What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-12 compared with 2025-08-12 · 598 added, 257 removed, 255 unchanged (77% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

Current assets:

27 unchanged sentences

Stockholders' equity:

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,868,826 and 3,838,743 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,868,826 and 3,838,743 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.

Additional paid-in capital

3 unchanged sentences

Total liabilities and stockholders’ equity

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

The accompanying notes are an integral part of

these unaudited financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(in thousands, except per share amounts)

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Cost of revenues

7 unchanged sentences

Interest income (expense), net

Other income (loss), net

Loss before taxes

Income tax benefit

Other expense, net

Income (loss) before taxes

Income tax expense (benefit)

Net loss from continuing operations

Net income (loss) from discontinued operations, net of tax

Net income from discontinued operations, net of tax

Net income (loss)

1 unchanged sentence

Loss from continuing operations per share – fully diluted

Income (loss) from discontinued operations per share – basic

Income (loss) from discontinued operations per share – fully diluted

Income from discontinued operations per share – basic

Income from discontinued operations per share – fully diluted

Income (loss) per share – basic

2 unchanged sentences

Weighted average number of common shares outstanding – fully diluted

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

ACESS NEWSWIRE INC.

The accompanying notes are an integral part of

these unaudited financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Net income (loss)

Foreign currency translation adjustment

Comprehensive (loss) income

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

ACCESS NEEWSWIRE INC.

Comprehensive income (loss)

The accompanying notes are an integral part of

these unaudited financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

(in thousands, except share and per share amounts)

1 unchanged sentence

Total Stockholders’

Income (Loss)

Balance at December 31, 2023

7 unchanged sentences

Balance at June 30, 2024

Stock-based compensation expense

Exercise of stock awards, net of tax

Foreign Currency Translation

Balance at September 30, 2024

Balance at December 31, 2024

7 unchanged sentences

Balance at June 30, 2025

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

Stock-based compensation expense

Foreign currency translation

Balance at September 30, 2025

The accompanying notes are an integral part of

these unaudited financial statements.

ACCESS NEWSWIRE INC.

2 unchanged sentences

(in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Cash flows from operating activities:

Net income (loss)

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

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

Gain on disposal of business

2 unchanged sentences

Deferred income taxes

Change in fair value of interest rate swaps

Stock-based compensation expense

23 unchanged sentences

Cash paid for interest

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

The accompanying notes are an integral part of

these unaudited financial statements.

ACCESS NEWSWIRE INC.

2 unchanged sentences

Basis of Presentation

The unaudited interim Consolidated Balance Sheet as of June 30, 2025 and Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows for the three and six-month periods ended June 30, 2025 and 2024 included herein, have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act.

In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the financial statements.

Results of operations reported for the interim periods are not necessarily indicative of results for the entire year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

The interim financial information should be read in conjunction with the 2024 audited financial statements of ACCESS Newswire Inc.

(the “Company”, “We”, or “Our”) filed on Form 10-K for the year ended December 31, 2024.

The unaudited interim consolidated

balance sheet as of September 30, 2025 and consolidated statements of operations, comprehensive income (loss), stockholders’ equity

and cash flows for the three and nine-month periods ended September 30, 2025 and 2024 included herein, have been prepared in accordance

with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article

10 of Regulation S-X under the Exchange Act.

In the opinion of management, they include all normal recurring adjustments necessary for

a fair presentation of the financial statements.

Results of operations reported for the interim periods are not necessarily indicative

of results for the entire year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance

with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such

rules and regulations relating to interim financial statements.

The interim financial information should be read in conjunction with the

2024 audited financial statements of ACCESS Newswire Inc.

(the “Company”, “We”, or “Our”) filed on

Form 10-K for the year ended December 31, 2024.

Summary of Significant Accounting Policies

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

Significant intercompany accounts and transactions are eliminated in consolidation.

The consolidated financial

statements include the accounts of the Company and its wholly owned subsidiaries.

Significant intercompany accounts and transactions are

eliminated in consolidation.

Cash Equivalents

For purposes of the Company’s financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Credit Losses

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.

The following is a summary of the allowance for credit losses during the three and six months ended June 30, 2025 and 2024 (in thousands):

For purposes of the Company’s

financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or

less to be cash equivalents.

Accounts Receivable and Allowance for Credit

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 balance 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.

The following is a summary

of the allowance for credit losses during the three and nine months ended September 30, 2025 and 2024 (in thousands):

Schedule of allowance for credit losses

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Beginning balance

2 unchanged sentences

Concentration of Credit Risk

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

Financial instruments and

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

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

As of June 30, 2025, 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 $ 10,000 in Europe and $ 2,196,000 in Canada as of June 30, 2025.

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 three months ended June 30, 2025 or 2024 that accounted for more than 10% of revenue.

As of September 30, 2025, 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 $ 1,647,000 in Canada as of September 30, 2025.

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

The Company did not have

any customers during the three months ended September 30, 2025 or 2024 that accounted for more than 10% of revenue.

Revenue Recognition

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.

In the case of news distribution and webcasting offerings, customers also include private companies.

The Company accounts for a contract with a customer when there is an enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has economic substance, and collectability of the contract consideration is probable.

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.

In the case of news distribution and webcasting offerings, customers

also include private companies.

The Company accounts for a contract with a customer when there is an enforceable contract between the

Company and the customer, the rights of the parties are identified, the contract has economic substance, and collectability of the contract

consideration is probable.

The Company's revenues are measured based on consideration specified in the contract with each customer.

The Company's contracts include either a subscription to its entire platform, certain modules within the platform or to its Press Release Optimizer Plan (“PRO”), or an agreement to perform services, or any combination thereof, and often contain multiple subscriptions and services.

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.

Performance obligations 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.

The Company's contracts include

either a subscription to its entire platform, certain modules within the platform or to its Press Release Optimizer Plan (“PRO”),

or an agreement to perform services, or any combination thereof, and often contain multiple subscriptions and services.

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.

Performance obligations 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.

The contracts do not contain any rights of returns, guarantees, or warranties.

Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date.

As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.

The Company recognizes revenue for subscriptions evenly over the contract period, upon distribution for pay per release or packages of press releases and upon event completion for webcasting and virtual annual meeting events.

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.

For bundled contracts, revenue is allocated to each performance obligation based on its relative standalone selling price.

Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service.

If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service.

The Company reviews standalone selling prices, at least annually, and updates these estimates if necessary.

The Company invoices its customers based on the billing schedules designated in its contracts, typically upfront on either a monthly, quarterly or annual basis or per transaction at the completion of the performance obligation.

Deferred revenue for the periods presented was primarily related to press release packages which have been invoiced or paid, however the releases have not yet been disseminated, as well as, subscription and service contracts, which are billed upfront, quarterly, or annually, however the revenue has not yet been recognized.

The associated deferred revenue is generally recognized as releases are disseminated for press release packages and ratably over the billing period for subscriptions.

Deferred revenue as of June 30, 2025 and December 31, 2024, was $ 4,741,000 and $ 4,743,000 , respectively, and is expected to be recognized primarily within one year.

Approximately $ 817,000 of the deferred revenue balance as of June 30, 2025, relates to contracts for press release packages with an expiration date after June 30, 2026, however the customer may use the balance within one year.

As of January 1, 2024, deferred revenue was $ 4,750,000 .

Revenue recognized for the six months ended June 30, 2025 and 2024, which was included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 3,569,000 and $ 4,629,000 , respectively.

Accounts receivable, net of allowance for credit losses, related to contracts with customers was $ 3,731,000 and $ 3,351,000 as of June 30, 2025 and December 31, 2024, respectively.

(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.

The contracts do not contain any rights of returns, guarantees,

or warranties.

Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract

As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated

to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.

The Company recognizes revenue

for subscriptions evenly over the contract period, upon distribution for pay per release or packages of press releases and upon event

completion for webcasting and virtual annual meeting events.

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.

For bundled contracts, revenue

is allocated to each performance obligation based on its relative standalone selling price.

Standalone selling prices are based on observable

prices at which the Company separately sells the subscription or service.

If a standalone selling price is not directly observable, the

Company uses the residual method to allocate any remaining price to that subscription or service.

The Company reviews standalone selling

prices, at least annually, and updates these estimates if necessary.

The Company invoices its customers

based on the billing schedules designated in its contracts, typically upfront on either a monthly, quarterly or annual basis or per transaction

at the completion of the performance obligation.

Deferred revenue for the periods presented was primarily related to press release packages

which have been invoiced or paid, however the releases have not yet been disseminated, as well as, subscription and service contracts,

which are billed upfront, quarterly, or annually, however the revenue has not yet been recognized.

The associated deferred revenue is

generally recognized as releases are disseminated for press release packages and ratably over the billing period for subscriptions.

revenue as of September 30, 2025 and December 31, 2024, was $ 5,020,000 and $ 4,743,000 , respectively, and is expected to be recognized

primarily within one year.

Approximately $ 688,000 of the deferred revenue balance as of September 30, 2025, relates to contracts for press

release packages with an expiration date after September 30, 2026, however the customer may use the balance within one year.

As of January

1, 2024, deferred revenue was $ 4,750,000 .

Revenue recognized for the nine months ended September 30, 2025 and 2024, which was included

in the deferred revenue balance at the beginning of each reporting period, was approximately $ 3,642,000 and $ 3,396,000 , respectively.

Accounts receivable, net of allowance for credit losses, related to contracts with customers was $ 4,137,000 and $ 3,351,000 as of September

30, 2025 and December 31, 2024, respectively.

As of January 1, 2024, accounts receivable, net of allowance for credit losses was $ 3,005,000 .

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 significant financing.

Costs to obtain contracts with customers consist primarily of sales commissions.

As of June 30, 2025 and December 31, 2024, the Company has capitalized $ 60,000 and $ 69,000 , respectively, of costs to obtain contracts that are expected to be amortized over more than one year.

For contract costs expected to be amortized in less than one year, the Company has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense when incurred.

The Company has considered historical renewal rates, expectations of future renewals and economic factors in making these determinations.

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 significant financing.

Costs to obtain

contracts with customers consist primarily of sales commissions.

As of September 30, 2025 and December 31, 2024, the Company has

capitalized $ 52,000 and $ 69,000 ,

respectively, of costs to obtain contracts that are expected to be amortized over more than one year.

For contract costs expected to

be amortized in less than one year, the Company has elected to use the practical expedient allowing the recognition of incremental

costs of obtaining a contract as an expense when incurred.

The Company has considered historical renewal rates, expectations of

future renewals and economic factors in making these determinations.

Earnings Per Share (EPS)

Earnings per share accounting guidance requires that basic net income per common share be computed by dividing net income for the period by the weighted average number of common shares outstanding during the period.

Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period.

Shares issuable upon the exercise of stock options totaling 53,750 were excluded in the computation of diluted earnings per common share during the three and six months ended June 30, 2025 because their impact was anti-dilutive.

Shares issuable upon the exercise of stock options totaling 70,750 and 68,750 were excluded in the computation of diluted earnings per common share during the three and six months ended June 30, 2024, respectively, because their impact was anti-dilutive.

Earnings per share accounting

guidance requires that basic net income per common share be computed by dividing net income for the period by the weighted average number

of common shares outstanding during the period.

Diluted net income per share is computed by dividing the net income for the period by

the weighted average number of common and dilutive common equivalent shares outstanding during the period.

Shares issuable upon the exercise

of stock options totaling 53,750 were excluded in the computation of diluted earnings per common share during the three and nine months

ended September 30, 2025, respectively, because their impact was anti-dilutive.

Shares issuable upon the exercise of stock options totaling

54,750 and 52,750 were excluded in the computation of diluted earnings per common share during the three and nine months ended September

30, 2024, respectively, because their impact was anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include the allowance for credit losses and the valuation of goodwill, intangible assets, deferred tax assets, and stock-based compensation.

The preparation of financial

statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

Significant estimates include the allowance for credit losses and the valuation of goodwill,

intangible assets, deferred tax assets, and stock-based compensation.

Actual results could differ from those estimates.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized.

For any uncertain tax positions, the Company recognizes the impact of a tax position, only if it is more likely than not of being sustained upon examination, based on the technical merits of the position.

The Company’s policy regarding the classification of interest and penalties is to classify them as income tax expense in the financial statements, if applicable.

Deferred income tax assets

and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result

in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected

to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected

to be realized.

For any uncertain tax positions, the Company recognizes the impact of a tax position, only if it is more likely than not

of being sustained upon examination, based on the technical merits of the position.

The Company’s policy regarding the classification

of interest and penalties is to classify them as income tax expense in the financial statements, if applicable.

Capitalized Software

Costs incurred to develop the Company’s cloud-based platform products are capitalized when the preliminary project phase is complete, management commits to fund the project and it is probable the project will be completed and used for its intended purposes.

Once the software is substantially complete and ready for its intended use, the software is amortized over its estimated useful life, which is typically four years.

Costs related to design or maintenance of the software are expensed as incurred.

Amortization for the three and six-month periods ended June 30, 2025 and 2024, is as follows (in thousands):

Costs incurred to develop

the Company’s cloud-based platform products are capitalized when the preliminary project phase is complete, management commits

to fund the project and it is probable the project will be completed and used for its intended purposes.

Once the software is substantially

complete and ready for its intended use, the software is amortized over its estimated useful life, which is typically four years.

related to design or maintenance of the software are expensed as incurred.

Amortization for the three and nine-month periods ended September

30, 2025 and 2024, is as follows (in thousands):

Schedule of capitalized costs and amortization

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Capitalized software development costs

1 unchanged sentence

Impairment of Long-lived Assets

In accordance with the authoritative guidance for accounting for long-lived assets, assets such as property and equipment, trademarks, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group.

If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

In accordance with the authoritative

guidance for accounting for long-lived assets, assets such as property and equipment, trademarks, and intangible assets subject to amortization,

are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be

Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to

estimated undiscounted future cash flows expected to be generated by the asset group.

If the carrying amount of an asset group exceeds

its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds

fair value of the asset group.

Lease Accounting

The Company determines if an arrangement is a lease at inception.

Operating lease agreements are primarily for office space and are included within lease right-of-use (“ROU”) assets and lease liabilities on the Consolidated Balance Sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

The Company determines if

an arrangement is a lease at inception.

Operating lease agreements are primarily for office space and are included within lease right-of-use

(“ROU”) assets and lease liabilities on the consolidated balance sheet.

ROU assets represent the right

to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

Variable lease payments consist of non-lease services related to the lease and payments under operating leases classified as short-term.

Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

ROU assets include any lease payments due and exclude lease incentives.

Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.

Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation

for those payments is incurred.

As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate

based on the information available at the commencement date in determining the present value of lease payments.

ROU assets include any

lease payments due and exclude lease incentives.

Rental expense for lease payments related to operating leases is recognized on a straight-line

basis over the lease term.

Fair Value Measurements

Accounting Standards Codification (“ASC”) Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value.

Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

Accounting Standards Codification

(“ASC”) Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and

minimize the use of unobservable inputs when measuring fair value.

Assets and liabilities recorded at fair value in the financial statements

are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value.

levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are

Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date.

7 unchanged sentences

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

As of June 30, 2025 and December 31, 2024, the Company believes the fair value of its financial instruments, such as, accounts receivable, long-term debt, the line of credit, and accounts payable approximate their carrying amounts.

As of September 30, 2025 and

December 31, 2024, the Company believes the fair value of its financial instruments, such as, accounts receivable, long-term debt, the

line of credit, and accounts payable approximate their carrying amounts.

Stock-based Compensation

The authoritative guidance for stock compensation requires that companies estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model.

The associated cost is recognized over the period during which an employee or director is required to provide service in exchange for the award.

The authoritative guidance

for stock compensation requires that companies estimate the fair value of share-based payment awards on the date of the grant using an

option-pricing model.

The associated cost is recognized over the period during which an employee or director is required to provide service

in exchange for the award.

Translation of Foreign Financial Statements

The financial statements of the foreign subsidiaries of the Company have been translated into U.S.

All assets and liabilities have been translated at current rates of exchange in effect at the end of the period.

Income and expense items have been translated at the average exchange rates for the year or the applicable interim period.

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 Loss

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

Business Combinations, Goodwill, and Intangible Assets

The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill.

The Company records the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recorded as goodwill.

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

Intangible assets consist of client relationships, customer lists, distribution partner relationships, software, technology, non-compete agreements and trademarks that are initially measured at fair value.

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, 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.

The client relationships ( 5 - 10 years), customer lists ( 3 years), distribution partner relationships ( 10 years), non-compete agreements ( 5 years) and software and technology ( 3 - 7 years) are amortized over their estimated useful lives.

The Company expenses advertising as incurred.

During the three and six-month periods ended June 30, 2025, advertising expense was $ 330,000 and $ 631,000 , respectively.

Additionally, during the six-month period ended June 30,2025, the Company incurred $ 132,000 in costs associated with its corporate re-brand.

During the three and six-month periods ended June 30, 2024, advertising expense was $ 339,000 and $ 778,000 , respectively.

The financial statements of

the foreign subsidiaries of the Company have been translated into U.S.

All assets and liabilities have been translated at current

rates of exchange in effect at the end of the period.

Income and expense items have been translated at the average exchange rates for

the year or the applicable interim period.

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 (Loss)

Comprehensive income (loss)

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

Business Combinations, Goodwill, and Intangible

The authoritative guidance

for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill.

The Company records

the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with

any excess purchase price recorded as goodwill.

Goodwill is an asset representing the future economic benefits arising from other assets

acquired in a business combination that are not individually identified and separately recognized.

Intangible assets consist of client

relationships, customer lists, distribution partner relationships, software, technology, non-compete agreements and trademarks that are

initially measured at fair value.

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, 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.

The client relationships ( 5 - 10 years),

customer lists ( 3 years), distribution partner relationships ( 10 years), non-compete agreements ( 5 years) and software and technology

( 3 - 7 years) are amortized over their estimated useful lives.

The Company expenses advertising

During the three and nine-month periods ended September 30, 2025, advertising expense was $ 248,000 and $ 879,000 , respectively.

Additionally, during the nine-month period ended September 30, 2025, the Company incurred $ 132,000 in costs associated with its corporate

During the three and nine-month periods ended September 30, 2024, advertising expense was $ 255,000 and $ 1,033,000 , respectively.

Liquidity and Capital Resources

As of June 30, 2025, we had $ 4,111,000 in cash and cash equivalents and $ 3,731,000 in net accounts receivable.

Current liabilities from continuing operations as of June 30, 2025, totaled $ 12,167,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

As of June 30, 2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $ 2,609,000 .

While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement (see Note 8 below) and ability to continue to generate cash will benefit us in the future.

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.

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.

As of September 30,

2025, we had $ 3,261,000

in cash and cash equivalents and $ 4,137,000

in net accounts receivable.

Current liabilities from continuing operations as of September 30, 2025, totaled $ 10,847,000

including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes

payable, current portion of lease liabilities and other accrued expenses.

As of September 30,

2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $ 1,846,000 .

While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to

renegotiate our Credit Agreement (see Note 8 below) and ability to continue to generate cash will benefit us in the future.

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.

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

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

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;

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.

The Company is currently evaluating the impact the new accounting guidance

will have on its disclosures.

Discontinued Operations

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

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

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

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

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

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

The Company reviewed 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.

On February 28, 2025 (the

“Closing Date”), the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into and closed an Asset Purchase

Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”).

Pursuant to, and subject

to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s compliance business

(the “Purchased Assets”).

The Purchased Assets consisted of certain accounts receivable, prepaid assets, contracts and intellectual

property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting,

ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting

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

Revenue related to these services was previously

included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related

to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings.

Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported

as “compliance revenue” was retained by the Company.

The Buyer assumed certain liabilities related to the Purchased Assets,

which included certain accounts payable, accrued liabilities and deferred revenue.

Company reviewed 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

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.

As of the Closing Date, there was $ 1,227,000 of gross accounts receivable that did not transfer to the Buyer as a result of the Purchase Agreement.

The following table sets forth the assets and liabilities included in discontinued operations as of June 30, 2025 and December 31, 2024 as presented in the Consolidated Balance Sheets (in thousands):

Accounts Receivable (net of provision for credit losses of $1,016 and $559 as of June 30, 2025 and December 31, 2024)

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.

of the Closing Date, there was $ 1,227,000 of gross accounts receivable that did not transfer to the Buyer as a result of the Purchase

The following table sets forth the assets and liabilities included in discontinued operations as of September 30, 2025 and

December 31, 2024 as presented in the Consolidated Balance Sheets (in thousands):

Schedule of discontinued operations of assets and liabilities

September 30, 2025

December 31, 2024

Accounts Receivable (net of provision for credit losses of $ 1,016 and $ 559 as of

September 30, 2025 and December 31, 2024

Other current assets

6 unchanged sentences

Total liabilities

The following table sets forth the details of income from discontinued operations for the three and six months ended June 30, 2025 and 2024 as presented in the Consolidated Statement of Operations (in thousands):

following table sets forth the details of income from discontinued operations for the three and nine months ended September 30, 2025

and 2024 as presented in the Consolidated Statement of Operations (in thousands):

Schedule of income from discontinued operations

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Cost of revenues

5 unchanged sentences

Operating income (loss)

Interest income (expense), net

Gain on disposal of business

Income (loss) before taxes

Income tax expense (benefit)

Net income (loss) from discontinued operations

The following table presents the significant non-cash items related to discontinued operations for the six-month period ended June 30, 2025 and 2024 that are included in the accompanying statements of cash flows:

Adjustments to reconcile net income (loss) to net cash used in operating activities

Interest income

Income before taxes

Income tax expense

Net income from continuing discontinued

following table presents the significant non-cash items related to discontinued operations for the nine-month periods ended September

30, 2025 and 2024 that are included in the accompanying statement of cash flows (in thousands):

to reconcile net loss to net cash used in operating activities:

Schedule of reconcile net loss to net cash used in operating activities

September 30, 2025

September 30, 2024

Depreciation and amortization

Provision for credit losses

Provision for credit loses

Stock-based compensation expense

Gain on disposal of business

The Company did not pay any dividends during the three and six-month periods ended June 30, 2025 and 2024.

The Company did not pay

any dividends during the three and nine-month periods ended September 30, 2025 and 2024.

Preferred stock and common stock

There were no issuances of preferred stock or common stock during the three and six-month periods ended June 30, 2025 and 2024, other than stock awarded to employees and the Board of Directors.

There were no issuances

of preferred stock or common stock during the three and nine-month periods ended September 30, 2025 and 2024, other than stock awarded

to employees and the Board of Directors.

2023 Equity Incentive Plan

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

Under the terms of the 2023 Plan, the Company is authorized to issue incentive awards for common stock up to 300,000 shares to employees and other personnel.

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

The 2023 Plan is effective through April 1, 2033.

As of June 30, 2025, there are 358,416 shares which remain to be granted under the 2023 Plan, including 123,076 shares assumed under the Company’s previous 2014 Equity Incentive Plan, as amended.

The following table summarizes information about stock options outstanding and exercisable at June 30, 2025:

On June 7, 2023, the shareholders

of the Company approved the 2023 Equity Incentive Plan (the “2023 Plan”).

Under the terms of the 2023 Plan, the Company

is authorized to issue incentive awards for common stock up to 300,000 shares to employees and other personnel.

The awards may be in the

form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards.

Plan is effective through April 1, 2033.

As of September 30, 2025, there are 358,416 shares which remain to be granted under the 2023

Plan, including 123,076 shares assumed under the Company’s previous 2014 Equity Incentive Plan, as amended.

The following table summarizes

information about stock options outstanding and exercisable at September 30, 2025:

Schedule of stock options outstanding and exercisable

Options Outstanding

11 unchanged sentences

$ 27.01 - 27.71

As of June 30, 2025, the Company had unrecognized stock compensation related to the options of $ 157,000 , which will be recognized through 2027.

During the three and six months ended June 30, 2025, the Company granted 7,662 restricted stock units to its Board of Directors which vest at the earlier of June 13, 2026, or the Company’s 2026 annual meeting.

As of September 30, 2025,

the Company had unrecognized stock compensation related to the options of $ 131,000 , which will be recognized through 2027.

During the nine-month

period ended September 30, 2025, the Company granted 7,662

restricted stock units to its Board of Directors which vest at the earlier of June 13, 2026, or the Company’s 2026 annual

The average grant date fair value of these grants was $ 11.75 .

During the three and six months ended June 30, 2024, the Company granted 6,000 and 32,500 restricted stock units, respectively, to employees and contractors which vest at various intervals over 3 years.

The average grant date fair value of these grants was $ 9.70 and $ 13.91 per share during the three and six months ended June 30, 2024, respectively.

During the three and six months ended June 30, 2025, 21,083 and 30,083 restricted stock units with an intrinsic value of $ 13.41 and $ 15.63 , respectively, vested.

During the three and six months ended June 30, 2024, 14,332 and 16,499 restricted stock units with an intrinsic value of $ 18.70 and $ 19.95 , respectively, vested.

As of June 30, 2025, there was $ 502,000 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2027.

The Company recognized an income tax benefit of $ 9,000 and $ 194,000 for the three and six-month periods ended June 30, 2025, respectively, compared to $ 137,000 and $ 295,000 for the three and six-month periods ended June 30, 2024.

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 six-month periods ended June 30, 2025 and 2024, the variance between our effective tax rate and the U.S.

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

restricted stock units were granted during the three-month period ended September 30, 2025.

During the three and nine-month periods

ended September 30, 2024, the Company granted 11,166

restricted stock units, respectively, to members of the Company’s Board of Directors, employees and contractors which vest at

various intervals over 3

The average grant date fair value of these grants was $ 8.06

per share during the three and nine-month periods ended September 30, 2024, respectively.

During the nine-month period

ended September 30, 2025, 30,083 restricted stock units with an intrinsic value of $ 15.63 , vested.

During the nine-month period ended

September 30, 2024, 16,499 restricted stock units with an intrinsic value of $ 19.95 , vested.

No restricted stock units vested during the

three-month periods ended September 30, 2025 and 2024.

As of September 30, 2025, there was $ 347,000 of unrecognized compensation cost

related to our unvested restricted stock units, which will be recognized through 2027.

The Company recognized an

income tax expense of $ 67,000 and benefit of $ 127,000 for the three and nine-month periods ended September 30, 2025, respectively, compared

to income tax benefits of $ 347,000 and $ 642,000 for the three and nine-month periods ended September 30, 2024.

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, 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.

The One Big Beautiful Bill Act (or “OBBB Act”), enacted on July 4, 2025, permits the deduction of certain U.S.

research and development expenditures incurred in tax years beginning on or after January 1, 2025 but expenditures attributable to research and development conducted outside the U.S.

The One Big Beautiful Bill

Act (or “OBBB Act”), enacted on July 4, 2025, permits the deduction of certain U.S.

research and development expenditures

incurred in tax years beginning on or after January 1, 2025.

However, expenditures attributable to research and development conducted

outside the U.S.

must continue to be capitalized and amortized over fifteen years.

The OBBB Act also provides the option to accelerate the amortization of any remaining unamortized U.S.

research and development expenditures incurred in tax years beginning on or after January 1, 2022, and before January 1, 2025, over a one or two year period beginning with the first taxable year beginning after December 31, 2024.

As the law was enacted after June 30, 2025, the effects of the OBBB are not reflected in our financial results for the three months ended June 30, 2025.

The Company is currently evaluating the provisions of the OBBB Act and assessing its potential effects on its Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows, including the expected tax benefits that may arise from the implementation of this new law.

Leasing activity generally consists of office leases.

The OBBB Act also provides the option to accelerate

the amortization of any remaining unamortized U.S.

research and development expenditures incurred in tax years beginning on or after January

1, 2022, and before January 1, 2025, over a one or two year period beginning with the first taxable year beginning after December 31,

While the Company currently does not anticipate the OBBB Act will have a material impact on its estimated annual effective tax rate

in 2025, the Company will continue to assess its impact.

The OBBB Act also enacted

changes to rules governing global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII).

Those changes will

go into effect for tax years beginning after December 31, 2025;

and thus do not impact current financial statements.

Under US GAAP, the effects

of the changes in tax laws are recognized in the period in which the tax laws are enacted.

Accordingly, the Company has reflected the

estimated impact of provisions of the OBBB Act in the Company’s financial statements for the three and nine months ended September

Leasing activity generally

consists of office leases.

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 June 30, 2025 and December 31, 2024.

The Company recognized a ROU asset and corresponding lease liability of $ 2,596,000 , which represents the present value of minimum lease payments discounted at 3.77 %, the Company’s incremental borrowing rate at lease inception.

Lease liabilities totaled $ 889,000 as of June 30, 2025.

The current portion of this liability of $ 394,000 is included in Accrued expenses on the Consolidated Balance Sheets and the long-term portion of $ 495,000 is included in Lease liabilities on the Consolidated Balance Sheets.

Rent expense consists of both operating lease expense from amortization of our ROU assets as well as variable lease expense which consists of non-lease components of office leases (i.e.

common area maintenance) or rent expense associated with short-term leases.

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 September 30, 2025 and December 31, 2024.

recognized a ROU asset and corresponding lease liability of $ 2,596,000 , which represents the present value of minimum lease payments discounted

at 3.77 %, the Company’s incremental borrowing rate at lease inception.

Lease liabilities totaled

as of September 30, 2025.

The current portion of this liability of $ 396,000

is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $ 408,000

is included in Lease liabilities on the Consolidated balance sheets.

Rent expense consists of both operating lease expense from amortization

of our ROU assets as well as variable lease expense which consists of non-lease components of office leases (i.e.

common area maintenance)

or rent expense associated with short-term leases.

The components of lease expense were as follows (in thousands):

Schedule of lease expense

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Lease expense

2 unchanged sentences

Total lease expense

The weighted-average remaining non-cancelable lease term for our operating leases was 2.50 years as of June 30, 2025.

As of June 30, 2025, the weighted-average discount rate used to determine the lease liability was 3.77 %.

The future minimum lease payments to be made under non-cancelable operating leases on June 30, 2025, are as follows (in thousands):

The weighted-average remaining

non-cancelable lease term for our operating leases was 2.25

years as of September 30, 2025.

As of September 30, 2025, the weighted-average discount rate used to determine the lease liability was

The future minimum

lease payments to be made under non-cancelable operating leases on September 30, 2025, are as follows (in thousands):

Schedule of future lease payments of operating leases

Year Ended December 31:

2 unchanged sentences

Lease liability

We have performed an evaluation of our other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described above, none of our contracts contain a lease.

We have performed an evaluation

of our other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described

above, none of our contracts contain a lease.

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.

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 Chief Executive Officer 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 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 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 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.

Below provides a further breakdown of costs and expenses of our one reporting segment (in thousands):

The competitive

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

Below provides

a breakdown of costs and expenses of our one operating unit (in thousands):

Schedule of segment reporting

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Cost of revenues

18 unchanged sentences

Operating loss

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

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

and administrative expenses

Credit Agreement

On March 20, 2023 (the “Closing Date”), the Company entered into a $ 25 million Credit Agreement (the “Credit Agreement”) with Pinnacle Bank (“Pinnacle”).

On March 20, 2023 (the “Closing

Date”), the Company entered into a $ 25 million Credit Agreement (the “Credit Agreement”) with Pinnacle Bank (“Pinnacle”).

Initially, the Credit Agreement provided for the following:

(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) .

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%.

However, the Term Loan issued on the Closing Date has a per annum interest rate of 6.217%, which was fixed with respect to the entire principal amount as a result of an interest rate swap agreement entered into between the Company and Pinnacle on the Closing Date in accordance with the terms of the Credit Agreement .

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 %.

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 June 30, 2025, there was no outstanding balance under the Revolving LOC and the interest rate was 6.37 %.

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 the Credit Agreement.

Pursuant to the terms of the Third Modification to Credit Agreement and a subsequent amendment, 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 .

The Credit Agreement, as amended, contains the following financial covenants:

(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).

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%.

However, the Term Loan issued on the Closing Date has a per annum

interest rate of 6.217 %, which was fixed with respect to the entire principal amount as a result of an interest rate swap agreement entered

into between the Company and Pinnacle on the Closing Date in accordance with the terms of the Credit Agreement.

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%.

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 September 30, 2025,

there was no outstanding balance under the Revolving LOC and the interest rate was 6.36%.

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 the Credit Agreement.

to the terms of the Third Modification to Credit Agreement and a subsequent amendment, 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;

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.

The Credit Agreement, as

amended, contains the following financial covenants:

Fiscal Quarter

1 unchanged sentence

Each fiscal quarter ending on or after June 30, 2025

Additionally, the Company is required to maintain unrestricted liquidity, as follows.

Additionally, the Company

is required to maintain unrestricted liquidity, as follows.

Leverage Ratio

3 unchanged sentences

If the Leverage Ratio is greater than 1.75:1.00

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

maintenance of adequate financial and accounting books and records, delivery of financial statements and other information, preservation of existence of the Company and subsidiaries, payment of taxes and claims, compliance with laws, maintenance of insurance, foreign qualification, use of proceeds, cash management system, maintenance of properties, and conduct of business.

The Credit Agreement also contains customary negative covenants for a transaction of this nature, including, among other things, covenants relating to debt, liens, investments, negative pledges, dividends and other debt payments, restriction on fundamental changes, sale of assets, transactions with affiliates, restrictive agreements, and changes in fiscal year.

The Credit Agreement also contains various Events of Default (subject to certain grace periods, to the extent applicable), including among other things, Events of Default for the nonpayment of principal, interest or fees;

The Credit Agreement also

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

of adequate financial and accounting books and records, delivery of financial statements and other information, preservation of existence

of the Company and subsidiaries, payment of taxes and claims, compliance with laws, maintenance of insurance, foreign qualification, use

of proceeds, cash management system, maintenance of properties, and conduct of business.

The Credit Agreement also

contains customary negative covenants for a transaction of this nature, including, among other things, covenants relating to debt, liens,

investments, negative pledges, dividends and other debt payments, restriction on fundamental changes, sale of assets, transactions with

affiliates, restrictive agreements, and changes in fiscal year.

The Credit Agreement also

contains various Events of Default (subject to certain grace periods, to the extent applicable), including among other things, Events

of Default for the nonpayment of principal, interest or fees;

breach of certain covenants;

inaccuracy of the representations or warranties in any material respect;

inaccuracy of the representations or warranties

in any material respect;

bankruptcy or insolvency;

1 unchanged sentence

certain unsatisfied judgments;

defaults under material agreements;

defaults under material

certain unfunded liabilities under employee benefit plans;

1 unchanged sentence

certain ERISA violations;

and the invalidity or unenforceability of the Credit Agreement.

If an Event of Default occurs, the Company may be required to repay all amounts outstanding under the Credit Agreement.

The Term Loan and any advances under the Revolving LOC are secured by a first priority lien and security interest to the benefit of Pinnacle in the Event of Default on all of the Company’s current or future assets and each of the Guarantor’s current or future assets.

invalidity or unenforceability of the Credit Agreement.

If an Event of Default occurs, the Company may be required to repay all amounts

outstanding under the Credit Agreement.

The Term Loan and any advances under the Revolving LOC are secured by a first priority lien and

security interest to the benefit of Pinnacle in the Event of Default on all of the Company’s current or future assets and each of

the Guarantor’s current or future assets.

Interest Rate Swap

The Company entered into an interest rate swap agreement to convert its interest rate exposure from variable rate to fixed rate to control cash outflows related to interest on its variable rate debt.

The Company originally had $ 20,000,000 of notional amount interest rate swap agreement, which amortized in-line with its long-term Credit Agreement.

Under the swap agreement, the Company pays a fixed rate of interest at 6.217% and receives an average variable rate of SOFR + 2.35% adjusted monthly .

As of June 30, 2025, the variable rate was 6.67 %.

The carrying amount for the Company’s derivative financial instrument is the estimated fair value of the financial instrument.

The Company’s derivative is not exchange listed and therefore the fair value is estimated under a mark-to-market approach using an analytics model that is a readily observable market input.

This model reflects the contractual terms of the derivative, such as notional value and expiration date, as well as market-based observables including interest rates, yield curves, and the credit quality of the counterparty.

The model also incorporates the Company’s creditworthiness in order to appropriately reflect non-performance risk.

Inputs to the derivative pricing model are generally observable and do not contain a high level of subjectivity, and accordingly, the Company’s derivative is classified within Level 2 of the fair value hierarchy.

While the Company believes its estimate results in a reasonable reflection of the fair value of the instrument, the estimated value may not be representative of actual value that could have been realized or that will be realized in the near future.

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 June 30, 2025 was a liability of $ 18,000 and December 31, 2024 was an asset of $ 60,000 and is included in either Other long-term assets or liabilities, accordingly, 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, the Company recognized a net unrealized loss of $ 10,000 and $ 78,000 during the three and six months ended June 30, 2025, respectively, compared to a net unrealized gain of $ 14,000 and $ 219,000 during the three and six months ended June 30, 2024, which are included in Other expense in the Consolidated Statements of Operations.

The Company entered into an

interest rate swap agreement to convert its interest rate exposure from variable rate to fixed rate to control cash outflows related to

interest on its variable rate debt.

The Company originally had $ 20,000,000 of notional amount interest rate swap agreement, which amortized

in-line with its long-term Credit Agreement.

Under the swap agreement, the Company pays a fixed rate of interest at 6.217 % and receives

an average variable rate of SOFR + 2.35% adjusted monthly.

As of September 30, 2025, the variable rate was 6.66 %.

The carrying amount for the

Company’s derivative financial instrument is the estimated fair value of the financial instrument.

The Company’s derivative

is not exchange listed and therefore the fair value is estimated under a mark-to-market approach using an analytics model that is a readily

observable market input.

This model reflects the contractual terms of the derivative, such as notional value and expiration date, as well

as market-based observables including interest rates, yield curves, and the credit quality of the counterparty.

The model also incorporates

the Company’s creditworthiness in order to appropriately reflect non-performance risk.

Inputs to the derivative pricing model are

generally observable and do not contain a high level of subjectivity, and accordingly, the Company’s derivative is classified within

Level 2 of the fair value hierarchy.

While the Company believes its estimate results in a reasonable reflection of the fair value of the

instrument, the estimated value may not be representative of actual value that could have been realized or that will be realized in the

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 September

30, 2025 was a liability of $ 20,000 and December 31, 2024 was an asset of $ 60,000 and is included in either Other long-term assets or

liabilities, accordingly, 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

As a result of the interest rate swap, the Company recognized a net unrealized loss of $ 1,000 and $ 80,000 during the three

and nine months ended September 30, 2025, respectively, compared to a net unrealized loss of $ 343,000 and $ 124,000 during the three and

nine months ended September 30, 2024, which are included in Other expense in the Consolidated statements of operations.

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 1. Financial Statements