convertible Debentures were $21,822 and $26,663, respectively. The non-cash gain of $458 and $1,810 was recorded in the change in the fair value of financial instruments in the condensed consolidated statement of operations for the three and six months ended June 30, 2026. The following table presents the assumptions used to determine the fair value of the Convertible Debentures at June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

Common stock share price

 

$

0.12

 

 

$

1.47

 

Risk free rate

 

4.0% (a)

 

 

3.5% (a)

 

Yield

 

 

113.5

%

 

 

101.5

%

Expected volatility

 

 

140.0

%

 

 

111.0

%

Expected term (years)

 

0.6 and 0.7 (a)

 

 

1.1 and 1.2 (a)

 

(a) - Includes both the First and Second Convertible Debenture

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. Excluding the impairment of goodwill as disclosed in Note 6, Goodwill, no other impairment charges were recorded during the three and six months ended June 30, 2026 and 2025. There were no transfers of assets or liabilities between levels during the six months ended June 30, 2026 and 2025. Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive loss.

Note 15. Related Party Transactions

Sublease income

In September 2024, the Company entered into a sublease agreement with a third party, Nitra. In July 2025, the Company amended the initial sublease to include additional space, and in May 2026, the Company further amended the sublease to increase the monthly rent. Our Co-Founder and Executive Chairman is also a board member at Nitra. During the three months ended June 30, 2026 and 2025, we received income from Nitra of approximately $58 and $27, respectively, and $93 and $54 during the six months ended June 30, 2026 and 2025.

 

Note 16. Commitments and Contingencies

Legal Proceedings

From time to time the Company is a party to various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.

Legal fees are recognized as incurred when the legal services are provided, and therefore are not recognized as part of the loss contingency.

 

Note 17. Subsequent Events

The Company has evaluated subsequent events through August 10, 2026, the date that the financial statements were available to be issued.

On July 22, 2026, the forbearance agreements with the Subordinated Creditors was extended to August 21, 2026, whereby 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 22, 2026.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides information that FiscalNote’s management believes is relevant to an assessment and understanding of FiscalNote’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Certain monetary amounts, percentages and other figures included below have been subject to rounding adjustments as amounts are presented in thousands or millions, as the context describes. Percentage amounts included below have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the Closing.

Overview

FiscalNote delivers deep expertise in legislative tracking, regulatory analysis, and stakeholder engagement through PolicyNote, our flagship platform. Built to ensure a complete, real-time view of the policy landscape, PolicyNote delivers extensive policy data integrated with AI-powered monitoring and expert analysis, fueled by the trusted reporting of CQ and Roll Call, and coupled with the grassroots mobilization power of VoterVoice. Our PolicyNote suite rapidly provides users with the clarity on the policy landscape needed to make an impact. In our core products, we ingest unstructured data on legislative and regulatory developments, and overlay that data with our sophisticated in-house AI and data science expertise to deliver structured, relevant and actionable information that facilitates and informs our customers’ key operational and strategic decisions. In addition, as the way organizations consume policy data and analysis changes, we are leveraging our policy domain expertise to expand into political prediction markets and enhancing our agentic API offerings to enable organizations to incorporate our policy intelligence directly into their internally-developed systems.

Significant Events

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.

Factors Impacting the Comparability of Our Operating Results

Dispositions

On July 1, 2025, we completed the sale of TimeBase for $7.4 million comprised of a cash payment to the Company of $6.7 million and a buyer holdback of $0.7 million. The Company recorded a gain of $1.3 million from the sale of TimeBase during the year ended December 31, 2025.

On March 31, 2025, we completed the sale of Dragonfly and Oxford Analytica for $40.3 million in cash. The Company recorded a gain of $15.4 million during the six months ended June 30, 2025.

These businesses contributed the following:

•
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
•
Non-subscription revenue of approximately $0.7 million for the six months ended June 30, 2025

 

Product rationalization

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.

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

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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.

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.

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 evaluate investment and commercial partnership opportunities in complementary businesses 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.

Key Performance Indicators

In addition to our GAAP results further described and discussed below in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we monitor the following key performance indicators to evaluate growth trends, prepare financial projections, make strategic decisions, and measure the effectiveness of our sales and marketing efforts. Our management team assesses our performance based on these key performance indicators because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance.

Annual Recurring Revenue (“ARR”)

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.

Our ARR at June 30, 2026 and December 31, 2025, was $74.9 million and $84.1 million, respectively.

Net Revenue Retention (“NRR”)

Our NRR, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our NRR for a given period as ARR at the end of the period minus ARR contracted from new clients for which there is no historical revenue booked during the period, divided by the beginning ARR for the period. We calculate NRR at our parent account level. Our calculation of NRR for any fiscal period includes the positive recurring revenue impacts of selling additional licenses and services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our NRR may fluctuate as a result of a number of factors, including the level of our revenue base, the level of penetration within our customer base, expansion of products and features, the timing of renewals, and our ability to retain our customers. Our calculation of NRR may differ from similarly titled metrics presented by other companies. NRR was 98% and 96% (excluding the impact of Oxford Analytica and Dragonfly) for the three months ended June 30, 2026 and 2025, respectively.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. While we believe that these non-GAAP financial measures provide useful supplemental information, non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in their financing and accounting methods, the book value of their assets, their capital structures, the method by which their assets were acquired and the manner in which they define non-GAAP measures.

Adjusted Gross Profit and Adjusted Gross Profit Margin

We define Adjusted Gross Profit as Total revenues minus cost of revenues, before amortization of capitalized software development costs and acquired developed technology, before impairment of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Total revenues.

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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.

Adjusted Gross Profit and Adjusted Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. They should not be considered as replacements for gross profit and gross profit margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes. Adjusted Gross Profit and Adjusted Gross Profit Margin as presented herein are not necessarily comparable to similarly titled measures presented by other companies.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items that management believes are not indicative of ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Total Revenues.

We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Quarterly Report on Form 10-Q because these non-GAAP measures are 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.

 

Key Components of Results of Operations

Revenues

We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues accounted for approximately 96% and 92% of our total revenues for the six months ended June 30, 2026 and 2025, respectively.

Subscription revenues

Subscription revenues consist of revenue earned from subscription-based arrangements that provide customers the right to use the Company’s software and products in a cloud-based infrastructure. Subscription revenues are driven primarily by the number of active licenses, the types of products and the price of the subscriptions. The Company also earns subscription revenues by licensing to customers its digital content, including transcripts, news and analysis, images, video and podcast data.

Our subscription arrangements generally have contractual terms of 12 months or more and are non-refundable regardless of the actual use of the service. Subscription revenues are recognized ratably over the non-cancellable contract terms beginning on the commencement date of each contract, which is the date our service is first made available to customers.

Non-subscription revenues

Advisory revenues are typically earned under contracts for specific deliverables and are non-recurring in nature, although we regularly sell different advisory services to repeat customers. One-time advisory revenues are invoiced according to the terms of the contract, usually delivered to the customer over a short period of time, during which revenues are recognized.

Advertising revenues are primarily generated by delivering advertising in our own publications (Roll Call and CQ) in both print and digital formats. Revenues for print advertising are recognized upon publication of the advertisement. Revenues for digital advertising are recognized over the period of the advertisement or, if the contract contains impression guarantees, based on delivered impressions.

Cost of revenues

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, including amortization are our costs related to the preparation of contracted advisory deliverables.

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Research and development

Research and development expenses include the costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with the creation and testing of the products we offer, related software subscriptions, consulting and contractor fees and allocated overhead.

Sales and marketing

Sales and marketing expenses consist primarily of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for our sales and marketing staff, including commissions, related software subscriptions, consulting fees, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities.

Editorial

Editorial expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for the editorial team involved in acquiring, creating, and distributing content and allocated overhead.

General and administrative

General and administrative expenses are primarily related to our executive offices, finance and accounting, human resources, legal, internal operations and other corporate functions. These expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses, along with professional fees, depreciation and other allocated overhead.

Amortization of intangible assets

Amortization expense relates to our finite-lived intangible assets, including developed technology, customer relationship, databases and tradenames. These assets are amortized over periods of between three and twenty years. Finite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value. No impairment of intangible assets has been identified during any financial period included in our accompanying condensed consolidated financial statements.

Interest expense, net

Interest expense, net, consists of expense related to interest on our borrowings, the amortization and write off of debt issuance costs and original discount, and interest related to certain derivative instruments.

Change in fair value of financial instruments

The fair value of financial instruments are accounted for in accordance with ASC 815 and ASC 480. The warrant and derivative liabilities are marked to market each reporting period in accordance with ASC 820 with all gains and losses being recorded within the condensed consolidated statement of operations and comprehensive income (loss).

Income taxes

We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence.

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Results of Operations

The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our condensed consolidated financial statements. The following discussion should be read in conjunction with those condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the Consolidated Results for the Three and Six Months Ended June 30, 2026 and June 30, 2025

The following table presents our results of operations for the periods indicated:

 

 

Three Months Ended
June 30,

 

 

Change

 

 

Six Months Ended
June 30,

 

 

Change

 

(In thousands)

 

2026

 

 

2025

 

 

$

 

 

%

 

 

2026

 

 

2025

 

 

$

 

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription

 

$

18,800

 

 

$

21,380

 

 

$

(2,580

)

 

 

(12.1

)%

 

$

37,853

 

 

$

46,612

 

 

$

(8,759

)

 

 

(18.8

)%

Non-subscription

 

 

781

 

 

 

1,884

 

 

 

(1,103

)

 

 

(58.5

)%

 

 

1,753

 

 

 

4,163

 

 

 

(2,410

)

 

 

(57.9

)%

Total revenues

 

 

19,581

 

 

 

23,264

 

 

 

(3,683

)

 

 

(15.8

)%

 

 

39,606

 

 

 

50,775

 

 

 

(11,169

)

 

 

(22.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, including amortization

 

 

3,976

 

 

 

4,948

 

 

 

(972

)

 

 

(19.6

)%

 

 

8,129

 

 

 

11,932

 

 

 

(3,803

)

 

 

(31.9

)%

Research and development

 

 

1,580

 

 

 

2,267

 

 

 

(687

)

 

 

(30.3

)%

 

 

3,622

 

 

 

5,370

 

 

 

(1,748

)

 

 

(32.6

)%

Sales and marketing

 

 

4,504

 

 

 

6,692

 

 

 

(2,188

)

 

 

(32.7

)%

 

 

10,223

 

 

 

14,451

 

 

 

(4,228

)

 

 

(29.3

)%

Editorial

 

 

3,391

 

 

 

3,472

 

 

 

(81

)

 

 

(2.3

)%

 

 

7,011

 

 

 

8,270

 

 

 

(1,259

)

 

 

(15.2

)%

General and administrative

 

 

9,231

 

 

 

11,378

 

 

 

(2,147

)

 

 

(18.9

)%

 

 

18,735

 

 

 

27,676

 

 

 

(8,941

)

 

 

(32.3

)%

Amortization of intangible assets

 

 

1,889

 

 

 

1,934

 

 

 

(45

)

 

 

(2.3

)%

 

 

3,782

 

 

 

4,265

 

 

 

(483

)

 

 

(11.3

)%

Impairment of goodwill

 

 

19,100

 

 

 

-

 

 

 

19,100

 

 

NM

 

 

 

54,700

 

 

 

-

 

 

 

54,700

 

 

NM

 

Total operating expenses

 

 

43,671

 

 

 

30,691

 

 

 

12,980

 

 

 

42.3

%

 

 

106,202

 

 

 

71,964

 

 

 

34,238

 

 

 

47.6

%

Operating loss

 

 

(24,090

)

 

 

(7,427

)

 

 

(16,663

)

 

 

224.4

%

 

 

(66,596

)

 

 

(21,189

)

 

 

(45,407

)

 

 

214.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on sale of business

 

 

-

 

 

 

319

 

 

 

(319

)

 

 

(100.0

)%

 

 

-

 

 

 

(15,424

)

 

 

15,424

 

 

 

100.0

%

Interest expense, net

 

 

3,904

 

 

 

4,338

 

 

 

(434

)

 

 

(10.0

)%

 

 

7,260

 

 

 

9,465

 

 

 

(2,205

)

 

 

(23.3

)%

Loss on debt extinguishment, net

 

 

-

 

 

 

-

 

 

 

-

 

 

NM

 

 

 

-

 

 

 

1,784

 

 

 

(1,784

)

 

 

(100.0

)%

Change in fair value of financial instruments

 

 

(93

)

 

 

1,577

 

 

 

(1,670

)

 

 

(105.9

)%

 

 

(1,955

)

 

 

906

 

 

 

(2,861

)

 

 

(315.8

)%

Other (income) expense, net

 

 

21

 

 

 

405

 

 

 

(384

)

 

 

(94.8

)%

 

 

(165

)

 

 

435

 

 

 

(600

)

 

NM

 

Net loss before income taxes

 

 

(27,922

)

 

 

(14,066

)

 

 

(13,856

)

 

 

98.5

%

 

 

(71,736

)

 

 

(18,355

)

 

 

(53,381

)

 

NM

 

Benefit from income taxes

 

 

(88

)

 

 

(795

)

 

 

707

 

 

 

(88.9

)%

 

 

(289

)

 

 

(834

)

 

 

545

 

 

NM

 

Net loss

 

$

(27,834

)

 

$

(13,271

)

 

$

(14,563

)

 

 

109.7

%

 

$

(71,447

)

 

$

(17,521

)

 

$

(53,926

)

 

NM

 

NM - Not meaningful

Revenue:

Subscription revenue

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.

The comparability of our revenues between periods was primarily impacted by sales of the businesses of Dragonfly, Oxford Analytica on March 31, 2025 and TimeBase on July 1, 2025 described under “Factors Impacting the Comparability of Our Results of Operations” above. The decrease in organic subscription revenue is primarily the result of customer retention challenges combined with the impact of Federal government cuts. The table below presents the primary items that impacted the comparability of our subscription revenues between periods.

 

 

Change for the Three Months Ended

 

 

Change for the Six Months Ended

 

 

 

June 30, 2026 vs June 30, 2025

 

 

June 30, 2026 vs June 30, 2025

 

(In thousands)

 

$

 

 

%

 

 

$

 

 

%

 

Revenue change driver:

 

 

 

 

 

 

 

 

 

 

 

 

Decrease from sale of businesses

 

 

(300

)

 

 

(100

)%

 

 

(4,048

)

 

 

(100

)%

Decrease from discontinued products

 

 

-

 

 

 

0

%

 

 

(22

)

 

 

(14

)%

Decrease from organic business

 

 

(2,280

)

 

 

(11

)%

 

 

(4,689

)

 

 

(11

)%

Revenues, net (total change)

 

$

(2,580

)

 

 

(12

)%

 

$

(8,759

)

 

 

(19

)%

Non-subscription revenue

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.

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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.

Revenues by Geography

The below tables present our revenues split by geographic region for the periods presented:

 

 

Three Months Ended
June 30,

 

 

Change

 

(In thousands)

 

2026

 

 

2025

 

 

$

 

 

%

 

North America

 

$

18,348

 

 

$

21,699

 

 

$

(3,351

)

 

 

(15.4

)%

Rest of the world

 

 

1,233

 

 

 

1,565

 

 

 

(332

)

 

 

(21.2

)%

Total revenues

 

$

19,581

 

 

$

23,264

 

 

$

(3,683

)

 

 

(15.8

)%

 

 

 

Six Months Ended
June 30,

 

 

Change

 

(In thousands)

 

2026

 

 

2025

 

 

$

 

 

%

 

North America

 

$

37,123

 

 

$

43,609

 

 

$

(6,486

)

 

 

(14.9

)%

Rest of the world

 

 

2,483

 

 

 

7,166

 

 

 

(4,683

)

 

 

(65.4

)%

Total revenues

 

$

39,606

 

 

$

50,775

 

 

$

(11,169

)

 

 

(22.0

)%

Revenues by geography are determined based on the region of the FiscalNote contracting entity, which may be different than the region of the customer. North America revenues decreased primarily for the reasons stated above. The Rest of the world revenues decreased primarily for the decreases due to sale of businesses.

Cost of revenues, including amortization

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.

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.

Research and development

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.

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.

 

Sales and marketing

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.

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.

Editorial expense

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.

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.

General and administrative

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.

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

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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.

Amortization of intangibles

Amortization of intangibles was $1.9 million for the three months ended June 30, 2026 and 2025, respectively.

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.

Interest expense, net

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.

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.

Change in fair value of financial instruments

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.

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.

Certain Non-GAAP Measures

We present certain non-GAAP financial measures including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA. Our management team assesses our performance based on these non-GAAP measures because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance. We believe these measures are useful for investors for the same reasons. Investors should be aware that these measures are not a substitute for GAAP financial measures or disclosures. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure.

Adjusted Gross Profit and Adjusted Gross Profit Margin

The following table presents our calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin for the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Total revenues

 

$

19,581

 

 

$

23,264

 

 

$

39,606

 

 

$

50,775

 

Costs of revenues, including amortization of capitalized software development costs and acquired developed technology

 

 

(3,976

)

 

 

(4,948

)

 

 

(8,129

)

 

 

(11,932

)

Gross Profit

 

$

15,605

 

 

$

18,316

 

 

$

31,477

 

 

$

38,843

 

Gross Profit Margin

 

 

80

%

 

 

79

%

 

 

79

%

 

 

77

%

Gross Profit

 

 

15,605

 

 

 

18,316

 

 

 

31,477

 

 

 

38,843

 

Amortization of intangible assets

 

 

1,661

 

 

 

1,779

 

 

 

3,250

 

 

 

5,311

 

Adjusted Gross Profit

 

$

17,266

 

 

$

20,095

 

 

$

34,727

 

 

$

44,154

 

Adjusted Gross Profit Margin

 

 

88

%

 

 

86

%

 

 

88

%

 

 

87

%

 

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

The following table presents our calculation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the periods presented:

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Table of Contents

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Net loss

 

$

(27,834

)

 

$

(13,271

)

 

$

(71,447

)

 

$

(17,521

)

Benefit from income taxes

 

 

(88

)

 

 

(795

)

 

 

(289

)

 

 

(834

)

Depreciation and amortization

 

 

3,784

 

 

 

3,960

 

 

 

7,503

 

 

 

10,078

 

Interest expense, net

 

 

3,904

 

 

 

4,338

 

 

 

7,260

 

 

 

9,465

 

EBITDA

 

 

(20,234

)

 

 

(5,768

)

 

 

(56,973

)

 

 

1,188

 

Loss (gain) on sale of business (a)

 

 

-

 

 

 

319

 

 

 

-

 

 

 

(15,424

)

Stock-based compensation

 

 

828

 

 

 

3,964

 

 

 

3,869

 

 

 

7,339

 

Change in fair value of financial instruments (b)

 

 

(93

)

 

 

1,577

 

 

 

(1,955

)

 

 

906

 

Other non-cash charges (c)

 

 

19,121

 

 

 

662

 

 

 

54,544

 

 

 

2,801

 

Disposal related costs (d)

 

 

27

 

 

 

971

 

 

 

245

 

 

 

5,945

 

Employee severance costs (e)

 

 

335

 

 

 

800

 

 

 

929

 

 

 

2,144

 

CEO severance (f)

 

 

1,812

 

 

 

-

 

 

 

1,812

 

 

 

-

 

Non-capitalizable debt costs

 

 

533

 

 

 

337

 

 

 

831

 

 

 

744

 

Costs incurred related to the Special Committee

 

 

(3

)

 

 

167

 

 

 

45

 

 

 

167

 

Non-operating income (g)

 

 

-

 

 

 

(228

)

 

 

-

 

 

 

(228

)

Adjusted EBITDA

 

$

2,326

 

 

$

2,801

 

 

$

3,347

 

 

$

5,582

 

Adjusted EBITDA Margin

 

 

11.9

%

 

 

12.0

%

 

 

8.5

%

 

 

11.0

%

(a)
Reflects the gain on disposal of Dragonfly and Oxford Analytica on March 31, 2025.
(b)
Reflects the non-cash impact from the mark to market adjustments on our financial instruments.
(c)
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.
(d)
Reflects the costs incurred related to the sale of Oxford Analytica and Dragonfly, in the first quarter of 2025, principally consisting of transaction advisory, accounting, tax, and legal fees.
(e)
Severance costs associated with workforce changes related to business realignment actions.
(f)
Reflects severance costs incurred related to the resignation of our prior CEO on June 26, 2026.
(g)
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.

 

Liquidity and Capital Resources

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.

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.

As described in Note 7, Debt to the condensed consolidated financial statements included elsewhere in this Form 10-Q, on August 12, 2025 we refinanced a substantial amount of our legacy indebtedness. On March 23, 2026, we amended the financial covenants of our 2025 Senior Term Loan (the "2025 Senior Term Loan Amendment").

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.

Our ability to maintain our minimum cash requirement, fund our future cash interest 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 2025 and 2026 that we believe provide 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.

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 June 30, 2026 and December 31, 2025

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consisted of the following (excluding any fair value adjustments and debt discounts, as applicable):

(In thousands)

 

June 30, 2026

 

 

December 31, 2025

 

2025 Senior Term Loan

 

$

70,313

 

 

$

74,063

 

2025 GPO Convertible Note

 

 

18,434

 

 

 

20,434

 

Convertible Debentures

 

 

24,241

 

 

 

27,400

 

Dragonfly Seller Convertible Notes

 

 

14,637

 

 

 

14,289

 

Total Indebtedness

 

$

127,625

 

 

$

136,186

 

2025 Senior Term Loan

On August 12, 2025 the Company closed on its new $75.0 million senior term loan that matures on August 12, 2029 (the "2025 Senior Term Loan") and received net proceeds of $72.9 million after original issue discount (“OID”) of $2.1 million, or 2.75%. The Company incurred approximately $1.9 million of lender fees and fees paid to third parties. OID and capitalized debt issuance costs totaled $4.0 million and is treated as a debt discount and will be amortized over the term of the 2025 Senior Term Loan using the effective interest method.

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.

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.

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.

On March 23, 2026, the Company entered into an amendment to its 2025 Senior Term Loan whereby the lenders, (a) waived the Company's default of its minimum ARR requirement, (b) amended the Company's financial covenants through March 31, 2027, and (c) increased the Company's interest rate to the reference rate plus 8.50% or SOFR plus 9.50%.

Convertible Debentures

In conjunction with the establishment of the 2025 Senior Term Loan and in order to fund the GPO Redemption (defined below), on August 5, 2025 (the “Purchase Agreement Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”), with YA II PN, Ltd (“YA”), pursuant to which the Company issued YA convertible debentures in an aggregate principal amount of $33.3 million (the “Convertible Debentures”) for a total cash purchase price of approximately $30.0 million, subject to satisfaction of certain closing conditions.

On August 12, 2025, the initial tranche of Convertible Debentures comprising $21.0 million in stated principal amount were issued to YA, in accordance with the Purchase Agreement, with the Company receiving net proceeds of $18.9 million (the "First YA Debenture"). On September 11, 2025, the second, and final tranche of Convertible Debentures comprising $12.3 million in stated principal amount were issued to YA, in accordance with the Purchase Agreement with the Company receiving net proceeds of $11.0 million (the "Second YA Debenture").

The Company’s obligations under the Purchase Agreement and the Debentures are guaranteed by FiscalNote, Inc., a wholly owned subsidiary of the Company, and are contractually subordinated to the Company’s obligations under its 2025 Senior Term Loan and the 2025 GPO Convertible Note. The First YA Debenture matures on February 12, 2027 and the Second YA Debenture matures on March 11, 2027 and both bear interest at a rate of 5% per annum or 18% per annum in the event of an event of default.

At any time prior to the maturity dates, and subject to certain ownership and conversion limitations, YA is entitled to convert any portion of the principal amount of the Debentures and accrued interest thereon into shares of the Company’s Class A Common Stock (the “Debenture Conversion Shares”) at a conversion price equal to 94% of the lowest daily volume weighted average trading price (“VWAP”) during the five trading days prior to the conversion date, subject to a floor price of $0.8884 (the “Floor Price”). Because the delisting from NYSE and subsequent trading of our Class A common stock caused our daily VWAP to be less than the Floor Price, the Company was required to make certain amortizing payments to the YA (if and to the extent permitted under the subordination agreements) or reduce the Floor Price to no more than 75% of the closing price on the relevant date pursuant to the Convertible Debentures. However, pursuant to the forbearance agreement, YA has agreed not to cause an event of default based on this obligation until August 22, 2026.

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2025 GPO Convertible Note / Prior GPO Convertible Note

On June 30, 2023, the Company issued to GPO FN Noteholder LLC (the “GPO Investor”) a subordinated convertible promissory note in an initial principal amount of $46.8 million (the “Prior GPO Convertible Note”). Pursuant to the terms of the Prior GPO Convertible Note, paid-in-kind interest accrued from the date of issuance through June 30, 2024. Beginning on July 1, 2024, the Company was required to pay interest with either cash or shares, solely at the discretion of the Company. Accordingly, since September 30, 2024 and through December 31, 2025, the Company issued the GPO Investor 346,058 Class A Common Shares, in the aggregate, in satisfaction of quarterly interest.

In conjunction with the establishment of the 2025 Senior Term Loan, on August 5, 2025, the Company entered into a redemption and exchange agreement with the GPO Investor.

Pursuant to the redemption and exchange with the GPO Investor, on August 12, 2025, the Company redeemed $30.0 million of the Prior GPO Convertible Note in exchange for a cash payment of $27.0 million to the GPO Investor (the "GPO Redemption"). The Company also issued the 2025 GPO Convertible Note in exchange for, and the cancellation of, the remaining obligations under the existing Prior GPO Convertible Note.

The 2025 GPO Convertible Note is guaranteed by the Company’s domestic subsidiaries, which are parties to the 2025 Senior Term Loan, and is contractually subordinated to the Company’s obligations under the 2025 Senior Term Loan. The 2025 GPO Convertible Note matures on November 13, 2029 and bears interest at a rate of 7.50% per annum payable quarterly in arrears, in cash or, provided no event of default is then occurring under the 2025 GPO Convertible Note, freely tradeable shares of the Company's Class A Common Stock, at the Company’s option, with the value per share determined with reference to the VWAP of the Class A Common Stock over the trading days occurring within the thirty calendar days prior to the applicable interest payment date. At any time prior to November 13, 2029, the GPO Investor is entitled to convert all or any portion of the principal amount of the 2025 GPO Convertible Note and accrued interest thereon into shares of the Company's Class A Common Stock at an initial conversion price of $82.92 per share (subject to customary anti-dilution adjustments). Under the terms of the 2025 GPO Convertible Note, the Company is required to make quarterly installment payments of $2.0 million of the outstanding principal beginning April 1, 2026 in the form of freely tradeable shares of the Company's Class A Common Stock, cash, or a combination thereof, solely at the determination of the Company. Class A Common Stock issued to satisfy quarterly interest and principal repayments will be issued at a price equal to the lowest of (i) the then-effective Conversion Price under the 2025 GPO Convertible Note, (ii) 95% of the VWAP of the Class A Common Stock over the ten trading days immediately preceding the applicable Installment Date and (iii) 95% of the VWAP of the Class A Common Stock over the trading days occurring within the ninety calendar day period immediately preceding the applicable payment date.


Dragonfly Seller Convertible Note

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

Capital expenditures

Capital expenditures primarily consist of purchases of capitalized software costs and property and equipment. Our capital expenditures program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment to grow our business. We typically fund our capital expenditures through cash 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.

Cash Flow Summary

The following tables summarizes our cash flows for the periods presented:

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

Net cash provided by (used in):

 

 

 

 

 

 

Operating activities

 

$

895

 

 

$

(2,895

)

Investing activities

 

$

(3,323

)

 

$

36,795

 

Financing activities

 

$

(3,705

)

 

$

(28,817

)

Effect of exchange rates on cash

 

$

(231

)

 

$

116

 

Net change in cash and cash equivalents

 

$

(6,364

)

 

$

5,199

 

Operating activities

Cash provided by operating activities consists of net loss 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 warrant liabilities, non-cash interest expense, and loss on debt extinguishment, as well as the effect of changes in working capital and other activities.

Cash 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.

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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.

Investing activities

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.

Financing activities

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.

Commitments and Contingencies

Our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 4, Leases to the condensed consolidated financial statements included elsewhere herein. For more information regarding our debt service obligations, see Note 7, Debt to the condensed consolidated financial statements included elsewhere herein. See also Note 16, Commitments and Contingencies to the condensed consolidated financial statements included elsewhere herein.

Off-Balance Sheet Arrangements

During the periods presented, we did not engage in any off-balance sheet financing activities or other arrangements that have or are reasonably likely to have a current or future material effect on our financial condition or results of operations.

Recently Issued Accounting Pronouncements

For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, if any, refer to Note 1 of the notes to our financial statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates and Policies

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that involve a significant level of estimation uncertainty and are reasonably likely to have a material impact on the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

There were no significant and material changes in our critical accounting policies and use of estimates during the 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.

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Table of Contents

 

Item 3. Quantitative and Qualitative Disclosures About Market Risks.

We are exposed to market risks in the ordinary course of our business. These risks primarily consist of inflation risk and fluctuations in interest rates and foreign currency exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Foreign Currency Exchange Risk

We use the U.S. Dollar ("USD") as our reporting currency. Our local subsidiaries transact generally in their local currency, considered the functional currency for that subsidiary. Our foreign currency exchange rate risk is related to translation of our assets and liabilities from the subsidiaries' functional currencies to USD. These adjustments are recorded in accumulated other comprehensive income (loss) on our condensed consolidated balance sheets. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro and British Pound Sterling. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States as well as the European Union, United Kingdom, and India. Our results of operations and cash flows in the future may be adversely affected due to an expansion of non-U.S. dollar denominated contracts, growth of our international entities and changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our cash denominated in foreign currency. To date, we have not engaged in any hedging strategies. As our international operations grow, we will continue to reassess our approach to manage the risk relating to fluctuations in currency rates.

Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenues for the three and six months ended June 30, 2026, were impacted by less than 1.0% compared to the three and six months ended June 30, 2025.

Interest Rate Risk

We are subject to market risk associated with changing interest rates within our variable rate 2025 Senior Term Loan. Our exposure to changes in interest rates in the future is currently associated with the secured overnight financing rate as determined by the Federal Reserve Bank of New York ("SOFR").

As of June 30, 2026, we had outstanding borrowings on our Senior Term Loan of $70.3 million, which bears interest at a variable rates, set at the Company's option, based on a referenced rate plus 8.50%, or SOFR plus 9.50%. At June 30, 2026, the interest rate on our 2025 Senior Term Loan was 13.14% determined based on SOFR plus 9.50%. Assuming no change in the outstanding borrowings on our 2025 Senior Term Loan, we estimate that a one percentage point increase in SOFR would increase our annual cash interest expense by approximately $0.7 million.

Inflation Risk

Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our business.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, due to the material weakness identified in the prior year, our disclosure controls and procedures were not effective as of June 30, 2026. Notwithstanding the material weakness, our management has concluded that the financial statements included elsewhere in this report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.

Changes in Internal Control over Financial Reporting

Other than the material weakness disclosure in our Annual Report on Form 10-K filed with the SEC on March 24, 2026, and material weakness remediation activities that have begun in 2026, there were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that occurred during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

36


 

PART II—OTHER INFORMATION

From time to time, we may become involved in legal or regulatory proceedings, including intellectual property claims, commercial contract matters or employment-related disputes. Such cases may raise complex factual and legal issues, may subject us to material risks and uncertainties, could require significant management time and corporate resources to defend, could result in significant media coverage and negative publicity, and could be harmful to our reputation and our brand. We are not currently a party to any litigation or regulatory proceeding that we expect to have a material adverse effect on our business, results of operations, financial conditions or cash flows.

Item 1A. Risk Factors.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 24, 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

Other than as reported on each of our Current Reports on Form 8-K, we did not have any unregistered sales of equity securities during the three months ended June 30, 2026.

Use of Proceeds

Not applicable.

Purchase of Equity Securities

We did not repurchase shares of our common stock during the three months ended June 30, 2026.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit

Number

Description

Incorporation by Reference (where a report is indicated below, that document has been previously filed with the SEC and the applicable exhibit is incorporated by reference thereto)

2.1

 

Agreement and Plan of Merger, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).

Annex A to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483).

2.2

 

First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).

Annex A-2 to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483).

3.1

 

Certificate of Incorporation of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.).

Exhibit 3.1 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972)

3.2

 

Bylaws of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.).

Exhibit 3.2 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972)

4.1

 

Warrant Agreement, dated as of October 28, 2020, by and among Duddell Street Acquisition Corp and Continental Stock Transfer & Trust Company, as warrant agent.

Exhibit 4.1 of DSAC’s Current Report on Form 8-K filed with the SEC on November 2, 2020 (File No. 333-249207).

4.2

 

Form of Warrant

Exhibit 10.2 to the Current Report on Form 8-K filed on March 20, 2023 (File No. 001-39672).

10.1+*

 

 

10.2+

 

Employment Agreement, dated July 24, 2026, by and between the Company and Key Compton

Performance-Based Restricted Stock Award, dated July 24, 2026, by and between the Company and Key Compton

Filed with this report.

 

 

Filed with this report.

37

 


Table of Contents

 

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).

Filed with this report.

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).

Filed with this report.

32

 

Section 1350 Certifications.

Furnished with this report.

101.INS

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

Submitted electronically with this report.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

Submitted electronically with this report.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Submitted electronically with this report.

 

+ Indicates a management contract or compensatory plan.

* All schedules have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish a copy of all omitted schedules to the SEC upon its request.

 

 

38


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FISCALNOTE HOLDINGS, INC.

Date: August 10, 2026

By:

/s/ Jon Slabaugh

Name: Jon Slabaugh

Title: Chief Financial Officer

Date: August 10, 2026

By:

/s/ Key Compton

Name: Key Compton

Title: Chief Executive Officer

39

 


Exhibit 10.1

 

Execution Copy

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), entered into as of July 24, 2026, is made by and between FiscalNote Holdings, Inc., a Delaware corporation (the “Company”), and Key Compton (“Executive” and together with the Company, the “Parties”).

 

WHEREAS, the Company and the Executive mutually desire that the Executive serve the Company as the President and Chief Executive Officer of the Company pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

1)
Employment.

 

a)
General. During the Term (as defined below), the Company shall employ Executive upon the terms and conditions provided herein.

 

b)
Position and Duties. During the Term, Executive (i) shall serve as the Company’s President and CEO, with responsibilities, duties, and authority usual and customary for the such position, subject to direction by the Company’s Board of Directors (the “Board”) consistent with the foregoing; (ii) shall report directly to the Board and (iii) shall comply in all material respects with all present and future policies, requirements, rules and regulations, and reasonable directions and requests of the Company in connection with the Company’s business that are consistent with his position. During the Term, Executive shall continue to serve as a member of the Board, subject to applicable law, the Company’s organizational documents and any required stockholder approval. At the Company’s request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executive’s position with the Company. In the event that Executive serves in any one or more of such additional capacities, Executive’s compensation shall not automatically be increased on account of such additional service.

 

c)
Performance of Executive’s Duties. During Executive’s employment with the Company, and except for periods of illness, vacation, Disability (as defined below), or reasonable leaves of absence or as discussed in Section 1(e), Executive shall devote Executive’s full time and attention to the business and affairs of the Company pursuant to the general direction of the Board.

 

d)
Principal Office. Except as may otherwise be mutually agreed, Executive will work remotely as Executive’s principal place of employment. Executive may maintain Executive’s primary residence in New Jersey and, in such case, shall perform Executive’s duties remotely from such residence, subject to reasonable travel to Washington, District of Columbia and other locations for Company business as reasonably requested by the Company.

DOCPROPERTY "CUS_DocIDChunk0" 120406333.3


 

 

 

e)
Exclusivity. Except with the prior written approval of the Board, Executive shall devote substantially all of Executive’s working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and not-for-profit or charitable affairs (including without limitation serving on boards of not-for-profit entities) without approval of the Board, provided such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the Company’s standards of conduct then in effect, or raise a conflict under any conflict of interest policy of the Company. With the written approval of the Board, Executive may also serve on the board of directors or board of advisors of up to one (1) for-profit entity provided (i) each such organization is not a competitor of the Company; and (ii) such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the Company’s standards of conduct then in effect, or raise a conflict under any conflict of interest policy of the Company. Executive agrees to resign from any such board service in the event the Board reasonably determines that Executive continuing such board service violates clause (i) or (ii) of the preceding sentence.
f)
Permitted Outside Activity. Notwithstanding anything to the contrary in this Section 1 (including the exclusivity obligations set forth in Section 1(e)), the Company acknowledges and agrees that, during the Term, Executive serves, and may continue to serve, as a Managing Director of Urgent International, Inc. and its affiliated entities (including, without limitation, Urgent Capital LLC and Global Public Offering Master Fund LP) (collectively, “Urgent”), and that Executive may continue to perform services for, hold equity and partnership interests in, and receive compensation from Urgent. The Company agrees that such service and activities shall be deemed permitted activities for all purposes of this Agreement and shall not constitute a breach of Section 1 or a basis for Cause, provided that such service and activities do not (i) involve a business that is a competitor of the Company or (ii) individually or in the aggregate materially interfere with the performance of Executive's duties under this Agreement.

 

2)
Term. The period of Executive’s employment under this Agreement shall be deemed to have commenced on June 22, 2026 (the “Effective Date”) and unless earlier terminated by either Party, shall continue until the first anniversary of the Effective Date (the “Initial Term”) and upon the expiration of the Initial Term, and each year thereafter, this Agreement shall renew automatically for an additional twelve (12) months (any such twelve (12) month extension, once in effect, along with the Initial Term, the “Term”) unless either Party provides written notice of non-renewal to the other Party at least three (3) months in advance of the then scheduled expiration of the Term. Notwithstanding any contrary provision herein, Executive’s employment with the Company is “at will” and may be terminated by the Company or Executive at any time and for any or no reason.

 

3)
Compensation and Related Matters.

 

 

DOCPROPERTY "CUS_DocIDChunk0" 120406333.3


 

 

a)
Annual Base Salary. During the Term, Executive shall receive a base salary at the rate of $425,000 per year (as may be increased from time to time, the “Annual Base Salary”), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the Board and/or the Compensation Committee of the Board (“Compensation Committee”) not less than annually.

 

b)
Annual Bonus. During the Term, Executive shall be eligible to receive a discretionary annual bonus based on Executive’s achievement of performance objectives determined annually by the Compensation Committee in consultation with Executive (the “Annual Bonus”), such bonus to be targeted at 75% of Executive’s Annual Base Salary (the “Target Bonus”). Any Annual Bonus approved by the Compensation Committee of the Board shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executive’s continuous employment through the date of payment (other than as otherwise set forth in Section 6(a)). Executive’s annual bonus for 2026 will be no less than the Target Bonus, pro-rated based on the number of days during 2026 that Executive was employed by the Company.

 

c)
Benefits. During the Term, Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.

 

d)
Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company, including reasonable, documented, out-of-pocket travel and related expenses incurred in connection with (i) travel to and within Washington, District of Columbia for Company business, and (iii) other Company-requested or Company-related business travel, in each case in accordance with the Company’s applicable expense reimbursement policies and procedures as are in effect from time to time.

 

e)
Legal Fees. The Company shall reimburse Executive for reasonable legal fees and expenses incurred by Executive in connection with the preparation, negotiation, and documentation of this Agreement and any related documents, ancillary agreements, and any other matters arising out of the employment relationship, within ten (10) days after Executive’s presentation of reasonable documentation therefor.

 

f)
Vacation. Executive will be entitled to paid vacation in accordance with the Company’s vacation policy. Any vacation shall be taken at the reasonable and mutual convenience of the Company and Executive.

 

4)
Incentive Awards.
 

 

DOCPROPERTY "CUS_DocIDChunk0" 120406333.3


 

 

a)
Initial Equity Award. Upon the date hereof, Executive shall be granted an award of no less than 1,450,000 shares of restricted common stock (the “Performance Stock”) that shall become vested and otherwise be subject to the terms and conditions of the Notice of Performance-Based Restricted Stock Award and Standard Terms and Conditions for Performance-Based Restricted Stock substantially in the form set forth on Exhibit B. In addition, within thirty (30) days following the grant of such Performance Stock, the Company shall provide Executive a cash payment in an amount sufficient, after payment of any and all applicable federal, state, local and foreign income and employment taxes imposed on such cash payment, to cover the taxes imposed on Executive as a result of taking such Performance Stock into income as of the date of grant, based on an assumed effective tax rate equal to the highest applicable U.S. federal, state and local tax rate applicable to Executive, provided that Executive timely files a Section 83(b) election with respect to all of the shares of the Performance Stock and provides evidence of such election to the Company.

 

b)
Annual Equity Grants. Executive shall be eligible for such stock options and equity awards as may be determined by the Compensation Committee, in its sole discretion, consistent with its policies and practices pertaining to equity awards for Company executives.

 

c)
Transaction Bonus. Upon the occurrence of a Change in Control during the period that commences on the Effective Date and ends six-months following the Date of Termination, Executive shall receive a transaction bonus equal to $1,000,000, less the proceeds, if any, actually received by Executive in connection with the consummation of such Change in Control in respect of the outstanding Performance Stock (the “Transaction Bonus”), payable within thirty (30) days following the consummation of such Change in Control. To the extent that additional amounts become payable with respect to the Performance Stock after the date of the Change in Control, Executive shall repay to the Company the amount of the Transaction Bonus received by Executive that is equal to such additional amounts payable (but in no event shall Executive be required to repay an amount in excess of the Transaction Bonus paid to Executive).

 

5)
Termination.

 

a)
At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and shall continue to be “at will,” as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executive’s job duties, title, responsibility and reporting level, work schedule, compensation, and benefits, as well as the Company’s personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of this Agreement). This “at-will” nature of Executive’s employment shall remain unchanged during Executive’s tenure as an employee and may not be changed, except in an express writing signed by Executive, on the one hand, and a duly-authorized officer of the Company (other than Executive) acting with the approval

 

DOCPROPERTY "CUS_DocIDChunk0" 120406333.3


 

 

of the Board or the Compensation Committee, on the other hand. If Executive’s employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement or another written agreement between a member of the Company Group and Executive.

 

b)
Notice of Termination. During the Term, any termination of Executive’s employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a “Notice of Termination”) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any; (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated; and (iii) specifying the Date of Termination (as defined below). The failure by either party to set forth in the Notice of Termination all of the facts and circumstances that contribute to a showing of Cause or Good Reason, as applicable, shall not waive any right of such party hereunder or preclude such party from asserting such facts or circumstances in enforcing its rights hereunder.

 

c)
Date of Termination. For purposes of this Agreement, “Date of Termination” shall mean the date of the termination of Executive’s employment with the Company specified in a Notice of Termination; provided, however, that in the event of Executive’s resignation without Good Reason (as defined below), such date shall not be earlier than thirty (30) days following the date on which the Notice of Termination is delivered by Executive to the Company; and provided, further, that the Company may waive any period of notice provided by Executive, thereby accelerating Executive’s Date of Termination.

 

d)
Deemed Resignation. Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Company’s request, Executive shall immediately execute such documents as are necessary or desirable to effectuate such resignations.

 

6)
Consequences of Termination.

 

a)
Payments of Accrued Obligations upon All Terminations of Employment. Upon a termination of Executive’s employment for any reason, Executive (or Executive’s estate or legal representative, as applicable) shall be entitled to receive, within 30 days after Executive’s Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executive’s Annual Base Salary earned through Executive’s Date of Termination not theretofore paid; (ii) any expenses owed to Executive under Section 3; (iii) any accrued but unused paid time off owed to Executive; (iv) any vested amount arising from Executive’s participation in any employee benefit plans, programs or arrangements under Section 3 or 4, which amounts shall be payable in accordance with the terms and conditions of such plans, programs, agreements or arrangements; (v) other than in connection with a termination by the Company for Cause or by Executive without Good Reason, payment of any prior year’s earned discretionary annual bonus to the extent not previously paid, paid in accordance with Section 3(b); and (vi) other than in connection with a termination by the Company for Cause, for purposes of vesting with respect to

 

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the Transaction Bonus or Executive’s outstanding Company equity awards that are scheduled to vest subject to continued service or employment and the attainment of one or more performance objectives, the time (service) conditions shall accelerate so that such awards shall be vested to the same extent as if Executive had provided an additional six (6) months of service or employment from the Date of Termination, and the performance conditions will not be accelerated but will become vested if and to the extent a performance vesting milestone is attained as of the Date of Termination or within the additional six (6) month period following the Date of Termination. Except as otherwise set forth in Sections 6(b) and (c), the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executive’s termination of employment for any reason under this Agreement.

 

b)
Severance Payments upon Covered Termination Outside a Change in Control Period. If Executive experiences a Covered Termination outside a Change in Control Period (each as defined below), then in addition to the payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of a Release (as defined below) that becomes effective and irrevocable in accordance with Section 11(d) and Executive’s continued compliance with the terms of this Agreement, provide Executive with the following benefits set forth in this Section 6(b). For purposes of this Agreement, “Release” means a separation and general release agreement in all material respects in the form attached as hereto as Exhibit A, subject to such changes that the Company reasonably determines are appropriate in light of changes in applicable law.
i)
The Company shall pay to Executive an amount equal to the sum of (A) fifty percent (50%) of Executive’s Annual Base Salary and (B) fifty percent (50%) of the Target Bonus for the fiscal year in which the Date of Termination occurs. Such amount shall be paid, subject to applicable withholding and Sections 10 and 11(c), in substantially equal installments over six (6) months following the Date of Termination in accordance with the Company’s regular payroll practices; provided, however, that amounts shall accrue, with payments of accrued amounts made on the second regularly scheduled payroll date after the Release Expiration Date (as defined below) and then continuing thereafter.
ii)
For purposes of vesting with respect to Executive’s outstanding Company equity awards that are scheduled to vest subject to continued service or employment, vesting shall accelerate so that such awards shall be vested to the same extent as if Executive had provided an additional six (6) months of service or employment from the Date of Termination.
iii)
During the period commencing on the Date of Termination and ending on the six (6)-month anniversary thereof or, if earlier, the date of Executive’s death, subject to Executive’s valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder, the Company shall pay 100% of the Executive’s COBRA premium; provided, however, that if the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health

 

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Service Act), then the parties hereby agree to negotiate in good faith to modify the foregoing provision in such manner as to avoid the imposition of such excise taxes while also maintaining, to the maximum extent reasonably possible, the original intent and economic benefits to the Executive and the Company under this clause (iii).
iv)
For avoidance of doubt, the Transaction Bonus shall remain payable upon any Change in Control that occurs within six months following the Date of Termination.

 

c)
Severance Payments upon Covered Termination During a Change in Control Period At Any Time During the Term. If, Executive experiences a Covered Termination during a Change in Control Period (each as defined below), then, in addition to the payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of a Release that becomes effective and irrevocable in accordance with Section 11(d) and Executive’s continued compliance with the terms of this Agreement, provide Executive with the following:
i)
The Company shall pay to Executive an amount equal to the sum of (A) one hundred percent (100%) of the Executive’s Annual Base Salary and (B) one hundred percent (100%) of the Target Bonus for the fiscal year in which the Date of Termination occurs. Such amount shall be paid, subject to applicable withholding and Sections 10(a) and 10(b), payable in a lump sum on the second regularly scheduled payroll date after the Release Expiration Date.
ii)
For purposes of vesting with respect to Executive’s outstanding Company equity awards that are scheduled to vest subject to continued service or employment, vesting shall accelerate so that all service conditions are fully met as of the Date of Termination. For purposes of vesting with respect to Executive’s outstanding Company equity awards that are scheduled to vest subject to continued service or employment and the attainment of one or more performance objectives, the time vesting shall accelerate so that such awards shall be fully vested as of the Date of Termination, and the performance vesting will not be accelerated but will become vested if and to the extent the performance vesting requirements are attained as of the Date of Termination or within the subsequent six months following the Date of Termination.
iii)
During the period commencing on the Date of Termination and ending on the twelve (12)-month anniversary thereof or, if earlier, the date of Executive’s death, subject to Executive’s valid election to continue healthcare coverage under Section 4980B of the Code, the Company shall pay 100% of the Executive’s COBRA premium; provided, however, that if the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the parties hereby agree to negotiate in good faith to modify the foregoing provision in such manner as to avoid the imposition of such excise taxes while also maintaining, to the maximum extent reasonably possible, the original intent and economic benefits to the Executive and the Company under this clause (iii).

 

d)
No Other Severance. The provisions of this Section 6 shall supersede in their entirety any

 

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severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company or any of its subsidiaries except as otherwise approved by the Board or the Compensation Committee.

 

e)
No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executive’s employment shall not impair the rights or obligations of any Party.

 

f)
Definition of Cause. For purposes hereof, “Cause” shall mean any one of the following:
i)
Executive’s material violation of any applicable law or regulation respecting the business of the Company; (ii) Executive’s conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude or any felony; (iii) any act of fraud, embezzlement, theft, misrepresentation, material dishonesty, gross negligence or willful misconduct by Executive; (iv) Executive’s willful and repeated refusal to attempt in good faith to implement a clear, reasonable and lawful directive from the Board that is consistent with his position; (v) conduct by Executive that brings or is reasonably expected to bring Executive or the Company into disrepute or otherwise make Executive unfit to continue to serve as an officer of the Company, in each case, in any material respect; (vi) Executive’s breach of fiduciary duty owed to the Company; or (vii) Executive’s material breach of this Agreement, another material written agreement with the Company or the Company’s material written policies or procedures; provided, that solely for purposes of clause (i), (iv) and (vii) of this paragraph, the Company will not be deemed to have Cause unless (1) the Company first provides Executive with written notice of the condition giving rise to Cause within 30 days of the date the Board first becomes aware of its initial occurrence; and (2) if curable, Executive fails to cure such condition within 30 days after receiving such written notice.

 

g)
Definition of Change in Control. For purposes of this Agreement, “Change in Control” shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than 50% of the outstanding capital stock of the Company representing more than 50% of the total voting power of outstanding capital stock of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger, consolidation, reorganization, or business combination involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then “beneficially owned” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger, consolidation, reorganization, or business combination; or (iv) a circumstance in which the Incumbent Directors (as defined below) cease for any reason to constitute a majority of the Board. For the avoidance of doubt and notwithstanding anything herein to the contrary, in

 

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no event shall a transaction constitute a “Change in Control” if (x) its sole purpose is to change the state of the Company’s incorporation; or (y) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

 

h)
Definition of Change in Control Period. For purposes hereof, “Change in Control Period” shall mean the period of time commencing six (6) months prior to a Change in Control and ending twelve (12) months after such Change in Control.

 

i)
Definition of Covered Termination. For purposes hereof, “Covered Termination” shall mean the termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, or Executive’s cessation of employment at the end of the Term following a notice of non-renewal by the Company, and shall not include a termination due to Executive’s death or Disability.

 

j)
Definition of Disability. For purposes hereof, “Disability” shall mean a physical or mental incapacity of Executive that entitles Executive to benefits under the Company’s long-term disability plan, or, in the absence of such a plan, it is reasonably determined by the Board that Executive is unable to perform, by reason of such physical or mental incapacity, the essential functions of his or her position for a period of at least 180 days in any twelve (12)-month period or that is reasonably expected to result in Executive’s death.

 

k)
Definition of Good Reason. For purposes hereof, “Good Reason” shall mean any one of the following that occurs without the consent of Executive: (i) the reduction of Executive’s Annual Base Salary or Target Bonus, other than a reduction of up to 10% that occurs in connection with a Company-wide decrease in executive team compensation; (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect with Executive’s position (including status, offices, titles, and reporting requirements), authority, duties, or responsibilities; (iii) any other action by the Company or the Board (or any member thereof) that results in a material diminution in, or unreasonable interference with, Executive’s exercise of such position, authority, duties, or responsibilities, including any requirement that Executive take any action that Executive considers, in good faith, to violate legal, business, moral or ethical standards; (iv) the relocation of Executive’s principal place of employment by more than 35 miles; (v) the Company’s failure to nominate, or renominate, Executive to serve as a member of the Board; or (vi) the Company’s material breach of the Agreement or any other material written agreement with Executive; provided, that in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within 30 days of the date Executive first determines in good faith that a Good Reason occurrence is present; (2) the Company or the successor company fails to cure such condition within 30 days after receiving such written notice (the “Cure Period”); and (3) Executive’s resignation based on such Good Reason is effective within 30 days after the expiration of the Cure Period.
l)
Definition of Incumbent Directors. For purposes hereof, “Incumbent Directors”

 

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shall mean for any period of twelve (12) consecutive months, individuals who, at the beginning of such period, constitute the Board together with any new director(s) whose election or nomination for election to the Board was approved by a vote of at least a majority (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) of the directors then still in office who either were directors at the beginning of the twelve (12)-month period or whose election or nomination for election was previously so approved.

 

7.
Executive Covenants. To protect the trade secrets and Confidential Information of the Company and its subsidiaries (“Company Group”) and its customers and clients that have been and will be entrusted to Executive, the business goodwill of the Company Group that will be developed in and through Executive and the business opportunities that will be disclosed or entrusted to Executive by the Company Group, and as an additional incentive for the Company to enter into this Agreement, pay the compensation and benefits hereunder, Executive agrees as follows:

 

(a)
Nondisclosure of Confidential Information.
(i)
Executive acknowledges that it is the policy of the Company to maintain as secret and confidential (A) all valuable and unique information; (B) other information heretofore or hereafter acquired by the Company Group and deemed by it to be confidential; and (C) information developed or used by the Company Group relating to the Business, operations, employees and/or customers of the Company Group including, but not limited to, any employee information (all such information described in the foregoing clauses (A), (B) and (C) (other than information which is (x) known to the public or becomes known to the public through no fault of Executive; (y) received by Executive on a non-confidential basis from a Person that is not bound by an obligation of confidentiality to the Company Group; or (z) in Executive’s possession prior to receipt from the Company Group, as evidenced by Executive’s written records) is hereinafter referred to as “Confidential Information”). The Parties recognize that the services to be performed by Executive pursuant to this Agreement are special and unique and that by reason of Executive’s employment by the Company, Executive may acquire Confidential Information. Executive recognizes that all such Confidential Information is the property of the Company Group. Accordingly, Executive shall not at any time during or after the Term, except in the proper performance of Executive’s duties under this Agreement, directly or indirectly, without the prior written consent of the Board, disclose to any Person other than the Company, whether or not such Person is a competitor of the Company, and shall use Executive’s best efforts to prevent the publication or disclosure of, any Confidential Information obtained by, or which has come to the knowledge of, Executive prior or subsequent to the date hereof.
(ii)
Notwithstanding the foregoing or anything herein to the contrary, nothing

 

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contained herein shall prohibit Executive from (A) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation; and/or (B) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing such information to Executive’s attorney or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding. Pursuant to 18 USC Section 1833(b), Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (B) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

 

(b)
Non-Competition and Non-Solicitation of Customers or Clients.
(i)
During the Term and ending on the one (1)-year anniversary of the Date of Termination (“Restricted Period”), in any case, Executive shall not, in any manner, anywhere in the United States or any other region in which the Company Group is then operating or has taken affirmative steps to operate (the “Geographic Area”) (whether on Executive’s own account, or as an employee, director, consultant, contractor, agent, partner, manager, joint venturer, owner, operator or officer of any other Person, or in any other capacity) either directly or indirectly:

 

(1)
become engaged in or with, either alone or with any Person that is engaged in or preparing to engage in, the Business or any portion thereof
(2)
act in any capacity for, perform services to, invest in, aid or abet, or give information or financial assistance to, any Person engaged in or preparing to engage in the Business or any portion thereof; or
(3)
seek to diminish the relationships between the Company Group and any of their customers or clients or seek, directly or indirectly, to divert such relationships for Executive’s personal benefit or to such firm or other person or entity with whom Executive may then be employed or otherwise associated.

Nothing contained in this Section 7(b) shall be deemed to prohibit Executive from passively owning, directly or indirectly, not more than two percent (2%) of the securities of any publicly-traded company, so long as Executive has no active participation in the business of such company or not more than two percent (2%)

 

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of the limited partnership interests of a private equity fund, irrespective of the companies in which the fund invests, so long as Executive has no active participation in the business of any such companies owned by the private equity fund.

(ii)
For purposes of this Agreement, “Person” shall mean any individual, corporation, limited liability company, partnership, firm or other business of whatever nature, in any case, to which is now existing or hereafter created.
(iii)
For purposes of this Agreement, “Business” shall mean the business of providing technology, information, tools, features, functionality, and/or related services in regards to any of the following: (a) local, state, federal and/or global legislative, regulatory and policy issues; (b) geopolitical and related economic risk and opportunity; (c) grassroots and/or grasstops advocacy and/or (d) any other business of the Company Group commenced (or with respect to which affirmative steps toward commencement have been taken, including without limitation by acquisition or investment) prior to the Date of Termination.

 

(c)
Non-Solicitation of Employees. During the Restricted Period, Executive shall not, in any manner, (whether on Executive’s own account, or as an employee, director, consultant, contractor, agent, partner, manager, joint venturer, owner, operator or officer of any other Person, or in any other capacity) either directly or indirectly:
(i)
hire or solicit the employment or engagement of any Person who (A) as of the period during the six (6) months prior to and including the Date of Termination or (B) at the time of such solicitation or hire, in any case, is or was employed or engaged by the Company Group; or
(ii)
solicit, canvass, induce or encourage any employee or consultant of the Company Group entity to leave the employment or service of, or cease providing services to, the Company Group, as applicable.

 

Nothing contained in this Section 7(c) shall restrict Executive from conducting any general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) for employees or consultants that is not targeted at any employee or consultant of the Company Group, including, without limitation, through the use of employment agencies, provided Executive does not actually hire such employee or consultant.

 

(d)
Intellectual Property Rights. Executive acknowledges and agrees that all inventions, technology, processes, innovations, ideas, improvements, developments, methods, designs, analyses, trademarks, service marks, and other indicia of origin, writings, audiovisual works, concepts, drawings, reports and all similar, related, or derivative information or works (whether or not patentable or subject to copyright), including but not limited to all patents, copyrights, copyright registrations, trademarks, and trademark registrations in and to any of the foregoing, along with the right to practice, employ, exploit, use, develop, reproduce, copy, distribute copies,

 

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publish, license, or create works derivative of any of the foregoing, and the right to choose not to do or permit any of the aforementioned actions (collectively, the “Inventions”), which relate at the time of conception or reduction to practice to the Business, research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by the Company (collectively, the “Work Product”) belong to the Company. All Work Product created by Executive while employed by the Company will be considered “work made for hire,” and as such, the Company is the sole owner of all rights, title, and interests therein. Executive hereby agrees that all rights to any new Work Product and all rights to any existing Work Product, including but not limited to all of Executive’s rights to any copyrights or copyright registrations related thereto, are hereby conveyed, assigned and transferred to the Company pursuant to this Agreement. Executive will promptly disclose and deliver such Work Product to the Company and, at the Company’s expense, perform all actions reasonably requested by the Company (whether during or after the Term) to establish, confirm and protect such ownership (including, without limitation, the execution of assignments, copyright registrations, consents, licenses, powers of attorney and other instruments). All Work Product made within six (6) months after the applicable Date of Termination will be presumed to have been conceived during Executive’s employment with the Company, unless Executive can prove conclusively that it was created solely after such termination. Work Product will not include Inventions developed entirely on Executive’s own time without using any equipment, supplies, facilities, or trade secret information of the Company Group; provided, however, Work Product will include, without exception, any Invention that either (i) relates, at the time of conception or reduction to practice of such Invention, to the Business, or actual or demonstrably anticipated research or development of the Company Group or (ii) results from any service or work performed by Executive to or for the benefit of the Company Group. Executive further acknowledges and agrees that if Executive uses any other Inventions in which Executive has an interest and that are not Work Product (collectively, the “Excluded Inventions”) in the course of Executive’s employment for the Company or incorporates any Excluded Inventions in any Work Product, technology, product, or service of the Company, Executive hereby grants the Company a non-exclusive, royalty-free, perpetual and irrevocable, worldwide right to use and sublicense the use of Excluded Inventions for the purpose of developing, marketing, selling and supporting the Work Product and any other Company technology, products and services, either directly or through multiple tiers of distribution, but not for the purpose of selling or marketing Excluded Inventions separately from the Work Product or other Company technology, products or services.

 

(e)
Continuing Operation; Survival. If the restrictions and covenants set forth in this Section 7 are determined by any court of competent jurisdiction to be unenforceable by reason of extending for too great of a period of time or over too great a Geographic Area, or by reason of being too extensive in any other respect, the applicable covenant shall be interpreted to provide for the longest period of time, over the greatest Geographic Area and/or the broadest scope of activities and to otherwise have the broadest application, as shall be enforceable by applicable law. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, which shall continue in full force and effect. Without limiting the foregoing, the restrictions contained herein shall be construed as separate covenants, covering

 

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their respective subject matters, with respect to each of the separate cities, counties and states of the United States, and each other country, and political subdivision thereof, in which the Business is being conducted. Neither the termination of Executive’s employment nor the termination of the Term or this Agreement, in any case, will have any effect on the continuing operation of this Section 7, and this Section 7 shall continue to apply in accordance with its terms during and after Executive’s employment with the Company, whether or not any other provisions of this Agreement remain in effect at such time.

 

(f)
Remedies. Executive acknowledges and understands that this Section 7 and the other provisions of this Agreement are of a special and unique nature, the breach of which cannot be adequately compensated for in damages by an action at law, and that any breach or threatened breach of such provisions would cause the Company Group irreparable harm. In the event of a breach or threatened breach by Executive of the provisions of this Agreement, the Company shall be entitled to an injunction restraining Executive from such breach without the need to post bond therefor. Nothing contained in this Section 7 shall be construed as prohibiting the Company from pursuing, or limiting the Company’s ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by Executive. The provisions of Section 9(f) below relating to arbitration of disputes shall not be applicable to the Company to the extent it seeks a temporary or permanent injunction or other equitable relief in any court to restrain Executive from violating the covenants set forth in this Section 7.
(g)
As a material inducement to the Company to enter into this Agreement and to provide the severance payments and benefits set forth in Section 6, and in recognition that Executive’s continued compliance with this Section 7 is of substantial and independent value to the Company, the Parties acknowledge and agree that the severance payments and benefits payable pursuant to Section 6(b) and Section 6(c) are in direct consideration for, and conditioned upon, Executive’s continued compliance with Executive’s obligations under this Section 7. The Parties further intend that the portion of any payments or benefits under this Agreement that is provided in consideration of Executive’s compliance with Section 7 be treated as reasonable compensation for services to be rendered before and after a Change in Control, including Executive’s agreement to refrain from performing services, within the meaning of Section 280G of the Code, to the maximum extent permitted by applicable law.

 

8.
Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.

 

 

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9.
Miscellaneous Provisions.

 

(a)
Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of Delaware, without giving effect to any principles of conflicts of law, whether of the State of Delaware or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.

 

(b)
Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

(c)
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.

 

(d)
Entire Agreement. The terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executive’s service to the Company, except the Indemnification Agreement between Executive and FiscalNote Holdings, Inc., effective as of May 2, 2024 (the “Indemnification Agreement”), which agreement shall remain in full force in effect. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.
(e)
Amendments; Waivers. This Agreement sets forth the intent of the Parties. The Parties anticipate that, in the ordinary course, the Company may ask Executive to sign other documents in connection with his continued employment with the Company (e.g., employee handbook acknowledgments, forms of grant agreements, etc.). The Parties expressly acknowledge and agree that, in the event of a conflict between this Agreement and any such documents, the terms of this Agreement shall control; however, nothing in this Agreement shall prohibit the Company from conditioning Executive’s receipt of any compensation or benefit to which Executive is not entitled under this Agreement on his execution of an agreement that has terms and conditions that may be different from this Agreement. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

 

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(f)
Dispute Resolution. Both Executive and the Company agree to submit any and all disputes, controversies, or claims based upon, relating to, or arising from this Agreement (other than workers’ compensation claims) or the terms, interpretation, performance, breach, or arbitrability of this Agreement, Executive’s employment with the Company or any termination thereof (each, a “Covered Claim”) to final and binding arbitration before a single neutral arbitrator in Washington, District of Columbia. Subject to the terms of this paragraph, the arbitration proceedings shall be initiated in accordance with, and governed by, the applicable rules (the “Rules”) for the resolution of employment disputes of the American Arbitration Association (“AAA”) (such rules previously referred to as the National Rules for the Resolution of Employment Disputes). The arbitrator shall be appointed by agreement of the Parties hereto or, if no agreement can be reached, by the AAA pursuant to its Rules. The Company shall bear AAA’s administrative fees and the arbitrator’s fees and costs. The Executive shall be entitled to prompt advancement of any and all reasonable costs and expenses (including without limitation attorneys’ fees, and other professional fees and charges) incurred by him in connection with any such Covered Claim, or in connection with seeking to enforce his rights under this Section 9(f), any such advancement to be made within fifteen (15) days after the Executive gives written notice, supported by reasonable documentation, requesting such advancement. To the extent that it is determined by the arbitrator that the Company substantially prevailed in respect of the Covered Claims, the Executive shall promptly reimburse the Company all such costs and expenses. This Section 9(f) is intended to be the exclusive method for resolving any and all claims by Executive or the Company against each other for payment of damages under this Agreement; provided, however, that neither this Agreement nor the submission to arbitration shall limit Executive’s or the Company’s right to seek provisional relief, including without limitation injunctive relief, in any court of competent jurisdiction. Both Executive and the Company expressly waive their respective rights to a jury trial. Pending the resolution of any Covered Claim hereunder, the Executive (and his beneficiaries) shall continue to receive all payments and benefits that are then due under this Agreement and that are not the subject of a good faith dispute, unless the arbitrator determines otherwise.

 

(g)
Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

 

(h)
Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges that the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

 

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(i)
Indemnification. The Company agrees to advance and indemnify Executive for all costs, damages, losses and expenses reasonably and actually incurred by Executive in connection with any and all third-party claims or proceedings arising from, as a result of, or in connection with Executive’s employment by the Company hereunder (and service on the Board and in any other offices or directorships with any member of the Company Group, as applicable) to the greatest extent permitted under the Company’s organizational documents and applicable law. This right to advancement of expenses and indemnification shall not apply to, and the Company will have no obligation to advance or indemnify Executive with respect to, any action, suit or proceeding brought by or on behalf of Executive against the Company Group, or by the Company Group against Executive. The Indemnification Agreement shall also remain in full force and effect.

 

(j)
Clawback Policy. Executive acknowledges that Executive’s Annual Bonus and equity compensation shall be subject to “claw back” in accordance with applicable Company policy, if any, and applicable law.

 

10.
Golden Parachute Excise Tax.

 

(a)
Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive pursuant to this Agreement or otherwise (“Payment”) would individually or in the aggregate with all other Payments (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined below). The “Reduced Amount” will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes that could be obtained from a deduction of such state and local taxes), results in Executive’ s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve, to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second

 

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priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b)
Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a). If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good-faith determinations of the accounting firm made hereunder will be final, binding, and conclusive upon the Company and Executive.

 

11.
Section 409A.

 

(a)
General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Effective Date (“Section 409A”), and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. Notwithstanding the foregoing, this Section 11 does not, and shall not be construed so as to, create any obligation or liability on the part of the Company if the payments and benefits under this Agreement do not comply with Section 409A. Executive shall be solely liable for any taxes imposed on him under or by operation of Section 409A.

 

(b)
Separation from Service. Notwithstanding any provision to the contrary in this Agreement, (i) no amount that constitutes “deferred compensation” under Section 409A shall be payable pursuant to Section 6 unless the termination of Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (“Separation from Service”); (ii) for purposes of Section 409A, Executive’s right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the

 

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expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.

 

(c)
Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent that delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.

 

(d)
Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement or otherwise as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of a Release, (i) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executive’s acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (ii) in any case where Executive’s Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), “Release Expiration Date” shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement or otherwise as a result of Executive’s termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(ii), on the first payroll period to occur in the subsequent taxable year, if later.

 

12.
Executive Coach. During the Term, Executive shall have the option to retain a professional executive coach to provide Executive with professional advice, guidance and training. The Company shall directly pay all fees of the executive coach.

 

13.
Executive Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any

 

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representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

 

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The Parties have executed this Agreement as of the date first set forth above.

 

FISCALNOTE HOLDINGS, INC.


 

 

By: /s/ Jon Slabaugh

Name: Jon Slabaugh

Its: Chief Financial Officer

 

 

EXECUTIVE

 

/s/ Key Compton

Name: Key Compton

 

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Exhibit 10.2

 

Execution Copy

FiscalNote Holdings, Inc.

 

NOTICE OF PERFORMANCE-BASED RESTRICTED STOCK AWARD

FiscalNote Holdings, Inc. (“Company”) has awarded to you (“Participant”) an award of performance-based restricted stock covering the number of Shares set forth below (the “Award”). The Award is being granted pursuant to the approval of the Board of Directors of the Company and is not granted under, and is not governed by the terms of, the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan (the “Plan”); provided, however, that, except as otherwise provided, capitalized terms used but not defined in this Award Agreement will have the same meanings specified in the Plan. Your “Award Agreement” applicable to the Award consists of (a) this Notice of Performance-Based Stock Award (this “Notice”), and (b) the attached Standard Terms and Conditions for Performance-Based Restricted Stock Awards (the “Terms and Conditions”), including the Performance Vesting Terms.

Name of Participant:

 

Key Compton

 

Grant Date:

 

July 24, 2026

 

Grant ID:

 

KC – RSA – 2026-1

 

Number of Shares:

 

1,450,000

 

Country at Grant:

 

United States

 

Vesting Commencement Date:

 

June 22, 2026

 

Vesting Schedule:

 

As provided in Exhibit A to this Notice (the “Performance Vesting Terms”)

 

 

By accepting (whether electronically or otherwise) the Award, you acknowledge and agree to the following:

1.

The Award is governed by the terms and conditions of this Award Agreement.

2.

You have received a copy of this Award Agreement and the FiscalNote Holdings, Inc. Insider Trading Policy (“Trading Policy”), and represent that you have read these documents and are familiar with their terms.

3.

Vesting of the Award is subject to your Continuous Service as an Employee, Director, or Consultant (except as provided in the Performance Vesting Terms), which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement changes the nature of that relationship.

4.

The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding this Award. You should consult with your own personal tax, legal, and financial advisors regarding this Award before taking any action related to this Award.

5.

 If you wish to decline this Award, you should promptly notify the Company at its principal place of business, Attention: Stock Administration, or by electronic mail to [email protected]. If

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you decline this Award, the Award will be cancelled and no benefits from the Award nor any compensation or benefits in lieu of the Award will be provided to you.

IN WITNESS WHEREOF, the Company has caused this Notice to be executed by its duly authorized officer.

 

FISCALNOTE HOLDINGS, INC

 

 /s/ Jon Slabaugh

Name: Jon Slabaugh

Title: Chief Financial Officer

 

[Participant Signature page follows on the reverse side of this Notice]

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PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing Award and agrees to the terms and conditions of the Award Agreement. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s internal SharePoint website.

 

PARTICIPANT

 

/s/ Key Compton

Key Compton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

Performance Vesting Terms

 

1.
Vesting Terms Generally.

 

(a)
Initially, all 1,450,000 Shares subject to the Award shall be non-transferable and subject to a substantial risk of forfeiture. The Shares subject to the Award are divided into five tranches (each, a “Tranche”). The Shares subject to each Tranche will vest and cease to be subject to a substantial risk of forfeiture only if (i) the applicable performance condition for such Tranche is satisfied during the applicable performance period, and (ii) the applicable service condition is satisfied for such Tranche, subject in all cases to the provisions set forth in this Exhibit A. For purposes of this Award Agreement, Shares subject to the Award that remain subject to a substantial risk of forfeiture are referred to as “Unvested Shares” and Shares subject to the Award with respect to which the substantial risk of forfeiture has lapsed are referred to as “Vested Shares.” The following table sets forth the number of Shares subject to each Tranche and the Stock Price Milestone, performance period, and service requirement applicable to each Tranche:

 

Tranche

Shares subject to Tranche

 Stock Price Milestone

Performance Period

Service Requirement

Tranche 1

80,000

$0.15

5 years

1 year

Tranche 2

120,000

$1.13

5 years

1 year

Tranche 3

250,000

$3.75

5 years

1 year

Tranche 4

500,000

$11.26

5 years

1 year

Tranche 5

500,000

$22.51

10 years

2 years

 

2.
Performance Condition

 

(a)
Performance Measurement. For purposes of the performance condition of this Award, the Stock Price Milestone for a Tranche will be satisfied during the applicable performance period, as follows:
i.
If the Company’s Common Stock is publicly traded: the volume weighted average price of a Share of the Company’s Common Stock during regular trading hours as reported by Bloomberg L.P. over any sixty (60) calendar day trading period equals or exceeds the applicable Stock Price Milestone for such Tranche;
ii.
In connection with a Change in Control (as defined in that certain Employment Agreement, by and between the Participant and the Company, dated as of July 22, 2026 (the “Employment Agreement”)), the Change in Control Price (defined below) equals or exceeds any applicable Stock Price Milestone for such Tranche. The “Change in Control Price” means the consideration paid or payable per Share at closing of such Change in Control, including the value of any non-cash consideration (the “Change in Control Price”). If such Change in Control Price equals or exceeds the applicable Stock Price Milestone for such Tranche, the performance condition for such Tranche shall be deemed satisfied as of immediately prior to such Change in Control. The Change in Control Price shall be increased to the extent of the achievement of any earn-out metrics or receipt of other deferred or contingent consideration resulting in an additional payment per Share pursuant to the terms of the definitive agreement providing for such Change in Control; it being understood that upon the closing of a Change in Control the performance period shall

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be extended and any Unvested Shares subject to this Award shall remain eligible to vest for so long as there remains any unpaid any deferred, contingent or escrowed consideration,
iii.
If at any time during the applicable performance period the Company’s Common Stock ceases to be publicly traded (such date, the “Private Company Date”), then, the Unvested Shares shall remain outstanding and eligible to vest on each Valuation Date (defined below) that occurs during the performance period. The applicable performance condition for a Tranche shall be deemed satisfied on the applicable Valuation Date if the per-Share Fair Market Value (defined below) equals or exceeds the applicable Stock Price Milestone for such Tranche as of such date.

 

1.
“Valuation Date” means as of each of the following dates: (a) the Private Company Date, (b) each anniversary of the Private Company Date thereafter that occurs during the performance period, (c) the Participant’s date of termination of Continuous Service, (d) the date that is six months following the Participant’s termination of Continuous Service, and (e) as of such additional date or dates as the Compensation Committee of the Board (the “Committee”) may determine in good faith.
2.
Method of Valuation: a nationally recognized independent third-party valuation firm reasonably selected by the Committee and approved by the Participant shall determine the Fair Market Value of a Share at the Company’s expense, using a reasonable application of a reasonable method of valuation with such determinations being performed and completed within six (6) weeks following each Valuation Date. A written valuation report so produced, along with any supporting documentation necessary to review the result, will be provided to the Committee and to the Participant.
3.
“Fair Market Value” for purposes of this Section 2(a), means the price at which a Share of the Company’s Common Stock would change hands in a hypothetical third-party arms’ length sale between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts, determined without applying any discounts for lack of control, minority interest, lack of marketability, lack of liquidity, applicable restrictions on transfer, or similar discounts.

In addition, if at any time during the applicable performance period while the Company's Common Stock is not publicly traded, the Company consummates a bona fide arm’s-length equity financing for cash investment, issuer tender offer or share repurchase of Common Stock, then the per-Share price implied by such transaction (determined on an as-converted, fully diluted basis and without applying any of the discounts described in this Section 2(a)) shall be deemed the per-Share Fair Market Value as of the date of such transaction, such date shall constitute a Valuation Date, and the applicable performance condition for a Tranche shall be deemed satisfied as of such date if such implied per-Share price equals or exceeds the applicable Stock Price Milestone for such Tranche.

 

In the event the applicable Stock Price Milestone for a Tranche is attained, then the performance condition shall be satisfied as of the last trading day of such sixty (60) calendar day trading period, as of immediately prior to the consummation of such Change in Control, or as of the applicable Valuation Date, as applicable.

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(b)
Performance Period. Tranches 1 through 4 must satisfy the applicable performance condition no later than the fifth (5th) anniversary of the Grant Date. Tranche 5 must satisfy the applicable performance condition no later than the tenth (10th) anniversary of the Grant Date. The Unvested Shares subject to a Tranche with respect to which the applicable performance condition has not been satisfied as of the last day of the applicable performance period shall immediately be forfeited to the Company, and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

(c)
Adjustment. In the event of any change in the outstanding Shares or other capital stock of the Company by reason of any stock split, reverse stock split, stock dividend, share combination, recapitalization, reclassification, exchange of shares, spin-off, split-up, or extraordinary dividend or distribution, the Committee shall make such equitable and proportionate adjustments as are necessary or appropriate to prevent dilution or enlargement of Participant’s rights under this Award. Without limiting the foregoing, the Committee may equitably adjust the number of Shares subject to the Award and each Tranche, the applicable Stock Price Milestone for each Tranche, the method of measuring achievement of any performance condition, and any other terms of this Award that the Committee determines in good faith are reasonably necessary to be adjusted to preserve the intended economic benefit of the Award; provided, however, that any such adjustment shall be made in a manner intended to preserve, and not impair, the Participant’s rights and expected economic opportunity under this Award. Any determination by the Committee pursuant to this Section shall be made in good faith.

 

3.
Service Condition

 

(a)
For purposes of this Award, the applicable service condition for a Tranche will be satisfied if (i) with respect to Tranches 1, 2, 3 and 4, Participant completes one year of Continuous Service from the Vesting Commencement Date, and (ii) with respect to Tranche 5, Participant completes two years of Continuous Service from the Vesting Commencement Date.

 

4.
Vesting Date

 

(a)
Except as otherwise provided in this Exhibit A, the Unvested Shares subject to a Tranche will cease to be subject to a substantial risk of forfeiture and become Vested Shares on the date that both the performance condition and service condition applicable to such Tranche are satisfied. For clarity, the performance condition applicable to a Tranche may be satisfied before the service condition applicable to a Tranche is satisfied (and vice versa), but no Unvested Shares subject to such Tranche will become Vested Shares unless and until both the service condition and the performance condition have been satisfied.

 

5.
Termination of Service

 

(a)
Termination for Cause. If Participant’s Continuous Service is terminated by the Company for Cause (as defined in the Employment Agreement), then, as of the date of such termination, all Unvested Shares shall immediately be forfeited to the Company, and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

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(b)
Termination Other Than for Cause. If Participant’s Continuous Service terminates for any reason other than due to a termination by the Company for Cause, then (i) Participant will receive six additional months of credited Continuous Service with respect to each Tranche, such that the service condition applicable to each Tranche shall be deemed to be satisfied to the same extent as if Participant had completed six (6) additional months of Continuous Service from the date of such termination; and (ii) the performance condition applicable to each Tranche will be deemed satisfied if and to the extent the applicable Stock Price Milestone for such Tranche is satisfied as of the date of such termination or at any time during the six (6)-month period following the date of such termination and prior to the end of the applicable performance period in accordance with Section 2(a), including in connection with a Change in Control. Following the end of such six (6)-month period, to the extent the service condition and performance condition applicable to a Tranche have not both been satisfied, all Unvested Shares subject to such Tranche shall immediately be forfeited to the Company, and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

6.
Change in Control

 

(a)
General Rule. Upon the occurrence of a Change in Control, (i) the service condition for each then-outstanding Tranche shall be deemed satisfied in full as of immediately prior to the consummation of such Change in Control; and (ii) the performance condition applicable to each Tranche will be deemed satisfied if and to the extent the applicable Stock Price Milestone for such Tranche is attained in accordance with Section 2(a). Subject to Section 6(b), to the extent any Unvested Shares do not become Vested Shares in accordance with this Section 6(a) upon the consummation of a Change in Control, then such Unvested Shares shall remain outstanding and eligible to become Vested Shares based solely on the satisfaction of the applicable performance condition during the applicable performance period. Notwithstanding the foregoing, or anything to the contrary herein, the Committee shall at all times have the discretion to accelerate the vesting of all or any portion of the Award.

 

(b)
Termination without Cause or for Good Reason during Change in Control Period. Notwithstanding anything to the contrary herein, if the Participant’s Continuous Service is terminated by the Company without Cause or by Participant for Good Reason (as defined in the Employment Agreement) during the Change in Control Period (as defined in the Employment Agreement), then (i) the service condition applicable to each Tranche shall be deemed satisfied in full on the date of such termination, and (ii) the performance condition applicable to each Tranche will be deemed satisfied if and to the extent the applicable Stock Price Milestone for such Tranche is satisfied as of the date of such termination or at any time during the six (6)-month period following the date of such termination and prior to the end of the applicable performance period in accordance with Section 2(a), including in connection with a Change in Control. Following the end of such six (6)-month period, to the extent the performance condition applicable to a Tranche have not been satisfied, all Unvested Shares subject to such Tranche shall immediately be forfeited to the Company, and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

 

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FiscalNote Holdings, Inc.

 

STANDARD TERMS AND CONDITIONS FOR

PERFORMANCE-BASED RESTRICTED STOCK

 

1.
GRANT OF PERFORMANCE-BASED RESTRICTED STOCK

 

(a)
The Award is a grant of Shares subject to such restrictions set forth in the Award Agreement. Initially, all of the Shares are non-transferable and subject to a substantial risk of forfeiture and are Shares of Restricted Stock. The Shares of Restricted Stock may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of the Shares of Restricted Stock, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to the Shares of Restricted Stock.

 

2.
VESTING

 

(a)
The risk of forfeiture will lapse at such time or times, in such installments or otherwise, with respect to the number of Shares that Participant actually earns based on the level of achievement of the performance goal(s) in accordance with Exhibit A to the Notice. As soon as administratively practical (and within thirty (30) days) following the date on which the risk of forfeiture lapses (the “Vesting Date”), and subject to the Participant remaining in Continuous Service through the Vesting Date (except as otherwise set forth in the Award Agreement), Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to the Participant, subject to the satisfaction of any applicable withholding obligations for Tax-Related Items (defined below).

 

3.
DIVIDEND AND VOTING RIGHTS

 

(a)
The Participant, during the duration of this Award Agreement, shall be considered the record owner of and shall be entitled to vote the Shares if and to the extent the Shares are entitled to voting rights. The Participant shall be entitled to receive all dividends and any other payment-in-kind or any equivalent with regard to any cash or other dividends that are declared and paid on Shares; provided, however, that the Company is under no duty to declare any such dividends or to make any such distribution.

 

4.
LIMITED TRANSFERABILITY OF RESTRICTED SHARES

 

(a)
Except as provided in this Agreement, during the period that the Shares subject to the Award are Unvested Shares, such Unvested Shares and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order, and any permitted transferee shall be bound by all of the terms and conditions of this Award Agreement. In accordance with procedures established by the Committee, the Participant may make gratuitous transfers of the Unvested Shares to trusts or other entities for estate planning purpose where Family Members (defined below) have more than fifty percent of the beneficial or

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voting interests of such trusts or entities. “Family Member” means the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships, and any person sharing the Participant’s household (other than a tenant or employee). The terms of this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.

 

5.
TERMINATION

Unless otherwise set forth in Exhibit A to the Notice, the following default provisions shall apply. The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Award (including whether Participant may still be considered to be providing services while on a leave of absence).

(a)
Cause. In the event that Participant’s Continuous Service is terminated for Cause (as defined in the Employment Agreement), as of the date of such termination the Award shall cease to vest and any outstanding Unvested Shares shall immediately be forfeited to the Company, and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

(b)
Other. Except as otherwise set forth in Exhibit A to the Notice, in the event that Participant’s Continuous Service terminates for any reason other than for Cause, as of the date of such termination all Unvested Shares shall cease to vest and shall immediately be forfeited to the Company and all rights of Participant to such Unvested Shares will immediately terminate without payment of consideration by the Company.

 

6.
TAXES

 

(a)
Responsibility for Taxes. By accepting this Award, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Affiliate that employs Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax or other tax-related items related to this Award and legally applicable to the Participant, including any employer liability for which the Participant is liable (the “Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting, or settlement of the Award, the subsequent sale of Shares, and the receipt of any dividends or other distributions, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of this Award that cannot be satisfied by the means described in this Section.

 

(b)
Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. The Company shall be authorized to withhold from this Award the amount

DOCPROPERTY "CUS_DocIDChunk0" 120406059.2


 

of withholding taxes due in respect of this Award and to take such other action as may be necessary to satisfy statutory withholding obligations for the payment of such Tax-Related Items. Participant is solely responsible and liable for the satisfaction of all Tax-Related Items that may arise in connection with this Award, and neither the Company, nor any Affiliate, nor any of their employees, directors, or agents, shall have any duty or obligation to mitigate, minimize, indemnify, or to otherwise hold Participant harmless from any or all of such tax consequences. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld. If the withholding obligation is satisfied by withholding Shares issued or otherwise issuable to Participant in connection with the Award, such Shares shall have a Fair Market Value equal to the amount of such Tax-Related Items. No fractional Shares will be withheld pursuant to the Tax-Related Items thereunder.

 

(c)
Section 83(b) Election. The Participant shall consult with the Participant’s tax advisor to determine whether it would be appropriate for the Participant to make an election under Section 83(b) of the Code with respect to the Award. Any such election must be filed with the Internal Revenue Service within 30 days of the Grant Date.

 

7.
GOVERNING LAW AND VENUE

 

(a)
This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of Delaware, or the federal courts for the United States for Delaware, and no other courts, where this grant is made and/or to be performed.

 

8.
ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS

 

(a)
This Award Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. No modification of, or amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

 

9.
SEVERABILITY

 

(a)
If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Award Agreement, (ii) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (iii) the balance of this Award Agreement shall be enforceable in accordance with its terms.

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10.
CONSENT TO ELECTRONIC DELIVERY AND PARTICIPATION

 

(a)
By accepting this Award, the Participant agrees to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, account statements, prospectuses, and all other documents, communications, or information related to the Award. Electronic delivery may include the delivery of a link to the Company’s internal SharePoint website or the internet site of a third party involved in administering this Award, the delivery of the document via e-mail, or such other delivery determined at the Company’s discretion. Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Stock Administration.

 

11.
LANGUAGE

 

(a)
Participant acknowledges that Participant is proficient in the English language and, accordingly, understands the provisions of this Award Agreement. If Participant has received this Award Agreement, or any other document related to the Award translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

 

12.
IMPOSITION OF OTHER REQUIREMENTS

 

(a)
The Company reserves the right to impose other requirements on this Award to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing; provided, that any such requirements shall not diminish the Participant's rights or increase the Participant's obligations under this Award Agreement without the Participant’s prior written consent.

 

13.
INSIDER TRADING/MARKET ABUSE LAWS

 

(a)
Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including, but not limited to, the United States, which may affect Participant’s ability to accept, acquire, sell, or otherwise dispose of Shares, rights to Shares, or rights linked to the value of Shares during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Trading Policy. Neither the Company nor any of its Subsidiaries or Affiliates will be responsible for such restrictions or liable for the failure on Participant’s part to know and abide by such restrictions. Participant should consult with his or her own personal legal advisers to ensure compliance with local laws.

 

14.
NO EMPLOYMENT RIGHT

 

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(a)
Nothing in this Award Agreement or any other instrument executed in connection herewith shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason.

DOCPROPERTY "CUS_DocIDChunk0" 120406059.2


EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Key Compton, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 of FiscalNote Holdings, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

 

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 


 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

 

 

 

 

 

 

August 10, 2026

/s/ Key Compton

 

Key Compton
Chief Executive Officer
(Principal Executive Officer)


 

 

 


 

 

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jon Slabaugh, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 of FiscalNote Holdings, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

 

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.


 

 

 

 

 

 

 

August 10, 2026

/s/ Jon Slabaugh

 

Jon Slabaugh
Chief Financial Officer
(Principal Financial Officer)


 

 

 


EXHIBIT 32

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FiscalNote Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Key Compton, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

 

 

August 10, 2026

/s/ Key Compton

 

Key Compton
Chief Executive Officer
(Principal Executive Officer)


 

 

In connection with the Quarterly Report of FiscalNote Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jon Slabaugh, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

 

 

August 10, 2026

/s/ Jon Slabaugh

 

Jon Slabaugh

Chief Financial Officer
(Principal Financial Officer)