What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-25 · 358 added, 163 removed, 67 unchanged (89% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Except for the historical information contained herein, the matters discussed in this Form 10-K include certain forward-looking statements that involve risks and uncertainties, which are intended to be covered by safe harbors.

Those statements include, but are not limited to, all statements regarding our and management’s intent, belief and expectations, such as statements concerning our future and our operating and growth strategy.

We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements.

You should not place undue reliance on these forward-looking statements.

Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including our ability to implement our business plan, our ability to raise additional funds and manage consumer acceptance of our products, our ability to broaden our customer base, our ability to maintain a satisfactory relationship with our suppliers and other risks described in our reports filed with the Securities and Exchange Commission, including Item 1A of this Report on Form 10-K.

Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations.

Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors set forth under the Risk Factors section of this report.

In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

All forward-looking statements made in this Form 10-K are based on information presently available to our management.

We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Except for the historical

information contained herein, the matters discussed in this Form 10-K include certain forward-looking statements that involve risks and

uncertainties, which are intended to be covered by safe harbors.

Those statements include, but are not limited to, all statements regarding

our and management’s intent, belief and expectations, such as statements concerning our future and our operating and growth strategy.

We generally use words such as “believe,” “may,” “could,” “will,” “intend,” “expect,”

“anticipate,” “plan,” and similar expressions to identify forward-looking statements.

You should not place undue reliance

on these forward-looking statements.

Our actual results could differ materially from those anticipated in the forward-looking statements

for many reasons including our ability to implement our business plan, our ability to raise additional funds and manage consumer acceptance

of our products, our ability to broaden our customer base, our ability to maintain a satisfactory relationship with our suppliers and

other risks described in our reports filed with the Securities and Exchange Commission, including Item 1A of this Report on Form 10-K.

Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the

date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations.

Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors

set forth under the Risk Factors section of this report.

In light of the significant uncertainties inherent in the forward-looking statements

included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives

and plans will be achieved.

All forward-looking statements made in this Form 10-K are based on information presently available to our

We do not intend to update any of the forward-looking statements after the date of this document to conform these statements

to actual results or to changes in our expectations, except as required by law.

Results of Operations

The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue, and the change in those amounts from fiscal year 2024 compared to 2023.

The data below is comprised of results from continuing operations only and does not include results from discontinued operations.

For more information regarding continuing and discontinued operations, see Note 3 to our Consolidated Financial Statements for the year ended December 31, 2024.

Comparison of results of operations for the years ended December 31, 2024 and 2023 (in 000’s):

The following table presents

certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue, and

the change in those amounts from fiscal year 2025 compared to 2024.

The data below is comprised of results from continuing operations

only and does not include results from discontinued operations.

For more information regarding continuing and discontinued operations,

see Note 3 to our Consolidated Financial Statements for the years ended December 31, 2025 and 2024.

Comparison of results of operations for

the years ended December 31, 2025 and 2024 (in thousands):

Percentage of Revenue

10 unchanged sentences

Other income (expense)

Loss before income taxes

Loss from continuing operations before income taxes

Income tax benefit

Net loss from continuing operations

Total revenue decreased by $1,465,000, or 6%, to $23,057,000 during the year ended December 31, 2024, as compared to $24,522,000 in 2023.

The decrease is primarily due to a 15% decrease in revenue from our previously branded Newswire business due to a decrease in volume.

Revenue from our investor relations website subscriptions and webcasting and events business decreased slightly as well.

Total revenue decreased by

$438,000, or 2%, to $22,619,000 during the year ended December 31, 2025, as compared to $23,057,000 in 2024.

The decrease is primarily

related to decrease in revenue from our PRO plan products and webcasting and events business, partially offset by an increase in revenue

from our core press release business driven by increases in subscriptions.

Deferred Revenue

As of December 31, 2024, our deferred revenue balance was $4,743,000, which we expect to recognize primarily over the next twelve months, compared to $4,750,000 as of December 31, 2023.

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

Cost of Revenues

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

Cost of revenues increased by $10,000 during the year ended December 31, 2024, as compared to the same period of 2023.

Overall gross margin decreased $1,475,000, or 8%, during the year ended December 31, 2024, compared to 2023.

