What changed in this filing

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Item 9A. Controls and Procedures

2025-03-25 compared with 2024-03-07 · 298 added, 226 removed, 551 unchanged (49% of the section changed)

5 unchanged sentences

Also, projections of any evaluation of effectiveness of future periods are subject to the risk that the controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

19 unchanged sentences

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JUSRISDICATIONS THAT PREVENT INSPECTIONS

Not applicable

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Securities and Exchange Commission ("SEC") within 120 days after December 31, 2023, in connection with the solicitation of proxies for the Company’s 2024 annual meeting of shareholders and is incorporated herein by reference.

The information required by this Item is set forth under the headings “Directors, Executive Officers and Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s 2025 Proxy Statement to be filed with the SEC within 120 days after December 31, 2024, in connection with the solicitation of proxies for the Company’s 2025 annual meeting of shareholders and is incorporated herein by reference.

Our board of directors has adopted a Code of Conduct applicable to all officers, directors and employees, which is available on our website ( https://investors.accessnewswire.com/governance-documents ) under “Governance Documents." We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct by posting such information on the website address and location specified above.

We have adopted an Insider Trading Policy applicable to our directors, officers, employees and other covered persons that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations, and the NYSE American listing standards.

Our Insider Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

EXECUTIVE COMPENSATION.

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(a) Financial Statements

The financial statements listed in the accompanying index (page F-1) to the financial statements are filed as part of this Annual Report on Form 10-K.

The financial statements listed in the accompanying index (page F-1) to the financial statements are filed as part of this Form 10-K.

Exhibit Number

Exhibit Description

Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Form S-3 filed on May 10, 2017)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on April 6, 2022)

2014 Equity Incentive Plan (incorporated by reference to Annex A to the Schedule 14A filed on April 2, 2014)

Certificate of Incorporation, as amended.*

Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on January 27, 2025, 2025).

Credit Agreement dated March 20, 2023 with Pinnacle Bank and the other loan parties thereto (incorporated by referenced to Exhibit 4.1 to the Current Report on Form 8-K filed on March 22, 2023).

Third Modification to Credit Agreement and Partial Release dated February 28, 2025 with Pinnacle Bank and the other loan parties thereto (incorporated by referenced to Exhibit 10.2 to the Current Report on Form 8-K filed on March, 2023).

Executive Employment Agreement dated April 30, 2015 with Brian R.

Balbirnie (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 5, 2014)

First Amendment to 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on June 13, 2016

Second Amendment to 2014 Equity Incentive Plan (incorporated by reference to Exhibit A to the Definitive Proxy Statement filed on April 28, 2020)

Balbirnie (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 5, 2014).

First Amendment to Executive Employment Agreement dated May 4, 2017 with Brian R.

Balbirnie (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 5, 2017)

Stock Purchase Agreement dated October 2, 2017 with Kurtis D.

Hughes (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 3, 2017)

Stock Purchase Agreement dated July 3, 2018 with ACCESSWIRE Canada Ltd.

and Fred Gautreau (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on July 5, 2018)

Stock Repurchase Agreement dated November 28, 2018 with EQS Group AG (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on December 4, 2018)

Asset Purchase Agreement dated January 3, 2019 with Onstream Media Corporation (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 3, 2019)

Executive Employment Agreement dated January 12, 2022 with Timothy Pitoniak (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 19, 2022)

Restricted Stock Unit Award Agreement dated January 24, 2022 with Timothy Pitoniak (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on January 19, 2022)

Incentive Stock Option Grant and Agreement dated January 24, 2022 with Timothy Pitoniak (incorporated by reference to Exhibit 10.3 to the Form 8-K filed on January 19, 2022)

Indemnification Agreement dated January 24, 2022 with Timothy Pitoniak (incorporated by reference to Exhibit 10.4 to the Form 8-K filed on January 19, 2022)

Membership Interest Purchase Agreement dated November 1, 2022 with Lead Capital, LLC (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on November 3, 2022)

Secured Promissory Note date November 1, 2022 issued to Lead Capital, LLC (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on November 3, 2022)

Balbirnie (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 5, 2017) .

Membership Interest Purchase Agreement dated November 1, 2022 with Lead Capital, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 3, 2022) .

2023 Equity Incentive Plan (incorporated by reference to Annex A to the Schedule 14A filed on April 28, 2023).

Executive Employment Agreement with Steven Knerr dated September 16, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 17, 2024).

Asset Purchase Agreement dated February 28, 2025 with Equiniti Transfer Company, LLC and Direct Transfer, LLC (incorporated by reference to Exhibit 10,1 to the Current Report on Form 8-K filed on March 6, 2025).

The Company’s Insider Trading Policy.*

Subsidiaries of the Registrant.*

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Section 1350 Certification of Principal Financial Officer.*

Issuer Direct Corporation Policy for the Recovery of Erroneously Awarded Compensation, effective December 1, 2023*

ACCESS Newswire Inc.

Policy for the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97 to the Annual Report on Form 10-K filed on March 7, 2024).

The following financial information from ACCESS Newswire Inc.'s Annual Report on Form 10-K for the year ended December 31, 2024 formatted in Inline XBRL (Extensible Business Reporting Language) includes:

(i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (Loss), (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Stockholders Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements.

Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

_______________

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Pursuant to the requirements of Section 13 or 15(d) 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.

ISSUER DIRECT CORPORATION

ACCESS NEWSWIRE INC.

March 25, 2025

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March 25, 2025

Director, Chief Executive Officer

Director, Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

/s/ Timothy Pitoniak

/s/ Steven Knerr

March 25, 2025

Chief Financial Officer

Timothy Pitoniak

(Principal Financial Officer)

/s/ Michael Nowlan

March 7, 2024

Director, Chairman of the Board and Member of the Audit Committee

Michael Nowlan

Patrick Galleher

March 7, 2024

Director, Chairman of the Compensation Committee

Patrick Galleher

/s/ Graeme Rein

1 unchanged sentence

Director, Chairman of the Audit Committee

/s/ Marti Beller

/s/ Joe Staples

March 25, 2025

Director, Member of the Compensation Committee

Director, Chairman of the Compensation Committee

/s/ Wesley Pollard

March 25, 2025

Director, Member of the Audit and Compensation Committee

Wesley Pollard

INDEX TO FINANCIAL STATEMENTS

1 unchanged sentence

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Income for the years ended December 31, 2023 and 2022

Consolidated Statements of Comprehensive Income for the years ended December 31, 2023 and 2022

Consolidated Statements of Income (Loss) for the years ended December 31, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Issuer Direct Corporation

To the Board of Directors and

Stockholders of ACCESS Newswire Inc.

Raleigh, North Carolina

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Issuer Direct Corporation and subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying balance sheets of ACCESS Newswire Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related statements of income (loss), comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the two-period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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Revenue from Contracts with Customers

The Company had $33,378,000 in revenue for the year ended December 31, 2023.

As disclosed in Note 2 to the consolidated financial statements, the Company’s contracts include subscriptions to its cloud-based products or contracts for communications and compliance products and services.

The Company had $23,057,000 in revenue from continuing operations and $5,831,000 in revenue from discontinued operations for the year ended December 31, 2024.

As disclosed in Note 2 to the consolidated financial statements, the Company’s contracts include subscriptions to its cloud-based products or contracts for products and services.

The Company’s contracts include either a subscription to the entire platform or certain modules within the platform, or an agreement to perform services, or any combination thereof, and often contain multiple subscriptions and services.

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Collectability of Accounts Receivable

As discussed in Note 2 to the consolidated financial statements, the Company’s allowance for credit losses was $1,119,000 as of December 31, 2023.

The Company accounts for the allowance for credit losses using an expected losses model, based on credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balance sheet date through analyzing historical customer data as well as taking into consideration current economic trends.

The Company’s allowance for credit losses was $1,059,000 from continuing operations and was $559,000 from discontinued operations as of December 31, 2024.

As disclosed in Note 2 to the consolidated financial statements, the Company accounts for the allowance for credit losses using an expected losses model, based on credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balance sheet date through analyzing historical customer data as well as taking into consideration current economic trends.

Management makes significant judgments when assessing the likelihood of collection of a customer’s accounts receivable by considering various factors such as communications from the customer, historical collections, and number of days accounts receivables have been outstanding.

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Analyzed the significant assumptions and estimates made by management as discussed above.

Assessed the recorded accounts receivable balance by selecting a sample of transactions to confirm the outstanding balance as of year-end and analyzed the original invoices that comprised the accounts receivable balance for any non-replies to ensure existence of the receivable as of the balance sheet date.

Evaluated the reasonableness of management’s valuation for allowance for credit losses by performing an independent retrospective review.

Goodwill and Intangible Assets Impairment Assessment

The Company’s goodwill balance was $19,043,000 from continuing operations and $2,885,000 from discontinued operations and intangible asset balance was $11,976,000 from continuing operations and $637,000 from discontinued operations as of December 31, 2024.

The Company’s evaluation of goodwill and intangible assets for impairment involves the comparison of the fair value of each reporting unit or asset group to its carrying value.

The fair value of each reporting unit or asset group is estimated using discounted cash flow and guideline public company methods, which requires the use of estimates and assumptions related to cash flow forecasts, discount rates, terminal values, and market multiples of comparable companies.

Management’s cash flow forecasts included significant judgments and assumptions relating to revenue growth rates and operating margins.

The fair value of the reporting unit exceeded its carrying value as of December 31, 2024, therefore, no impairment of goodwill was recognized.

The fair value of the Company’s Newswire trademarks did not exceed their carrying value as of December 31, 2024;

therefore, an impairment charge of $14,150,000 was recognized during the year ended December 31, 2024.

The impairment charge was recognized for the amount by which the carrying amount exceeded the estimated fair value.

Management made significant judgments when developing the fair value estimate of the Newswire trademarks and reporting unit.

As a result, a high degree of auditor judgment and effort was required, including involving the use of our valuation specialists, in performing audit procedures to evaluate the reasonableness of management’s cash flow forecasts and the significant assumptions identified above.

Significant uncertainty exists with these assumptions because they are sensitive to future market or economic conditions.

Our audit procedures included the following:

Obtained an understanding of the internal controls and processes in place over the Company’s impairment review process, including management’s review of the significant assumptions described above.

Evaluated the reasonableness of management’s revenue, operating margins, and other forecasted amounts by comparing the forecasts to actual historical results.

Evaluated the reasonableness of guideline public company valuation multiples.

Evaluated management’s determination of reporting units and segments.

With the assistance of our valuation specialists, evaluated the valuation methodologies and significant assumptions, including discount rates, and developed a range of independent estimates and compared those to the significant assumptions used by management.

Tested the mathematical accuracy of the calculations.

/s/ Cherry Bekaert LLP

2 unchanged sentences

March 25, 2025

ISSUER DIRECT CORPORATION AND SUBSIDIARIES

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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Other current assets

Current assets held for sale

Total current assets

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Intangible assets (net of accumulated amortization of $ 7,024 and $ 4,465 , respectively)

Deferred tax asset

Non-current assets held for sale

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Deferred revenue

Current liabilities held for sale

Total current liabilities

13 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

ISSUER DIRECT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands, except per share amounts)

6 unchanged sentences

Depreciation and amortization

Impairment loss on intangible assets

Total operating costs and expenses

Operating income

Operating loss

Other income (expense)

Interest expense, net

Other expense (See Notes 6 and 7)

Income before income taxes

Income tax expense

Income per share – basic

Income per share – diluted

Other income (expense) (See Notes 6 and 7)

Loss before income taxes

Income tax benefit

Net loss from continuing operations

Net income from discontinued operations, net of taxes

Net (loss) income

Loss from continuing operations per share – basic

Loss from continuing operations per share – diluted

Income from discontinued operations per share – basic

Income from discontinued operations per share – diluted

(Loss) income per share – basic

(Loss) income per share – diluted

Weighted average number of common shares outstanding – basic

1 unchanged sentence

The accompanying notes are an integral part of these consolidated financial statements.

ISSUER DIRECT CORPORATION

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

Years Ended December 31,

Net (loss) income

Foreign currency translation adjustment

Comprehensive income

Comprehensive (loss) income

The accompanying notes are an integral part of these consolidated financial statements.

ISSUER DIRECT CORPORATION AND SUBSIDIARIES

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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Exercise of stock awards, net of tax

Shares issued upon acquisition of Newswire (see Note 4)

Stock repurchase and retirement (see Note 8)

Foreign currency translation

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Exercise of stock awards, net of tax

Stock issued to consultants

Foreign currency translation

1 unchanged sentence

The accompanying notes are an integral part of these consolidated financial statements.

ISSUER DIRECT CORPORATION AND SUBSIDIARIES

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Cash flows from operating activities

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

Bad debt expense

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income from discontinued operations, net of tax

Loss on impairment of intangible assets

Provision for credit losses

Depreciation and amortization

Deferred income taxes

Stock-based compensation expense

Stock-based compensation expense – employees and directors

Stock-based compensation expense - consultants

Change in fair value of interest rate swap

Amortization of debt issuance costs

Changes in operating assets and liabilities, net of effect of business acquisition:

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

3 unchanged sentences

Increase (decrease) in accrued expenses and other liabilities

Net cash provided by (used in) operating activities of continuing operations

Net cash provided by operating activities of discontinued operations

Net cash provided by operating activities

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Cash flows from financing activities

Payment for stock repurchase and retirement (see Note 8)

Payment of note payable (see Note 6)

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Net cash used in financing activities

Net change in cash

Cash- beginning

Net change in cash and cash equivalents

Cash and cash equivalents - beginning

Currency translation adjustment

Cash and cash equivalents - ending

Supplemental disclosures :

1 unchanged sentence

Cash paid for interest

Non-cash activities:

Issuance of secured promissory note in acquisition of Newswire (see Note 4)

Shares issued in acquisition of Newswire (see Note 4)

The accompanying notes are an integral part of these consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Description, Background and Basis of Operations

Nature of Operations

Issuer Direct Corporation (the “Company” or “Issuer Direct”) was incorporated in the State of Delaware in October 1988 under the name Docucon Inc.

Subsequent to the December 13, 2007 merger with My EDGAR, Inc., the Company changed its name to Issuer Direct Corporation.

Today, Issuer Direct is a leading communications company providing solutions for both public relations and investor relations professionals.

ACCESS Newswire Inc.

(the “Company” or “ACCESS”) was incorporated in the State of Delaware in October 1988 under the name Docucon Inc.

Subsequent to the December 13, 2007 merger with My EDGAR, Inc., the Company changed its name to Issuer Direct Corporation and on January 27, 2025, changed its name to ACCESS Newswire Inc.

Today, ACCESS is a leading communications company providing solutions for both public relations and investor relations professionals.

The Company operates under several brands in the market, including Direct Transfer, Interwest, ACCESSWIRE and Newswire.

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Accounts Receivable and Allowance for Credit Losses

The Company adopted Financial Accounting Standards Codification (“ASC”) Topic 326, Financial Statements – Credit Losses (“Topic 326”) with an adoption date of January 1, 2023.

As a result, the Company changed its accounting policy for its allowance for credit losses using an expected losses model rather than using incurred losses.

The new model is based on the credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balances sheet date through analyzing historical customer data as well as taking into consideration current economic trends.

The Company adopted Topic 326 and determined it did not have a material financial impact.

The Company calculates its allowance for credit losses using an expected losses model rather than using incurred losses.

The model is based on the credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balances sheet date through analyzing historical customer data as well as taking into consideration current economic trends.

The Company generally writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection.

1 unchanged sentence

Beginning balance

Bad debt expense

Provision for credit losses

Ending balance

Concentration of Credit Risk

Concentrations of Credit Risk & Customers

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivables.

The Company places its cash and temporary cash investments with credit quality institutions.

Such cash balances are currently in excess of the FDIC insurance limit of $ 250,000 .

To reduce its risk associated with the failure of such financial institutions, the Company evaluates the rating of the financial institution in which it holds deposits.

As of December 31, 2023, the total amount exceeding such limit was $ 397,000 .

As of December 31, 2024, the Company’s domestic cash balance is spread among different depository institutions such that there is no balance which exceeds the FDIC insurance limit of $ 250,000 .

The Company also had cash-on-hand of $ 68,000 in Europe and $ 1,691,000 in Canada as of December 31, 2024.

The Company believes it did not have any financial instruments that could have potentially subjected us to significant concentrations of credit risk for any relevant period.

The Company did not have any customers during the years ended December 31, 2024 or 2023 that accounted for more than 10% of revenue.

Revenue Recognition

Substantially all the Company’s revenue comes from contracts with customers for subscriptions to its cloud-based products or contracts for Communications and Compliance products and services.

Substantially all the Company’s revenue comes from contracts with customers for its press release distribution and related products, investor relations website hosting or data feeds, events and webcast offerings and subscriptions to its incident hotline.

Customers consist of public corporate issuers and professional firms, such as investor and public relations firms.

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For these bundled contracts, the Company accounts for individual subscriptions and services as separate performance obligations if they are distinct, which is when a product or service is separately identifiable from other items in the bundled package, and a customer can benefit from it on its own or with other resources that are readily available to the customer.

The Company separates revenue from its contracts into two revenue streams:

i) Communications and ii) Compliance.

Performance obligations of Communications contracts include providing subscriptions to certain modules or our entire Communications platform, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis.

PRO subscription contracts contain two performance obligations of which the first is a series of distinct services that include, but are not limited to, developing specific media plans, and creating content to be distributed and the second performance obligation being access to the PRO platform along with distribution of press releases, ongoing support, and assessment of performance as a stand-ready obligation.

Performance obligations of Compliance contracts include providing subscriptions to certain Compliance modules or other stand-ready obligations to deliver services and annual report printing and distribution.

Additionally, services are provided on a per project basis.

Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront.

Set up fees for the transfer agent module and investor relations content management module are immaterial.

Performance obligations of include providing subscriptions to certain modules or our entire platform, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis.

PRO subscription contracts contain two performance obligations:

(i) the first is a series of distinct services that include, but are not limited to, developing specific media plans, and creating content to be distributed and (ii) the second performance obligation being access to the PRO platform along with distribution of press releases, ongoing support, and assessment of performance as a stand-ready obligation.

The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled.

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Deferred revenue as of December 31, 2024 and December 31, 2023, was $ 4,743,000 and $ 4,750,000 , respectively, and is expected to be recognized within one year.

Approximately $ 200,000 of the deferred revenue balance as of December 31, 2024, relates to contracts for press release packages with an expiration date after December 31, 2025, however the customer may use the balance within one year.

As of January 1, 2023, deferred revenue was $ 4,788,000 .

Revenue recognized for the years ended December 31, 2024 and 2023, which was included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 4,750,000 and $ 4,788,000 , respectively.

Accounts receivable, net of allowance for credit losses, related to contracts with customers was $ 3,351,000 and $ 3,005,000 as of December 31, 2024 and 2023, respectively.

As of January 1, 2023, accounts receivable, net of allowance for credit losses was $2,130,000.

Since substantially all the contracts have terms of one year or less, the Company has elected to use the practical expedient regarding the existence of a significant financing.

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The gains or losses that result from this process are recorded as a separate component of other accumulated comprehensive income until the entity is sold or substantially liquidated.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income related to changes in the cumulative foreign currency translation adjustment.

Comprehensive (Loss) Income

Comprehensive (loss) income consists of net (loss) income and other comprehensive loss (income) related to changes in the cumulative foreign currency translation adjustment.

Business Combinations, Goodwill, and Intangible Assets

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At the time of the business combination, trademarks may be considered an indefinite-lived asset and, as such, are not amortized as there may be no foreseeable limit to cash flows generated from them.

For the Newswire acquisition (see Note 4), the Company determined the trademarks acquired were considered a definite lived asset which will be amortized over a period of 15 years.

For the Newswire acquisition (see Note 4), the Company originally determined the trademarks acquired were considered a definite lived asset which will be amortized over a period of 15 years, however upon the re-brand of the Company to ACCESS Newswire and subsequent review of the trademarks associated with Newswire, determined the life to be 5 years remaining.

The goodwill and intangible assets are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified.

2 unchanged sentences

During the years ended December 31, 2024 and 2023, advertising expense was $ 1,267,000 and $ 1,690,000 , respectively.

Most of the increase is due to additional advertising expense resulting from Newswire, which was acquired in November 2022.

Liquidity and Capital Resources

As of December 31, 2024, we had $ 4,103,000 in cash and cash equivalents and $3,351,000 in net accounts receivable.

Current liabilities as of December 31, 2023, totaled $12,650,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

As of December 31, 2023, our current liabilities exceeded our current assets by $1,146,000.

While our current liabilities exceed current assets, we believe we will be able to continue to generate cash as well as benefit from the addition of Newswire operations.

Current liabilities from continuing operations as of December 31, 2024, totaled $ 12,790,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

As of December 31, 2024, our current liabilities from continuing operations exceeded our current assets from continuing operations by $ 2,510,000 .

While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement and ability to continue to generate cash will benefit us in the future.

See Note 15 (Subsequent Events) to our Consolidated Financial Statements relating to the sale of our Compliance business and the repayment of $ 12,000,000 of our long-term debt as of February 28, 2025.

Newly Adopted Accounting Pronouncements

Topic 326 was effective for the Company beginning on January 1, 2023.

This update requires a financial asset (or group of financial assets) measured at amortized cost basis, to be presented at the net amount expected to be collected.

This allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value of the amount expected to be collected on the financial asset.

The Company has evaluated the impact of Topic 326 and has determined it does not have a material financial impact.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for the Company for the year ended December 31, 2024.

The Company adopted the new standard effective December 31, 2024 on a retrospective basis.

The adoption did not have any impact on the Company’s financial position, results of operations or cash flows.

Refer to Note 12, Segment Information, for details.

Accounting Pronouncements Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

ASU 2023-09 is effective for the Company for the year ending December 31, 2025 and early adoption is permitted.

The guidance allows for adoption using either a prospective or retrospective transition method.

The Company does not believe the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows, however, is evaluating the impact that the updated standard will have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

This update requires enhanced disclosures of certain costs and expenses in the notes to the financial statements.

This update is applicable to all public entities and is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this update should be applied prospectively;

however, retrospective application is permitted.

The Company is currently evaluating the impact the new accounting guidance will have on its disclosures.

Discontinued Operations

On February 28, 2025, the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”).

Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s compliance business (the “Purchased Assets”).

The Purchased Assets consist of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services).

Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings.

Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “compliance revenue” will be retained by the Company.

The Buyer will only assume certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue.

This transaction also closed on February 28, 2025.

The Company reviewed Accounting Standards Codification (ASC) 205-20-45, which provides guidance over the disposal of a component of an entity and determined that the criteria were met to classify the assets of the compliance business as held-for-sale as of December 31, 2024.

Further guidance states that once a group of assets are determined to be held-for-sale, then they should be recorded as discontinued operations in the financial statements of the entity.

Performance obligations of contracts included in discontinued operations include providing subscriptions to certain modules of our compliance software or other stand-ready obligations to deliver services and annual report printing and distribution.

Additionally, services are provided on a per project basis.

Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront.

Set up fees for the transfer agent module and investor relations content management module are immaterial.

For service contracts that include stand ready obligations, revenue is recognized evenly over the contract period.

For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event.

The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.

The following table sets forth the assets and liabilities included in discontinued operations as of December 31, 2024 and 2023 as presented into the Consolidated Balance Sheets:

Accounts Receivable (net of provision for credit losses of $559 and $398 as of December 31, 2024 and 2023, respectively

Other current assets

Total current assets

Intangible Assets (net of accumulated amortization of $5,265 and $5,097 as of December 31, 2024 and 2023, respectively

Other non current assets

Accounts Payable

Accrued Expenses

Deferred Revenue

Total liabilities

The following table sets forth the details of income from discontinued operations for the years ended December 31, 2024 and 2023 as presented in the Consolidated Statement of Operations:

Years Ended December 31,

Cost of revenues

Operating costs and expenses:

General and administrative

Sales and marketing

Product development

Depreciation and amortization

Total operating costs and expenses

Operating income

Other income (expense)

Interest income

Income before income taxes

Income tax expense

Net income from discontinued operations

Computer equipment

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No disposals were made during the years ended December 31, 2024 and 2023.

Acquisition of iNewswire.com LLC

On November 1, 2022, the Company entered into a Membership Interest Purchase Agreement with Lead Capital, LLC, a Delaware limited liability company (“Seller”), whereby the Company purchased all the issued and outstanding membership interests of iNewswire.com LLC, a Delaware limited liability company (“Newswire”).

Newswire is a leading media and marketing communications technology company that provides press release distribution, media databases, media monitoring, and newsrooms through its PRO offering, formally Media Advantage Platform.

In connection with the transaction (the “Acquisition”), the Company paid to the Seller aggregate consideration of $ 43.5 million, consisting of the following:

(i) a cash payment of $ 18.0 million subject to a 60-day escrow to secure the payment of any working capital adjustments or any employee bonus obligations of Newswire, (ii) the issuance of a secured promissory note in the principal amount of $ 22.0 million (the “Secured Note”), and (iii) the issuance of 180,181 shares of the Company’s common stock, par value $ 0.001 , valued at $ 3.9 million based on the Company’s closing stock price of $ 21.60 on the Closing Date.

During the three months ended March 31, 2023, the Seller paid a $ 350,000 net working capital adjustment to the Company.

The Secured Note was due and payable on November 8, 2023, with an annual interest rate of 6 %.

The Secured Note allowed for prepayment, however, the 6% interest payment was guaranteed through the Maturity Date even if prepayments were made.

On March 20, 2023, the Company paid $ 370,000 to pay the Secured Note in full, with the Seller agreeing to forgive $ 440,000 of interest which would have otherwise been due.

The $ 370,000 payment is recorded in Other expense on the Consolidated statements of operations for the year ended December 31, 2023.

The Company has determined that the acquisition of Newswire constitutes a business acquisition as defined by ASC 805, Business Combinations .

Accordingly, the assets acquired, and the liabilities assumed in the transaction were recorded at their acquisition date estimated fair value, while the transaction costs associated with the acquisition, which totaled $ 178,000 , were expensed as incurred pursuant to the purchase method of accounting in accordance with ASC 805.

The Company’s preliminary purchase price allocation was based on an evaluation of the appropriate fair values and represents management’s best estimate based on available data.

Any changes within the measurement period resulting from facts and circumstances that existed as of the acquisition date may result in retrospective adjustments to the provisional amounts recorded at the acquisition date.

The Company employed a third-party valuation firm to assist in determining the purchase price allocation of assets and liabilities acquired from Newswire.

The income approach was used to determine the value of trademarks/tradename and client relationships.

The income approach determines the fair value for the asset based on the present value of cash flows projected to be generated by the asset.

Projected cash flows are discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money.

Projected cash flows for each asset considered multiple factors, including current revenue from existing customers;

analysis of expected revenue and attrition trends;

reasonable contract renewal assumptions from the perspective of a marketplace participant;

expected profit margins giving consideration to marketplace synergies;

and required returns to contributory assets.

The relief from royalty method was used to value the technology.

This approach applies an industry-based royalty rate to future projected cashflows to express the fair value as the expected after-tax royalty savings of the asset.

Fair values are determined based on the requirements of ASC 820, Fair Measurements and Disclosure .

During the year ended December 31, 2023, the Company obtained the necessary information to determine contract assets and deferred revenue acquired and as such, completed its allocation of the fair value of the assets and liabilities acquired.

The measurement period adjustments below did not have a material impact to the Company’s Consolidated statement of operations from November 1, 2022, to December 31, 2023.

A summary of the fair value consideration transferred for the Acquisition and the allocation to the fair value of the assets and liabilities of Newswire are as follows (in 000's):

A summary of the fair value consideration transferred for the Acquisition and the preliminary allocation to the fair value of the assets and liabilities of Newswire are as follows (in 000's):

Consideration transferred:

Secured promissory note

Shares of Issuer Direct common stock based on closing market price prior to the Acquisition

Net working capital adjustment

Total consideration transferred

Final allocation of tangible and intangible assets and liabilities:

As Originally

Measurement Period Adjustments

Trademarks/Tradename

Customer relationships

Net liabilities assumed

Total amount allocated

Net liabilities assumed:

Accounts Receivable

Other Current Assets

Accounts Payable

Accrued Expenses

Deferred Revenue

Deferred tax liability

Supplemental pro forma information

The following unaudited supplemental pro forma information summarizes the Company’s results of operations for the current reporting period, as if the Company completed the acquisition as of the beginning of the annual reporting period.

Supplemental pro forma information is as follows:

in $000’s, except per share amounts

Basic earnings per share

Diluted earnings per share

The unaudited pro forma combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisitions been completed as of the date and for the periods presented and should not be taken as representative of our consolidated results of operations or financial condition following the acquisition.

In addition, the unaudited pro forma combined financial information is not intended to project the future financial position or results of operations of the combined company.

The unaudited pro forma financial information was prepared using the acquisition method of accounting for the acquisition under existing US GAAP.

Issuer Direct has been treated as the acquirer.

Goodwill and Other Intangible Assets

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Gross Carrying

Customer lists

Customer relationships

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Gross Carrying

Customer lists

Customer relationships

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Total intangible assets

The Company performed its annual assessment for impairment of intangible assets and determined there was no impairment as of and for the years ended December 31, 2023 and 2022.

The amortization of intangible assets is a charge to operating expenses and totaled $ 2,741,000 and $ 816,000 in the years ended 2023 and 2022, respectively.

The Company performed its annual assessment for impairment of intangible assets and determined an impairment charge of $ 14,150,000 associated with the Newswire trademarks was necessary for the year ended December 31, 2024.

As a result of the Company’s rebranding to ACCESS Newswire, management determined the useful life of the Newswire trademarks to be 5 years as opposed to the original 15 years upon the initial valuation in 2022.

This decrease caused a decrease in the expected cashflows the assets will generate, which resulted in the impairment charge.

There was no impairment loss recorded as of and for the year ended December 31, 2023.

The amortization of intangible assets is a charge to operating expenses and totaled $ 2,559,000 in the years ended 2024 and 2023, respectively.

The future amortization of the identifiable intangible assets is as follows (in 000’s):

Years Ending December 31:

The balance of goodwill was $ 6,376,000 as of December 31, 2021.

During the year ending December 31, 2022, we acquired Newswire, which added $ 16,122,000 of goodwill based on our preliminary purchase price allocation.

During the year ended December 31, 2022, we acquired Newswire, which added $ 16,122,000 of goodwill based on our preliminary purchase price allocation.

During the year ending December 31, 2023, we concluded our purchase price allocation, which resulted in a reduction in goodwill of $ 571,000 .

Along with Newswire, the goodwill balance of $ 21,927,000 is related to the stock acquisitions of Basset Press in July 2007, PIR in 2013, ACCESSWIRE in 2014, Interwest in 2017 and Filing Services Canada, Inc.

Along with Newswire, the goodwill balance of $ 19,043,000 is related to the stock acquisitions of ACCESSWIRE in 2014 and Filing Services Canada, Inc.

in 2018 and the assets of the Visual Webcasting Platform in 2019.

The Company conducted its annual impairment analyses as of October 1, of 2023 and 2022 and determined that no goodwill was impaired.

The Company conducted its annual impairment analyses as of December 31, 2024 and 2023 and determined that no goodwill was impaired.

Credit Agreement

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The Credit Agreement provides for the following:

(i) term loan facility in an aggregate principal amount of $20 million (the “Term Loan”), and (ii) revolving letter of credit in an up to aggregate principal amount of $5 million (the “Revolving LOC”), subject to an 85% limit based on the current eligible accounts receivable (as defined in the Credit Agreement) .

(i) term loan facility in an aggregate principal amount of $20 million (the “Term Loan”), and (ii) revolving line of credit in an up to aggregate principal amount of $5 million (the “Revolving LOC”), subject to an 85% limit based on the current eligible accounts receivable (as defined in the Credit Agreement) .

Please also see Note 15 (Subsequent Events) relating to the amendments to the Credit Agreement as of February 28, 2025.

Pursuant to the terms of the Credit Agreement, the per annum interest rate of the Term Loan is variable based on the one-month secured overnight financing rate (“SOFR”) plus 2.35%, subject to a minimum SOFR of 2.00%.

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The Company began making monthly interest only payments on the Term Loan on April 1, 2023.

Beginning on January 1, 2024, the Company will make monthly principal payments of $ 333,333 plus interest payments on the Term Loan until the maturity date of December 28, 2028.

The proceeds of the Term Loan along with certain cash on hand of the Company were used to repay in its entirety the one-year Secured Promissory Note (the “Secured Note”) issued to Lead Capital, LLC in connection with the Company’s November 1, 2022 acquisition of iNewswire.com LLC for a lump sum payment of $ 22,880,000 .

In order to settle the Secured Note on March 20, 2023, the Company paid $ 370,000 to the Seller, with the Seller agreeing to forgive $ 440,000 of interest which would have otherwise been due.

The $ 370,000 payment is recorded in Other expense on the Consolidated statements of operations.

On January 1, 2024, the Company began making monthly principal payments of $ 333,333 plus interest payments on the Term Loan until the maturity date of December 20, 2028 .

The proceeds of the Term Loan along with certain cash on hand of the Company were used to repay in its entirety the one-year Secured Promissory Note (the “Seller Note”) issued to Lead Capital, LLC (“the Seller”) in connection with the Company’s November 1, 2022 acquisition of iNewswire.com LLC (“Newswire”) for a lump sum payment of $ 22,880,000 .

In order to settle the Seller Note on March 20, 2023, the Company paid $ 370,000 to Seller, with the Seller agreeing to forgive $ 440,000 of interest which would have otherwise been due.

The $ 370,000 payment is recorded in Other income (expense), net on the Consolidated statements of operations for the year ended December 31, 2023.

Effective June 25, 2024, the aggregate principal amount of the Revolving LOC was reduced to $ 1,500,000 .

The Company currently has no plans to utilize the Revolving LOC but may do so in the future.

If the Company does utilize any funds under the Revolving LOC, the funds will bear interest at a per annum rate equal to the then current SOFR plus 2.05%.

Pinnacle’s commitment to fund under the Revolving LOC terminates on September 1, 2024, unless terminated earlier pursuant to the terms of the Credit Agreement.

The Company terminated its $ 3,000,000 unsecured line of credit with Fifth Third Bank immediately prior to the Closing Date.

Effective June 25, 2024, Pinnacle’s commitment to fund under the Revolving LOC was amended to terminate on June 30, 2025, unless terminated earlier pursuant to the terms of the Credit Agreement.

The Company terminated its existing $ 3,000,000 unsecured line of credit with Fifth Third Bank immediately prior to the Closing Date.

As of December 31, 2024, there was no outstanding balance under the Revolving LOC and the interest rate was 6.58 %.

The Credit Agreement contains the following financial covenants, which commenced with fiscal quarter ended June 30, 2023:

a fixed charge coverage ratio of no less than 1.20:1.00 and a leverage ratio requiring that, for each fiscal quarter of the Company ending after June 30, 2023 through September 30, 2023, the leverage ratio shall not exceed 2.75:1.00 and for each fiscal quarter of the Company ending after December 31, 2023, the leverage ratio shall not exceed 2.50:1.00.

All covenants were successfully achieved as of December 31, 2023.

The Credit Agreement originally contained financial covenants, which commenced with fiscal quarter ending September 30, 2023, and were subsequently amended on June 25, 2024, as follows:

Fiscal Quarter

Fixed Charge Coverage Ratio

Each fiscal quarter ending on or after June 30, 2023 through June 30, 2024

Fiscal quarter ending on or after September 30, 2024 through March 31, 2025

Each fiscal quarter ending on or after June 30, 2025

Leverage Ratio

Each fiscal quarter ending on or after June 30, 2023 through September 30, 2023

Fiscal quarter ending December 31, 2023

Fiscal quarter ending March 31, 2024

Each fiscal quarter ending on or after June 30, 2024 through September 30, 2024

Fiscal quarter ending December 31, 2024

Fiscal quarter ending March 31, 2025

Each fiscal quarter ending on or after June 30, 2025

Additionally, as long as the Company maintains a Leverage Ratio greater than 2.75:1.0, the Company is required to maintain unrestricted liquidity, as defined in the amendment, of not less than $1,500,000, beginning June 30, 2024.

As of December 31,2024, the Company was not in compliance with the above covenants.

However, with sale of the Purchased Assets and simultaneous restructuring of the Credit Agreement (See Note 15:

Subsequent Events) the above covenants were modified that the Company is in compliance and based on future projections expects to be in Compliance for the following twelve months.

The Credit Agreement also contains customary affirmative covenants for a transaction of this nature, including among other things, covenants relating to:

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In accounting for the interest rate swap, the Company has determined it does not qualify for hedge accounting.

The fair value of the swap agreement as of December 31, 2023 was a net liability of $ 21,000 and is included in Other long-term liabilities, in the Consolidated balance sheets.

The fair value of the swap agreement as of December 31, 2024 and 2023 was an asset of $ 60,000 and liability of $ 21,000 , respectively and is included in Other long-term assets and liabilities, in the Consolidated balance sheets.

The fair value of the interest rate swap agreement excludes accrued interest and takes into consideration current interest rates and current likelihood of the swap counterparty’s compliance with its contractual obligations.

As a result of the interest rate swap, we have also recognized a net unrealized loss of $ 21,000 during the year ended December 31, 2023, which is included in Other expense in the Consolidated statements of operations.

As a result of the interest rate swap, the Company recognized a net unrealized gain of $ 81,000 during the year ended December 31, 2024, and a net unrealized loss of $ 21,000 during the year ended December 31, 2023, which are included in Other expense in the Consolidated statements of operations.

The Company did not pay any dividends during the years ended December 31, 2024 and 2023.

Preferred stock and common stock

There were no issuances of preferred stock or common stock during the years ended December 31, 2023 and 2022 other than stock awarded to employees and the Board of Directors as well as the shares issued as part of the Newswire acquisition (see Note 4).

Stock repurchase and retirement

On March 1, 2022, the Company’s board of directors authorized a stock repurchase program under which the Company was authorized to repurchase up to $ 5,000,000 of its common shares.

As of August 31, 2022, the Company completed the repurchase program by purchasing a total of 207,964 shares as shown in the table below ($ in 000’s, except share or per share amounts):

Shares Repurchased

Total Number of Shares Purchased as Part of Publicly Announced Program

Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program

March 1-31, 2022

April 1-30, 2022

May 1-31, 2022

June 1-30, 2022

July 1-31, 2022

August 1-31, 2022

No shares repurchased between September 2022 and December 2023

During the year ended December 31, 2024, there was 4,532 shares of common stock issued to a consultant in exchange for services.

There were no issuances of preferred stock or common stock during the years ended December 31, 2024 and 2023 other than stock awarded to employees and the Board of Directors.

Stock Options and Restricted Stock Units

On May 23, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan, as amended (the “2014 Plan”).

Under the terms of the 2014 Plan, the Company is authorized to issue incentive awards for common stock up to 200,000 shares to employees and other personnel.

On June 10, 2016 and June 17, 2020, the shareholders of the Company approved an additional 200,000 and 200,000 awards, respectively, to be issued under the 2014 Plan, bringing the total number of shares to be awarded to 600,000 .

The awards may be in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards.

The 2014 Plan is effective through March 31, 2024.

As of December 31, 2023, there were 51,743 shares which remained to be granted under the 2014 Plan.

These shares were assumed by the 2023 Plan described below.

On June 7, 2023, the shareholders of the Company approved the 2023 Equity Incentive Plan (the “2023 Plan”).

2 unchanged sentences

The 2023 Plan is effective through April 1, 2033.

As of December 31, 2023, there are 337,411 shares which remain to be granted under the 2023 Plan, including 51,743 shares assumed under the 2014 Plan described above.

As of December 31, 2024, there are 365,078 shares which remain to be granted under the 2023 Plan, including 122,076 shares assumed under the Company’s previous 2014 Equity Incentive Plan, as amended.

The following is a summary of stock options issued during the year ended December 31, 2024 and 2023:

7 unchanged sentences

Options granted

26.00 – 27.71

Options exercised

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All options have been registered with the SEC.

The fair value of common stock options issued during the year ended December 31, 2023 were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used:

Expected dividend yield

Expected stock price volatility

Weighted-average risk-free interest rate

Weighted-average expected life of options (in years)

The following is a summary of restricted stock units issued during the years ended December 31, 2024 and 2023:

11 unchanged sentences

Balance on December 31, 2024

During the year ended December 31, 2023, the Company granted 74,832 shares of restricted stock units to employees and the Board of Directors, which vest at various intervals over the next 3 years.

During the year ended December 31, 2024, the Company granted 43,666 shares of restricted stock units to employees, contractors and the Board of Directors, which vest at various intervals over the next 3 years.

The average grant date fair value of these grants was $ 12.41 per share during the year ended December 31, 2024.

During the year ended December 31, 2023, 21,490 restricted stock units with an average intrinsic value of $ 25.24 per share, vested.

During the year ended December 31, 2024, 18,999 restricted stock units with a grant date average intrinsic value of $ 20.26 per share, vested.

As of December 31, 2024, there was $ 830,000 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2027.

1 unchanged sentence

Leasing activity generally consists of office leases.

In March 2019, a new lease was signed to move the corporate headquarters to Raleigh, North Carolina.

The new lease, which had a lease commencement date of October 2, 2019, expires December 31, 2027.

In March 2019, a lease was signed to move the corporate headquarters to Raleigh, North Carolina.

The lease had a lease commencement date of October 2, 2019 and expires December 31, 2027.

Minimum lease payments are $ 2,997,000 , not including a tenant improvement allowance of $ 488,000 , which is included in fixed assets as of December 31, 2024.

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The Company is neither a party to any litigation nor is aware of any such threatened or pending litigation that might result in a material adverse effect to the Company’s business.

Segment Reporting

Operating segments are components of an enterprise about which separate financial information is available and is evaluated periodically by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions.

By this definition, the Company has identified its CEO as the CODM.

The Company considers itself to be in a single reportable segment under the authoritative guidance for segment reporting, specifically a communications company for publicly traded and private companies.

The following tables present revenue disaggregated by revenue stream in (000’s):

For the years ended December 31, 2023 and 2022, the Company generated revenues from the following revenue streams as a percentage of total revenue (in 000’s):

December 31, 2023

December 31, 2022

Communications

The Company did not have any customers during the years ended December 31, 2023 or 2022 that accounted for more than 10% of revenue.

The CODM uses operating income to evaluate our capital allocation, which could be re-investing income back into the Company, executing a share-repurchase, paying dividends or acquiring other entities.

Operating income is used to monitor budget versus actual results.

The CODM also uses operating income in competitive analysis by benchmarking to the Company’s competitors.

The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the Company.

Years Ended December 31,

Cost of revenues

Costs to deliver products

Employee costs

Teleconference costs

Amortization of capitalized software

Other segment costs

Total cost of revenue

Operating costs and expenses:

Employee costs

Consultants and professional services

Depreciation and amortization

Provision for credit losses

Software licensing

Stock compensation

Merchant and bank fees

Acquisition/integration and other non-recurring costs

Impairment loss on intangible assets

Other operating expenses (1)

Total operating costs and expenses

Operating loss

Other operating expenses include insurance, travel, reseller commissions, tradeshow expense and other miscellaneous selling, general and administrative expenses

The provision for income taxes consisted of the following components for the years ended December 31 (in 000’s):

1 unchanged sentence

Total Deferred

Total expense for income taxes

Total benefit for income taxes

Reconciliation between the statutory rate and the effective tax rate is as follows on December 31 (in 000's, except percentages):

14 unchanged sentences

ROU lease liability

Purchase of intangible assets

Total deferred tax asset

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Subsequent Events

On February 20, 2024, Timothy Pitoniak informed the Company of his resignation as Chief Financial Officer of the Company, effective March 8, 2024 (the “Effective Date”).

Pitoniak’s resignation did not arise from any disagreement on any matter relating to the operations, policies, or practices of the Company.

In accordance with ASC 855 “Subsequent Events”, the Company evaluated subsequent events after December 31, 2024, through the date these Consolidated Financial Statements were issued and has no transactions or events requiring disclosure except as set forth below:

On January 23, 2025, the Company filed a Certificate of Amendment to its Certificate of Incorporation to change its corporate name from “Issuer Direct Corporation” to “ACCESS Newswire Inc.” effective as of January 27, 2025.

Asset Purchase Agreement

On February 28, 2025, the Company and Direct Transfer, LLC, a wholly owned subsidiary of the Company (“Direct Transfer” and, collectively with the Company, the “Sellers”) entered into the Purchase Agreement with the Buyer.

Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Sellers’s Compliance business (the “Purchased Assets”).

The Purchased Assets consist of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing the following:

(i) disclosure software and services for financial reporting;

(ii) stock transfer services;

(iii) annual meeting, print and shareholder distribution and fulfillment services;

and (iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services).

Revenue related to these services was previously included in the Company’s “Compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “Communications revenue” stream in previous SEC filings.

Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “Compliance revenue” will be retained by the Company.

The Buyer will only assume certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue.

The transaction also closed on February 28, 2025.

The purchase price for the Purchased Assets is $ 12,500,000 in cash, subject to adjustment as set forth in the Purchase Agreement, with $ 12,000,000 of the purchase price being paid to the Sellers at closing and $500,000 being 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.

As discussed in more detail below, the Company used the entire $ 12,000,000 in closing cash to reduce its indebtedness to Pinnacle Bank (“Pinnacle”).

Third Modification to Credit Agreement and Partial Release

On February 28, 2025 and in connection with the Purchased Assets transaction described above, the Company and each of its wholly-owned subsidiaries entered into a Third Modification to Credit Agreement and Partial Release (the “Third Modification to Credit Agreement”) with Pinnacle with respect to that certain Credit Agreement dated as of March 20, 2023, as amended (the “Credit Agreement”), and more fully described in the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2023 and in the Company’s subsequent periodic filings with the SEC.

Pursuant to the terms of the Third Modification to Credit Agreement, the Company and Pinnacle agreed to the following:

(i) to pay down the current principal balance of the Term Loan (as defined in the Credit Agreement) by $12,000,000 as of the closing of the Purchased Assets transaction such that the current principal balance was reduced from $15,333,333 to $3,333,333 ;

(ii) beginning on March 1, 2025, to reduce the monthly principal payments due by the Company to Pinnacle under the Term Loan from $333,333 to $72,464 ;

(iii) to amend the financial covenants set forth in the Credit Agreement, as amended;

and (iv) to release the Liens (as defined in the Credit Agreement) relating to the Purchased Assets.

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.

What changed 10-K

Item 9A. Controls and Procedures