What changed in this filing

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Item 1. Financial Statements

2026-08-11 compared with 2026-05-12 · 372 added, 334 removed, 450 unchanged (61% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

March 31, 2026

(in thousands, except share and

per share amounts)

June 30, 2026

December 31, 2025

2 unchanged sentences

Accounts receivable (net of allowance for credit losses of $ 1,452 and $ 1,336 , respectively)

Income tax receivable

Other current assets

11 unchanged sentences

Income tax payable

Current portion of long-term debt

Current portion of Notes payable

Deferred revenue

7 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,882,144 and 3,850,435 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Preferred stock, $ 0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Common stock $ 0.001 par value, 20,000,000 shares authorized, 3,854,504 and 3,850,435 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

3 unchanged sentences

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

The accompanying notes are an

integral part of these unaudited consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF

(in thousands, except per share

For the Three Months Ended

For the Six Months Ended

Cost of revenues

1 unchanged sentence

General and administrative

Sales and marketing

Sales and marketing expenses

Product development

2 unchanged sentences

Operating loss

Interest expense, net

Other income (expense)

Loss from continuing operations before income taxes

Income tax benefit

Interest income (expense), net

Other income (expense), net

Income (loss) before taxes

Income tax expense (benefit)

Net loss from continuing operations

Net income from discontinued operations, net of taxes

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

Net income (loss)

Net income (loss) from continuing operations per share – basic

Net income (loss) from continuing operations per share – diluted

Net income from discontinued operations per share – basic

Net income from discontinued operations per share – diluted

Net income (loss) per share – basic

Net income (loss) per share – fully diluted

Loss from continuing operations per share – basic

Loss from continuing 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

Income (loss) per share – fully diluted

Weighted average number of common shares outstanding – basic

Weighted average number of common shares outstanding – fully diluted

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

The accompanying notes are an

integral part of these unaudited consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)

(in thousands)

For the Three Months Ended

For the Six Months Ended

Net income (loss)

Foreign currency translation adjustment

Comprehensive income (loss)

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

Comprehensive (loss) income

The accompanying notes are an

integral part of these unaudited consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share amounts)

CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

(in thousands, except share and

per share amounts)

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders’

Accumulated Other Comprehensive Income

Stockholders’

Balance at December 31, 2024

3 unchanged sentences

Balance at March 31, 2025

Stock-based compensation expense

Exercise of stock awards, net of tax

Foreign currency translation

Balance at June 30, 2025

Balance at December 31, 2025

5 unchanged sentences

Balance at March 31, 2026

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

Stock-based compensation expense

Exercise of stock awards, net of tax

Stock issued to consultants

Stock repurchase and retirement

Foreign currency translation

Balance at June 30, 2026

The accompanying notes are an

integral part of these unaudited consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF

(in thousands)

For the Three Months Ended

For the Six Months Ended

Cash flows from operating activities:

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Proceeds from Sale of Compliance Business

Purchase of fixed assets

Capitalized software

Purchase of fixed assets

Net cash provided by (used in) investing activities

8 unchanged sentences

Supplemental disclosures:

Cash paid for income taxes

Cash paid for interest

The accompanying notes are an integral part of these

unaudited consolidated financial statements.

The accompanying notes are an

integral part of these unaudited consolidated financial statements.

ACCESS NEWSWIRE INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL

Basis of Presentation

The unaudited interim consolidated

balance sheet as of March 31, 2026 and consolidated statements of operations, comprehensive income (loss), stockholders’ equity

and cash flows for the three-month periods ended March 31, 2026 and 2025 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

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 2025 audited financial

statements of ACCESS Newswire Inc.

(the “Company”, “We”, or “Our”) filed on Form 10-K for the year

ended December 31, 2025.

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 unaudited

interim Consolidated Balance Sheet as of June 30, 2026 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, 2026 and 2025 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.

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 2025 audited financial statements of ACCESS Newswire Inc.

“Company”, “We”, or “Our”) filed on Form 10-K for the year ended December 31, 2025.

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.

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 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.