The decrease in gross margin is primarily the result of the decrease in Newswire revenue noted earlier.

Overall gross margin percentage decreased 1% to 76% during the year ended December 31, 2024, as compared to the prior year.

As of December 31, 2025, our

deferred revenue balance was $5,265,000, which we expect to recognize primarily over the next twelve months, compared to $4,743,000 as

of December 31, 2024, an increase of 11%.

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 Revenue

Cost of revenue consists primarily

of direct labor costs, newswire distribution costs, teleconferencing costs and third-party licensing costs.

Cost of revenue decreased

by $312,000, or 6%, during the year ended December 31, 2025, as compared to the same period of 2024.

The decrease was primarily related

to a decrease in headcount and optimization of operational teams, partially offset by an increase in distribution costs of our newswire

Overall gross margin decreased $126,000, or 1%, during the year ended December 31, 2025, compared to 2024, primarily due to

the decline in revenue.

As a result, overall gross margin percentage increased 1% to 77% during the year ended December 31, 2025, as compared

to the prior year.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, 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 $7,000,000 for the year ended December 31, 2024, a decrease of $1,354,000 or 16%, as compared to the prior year.

The decrease is primarily due to 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 integration costs, partially offset by an increase in the provision for credit losses.

As a percentage of revenue, General and administrative expenses were 30% for the year ended December 31, 2024, as compared to 34% for 2023.

General and administrative

expenses consist primarily of salaries, 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 $7,151,000 for the year ended

December 31, 2025, an increase of $151,000 or 2%, as compared to the prior year.

During the year-ended December 31, 2025, general and

administrative were impacted by an increase in one-time costs for the year of $484,000 partially offset by a decrease in employee-related

expenses due to a decrease in corporate headcount.

During the year ended December 31, 2024, general and administrative expenses were favorably

impacted by a benefit of $340,000 to stock compensation expense as a result of the resignation of an executive officer.

As a percentage of revenue,

General and administrative expenses were 32% for the year ended December 31, 2025, as compared to 30% for 2024.

Sales and Marketing Expenses

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

Sales and marketing expenses were $7,080,000 for the year ended December 31, 2024, a decrease of $948,000, or 12%, as compared to $8,028,000 in the prior year.

This decrease is primarily due to a decrease in employee-related expenses due to lower headcount as well as lower advertising expense.

As a percentage of revenue, sales and marketing expenses were 31% for the year ended December 31, 2024, as compared to 33% for 2023.

Sales and marketing expenses

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

marketing expenses were $6,405,000 for the year ended December 31, 2025, a decrease of $675,000, or 10%, as compared to $7,080,000 in

the prior year.

This decrease is primarily due to a decrease in employee-related expenses and commissions due to lower headcount and overall

As a percentage of revenue,

sales and marketing expenses were 28% for the year ended December 31, 2025, as compared to 31% for 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 tour platform .

Product development expenses increased $277,000, or 11%, to $2,821,000 during the year ended December 31, 2024, as compared to $2,544,000 in 2023.

This increase is primarily due to an increase headcount, as we continue to invest in our products and technology.

During the year ended December 31, 2024, we capitalized $597,000 of costs related to the development our news distribution systems and internal reporting platforms.

During the year-end December 31, 2023, we capitalized costs of $478,000.

As a percentage of revenue, product development expenses increased to 12% for the year ended December 31, 2024, as compared to 10% for 2023.

Product development expenses

consist primarily of salaries, stock-based compensation, bonuses and licenses to develop new products and technology to complement and/or

enhance tour platform .

Product development expenses decreased $129,000, or 5%, to $2,692,000 during the year ended December 31,

2025, as compared to $2,821,000 during the year ended December 31, 2024.

This decrease is primarily due to a decrease in headcount and

consulting expense, partially offset by a decrease in capitalized costs during the periods.

During the year ended December 31, 2025, we

capitalized $172,000 of costs related to the development of our news distribution systems and internal reporting platforms, compared to

$597,000 during the year-ended December 31, 2024.

As a percentage of revenue,

product development expenses was consistent at 12% for the year ended December 31, 2025 and 2024, respectively.

Depreciation and Amortization Expenses

During the year ended December 31, 2024, depreciation and amortization expenses decreased by $20,000 or 1%, to $2,708,000, as compared to $2,728,000 during 2023.

