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Investing in our common stock involves a high degree of risk.
−Removed: Prospective investors should carefully consider the following risks and uncertainties and all other information contained or referred to in this Annual Report on Form 10-K before investing in our common stock.
+Added: Prospective investors should carefully consider the following risks and uncertainties and all other information contained or referred to in this Form 10-K before investing in our common stock.
The risks and uncertainties described below are not the only ones facing us.
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Risks related to our business
−Removed: Legislative and regulatory changes can influence demand for our solutions and could adversely affect our business.
−Removed: The market for our solutions depends in part on the requirements of the SEC and other regulatory bodies.
−Removed: Any legislation or rulemaking substantially affecting the content or method of delivery of documents to be filed with these regulatory bodies could have an adverse effect on our business.
−Removed: In addition, evolving market practices in light of regulatory developments could adversely affect the demand for our solutions.
−Removed: New legislation, or a significant change in rules, regulations, directives or standards could reduce demand for our products and services.
−Removed: Regulatory changes could also increase expenses as we modify our products and services to comply with new requirements and retain relevancy, impose limitations on our operations, and increase compliance or litigation expense, each of which could have a material adverse effect on our business, financial condition and results of operations.
The environment in which we compete is highly competitive, which creates adverse pricing pressures and may harm our business and operating results if we cannot compete effectively.
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These competitive pressures to any aspect of our business could reduce our revenue and earnings.
−Removed: Our business could be harmed if we do not successfully manage the integration of any business that we have acquired or may acquire in the future, particularly in light of our recent acquisition of Newswire.
+Added: Our business could be harmed if we do not successfully manage the integration of any business that we have acquired or may acquire in the future.
These risks include, among other things:
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potential unknown liabilities, such as liability for hazardous substances, or other difficulties associated with acquired businesses.
−Removed: Our revenue growth rate in past periods relating to our Communications revenue stream may not be indicative of its future performance.
−Removed: With respect to our Communications revenue stream, we have experienced an annual revenue growth rate ranging from 13% to 55% between 2016 and 2023.
+Added: Our revenue growth rate in past periods relating to our historical Communications revenue stream may not be indicative of its future performance.
+Added: With respect to our historical Communications revenue stream, we have experienced an annual revenue growth rate ranging from 13% to 55% between 2016 and 2023, however in 2024 it decreased 7%.
Throughout these years, most of the growth has been due to the success of our ACCESSWIRE newswire brand.
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Since our customers use our solutions for important aspects of their business, any errors, defects, disruptions in access, security flaws, viruses, data corruption or other performance problems with our solutions could hurt our reputation and may damage our customers’ businesses.
−Removed: If that occurs, customers could elect not to renew, could delay or withhold payment to us or may make claims against us, which could result in an increase in our provision for doubtful accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation.
+Added: If that occurs, customers could elect not to renew, could delay or withhold payment to us or may make claims against us, which could result in an increase in our provision for credit losses, an increase in collection cycles for accounts receivable or the expense and risk of litigation.
We could also lose future sales.
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It is expected that our recent acquisition of Newswire will also add significant revenue to our Communications business in the future.
−Removed: ACCESSWIRE and Newswire are dependent upon several key partners for news distribution, some of which are also partners that we rely on for other shareholder communications services.
+Added: These two brands, combined into our new brand of ACCESS Newswire, is dependent upon several key partners for news distribution, some of which are also partners that we rely on for other shareholder communications services.
During the second quarter of 2019, one of our key partners made an industry-wide decision to no longer accept investor commentary content.
A significant portion of our historical ACCESSWIRE revenue was generated from this type of content, which significantly affected revenue going forward.
−Removed: Further disruption in any of these partnerships could have a material adverse impact on our business and financial results and the inability to procure new key partners could impact the growth of the ACCESSWIRE brand, particularly with respect to public company news distribution.
−Removed: Additionally, ACCESSWIRE and Newswire are highly dependent on technology and any performance issues with this technology could have a material impact on our ability to serve our customers and thus our ability to generate revenue.
+Added: Further disruption in any of these partnerships could have a material adverse impact on our business and financial results and the inability to procure new key partners could impact the growth of the ACCESS Newswire brand, particularly with respect to public company news distribution.
+Added: Additionally, ACCESS Newswire is highly dependent on technology and any performance issues with this technology could have a material impact on our ability to serve our customers and thus our ability to generate revenue.
Failure to manage our growth may adversely affect our business or operations.
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Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.
+Added: There are risks and uncertainties associated with the sale of our Compliance business.
+Added: On February 28, 2025, we sold our Compliance business to the Buyer for aggregate cash consideration of $12,500,000, with $12,000,000 of the purchase price paid at closing and $500,000 retained by the Buyer as a holdback for a period of 12 months post-closing to satisfy potential indemnification claims by the Buyer under the Purchase Agreement if any.
+Added: We used the entire $12,000,000 in closing cash to reduce our indebtedness to Pinnacle Bank.
+Added: As such, we did not receive any cash at closing as a result of the sale of our Compliance business.
+Added: Our Compliance business has historically provided strong revenue and cash flow at high gross margins.
+Added: While we believe our Communications business, which has been our primary focus for approximately the last 10 years, will be a strong stand-alone business, there can be no guaranty that it will be able to replace the revenue and cash flow of the Compliance business, which would result in a material adverse effect on our business, financial condition and results of operations.
+Added: Additionally, the sale of our Compliance business required us to separate and allocate specific assets to the business, including some shared assets.
+Added: We could face disputes with the Buyer regarding whether or not certain assets were included in the sale.
+Added: Moreover, we agreed, for a period of time after the sale pursuant to a Transition Services Agreement, to continue to perform certain services that we historically performed for the Compliance business, and we also undertook other customary obligations associated with a disposition of a business by means of asset sale.
+Added: The attention of our management may be directed toward closing or post-closing matters relating to the sale of our Compliance business, including the services required by the Transition Services Agreement, and their focus may be diverted from the day-to-day business operations of our company.
+Added: We have also agreed to indemnify the Buyer against certain losses suffered as a result of certain breaches of our representations, warranties, covenants and agreements in the Purchase Agreement and related documents.
+Added: Any event that results in a right for the Buyer to seek indemnity from us could result in substantial liability to us and could adversely affect our financial position and results of operations.
+Added: Although the Buyer agreed to assume certain liabilities associated with the Compliance business, it did not assume all such liabilities, which could lead to a dispute.
+Added: Any disputes with the Buyer related to the sale of our Compliance business could divert the attention of our management or otherwise have a material adverse effect on our business, financial condition and results of operations.
If we are unable to retain our key employees and attract and retain other qualified personnel, our business could suffer.
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If potential customers take longer than we expect to decide whether to use our services and require that we travel to their sites, present more marketing material, or spend more time in completing the sales process, our selling expenses could increase, and decrease our profitability.
−Removed: The seasonality of business makes it difficult to predict future results based on specific quarters.
−Removed: A greater portion of our printing, distribution and solicitation of proxy materials business will be processed during the second quarter of our fiscal year.
−Removed: Therefore, the seasonality of our revenue makes it difficult to estimate future operating results based on the results of any specific quarter and could affect an investor’s ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
−Removed: To balance the seasonal activity of print, distribution and solicitation of proxy materials, we will attempt to continue to grow other revenues linked to predictable periodic activity that is not cyclical in nature.
If we are unable to successfully develop and timely introduce new technology-based products or enhance existing technology-based products, our business may be adversely affected.
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Risks Related to Our Credit Agreement
−Removed: Our obligations under the Credit Agreement are secured by a first priority security interest in substantially all of our assets.
+Added: Our obligations under the Credit Agreement, as amended, with Pinnacle Bank are secured by a first priority security interest in substantially all of our assets.
Additionally, all of our subsidiaries agreed to guarantee our obligations under the Credit Agreement.
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The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Loan Parties and their subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, transactions with affiliates, and dividends and other distributions.
−Removed: In addition, the Credit Agreement contains financial covenants, tested quarterly, that require a Fixed Charge Ratio (as defined in the Credit Agreement) of no less than 1:20:1.00 measured on a trailing twelve-month basis and a Leverage Ratio (as defined in the Credit Agreement) no greater than 2.5:1.0 measured on a trailing twelve-month basis.
+Added: In addition, the Credit Agreement contains financial covenants, tested quarterly, that require a Fixed Charge Ratio (as defined in the Credit Agreement) and a Leverage Ratio (as defined in the Credit Agreement) to be maintained at certain levels.
Events of default under the Credit Agreement include, but are not limited to the following:
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certain defaults under other indebtedness of the Loan Parties;
−Removed: insolvency or bankruptcy-related events with respect to Issuer Direct or any of its subsidiaries;
+Added: insolvency or bankruptcy-related events with respect to the Company or any of its subsidiaries;
if the Credit Agreement or certain related agreements or security interests created by them cease to be in full force and effect;
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.