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

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 months ended March 31, 2026 and 2025 (in thousands):

the allowance for credit losses during the three and six months ended June 30, 2026 and 2025 (in thousands):

Schedule of allowance for credit losses

Three months ended

March 31, 2026

Three months ended

March 31, 2025

For the Three Months Ended

For the Six Months Ended

Beginning balance

2 unchanged sentences

Concentration of Credit Risk

Financial instruments and related

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

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

and accounts receivable.

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

As of March 31, 2026, 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 $ 2,039,000 and $ 1,943,000 in Canada as of March 31, 2026 and December 31, 2025,

respectively.

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 March 31, 2026 or 2025 that accounted for more than 10% of revenue.

As of June 30, 2026,

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 $ 2,259,000 and $ 1,943,000 in Canada as of June 30, 2026 and

December 31, 2025, respectively.

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 and six-month periods ended June 30, 2026 or 2025 that accounted for more than 10% of revenue.

Revenue Recognition

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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”),

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.

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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 March 31, 2026 and December 31, 2025, was $ 5,390,000 and $ 5,265,000 , respectively, and is expected to be recognized primarily

within one year.

Approximately $ 385,000 of the deferred revenue balance as of March 31, 2026, relates to contracts for press release packages

with an expiration date after March 31, 2027, however, since the customer may use the balance within one year, the entire balance is classified

As of January 1, 2025, deferred revenue was $ 4,743,000 .

Revenue recognized for the three months ended March 31, 2026 and 2025,

which was included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 2,210,000 and $ 2,162,000 ,

respectively.

Accounts receivable, net of allowance for credit losses, related to contracts with customers was $ 3,596,000 and $ 3,884,000

as of March 31, 2026 and December 31, 2025, respectively.

As of January 1, 2025, accounts receivable, net of allowance for credit losses

was $ 3,351,000 .

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 March 31, 2026 and December 31, 2025, the Company has capitalized $ 40,000 and

$ 45,000 , 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.

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, 2026 and December 31, 2025, was $ 5,072,000 and $ 5,265,000 , respectively, and is expected

to be recognized primarily within one year.

Approximately $ 255,000 of the deferred revenue balance as of June 30, 2026, 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.

January 1, 2025, deferred revenue was $ 4,743,000 .

Revenue recognized for the six-month periods ended June 30, 2026 and 2025, which was

included in the deferred revenue balance at the beginning of each reporting period, was approximately $ 4,145,000 and $ 3,569,000 , respectively.

Accounts receivable, net of allowance for credit losses, related to contracts with customers was $ 3,450,000 and $ 3,884,000 as of June

30, 2026 and December 31, 2025, respectively.

As of January 1, 2025, accounts receivable, net of allowance for credit losses was $ 3,351,000 .

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.

obtain contracts with customers consist primarily of sales commissions.

As of June 30, 2026 and December 31, 2025, the Company has capitalized

$ 35,000 and $ 45,000 , respectively, of costs to obtain contracts that are expected to be amortized over more than one year.

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 45,000 and 53,750 were excluded in the computation of diluted earnings per common share during the three months

ended March 31, 2026 and 2025, respectively, because their impact was anti-dilutive.

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 50,000 and 45,000 were excluded in the computation of diluted earnings per common share during

the three and six months ended June 30, 2026 because their impact was anti-dilutive.

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.

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

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.

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-month periods ended March 31, 2026 and

2025, 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

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

Amortization for the three and six-month periods

ended June 30, 2026 and 2025, is as follows (in thousands):

Schedule of capitalized costs and amortization

For the Three Months Ended

For the Six Months Ended

Capitalized software development costs

Amortization included in cost of revenues

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

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.

Impairment of Long-lived

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.

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.

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 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.

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.

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.

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.

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

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:

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

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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 March 31, 2026 and December

31, 2025, 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.

30, 2026 and December 31, 2025, 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

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

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

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 income (loss) and other comprehensive income related to changes in the cumulative foreign currency translation

Business Combinations, Goodwill,

and Intangible Assets

The authoritative guidance for

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

The Company expenses advertising

During the three-month periods ended March 31, 2026 and 2025, advertising expense was $ 406,000 and $ 301,000 , respectively.

Additionally, during the three-month period ended March 31, 2025, the Company incurred $ 132,000 in costs associated with its corporate

As of June 30, 2026, the Company’s

market capitalization is less than the carrying value of its equity.

This may be an indicator of impairment of the Company’s long-lived

assets, however, at this time, management believes the Company’s stock price is in temporary decline and also considers other factors

such as future growth, positive cash flow and other measures the Company is able to control in determining if a quantitative test is necessary.

Should the stock price continue to remain at levels below the Company’s carrying value, a quantitative test may be necessary, which

could conclude an impairment exists.

expenses advertising as incurred.

During the three and six-month periods ended June 30, 2026, advertising expense was $ 445,000 and $ 851,000 ,

respectively.

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.

Liquidity and Capital Resources

As of March 31, 2026, we had $ 3,487,000

As of June 30, 2026, we had

$ 2,962,000 in cash and cash equivalents and $ 3,450,000 in net accounts receivable.

Current liabilities as of March 31, 2026, totaled $ 9,862,000 including

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

portion of lease liabilities and other accrued expenses.

As of March 31, 2026, our current

liabilities exceeded our current assets by $ 1,191,000 .

While our current liabilities exceed current assets, we believe our ability

to renegotiate our Credit Agreement (as defined in Note 9) and ability to continue to generate cash will benefit us in the future.

Accounting Pronouncements Not Yet Effective

Current liabilities as of June 30, 2026, totaled $ 9,298,000 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, 2026, our

current liabilities exceeded our current assets by $1,681,000.

current liabilities exceed current assets, we believe our ability to

renegotiate our Credit Agreement (see Note 9 below) and ability to continue to generate cash will benefit us in the future.

Accounting Pronouncements

Not Yet Effective

In November 2024, the FASB issued ASU 2024-03,

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obligations to deliver services and annual report printing and distribution.

Additionally, services are provided on a per project

Additionally, services are provided on a per project basis.

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

Set up fees for

the transfer agent module and investor relations content management module are immaterial.

For service contracts that include stand ready

obligations, revenue is recognized evenly over the contract period.

For all other services delivered on a per project or event basis,

the revenue is recognized at the completion of the event.

The Company believes recognizing revenue for subscriptions and stand ready obligations

using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.

February 26, 2026, the Buyer submitted an indemnification notice to the Company alleging indemnity claims under the Purchase Agreement

in the aggregate of $ 549,000 .

While the Company disputes this amount and is in the process of discussing and negotiating the matter with

the Buyer, there is no guarantee that we will receive all or a substantial portion of the $500,000 holdback from the Buyer.

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

There were no remaining assets or liabilities associated with discontinued operations as of March 31, 2026 and December 31,

2025 as presented in the Consolidated Balance Sheets.

following table sets forth the details of income from discontinued operations for the three months ended March 31, 2025 (in thousands):

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.

There were no remaining

assets or liabilities associated with discontinued operations as of June 30, 2026 and December 31, 2025 as presented in the Consolidated

Balance Sheets.

On July 16, 2026, the Company

and the Buyer agreed to settle a dispute related to the $ 500,000 holdback which was part of the (Purchase Agreement).

As a result, the

Company received $ 308,000 of the holdback and recognized the difference as a loss on disposal of the business in the table below.

following table sets forth the details of income from discontinued operations for the three and six months ended June 30, 2026 and 2025

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

Schedule of income from discontinued operations

Three Months Ended March 31, 2025

For the Three Months Ended

For the Six Months Ended

Cost of revenues

1 unchanged sentence

General and administrative

Sales and marketing

Sales and marketing expenses

Depreciation and amortization

Total operating costs and expenses

Operating income

Interest income

Gain on disposal of compliance business

Income before income taxes

Income tax expense

Net income from discontinued operations

following table presents the significant non-cash items related to discontinued operations for the three months ended March 31, 2025

(in thousands):

Operating income (loss)

Interest income (expense), net

Gain (loss) on disposal of business

Income (loss) before taxes

Income tax expense (benefit)

Net income (loss) from discontinued operations

following table presents the significant non-cash items related to discontinued operations for the six-month period ended June 30, 2026

and 2025 that are included in the accompanying statements of cash flows (in thousands):

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

Three Months Ended March 31, 2025

June 30, 2026

June 30, 2025

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

Depreciation and amortization

Provision for credit losses

Stock-based compensation expense

Gain on disposal of business

The Company did not pay any

dividends during the three-month periods ended March 31, 2026 and 2025.

Preferred stock and common stock

During the three months ended

March 31, 2026, there were 11,260 shares of common stock issued to consultants in exchange for services.

No common stock was issued to

consultants during the three months ended March 31, 2025.

There were no other issuances of common or preferred stock during the three-month

periods ended March 31, 2026 and 2025, other than stock awarded to employees and the Board of Directors.

Loss on disposal of business

did not pay any dividends during the three and six-month periods ended June 30, 2026 and 2025.

Preferred stock and common

During the three and six months

ended June 30, 2026, there were 2,612 and 13,872 shares, respectively, of common stock issued to consultants in exchange for services.

No common stock was issued to consultants during the three and six months ended June 30, 2025.

There were no other issuances of common

or preferred stock during the three and six-month periods ended June 30, 2026 and 2025, other than stock awarded to employees and the

Board of Directors.

Stock repurchase and retirement

On December 4, 2025, the Company’s

board of directors authorized a stock repurchase program under which the Company was authorized to repurchase up to $ 1,000,000

of its common shares.

The table below shows the shares that have been repurchased under the stock repurchase program ($ in thousands,

except per share amounts):

board of directors authorized a stock repurchase program under which the Company was authorized to repurchase up to $ 1,000,000 of its

common shares.

The table below shows the shares that have been repurchased under the stock repurchase program ($ in thousands, except

per share amounts):

Schedule of stock repurchase program

8 unchanged sentences

March 1-31, 2026

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.

Plan is effective through April 1, 2033.

As of March 31, 2026, there are 318,166 shares which remain to be granted under the 2023 Plan,

including 131,826 shares assumed under the Company’s previous 2014 Equity Incentive Plan, as amended.

April 1-30, 2026

May 1-31, 2026

June 1-30, 2026

2023 Equity Incentive

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

The 2023 Plan is effective through April 1, 2033.

As of June 30, 2026, there are 305,008 shares which remain to be granted under

the 2023 Plan, including 131,826 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 March 31, 2026:

information about stock options outstanding and exercisable at June 30, 2026:

Schedule of stock options outstanding and exercisable

12 unchanged sentences

$ 27.01 - 27.71

As of March 31, 2026, the Company

had unrecognized stock compensation related to the options of $ 79,000 , which will be recognized through 2027.

The Company did no t grant any

restricted stock units during the three months ended March 31, 2026 and 2025.

During the three months ended March 31, 2026, 23,981 restricted

stock units with an intrinsic value of $ 25.45 , vested.

During the three months ended March 31, 2025, 9,000 restricted stock units with

an intrinsic value of $ 20.81 , vested.

As of March 31, 2026, there was $ 539,000 of unrecognized compensation cost related to our unvested

restricted stock units, which will be recognized through 2028.

30, 2026, the Company had unrecognized stock compensation related to the options of $ 53,000 , which will be recognized through 2027.

three and six-month periods ended June 30, 2026, the Company granted 13,158 restricted stock units to its Board of Directors, which vest

at the earlier of June 26, 2027, or the Company’s 2027 annual meeting.

The average grant date fair value of these grants was $6.84.

During the three and six-month periods ended June 30, 2025, the Company granted 7,662 restricted stock units to its Board of Directors

which vested on June 13, 2026 and had an average grant date fair value of $11.75 per share.

to the shares vesting for the Board of Directors, 2,000 restricted stock units issued to employees vested during the three-month period

ended June 30, 2026, with an intrinsic value of $ 11.33 per share.

During the six-month period ended June 30, 2026, 33,643 shares issued

to employees vested with an average intrinsic value of $ 21.39 per share.

During the three and six-month periods ended June 30, 2025, 21,083

and 30,083 restricted stock units with an average intrinsic value of $ 13.41 and $ 15.63 , respectively, vested.

As of June 30, 2026, there

was $529,000 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2028.

The Company recognized income

tax benefit of $ 121,000 and $ 185,000 for the three-month periods ended March 31, 2026 and 2025.

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-month periods ended March 31, 2026 and 2025, 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

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

Leasing activity generally consists

of office leases.

tax expense of $ 53,000 for three-month period ended June 30, 2026 and an income tax benefit of $ 68,000 for the six-month period ended

June 30, 2026, compared to an income tax benefit of $ 9,000 and $ 194,000 for the three and six-month periods ended June 30, 2025.

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, 2026 and 2025, 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.

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 March 31, 2026 and December 31, 2025.

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.

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, 2026 and December 31, 2025.

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 $ 543,000

as of March 31, 2026.

as of June 30, 2026.

The current portion of this liability of $ 406,000

7 unchanged sentences

Schedule of lease expense

Three months ended

For the Three Months Ended

For the Six Months Ended

Lease expense

1 unchanged sentence

Variable lease expense

Total lease expense

The weighted-average remaining

non-cancelable lease term for our operating leases was 1.50

years as of March 31, 2026.

As of March 31, 2026, 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 March 31, 2026, are as follows (in thousands):

years as of June 30, 2026.

As of June 30, 2026, 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, 2026, are as follows (in thousands):

Schedule of future lease payments of operating leases

3 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.

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.

On December 18, 2025, the Company

21 unchanged sentences

Below provides

a breakdown of costs and expenses of our one

operating unit (in thousands):

a further breakdown of costs and expenses of our one

reporting segment (in thousands):

Schedule of segment reporting

Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Cost of revenues

29 unchanged sentences

with an unidentified “John Doe” defendant.

The complaint alleges that on March 16, 2026, the Company disseminated a press release

concerning Cycurion that the plaintiff contends was fabricated and submitted to the Company by an unauthorized third party, and asserts

claims against the Company for common law defamation, violation of the North Carolina Unfair and Deceptive Trade Practices Act, and common

law negligence.

The complaint alleges that on March 16, 2026, the Company disseminated a press

release concerning Cycurion that the plaintiff contends was fabricated and submitted to the Company by an unauthorized third party, and

asserts claims against the Company for common law defamation, violation of the North Carolina Unfair and Deceptive Trade Practices Act,

and common law negligence.

The plaintiff seeks monetary damages.

The Company believes the claims against it are without merit and intends to defend

the matter vigorously.

The Company believes the claims against it are without merit and intends

to defend the matter vigorously.

This litigation matter is covered under the Company’s insurance policies.

At this time, the Company is unable to

reasonably estimate the amount or range of possible loss, if any, that may result from this matter, and accordingly no accrual for any

loss contingency has been recorded in the accompanying condensed consolidated financial statements.

The Company does not expect the outcome

of this litigation to have a material adverse effect on its financial condition or results of operations, or cash flows, although there

can be no assurance as to the ultimate outcome.

At this time, the Company

is unable to reasonably estimate the amount or range of possible loss, if any, that may result from this matter, and accordingly no accrual

for any loss contingency has been recorded in the accompanying condensed consolidated financial statements.

The Company does not expect

the outcome of this litigation to have a material adverse effect on its financial condition or results of operations, or cash flows, although

there can be no assurance as to the ultimate outcome.

Credit Agreement

20 unchanged sentences

to terminate on June 30, 2028, unless terminated earlier pursuant to the terms of the Credit Agreement.

As of March 31, 2026, there was

As of June 30, 2026, there was

no outstanding balance under the Revolving LOC and the interest rate was 5.67%.

11 unchanged sentences

set forth in the Credit Agreement, as amended;

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

and (v) to extend the maturity of the Revolving LOC to June 30, 2026 .

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

The Credit Agreement, as amended,

3 unchanged sentences

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

41 unchanged sentences

variable rate of SOFR + 2.35% adjusted monthly.

As of March 31, 2026, the variable rate was 6.02 %.

As of June 30, 2026, the variable rate was 5.97 %.

The carrying amount for the Company’s

12 unchanged sentences

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 March 31, 2026

and December 31, 2025 was a liability of $ 9,000 and $ 20,000 , respectively, and is included in Interest rate swap liability 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 gain of $ 11,000 for the three months ended March 31, 2026 compared to a loss of $ 69,000

during the three months ended March 31, 2025, which are included in Other income (expense), net in the Consolidated statements of operations.

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, 2026 and December 31, 2025 was a liability of $ 1,000 and $ 20,000 , respectively 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 gain of $ 8,000 and $ 19,000 during

the three and six months ended June 30, 2026, respectively, compared to a net unrealized loss of $ 10,000 and $ 78,000 during the three

and six months ended June 30, 2025, 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