Impairment loss on intangible assets

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

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

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

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

During the year ended December

31, 2025, depreciation and amortization expenses decreased by $21,000 or 1%, to $2,687,000, as compared to $2,708,000 during 2024.

Impairment loss

On December 18, 2025, we entered

into a Commercial Sublease Agreement (the “Sublease”), to lease 100% of our corporate headquarters for the remaining term

of the lease, commencing on March 1, 2026 through December 31, 2027.

As a result of the Sublease, the Company recorded an impairment charge

of $250,000 for the year ended December 31, 2025.

The impairment loss was allocated between our right-of-use-asset for the office lease

in the amount of $187,000 and our leasehold improvements of $63,000.

During the year ended December

31, 2025, we performed our annual assessment for impairment of goodwill and intangible assets and determined there was no impairment charge.

During the year ended December 31, 2024, an impairment charge of $14,150,000 associated with the Newswire trademarks was required.

a result of our rebranding to ACCESS Newswire, management determined the useful life of the Newswire trademarks to be 5 years as opposed

to the original 15 years upon the initial valuation in 2022.

This decrease caused a decrease in the expected cashflows the assets will

generate, which resulted in the impairment charge.

Interest Expense, net

We recognized interest expense of $1,167,000 and $1,284,000 during the years ended December 31, 2024 and 2023, respectively, related to our long-term Credit Agreement.

For the year ended December 31, 2023, interest expense is also attributed to the $22,000,000 Seller Note to finance the acquisition of Newswire.

Interest expense, net was partially offset by interest income of $60,000 and $35,000 for the year ended December 31, 2024, and 2023, respectively, from deposit and money market accounts.

recognized interest expense of $371,000 and $1,167,000 during the years ended December 31, 2025 and 2024, respectively, related to our

long-term Credit Agreement.

Interest expense, net was partially offset by interest income of $369,000 and $60,000 for the year ended December

31, 2025, and 2024, respectively, from deposit and money market accounts.

Other income (expense)

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

For the year ended December 31, 2023, this also includes $370,000 paid to extinguish the Seller Note.

We recorded income tax benefit of $4,064,000 during the year ended December 31, 2024, compared to $938,000 during the year ended December 31, 2023.

The difference in our effective tax rate of 23.0% and the statutory rate of 21% is primarily attributable to state income taxes, partially offset by the impact of stock-based compensation and return to provision adjustments.

Other income (expense) represents

the change in fair value of our interest rate swap.

We recorded income tax benefit

of $395,000 during the year ended December 31, 2025, compared to $4,064,000 during the year ended December 31, 2024.

The difference in

our effective tax rate as of December 31, 2025 and 2024, and the statutory rate of 21% is primarily attributable to state income taxes.

For the year ended December 31, 2025, this was partially offset by the impact of stock-based compensation and foreign taxes.

Liquidity and Capital Resources

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

Current liabilities from continuing operations as of December 31, 2024, totaled $12,814,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

As of December 31, 2024, our current liabilities from continuing operations exceeded our current assets from continuing operations by $2,788,000.

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

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

As a result of the repayment, the Company expects to no longer have negative working capital for the foreseeable future.

See Note 6 to our financial statements regarding information on our Credit Agreement.

As of December 31, 2025, we

had $3,025,000 in cash and cash equivalents and $3,884,000 in net accounts receivable.

Current liabilities from continuing operations

as of December 31, 2025, totaled $9,538,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued

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

As of December 31, 2025, our

current liabilities from continuing operations exceeded our current assets from continuing operations by $1,116,000.

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.

As of December 31, 2025, the

aggregate principal amount available under our Revolving LOC was $1,500,000 and is set to expire June 30, 2026.

We currently have 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%.

As of December 31, 2025, there was no outstanding balance

under the Revolving LOC and the interest rate was 5.74%.

See Note 6 to our financial statements for additional information.

Disclosure about Off-Balance Sheet Arrangements

We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.

We do not have any transactions,

agreements or other contractual arrangements that constitute off-balance sheet arrangements.

Non-GAAP Measures

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 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.

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.

Management uses free cash flow, which is defined as net cash flows provided by operating activities less payments for purchases of fixed assets and capitalized software, in reviewing the financial performance and cash generation by our various business groups and evaluating cash levels.

We believe free cash flow is a useful measure for investors because it portrays our ability to grow organically and generate cash from our businesses for purposes such as paying interest on our indebtedness, repaying debt, funding business acquisitions, investing in product development, re-purchasing our common stock, and paying dividends, if it is determined we do so in the future.

In addition, securities analysts, investors, and others frequently use free cash flow in their evaluation of companies.

Adjusted free cash flow represents a further non-GAAP adjustment to free cash flow to exclude the effect of cash paid for acquisition and integration related activities and unusual or non-recurring transactions.

Management believes that by excluding these infrequent or unusual items from free cash flow, it better portrays our ability to generate cash, as such items are not indicative of the Company’s operating performance for the period.

The uses of these non-GAAP financial measures are not intended to be considered in isolation of, or as substitute for, the financial information prepared and presented in accordance with US GAAP.

Free cash flow and adjusted free cash flow do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.

Our calculation of free cash flow and adjusted free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as a comparative measure.

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

For the years ended December 31, 2024 and 2023, free cash flow and adjusted free cash flow were as follows:

Year Ended December 31,

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

Payments for purchase of fixed assets and capitalized software

Free cash flow (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 year ended December 31, 2024, this adjustment gives effect to payments for one-time accounting fees, termination benefits and other non-recurring or unusual expenses.

During the year ended December 31, 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.

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 years ended December 31, 2024 and 2023 is presented in the following table (in 000’s):

The non-GAAP adjustments referenced

below and herein relate to the exclusion of stock-based compensation, amortization of acquisition-related intangible assets.

expenses the Company believes to be non-recurring.

A reconciliation of GAAP to non-GAAP historical financial measures has been provided

in the tables below.

Management believes that the

use of EBITDA from continuing operations, Adjusted EBITDA from continuing operations, non-GAAP net income (loss) from continuing operations,

non-GAAP net income (loss) from continuing operations per share, free cash flow and adjusted free cash flow is helpful to its investors.

These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting

principles in the United States, or GAAP.

Our management uses these non-GAAP financial measures as tools for financial and operational

decision making and for evaluating our own operating results over different periods of time.

EBITDA from continuing operations

is calculated by excluding depreciation and amortization, interest expense, net, and income taxes from the loss from continuing operations.

Adjusted EBITDA also excludes certain other expenses which the Company believes to be non-recurring as well as the gain or loss on the

change in fair value of our interest rate swap.

Non-GAAP net income (loss)

from continuing operations is calculated by excluding stock-based compensation expense and amortization expense for acquisition-related

intangible assets from loss from continuing operations and certain other adjustments noted in the tables below.

Non-GAAP net income (loss)

from continuing operations per share is calculated by dividing non-GAAP net income (loss) from continuing operations by the weighted-average

diluted shares outstanding as presented in the calculation of GAAP net income (loss) from continuing operations per share.

varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s

non-cash expenses, management believes that providing non-GAAP financial measures that exclude stock-based compensation expense allows

for more meaningful comparisons between its operating results from period to period.

For business combinations, management generally allocates

a portion of the purchase price to intangible assets.

The amount of the allocation is based on estimates and assumptions made by management

and is subject to amortization.

The amount of purchase price allocated to intangible assets and the term of its related amortization can

vary significantly and are unique to each acquisition and thus management does not believe they are reflective of ongoing operations.

Free cash flow, a non-GAAP

measure, represents cash flow from operating activities less purchases of property and equipment and capitalized software.

Adjusted free

cash flow also deducts certain cash payments which the Company believe to be non-recurring in nature.

Management considers free cash flow

and adjusted free cash flow to be liquidity measures that provide useful information to investors about the amount of cash generated or

used by the business.

Non-GAAP financial measures

may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in the

industry may calculate non-GAAP financial results differently.

In addition, there are limitations in using non-GAAP financial measures

because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used

by other companies and exclude expenses that may have a material impact on our reported financial results.

The presentation of non-GAAP

financial information below and herein are not meant to be considered in isolation or as a substitute for the directly comparable financial

measures prepared in accordance with GAAP.

Investors should review the reconciliation of non-GAAP financial measures to the comparable

GAAP financial measures included below and not rely on any single financial measure to evaluate our business.

A reconciliation of

net income to adjusted EBITDA for the years ended December 31, 2025 and 2024 is presented in the following table (in thousands):

Year Ended December 31,

Net loss from continuing operations:

Impairment loss on intangible assets

Impairment loss

Depreciation and amortization

5 unchanged sentences

Adjusted EBITDA:

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

For the year ended December 31, 2024, this adjustment gives effect to a gain recorded on the change in fair value of our interest rate swap of $81,000, as well as, one-time accounting fees, termination benefits and other non-recurring or unusual expenses of $219,000.

For the year ended December 31, 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 and a loss on the change in fair value of our interest rate swap of $21,000.

____________________

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

For the year ended December 31, 2025, this adjustment gives effect to a loss recorded on the change in fair value of our interest rate swap of $80,000, as well as corporate re-brand costs of $154,000 and non-recurring fees of $629,000.

For the year ended December 31, 2024, this adjustment gives effect to a gain recorded on the change in fair value of our interest rate swap of $81,000, as well as a one-time accounting fees, termination benefits and other non-recurring or unusual expense of $219,000.

The adjustments represent stock-based compensation expense 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 years ended December 31, 2024 and 2023 is presented in the following table (in 000’s):

A reconciliation of net

income to adjusted net income for the years ended December 31, 2025 and 2024 is presented in the following table (in thousands):

Year Ended December 31,

Net loss from continuing operations:

Impairment loss on intangible assets (1)

Impairment loss (1)

Amortization of intangible assets (2)

5 unchanged sentences

Weighted average number of common shares outstanding – diluted

This adjustment represents the impairment loss on intangible assets that was recognized for the year ended December 31, 2024.

__________________

The adjustment represents the impairment loss on right-of-use asset and leasehold improvements due to the Company’s sublease for the year ended December 31, 2025, and intangible assets for the year ended December 31, 2024.

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

1 unchanged sentence

For the year ended December 31, 2023, this adjustment gives effect to $370,000 payment related to early extinguishment of our Seller Note and one-time non-recurring expenses, including acquisition and/or integration expenses of $591,000 and a loss on the change in fair value of our interest rate swap of $21,000.

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

This adjustment eliminates discrete items impacting income tax expense.

For the year ended December 31, 2024 and 2023, discrete items relate to additional income tax expense recorded during the period related to the exercise of stock compensation.

The following statements are forward looking and are subject to factors that could cause actual results to differ materially from those suggested here, including, without limitation, demand for and acceptance of our services, new developments, competition and general economic or market conditions, particularly in the domestic and international capital markets.

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.

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.

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:

For the year ended December 31, 2025 and 2024, discrete items relate to additional income tax expense recorded during the period associated with vesting of stock-based compensation awards.

For the years ended December

31, 2025 and 2024, free cash flow and adjusted free cash flow were as follows:

Year Ended December 31,

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

Payments for purchase of fixed assets and capitalized software

Free cash flow (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 year ended December 31, 2025 and 2024, this adjustment gives effect to payments for one-time accounting fees, termination benefits and other non-recurring or unusual expenses.

The following statements

are forward-looking and are subject to factors that could cause actual results to differ materially from those suggested here, including,

without limitation, demand for and acceptance of our services, new developments, competition and general economic or market conditions,

particularly in the domestic and international capital markets.

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, tariff wars, instability in global energy markets, global inflation and fluctuations

in 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.

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 2026:

Expanding our products and adapting to this changing industry,

5 unchanged sentences

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.

Critical Accounting Policies and Estimates

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

Significant intercompany accounts and transactions are eliminated in consolidation.

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 consolidated financial

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

Significant intercompany accounts and transactions are

eliminated in consolidation.

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.

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

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 per release contracts 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.

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.

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.

(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.

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 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.

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.

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.

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 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.

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 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.

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

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

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.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We do not believe that we face material market risk with respect to our cash or cash equivalents, which totaled $4,103,000 and $5,714,000 at December 31, 2024 and 2023, respectively.

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 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.

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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

We do not believe that we

face material market risk with respect to our cash or cash equivalents, which totaled $3,025,000 and $4,103,000 at December 31, 2025 and

2024, respectively.

We did not hold any marketable securities as of December 31, 2025 or 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis