What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-13 compared with 2024-11-07 · 144 added, 272 removed, 104 unchanged (80% of the section changed)

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All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on the Company’s behalf, are expressly qualified in their entirety by the Cautionary Statements.

Issuer Direct Corporation and its subsidiaries are hereinafter collectively referred to as “Issuer Direct”, the “Company”, “We” or “Our” unless otherwise noted.

Our corporate headquarters are located at One Glenwood Ave., Suite 1001, Raleigh, North Carolina, 27603.

We announce material financial information to our investors using our investor relations website, SEC filings, investor events, news and earnings releases, public conference calls, webcasts, and social media.

ACCESS Newswire Inc.

and its subsidiaries are hereinafter collectively referred to as “ACCESS”, “ACCESS Newswire”, the “Company”, “We” or “Our” unless otherwise noted.

We are a Delaware corporation formed in October 1988 under the name Docucon Incorporated.

In December 2007, we changed our name to Issuer Direct Corporation, and then effective January 27, 2025, we changed our name from Issuer Direct Corporation to ACCESS Newswire Inc.

Our principal executive offices are located at One Glenwood Ave., Suite 1001, Raleigh, North Carolina, 27603, and our main telephone number is 888-808-ACCS (2227).

Our website address is https://www.accessnewswire.com.

Both the Company and its executive officers, announce material financial information to our investors using our investor relations website, SEC filings, investor events, news and earnings releases, public conference calls, webcasts, and social media.

We use these channels to communicate with our investors and the public about our company, our products and services and other related matters.

It is possible that information we post on some of these channels could be deemed to be material information.

Therefore, we encourage investors, the media and others interested in Issuer Direct to review the information we post to all our channels, including our social media accounts.

We are a leading communications and compliance company, providing solutions for both public relations and investor relations professionals.

Our comprehensive solutions are used by thousands of customers from emerging startups to multi-billion-dollar global brands, ensuring their most important moments are reaching the right audiences, via our industry leading newswire, IR website solutions, events technology and compliance solutions.

Our platform efficiently and effectively helps our customers manage their events when seeking to distribute their messaging to key constituents, investors, markets and regulatory systems around the globe.

Our platform consists of several related but distinct Communications and Compliance modules that companies and customers utilize every quarter.

As such, we disclose our revenue in the following two main categories:

(i) Communications and (ii) Compliance.

Set forth below is an infographic depicting the products included in each of these two main categories we provide today:

Long term, we expect the Communications portion of our business to increase, both in terms of overall revenue and as compared to the Compliance portion of our business.

Therefore, we plan to continue to invest in offerings we intend to incorporate into and complement our Communications product lineup.

Within most of our target markets, customers require several individual services and/or software providers to meet their communications and investor relations needs.

We believe our platform can address all these needs in a single, secure, cloud-based platform - one that offers a customer control, increases efficiencies, demonstrates clear value and, most importantly, delivers consistent and compliant messaging from one centralized platform.

We work with a diverse customer base, which includes not only corporate issuers and private companies, but also investment banks, professional firms, such as investor relations and public relations firms, as well as the accounting and legal communities.

Our customers and their service providers utilize our platform and related solutions from document creation all the way to dissemination to regulatory bodies, news outlets, financial platforms, and our customers’ shareholders.

Private companies primarily use our news distribution, newsroom and webcasting products and services to disseminate their message globally.

We also work with several select stock exchanges by making available certain parts of our platform under agreements to integrate our offerings within their products.

We believe such partnerships will continue to yield increased exposure to a targeted customer base that could impact our revenue and overall brand in the market.

COMMUNICATIONS

Our Communications platform consists of our press release distribution businesses branded as ACCESSWIRE and Newswire, our webcasting and events business, professional conference and events software, as well as our investor relations website technology.

Our ACCESSWIRE and Newswire news distribution platforms have been integrated into one dissemination platform that will give our customers all the distribution benefits of our global distribution footprint.

These products are sold as the leading part of our Communications subscription, as well as individually to customers around the globe and are further described below.

Like other newswires, ours are dependent upon several key partners for its news distribution.

Disruption in any of our partnerships could have a materially adverse impact on our overall business.

Our leading press release offering, which is marketed under the brand ACCESSWIRE , is a news dissemination and media outreach service.

The ACCESSWIRE product offering focuses on press release distribution for both private and public companies globally.

We believe ACCESSWIRE is becoming a competitive alternative in the newswire industry because we have been able to use our technological advancements to allow customers to self-edit releases or use our editorial staff as desired to edit releases.

We continue to expand our distribution points, improve our targeting and enhance our analytics reporting.

We also offer an e-commerce element to our ACCESSWIRE product, whereby customers can self-select their distribution, register, and then upload their press release for editorial review in minutes.

We believe these enhancements have helped increase ACCESSWIRE revenues each year compared to the prior year, a trend we expect to continue over the next several years.

We have also been able to maintain high gross margins while providing our customers flexible pricing, with options to pay per release or enter into a longer-term pricing contract commitment, as well as subscriptions.

The Newswire brand was acquired on November 1, 2022, as part of the iNewswire, LLC transaction.

Today we continue to operate this brand independently as a stand-alone front-end marketing and news distribution brand option for private companies.

Its distribution was fully integrated into ACCESSWIRE’s distribution network in early 2023.

Newswire began in 2016 as an ecommerce news distribution platform, that has evolved over the years to serve thousands of customers globally.

Additionally, the brand added new products to complement its news distribution services, such as media database, media rooms and Press Release Optimizer (”PRO”).

Therefore, we encourage investors, the media and others interested in ACCESS to review the information we post to all our channels, including our social media accounts.

We offer a dynamic customer platform that empowers businesses to connect, engage and build their brands.

Our platform streamlines Public Relations (PR) and Investor Relations (IR), helping organizations manage events, enhance communication and strategically distribute their messaging to key stakeholders, including investors, media professionals, markets, and regulatory systems worldwide.

Today, thousands of customers—from emerging startups to multi-billion-dollar global brands—trust our ACCESS platforms to elevate their reach and impact.

Specifically, the core products that encompass our platform are the following:

Press Release Distribution, Media Monitoring, Database and Pitching, as well as Investor Relations Websites and Earnings and Event technologies.

We focus on selling to small and mid-market business-to-business (“B2B”) companies, which we define as companies that have between 2 and 2,000 employees.

Beginning in late 2024, we launched our new subscription platform to existing customers only, and at the beginning of 2025, officially released it as part of our rebrand to ACCESS Newswire.

As of March 31, 2025, we had 955 subscriptions with an annual recurring revenue (“ARR”) of approximately $10.6 million.

Sale of our Compliance Business

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

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

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

As a result, assets associated with our Compliance business, and revenue and expenses associated with the assets, have been categorized as discontinued operations in our financial statements for the three months ended March 31, 2025 and 2024, while the remaining assets associated with our Communications business are included in continuing operations.

In previous periods we have sold our products in different bundles and names, such as Media Suite and/or as a Communications platform.

As part of our rebrand, in January 2025 we consolidated the naming conventions, product sets and subscriptions to be less onerous on the customers, easier to subscribe to and significantly clearer to the investment community.

Our communications platform consists of the following subscriptions:

ACCESS PR – a subscription that includes press release distribution, media monitoring, pitching and database.

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

ALL ACCESS – encompasses the best of both ACCESS PR and ACCESS IR into a customized platform for each customer.

As an option, the Company provides customers the ability to purchase stand-alone solutions to try each of its products before subscribing to our platform.

For example, a small company looking to build their brand and tell their story would utilize the press release distribution product from ACCESS Newswire in a pay-as-you-go option.

Products in the Platform

Press Release Distribution.

Our flagship press release distribution service—marketed under the brands ACCESS Newswire, Newswire.com, and PressRelease.com — offers comprehensive news dissemination and media outreach solutions for both private and public companies worldwide.

We believe ACCESS is emerging as a competitive force in the newswire industry, leveraging advanced technology to provide customers with greater control and flexibility.

Users can choose self-publishing or AI-assisted creations of their press releases, which is reviewed by our expert editorial team for compliance and professional review.

We continue to expand our distribution network, refine targeting capabilities, and enhance analytics reporting to maximize impact.

Our platform also includes a seamless e-commerce experience, allowing customers to self-select distribution options, register, and upload their press releases for editorial review within minutes .

These innovations have contributed to historical growth of press release distribution products , a trend we anticipate will continue in the coming years.

Additionally, we maintain high gross margins while offering flexible pricing options , enabling customers to pay per release or opt for long-term contract commitments.

Looking ahead to 2025, our core press release distribution service will be integrated into all three ACCESS subscription plans , ensuring even greater value for our customers.

Press Release Optimizer (”PRO”) .

Our PRO offering, formally Media Advantage Platform, automates media and marketing communications for businesses seeking to deliver the right message to the right audience at the right time for the right purpose.

Through the PRO offering, we provide content and media communications services that provide customers the opportunity to optimize their content and increase their media visibility, therefore building their brand awareness and engaging a larger audience.

With the flexibility of these offerings, customers have the ability to choose between support with content optimization, increased media visibility, or both for optimal results.

We believe the PRO product offering provides the most effective and efficient integrated media and content communication program available in the market today.

We believe for the near term we will operate the newswire brand (newswire.com) platform separate from ACCESSWIRE as there are clear customer segmentation differentiation and offerings surrounding both the Investor Relations and Public Relations Community.

However, as the market changes, we could move the brands together and alter the offerings to remain competitive in the market.

As part of the iNewswire acquisition, we acquired certain assets that with further development resulted in our ability to release a subscription add-on to our Newswire and ACCESSWIRE brands, which we call Media Suite.

The Media Suite offering provides communication professionals with the opportunity to build their story, incorporate artificial intelligence (AI) if desired, effectively pitch the media, and monitor their internal brand as well as their competitors.

This is all accomplished with a blend of human curation and an advanced AI engine that ultimately serves as the foundation of an easy-to-use workflow we branded as our Media Suite.

Media Suite is a recurring subscription product, with three subscription options available:

Media Suite Starter, Media Suite Plus, and Media Suite Enterprise, each providing different combinations of our solutions to help our customers reach their goals.

Media Suite options include:

Media Database, Media Pitching, Media Monitoring and Media Room all of which are further described below.

Media Database – Our media database is based on the idea that pitching the media should be a targeted endeavor.

With the flexibility of these offerings, customers have the ability to now choose to add a PRO solution to any of their ACCESS subscriptions.

Media Database .

Our media database is based on the idea that pitching the media should be a targeted endeavor.

Our dataset includes only the journalists that are actively writing and publishing articles.

We built this component in reverse, looking at the tens of millions of articles published annually and sorted articles by industry, publication and journalist, then curated the most accurate data of each contact and made it available within our media database.

Additionally, within the interface we made it easy to see each article published by every journalist a user may want to connect with, making Media Suite a compelling combination of the right features and intelligence between database, pitching, and monitoring.

Media Pitching – Pitching is a critical part of the Media Suite because it allows the user to contact and connect with the most active journalists in their industry.

Media Suite not only gives the user the professionals to pitch, it also offers AIMee, our AI writing and recommendation engine, to enhance the user’s message, write a new message and highlight engageable content to help bring their pitch to the forefront.

Media Monitoring – a brand monitoring solution is extremely important, and every company should consider monitoring not only their brands, but their products, executives and competitors mentioned in all mediums – print, broadcast media and television, web, radio, video, blogs and social media.

Additionally, within the interface we made it easy to see each article published by every journalist a user may want to connect with, making our media suite a compelling combination of the right features and intelligence between database, pitching, and monitoring.

Media Pitching .

Pitching is a critical part of our media suite because it allows the user to contact and connect with the most active journalists in their industry.

Our media suite not only gives the user the professionals to pitch, it also offers AIMee, our AI writing and recommendation engine, to enhance the user’s message, write a new message and highlight engage-able content to help bring their pitch to the forefront.

Media Monitoring .

A brand monitoring solution is extremely important, and every company should consider monitoring not only their brands, but their products, executives and competitors mentioned in all mediums – print, broadcast media and television, web, radio, video, blogs and social media.

Our monitoring solution offers many of these mediums and we will continue to undergo expansion in each of these mediums with a goal of being a comprehensive media monitoring solution within the next year.

Our media monitoring solution ties together our journalist contacts and mention analytics into and with a customer’s dashboard of daily activity.

Media Room - a natural addition to our public relations and investor relations website business.

This product offering can be an add-on to any customer’s platform or Communications subscription.

A natural addition to our public relations and investor relations website business.

This product offering can be an add-on to any customer’s subscription.

The media room suite includes a custom newsroom page builder, a brand asset manager and contact manager.

Our Media Room suite addresses the needs of our customers looking to build connections with media, journalists, customers and if applicable the investment community.

According to a survey from TekGroup, a majority of journalists and media professionals indicated the importance of newsrooms that include digital media, press kits and video.

We believe our Media Room suite accomplishes this by making it a part of our new Media Suite, giving us a further competitive advantage in the market.

Our media room addresses the needs of our customers looking to build connections with media, journalists, customers and if applicable the investment community.

According to TekGroup’s latest survey in 2023, a majority of journalists and media professionals indicated the importance of media rooms that include digital media, press kits and video.

We believe our media room accomplishes this by making it a part of our media suite, giving us a further competitive advantage in the market.

This also allows our customers to have one media platform to manage all their assets, brands and outreach.

Webcasting & Events .

Our webcasting and events business is comprised of our earnings call webcasting solutions and our virtual meeting and events software (such as annual meetings, deal/non-deal road shows, analyst days and shareholder days).

Our webcasting and events business is comprised of our earnings call webcasting solutions and our virtual meeting and events software (such as deal/non-deal road shows, analyst days and shareholder days).

Our Webcasting Platform is a cloud-based webcast, webinar and virtual meeting platform that delivers live and on-demand streaming of events to audiences of all sizes.

Our solution allows customers to create, produce and deliver events, which we feel has significantly strengthened our webcasting product and Communications offering.

Our solution allows customers to create, produce and deliver events, which we feel has significantly strengthened our webcasting product and overall offering.

The platform architecture gives us the ability to host thousands of webcasts each year, expanding and diversifying our webcast business from our historical earnings-based events to include any type of virtual event.

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We estimate there are approximately 5,000 companies in North America conducting earnings events each quarter that include a teleconference, webcast or both as part of their events.

Our platform incorporates other elements of the earnings event, including earnings date/call announcement, earnings press release and SEC Form 8-K filings.

Our platform incorporates other elements of the earnings event, including earnings date/call announcement, and earnings press release.

There are a handful of our competitors that can offer this integrated full-service solution today, however, we believe our real-time event setup and integrated approach offers a more effective way to manage the process.

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This software, which is also available as a native mobile app, offers organizers, issuers and investors the ability to register, request and approve one-on-one meetings, manage schedules, perform event promotion and sponsorship, print attendee badges and manage lodging.

This cloud-based product can be used in a virtual or in person conference setting and is integrated within our Communications subscription offerings of newswire, newsrooms, webcasting and shareholder targeting.

This cloud-based product can be used in a virtual or in person conference setting and is integrated within other offerings of press release distribution, media rooms and webcasting and events.

We believe this integration gives us a unique offering for professional conference organizers that is not available elsewhere in the market.

Investor Relations Websites .

Our investor relations content network is another component of our Communications offering, which is used to create the investor relations’ tab of a company’s website.

Our investor relations content network is another component of our platform, which is used to create the investor relations’ tab of a company’s website.

This investor relations content network is a robust series of data feeds including news feeds, stock feeds, fundamentals, regulatory filings, corporate governance and many other components which are aggregated from most of the major exchanges and news distribution outlets around the world.

Customers can subscribe to one or more of these data feeds or as a component of a fully designed and hosted website for pre-IPO companies, SEC reporting companies and partners seeking to display our content on their corporate sites.

The clear benefit to our investor relations content network is its integration with our other Communications offerings.

The clear benefit to our investor relations content network is its integration with our other offerings.

As such, companies can produce content for public distribution and it is automatically linked to their corporate website, distributed to targeted groups and placed into our data feed partners.

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This add-on requires a recurring annual subscription and is delivered fully integrated into and with our investor relations website offering.

Our Compliance offerings consist of our disclosure software for financial reporting, stock transfer services, whistleblower hotline and related annual meeting, print and shareholder distribution services.

Some of these products are sold as part of a Compliance subscription as well as individually to customers around the globe.

Disclosure Software and Services

Our disclosure reporting module is a document conversion, editing and filing offering which is designed for reporting companies and professionals seeking to insource the document drafting, editing and filing processes to the SEC’s EDGAR system.

Our disclosure business also offers companies the ability to use our in-house staff to assist in the conversion, tagging and filing of their documents.

We generate revenues in disclosure both from software and services and, in most cases, customers have both components within their annual agreements, while others pay for services as they are completed.

Whistleblower Hotline

Our whistleblower hotline is an add-on product within our platform.

This system delivers secure notifications and basic incident workflow management processes that align with a company’s corporate governance whistleblower policy.

Incident Hotline .

Formally our whistleblower hotline offering, is an add-on product within our subscription platform.

This system delivers secure notifications and basic incident workflow management processes that align with a company’s corporate governance policies.

As a supported and subsidized bundle product of the New York Stock Exchange (“NYSE”) offerings, we are introduced to new IPO customers and other larger cap customers listed on the NYSE.

Since 2014, we have been a named NYSE subsidy provider of this Whistleblower solution.

Recently, we have been working on upgrading the incident response and management component of the workflow, which is expected to be deployed this year.

Stock Transfer Module

A valued subscription module in our Compliance offering is the ability for our customers to gain access to real-time information about their shareholders, stock ledgers and reports and to issue new shares from our cloud-based stock transfer module.

Managing the capitalization table of a public company or pre-IPO company is a cornerstone of corporate governance and transparency, and as such companies and community banks have chosen us to assist with their stock transfer needs, including bond offerings and dividend management.

This is an industry which has experienced declining overall revenues as it was affected by the replacement of paper certificates with digital certificates.

However, we have been focused on selling subscriptions of the stock transfer component of our platform, allowing customers to gain access to our cloud-based system in order to move shares or query shareholders, which we believe has resulted in a more efficient process for both our customers and us.

Annual Meeting / Proxy Voting Platform

Our proxy module is marketed as a fully integrated, real-time voting platform for our customers and their shareholders of record.

This module is utilized for every annual meeting or special meeting we manage for our customers and offers both full-set mailing and notice of internet availability options.

This module has been incorporated within our webcasting offering to enable our customers the ability to conduct their annual meetings in-person or fully virtual.

Our solution incorporates shareholder and guest registration, voting integration, real-time statistics on attendance, audio video and presentation features as well as fully managed meeting managers and inspector of elections.

We believe a virtual component to an annual meeting is both a benefit to all shareholders and a corporate governance advantage.

Shareholder Distribution

In the past, we have worked on refining the model of digital distribution of our customers’ message to the investment community and beyond.

This was accomplished by integrating our shareholder outreach module, Investor Network, into and with our Compliance offerings.

Most of the customers subscribing to this module today are historical PrecisionIR (“PIR”) – Annual Report Service (“ARS”) users, as well as new customers purchasing the entire platform subscription.

We migrated some of the customers from the traditional ARS business into this new digital subscription business, however, we continue to operate a portion of this legacy physical hard copy delivery of annual reports and prospectuses for customers who opt to take advantage of it.

We continue to see customer attrition for customers who subscribe to both the electronic and physical distribution of reports as a stand-alone product.

Since 2014, we have been a named NYSE subsidy provider of this incident response and management solution.

In 2020, NYSE renewed and extended the initial subsidy term to four years from two years, whereby the first two years are provided under subsidy and the added two years are at our standard subscription rates.

Results of Operations

Comparison of results of operations for the three and nine-months ended September 30, 2024 and 2023 (in thousands):

Comparison of results of operations for the three months ended March 31, 2025 and 2024 (in 000’s):

Three Months Ended

September 30,

Percentage of

Communications revenue

Compliance revenue

Total revenue

Cost of revenue:

Communications cost of revenue

Compliance cost of revenue

Total cost of revenue

Gross Margin:

Communications gross margin

Compliance gross margin

Total gross margin

Operating Expenses:

General and administrative

Sales and marketing

Product development

Depreciation and amortization

Total expenses

Operating income

Interest expense, net

Other income (expense), net

Income (loss) before income taxes

Income tax expense

Net income (loss)

Nine Months Ended

September 30,

Percentage of

Communications revenue

Compliance revenue

Total revenue

Cost of revenue:

Communications cost of revenue

Compliance cost of revenue

Total cost of revenue

Gross Margin:

Communications gross margin

Compliance gross margin

Total gross margin

Cost of revenues

Operating Expenses:

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Depreciation and amortization

Total expenses

Operating income

Total operating expenses

Operating loss

Interest expense, net

Other income (expense), net

Income (loss) before income taxes

Income tax expense

Net income (loss)

Percentage of revenue is calculated as the relevant revenue, expense, income amount divided by total revenue, except for communications and compliance cost of revenue and communications and compliance gross margin, which are divided by the related component of revenue.

Total revenue decreased $616,000, or 8%, to $6,953,000 during the three months ended September 30, 2024, as compared to $7,569,000 for the same period of 2023.

Total revenue decreased by $4,237,000, or 16%, to $21,602,000 during the nine months ended September 30, 2024, as compared to $25,839,000 during the same period of 2023.

The decreases are attributable to both our Communications and Compliance revenue streams.

Communications revenue decreased $597,000, or 10%, to $5,481,000 for the three months ended September 30, 2024, compared to $6,078,000 for the same period of 2023.

Communications revenue decreased $1,696,000, or 9% to $16,884,000 for the nine months ended September 30, 2024, compared to $18,580,000 for the same period of 2023.

The decrease in revenue for the three months ended September 30, 2024 is due to declines in revenue from both our ACCESSWIRE and Newswire news distribution platforms due to decreases in average rates per release, primarily as a result of the mix of releases being distributed.

As a percentage of total releases distributed, more releases with a lower tier, or less expensive distribution, were disseminated during the three and nine months ended September 30, 2024, as compared to the prior year.

Additionally, we experienced a decrease in revenue from our events and webcasting business due to a decrease in revenue from annual virtual meeting events, as they continue to move in-person, and lower activity from resellers.

The decrease in revenue for the nine months ended September 30, 2024, is primarily attributable to lower volumes and pricing from our Newswire brand and lower revenue from our webcasting and events business, noted earlier.

Communications revenue represented 79% and 78% of total revenue during the three and nine months ended September 30, 2024, respectively, as compared to 80% and 72%, respectively, for the same periods of 2023.

Compliance revenue decreased $19,000, or 1% and $2,541,000, or 35%, during the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023.

The decrease during the nine months ended September 30, 2024, is primarily related to a decrease in revenue from our print and proxy fulfillment services due to a few one-time, significant transactions which occurred during the nine months ended September 30, 2023, however, did not occur in the current year.

Additionally, we experienced a decrease in revenue from our disclosure services and transfer agent services due to a decrease in corporate actions and directives during the period.

Other income (expense)

Loss before income taxes

Income tax benefit

Net (loss) from continuing operations

Total revenue decreased $96,000, or 2%, to $5,476,000 during the three months ended March 31, 2025, as compared to $5,572,000 for the same period in 2024.

The decrease in revenue is due to slight declines across our various product lines, however, revenue from our core press release business increased 1% due to an increase in volume for the quarter as compared to the prior year.

Revenue Backlog

As of September 30, 2024, our deferred revenue balance was $5,308,000, which we expect to recognize over the next twelve months, compared to $5,412,000 as of December 31, 2023, a decrease of 2%.

Deferred revenue primarily consists of advance billings for pre-paid packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products and annual service contracts.

As of March 31, 2025, our deferred revenue balance was $5,021,000, which we expect to recognize over the next twelve months, compared to $4,743,000 at December 31, 2024, an increase of 6%.

Deferred revenue primarily consists of advance billings for pre-paid packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products.

Cost of Revenues

Communications cost of revenues consist primarily of direct labor costs, newswire distribution costs, teleconferencing costs, and third-party licensing costs.

Compliance cost of revenues consist primarily of direct labor costs, warehousing, logistics, print production materials and postage.

Cost of revenues decreased $16,000, or 1%, and $496,000, or 8%, during the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023.

Overall gross margin decreased $600,000, or 10%, and $3,741,000, or 19%, during the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023.

Overall gross margin percentage decreased to 74% and 75% for the three and nine months ended September 30, 2024, respectively, as compared to 76% and 77% during the same periods of 2023.

Cost of revenues associated with our Communications revenue decreased $47,000, or 3%, and $22,000, or 1%, during the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023.

The decreases are primarily due optimization of our editorial staff and lower distribution costs.

Gross margin percentage associated with our Communications revenue was 75% and 76% for the three and nine-months ended September 30, 2024, respectively, as compared to 76% and 78% during the same periods of 2023.

Cost of revenues associated with our Compliance revenue increased $31,000, or 9% for the three months ended September 30, 2024, compared to the same period of the prior year and decreased $474,000, or 26%, during the nine months ended September 30, 2024, as compared to the same period of 2023.

The increase during the three months ended September 30, 2024, is due to increased costs associated with our transfer agent business.

The decrease for the nine months ended September 30, 2024, is due to lower print and postage costs associated with the decreased revenue from print and proxy fulfillment services during the period.

As a result, gross margin percentage associated with our Compliance revenue decreased to 74% and 72% for the three and nine-months ended September 30, 2024, respectively, as compared to 76% and 75%, for the same periods of 2023.

Cost of revenues consists primarily of direct labor costs, newswire distribution costs, teleconferencing costs, and third-party licensing costs.

Cost of revenues decreased by $185,000, or 13%, during the three months ended March 31, 2025, as compared to the same period of 2024.

The decrease was primarily due to reduction in headcount and optimization of our operations teams.

Overall gross margin increased $89,000, or 2%, during the three months ended March 31, 2025, compared to the same period of 2024.

As a result, gross margin percentage increased to 78% during the three months ended March 31, 2025, as compared to 75% during the same period of 2024.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, bonuses, stock-based compensation, insurance, fees for professional services, general corporate expenses (including provision for credit losses) and facility and equipment expenses.

General and administrative expenses were $2,008,000 during the three months ended September 30, 2024, a decrease of $25,000, or 1%, as compared to the same period of 2023.

General and administrative expenses were $5,812,000 for the nine months ended September 30, 2024, a decrease of $827,000, or 12%, as compared to the same period of 2023.

The decrease for the nine months ended September 30, 2024, is primarily driven by a benefit to stock compensation expense as a result of the resignation of an executive officer, a decrease in corporate headcount, as well as, lower one-time transaction and integrations costs, partially offset by an increase in the provision for credit losses.

As a percentage of revenue, general and administrative expenses were 29% and 27% for the three and nine months ended September 30, 2024, respectively, compared to 27% and 26% for the same periods of 2023.

General and administrative expenses consist primarily of salaries, bonuses, stock-based compensation, insurance, fees for professional services, general corporate expenses (including bad debt expense) and facility and equipment expenses.

General and administrative expenses were $1,953,000 for the three months ended March 31, 2025, an increase of $314,000 or 19%, as compared to the same period of 2024.

The increase is primarily driven by a benefit to stock compensation expense of $340,000 recorded during the three months ended March 31, 2024, as a result of the resignation of an executive officer.

As a percentage of revenue, general and administrative expenses were 36% for the three months ended March 31, 2025, as compared to 29% for the same period of 2024.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of salaries, stock-based compensation, sales commissions, advertising expenses, tradeshow expenses and other marketing expenses.

Sales and marketing expenses were $1,618,000 for the three months ended September 30, 2024, a decrease of $220,000, or 12%, as compared to the same period of 2023.

Sales and marketing expenses were $5,684,000 for the nine months ended September 30, 2024, a decrease of $574,000, or 9%, as compared to the same period of 2023.

These decreases are primarily due to lower employee-related and advertising expenses.

As a percentage of revenue, sales and marketing expenses were 23% and 26% for the three and nine months ended September 30, 2024, respectively, as compared to 24% for the same periods of 2023.

Sales and marketing expenses were $1,594,000 for the three months ended March 31, 2025, a decrease of $477,000, or 23%, as compared to the same period of 2024.

This decrease is primarily due to lower employee-related and advertising expenses.

As a percentage of revenue, sales and marketing expenses were 29% for the three months ended March 31, 2025, as compared to 37% for the same period of 2024.

Product Development Expenses

Product development expenses consist primarily of salaries, stock-based compensation, bonuses, and licenses to develop new products and technology to complement and/or enhance our platform.

Product development expenses increased $90,000, or 15%, and $157,000, or 8%, to $671,000 and $2,044,000 during the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023.

These increases are primarily due to an increase in headcount as we continue to invest in our products and technology.

During the three and nine months ended September 30, 2024, we capitalized $137,000 and $537,000, respectively, compared to $152,000 and $319,000 during the same periods of the prior year.

As a percentage of revenue, product development expenses were 10% and 9% for the three and nine months ended September 30, 2024, respectively, as compared to 8% for the same periods of 2023.

Interest expense, net

We recognized interest expense of $280,000 and $903,000 for the three and nine months ended September 30, 2024, respectively, compared to $368,000 and $1,080,000 during the same periods of 2023.

Interest expense for these periods is related to our long-term credit agreement.

For the nine months ended September 30, 2023, interest expense is also attributed to the $22,000,000 Seller Note.

These amounts are partially offset by interest income of $15,000 and $68,000 for the three and nine months ended September 30, 2024, respectively, and $70,000 and $263,000 for the three and nine months ended September 30, 2023, from deposit and money market accounts.

Other income (expense), net

Other income (expense), net represents the change in fair value of our interest rate swap.

For the nine months ended September 30, 2023, Other income (expense), net also includes expense related to $370,000 paid to extinguish the Seller Note.

The Company recognized income tax expense of $14,000 and $77,000 for the three and nine-month period ended September 30, 2024, compared to $187,000 and $621,000 during the same periods of 2023.

At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year-to-date period, and then adjusted for any discrete period items.

For the three and nine-month periods ended September 30, 2024 and 2023, the variance between our effective tax rate and the U.S.

statutory rate of 21% is primarily attributable to state income tax and expenses not deductible for tax purposes.

For the nine-month period ended September 30, 2024, the effective tax rate was also impacted by additional expense associated with vesting of stock-based compensation.

Product development expenses increased $79,000, or 12%, to $733,000 during the three months ended March 31, 2025, as compared to 2024.

The increase is primarily due to lower capitalization of software, as $23,000 was capitalized during the three months ended March 31, 2025 compared to $245,000 during the three months ended March 31, 2024, partially offset by an increase in headcount.

As a percentage of revenue, product development expenses were 13% for the three months ended March 31, 2025 compared to 12% for the same period of 2024.

Interest Income (Expense), Net

We recognized interest expense of $214,000 for the three-month period ended March 31, 2025, compared to $308,000 during the same period of 2024, which is all related to our long-term credit agreement.

These amounts are offset by interest income on deposit and money market accounts of $10,000 and $23,000 for the three months ended March 31, 2025 and 2024, respectively.

Other income (expense)

Other income (expense) represents the change in fair value of our interest rate swap.

We recognized an income tax benefit of $185,000 for the three-month period ended March 31, 2025, compared to $158,000 during the same period of 2024.

For the three-month periods ended March 31, 2025 and 2024, the variance between our effective tax rate and the U.S.

statutory rate of 21% is primarily attributable to state income tax, a benefit related to the Foreign Derived Intangible Income ("FDII") deduction and a lower statutory tax rate applied to the Company's Canadian income.

This is partially offset by additional expense associated with vesting of stock-based compensation awards.

Liquidity and Capital Resources

As of September 30, 2024, we had $4,086,000 in cash and cash equivalents and $4,405,000 in net accounts receivable.

Current liabilities as of September 30, 2024, totaled $12,593,000 including our accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of long-term debt, current portion of lease liabilities and other accrued expenses.

On September 30, 2024, our current liabilities exceeded our current assets by $2,560,000.

See Note 7 to our financial statements regarding information on our Credit Agreement.

As of March 31, 2025, we had $4,100,000 in cash and cash equivalents and $3,489,000 in net accounts receivable.

Current liabilities from continuing operations as of March 31, 2025, totaled $13,473,000 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 March 31, 2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $3,336,000.

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.

Disclosure about Off-Balance Sheet Arrangements

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Management believes that certain non-GAAP measures, such as non-GAAP free cash flow, non-GAAP adjusted free cash flow, non-GAAP adjusted EBITDA (“adjusted EBITDA”), and non-GAAP adjusted net income (“adjusted net income”) provide useful information about our operating results and enhance the overall ability to assess our financial performance.

We use these measures, together with other measures of performance prepared in accordance with US GAAP, to compare the relative performance of operations in planning, budgeting, and reviewing the performance of our business.

We use these measures, together with other measures of performance prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), to compare the relative performance of operations in planning, budgeting, and reviewing the performance of our business.

Adjusted EBITDA and adjusted net income allow investors to make a more meaningful comparison between our core business operating results over different periods of time.

We believe that adjusted EBITDA and adjusted net income, when viewed with our results under US GAAP and the accompanying reconciliations, provide useful information about our business without regard to potential distortions.

We believe that adjusted EBITDA and adjusted net income, when viewed with our results under GAAP and the accompanying reconciliations, provide useful information about our business without regard to potential distortions.

By eliminating potential differences in results of operations between periods caused by factors such as acquisition-related expenses and other items as described below, we believe adjusted EBITDA and adjusted net income can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated.

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Free cash flow and adjusted free cash flow are non-GAAP financial measures.

For the three and nine months ended September 30, 2024 and 2023, free cash flow and adjusted free cash flow were as follows (in thousands):

For the three months ended March 31, 2025 and 2024, free cash flow and adjusted free cash flow were as follows:

Three Months Ended

September 30,

Net cash (used in) provided by operating activities (US GAAP)

Payments for purchase of fixed assets and capitalized software

Free cash flow (Non-GAAP)

Cash paid for acquisition and/or integration related items (1)

Cash paid for other unusual items (2)

Adjusted free cash flow (Non-GAAP)

Nine Months Ended

September 30,

Net cash provided by operating activities (US GAAP)

Net cash provided by operating activities of continuing operations (GAAP)

Payments for purchase of fixed assets and capitalized software

Free cash flow (Non-GAAP)

Cash paid for acquisition and/or integration related items (1)

Free cash flow from continuing operations (Non-GAAP)

Cash paid for acquisition and integration related items (1)

Cash paid for other unusual items (2)

Adjusted free cash flow (Non-GAAP)

This adjustment gives effect to one-time corporate projects, including acquisition and/or integration related expenses, paid during the periods.

For the three and nine months ended September 30, 2024, this adjustment gives effect to payments for one-time accounting fees, termination benefits and other non-recurring or unusual expenses.

During the nine months ended September 30, 2023, this adjustment is primarily related to a one-time payment of $370,000 related to the early termination of the note payable associated with the Newswire acquisition.

Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be considered as a substitute for analysis of our results as reported under US GAAP.

Adjusted free cash flow from continuing operations (Non-GAAP)

This adjustment gives effect to one-time corporate projects, including acquisition, divestiture and integration related expenses, paid during the periods.

For the three months ended March 31, 2025, this relates to payments related to our corporate re-brand and other non-recurring accounting fees.

For the three months ended March 31, 2024, this relates to payments for non-recurring accounting fees during the period.

Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be considered as a substitute for analysis of our results as reported under GAAP.

These measures are defined differently by different companies, and accordingly, such measures may not be comparable to similarly titled measures of other companies and have important limitations as an analytical tool.

A reconciliation of net income to adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023, is presented in the following table (in thousands):

A reconciliation of net income to adjusted EBITDA for the three months ended March 31, 2025 and 2024 is presented in the following table (in 000’s):

Three Months Ended

September 30,

Net (loss) income:

Depreciation and amortization

Interest expense, net

Income tax expense

Acquisition and/or integration costs (1)

Other non-recurring expenses (2)

Stock-based compensation expense (3)

Adjusted EBITDA:

Nine Months Ended

September 30,

Net (loss) income:

Net loss from continuing operations:

Depreciation and amortization

Interest expense, net

Income tax expense

Income tax expense (benefit)

EBITDA from continuing operations

Acquisition and/or integration costs (1)

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Stock-based compensation expense (3)

Adjusted EBITDA:

This adjustment gives effect to one-time corporate projects, including acquisition and/or integration related expenses, incurred during the periods.

For the three and nine months ended September 30, 2024, this adjustment gives effect to a loss recorded on the change in fair value of our interest rate swap of $343,000 and $124,000, as well as, one-time accounting fees, termination benefits and other non-recurring or unusual expenses of $125,000 and $212,000, respectively.

For the three months ended September 30, 2023, this adjustment gives effect to a gain recorded on the change in fair value of our interest rate swap of $165,000, partially offset by one-time, non-recurring expenses of $45,000.

For the nine months ended September 30, 2023, this adjustment gives effect to $370,000 payment related to early extinguishment of our Seller Note and one-time non-recurring expenses of $45,000, partially offset by a gain recorded on the change in fair value of our interest rate swap of $379,000.

The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services.

Adjusted EBITDA from continuing operations:

This adjustment gives effect to one-time corporate projects, including acquisition, divestiture and integration related expenses, incurred during the periods.

For the three months ended March 31, 2025, this adjustment gives effect to the change in fair value of our interest rate swap of $69,000 as well as corporate re-brand costs of $132,000 and non-recurring accounting fees of $35,000.

For the three months ended March 31, 2024, this adjustment gives effect to the change in fair value of our interest rate swap of $205,000, partially offset by non-recurring accounting costs of $35,000.

The adjustments represent stock-based compensation expense from continuing operations related to awards of stock options, restricted stock units, or common stock in exchange for services.

Although we expect to continue to award stock in exchange for services, the amount of stock-based compensation is excluded as it is subject to change as a result of one-time or non-recurring projects.

A reconciliation of net income to adjusted net income for the three and nine months ended September 30, 2024 and 2023 is presented in the following table (in thousands, except per share amounts):

Three Months Ended September 30,

Per diluted share

Net (loss) income:

Amortization of intangible assets (1)

Stock-based compensation expense (2)

Other unusual items (3)

Discrete items impacting income tax (4)

Tax impact of adjustments (5)

Non-GAAP net income:

Weighted average number of common shares outstanding – diluted

Nine Months Ended September 30,

Per diluted share

Net (loss) income:

For the three months ended March 31, 2024, this amount includes a benefit as a result of the resignation of an executive officer.

A reconciliation of net income to adjusted net income for the three months ended March 31, 2025 and 2024 is presented in the following table (in 000’s):

Three Months Ended March 31,

Net loss from continuing operations:

Amortization of intangible assets (1)

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Tax impact of adjustments (5)

Non-GAAP net income:

Non-GAAP net income (loss) from continuing operations:

Weighted average number of common shares outstanding – diluted

The adjustments represent the amortization of intangible assets related to acquired assets and companies.

The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services.

The adjustments represent stock-based compensation expense from continuing operations related to awards of stock options, restricted stock units, or common stock in exchange for services.

For the nine months ended September 30, 2023, this adjustment gives effect to one-time, non-recurring expenses, including acquisition and/or integration expenses of $430,000 and a $370,000 payment related to early extinguishment of our Seller Note and one-time non-recurring expenses of $45,000, partially offset by a gain recorded on the change in fair value of our interest rate swap of $379,000.

This adjustment eliminates discrete items impacting income tax expense.

For the three and nine months ended September 30, 2024, discrete items relate to additional income tax expense (benefit) recorded during the period related to the exercise of stock compensation of ($46,000) and $39,000, respectively, and a benefit related to a return to provision adjustment of ($25,000) for both periods.

There were no discrete items impacting income tax for the three and nine months ended September 30, 2023.

For the three months ended March 31, 2024, this amount includes a benefit as a result of the resignation of an executive officer.

For the three months ended March 31, 2025, this adjustment reflects the change in fair value of our interest rate swap of $69,000, one-time corporate projects, including acquisition, divestiture and integration costs of $129,000, corporate re-brand costs of $132,000 and non-recurring accounting fees of $35,000.

For the three months ended March 31, 2024, this adjustment gives effect to the change in fair value of our interest rate swap of $205,000, partially offset by one-time corporate projects, including acquisition and integration expenses, incurred during the period of $100,000.

This adjustment gives effect to discrete items that impact income tax expense.

For the three months ended March 31, 2025 and 2024, this relates to additional expense associated with vesting of stock-based compensation awards.

This adjustment gives effect to the tax impact of all non-GAAP adjustments at the current Federal tax rate of 21%.

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Refer also to the Cautionary Statement Concerning Forward Looking Statements included in this report.

Market factors like the current military conflicts in Ukraine, Israel and the Middle East, instability in global energy markets, global inflation and the increase of interest rates have contributed to significant global economic and political uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets.

Market factors like the current military conflicts in Ukraine, Israel and the Middle East, tariff wars, instability in global energy markets, global inflation and the increase of interest rates have contributed to significant global economic and political uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets.

Overall, despite many uncertainties in the market regarding the economic and political outlook, we believe the demand for our platforms and services is stable in a majority of the markets we serve.

The historical success of our Communications offering has been led by our ACCESSWIRE branded newswire, which is now complemented by the Newswire business.

We believe there is demand for our products around the world, led by our ACCESSWIRE and Newswire brands, as companies seek to find better platforms and tools to disseminate and communicate their messages in a more efficient and collaborative way.

However, under current accounting standards, in the event our stock price continues to decline, or we do not see stable to increased demand for our combined newswire business through 2024 and beyond, it may be possible we will be required to write down goodwill and/or intangible assets, specifically related to the Newswire acquisition, if we determine the assets have been impaired.

If a write-down of goodwill and/or intangible assets were to occur, it would likely have a short-term material negative effect on our consolidated financial statements.

We believe the continued transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth.

We will also continue to focus on the following key strategic initiatives during the remainder of 2024 and into 2025:

Expanding our Communications products and adapting to this changing industry,

Aligning our sales and marketing teams to be entirely focused on our Communications offerings,

We believe there is demand for our products around the world as companies seek to find better platforms and tools to disseminate and communicate their messages in a more efficient and collaborative way.

We also believe the continued transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth.

We will also continue to focus on the following key strategic initiatives during the remainder of 2025:

Expanding our products and adapting to this changing industry,

Expanding customer base,

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Generating cash flows from operations.

We have invested and will continue to invest in our product sets, platforms and intellectual property development via internal development and acquisitions.

Acquisitions remain a core part of our strategy and we believe acquisitions are key to enhancing our overall offerings in the market and are necessary to keep our competitive advantages and facilitate the next round of growth that management believes it can achieve.

If we are successful in this effort, we believe we can further increase our market share as we move forward.

Off-Balance Sheet Arrangements

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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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis