0000950170-24-057861.txt : 20240510
0000950170-24-057861.hdr.sgml : 20240510
20240510162751
ACCESSION NUMBER: 0000950170-24-057861
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 99
CONFORMED PERIOD OF REPORT: 20240331
FILED AS OF DATE: 20240510
DATE AS OF CHANGE: 20240510
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FiscalNote Holdings, Inc.
CENTRAL INDEX KEY: 0001823466
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389]
ORGANIZATION NAME: 07 Trade & Services
IRS NUMBER: 000000000
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-39672
FILM NUMBER: 24935341
BUSINESS ADDRESS:
STREET 1: 1201 PENNSYLVANIA AVENUE NW, 6TH FLOOR
CITY: WASHINGTON
STATE: DC
ZIP: 20004
BUSINESS PHONE: 202 793-5300
MAIL ADDRESS:
STREET 1: 1201 PENNSYLVANIA AVENUE NW, 6TH FLOOR
CITY: WASHINGTON
STATE: DC
ZIP: 20004
FORMER COMPANY:
FORMER CONFORMED NAME: Duddell Street Acquisition Corp.
DATE OF NAME CHANGE: 20200902
10-Q
1
note-20240331.htm
10-Q
10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
FISCALNOTE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
001-396972
88-3772307
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
1201 Pennsylvania Avenue NW, 6th Floor,
Washington, D.C.20004
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (202) 793-5300
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Class A common stock, par value $0.0001 per share
NOTE
NYSE
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share
NOTE.WS
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☒
Emerging growth company
☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
As of May 6, 2024, the registrant had 126,087,528 shares of Class A common stock, $0.0001 par value per share, outstanding, and 8,290,921 shares of Class B common Stock, $0.0001 par value per share, outstanding.
This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors,” and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity; our prospects, growth, strategies and the markets in which FiscalNote operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting FiscalNote. Factors that may impact such forward-looking statements include:
•
FiscalNote's ability to effectively manage its growth;
•
changes in FiscalNote's strategy, future operations, financial position, estimated revenue and losses, forecasts, projected costs, prospects and plans;
•
FiscalNote's future capital requirements;
•
FiscalNote’s ability to service its repayment obligations and maintain compliance with covenants and restrictions under its existing debt agreements;
•
demand for FiscalNote's services and the drivers of that demand;
•
FiscalNote's ability to provide highly useful, reliable, secure and innovative products and services to its customers;
•
FiscalNote's ability to attract new customers, retain existing customers, expand its products and service offerings with existing customers, expand into geographic markets or identify areas of higher growth;
•
any cost reduction initiatives undertaken by FiscalNote;
•
risks associated with international operations, including compliance complexity and costs, increased exposure to fluctuations in currency exchange rates, political, social and economic instability, and supply chain disruptions;
•
FiscalNote's ability to develop, enhance, and integrate its existing platforms, products, and services;
•
FiscalNote's estimated total addressable market and other industry and performance projections;
•
FiscalNote's reliance on third-party systems and data, its ability to integrate such systems and data with its solutions and its potential inability to continue to support integration;
•
potential technical disruptions, cyberattacks, security, privacy or data breaches or other technical or security incidents that affect FiscalNote's networks or systems or those of its service providers;
•
FiscalNote's ability to obtain and maintain accurate, comprehensive, or reliable data to support its products and services;
•
FiscalNote's ability to maintain and improve its methods and technologies, and anticipate new methods or technologies, for data collection, organization, and analysis to support its products and services;
•
competition and competitive pressures in the markets in which FiscalNote operates; including larger well-funded companies shifting their existing business models to become more competitive with FiscalNote;
•
FiscalNote's ability to protect and maintain its brands;
•
FiscalNote's ability to comply with laws and regulations in connection with selling products and services to U.S. and foreign governments and other highly regulated industries;
•
FiscalNote's ability to retain or recruit key personnel;
•
FiscalNote's ability to effectively maintain and grow its research and development team and conduct research and development;
•
FiscalNote's ability to adapt its products and services for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to artificial intelligence, machine learning, data privacy and government contracts;
•
adverse general economic and market conditions reducing spending on our products and services;
•
the outcome of any known and unknown litigation and regulatory proceedings;
•
FiscalNote's ability to successfully establish and maintain public company-quality internal control over financial reporting; and
•
the ability to adequately protect FiscalNote's intellectual property rights.
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of this Quarterly Report on Form 10-Q and the other documents filed by us from time to time with the U.S. Securities and Exchange Commission ("SEC"). The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us and our business. There can be no assurance that future developments affecting us will be those that we have anticipated. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
Costs capitalized to obtain revenue contracts, net
3,156
3,326
Prepaid expenses
4,000
2,593
Other current assets
3,679
2,521
Total current assets
69,666
49,805
Property and equipment, net
5,859
6,141
Capitalized software costs, net
13,762
13,372
Noncurrent costs capitalized to obtain revenue contracts, net
3,790
4,257
Operating lease assets
18,070
17,782
Goodwill
164,334
187,703
Customer relationships, net
46,720
53,917
Database, net
18,274
18,838
Other intangible assets, net
16,786
18,113
Other non-current assets
499
633
Total assets
$
357,760
$
370,561
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt
$
67
$
105
Accounts payable and accrued expenses
11,101
12,909
Deferred revenue, current portion
45,034
43,530
Customer deposits
839
3,032
Contingent liabilities from acquisitions, current portion
113
130
Operating lease liabilities, current portion
3,395
3,066
Other current liabilities
3,212
2,878
Total current liabilities
63,761
65,650
Long-term debt, net of current maturities
152,962
222,310
Deferred tax liabilities
2,062
2,178
Deferred revenue, net of current portion
389
875
Operating lease liabilities, net of current portion
25,845
26,162
Public and private warrant liabilities
3,840
4,761
Other non-current liabilities
2,805
5,166
Total liabilities
251,664
327,102
Commitment and contingencies (Note 17)
Stockholders' equity:
Class A Common stock ($0.0001 par value, 1,700,000,000 authorized, 122,749,497 and 121,679,829 issued and outstanding at March 31, 2024 and December 31, 2023, respectively)
11
11
Class B Common stock ($0.0001 par value, 9,000,000 authorized, 8,290,921 issued and outstanding at March 31, 2024 and December 31, 2023, respectively)
1
1
Additional paid-in capital
866,932
860,485
Accumulated other comprehensive income ( loss)
4,969
(622
)
Accumulated deficit
(765,817
)
(816,416
)
Total stockholders' equity
106,096
43,459
Total liabilities and stockholders' equity
$
357,760
$
370,561
See accompanying notes to unaudited condensed consolidated financial statements.
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation
304
336
Amortization of intangible assets and capitalized software development costs
5,113
5,411
Amortization of deferred costs to obtain revenue contracts
1,009
832
Gain on sale of business (Note 4)
(71,599
)
-
Impairment of goodwill
-
5,837
Non-cash operating lease expense
297
1,832
Stock-based compensation
6,175
6,506
Other non-cash expenses
-
190
Bad debt expense
29
156
Change in fair value of acquisition contingent consideration
(4
)
(156
)
Unrealized loss on securities
49
-
Change in fair value of financial instruments
527
(14,680
)
Deferred income taxes
(71
)
(218
)
Paid-in-kind interest, net
2,035
970
Non-cash interest expense
737
1,074
Changes in operating assets and liabilities:
Accounts receivable, net
1,320
(696
)
Prepaid expenses and other current assets
(1,924
)
619
Costs capitalized to obtain revenue contracts, net
(932
)
(1,126
)
Other non-current assets
148
27
Accounts payable and accrued expenses
460
(3,225
)
Deferred revenue
10,436
10,002
Customer deposits
(1,239
)
(1,923
)
Other current liabilities
318
(1,222
)
Contingent liabilities from acquisitions, net of current portion
(13
)
(39
)
Operating lease liabilities
(969
)
(4,052
)
Other non-current liabilities
(64
)
(8
)
Net cash provided by (used in) operating activities
2,741
(12,826
)
Investing Activities:
Capital expenditures
(1,692
)
(1,869
)
Cash proceeds from the sale of business, net (Note 4)
90,884
-
Cash paid for business acquisitions, net of cash acquired
-
(5,010
)
Net cash provided by (used in) investing activities
89,192
(6,879
)
Financing Activities:
Proceeds from long-term debt, net of issuance costs
801
6,000
Principal payments of long-term debt
(65,727
)
(27
)
Payment of deferred financing costs
(7,068
)
-
Proceeds from exercise of stock options and ESPP purchases
196
264
Net cash (used in) provided by financing activities
(71,798
)
6,237
Effects of exchange rates on cash
(119
)
(251
)
Net change in cash, cash equivalents, and restricted cash
20,016
(13,719
)
Cash, cash equivalents, and restricted cash, beginning of period
17,300
61,223
Cash, cash equivalents, and restricted cash, end of period
$
37,316
$
47,504
Supplemental Noncash Investing and Financing Activities:
Warrants issued in conjunction with long-term debt issuance
$
-
$
178
Amounts held in escrow related to the sale of Board.org
$
785
$
-
Property and equipment purchases included in accounts payable
$
124
$
121
Supplemental Cash Flow Activities:
Cash paid for interest
$
5,303
$
4,740
Cash paid for taxes
$
2
$
112
See accompanying notes to unaudited condensed consolidated financial statements.
6
FISCALNOTE HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(in thousands, except shares, par value, per share amounts, or as otherwise noted)
(Unaudited)
Note 1. Summary of Business and Significant Accounting Policies
Description of Business
FiscalNote Holdings, Inc. (“FiscalNote,” or the “Company”) is a leading technology provider of global policy and market intelligence. It delivers critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products. The Company is headquartered in Washington, D.C.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit), and cash flows. All adjustments are of a normal recurring nature. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Liquidity and Going Concern
Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company funded operations through raising equity and debt. The Company's ability to maintain its minimum cash requirement, fund its future cash interest requirements under its senior term loan and fund its operations depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond the Company's control. Accordingly, the Company continues to closely monitor expenses to assess whether any immediate, or long-term changes, are necessary to maintain compliance with its financial covenants.
The Company’s cash, cash equivalents, restricted cash, and short-term investments were $44.5 million at March 31, 2024, compared with $24.4 million at December 31, 2023. Further, the Company had a negative working capital balance of $38.5 million (excluding cash and short-term investments) at March 31, 2024 and had an accumulated deficit of $765.8 million and $816.4 million as of March 31, 2024 and December 31, 2023, respectively. The Company has incurred net losses of $21.0 million (excluding the effect of the gain on sale of business) and $19.3 million for the three months ended March 31, 2024 and 2023, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development.
In addition, as disclosed in Note 8, “Debt”, the Company is subject to certain financial covenants. The Company’s ability to maintain compliance with these financial covenants are based on the Company’s current expectations regarding continued growth in revenues, collections, cost structure, current cash burn rate and other operating assumptions. The Company believes our cash on hand at March 31, 2024, proceeds from our expected product sales, and available borrowings under our Senior Term Loan for certain acquisition activity, will be sufficient to meet our obligations and our required covenants for at least the next twelve months from the date of this filing.
Segments
The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Over the past several years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence, and reach in various market segments. While the Company has offerings in multiple market segments and operates in multiple countries, the Company’s business operates in one operating segment because the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis.
Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements).
For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
Fair Value of Financial Instruments
The Company has elected the fair value option on the subordinated convertible promissory notes issued as part of the Dragonfly acquisition, refer to Note 4, "Business Combinations" and Note 8, "Debt" for further details, and for the New GPO Note and Era Convertible Notes, refer to Note 8, "Debt" for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.
Investments
The Company has invested in highly liquid investments that have investment-grade ratings. These investments are accounted for at fair value through the condensed consolidated statement of operations. The Company is able to easily liquidate these into cash; accordingly, the Company has presented these investments as available for current operations and are presented as short-term investments within current assets in the condensed consolidated balance sheets. Purchases and sales of short-term investments are classified in the investing section of our consolidated statement of cash flows.
Concentrations of Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At March 31, 2024, approximately 77% of the Company’s cash and cash equivalents were held at JPMorgan Chase Bank, N.A.
The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of March 31, 2024 and December 31, 2023, allowance for credit losses of $1,120 and $1,252, respectively, was included in the accounts receivable, net balance.
No single customer accounted for more than 10% of the Company's accounts receivable balance as of March 31, 2024 and December 31, 2023. Revenue derived from the U.S. Federal Government was17% of revenue for both of the three months ended March 31, 2024 and 2023, respectively. As of both of March 31, 2024 and December 31, 2023, assets located in the United States were approximately 85% percent of total assets.
As of March 31, 2024 one vendor accounted for more than 10% of the Company's accounts payable balance. No vendors individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2023. During the three months ended March 31, 2024 and March 31, 2023, one vendor represented more than 10% of the total purchases made.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments("ASU 2016-13") guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate now reflects an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The Company adopted ASC 2016-13 on January 1, 2023 using the modified retrospective transition method. Upon adoption, the Company recorded a $212 cumulative-effect adjustment to accumulated deficit on the condensed consolidated balance sheets, our allowance for doubtful accounts receivable changed from $468 at December 31, 2022 to $680 at January 1, 2023.
In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (ASC 815-40) ("ASU 2020-06") guidance modifying the requirements for the accounting for convertible instruments and contracts in an entity’s own equity. The modifications eliminate certain accounting models for convertible debt instruments, eliminate certain requirements for equity classification of embedded derivatives and align earnings per share calculations for convertible instruments. The Company adopted ASC 2020-06 on January 1, 2023 using the modified retrospective approach. The adoption of ASC 2020-06 did not have a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280) guidance for segment reporting. The new guidance amends segment reporting to include significant segment expenses. The guidance is effective for the Company beginning with our annual
report for the year ended December 31, 2024, and the subsequent interim periods and is required to be disclosed retrospectively to all prior periods presented. The Company does not expect that this guidance will have a significant impact on our disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU enhance income tax disclosures, primarily through standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed. We are currently evaluating the impact of adoption on our financial disclosures.
Note 2. Business Combination with DSAC
On July 29, 2022, the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the closing on July 29, 2022. Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
In connection with the closing of the Business Combination Agreement, FiscalNote also entered into the Credit Agreement with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC (together the “New Senior Lenders”), pursuant to which a new senior term loan was consummated simultaneously with the Closing (the "Senior Term Loan").
Note 3. Revenues
Disaggregation of Revenue
The following table depicts the Company's disaggregated revenue for the periods presented:
Three Months Ended March 31,
2024
2023
Subscription
$
29,626
$
28,467
Advisory
1,257
1,113
Advertising
514
418
Books
148
584
Other revenue
567
947
Total
$
32,112
$
31,529
Revenue by Geographic Locations
The following table depicts the Company’s revenue by geographic operations for the periods presented:
Three Months Ended March 31,
2024
2023
North America
$
25,997
$
26,152
Europe
5,269
4,100
Australia
303
289
Asia
543
988
Total
$
32,112
$
31,529
Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. North America revenue consists solely of revenue attributed to the United States. For the three months ended March 31, 2024 and 2023, revenue attributed to the United Kingdom represented approximately thirteen percent and ten percent of total revenues, respectively. No other foreign country represented more than five percent of total revenue during the three months ended March 31, 2024 and 2023.
Contract Assets
The Company had contract assets of $1,044 and $1,183, as of March 31, 2024 and December 31, 2023, respectively. Contract assets are generated when contractual billing schedules differ from the timing of revenue recognition or cash collections. They represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. They are recorded as part of other current assets on the condensed consolidated balance sheets.
Details of the Company’s deferred revenue for the periods presented are as follows:
Balance at December 31, 2022
$
36,487
Acquired deferred revenue
4,013
Revenue recognized in the current period from amounts in the prior balance
(16,610
)
New deferrals, net of amounts recognized in the current period
25,928
Effects of foreign currency
32
Balance at March 31, 2023
$
49,850
Balance at December 31, 2023
$
44,405
Sale of Board.org
(9,117
)
Revenue recognized in the current period from amounts in the prior balance
(19,249
)
New deferrals, net of amounts recognized in the current period
29,502
Effects of foreign currency
(118
)
Balance at March 31, 2024
$
45,423
Costs to Obtain
During the three months ended March 31, 2024 and 2023, the Company capitalized $941 and $1,114 of costs to obtain revenue contracts. The Company amortized costs to obtain revenue contracts in the amount of $1,009 and $832 to sales and marketing expense during the three months ended March 31, 2024 and 2023, respectively. There were no impairments of costs to obtain revenue contracts for the three months ended March 31, 2024 and 2023.
Unsatisfied Performance Obligations
At March 31, 2024, the Company had $90,981 of remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations. The Company expects to recognize this over the next fiveyears.
Note 4. Acquisitions and Dispositions
2024 Disposition
On March 11, 2024, the Company entered into an agreement (the "Purchase Agreement") to sell the equity of the Company's subsidiary owning and operating its Board.org business ("Board.org") with Exec Connect Intermediate LLC (the “Buyer”). On March 11, 2024, after adjustments based on Board.org’s working capital, indebtedness and transaction expenses, as well as retention payments payable to certain employees of Board.org, the Company received $90,905 in cash (excluding $785 of the purchase price that was deposited into escrow to satisfy certain potential post-closing purchase price adjustments and indemnification claims and including $21 of cash acquired by the Buyer). The Company is entitled to receive an earn-out payment of up to $8,000, less the amount of certain retention payments potentially owing to the former Board.org employees, if the Board.org business achieves specified revenue targets for fiscal year 2024. The Purchase Agreement contains representations, warranties and indemnification obligations of the parties customary for transactions similar to those contemplated by the Purchase Agreement. As a result of the sale of Board.org, the Company recorded a pre-tax gain on disposal of $71,599, inclusive of the $785 of funds placed in escrow that the Company anticipates receiving and $50 of estimated post-closing purchase price adjustment which are included in other current assets.
The proceeds from the sale of Board.org were used in part to prepay $65,700 of term loans under the Company’s Credit Agreement, and pay $7,068 of related prepayment and exit fees associated with the retired amount. The remaining $18,137 of net proceeds were retained by the Company for general corporate purposes. As part of the sale the Company recorded a current tax liability for federal and state income tax of $1,448 and a non-cash deferred tax charge of $280.
The Company determined that Board.org was not a significant subsidiary, and the disposition of Board.org did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Board.org were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Pursuant to the Employee Lease Agreement entered into in connection with the closing of the sale of Board.org, the Company is the employer of record for the Board.org employees. Under the terms of the Employee Lease agreement, the Company is responsible for the payment of salaries and benefits to the Board.org employees at the direction of the buyer, until the buyer legally assumes those employees. The Company will be reimbursed by the buyer for the actual costs incurred pursuant to the Employee Lease Agreement. Accordingly, at March 31, 2024 the Company is due $378 from the buyer for payroll and benefit costs paid by the Company during the period from March 11, 2024 to March 31, 2024, which has been presented in other current assets on the condensed consolidated balance sheet.
Additionally, the Company entered into a Transition Services Agreement in connection with the closing of the sale of Board.org whereby the Company will provide certain transitional support services for a period of time following the closing and the buyer will reimburse FiscalNote for certain direct costs of those services. No material costs were incurred under the Transition Services Agreement during the period from March 11, 2024 to March 31, 2024.
On January 27, 2023, the Company entered into a Sale and Purchase Agreement for all of the issued and outstanding share capital of Dragonfly Eye Limited ("Dragonfly"), a UK- based SaaS-based geopolitical and security intelligence provider of actionable data and analysis delivered through Dragonfly's SaaS-based, proprietary Security Intelligence and Analysis Service subscription platform and API.
The aggregate purchase price consisted of (i) $5.6 million in cash (£4.5 million pounds sterling), (ii) 1,885,149 shares of the Company’s Class A Common Stock, and (iii) $11.1 million (£8.9 million pounds sterling) in aggregate principal amount of subordinated convertible promissory notes (“Seller Convertible Notes”). The Company incurred expenses of $1,272 in connection with the transaction during the year ended December 31, 2023 (inclusive of $446 of amounts paid on January 27, 2023 that were recognized as expense during the three months ended March 31, 2023).
The acquisition date fair value of the consideration transferred for Dragonfly consisted of the following:
Cash
$
5,617
Fair value of Class A common stock
9,539
Fair value of Seller Convertible Notes
8,635
Fair value of contingent consideration
1,445
Total
$
25,236
The Class A common stock issued as consideration as part of the acquisition of Dragonfly represents non-cash activity on the condensed consolidated statement of stockholders equity and condensed consolidated statement of cash flows.
Certain employees of Dragonfly are eligible for employee earnout bonus awards ("Employee Earnout Awards") based on 2024 revenue targets. The Employee Earnout Awards are subject to forfeiture in the event that Dragonfly does not achieve its revenue target or these employees terminate their employment. Any Employee Earnout Awards that are forfeited are reallocated to the other eligible employees.
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:
Cash and cash equivalents
$
607
Current assets, net
3,690
Property and equipment, net
18
Intangible assets
9,600
Deferred revenues
(3,933
)
Current liabilities
(1,764
)
Deferred tax liabilities
(1,517
)
Total net assets acquired
6,701
Goodwill
18,535
Total purchase price
$
25,236
The following table sets forth the components of identified intangible assets acquired and their estimated useful lives as of the date of acquisition:
Estimated Fair Value
Estimated Useful Life (Years)
Customer relationships
$
7,300
6,10
(a)
Developed technology
1,750
10
Tradename
550
3
Total intangible assets acquired
$
9,600
(a) Includes two separate customer relationships with two different useful lives
The fair values of the customer relationships, developed technology and tradename were determined using the income approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.
The purchase price allocation includes UK deferred income tax assets and liabilities for acquired book and tax basis differences. Goodwill recorded for this acquisition is not tax deductible.
Note 5. Leases
The Company has operating leases, principally for corporate offices under non-cancelable operating leases that expire at various dates through 2031. The non-cancellable base terms of these leases typically range from one to nine years. Certain lease agreements include
options to renew or terminate the lease, which if not reasonably certain to be exercised are therefore not factored into the determination of lease payments.
The following table details the composition of lease expense for the periods presented:
Three Months Ended March 31,
2024
2023
Operating lease cost
$
1,238
$
2,585
Variable lease cost
94
155
Short-term lease cost
37
178
Total lease costs
$
1,369
$
2,918
Sublease income
$
(26
)
$
(1,364
)
Cash payments related to operating lease liabilities were $1,499 and $4,797 (inclusive of $1,682 lease termination fee) for the three months ended March 31, 2024 and 2023, respectively.
Note 6. Intangible Assets
The following table summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets by major class:
March 31, 2024
December 31, 2023
Weighted Average
Gross Carrying Amount
Accumulated Amortization
Accumulated Impairment
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Impairment
Net Carrying Amount
Remaining Useful Life (Years) March 31, 2024
Customer relationships
$
76,071
$
(27,116
)
$
(2,235
)
$
46,720
$
88,544
$
(32,392
)
$
(2,235
)
$
53,917
8.5
Developed technology
29,968
(20,338
)
(1,909
)
7,721
37,205
(26,743
)
(1,909
)
8,553
6.7
Databases
29,864
(11,590
)
-
18,274
29,895
(11,057
)
-
18,838
8.6
Tradenames
11,119
(3,789
)
(579
)
6,751
12,077
(4,367
)
(579
)
7,131
8.2
Expert network
2,669
(1,391
)
-
1,278
2,692
(1,291
)
-
1,401
2.9
Patents
803
(213
)
(8
)
582
784
(217
)
(8
)
559
17.5
Content library
592
(138
)
-
454
592
(123
)
-
469
7.7
Total
$
151,086
$
(64,575
)
$
(4,731
)
$
81,780
$
171,789
$
(76,190
)
$
(4,731
)
$
90,868
Finite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. Amortization of intangible assets, excluding developed technology, was$2,685 and $2,814 for the three months ended March 31, 2024 and 2023, respectively.
Amortization of developed technology was recorded as part of cost of revenues in the amount of $765 and $1,316 for the three months ended March 31, 2024 and 2023, respectively.
The expected future amortization expense for intangible assets as of March 31, 2024 is as follows:
2024 (remainder)
$
8,800
2025
10,441
2026
10,183
2027
9,774
2028
9,427
Thereafter
33,155
Total
$
81,780
Capitalized software development costs
Capitalized software development costs are as follows.
March 31, 2024
December 31, 2023
Gross Carrying Amount
Accumulated Amortization
Accumulated Impairment
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Impairment
Net Carrying Amount
Capitalized software development costs
$
27,008
$
(11,754
)
$
(1,492
)
$
13,762
$
27,659
$
(12,795
)
$
(1,492
)
$
13,372
During the three months ended March 31, 2024 and 2023, the Company capitalized interest on capitalized software development costs in the amount of $132 and $117, respectively. Amortization of capitalized software development costs was recorded as part of cost of revenues in the amount of $1,663 and $1,281 for the three months ended March 31, 2024 and 2023, respectively. The estimated useful life is determined at the time each project is placed in service.
Note 7. Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but are rather tested for impairment at least annually as of October 1 of each year.
The changes in the carrying amounts of goodwill, which are generally not deductible for tax purposes, are as follows:
Balance at December 31, 2023
$
187,703
Sale of Board.org
(23,022
)
Impact of foreign currency fluctuations
(347
)
Balance at March 31, 2024
$
164,334
Due to the decline in the Company’s stock price and market capitalization in the first quarter of 2023, and the underperformance of the Company’s ESG reporting unit compared to internal projections, the Company performed a quantitative goodwill impairment assessment as of March 31, 2023. This quantitative assessment resulted in all the goodwill in our ESG reporting unit being impaired; accordingly, an impairment charge of $5,837 was recognized during the three months ended March 31, 2023. Prior to the quantitative goodwill impairment the Company tested the recoverability of its long-lived assets, and concluded that such assets were not impaired.
The fair value estimate of the Company's reporting units was derived based on an income approach. Under the income approach, the Company estimated the fair value of reporting units based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and the uncertainty related to our reporting unit's ability to execute on the projected cash flows.
Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more of these impairment indicators could occur or intensify in the near term, which may result in an impairment of long-lived assets or further impairment of goodwill.
Note 8. Debt
The following presents the carrying value of the Company’s debt as of the respective period ends:
March 31, 2024
December 31, 2023
Senior Term Loan
$
92,891
$
158,228
New GPO Note
33,252
36,954
Convertible Notes
14,557
14,052
Dragonfly Seller Convertible Notes
7,857
9,002
Era Convertible Note
8,461
5,977
Aicel Convertible Note
1,114
1,156
PPP loan
117
144
Total gross debt
158,249
225,513
Debt issuance costs
(5,220
)
(3,098
)
Total
153,029
222,415
Less: Current portion
(67
)
(105
)
Total
$
152,962
$
222,310
Senior Term Loan
On July 29, 2022, concurrent with the closing of the Company's Business Combination, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote Holdings, Inc., entered into a senior credit agreement (the "Credit Agreement") providing for a Senior Term Loan consisting of a fully funded principal amount of $150,000 and an uncommitted incremental loan facility totaling $100,000 available upon notice if the Company meets certain financial growth criteria and other customary requirements (the “Incremental Term Facility”) (collectively the “Senior Credit Facility”). The annual interest of the Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum or (ii) 9.0% payable monthly, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. The Senior Credit Facility will mature on July 29, 2027.
On March 17, 2023, the Company entered into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 1 provided for the extension of an incremental term loan by one of the lenders under the facility in the principal amount of $6,000 which was received by the Company on March 31, 2023, on the same terms as the existing term loans (the “Incremental Facility”). In connection with the funding of the Incremental Facility, the Company issued the lender warrants expiring July 15, 2027, to purchase up to 80,000 Class A Common Stock at an exercise price of $0.01 per share, in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation D promulgated thereunder. The lender warrants represented a non-cash financing activity.
On May 16, 2023, the Company entered into Amendment No. 2 ("Amendment No. 2") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 2 joined Dragonfly Eye Limited and Oxford Analytica Limited (“Oxford Analytica”), each a wholly owned subsidiary of the Company, as Guarantors under the Credit Agreement.
On August 3, 2023, the Company entered into Amendment No. 3 ("Amendment No. 3") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 3 provided for: (a) the extension of the July 2023 Deferred Fee from July 29, 2023 to July 29, 2024, (b) the increase of the July 2023 Deferred Fee from $1,734 to $2,034, (c) an increase of the Restatement Date Final Agreement from $7,410
to $8,970 and (d) the revision to the minimum annual recurring revenue ("ARR") and adjusted EBITDA covenants (as both are defined in the Credit Agreement).
In connection with the completion of the sale of Board.org on March 11, 2024, the Company also entered into Amendment No. 4 to the Credit Agreement (the “Amendment No. 4”), pursuant to which, among other things, the lenders consented to the release of the liens on Board.org’s assets and permitted the consummation of the sale in exchange for the permanent prepayment of $65,700 of term loans under the Credit Agreement. The Company also made a payment of $1,314 and $5,754 of related prepayment and exit fees, respectively. Amendment No. 4 also requires that upon receipt of any earn-out payment pursuant to the equity purchase agreement underlying the sale of Board.org, the Company will prepay outstanding obligations under the Credit Agreement in an amount equal to 70% of the net proceeds received from such earn-out payment, together with a prepayment fee and an exit fee, equal to 5.75% of the amount of such prepayment.
In addition, Amendment No. 4 extended the commencement of amortization payments under the Credit Agreement from August 15, 2025 to August 15, 2026, with such payments to fully amortize the term loans by the maturity date of July 15, 2027. Amendment No. 4 also increased the Company’s minimum liquidity covenant to $22,500 and modified the Company’s minimum ARR and adjusted EBITDA (as defined in the Credit Agreement, as amended) in order to appropriately reflect the sale of Board.org and the absence of its future contributions to the Company’s overall financial performance and position.
The Prime Rate in effect for the Senior Term Loan was8.50% at March 31, 2024. For the three months ended March 31, 2024, the Company incurred $4,911 of cash interest and $364 of paid-in-kind interest, respectively, on the Senior Term Loan. Paid-in-kind interest is reflected as a component of the carrying value of the Senior Term Loan as the payment of such interest will occur upon the settlement of the Senior Term Loan.
The Company may prepay the Senior Term Loan in whole, subject to a 2.0% prepayment fee if prepaid prior to July 30, 2024, 1.0% prepayment fee if prepaid after July 30, 2024 but prior to July 30, 2025, and no prepayment fee if prepaid on or after July 30, 2025. The July 2023 Deferred Fee, as previously amended, of $2,034 was paid as part of Amendment No. 4. Accordingly, the Company recognized the accretion of the July 2023 Deferred Fee as interest expense through March 11, 2024. Prior to Amendment No. 4, the Company had $8,970 of deferred fees due at the earlier of prepayment or maturity of the Senior Term Loan which were amortized over the term of the Senior Term Loan using the effective interest method. On March 11, 2024, and as a result of Amendment No. 4, the Company had $5,250 of deferred fees outstanding which the Company recognized the accretion of these deferred fees as interest expense. The $1,134 of prepayment fee paid on March 11, 2024 was treated as a debt discount. The amortization recorded for the three months ended March 31, 2024 and March 31, 2023 is $646 and $149, respectively, and is included within interest expense in the condensed consolidated statements of operations and comprehensive income (loss). The remaining unamortized debt discount at March 31, 2024 is $4,629, excluding any deferred fees, and is reflected net against debt on the condensed consolidated balance sheets.
The Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The Senior Term Loan contains customary negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. In addition to the negative covenants, there were four financial covenants in place at March 31, 2024: a minimum cash balance requirement, minimum ARR requirement, an adjusted EBITDA requirement and a capital expenditure limitation. As of, and for the three months ended March 31, 2024, the Company was in compliance with all required financial covenants. Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.
New GPO Note
On June 30, 2023 (the “Subscription Date”), the Company entered into an Exchange and Settlement Agreement (the “Exchange and Settlement Agreement”) with GPO FN Noteholder LLC (the “Investor”) pursuant to which (i) the Investor returned 5,881,723 shares of Class A Common Stock held by the Investor to the Company for cancellation, (ii) the Company issued to the Investor a subordinated convertible promissory note in an initial principal amount of $46,794 (the “New GPO Note”), and (iii) the parties agreed to a mutual settlement and release of all claims including, but not limited to, any claims by the Investor for additional shares or money damages resulting from the entry into the Merger Agreement, relating to or arising from the conversion of the Amended and Restated Senior Secured Subordinated Promissory Note, dated December 29, 2020, previously issued by a subsidiary of the pre-business combination FiscalNote Holdings, Inc. to the Investor. The exchange and settlement are non-cash exchanges in the condensed consolidated statement of cash flows. The before mentioned transactions closed on July 3, 2023.
The New GPO Note will mature on July 3, 2028, unless earlier redeemed or repurchased by the Company or converted in accordance with the terms thereof. The New GPO Note bears interest at a rate of 7.50% per annum payable quarterly in arrears, as follows: (i) for the first year following the date of issuance, interest will be payable in kind by adding interest to the principal amount of the New GPO Note; and (ii) for any period thereafter, interest will be payable in cash or freely tradeable shares of Class A Common Stock, at the Company’s option, with the value per share determined with reference to the trailing 30-day volume weighted average trading price prior to the interest payment date, subject to certain exceptions under which the Company will be permitted to pay PIK Interest.
The New GPO Note is subordinate to the Company’s obligations under its Senior Term Loan which limits certain actions that the Company and the Investor may take under the New GPO Note. At any time prior to the July 3, 2028, the Investor is entitled to convert all or any portion of the principal amount of the New GPO Note and accrued interest thereon into shares of Class A Common Stock at $8.28 per share (adjusted to $6.89 on April 11, 2024 pursuant to the terms of the New GPO Note as a result of the issuance of the Additional Fee Shares to Era as described in Note 18, "Subsequent Events"). The New GPO Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, of the New GPO Note is redeemable by the Company in whole or in part based on certain conditions as defined in the New GPO Note.
The Company elected to account for the New GPO Note using the fair value option. The New GPO Note was recorded at its June 30, 2023 acquisition date fair value of $36,583. The Company initially recorded a loss contingency of $11,700 in its fiscal year 2022 financial statements representing the difference between the fair value of the shares returned by the Investor and the fair value of the New GPO Note on the date of exchange. With the execution of the Exchange and Settlement Agreement and New GPO Note, the Company recorded an additional non-cash loss on settlement with GPO of $3,474 in the condensed consolidated statement of operationsfor the year ended December 31, 2023. The fair market value at March 31, 2024 and December 31, 2023 was $33,252 and $36,954, respectively. The unrealized change in the fair value of the New GPO Note of $4,443 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $180 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024. The Company incurred total interest expense related to the new GPO note of $921 for the three months ended March 31, 2024.
Convertible Notes
At March 31, 2024, the holders of four convertible notes that were previously issued by Old FiscalNote (the “Convertible Notes”) with a principal and accrued PIK balance of $14,557 remain outstanding. The Company incurred total interest expense related to the Convertible Notes, including the amortization of the various discounts, of $598 and $515 during the three months ended March 31, 2024 and 2023, respectively.
Dragonfly Seller Convertible Notes
In connection with the Company's acquisition of Dragonfly, the Company financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Notes were issued in a principal amount of £8.9 million pounds sterling (approximately $11,050 on the closing date of the acquisition), with interest at an annual rate of 8%, which can be paid in cash or paid-in-kind. The paid-in-kind interest will be annually credited to the principal amount. All principal and accrued interest are due upon maturity on January 27, 2028.
At any time after August 2, 2023, the Company can convert any portion of the principal and accrued interest at the volume weighted-average price for the five consecutive trading day period ending on the last trading day of the calendar month preceding the date the Company provides notice of conversion to the Sellers.
At any time after the 18 month anniversary of the Dragonfly acquisition closing date, the lender has the right to convert the outstanding principal and accrued interest for FiscalNote common stock at $10.00 per share, subject to adjustment in the event of any stock dividend, stock split, reverse stock split, combination or other similar recapitalization with respect to common stock.
The Company elected to account for the Dragonfly Seller Convertible Notes using the fair value option. The Dragonfly Seller Convertible Notes were recorded at their acquisition date fair value of $8,635. The fair market value at March 31, 2024 and at December 31, 2023 was $7,857 and $9,002.The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $47 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024 and a non-cash gain of $574 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2023, respectively. The Company incurred total interest expense related to the Dragonfly Seller Convertible Notes of $241 and $153during the three months ended March 31, 2024 and March 31, 2023, respectively.
Era Convertible Notes
In connection with the Company’s strategic commercial partnership, the Company issued a convertible note to Era, a third-party lender, dated December 8, 2023 for $5,500 on December 8, 2023 (the "Issuance Date"). Pursuant to the terms of the December 8, 2023 convertible note, the Company issued that same third-party lender a second convertible note for $801 on January 5, 2024 (collectively, the "Era Convertible Notes"). The Era Convertible Notes were issued in a principal amount of $6,301, with cash interest at a rate equal to the applicable federal rate published by the Internal Revenue Service beginning on the six-month anniversary of the Issuance Date. All principal and unpaid interest are due on maturity at December 8, 2027.
The Era Convertible Notes are contractually subordinated to the Company’s obligations under its senior secured indebtedness, and accordingly, the Company’s right to make certain cash payments in connection therewith is limited by the terms of such subordination agreement (the “Subordination Agreement”). Era may convert the Notes into shares of Common Stock (the “Underlying Shares”), beginning on the six-month anniversary of the Issuance Date based on the volume weighted average price of the trailing 30 trading day period prior to the conversion. In addition, the Company may elect to convert the Era Convertible Notes into the Underlying Shares if the Underlying Shares are registered for resale under the Securities Act of 1933, as amended (the “Securities Act”).
Pursuant to the copilot agreement (the "Co-Pilot Agreement") entered into by and among the Company, FiscalNote Inc., a subsidiary of the Company, and Era on December 8, 2023, the Company agreed to issue Era up to an additional $3,105,105 in the form of shares of the Company's Class A Common Stock no later than June 2024 (the "Partnership Shares"). The Co-Pilot Agreement requires the Company to issue additional shares of Common Stock (“Additional Shares”) to Era if Era’s sales of the Partnership Shares and the Underlying Shares do not generate aggregate cash proceeds to Era that equal or exceed approximately $9.5 million during the sell-off period set forth in the Co-Pilot Agreement. Any such Additional Shares would be valued based on the volume weighted average price of the trailing 30 trading day period, calculated prior to the date of any such issuance.
The Company elected to account for the Era Convertible Notes using the fair value option. The Era Convertible Note dated December 8, 2023 was recorded at its acquisition date fair value of $5,500. The Era Convertible Note Dated January 5, 2024 was recorded at its acquisition date fair value of $801. The fair market value of the Era Convertible Note dated December 8, 2023 was $5,977 at December 31, 2023. The fair market value of the two Era Convertible Notes was $8,461 at March 31, 2024. The non-cash loss was recorded in the change
in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) in the amount of a loss of $1,683 for the three months ended March 31, 2024.
Aicel Convertible Note
In connection with the Company’s acquisition of Aicel, the Company assumed a convertible note (“Aicel Convertible Note”) issued by Aicel in a private placement to a third-party lender dated July 27, 2022. The Aicel Convertible Note was issued in a principal amount of $1,131, with paid-in-kind interest at an annual rate of 1%. All principal and accrued and unpaid interest are due on maturity at July 27, 2027. The Aicel Convertible Note provides for no prepayments until maturity without written consent of the lender.
The Aicel Convertible Note can be converted upon the occurrence of certain events, including (i) Aicel initial public offering (“IPO”), (ii) change in control of Aicel (the acquisition of Aicel by FiscalNote did not constitute a change in control as defined in the purchase agreement), or (iii) sale of substantially all of Aicel’s assets (collectively, a “Conversion Event”). The Company has the right to convert the Aicel Convertible Note into shares of common stock issued in an IPO, if (a) the Conversion Event is an IPO and (b) the price per share paid in an IPO is greater than the stipulated initial conversion price. The lender has the right to elect to convert the Aicel Convertible Note into shares of common stock upon the occurrence of a Conversion Event.
At any time after the second anniversary of the Aicel acquisition closing date until the earlier of (a) the Aicel Convertible Note maturity date, or (b) the occurrence of any liquidity event, the lender has the right to require FiscalNote to repurchase the outstanding principal in exchange for FiscalNote common stock. The lender will receive a number of shares of FiscalNote equal to the outstanding principal plus accrued interest divided by the FiscalNote common stock price and rounded to the nearest whole share.
Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Aicel Convertible Note due and payable the lenders can elect to increase the paid-in-kind interest rate to 12.0% per annum.
The Company concluded that the contingent default interest provision was required to be bifurcated and treated as an embedded derivative liability. The associated value was immaterial and required no initial amount to be recorded and continues to be immaterial as of the reporting date . The Company determined that the remaining embedded features were clearly and closely related to the debt host and did not require bifurcation from the debt host.
The Aicel Convertible Note was recorded at its acquisition fair value of $1,131. The Company incurred total interest expense related to the Aicel Convertible Note of $19 and $3 during the three months ended March 31, 2024 and March 31, 2023, respectively.
PPP Loan
On April 13, 2020, the Company received funding in the principal amount of $8,000 under the CARES Act. Interest accrues annually at 1%. On February 14, 2022, the SBA forgave $7,667 of the PPP Loan with the remaining balance of $333 to be repaid over five years. The Company recognized the forgiveness of PPP Loan as a gain on debt extinguishment in the condensed consolidated statements of operations and comprehensive income (loss) in 2022. As of March 31, 2024, the Company recorded $67 of the remaining PPP Loan as short-term debt and $50 as long-term debt in the condensed consolidated balance sheets.
Total Debt
The following table summarizes the total estimated fair value of the Company's debt as of March 31, 2024 and December 31, 2023, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.
March 31, 2024
December 31, 2023
Senior Term Loan
$
92,497
$
168,702
New GPO Note
33,252
36,954
Convertible Notes
13,709
13,992
Dragonfly Seller Convertible Notes
7,857
10,407
Era Convertible Notes
8,461
5,977
Total
$
155,776
$
236,032
Warrants
Old FiscalNote Warrants
At March 31, 2024, 118,700 warrants (previously issued by Old FiscalNote to lenders prior to the Senior Term Loan) with an exercise price of $8.56, remain outstanding. These warrants are accounted for as a liability with a fair value of $0 at March 31, 2024, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.
Warrants associated with Amendment No. 1
On March 17, 2023, in connection with Amendment No. 1 discussed above, the Company issued 80,000 warrants with an exercise price of $0.01. These warrants are accounted for as a liability with a fair value of $106at March 31, 2024, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.
The Company’s charter authorizes the issuance of 1,809,000,000 shares, which includes Class A common stock, Class B common stock, and preferred stock.
Class A Common Stock
Subsequent to the Closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. Pursuant to the Company’s charter, the Company is authorized to issue 1,700,000,000 shares of Class A common stock, par value $0.0001 per share. As of March 31, 2024, the Company had122,749,497 shares of Class A common stock issued and outstanding.
Additionally, the Company has outstanding warrants to purchase shares of New FiscalNote Class A common stock that became exercisable upon the Closing of the Business Combination. Refer to Note 11, "Warrant Liabilities."
Class B Common Stock
Pursuant to the Company’s charter, the Company is authorized to issue 9,000,000 shares of Class B common stock, par value $0.0001 per share.
In connection with the Closing of the Business Combination, the Co-Founders, or entities controlled by the Co-Founders, received Class B shares of New FiscalNote common stock as consideration (see further details in Note 2, "Business Combination with DSAC").
As of March 31, 2024, the Company had 8,290,921 shares of Class B common stock issued and outstanding.
Preferred Stock
Pursuant to the Company’s charter, the Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of March 31, 2024, there were no shares of preferred stock issued and outstanding.
Dividends
The Company's Class A and Class B common stock are entitled to dividends if and when any dividend is declared by the Company's board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of the Company's business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of the Company's board of directors and will depend on, among other things, the Company's financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as the Company's board of directors may deem relevant.
Note 10. Earnout Shares and RSUs
The shareholders and other equity holders of Old FiscalNote as described below are entitled to receive up to 19,195,100 additional shares of Class A common stock of New FiscalNote (the “Earnout Awards”) in the form of Earnout Shares or as shares reserved for issuances upon settlement of Earnout RSUs, as described below. The Earnout Awards are split into five tranches each consisting of 3,839,020 shares of Class A common stock in New FiscalNote. Certain Old FiscalNote equity holders will receive Earnout Restricted Stock Units (the “Earnout RSUs”), which are settled in Class A common stock. The right to receive Earnout Awards will expire five years after the Closing Date (the “Earnout Period”). Each tranche of the Earnout Awards will be issued only when the dollar volume-weighted average price of one share of New FiscalNote Class A common stock is greater than or equal to $10.50, $12.50, $15.00, $20.00, or $25.00, respectively, for any 10 trading days within any period of 20 consecutive trading days during the Earnout Period (collectively, the “Triggering Events”).
Pursuant to the terms of the Business Combination Agreement, the holders of Old FiscalNote common stock, Old FiscalNote warrants, vested Old FiscalNote options and vested Old FiscalNote RSUs outstanding immediately prior to the Closing Date will be entitled to receive their proportionate allocation of Earnout Shares subject to achievement of the Triggering Event. Holders of unvested Old FiscalNote options and unvested Old FiscalNote RSUs outstanding immediately prior to the Closing Date will be entitled to receive their proportionate allocation of Earnout Shares in the form of Earnout RSUs subject to achievement of the Triggering Event. To the extent the equity award issued upon New FiscalNote's assumption of such any Old FiscalNote Option or Old FiscalNote RSU (each a “Converted Award”) is outstanding and has vested as of the occurrence of a Triggering Event, the holder thereof will receive a proportionate allocation of Earnout Shares in lieu of Earnout RSUs.
If a Converted Award is forfeited after the Closing Date but prior to the Triggering Event, no Earnout RSUs will be issued for such Converted Award. The right to receive Earnout RSUs that have been forfeited shall be reallocated pro-rata to the remaining holders of vested Converted Awards in the form of Earnout Shares and unvested Converted Awards in the form of Earnout RSUs in the manner described above. Reallocated Earnout RSUs are subject to the remaining vesting schedule and conditions of the Converted Award held by such equity holder. The forfeiture and subsequent reallocation of the Earnout RSUs are accounted for as the forfeiture of the original award and the grant of a new award.
A portion of the Earnout Shares that may be issued to Old FiscalNote common stockholders, Old FiscalNote vested option holders and Old FiscalNote warrant holders and all of the Earnout RSUs were determined to represent additional compensation for accounting purposes pursuant to ASC 718, “Compensation-Stock Compensation”. The Company recognizes stock-compensation expense based on the fair value of the Earnout Awards over the requisite service period for each tranche. Upon Closing, the Company recognized $17,712 of share-based compensation expense for vested Earnout Awards. The Company recognized $131 and $1,124 of share-based compensation expense during the three months ended March 31, 2024 and March 31, 2023, respectively. The remaining Earnout Shares were determined to represent an equity transaction in conjunction with the reverse recapitalization and were evaluated pursuant to ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. These remaining Earnout Shares will be accounted for as a liability as the arrangement is indexed to something other than the Company’s stock. The liability is revalued at each reporting period with changes being recorded as a non-operating gain or loss in the condensed consolidated statements of operations and comprehensive income (loss). The liability of $68 was recorded in other non-current liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.
As of March 31, 2024, there was $546 of unrecognized compensation expense related to the Earnout Awards to be recognized over a weighted-average period of approximately one and a half years. As of March 31, 2024, no Earnout Shares and no Earnout RSUs have been issued as no Triggering Events have occurred.
Note 11. Warrant Liabilities
Upon the Closing of the Business Combination, the Company assumed 8,750,000 public warrants and 7,000,000 private placement warrants that were previously issued by Old DSAC. Each public warrant and private placement warrant is exercisable for 1.571428 shares of New FiscalNote Class A common stock (or an aggregate of up to 24,750,000 shares of New FiscalNote Class A common stock).
During the three months ended March 31, 2024, no public warrants were exercised into shares of Class A common stock. No private placement warrants have been exercised to date. Accordingly, as of March 31, 2024, the Company had 8,358,964public warrants and 7,000,000private placement warrants outstanding with a per share fair value of $0.44. These warrants are accounted for as a liability and have a fair value of $3,840 at March 31, 2024.
Public Warrants
Each public warrant entitles the registered holder to acquire 1.571428 shares of the Company’s Class A common stock at a price of $7.32 per share, subject to adjustment as discussed below. The warrants became exercisable on August 29, 2022. Warrants may only be exercised for a whole number of shares of Class A common stock. The public warrants will expire on July 29, 2027, or earlier upon redemption or liquidation.
Redemption of warrants for cash
The Company may call the public warrants for redemption for cash:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $11.45 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company’s Class A common stock and equity-linked securities) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company for cash, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants for shares of Class A common stock
The Company may redeem the outstanding warrants for shares of Class A common stock:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares determined by reference to an agreed table, based on the redemption date and the “fair market value” of Class A common stock (as defined below) except as otherwise described below;
•
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $6.36 per share (as adjusted per stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company’s Class A common stock and equity-linked securities) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
•
if and only if, the private placement warrants are also concurrently exchanged at the same price (equal to a number of shares of our Class A common stock) as the outstanding public warrants, as described above.
•
The “fair market value” of the Class A common stock shall mean the average of the last reported sales price for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.567 shares of Class A common stock per warrant (subject to adjustment).
The private placement warrants are not redeemable by the Company so long as they are held by the sponsor of DSAC or its permitted transferees, except in certain limited circumstances. The DSAC Sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis and the DSAC Sponsor and its permitted transferees has certain registration rights related to the private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants). Except as described in this section, the private placement warrants have terms and provisions that are identical to those of the public warrants. If the private placement warrants are held by holders other than the DSAC Sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants.
Note 12. Stock-Based Compensation
2022 Long-Term Incentive Plan
In connection with the Business Combination, the Company's board of directors adopted, and its stockholders approved, the 2022 Long-Term Incentive Plan (the “2022 Plan”) under which 20,285,600 shares of Class A common stock were initially reserved for issuance. The 2022 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, other stock-based awards and cash-based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2022 Plan increases on the first day of each calendar year, starting on January 1, 2023 and continuing through and including January 1, 2027, by the lesser of (a) 13,523,734, (b) three percent (3%) of the total number of shares of Class A Common Stock outstanding on December 31st of the immediately preceding fiscal year or (c) a lesser number determined by the Company’s board of directors prior to January 1 of a given year. In accordance with this provision, on each of January 1, 2023 and January 1, 2024, the number of shares authorized for issuance under the 2022 Plan increased by 3,693,767 and 3,650,394, respectively.
During the three months ended March 31, 2024, the Company issued1,271,410 stock options and 239,663 restricted stock units. At March 31, 2024, 7,868,951 stock options, 2,601,649 performance stock options, 5,499,350 restricted stock units, and 75,000 performance based restricted stock units remain outstanding. As of March 31, 2024, the Company had 4,219,656 shares of Class A common stock available for issuance under the 2022 Plan.
The Company recognized $5,776 and $6,404 of stock-based compensation expense for all long term incentive plans in effect during the three months ended March 31, 2024 and 2023, respectively. The Company recognized $169 of stock-based compensation expense related to acquisition earnouts during the three ended March 31, 2024 and 2023, respectively.
2022 Employee Stock Purchase Plan
In connection with the Business Combination, the Company’s board of directors adopted, and its stockholders approved, the 2022 Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may authorize payroll deductions of up to 15% of their regular base salary to purchase shares at the lower of 85% of the fair market value of the common stock on the date of commencement of the offering period or on the last day of the six-month offering period. The plan is defined as compensatory, and accordingly, a stock-based compensation charge of $99 and $102 was recorded as the difference between the fair market value and the discounted purchase price of the Company's common stock for the three months ended March 31, 2024 and 2023, respectively. The number of shares of Common Stock reserved for issuance under the ESPP will automatically increase on January 1st each year, starting on January 1, 2023 and continuing through and including January 1, 2027, by the lesser of (a) 3,267,760, (b) one percent (1%) of the total number of shares of all classes of Common Stock outstanding on December 31st of the preceding fiscal year, or (c) a lesser number determined by the Board prior to January 1 of a given year. Pursuant to this provision, on each of January 1, 2023 and January 1, 2024, the number of shares authorized for issuance under the ESPP increased by 1,231,255 and 1,299,707, respectively. During the three months ended March 31, 2024, 202,327 shares have been issued under the ESPP and the Company had 5,493,588 shares of Class A common stock available for issuance under the ESPP.
Withholding Taxes on Equity Awards
In connection with the settlement of equity awards, the Company records a non-cash liability and corresponding APIC adjustment for the withholding taxes on net share settlement of stock-based compensation and option exercises until such time as those taxes have been remitted to the respective taxing authorities.
Note 13. Transaction (Gains) Costs, net
The Company incurred the following transaction costs related to businesses acquired and the consummation of the Business Combination during the periods presented:
The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty-five votes per share. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net loss per share. As a result, basic and diluted net income (loss) per share of Class A common stock and Class B common stock are equivalent.
The following is a calculation of the basic and diluted earnings per share for the Company's common stock, including a reconciliation between net income attributable to common stockholders used for Basic EPS and Diluted EPS for the three months ended March 31, 2024 and 2023:
(in thousands, except per share data)
Three Months Ended March 31,
2024
2023
Basic Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Basic Earnings Per Share
$
0.39
$
(0.14
)
Diluted Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
If-converted impact on net income (loss) attributable to common stockholders
3,673
-
Net income (loss) attributable to common stockholders for diluted EPS
$
54,272
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Weighted average effect of dilutive securities
15,315,053
-
Weighted average common stock outstanding used in diluted EPS computations
146,027,085
133,082,639
Diluted Earnings Per Share
$
0.37
$
(0.14
)
Since the Company was in a net loss position during the three months ended March 31, 2023, basic net loss per share attributable to common stockholders is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive.
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Three Months Ended March 31,
Anti-dilutive securities excluded from diluted loss per share:
2024
2023
Anti-dilutive Earnout Awards
19,195,100
19,195,100
Anti-dilutive stock options
-
2,033,574
Anti-dilutive Convertible Notes
-
2,075,225
Anti-dilutive contingently issuable shares
-
1,339,924
Anti-dilutive restricted stock units
5,569,966
7,022,744
Anti-dilutive Aicel Convertible Notes
-
112,899
Total anti-dilutive securities excluded from diluted loss per share
24,765,066
31,779,466
Note 15. Provision (Benefit) from Income Taxes
Effective Tax Rate
The Company computes its quarterly and year-to-date provisions for income taxes by applying the estimated effective tax rates to the quarterly and year-to-date pre-tax income or losses and adjusting the provisions for discrete tax items recorded in the periods. For the three months ended March 31, 2024 the Company reported tax expense of $1,426 on pre-tax income of $52,025, which resulted in an effective tax rate of 2.74 percent. The Company’s effective tax rate differed from the U.S. statutory rate of 21 percent primarily due to the impact of a valuation allowance on the Company’s deferred tax assets. During the three months ended March 31, 2024, the Company recorded a discrete tax charge for the impact of the sale of Board.org of $1,729.
For the three months ended March 31, 2023, the Company reported tax expense of $30 on a pre-tax loss of $19,243, which resulted in an effective tax rate of (0.16) percent. The Company's effective tax rate differed from the U.S. statutory rate of 21 percent primarily due to the impact of a valuation allowance on the Company’s deferred tax assets. During the three months ended March 31, 2023, the Company had discrete items relating to goodwill impairment, unrecognized tax benefits and the tax impact of interest expense on unrecognized tax benefits.
Unrecognized Tax Benefits and Other Considerations
The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company's tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for
income taxes in the future. For the three months ended March 31, 2024, the Company reported an uncertain tax position totaling $639 relating to a state tax filing position. The Company has the following activities relating to unrecognized tax benefits for the periods presented:
Beginning balances at December 31, 2023 and 2022
$
639
$
639
Lapses in statutes of limitations
-
-
Ending balances at March 31, 2024 and 2023
$
639
$
639
Note 16. Fair Value Measurements and Disclosures
The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments.
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2024 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,157
$
-
$
-
$
3,157
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,090
$
-
$
-
$
2,090
Private placement warrants
-
1,750
-
1,750
Contingent liabilities from acquisitions
-
-
113
113
New GPO Note
-
-
33,252
33,252
Dragonfly Seller Convertible Notes
-
-
7,857
7,857
Era Convertible Note
-
-
8,461
8,461
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2023 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,044
$
-
$
-
$
3,044
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,591
$
-
$
-
$
2,591
Private placement warrants
-
2,170
-
2,170
Contingent liabilities from acquisitions
-
-
130
130
Liability classified warrants (a)
-
-
23
23
New GPO Note
-
-
36,954
36,954
Dragonfly Seller Convertible Notes
-
-
9,002
9,002
Era Convertible Note
-
-
5,977
5,977
(a) - Included in other non-current liabilities on the condensed consolidated balance sheets
The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:
Contingent Liabilities from Acquisitions
Liability Classified Warrants
New GPO Note
Dragonfly Seller Convertible Notes
Era Convertible Note
Balance at December 31, 2023
$
130
$
23
$
36,954
$
9,002
$
5,977
Fair value at issuance date
-
-
-
-
801
Change in fair value included in the determination of net (income) loss(a)
(3
)
(23
)
(180
)
(47
)
1,683
Change in fair value included in accumulated other comprehensive income
-
-
(4,443
)
(1,264
)
-
Cash contingent consideration earned and subsequently settled
(14
)
-
-
-
-
Paid in kind interest
-
-
921
241
-
Foreign exchange
-
-
-
(75
)
-
Balance at March 31, 2024
$
113
$
-
$
33,252
$
7,857
$
8,461
(a)
The change in contingent liabilities from acquisitions is recorded as transaction costs on the condensed consolidated statements of operations and comprehensive income (loss).
Short-Term Investments
The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of March 31, 2024, the estimated fair value of the short-term investments was $7,134. The Company recognized a non-cash loss of $49 for the three
months ended March 31, 2024 resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).
Public Warrants
The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of March 31, 2024 and December 31, 2023, the estimated fair value of the public warrants was $2,090 and $2,591, respectively. The Company recognized a non-cash gain of $501 and $7,607 during the three months ended March 31, 2024 and 2023, respectively, resulting from the change in fair value of the public warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).
Private Placement Warrants
As of March 31, 2024 and December 31, 2023, the estimated fair value of the private warrants was $1,750and $2,170, respectively. The Company recognized a non-cash gain of $420and $6,370 during the three months ended March 31, 2024 and March 31, 2023, respectively, resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).
New GPO Note
The New GPO Note was recognized as a liability in connection with the settlement of litigation on June 30, 2023 at its estimated fair value of $36,583. As of March 31, 2024 and December 31, 2023, the estimated fair value of the New GPO Note was $33,252 and $36,954, respectively. The unrealized change in the fair value of the New GPO Note of $4,443 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $180 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024. The estimated fair value of the New GPO Note was determined based on a trinomial lattice model.The following table presents the assumptions used to determine the fair value of the New GPO Note at March 31, 2024 and at December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.3
%
3.9
%
Yield
18.5
%
14.5
%
Expected volatility
50.0
%
50.0
%
Expected term (years)
4.3
4.5
Dragonfly Seller Convertible Notes
The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of March 31, 2024 and December 31, 2023, the estimated fair value of the Dragonfly Seller Convertible Notes were $7,857 and $9,002, respectively. The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the period ended March 31, 2024, a non-cash gain of $47 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024 and a non-cash gain of $573 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2023, respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at March 31, 2024 and December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.3
%
3.9
%
Yield
20.0
%
15.5
%
Expected volatility
50.0
%
50.0
%
Expected term (years)
3.8
4.1
As of March 31, 2024, the difference between the aggregate fair value and the unpaid principal balance of the Dragonfly Seller Convertible Notes is $4,490.
Era Convertible Note
The Era Convertible Note was recognized as a liability associated with the Company’s strategic commercial partnership on December 8, 2023 at a fair value of $5,500. During the first quarter of 2024, the Company issued $801 of new debt related to the new Era Convertible Note. At March 31, 2024 and December 31, 2023 the fair value of the Era Convertible Note was $8,461 and $5,977, respectively. The non-cash loss of $1,684 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations
and comprehensive income (loss) during the three months ended March 31, 2024. The following table presents the assumptions used to determine the fair value of the Era Convertible Note at March 31, 2024 and December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.8
%
4.17
%
Yield
156.1
%
153.24
%
Expected volatility
51.0
%
63.00
%
Expected term (years)
3.7
3.9
Contingent Liabilities from acquisitions
The contingent liabilities from acquisitions are classified as Level 3 in the fair value hierarchy. At March 31, 2024 and December 31, 2023, the contingent consideration and compensation relates to the following acquisitions:
March 31, 2024
December 31, 2023
Curate
$
-
$
4
Equilibrium
113
112
DT Global
-
14
Total contingent liabilities from acquisitions
$
113
$
130
The Company settled part of the Curate contingent consideration and compensation through an issuance of 83,393 additional shares in a non-cash transaction during the first quarter of 2023.
Liability classified warrants
The Last Out Lender Warrants are classified as Level 3 in the fair value hierarchy. The fair value of the Last Out Lender Warrants is calculated using the Black-Scholes calculation with the following inputs:
March 31, 2024
Common stock fair value
$
1.33
Time to maturity (years)
1.3
Risk free rate
4.88
%
Volatility
52
%
Exercise price
$
8.56
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. The Company has recognized an impairment of goodwill as disclosed in Note 7, "Goodwill" during the three months ended March 31, 2023. The Company has not identified any additional impairments to be recorded during both the three months ended March 31, 2024 and 2023.
There were no other transfers of assets or liabilities between levels during both the three months ended March 31, 2024 and 2023.
Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive income (loss).
Note 17. Commitments and Contingencies
Legal Proceedings
From time to time the Company is a party to various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.
Legal fees are recognized as incurred when the legal services are provided, and therefore are not recognized as part of the loss contingency.
Note 18. Subsequent Events
The Company has evaluated subsequent events through May 10, 2024, the date that the financial statements were available to be issued.
Era Convertible Note
On April 11, 2024, the “Company entered into a letter agreement (the “Letter Agreement”) with Era modifying certain provisions of the Era Convertible Notes and the Co-Pilot Agreement. The Letter Agreement permitted and required the Company to convert approximately
$1.6 million in aggregate principal amount of the Era Convertible Notes (the “Early Converted Notes”) into a portion of the Underlying Shares. Pursuant to the Letter Agreement, the Company was also required to issue to Era the Partnership Shares. Pursuant to the Letter Agreement, Era has the right to convert the aggregate principal amount of the remaining Era Convertible Notes (the “Remaining Notes”), but only on or after June 30, 2024, if such conversion right is not cancelled by the terms of the Letter Agreement. In addition, the Letter Agreement terminates the Company’s obligation to issue the Additional Shares under the circumstances specified therein. On April 11, 2024 and pursuant to the Letter Agreement, the Company issued the Investor an aggregate of 3,003,268 shares of Common Stock to satisfy its obligations with respect to the Partnership Shares and a portion of the Underlying Shares.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion provides information that FiscalNote’s management believes is relevant to an assessment and understanding of FiscalNote’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Certain monetary amounts, percentages and other figures included below have been subject to rounding adjustments as amounts are presented in thousands or millions, as the context describes. Percentage amounts included below have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the Closing.
Overview
FiscalNote is a leading technology provider of global policy and market intelligence. It delivers critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products, coupled with expert research and analysis of markets and geopolitical events, as well as powerful tools to manage workflows, advocacy campaigns and constituent relationships.
Business Combination
On July 29, 2022, the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the closing on July 29, 2022. Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Factors Impacting the Comparability of Our Operating Results
Acquisitions / Disposals
On March 11, 2024, we completed the sale of Board.org for a total value of up to $103.0 million, consisting of $95.0 million in cash at closing and a potential earnout opportunity of up to $8.0 million. The Company recorded a gain on sale of business of $71.6 million during the three months ended March 31, 2024.
On January 27, 2023, we completed the acquisition of Dragonfly for up to $25.2 million (the "2023 Acquisition"), which included a combination of cash, stock, convertible notes and contingent payments.
As a result of our acquisitions, respectively, we have, and will continue to incur, significant non-cash amortization expense related to the amortization of purchased intangibles, which have reduced our operating income by approximately $1.0 million and $1.2 million during the three months ended March 31, 2024 and 2023, respectively.
Product rationalization
From time to time, management reviews the Company’s existing products and services based on their financial profile and other strategic factors. In connection with such reviews, management decided to cease actively selling and therefore sunset certain non-core products, representing, in aggregate:
•
subscription revenue of approximately $0.2 million and $0.3 million during the three months ended March 31, 2024 and 2023; and
Non-subscription advisory revenue of approximately $0.1 million and $0.8 million during the three months ended March 31, 2024 and 2023.
On March 11, 2024, we sold Board.org. Board.org’s contributions to FiscalNote through March 11, 2024 were as follows:
•
Subscription revenue of approximately $2.8 million and $3.0 million during the three months ended March 31, 2024 and 2023;
•
Run-rate revenue of approximately $15.2 million at December 31, 2023 and $12.7 million at March 31, 2023; and
•
Annual Recurring Revenue ("ARR") of approximately $14.7 million at December 31, 2023 and $12.7 million at March 31, 2023.
At the end of the first quarter of 2023 the Company had approximately 825 employees. In conjunction with the Company's product rationalization, business simplification, and cost takeout actions, the Company's full-time equivalent headcount reduced by approximately 150 from the end of the first quarter of 2023 through December 31, 2023. As a result, the Company has seen a reduction in overall costs across all operating expenses. We continue to invest for future growth. We are focused on several key growth levers, including cross-selling and upselling opportunities at existing clients, expanding our client base with a focus on enterprise and government customers, expansion into adjacent markets and deepening our offerings for regulated industries or sectors, and continuing to execute on our acquisition strategy. Several of these growth drivers require investment in and refinement of our go-to-market approach and, as a result, we may continue to incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses specific to subscription revenue.
We plan to invest a portion of the available capital resources in building innovative products, acquiring complementary businesses, attracting new customers and expanding our leadership role in the legal and regulatory information market. We drive growth both organically and through acquisitions. We regularly evaluate acquisitions and investment opportunities in complementary businesses to supplement our existing platform, enable us to enter new markets and ensure that we are well positioned to provide critical insights to the regulated sectors of the future. Past acquisitions have enabled us to deliver innovative solutions in new categories, such as global risk analysis and AI-enabled new products, and new data sets to enhance the functionality of our existing products. Strategic acquisitions will remain a core component of our strategy in the future.
Key Performance Indicators
In addition to our GAAP results further described and discussed below in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we monitor the following key performance indicators to evaluate growth trends, prepare financial projections, make strategic decisions, and measure the effectiveness of our sales and marketing efforts. Our management team assesses our performance based on these key performance indicators because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance.
Annual Recurring Revenue (“ARR”)
Approximately 90% of our revenues are subscription based, which leads to high revenue predictability. Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for subsequent periods. We use ARR as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring subscription customer contracts. We calculate ARR on a parent account level by annualizing the contracted subscription revenue, and our total ARR as of the end of a period is the aggregate thereof. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades, or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to timing of the revenue bookings during the period, cancellations, upgrades, or downgrades and pending renewals. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.
Our ARR at March 31, 2024 and December 31, 2023, was $109.6 million and $126.1 million, respectively. Excluding Board.org, our ARR at December 31, 2023 and March 31, 2023 was $111.4 and $106.2, respectively.
Run-Rate Revenue
Management also monitors Run-Rate Revenue, which we define as ARR plus non-subscription revenue earned during the last twelve months. We believe Run-Rate Revenue is an indicator of our total revenue growth, incorporating the non-subscription revenue that we believe is a meaningful contribution to our business as a whole. Although our non-subscription business is non-recurring, we regularly sell different advisory services to repeat customers. The amount of actual subscription and non-subscription revenue that we recognize over any 12-month period is likely to differ from Run-Rate Revenue at the beginning of that period, sometimes significantly. Our Run-Rate Revenue at March 31, 2024 and December 31, 2023, was $122.0 million and $139.7 million, respectively. Excluding Board.org, our Run-Rate Revenue at December 31, 2023 and March 31, 2023 was $124.5 and $120.9 million, respectively.
Net Revenue Retention (“NRR”)
Our NRR, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our NRR for a given period as ARR at the end of the period minus ARR contracted from new clients for which there is no historical revenue booked during the period, divided by the beginning ARR for the period. We calculate NRR at our parent account level. Customers from acquisitions are not included in NRR until they have been part of our condensed consolidated results for 12 months. Accordingly, the 2022 and 2023 Acquisitions are not included in our NRR for the three months ended March 31, 2023. Our calculation of NRR for any fiscal period includes the positive recurring revenue impacts of selling additional licenses and services to existing customers and the negative recognized recurring revenue impacts of contraction
and attrition among this set of customers. Our NRR may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, the timing of renewals, and our ability to retain our customers. Our calculation of NRR may differ from similarly titled metrics presented by other companies. NRR was 96% for the three months ended March 31, 2024 and 2023, respectively.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. While we believe that these non-GAAP financial measures provide useful supplemental information, non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in their financing and accounting methods, the book value of their assets, their capital structures, the method by which their assets were acquired and the manner in which they define non-GAAP measures.
Adjusted Gross Profit and Adjusted Gross Profit Margin
We define Adjusted Gross Profit as Total Revenue minus cost of revenues, before amortization of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Total Revenues.
We use Adjusted Gross Profit and Adjusted Gross Profit Margin to understand and evaluate our core operating performance and trends. We believe these metrics are useful measures to us and to our investors to assist in evaluating our core operating performance because they provide consistency and direct comparability with our past financial performance and between fiscal periods, as the metrics eliminate the non-cash effects of amortization of intangible assets that may fluctuate for reasons unrelated to overall operating performance.
Adjusted Gross Profit and Adjusted Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. They should not be considered as replacements for gross profit and gross profit margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes. Adjusted Gross Profit and Adjusted Gross Profit Margin as presented herein are not necessarily comparable to similarly titled measures presented by other companies.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items that management believes are not indicative of ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Total Revenue.
We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Quarterly Report on Form 10-Q because these non-GAAP measures are key measures used by management to evaluate our business, measure our operating performance and make strategic decisions. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful for investors and others in understanding and evaluating our operating results in the same manner as management. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for net income (loss), net income (loss) before income taxes, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business would material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may otherwise find significant. In addition, although other companies in our industry may report measures titled EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate non-GAAP financial measures, which reduces their comparability. Because of these limitations, you should consider EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP.
Key Components of Results of Operations
Revenues
We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues accounted for approximately 92% and 90% of our total revenues for the three months ended March 31, 2024 and 2023.
Subscription revenue
Subscription revenues consist of revenue earned from subscription-based arrangements that provide customers the right to use the Company’s software and products in a cloud-based infrastructure. Subscription revenues are driven primarily by the number of active licenses, the types of products and the price of the subscriptions. The Company also earns subscription revenues by licensing to customers its digital content, including transcripts, news and analysis, images, video and podcast data.
Our subscription arrangements generally have contractual terms of 12 months or more and are non-refundable regardless of the actual use of the service. Subscription revenues are recognized ratably over the non-cancellable contract terms beginning on the commencement date of each contract, which is the date our service is first made available to customers.
Advisory revenue is typically earned under contracts for specific deliverables and are non-recurring in nature, although we regularly sell different advisory services to repeat customers. One-time advisory revenues are invoiced according to the terms of the contract, usually delivered to the customer over a short period of time, during which revenues are recognized.
Advertising revenue is primarily generated by delivering advertising in our own publications (Roll Call and CQ) in both print and digital formats. Revenue for print advertising is recognized upon publication of the advertisement. Revenue for digital advertising is recognized over the period of the advertisement or, if the contract contains impression guarantees, based on delivered impressions.
Books revenue is recognized when the product is shipped to the customer, which is when control of the product transfers to the customer. Shipping and handling costs are treated as a fulfillment activity and are expensed as incurred.
Events revenue is deferred and only recognized when the event has taken place and is included in other revenues.
Cost of revenues
Cost of revenues primarily consists of expenses related to hosting our service, the costs of data center capacity, amortization of developed technology and capitalized software development costs, certain fees paid to various third parties for the use of their technology, services, or data, costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with providing professional services and other direct costs of production. Also included in cost of revenues are our costs related to the preparation of contracted advisory deliverables, as well as costs to develop, publish, print and deliver our publications underlying our books revenue.
Research and development
Research and development expenses include the costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with the creation and testing of the products we offer, related software subscriptions, consulting and contractor fees and allocated overhead.
Sales and marketing
Sales and marketing expenses consist primarily of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for our sales and marketing staff, including commissions, related software subscriptions, consulting fees, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities.
Editorial
Editorial expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for the editorial team involved in acquiring, creating, and distributing content and allocated overhead.
General and administrative
General and administrative expenses are primarily related to our executive offices, finance and accounting, human resources, legal, internal operations and other corporate functions. These expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses, along with professional fees, depreciation and other allocated overhead.
Amortization of intangible assets
Amortization expense relates to our finite-lived intangible assets, including developed technology, customer relationship, databases and tradenames. These assets are amortized over periods of between three and twenty years. Finite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value. No impairment of intangible assets has been identified during any financial period included in our accompanying condensed consolidated financial statements.
Impairment of goodwill
Goodwill is tested for impairment when indicators are present, and if impaired are written down to fair value. An impairment of goodwill has been identified for the three months ended March 31, 2023 and is included in our accompanying condensed consolidated financial statements.
Transaction costs, net
Transaction costs consist of acquisition related costs (including due diligence, accounting, legal, and other professional fees, incurred from acquisition activity), fair value adjustments to contingent consideration due to sellers, and non-capitalizable costs.
Interest expense, net
Interest expense, net, consists of expense related to interest on our borrowings, the amortization and write off of debt issuance costs and original discount, and interest related to certain derivative instruments.
Fair value of financial instruments
The fair value of warrants, debt accounted for under the fair value option, and derivative liabilities are accounted for in accordance with ASC 815, ASC 825, and ASC 480. These financial instruments are marked to market each reporting period in accordance with ASC 820
with all gains and losses being recorded within the condensed consolidated statement of operations and comprehensive loss, with the exception of any gains or losses recorded due to changes in the fair value of instrument-specific credit risk being recorded as a component of accumulated other comprehensive income in the condensed consolidated balance sheets.
Income taxes
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence.
Results of Operations
The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our condensed consolidated financial statements. The following discussion should be read in conjunction with those condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
Comparison of the Consolidated Results for the Three Months Ended March 31, 2024 and March 31, 2023
The following table presents our results of operations for the periods indicated:
Three Months Ended March 31,
Change
(In thousands)
2024
2023
$
%
Revenues:
Subscription
$
29,626
$
28,467
$
1,159
4.1
%
Advisory, advertising, and other
2,486
3,062
(576
)
(18.8
)%
Total revenues
32,112
31,529
583
1.8
%
Operating expenses:
Cost of revenues
7,244
8,937
(1,693
)
(18.9
)%
Research and development
3,480
5,120
(1,640
)
(32.0
)%
Sales and marketing
9,415
12,298
(2,883
)
(23.4
)%
Editorial
4,660
4,265
395
9.3
%
General and administrative
16,076
18,221
(2,145
)
(11.8
)%
Amortization of intangible assets
2,685
2,814
(129
)
(4.6
)%
Impairment of goodwill
-
5,837
(5,837
)
0
%
Transaction (gains) costs, net
(4
)
1,408
(1,412
)
(100.3
)%
Total operating expenses
43,556
58,900
(15,344
)
(26.1
)%
Operating loss
(11,444
)
(27,371
)
15,927
(58.2
)%
Gain on sale of business
(71,599
)
-
(71,599
)
100.0
%
Interest expense, net
7,362
6,681
681
10.2
%
Change in fair value of financial instruments
527
(14,680
)
15,207
(103.6
)%
Other expense (income), net
241
(129
)
370
NM
Net income (loss) before income taxes
52,025
(19,243
)
71,268
NM
Provision from income taxes
1,426
30
1,396
NM
Net income (loss)
$
50,599
$
(19,273
)
$
69,872
NM
Revenue:
Subscription revenue
Subscription revenue of $29.6 million for the three months ended March 31, 2024 increased $1.2 million, or 4%, from $28.5 million for the three months ended March 31, 2023.
The comparability of our revenues between periods was impacted by the Acquisitions described under “Factors Impacting the Comparability of Our Results of Operations” above. The table below presents the primary items that impacted the comparability of our subscription revenues between periods.
The increase in subscription revenue is largely due to having a full quarter of subscription revenue from the Dragonfly acquisition while the first quarter of 2023 only includes Dragonfly subscription revenue from January 27, 2023 (the acquisition date) to March 31, 2023. This is partially offset by the reduction in revenue in the first quarter 2024 from the sale of Board.org on March 11, 2024.
Advisory, advertising, and other revenue
Advisory, advertising, and other revenue was $2.5 million for the three months ended March 31, 2024, as compared to $3.1 million for the three months ended March 31, 2023. The decrease of $0.6 million, or 19%, was primarily due to timing of revenue recognition for certain contracts combined with movement away from certain product lines.
Revenue by Geography
The below tables present our revenues split by geographic region for the periods presented:
Three Months Ended March 31,
Change
(In thousands)
2024
2023
$
%
North America
$
25,997
$
26,152
$
(155
)
(0.6
)%
Europe
5,269
4,100
1,169
28.5
%
Australia
303
289
14
4.8
%
Asia
543
988
(445
)
(45.0
)%
Total revenues
$
32,112
$
31,529
$
583
1.8
%
Revenues by geography are determined based on the region of the FiscalNote contracting entity, which may be different than the region of the customer. North America revenues decreased primarily for the reasons stated above. Revenues outside of North America increased primarily due to our acquisitions of Dragonfly (included in Europe).
Cost of revenues
Cost of revenues was $7.2 million for the three months ended March 31, 2024, as compared to $8.9 million for the three months ended March 31, 2023. The decrease of $1.7 million, or 19%, was primarily attributable to a decrease of $0.8 million from sunset products, and $0.7 million decrease from workforce planning actions made primarily throughout the second half of 2023.
Research and development
Research and development expense was $3.5 million for the three months ended March 31, 2024 as compared to $5.1 million for the three months ended March 31, 2023. The decrease of $1.6 million, or 32%, was primarily attributable to workforce planning actions made throughout the second half of 2023.
Sales and marketing
Sales and marketing expense was $9.4 million for the three months ended March 31, 2024 as compared to $12.3 million for the three months ended March 31, 2023. The decrease of $2.9 million, or 23%, was primarily attributable to a decrease in $0.5 million from sunset products, and the remainder primarily attributable to workforce planning actions made throughout the second half of 2023.
Editorial expense
Editorial expense was relatively flat at $4.7 million for the three months ended March 31, 2024 as compared to $4.3 million for the three months ended March 31, 2023.
General and administrative
General and administrative expense was $16.1 million for the three months ended March 31, 2024 as compared to $18.2 million for the three months ended March 31, 2023. The decrease of $2.1 million, or 12%, was primarily attributable to a decrease of $0.5 million from sunset products, $0.5 million reduction in public company insurance costs, with the remainder primarily attributable to workforce planning actions made throughout the second half of 2023.
Impairment of goodwill
Impairment of goodwill was $5.8 million recognized during the first quarter of 2023 related to the impairment of goodwill in the ESG reporting unit.
Amortization of intangibles
Amortization of intangibles was $2.7 million for the three months ended March 31, 2024 as compared to $2.8 million for the three months ended March 31, 2023.
Transaction (gains) costs, net
Transaction gains were $0.0 million for the three months ended March 31, 2024, as compared to transaction costs of $1.4 million for the three months ended March 31, 2023. The change of $1.4 million relates to a decrease of $1.2 million in non-capitalized costs related to business acquisitions primarily related to the acquisition of Dragonfly combined and $0.2 million from non-capitalizable business combination costs.
Interest expense was $7.4 million for the three months ended March 31, 2024 as compared to $6.7 million for the three months ended March 31, 2023. The increase in interest expense of $0.7 million was primarily attributable to the new GPO note partially offset by interest income attributable to our investments.
Change in fair value of financial instruments
Change in fair value of financial instruments was a $0.5 million loss for the three months ended March 31, 2024 as compared to a $14.7 million gain for the three months ended March 31, 2023. The change in financial instruments of $15.2 million is primarily related to $13.2 million of less gain resulting of the fair value adjustment of the warrant liabilities that were assumed in connection with the Business Combination combined with the changes of $2.0 million in the Dragonfly Seller Convertible Notes, New GPO Note, and the Era Convertible Notes.
Income tax provision (benefit)
Income tax provision was $1.4 million for the three months ended March 31, 2024 as compared to an income tax provision of less than $0.1 million for the three months ended March 31, 2023. The change of $1.4 million in income tax was primarily driven by the discrete tax charge of $1.7 million for the impact of the sale of Board.org.
Certain Non-GAAP Measures
We present certain non-GAAP financial measures including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA. Our management team assesses our performance based on these non-GAAP measures because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance. We believe these measures are useful for investors for the same reasons. Investors should be aware that these measures are not a substitute for GAAP financial measures or disclosures. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure.
Adjusted Gross Profit and Adjusted Gross Profit Margin
The following table presents our calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin for the periods presented:
Three Months Ended March 31,
(In thousands)
2024
2023
Total revenues
$
32,112
$
31,529
Costs of revenue
(7,244
)
(8,937
)
Amortization of intangible assets
2,428
2,597
Adjusted Gross Profit
$
27,296
$
25,189
Adjusted Gross Profit Margin
85
%
80
%
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
The following table presents our calculation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the periods presented:
Three Months Ended March 31,
(In thousands)
2024
2023
Net loss
$
50,599
$
(19,273
)
Provision from income taxes
1,426
30
Depreciation and amortization
5,417
5,747
Interest expense, net
7,362
6,681
EBITDA
64,804
(6,815
)
Gain on sale of business (a)
(71,599
)
-
Stock-based compensation
6,175
6,506
Change in fair value of financial instruments (b)
527
(14,680
)
Other non-cash charges (c)
45
5,873
Acquisition and disposal related costs (d)
704
1,222
Employee severance costs (e)
107
369
Non-capitalizable debt raising costs
254
206
Business Combination with DSAC (f)
-
184
Loss contingency (g)
-
168
Costs incurred related to the Special Committee (h)
200
-
Adjusted EBITDA
$
1,217
$
(6,967
)
Adjusted EBITDA Margin
3.8
%
(22.1
)%
(a)
Reflects the gain on disposal from the sale of Board.org on March 11, 2024.
(b)
Reflects the non-cash impact from the mark to market adjustments on our financial instruments.
(c)
Reflects the non-cash impact of the following: (i) charge of $49 in the first quarter of 2024 related to the unrealized loss on investments; (ii) gain of $4 in the first quarter of 2024 from the change in fair value related to the contingent consideration and contingent compensation related to the 2021, 2022, and 2023 Acquisitions (iii) impairment of goodwill of $5,837 in the first quarter of 2023, (iv) loss from equity method investment of $34 in the first quarter of 2023; and (v) charge of $2 in the first quarter of 2023 from the change in fair value related to the contingent consideration and contingent compensation related to the 2021, 2022, and 2023 Acquisitions.
(d)
In 2024 reflects the costs incurred related to the sale of Board.org, principally consisting of accounting, tax, and legal fees. In 2023 reflects the costs incurred to identify, consider, and complete business combination transactions consisting of advisory, legal, and other professional and consulting costs.
(e)
Severance costs associated with workforce changes related to business realignment actions.
Includes non-capitalizable transaction costs incurred within one year of the Business Combination with DSAC.
(g)
Reflects accounting and legal costs incurred associated with the settlement with GPO FN Noteholder LLC totaling $168 in the first quarter of 2023.
(h)
Reflects costs incurred related to the Special Committee.
Liquidity and Capital Resources
Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company funded operations through raising equity and debt. At March 31, 2024, the Company’s cash, cash equivalents, restricted cash, and short-term investments was $44.5 million compared to $24.4 million at December 31, 2023.
The Company had a negative working capital balance of $38.5 million (excluding cash and short-term investments) at March 31, 2024 and had an accumulated deficit of $765.8 million and $816.4 million as of March 31, 2024 and December 31, 2023, respectively, and has incurred net losses of $21.0 million (excluding the gain on sale from business) and $19.3 million for the three months ended March 31, 2024 and 2023, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development.
While the Company’s future projections indicate that the Company will have sufficient liquidity to meet its obligations in the normal course of business within one year from the date of this filing, our ability to maintain our minimum cash requirement, fund our future cash interest requirements under our senior term loan and fund our operating expenses and capital expenditure requirements will depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond our control. The Company has implemented various cost saving measures throughout 2023 and into 2024 and is actively seeking additional sources of capital. Volatility in the credit markets may have an adverse effect on our ability to obtain debt financing. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.
Our historical financing activities included borrowings under senior secured credit facilities, senior secured promissory notes, convertible debt, and preferred share issuances. Our principal debt plus paid-in kind interest outstanding as of March 31, 2024 and December 31, 2023 consisted of the following (excluding any fair value adjustments and debt discounts, as applicable):
(In thousands)
March 31, 2024
December 31, 2023
Senior Term Loan
$
92,891
$
158,228
New GPO Note
49,496
48,575
Convertible Notes
14,557
14,052
Dragonfly Seller Convertible Notes
12,360
12,223
Era Convertible Note
6,301
5,500
Aicel Convertible Note
1,114
1,156
PPP Loan
117
144
Total Principal plus PIK Outstanding
$
176,836
$
239,878
Senior Term Loan
In connection with the closing of the business combination with DSAC, FiscalNote entered into a $150.0 million senior credit agreement (the “Credit Agreement”) with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC (together the “Senior Lenders”). The Credit Agreement also provides for an uncommitted incremental loan facility totaling $100.0 million available upon notice if the Company meets certain financial growth criteria and other customary requirements (the “Incremental Term Facility”) (collectively the “Senior Credit Facility”). The annual interest of the Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum and (ii) 9.0% payable monthly, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. The Senior Credit Facility will mature on July 29, 2027. Pursuant to Amendment No. 4, beginning on August 15, 2026, the Senior Term Loan must be repaid in even amounts on a monthly basis over the remaining 12 months, with the final balance due on July 15, 2027. Borrowings under our Senior Credit Facility are collateralized by substantially all assets of the borrowers and guarantors party thereto.
On March 17, 2023, the Company, entered into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 1 provided for the extension of an incremental term loan by one of the lenders to the borrowers under the facility in the principal amount of $6.0 million which was received by the Company on March 31, 2023, on the same terms as the existing term loans (the “Incremental Facility”).
On May 16, 2023, the Company, entered into Amendment No. 2 ("Amendment No. 2") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 2 joined Dragonfly Eye Limited (“Dragonfly”) and Oxford Analytica Limited (“Oxford Analytica”), each a wholly owned subsidiary of the Company, as Guarantors under the Credit Agreement.
On August 3, 2023, the Company entered into Amendment No. 3 ("Amendment No. 3") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 3 provides for: (a) the extension of the July 2023 Deferred Fee from July 29, 2023 to July 29, 2024, (b) the increase of the July 2023 Deferred Fee from $1,734 to $2,034, and (c) the revision to the minimum ARR and adjusted EBITDA covenants (as both are defined in the Credit Agreement).
In connection with the completion of the sale of Board.org on March 11, 2024, the Company also entered into Amendment No. 4 to the Credit Agreement (the “Amendment No. 4”), pursuant to which, among other things, the lenders consented to the release the liens on Board.org’s assets and permitted the consummation of the sale in exchange for the permanent retirement of $65.7 million of term loans under the Credit Agreement. The Company also made a payment of $1.3 million and $5.8 million of related prepayment and exit fees,
respectively. Amendment No. 4 also requires that upon receipt of any earn-out payment pursuant to the equity purchase agreement underlying the sale of Board.org, the Company will prepay outstanding obligations under the Credit Agreement in an amount equal to 70% of the net proceeds received from such earn-out payment, together with a prepayment fee and an exit fee, equal to 5.75% of the amount of such prepayment.
In addition, Amendment No. 4 extended the commencement of amortization payments under the Credit Agreement from August 15, 2025 to August 15, 2026, with such payments to fully amortize the term loans by the maturity date of July 15, 2027. Amendment No. 4 also increased the Company’s minimum liquidity covenant to $22.5 million and modified the Company’s minimum ARR and adjusted EBITDA in order to appropriately reflect the sale of Board.org and the absence of its future contributions to the Company’s overall financial performance and position.
During the three months ended March 31, 2024 and 2023, we made cash interest payments totaling $5.3 million and $4.7 million related to the Senior Term Loan.
The Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The Senior Term Loan contains customary negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. In addition to the negative covenants, there were four financial covenants in place at March 31, 2024: a minimum cash balance requirement, minimum ARR requirement, an adjusted EBITDA requirement (as defined in the Credit Agreement, as amended) and a capital expenditure limitation. At March 31, 2024, the Company was in compliance with all of the covenants. Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.
See Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein.
New GPO Note
On June 30, 2023 (the “Subscription Date”), the Company entered into an Exchange and Settlement Agreement (the “Exchange and Settlement Agreement”) with GPO FN Noteholder LLC (the “Investor”) pursuant to which (i) the Investor returned 5,881,723 shares of Class A Common Stock held by the Investor to the Company for cancellation, (ii) the Company issued to the Investor a subordinated convertible promissory note in an initial principal amount of $46.8 million (the “New GPO Note”), and (iii) the parties agreed to a mutual settlement and release of all claims (including, but not limited to, any claims by the Investor for additional shares or money damages resulting from the entry into the Merger Agreement, relating to or arising from the conversion of the Amended and Restated Senior Secured Subordinated Promissory Note, dated December 29, 2020, previously issued by a subsidiary of the pre-business combination FiscalNote Holdings, Inc. to the Investor. The exchange and settlement are non-cash exchanges in the condensed consolidated statement of cash flows. The before mentioned transactions closed on July 3, 2023.
The New GPO Note will mature on July 3, 2028, unless earlier redeemed or repurchased by the Company or converted in accordance with the terms thereof. The New GPO Note bears interest at a rate of 7.50% per annum payable quarterly in arrears, as follows: (i) for the first year following the date of issuance, interest will be payable in kind by adding interest to the principal amount of the New GPO Note; and (ii) for any period thereafter, interest will be payable in cash or freely tradeable shares of Class A Common Stock, at the Company’s option, with the value per share determined with reference to the trailing 30-day volume weighted average trading price prior to the interest payment date, subject to certain exceptions under which the Company will be permitted to pay PIK Interest.
The New GPO Note is subordinate to the Company’s obligations under its New Senior Term Loan which limits certain actions that the Company and the Investor may take under the New GPO Note. At any time prior to the July 3, 2028, the Investor is entitled to convert all or any portion of the principal amount of the New GPO Note and accrued interest thereon into shares of Class A Common Stock at $8.28 per share (adjusted to $6.89 on April 11, 2024 pursuant to the terms of the New GPO Note as a result of the issuance of the Additional Fee Shares to Era as described in Note 18, "Subsequent Events"). The New GPO Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, of the New GPO Note is redeemable by the Company in whole or in part based on certain conditions as defined in the New GPO Note.
The Company elected to account for the New GPO Note using the fair value option. The New GPO Note was recorded at its June 30, 2023 acquisition date fair value of $36.6 million. The Company initially recorded a loss contingency of $11.7 million in its fiscal year 2022 financial statements representing the difference between the fair value of the shares returned by the Investor and the fair value of the New GPO Note on the date of exchange. With the execution of the Exchange and Settlement Agreement and New GPO Note, the Company recorded an additional loss on settlement with GPO of $3.5 million in the condensed consolidated statement of operations for the year ended December 31, 2023.
Convertible Notes
Four convertible noteholders with an aggregate principal amount (including accrued paid in kind interest) of $10.5 million as of the Closing Date elected not to convert their notes into shares of capital stock of the Company in conjunction with Closing. The convertible notes are unsecured, earn payable in kind interest of 15% per annum, payable in kind monthly, and mature in 2025.
Dragonfly Seller Convertible Note
On January 27, 2023, we acquired Dragonfly and financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Note is subordinate to our New Senior Credit Facility, accrues interest of 8% per annum, payable in kind or in cash, and matures in January 2028.
On December 8, 2023 and January 5, 2024, we issued convertible notes in connection with the Company's strategic commercial partnership with Era. The Era Convertible Notes are contractually subordinated to the Company's obligations under its senior secured indebtedness, has cash interest at a rate equal to the applicable federal rate published by the Internal Revenue Service beginning on the six-month anniversary of the issuance date, and matures in December 2027. The Company elected to account for the Era Convertible Note using the fair value option.
Aicel Convertible Note
On July 29, 2022, we acquired Aicel Technologies and assumed its $1.0 million convertible note. The Aicel Convertible Note is subordinate to our New Senior Credit Facility, accrues interest of 1% per annum, payable in kind monthly, and matures in July 2027.
PPP Loan
The PPP Loan requires monthly principal and interest payments of approximately $9 thousand until maturity in 2027.
Capital expenditures
Capital expenditures primarily consist of purchases of capitalized software costs and property and equipment. Our capital expenditures program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment to grow our business. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. Our total capital expenditures were $1.6 million and $1.9 million for the three months ended March 31, 2024 and 2023, respectively.
Cash Flow Summary
The following tables summarizes our cash flows for the periods presented:
Three Months Ended March 31,
2024
2023
Net cash provided by (used in):
Operating activities
$
2,741
$
(12,826
)
Investing activities
$
89,192
$
(6,879
)
Financing activities
$
(71,798
)
$
6,237
Effect of exchange rates on cash
$
(119
)
$
(251
)
Net change in cash and cash equivalents
$
20,016
$
(13,719
)
Operating activities
Cash used in operating activities consists of net loss adjusted for certain non-cash items including depreciation and amortization, stock based compensation, changes in fair value of warrant liabilities, non-cash interest expense, and gain on disposal, as well as the effect of changes in working capital and other activities.
Cash provided by operating activities in the three months ended March 31, 2024 was $2.7 million, a change of $15.6 million from cash used in operating activities of $12.8 million compared to the three months ended March 31, 2023. The primary factors affecting our net operating cash flows during this period was our net income of $50.6 million, which includes non-cash income and expense items totaling $55.4 million, including a gain on disposal of $71.6 million, non-cash and paid-in kind interest expense of $2.8 million, stock-based compensation expense of $6.2 million, a loss due to the change in fair value of financial instruments of $0.5 million, non-cash lease expense of $0.3 million, amortization and depreciation of $6.4 million, and the effect of changes in operating assets and liabilities that resulted in cash inflows of $7.5 million.
Net cash used in operating activities was $12.8 million during the three months ended March 31, 2023. The primary factors affecting our net operating cash flows during this period was our net loss of $19.3 million, which includes non-cash expenses items totaling $8.4 million, including impairment of goodwill of $5.8 million, non-cash interest expense of $2.0 million, stock-based compensation expense of $6.5 million, a gain due to the change in fair value of financial instruments of $14.1 million, non-cash lease expense of $1.8 million, and amortization and depreciation of $6.4 million, and the effect of changes in operating assets and liabilities that resulted in cash outflows of $1.6 million.
Investing activities
Net cash provided by investing activities was $89.2 million for the three months ended March 31, 2024 compared to net cash used in investing activities of $6.9 million in the three months ended March 31, 2023. Net cash provided by investing activities in the three months ended March 31, 2024 primarily consisted of cash proceeds from the sale of a business of $90.9 million partially offset by cash paid of $1.7 million of capital expenditures primarily related to software development costs. Net cash used in investing activities in the three months ended March 31, 2023 primarily consisted of cash paid for acquisitions, net of cash acquired of $5.0 million and cash paid of $1.9 million of capital expenditures primarily related to software development costs.
Financing activities
Net cash used in financing activities in the three months ended March 31, 2024 was $71.8 million, compared to net cash provided by financing activities of $6.2 million for the three months ended March 31, 2023. Net cash used in financing activities during the three months ended March 31, 2024 primarily consisted of payments of long-term debt and deferred financing costs primarily related to Amendment 4 to
the Credit Agreement and the sale of Board.org of $72.8 million partially offset by the proceeds from the issuance of Era Convertible Notes of $0.8 million and proceeds from the issuance of stock options and ESPP purchases of $0.2 million. Net cash provided by financing activities during the three months ended March 31, 2023 primarily consisted of $6.0 million from Amendment 1 to the New Senior Term Loan and $0.3 million from the proceeds from the exercise of stock options.
Commitments and Contingencies
Our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 5 “Leases” to the condensed consolidated financial statements included elsewhere herein. For more information regarding our debt service obligations, see Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein.
Off-Balance Sheet Arrangements
During the periods presented, we did not engage in any off-balance sheet financing activities or other arrangements that have or are reasonably likely to have a current or future material effect on our financial condition or results of operations.
Recently Issued Accounting Pronouncements
For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, if any, refer to Note 1 of the notes to our financial statements included in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates and Policies
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
We believe that of our significant accounting policies, which are described in Note 1 “Summary of Business and Significant Accounting Policies” to our condensed consolidated financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.
There were no significant and material changes in our critical accounting policies and use of estimates during the three months ended March 31, 2024, as compared to those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates and Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 15, 2024.
Revenue Recognition
Subscription revenues are recurring in nature and include subscription fees from customers accessing our company’s cloud-based infrastructure, digital content, transcripts, news and analysis, images, video and podcast data. Advisory, advertising and other revenue includes revenues derived from non-recurring activities where we deliver specific deliverables for clients as well as where we provide advertising in our own publications (Roll Call and CQ) in both print and digital formats, the sale of various publications, and sponsorship revenue for events organized by the Company. Our company’s subscription arrangements are generally non-cancelable and do not contain refund-type provisions. Our company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised goods or services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services.
Our company’s contracts with customers may include promises to transfer multiple services. For these contracts, our company accounts for individual promises separately if they are distinct performance obligations. Determining whether services are considered distinct performance obligations may require significant judgment. Judgment is also required to determine the standalone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when our company does not sell the services separately, our company determines the SSP using available information, including market conditions and other observable inputs.
Costs Capitalized to Obtain Revenue Contracts
Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years, which, although longer than the typical initial contract period, reflects the average period of benefit, including expected contract renewals. Significant judgment is required in arriving at this average period of benefit. Therefore, we evaluate both qualitative and quantitative factors, including the estimated life cycles of our offerings and our customer attrition.
Business Combinations
Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to tangible and intangible assets acquired and liabilities assumed and pre-acquisition contingencies. We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets.
Critical estimates in valuing certain of the intangible assets and goodwill we have acquired are:
•
future expected cash flows from subscription and content contracts, other customer contracts and acquired developed technologies, and trade names;
•
historical and expected customer attrition rates and anticipated growth in revenue from acquired customers;
assumptions about the period of time the acquired trade name will continue to be used in our offerings;
•
discount rates;
•
uncertain tax positions and tax-related valuation allowances assumed; and
•
fair value of earnout consideration.
Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.
Goodwill and Intangible Assets
Significant judgment is required to estimate the fair value of our reporting units. Accordingly, we typically obtain the assistance of third-party valuation specialists for significant reporting units for purposes of determining whether there is goodwill impairment. The fair value estimates are based on available historical information and on future expectations. We typically estimate the fair value of these assets using the income method, which is based on the present value of estimated future cash flows attributable to the respective assets. The valuations used to establish and to test goodwill for impairment are dependent on a number of significant estimates and assumptions, including macroeconomic conditions, overall growth rates, competitive activities, cost containment and margin progression, Company business plans and the discount rate applied to cash flows.
Goodwill is not amortized, but tested at least annually for impairment. Our ongoing annual impairment testing for goodwill occurs on October 1st. Assumptions used in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections and operating plans. We believe these estimates and assumptions are reasonable and comparable to those that would be used by other marketplace participants. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. For example, future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets, including discount and tax rates or future cash flow projections, could result in significantly different estimates of the fair values. In addition, changes to or a failure to achieve business plans or deterioration of macroeconomic conditions could result in reduced cash flows or higher discount rates, leading to a lower valuation that would trigger an impairment of the goodwill of these businesses.
If the fair value of the reporting unit is less than its carrying value, that difference represents an impairment.
Determining the useful life of an intangible asset also requires judgment. Acquired intangible assets (customer relationships, patents and technologies, and tradenames) are expected to have determinable useful lives. Finite-lived intangible assets are amortized to expense over their estimated lives. An impairment assessment for finite-lived intangibles is only required when an event or change in circumstances indicates that the carrying amount of the asset may not be recoverable.
The most significant assumptions utilized in the determination of the estimated fair values of our reporting units are the net sales and earnings growth rates (including residual growth rates) and discount rate. The residual growth rate represents the expected rate at which the reporting units are expected to grow beyond the shorter-term business planning period. The residual growth rate utilized in our fair value estimates is consistent with the reporting unit operating plans and approximates expected long-term market growth rates. The residual growth rate is dependent on overall market growth rates, the competitive environment, inflation, and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth or an increased competitive environment. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors.
Future sustained depression of our stock price may indicate that a triggering event has occurred that may require us to reassess our goodwill for impairment and may trigger future impairment charges of one or all of our reporting units. Further, changes in operating plans or adverse changes in the business or in the macroeconomic environment in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of our reporting units.
Due to the decline in the Company’s stock price and market capitalization in the first quarter of 2023, and the underperformance of the Company’s ESG reporting unit compared to internal projections, the Company performed a quantitative goodwill impairment assessment as of March 31, 2023. This quantitative assessment resulted in all the goodwill in our ESG reporting unit being impaired; accordingly, a non-cash impairment charge of $5.8 million was recognized during the three months ended March 31, 2023. Prior to the quantitative goodwill impairment the Company tested the recoverability of its long-lived assets, and concluded that such assets were not impaired.
See Note 7, “Goodwill” to the condensed consolidated financial statements for additional discussion on goodwill.
Warrant Liabilities
The Company evaluates its financial instruments, including its outstanding warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company has outstanding public and private warrants, both of which do not meet the criteria for equity classification and are accounted for as liabilities. Accordingly, the Company recognizes the warrants as liabilities at fair value and adjusts the warrants to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statement of operations.
The fair value of the public warrants is estimated based on the quoted market price of such warrants. The fair value of the private warrants is estimated using a binomial option pricing model.
The Company accounts for certain of its debt obligations at fair value. Accordingly, the Company recognizes the debt obligations upon inception at fair value. The debt obligations are subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statement of operations. The Company estimates the fair value of the debt obligation using a lattice model.
Deferred Taxes and Valuation Allowance
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed.
Incremental Borrowing Rate Used to Calculate Lease Balances
As most of our leases do not provide an implicit rate, we use our incremental borrowing rate as the discount rate to measure the operating lease assets and liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease and includes considerations of both the market, our current capital structure and exiting debt borrowings. We perform an incremental borrowing rate analysis on a quarterly basis, or upon execution of any individually material agreement, to ensure that the rates being applied to newly acquired leases are still accurate.
Item 3. Quantitative and Qualitative Disclosures About Market Risks.
We are exposed to market risks in the ordinary course of our business. These risks primarily consist of inflation risk and fluctuations in interest rates and foreign currency exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.
Foreign Currency Exchange Risk
We use the U.S. Dollar ("USD") as our reporting currency. Our local subsidiaries transact generally in their local currency, considered the functional currency for that subsidiary. Our foreign currency exchange rate risk is related to translation of our assets and liabilities from the subsidiaries' functional currencies to USD. These adjustments are recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound Sterling and Australian Dollar. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States as well as the European Union, United Kingdom, Australia, South Korea, and India. Our results of operations and cash flows in the future may be adversely affected due to an expansion of non-U.S. dollar denominated contracts, growth of our international entities and changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our cash denominated in foreign currency. To date, we have not engaged in any hedging strategies. As our international operations grow, we will continue to reassess our approach to manage the risk relating to fluctuations in currency rates.
Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenue for the three months ended March 31, 2024, was negatively impacted by approximately 1.0% compared to the three months ended March 31, 2023.
Interest Rate Risk
We are subject to market risk associated with changing interest rates within our variable rate Senior Term Loan. Our exposure to changes in interest rates is associated with the Prime Rate.
As of March 31, 2024, we had outstanding borrowings on our Senior Term Loan of $92.9 million, which bears cash interest at a floating rate based on the Prime Rate plus an applicable margin. At March 31, 2024, the interest rate on our Senior Term Loan was 13.50%. Assuming no change in the outstanding borrowings on our Senior Term Loan, we estimate that a one percentage point increase in the Prime Rate would increase our annual cash interest expense by approximately $0.9 million.
Inflation Risk
Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our business.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Disclosure Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2024, due to the material weaknesses identified in the prior year, our disclosure controls and procedures were not effective as of March 31, 2024. Notwithstanding the material weaknesses, our management has concluded that the financial statements included elsewhere in this report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.
Changes in Internal Control over Financial Reporting
Other than the material weaknesses identified in prior year and material weakness remediation activities, there were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal or regulatory proceedings, including intellectual property claims, commercial contract matters or employment-related disputes. Such cases may raise complex factual and legal issues, may subject us to material risks and uncertainties, could require significant management time and corporate resources to defend, could result in significant media coverage and negative publicity, and could be harmful to our reputation and our brand. We are not currently a party to any litigation or regulatory proceeding that we expect to have a material adverse effect on our business, results of operations, financial conditions or cash flows.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 15, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
Other than as reported on each of our Current Reports on Form 8-K, we did not have any unregistered sales of equity securities during the three months ended March 31, 2024.
Use of Proceeds
Not applicable
Purchase of Equity Securities
We did not repurchase shares of our common stock during the three months ended March 31, 2024.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
In the first quarter of 2024, the Company effectuated an internal reorganization intended to, among other matters, streamline operations, increase efficiency, and accelerate progress against its product roadmap and other strategic objectives. In light of the reorganization, the Board of Directors determined on May 8, 2024 that the Company’s “executive officers,” as defined in Rule 3b-7 under the Exchange Act, are: Tim Hwang (Chairman, Chief Executive Officer and Co-Founder); Gerald Yao (Chief Strategy Officer, Global Head of ESG and Co-Founder); Josh Resnik (President and Chief Operating Officer); Jon Slabaugh (Chief Financial Officer and SVP of Corporate Development); and Todd Aman (SVP, General Counsel and Secretary). Messrs. Vladimir Eidelman (Chief Technology Officer) and Richard Henderson (Chief Revenue Officer) were reclassified as non-executive officers, although their roles and responsibilities remain unchanged.
On May 8, 2024, our board of directors approved a new form of indemnification agreement (“Indemnification Agreement”) which we expect to enter into with our directors and officers to supersede any indemnification agreements currently in effect. The Indemnification Agreement provides for indemnification and advancements of certain expenses and costs relating to claims, suits or proceedings arising from each of our director or executive officer’s service to the Company, or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law. The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the Indemnification Agreement, a copy of which is filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q and is hereby incorporated by reference.
In addition, on May 8, 2024, our board of directors approved a modification to our non-employee director compensation program. Pursuant to the modification, in lieu of the annual cash retainer otherwise owed to a non-employee director on a quarterly basis, such non-employee director can elect to receive shares of our Class A common stock, par value $0.0001 per share. A non-employee director’s election to receive shares of Class A common stock will apply for all payments with respect to the annual cash retainer for a given year. The terms of our non-employee director compensation program are otherwise unchanged and are included in our Annual Proxy Statement filed on April 12, 2024.
Insider Trading Arrangements
Tim Hwang, the Company’s Chairman, Chief Executive Officer and Co-Founder, adopted a trading plan on March 20, 2024, and Gerald Yao, the Company’s Chief Strategy Officer, Global Head of ESG, and Co-Founder, adopted a trading plan on March 19, 2024 (each, a "Trading Plan"). Each Trading Plan is intended to satisfy the Rule 10b5-1 affirmative defense. Mr, Hwang's Trading Plan covers the disposition of up to 25,000 shares per month of the Company’s Class A common stock, and will terminate on May 30, 2025, unless earlier
terminated in accordance with its terms. Mr. Yao's Trading Plan covers the disposition of up to 2,750 shares per month of the Company's Class A common stock, and will terminate on May 30, 2025, unless earlier terminated in accordance with its terms.
Item 6. Exhibits.
Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).
Exhibit
Number
Description
Incorporation by Reference (where a report is indicated below, that document has been previously filed with the SEC and the applicable exhibit is incorporated by reference thereto)
2.1
Agreement and Plan of Merger, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).
First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).
Warrant Agreement, dated as of October 28, 2020, by and among Duddell Street Acquisition Corp ad Continental Stock Transfer & Trust Company, as warrant agent.
Form of Restricted Stock Agreement, dated as of March 25, 2022, pursuant to the Membership Interest Purchase Agreement, dated as of November 19, 2021, by and among FiscalNote, Inc., the unitholders listed on the Appendix 1 thereto and Legacy FiscalNote.
Purchase Agreement, dated as of March 11, 2024, by and between the Registrant, FiscalNote, Inc. Exec Connect Intermediate LLC and FiscalNote Boards LLC.
Amendment No. 4 to Second Amended and Restated Credit and Guaranty Agreement by and among FiscalNote, Inc., CQ-Roll Call, Inc. and VoterVoice, L.L.C. as Borrowers, the Company, FiscalNote Intermediate Holdco, Inc., Fireside 21, LLC, Factsquared, LLC, The Oxford Analytica International Group, LLC, Oxford Analytica Inc., Predata, Inc., Curate Solutions, Inc., Frontier Strategy Group LLC, Oxford Analytica Limited, Dragonfly Eye Limited and Timebase PTY Ltd, as Guarantors, Runway Growth Finance Corp., as administrative agent and collateral agent, and each lender party thereto.
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
Submitted electronically with this report.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
Submitted electronically with this report.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
Submitted electronically with this report.
+ Indicates a management contract or compensatory plan.
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
FISCALNOTE HOLDINGS, INC.
Date: May 10, 2024
By:
/s/ Jon Slabaugh
Name: Jon Slabaugh
Title: Chief Financial Officer
Date: May 10, 2024
By:
/s/ Timothy Hwang
Name: Timothy Hwang
Title: Chief Executive Officer
41
EX-10.3
2
note-ex10_3.htm
EX-10.3
EX-10.3
Execution Version
FISCALNOTE HOLDINGS, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is entered into, effective as of the 2nd day of May 2024, by and between FiscalNote Holdings, Inc., a Delaware corporation (the “Company”), and the individual signatory hereto (“Indemnitee”).
WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the risk of litigation and other claims against directors and officers of corporations;
WHEREAS, the certificate of incorporation of the Company provides that the Company shall have the power to indemnify and advance expenses to its directors and officers to the fullest extent permitted under applicable law; and
WHEREAS, in recognition of Indemnitee’s need for specific contractual assurance of substantial protection against personal liability, and as an inducement to provide effective services to the Company as a director and/or officer, the Company wishes to provide for (a) the indemnification of and the advancement of expenses to Indemnitee as provided in this Agreement and, subject to the provisions of this Agreement, except to the extent prohibited by applicable law (whether partial or complete), and (b) to the extent insurance is maintained, the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows:
1.
Certain Definitions:
a.
“Board” shall mean the Board of Directors of the Company.
b.
“Affiliate” shall mean any corporation or other person or entity that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with, the person specified, including, without limitation, with respect to the Company, any direct or indirect subsidiary of the Company.
c.
A “Change in Control” means (i) the liquidation, dissolution or winding-up of the Company, (ii) the sale, license or lease of all or substantially all of the assets of the Company, or (iii) a share exchange, reorganization, recapitalization, or merger or consolidation of the Company with or into any other corporation or corporations (or other form of business entity) or of any other corporation or corporations (or
other form of business entity) with or into the Company, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company; provided, however, that a Change in Control shall not include any of the aforementioned transactions listed in clauses (i), (ii) and (iii) involving the Company or a Subsidiary Corporation in which the holders of shares of the Company voting stock outstanding immediately prior to such transaction or any Affiliate of such holders continue to hold at least a majority, by voting power, of the capital stock or, by a majority, based on fair market value as determined in good faith by the Board, of the assets, in each case in substantially the same proportion, of (x) the surviving or resulting corporation (or other form of business entity), (y) if the surviving or resulting corporation (or other form of business entity) is a wholly owned subsidiary of another corporation (or other form of business entity) immediately following such transaction, the parent corporation (or other form of business entity) of such surviving or resulting corporation (or other form of business entity) or (z) a successor entity holding a majority of the assets of the Company.
d.
“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
e.
“Expenses” shall mean any expense, liability or loss, including reasonable attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments or other charges imposed thereon, any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement and all other costs and obligations, paid or incurred in connection with investigating, defending, resolving, being a witness in, participating in (including on appeal) or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event.
f.
“Indemnifiable Event” shall mean any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company or an Affiliate of the Company, or while a director or officer is or was serving at the request of the Company or an Affiliate of the Company as a director, officer, employee, trustee, agent or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust or other enterprise or was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity.
g.
“Independent Counsel” shall mean a law firm, or a person admitted to practice law in any State of the United States, that is experienced in matters of corporation law and neither presently is, nor in the past three years has been, retained to represent: (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to serving as Independent Counsel (or similar independent legal counsel position) as to matters concerning the rights of
2
Indemnitee under this Agreement, the rights of other indemnitees under similar indemnification agreements or the rights of Indemnitee or other indemnitees to indemnification under the Company’s certificate of incorporation or bylaws) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, “Independent Counsel” shall not include any law firm or person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. For the avoidance of doubt, “Independent Counsel” also shall not include any law firm or person who represented or advised any entity or person in connection with a Change in Control of the Company.
h.
“Proceeding” shall mean any threatened, pending or completed action, suit or proceeding or any alternative dispute resolution mechanism (including an action by or in the right of the Company or an Affiliate of the Company) or any inquiry, hearing or investigation, whether conducted by the Company or an Affiliate of the Company or any other party or entity (including a government agency), that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other.
i.
“Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.
2.
Agreement to Indemnify.
a.
General Agreement. In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses except to the extent prohibited by law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s certificate of incorporation, its bylaws, vote of its stockholders or disinterested directors or applicable law.
b.
Initiation of Proceeding. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding, (ii) the Proceeding is one to enforce rights under this Agreement or (iii) the Proceeding is instituted after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such
3
Change in Control) and Independent Counsel has approved its initiation. The prohibition of indemnification contained in this subsection 2(b) shall apply to the defense of any counterclaim (except for a compulsory counterclaim by the Indemnitee against the Company for which the Indemnitee shall have rights to indemnification in accordance with the terms of this Agreement), cross-claim, affirmative defense or like claim of the Company in such Proceeding).
c.
Expense Advances. Subject to Section 5(b), Indemnitee shall be entitled to select counsel to represent him or her and to select experts and consultants to be used in his or her defense. In selecting counsel, experts and consultants, Indemnitee shall consider whether his or her interests reasonably permit him or her to retain such persons along with other indemnitees; provided, however, that this Agreement shall not require such joint retentions. In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall, prior to the final disposition of a Proceeding, advance to Indemnitee any and all Expenses incurred in connection with such Proceeding (an “Expense Advance”) within thirty (30) calendar days after the receipt by the Company of a written request for such advance or advances from time to time. Such written request shall include or be accompanied by a statement or statements reasonably evidencing the Expenses incurred by or on behalf of the Indemnitee and for which advancement is requested. The Indemnitee shall qualify for such Expense Advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay such Expense Advances if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon. This Section 2(c) shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 2(b) or 2(f).
d.
Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.
e.
Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
f.
Prohibited Indemnification. No indemnification pursuant to this Agreement shall be paid by the Company on account of any Proceeding in which a final judgment is rendered against Indemnitee or Indemnitee enters into a settlement, in each case (i) for an accounting of profits made from the purchase or sale by Indemnitee of
4
securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act of 1934, as amended (the “Exchange Act”) or similar provisions of any federal, state or local laws; (ii) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision and provided, however, that payment made to Indemnitee pursuant to an insurance policy purchased and maintained by Indemnitee at his or her own expense of any amounts otherwise indemnifiable or obligated to be made pursuant to this Agreement shall not reduce the Company’s obligations to Indemnitee pursuant to this Agreement; or (iii) for which payment is prohibited by law as determined by a court of competent jurisdiction in a final adjudication not subject to further appeal. Notwithstanding anything to the contrary stated or implied in this Section 2(f), indemnification pursuant to this Agreement relating to any Proceeding against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws shall not be prohibited if Indemnitee ultimately establishes in any Proceeding that no recovery of such profits from Indemnitee is permitted under Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws. With respect to subpart (ii) of this subparagraph, the Company shall make indemnification payments during the time periods otherwise required by this Agreement if payments by the insurance carrier(s) have not previously been made; and to the extent the carrier(s) later make payments, Indemnitee will transfer or assign those payments to the Company.
3.
Indemnification Process and Appeal.
a.
To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company (following the final disposition of the applicable Proceeding) a written request for indemnification, including therein or therewith, except to the extent previously provided to the Company in connection with a request or requests for advancement pursuant to Section 2(c), a statement or statements reasonably evidencing all Expenses incurred or paid by or on behalf of the Indemnitee and for which indemnification is requested. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.
b.
Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 3(a), if required by applicable law and to the extent not otherwise provided pursuant to the terms of this Agreement, a determination with respect to the Indemnitee’s entitlement to indemnification shall be made in the specific case as follows: (i) if a Change in Control shall have occurred and if so requested in writing by the Indemnitee, by Independent Counsel in a written opinion to the Board; or (ii) if a Change in Control shall not have occurred (or if a Change in Control shall have occurred but the Indemnitee shall not have requested that indemnification be determined by Independent Counsel as provided in clause (i) of this Section 3(b), (A) by a majority vote of the Disinterested Directors, even
5
though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board or (D) by the Company’s stockholders in accordance with applicable law. Notice in writing of any determination as to the Indemnitee’s entitlement to indemnification shall be delivered to the Indemnitee promptly after such determination is made, and if such determination of entitlement to indemnification has been made by Independent Counsel in a written opinion to the Board, then such notice shall be accompanied by a copy of such written opinion. If it is determined that the Indemnitee is entitled to indemnification, then payment to the Indemnitee of all amounts to which the Indemnitee is determined to be entitled shall be made within twenty (20) calendar days after such determination and, in no event, not later than sixty (60) calendar days after the Indemnitee’s written request for indemnification. If it is determined that the Indemnitee is not entitled to indemnification, then the written notice to the Indemnitee (or, if such determination has been made by Independent Counsel in a written opinion, the copy of such written opinion delivered to the Indemnitee) shall disclose the basis upon which such determination is based. The Indemnitee shall cooperate with the person, persons or entity making the determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.
c.
If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b), the Independent Counsel shall be selected as provided in this Section 3(c). If a Change in Control shall not have occurred (or if a Change in Control shall have occurred but the Indemnitee shall not have requested that indemnification be determined by Independent Counsel as provided in clause (i) of Section 3(b)), then the Independent Counsel shall be selected by the Board, and the Company shall give written notice to the Indemnitee advising the Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred and the Indemnitee shall have requested that indemnification be determined by Independent Counsel, then the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and the Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, the Indemnitee or the Company, as the case may be, may, within ten (10) calendar days after such written notice of selection has been given, deliver to the Company or to the Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the law firm or person so selected does not meet the requirements of “Independent Counsel” as defined in Section 1, and the objection shall set forth the basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
6
Independent Counsel. If such written objection is so made and substantiated, the law firm or person so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Chancery Court or another court of competent jurisdiction in the State of Delaware has determined that such objection is without merit. If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b) and, following the expiration of twenty (20) calendar days after submission by the Indemnitee of a written request for indemnification pursuant to Section 3(a), Independent Counsel shall not have been selected, or an objection thereto has been made and not withdrawn, then either the Company or the Indemnitee may petition the Delaware Chancery Court or other court of competent jurisdiction in the State of Delaware for resolution of any objection that shall have been made by the Company or the Indemnitee to the other’s selection of Independent Counsel and/or for appointment as Independent Counsel of a law firm or person selected by such court (or selected by such person as the court shall designate), and the law firm or person with respect to whom all objections are so resolved or the law firm or person so appointed shall act as Independent Counsel under Section 3(b). If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b), then the Company agrees to pay the reasonable fees and expenses of such Independent Counsel and to fully indemnify and hold harmless such Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
d.
Suit to Enforce Rights. If Indemnitee has not received full indemnification or Expense Advances within sixty (60) or thirty (30) calendar days, respectively, after making a demand in accordance with Section 3(a), or if Indemnitee contends that Company has not performed other obligations required by this Agreement, or if Company has not provided consents on counsel selection, settlement or any other issue as described in this Agreement, Indemnitee may enforce his or her rights under this Agreement by commencing litigation in any court in the State of Delaware having subject matter jurisdiction thereof seeking a determination of the issue by the court or challenging any determination by the Company (including by its directors, Independent Counsel or its stockholders) or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Company (including by its directors, Independent Counsel or its stockholders) not challenged by the Indemnitee within two years of Indemnitee’s formal notice thereof shall be binding on the Company and Indemnitee. The Company shall be precluded from asserting in any such proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The remedy provided for in this Section 3 shall be in addition to any other remedies available to Indemnitee at law or in equity. Company and Indemnitee may, by a written agreement signed by Company and Indemnitee, agree to a different method to resolve any disagreement concerning Indemnitee’s rights, unless resolution by a court is required by law.
e.
Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this
7
Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action, or any determination by the Company (including by its directors, Independent Counsel or its stockholders) or otherwise, as to whether Indemnitee is entitled to be indemnified, or is entitled to an Expense Advance, the burden of proving such a defense shall be on the Company by clear and convincing evidence, and it shall be presumed that the Indemnitee is entitled to indemnification or to an Expense Advance, as the case may be. Neither the failure of the Company (including by its directors, Independent Counsel or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Company (including by its directors, Independent Counsel or its stockholders) that the Indemnitee is not entitled to Indemnification or an Expense Advance or has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. Neither such failure to have made the determination, nor an actual determination that the Indemnitee is not entitled to indemnification or an Expense Advance shall be admissible for any purposes in any such proceeding. For purposes of any determination of good faith under any applicable standard of conduct, Indemnitee shall be deemed to have acted in good faith if Indemnitee relied on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or the Board or counsel selected by any committee of the Board or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser, investment banker or other expert selected with reasonable care by the Company or the Board or any committee of the Board. The provisions of the preceding sentence shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct. The knowledge and/or actions, or failure to act, or any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. If the person or persons so empowered to make a determination pursuant to Section 3 hereof shall have failed to make the requested determination within ninety (90) days after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, or other disposition or partial disposition of any Proceeding or any other event that could enable the Company to determine Indemnitee’s entitlement to indemnification, the requisite determination that Indemnitee is entitled to indemnification shall be deemed to have been made
4.
Indemnification for Expenses Incurred in Enforcing Rights.
a.
The Company shall, within sixty (60) calendar days of demand therefore, indemnify Indemnitee against any and all reasonable Expenses that are incurred by Indemnitee
8
in connection with any action brought by Indemnitee for: (i) indemnification or Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s certificate of incorporation or bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, or to enforce any other rights under this Agreement; and/or (ii) recovery under directors’ and officers’ liability insurance policies maintained by the Company; but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or other rights, or insurance recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with Section 2(c).
b.
If Company and Indemnitee disagree about whether Expenses described in this Section 4 are reasonable, the issue shall first be presented to Independent Counsel, whose opinion shall be binding on Company. If Indemnitee disagrees with the opinion of Independent Counsel, he or she may file a lawsuit in an appropriate court in Delaware seeking a decision; provided, however, that Indemnitee and Company may agree in writing to an alternative method to resolve the disagreement.
5.
Notification and Defense of Proceeding.
a.
Notice. Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 5(c); and, provided, further, that notice will be deemed to have been given without any action on the part of Indemnitee in the event the Company is a party to the same Proceeding.
b.
Defense. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will, if authorized by law and applicable procedural rules, be entitled to participate in the Proceeding at its own expense. Except as otherwise provided below, the Company may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. If requested by Indemnitee, such counsel shall have substantial experience representing people in Indemnitee’s position in Proceedings of the type at issue. After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee for the defense of such Proceeding except as provided below. Indemnitee shall have the right to employ legal counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control, the employment of counsel by
9
Indemnitee has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company, or as to which Indemnitee shall have made the determination provided for in (ii) above or under the circumstances provided for in (i) and (i) above.
If the Company assumes the defense, as described above, Indemnitee’s right to indemnification for settlement or liability (as opposed to defense costs) shall be determined by the rules set forth for indemnification in this Agreement. By assuming the defense, the Company does not assume responsibility for indemnification for liability or settlement if such indemnification is not otherwise available.
If Indemnitee and the Company disagree about whether Indemnitee should have his or her own lawyer, expert or consultant, such dispute shall first be presented to the Independent Counsel. The determination of the Independent Counsel shall be binding on the Company; but if Indemnitee disagrees with the determination he or she may commence an action in an appropriate Delaware court to seek a judicial determination of the issue.
c.
Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. The Company shall not, on its own behalf, settle any part of any Proceeding to which Indemnitee is party with respect to other parties (including the Company) if any portion of such settlement is to be funded from corporate insurance proceeds unless approved by (i) the written consent of Indemnitee or (ii) a majority of the independent directors of the board; provided, however, that the right to constrain the Company’s use of corporate insurance as described in this section shall terminate at the time the Company concludes (per the terms of this Agreement) that (i) Indemnitee is not entitled to indemnification pursuant to this agreement, or (ii) such indemnification obligation to Indemnitee has been fully discharged by the Company. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity as a result of Indemnitee's failure to provide notice, at its expense, to participate in the defense of such action, and the lack of such notice materially prejudiced the Company’s ability to participate in defense of such action. The Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.
10
6.
Establishment of Trust. In the event of a Change in Control, the Company shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel; provided, however, that if Indemnitee disagrees with the determination of the Independent Counsel, Indemnitee may file a lawsuit in an appropriate Delaware court seeking a determination of the issue, as set forth in Sections 3 and 4 hereof. The terms of the Trust shall provide that (i) the Trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the Trustee shall advance, within thirty (30) calendar days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise no later than sixty (60) calendar days after notice pursuant to Section 3 and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 6 shall relieve the Company of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by the Company for federal, state, local and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorneys’ fees), claims, liabilities, loss and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust.
7.
Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s certificate of incorporation, bylaws, applicable law or otherwise; provided, however, that this Agreement shall supersede any prior indemnification agreement between the Company and the Indemnitee. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company’s certificate of incorporation, applicable law or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. The rights of Indemnitee under the Company’s certificate of incorporation as they exist as of the date hereof shall not be reduced or limited by any change therein occurring after the date hereof, unless Indemnitee agrees in writing to such reduction or limitation.
8.
Liability Insurance. To the extent the Company maintains an insurance policy or policies providing general and/or directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer. The Company shall use its best efforts to maintain such insurance on substantially the same terms and
11
conditions, including limits of liability, as such exist (1) on the effective date of this Agreement or (2) if more favorable to the Indemnitee, on the date of the Company’s first public listing on a U.S. or non-U.S. stock exchange. In the event of a change of control or the Company’s becoming insolvent, the Company shall maintain in force any and all insurance policies then maintained by the Company in providing insurance--directors’ and officers’ liability, fiduciary, employment practices or otherwise--in respect of the individual directors and officers of the Company, for a fixed period of six years thereafter (a “Tail Policy”). Such coverage shall be non-cancellable and shall be placed and serviced for the duration of its term by the Company’s incumbent insurance broker. Such broker shall place the Tail policy with the incumbent insurance carriers using the policies that were in place at the time of the change of control event (unless the incumbent carriers will not offer such policies, in which case the Tail Policy placed by the Company’s insurance broker shall be substantially comparable in scope and amount as the expiring policies, and the insurance carriers for the Tail Policy shall have an AM Best rating that is the same or better than the AM Best ratings of the expiring policies).
9.
Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any Affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of three (3) years from the date of accrual of such cause of action or such longer period as may be required by state law under the circumstances. Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely filing and notice of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.
10.
Amendment of this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
11.
Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. However, if Company pursues an action as subrogee and that action leads to further claims against Indemnitee, this Agreement shall apply to such further claims.
12.
No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received an unconditional and non-recoverable payment (under any insurance policy or otherwise) of the amounts otherwise indemnifiable hereunder;
12
provided, however, that payment made to Indemnitee pursuant to an insurance policy purchased and maintained by Indemnitee at his or her own expense of any amounts otherwise indemnifiable or obligated to be made pursuant to this Agreement shall not reduce the Company’s obligations to Indemnitee pursuant to this Agreement.
13.
Duration of Agreement. All the rights and privileges afforded by this agreement, including the right to indemnification and the advancement of legal fees provided under this Agreement, shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though Indemnitee may have ceased to serve in such capacity at the time of any Proceeding.
14.
Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement to the fullest extent permitted by law. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though Indemnitee may have ceased to serve in such capacity at the time of any Proceeding.
15.
Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, (a) the remaining provisions shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void or unenforceable.
16.
Contribution. To the fullest extent permissible under applicable law, whether or not the indemnification provided for in this Agreement is available to Indemnitee for any reason whatsoever, the Company shall pay all or a portion of the amount that would otherwise be incurred by Indemnitee for Expenses in connection with any claim relating to an Indemnifiable Event, as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The Company will to the fullest extent permissible under applicable law indemnify and hold harmless Indemnitee from any claim of contribution that may be brought by directors,
13
officers, employees or other agents or representatives of the Company, other than Indemnitee, who may be jointly liable with Indemnitee
17.
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement may be brought in the Delaware Court of Chancery, (ii) consent to submit to the jurisdiction of the Delaware Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii)waive any objection to the laying of venue of any such action or proceeding in the Delaware Court of Chancery, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court of Chancery has been brought in an improper or inconvenient forum.
18.
Headings; References; Pronouns. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. References herein to section numbers are to sections of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the singular or plural as appropriate.
19.
Notices. All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt or mailed, postage prepaid, certified or registered mail, return receipt requested and addressed to the Company at:
FiscalNote Holdings, Inc.
1201 Pennsylvania Avenue NW
Washington DC 20004
Attention: General Counsel
and to Indemnitee at the address set forth below Indemnitee’s signature hereto.
Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing.
20.
Notice by Company. If the Indemnitee is the subject of, or is, to the knowledge of the Company, implicated in any way during an investigation, whether formal or informal, that is related to Indemnitee’s Corporate Status and that reasonably could lead to a Proceeding for which indemnification can be provided under this Agreement, the Company shall notify the Indemnitee of such investigation and shall share with Indemnitee any information it has provided to any third parties concerning the investigation (“Shared Information”). By executing this Agreement, Indemnitee agrees that such Shared Information is material non-public information that Indemnitee is obligated to hold in confidence and may not disclose publicly; provided, however, that Indemnitee may use the Shared Information and disclose
14
such Shared Information to Indemnitee’s legal counsel and third parties, in each case solely in connection with defending Indemnitee from legal liability.
21.
Monetary Damages Insufficient/Specific Performance. The Company and Indemnitee agree that a monetary remedy for breach of this Agreement may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm (having agreed that actual and irreparable harm will result in not forcing the Company to specifically perform its obligations pursuant to this Agreement) and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the Court, and the Company hereby waives any such requirement of a bond or undertaking. If Indemnitee seeks mandatory injunctive relief, it shall not be a defense to enforcement of the Company’s obligations set forth in this Agreement that Indemnitee has an adequate remedy at law for damages.
22.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
* * * * *
15
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.
FISCALNOTE HOLDINGS, INC.
a Delaware corporation
By: ___________________________________
Print Name:
Title:
INDEMNITEE,
an individual
By: ____________________________________
Address for notices:
______________________________
______________________________
______________________________
______________________________
16
EX-31.1
3
note-ex31_1.htm
EX-31.1
EX-31.1
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy Hwang, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of FiscalNote Holdings, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jon Slabaugh, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of FiscalNote Holdings, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
May 10, 2024
/s/ Jon Slabaugh
Jon Slabaugh Chief Financial Officer (Principal Financial Officer)
EX-32
5
note-ex32.htm
EX-32
EX-32
EXHIBIT 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of FiscalNote Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy Hwang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
In connection with the Quarterly Report of FiscalNote Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jon Slabaugh, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]Summary of Changes in Fair Value of Level 3 LiabilitiesBackstop agreement with the sponsor of DSAC.Backstop Agreement With Sponsor Of D S A C [Member]Backstop Agreement With Sponsor Of DSACDebt Instruments [Abstract]Other non-current liabilitiesOther Liabilities, NoncurrentOther noncurrent liabilitiesAnti-dilutive Restricted Stock UnitsRestricted Stock Units (RSUs)Restricted Stock Units2021 Acquisitions.Two Thousand Twenty One Acquisitions [Member]2021 Acquisitions2026Finite-Lived Intangible Asset, Expected Amortization, Year TwoFair Value, Inputs, Level 1 [Member]Level 1Temporary Equity, Stock Issued During Period, Value, New IssuesIssuance of preferred stockNoncash operating lease expense.Noncash Operating Lease ExpenseNon-cash operating lease expenseLessee, Operating Lease, Liability, to be Paid, Year Four2026Anti-dilutive Aicel Convertible NotesAnti-dilutive Aicel Convertible Notes [Member]Anti-dilutive Aicel Convertible Notes [Member]DSAC’s trust.D S A Cs Trust [Member]DSACs TrustFair Value Disclosures [Text Block]Fair Value Measurements and DisclosuresIncome Tax, Policy [Policy Text Block]Income TaxesRevenue from Contract with Customer, Excluding Assessed TaxTotal revenuesTotalEarnout Shares and RSUsEarnout shares and restricted stock units.Earnout Shares And Restricted Stock Units [Text Block]Increase (Decrease) in Other Current LiabilitiesOther current liabilitiesIntangible assets disclosure.Intangible Assets Disclosure [Line Items]Intangible Assets Disclosure [Line Items]Government Assistance, Type [Domain]Government Assistance, TypeBusiness combination consideration transferred fair value of seller convertible notes.Business combination consideration transferred fair value of seller convertible notesFair value of Seller Convertible NotesSenior Notes, TotalSenior NotesCarrying value of promissory noteShare-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, TotalShare-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, AmountUnrecognized compensation expenseDisaggregation of Revenue [Table Text Block]Schedule of Disaggregation of RevenueCash paid for business acquisitions, net of cash acquiredPayments to Acquire Businesses, Net of Cash Acquired, TotalPayments to Acquire Businesses, Net of Cash AcquiredConcentration Risk Type [Axis]Concentration Risk TypeBooks.Books [Member]BooksShort-Term Debt, Type [Axis]Transaction expenses.Transaction ExpensesTransaction expensesTransaction costs (gains).Transaction Costs Gains [Text Block]Transaction (Gains) Costs, netSchedule of Business Acquisitions, by Acquisition [Table]Schedule Of Business Acquisitions By Acquisition [Table]Embedded Derivative, Fair Value of Embedded Derivative LiabilityValue of embedded derivative liabilitiesEarnout shares.Earnout Shares [Member]Earnout SharesSchedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]Summary of Fair Values of Assets Acquired and Liabilities AssumedShare-Based Payment Arrangement, Cost by Plan [Table Text Block]Summary of Total Stock Compensation ExpenseTitle of Individual [Domain]Title of IndividualSeries E Preferred Stock [Member]Series E Preferred StockSubsequent Events [Text Block]Subsequent EventsBusiness Combination, Step Acquisition, Equity Interest in Acquiree, Fair ValueFair value of contributed interestsPercentage of increase in paid-in-kind interest ratePercentage of increase in paid-in-kind interest rate.Embedded redemption features on 8090 FV Note.Embedded Redemption Features On Eighty Ninety F V Note [Member]Embedded Redemption Features on 8090 FV NoteDebt Instrument, Annual Principal PaymentDebt principal amountConvertible note, acquisition fair valueConvertible Debt, Fair Value DisclosuresFair value of the redemption featuresEarned cash contingent compensation other transfer of assets and liabilities between levels.Earned Cash Contingent Compensation Other Transfer Of Assets And Liabilities Between LevelsEarned cash contingent compensation other transfer of assets and liabilities between levelsPayment of exit feesPayment Of Exit FeesPayment of exit fees.Operating Lease, Liability, NoncurrentOperating lease liabilities, net of current portionStock Repurchased During Period, SharesRepurchase of common stock, sharesBusiness combination, consideration transferred, fair value of seller notes.Business Combination Consideration Transferred Fair Value Of Seller NotesFair value of seller notesSchedule of Stock by Class [Table]Schedule Of Stock By Class [Table]Debt instrument, convertible, beneficial conversion feature net of taxes.Debt Instrument Convertible Beneficial Conversion Feature Net Of TaxesDebt instrument, convertible, beneficial conversion feature net of taxesEurope [Member]EuropeDebt Instrument, Maturity Date, DescriptionPromissory note maturity descriptionIssuance of preferred stock and warrantsAdjustments to additional paid in capital and accumulated deficit due to issuance of preferred stock and warrantsAdjustments to additional paid in capital and accumulated deficit due to issuance of preferred stock and warrants.Contingent compensation shares of common stock.Contingent Compensation Shares Of Common StockContingent compensation shares of common stockLiabilities, Fair Value Disclosure, TotalLiabilities, Fair Value DisclosureLiabilitiesDebt Instrument, Unamortized Discount, TotalDebt Instrument, Unamortized DiscountUnamortized debt discountDebt instrument, debt discountDebt DiscountNumber of trading days for determining share price.Number Of Trading Days For Determining Share PriceNumber of trading days for determining share priceSchedule of Goodwill [Table]Class of Stock [Line Items]Class Of Stock [Line Items]Long-term debt, net of current maturitiesLong-term debt, net of current maturities.Balance Sheet Location [Axis]Balance Sheet LocationAssets, CurrentTotal current assetsVesting [Domain]VestingStock and warrants issued during period share preferred stock and warrants.Stock And Warrants Issued During Period Share Preferred Stock And WarrantsIssuance of preferred stock and warrants, sharesLiabilities and EquityTotal liabilities and stockholders' equityEntity Address, State or ProvinceIssuance of preferred stockStock Issued During Period, Value, New IssuesStockholders' Equity Note, Stock Split, Conversion RatioExchange ratio of sharesShare-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Beginning BalanceShare-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending BalanceShare-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, NumberStock options outstandingSupplier [Domain]SupplierCommon stock convertible conversion ratio.Common Stock Convertible Conversion RatioCommon stock convertible conversion ratioContent library.Content Library [Member]Content LibraryDebt instrument estimated fair value disclosure.Debt Instrument Estimated Fair Value Disclosure Table [Text Block]Summary of Estimated Fair Value of DebtAcquired deferred revenueContract with Customer, Liability, Increase (Decrease) for Contract Acquired in Business CombinationTrading SymbolTrading SymbolEarlier of Prepayment or July 29, 2024Earlier Of Prepayment Or July292024 [Member]Earlier of prepayment or July 29 2024.Debt Instrument, Redemption, Period [Axis]Debt Instrument, Redemption, PeriodResearch, Development, and Computer Software, Policy [Policy Text Block]Capitalized Software Development CostsCommon Stock, Shares, IssuedCommon stock, shares, issuedEstimated fair value of convertible note.Estimated Fair Value of Convertible NoteEstimated fair value of convertible noteLine of Credit Facility, Interest Rate During PeriodPercentage of monthly interest in cashWarrant liabilities.Warrant Liabilities [Text Block]Warrant LiabilitiesBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, ReceivablesAccounts receivable, netSkyone Capital Pty Limited.Skyone Capital Pty Limited [Member]Skyone Capital Pty LimitedSelling and Marketing Expense [Member]Sales and Marketing ExpenseSchedule of Long-Term Debt Instruments [Table]Debt Instrument [Table]Shares, OutstandingBalance, shareBalance, sharesLessee, Operating Lease, Liability, to be Paid, Year Three2025Common Stock, Capital Shares Reserved for Future IssuanceCommon stock, shares reserved for issuanceAOCI Attributable to Parent [Member]Accumulated Other Comprehensive LossAcquisitions and DispositionsBusiness Combination Disclosure [Text Block]Other comprehensive income (loss)Other Comprehensive Income (Loss), Net of Tax, TotalOther Comprehensive Income (Loss), Net of TaxCurrent maturities of long-term debtLess: Current portionLong-Term Debt, Current Maturities, TotalLong-Term Debt, Current MaturitiesLess: Current portionConvertible notes purchased worth shares of capital stock.Convertible Notes Purchased Worth Shares Of Capital StockConvertible notes purchased worth shares of capital stockForeign Currency Transactions and Translations Policy [Policy Text Block]Foreign Currency TransactionTwo thousand twenty two long term incentive plan.Two Thousand Twenty Two Long Term Incentive Plan [Member]2022 Long-Term Incentive PlanExchange ratio.Exchange RatioExchange ratioEntity Address, City or TownEntity Address, City or TownOperating Lease, Weighted Average Discount Rate, PercentWeighted average discount rateClass of Warrant or Right, OutstandingWarrants outstandingLetter agreement.Letter Agreement [Member]Letter AgreementDebt Disclosure [Text Block]DebtShare-Based Payment Arrangement, Performance Shares, Activity [Table Text Block]Summary of Activities Related to Stock Options and Performance Stock UnitsSubsequent EventSubsequent Event [Member]Subsequent Event Type [Axis]Share-Based Payment Arrangement, Tranche Two [Member]Share-Based Compensation Award Tranche TwoLast Out Lender warrants.Last Out Lender Warrants [Member]Last Out Lender WarrantsAdditional Paid-in Capital [Member]Additional Paid-in CapitalPrincipal and accrued PIK interest converted to common stock shares.Principal And Accrued P I K Interest Converted To Common Stock SharesPrincipal and accrued PIK interest converted to common stock sharesBusiness Acquisition, Pro Forma RevenueTotal revenuesBusiness Combination, Consideration Transferred, Liabilities IncurredFair value of contingent considerationAmortization expense.Amortization ExpenseAmortization expenseLiabilities, Current [Abstract]Current liabilities:Business combination recognized identifiable assets acquired and liabilities assumed equity method investment.Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Equity Method InvestmentEquity method investmentCash acquired by the buyerCash Acquired from AcquisitionEquilibrium.Equilibrium [Member]EquilibriumAssets, Current [Abstract]Current assets:Accounts Receivable, Allowance for Credit Loss, CurrentAllowance for credit lossesCounterparty Name [Axis]Counterparty NamePreferred Stock, Par or Stated Value Per SharePreferred stock, par value per shareStatement of Stockholders' Equity [Abstract]Intangible Assets Disclosure [Text Block]Intangible AssetsOperating Lease, Liability, CurrentOperating lease liabilities, current portionLender Name [Axis]Lender NameAdjustments to Additional Paid in Capital, Convertible Debt with Conversion FeatureBeneficial conversion feature, net of taxesCapitalized Computer Software, Net [Abstract]Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]Summary of Inputs and AssumptionsDebt Instrument, Maturity DateDebt instrument, maturity dateContingent liabilities from acquisitions.Contingent Liabilities From Acquisitions [Member]Contingent Liabilities from AcquisitionsTotalTotalLong-Term DebtLong-term debtProperty, Plant and Equipment, Net, TotalProperty, Plant and Equipment, NetProperty and equipment, netNon-cash gain (loss) of convertible noteFair value adjustment of convertible note.Fair Value Adjustment Of Convertible NoteNon-cash gain (loss) of convertible noteClass of Stock [Domain]Class of StockFair Value Measurement Inputs and Valuation Techniques [Line Items]Fair Value Measurement Inputs and Valuation Techniques [Line Items]Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Other Comprehensive Income (Loss)Change in fair value included in accumulated other comprehensive incomeConvertible notes purchased in cash.Convertible Notes Purchased In CashConvertible notes purchased in cashSecured Debt, TotalSecured DebtDebt instrument outstanding amountAccounts Receivable, Credit Loss Expense (Reversal)Bad debt expensePrior to July 30, 2024.Prior To July302024 [Member]Prior to July 30, 2024Temporary Equity Carrying Amount Outstanding Converted.Temporary Equity Carrying Amount Outstanding ConvertedBalance, as convertedEffective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, PercentU.S. statutory rateNew Senior Term Loan Amendment No. 3 [Member]New Senior Term Loan Amendment No. 3 [Member]New Senior Term Loan Amendment No. 3Business Combination, Contingent Consideration, Liability, TotalBusiness Combination, Contingent Consideration, LiabilityFair value of contingent considerationFair value of contingent considerationBusiness combination, liability recognizedTotal contingent liabilities from acquisitionsStatement of Comprehensive Income [Abstract]Scenario [Domain]ScenarioSenior Term LoanSenior Term Loan [Member]Senior term loan.Embedded redemption features on Promissory Note.Embedded Redemption Features On Promissory Note [Member]Embedded Redemption Features on Promissory NoteCollaborative Arrangement and Arrangement Other than Collaborative [Axis]Increase (Decrease) in Prepaid Expenses, OtherPrepaid expenses and other current assetsDifference between aggregate fair value and unpaid principal balance.Difference Between Aggregate Fair Value And Unpaid Principal BalanceDifference between aggregate fair value and unpaid principal balanceEntity Central Index KeyEntity Central Index KeyIndefinite lived intangible assets net excluding goodwill database net.Indefinite Lived Intangible Assets Net Excluding Goodwill Database NetDatabase, netClass of Warrant or Right, Number of Securities Called by Warrants or RightsWarrant to purchase of common stock shares issuedPlan Name [Domain]Plan NameAssets, Fair Value Disclosure, TotalAssets, Fair Value DisclosureAssetsEstimated fair value of short-term investmentsBusiness Combination, Consideration Transferred, Equity Interests Issued and IssuableFair value of common stockPreferred Stock, Shares Outstanding, Ending BalancePreferred Stock, Shares Outstanding, Beginning BalancePreferred Stock, Shares OutstandingPreferred stock, shares outstandingRevenue, Remaining Performance Obligation, Expected Timing of Satisfaction, PeriodRevenue remaining performance obligation, expected satisfaction periodCommon shares, votes per shareThe number of votes that each common share is entitled.Common Stock, Number Of Votes Per ShareCommon stock, votes per shareSchedule of Goodwill [Table Text Block]Summary of Changes in Carrying Amounts of GoodwillLiabilities, CurrentTotal current liabilitiesEntity Tax Identification NumberEntity Tax Identification NumberGoodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]Goodwill ImpairmentPretax income (loss)Net income (loss) before income taxesIncome (Loss) from Continuing Operations before Income Taxes, Noncontrolling InterestDebt Conversion, Converted Instrument, RateConverted instrument, RateFrontierView.Frontier View [Member]FrontierViewLegal FeesLegal costsSchedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table]Increase (Decrease) in Operating Capital [Abstract]Changes in operating assets and liabilities:Line of Credit Facility, DescriptionAnnual interest rate termConversion of convertible notes to common stock conversion ratio.Conversion Of Convertible Notes To Common Stock Conversion RatioConvertible note exchange ratioPercentage of cash and cash equivalents held.Percentage Of Cash And Cash Equivalents HeldPercentage of cash and cash equivalents heldDebt issuance costs paidPayments of Debt Issuance CostsCapitalized Computer Software, GrossCapitalized software development costs, Gross Carrying AmountEditorial expense.Editorial ExpenseEditorialCurate.Curate [Member]CurateDebt Instrument, TermLoan repayment termDebt instrument, termEarnout RSUs.Earnout R S Us [Member]Earnout RSUsThis member represents the Redeemable Warrants Each Whole Warrant Exercisable For One Share Of Class Common Stock At Exercise Price Member.Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per shareWarrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per shareIssuance of Class A common stock upon employee stock purchase planStock Issued During Period, Value, Employee Stock Purchase PlanTabular disclosure of business combination by region.Schedule Of Business Acquisitions By Region Table [Text Block]Summary of Acquisitions by RegionLessee, Operating Leases [Text Block]LeasesClass of Warrant or Right [Line Items]Class Of Warrant Or Right [Line Items]Capitalized Computer Software, Net, Ending BalanceCapitalized Computer Software, Net, Beginning BalanceCapitalized Computer Software, NetCapitalized software costs, netCapitalized software development costs, Net Carrying AmountPlan Name [Axis]Plan NameGeographical [Domain]GeographicalLessee, Operating Lease, Term of ContractNon-cancellable base termsAssetsTotal assetsUNITED STATESUnited StatesOperating Lease, Right-of-Use AssetOperating lease assetsCommon Class A [Member]Common Class AClass A Common StockEntity Registrant NameEntity Registrant NameDebt issuance costsDebt Issuance Costs, Net, TotalDebt Issuance Costs, NetDebt issuance costsDebt issuance costsDeferred Financing FeesDebt Securities, Unrealized Gain (Loss), TotalDebt Securities, Unrealized Gain (Loss)Unrealized loss on securitiesLessee, Lease, Description [Line Items]Lessee Lease Description [Line Items]Retained Earnings (Accumulated Deficit), TotalRetained Earnings (Accumulated Deficit)Accumulated deficitAccumulated deficitSupplemental Cash Flow Information [Abstract]Supplemental Cash Flow Activities:New fiscal note.New Fiscal Note [Member]New Fiscal NoteRetained Earnings [Member]Accumulated DeficitReturn of common stock, sharesShares returned on legal settlementShares Returned On Legal SettlementShares returned on legal settlement.Class of Stock [Axis]Class of StockShare-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, NumberNumber of shares, Ending balanceNumber of shares, Beginning balanceNumber of shares OutstandingStock remaining outstandingIntangible assets, Accumulated ImpairmentImpairment of Intangible Assets, Finite-LivedDeferred Income Tax Liabilities, NetDeferred tax liabilitiesIssuance of Class A common stock upon employee stock purchase plan, sharesStock Issued During Period, Shares, Employee Stock Purchase PlansMinimum [Member]MinimumEastward warrantsEastward Warrants [Member]Eastward WarrantsProceeds from exercise of stock options and ESPP purchasesProceeds from Stock Options ExercisedSignificant Accounting Policies [Text Block]Summary of Business and Significant Accounting PoliciesOperating Lease, Liability, TotalOperating Lease, LiabilityNet minimum lease paymentsAUSTRALIAAustraliaScenario ForecastForecast [Member]Forecast [Member]Capitalized software development costs, Accumulated ImpairmentCapitalized Computer Software, ImpairmentsShare-Based Payment Arrangement, Tranche One [Member]Share-Based Compensation Award Tranche OneFair Value Measurement Inputs and Valuation Techniques [Table]Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Table]Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table]Schedule Of Business Acquisitions By Acquisition Contingent Consideration [Table]Revenue [Policy Text Block]Cost of RevenuesDisaggregation of Revenue [Abstract]Equity Component [Domain]Equity ComponentSegments [Axis]Anti-dilutive Stock OptionsConversion of Stock, Shares ConvertedConverted common sharesAcquired businesses and initial public offering.Acquired Businesses And I P O [Member]Acquired Businesses and IPOPaycheck protection program.Paycheck Protection Program [Member]PPP LoanShare-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract]Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]Liability classified warrants.Liability Classified Warrants [Member]Liability Classified WarrantsMeasurement Frequency [Axis]Measurement FrequencySublease incomeSublease IncomeSublease incomeRepresents the information pertaining to public Warrants.Public WarrantsPublic WarrantsPublic WarrantsGoodwill, Foreign Currency Translation Gain (Loss)Impact of foreign currency fluctuationsDebt Disclosure [Abstract]Gain on sale of business (Note 4)Gain on sale of businessPre-tax gain on disposalGain (Loss) on Disposition of BusinessNet income (loss) attributable to common stockholders for diluted EPSNet Income (Loss) Available to Common Stockholders, DilutedSummary of Transaction Costs Related to Businesses Acquired and Consummation of Business CombinationSummary of Transaction Costs Related to Businesses acquired and consummation of Business Combination [Table Text Block]Summary of transaction costs related to businesses acquired and consummation of business combination.Debt Instrument, Basis Spread on Variable RateDebt instrument, interest rateEntity Current Reporting StatusEntity Current Reporting StatusCommon Stock, Shares AuthorizedCommon stock, shares authorizedResearch and Development Expense, TotalResearch and Development ExpenseResearch and developmentNet losses excluding effect of gain on sale of businessNet Losses Excluding Effect of Gain on Sale of BusinessNet losses excluding effect of gain on sale of business.Business combination separately recognized transactions expenses paid.Business Combination Separately Recognized Transactions Expenses PaidPayment of transaction costShares issued in exchange of termination of trust’s obligation.Shares Issued In Exchange Of Termination Of Trusts ObligationShares issued in exchange of termination of Trust’s obligationShare-Based Compensation Arrangement by Share-Based Payment Award, Discount from Market Price, Offering DateCommon stock fair market valueDebt Conversion, Converted Instrument, AmountBeneficial conversion feature in conjunction with long-term debt issuance, net of taxesDebt conversion converted instrument amountBusiness Acquisition, Goodwill, Expected Tax Deductible AmountBusiness acquisition, expected tax deductible amountBusiness acquisition, goodwill, expected tax deductible amountDerecognized deferred tax liabilitiesUnrecognized deferred tax liabilitiesUnrecognized deferred tax liabilities.New senior term loan.New Senior Term Loan [Member]New Senior Term LoanNew Senior Term LoanAssets [Abstract]AssetsAccounting Standards Update [Extensible Enumeration]Revenue from Contract with Customer [Policy Text Block]Revenue RecognitionAmortization of Intangible AssetsAmortization of intangible assetsShare-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for GrantShares entitled to receiveShare-based compensation award tranche four.Share Based Compensation Award Tranche Four [Member]Share-Based Compensation Award Tranche FourMeasurement Input, Expected Term [Member]Expected term (Years)Expected Life (Years)Maximum exercisable per share under redemption feature.Maximum exercisable per share under redemption featureReturn of common stock, valueStock Repurchased and Retired During Period, ValueComerica Warrants.Comerica Warrants [Member]Comerica WarrantsCommon stock valueCommon Stock, Value, IssuedDebt Instrument, Convertible, Conversion PriceConversion pricePrincipal payments of long-term debtPrincipal payments of long-term debtRepayment of long term debtRepayments of Long-Term Debt, TotalRepayments of Long-Term DebtAccretion of preferred stock to redemption valueAdjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred StockSchedule of grant date fair value of earnout RSU's and rollforward of earnout RSU's.Schedule Of Grant Date Fair Value Of Earnout R S Us And Rollforward Of Earnout R S Us Table [Text Block]Summarizes Grant Date Fair Value of Earnout Rsu's and Rollforward of Earnout Rsu's Available for IssuanceThe amount of working capital deficit.Working Capital DeficitWorking capital deficitRetroactive conversion of shares due to business combination.Retroactive Conversion Of Shares Due To Business CombinationRetroactive conversion of shares due to Business CombinationClass A common stock equals or exceeds dollar eleven point four five.Class A Common Stock Equals Or Exceeds Dollar Eleven Point Four Five [Member]Class A Common Stock Equals or Exceeds $11.45 per ShareLoans Payable, TotalLoans PayableRemaining balance of loanIntangible assets, excluding developed technology.Intangible Assets Excluding Developed Technology [Member]Intangible Assets Excluding Developed TechnologyContract with Customer, Liability, Revenue RecognizedRevenue recognized in the current period from amounts in the prior balanceFurniture and Fixtures [Member]Furniture and FixturesWithholding taxes on net share settlement of stock based compensation and option exercises.Withholding Taxes On Net Share Settlement Of Stock Based Compensation And Option ExercisesWithholding taxes on net share settlement of stock-based compensation and option exercisesRetroactive conversion of shares due to Business Combination, valueRetroactive conversion of shares due to Business Combination valueRetroactive conversion of shares due to Business Combination valueFair value adjustments of derivative instruments.Fair Value Adjustments Of Derivative InstrumentsNon-cash gain (loss) in fair value of financial instrumentsBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and EquivalentsCash and cash equivalentsCurrent Fiscal Year End DateCurrent Fiscal Year End DateShare-Based Payment Arrangement, Noncash Expense, TotalShare-Based Payment Arrangement, Noncash ExpenseStock-based compensationOperating Income (Loss)Operating lossPrepayments of debtRepayments of DebtEntity Ex Transition PeriodEntity Ex Transition PeriodBusiness Combination, Consideration TransferredTotal purchase priceTotalAcquisition considerationDeferred income taxesDeferred Income Tax Expense (Benefit), TotalDeferred Income Tax Expense (Benefit)Unearned contingent compensation reversalUnearned contingent compensation reversal.Payments to purchase seller note.Payments To Purchase Seller NotePayments to purchase seller noteTax expenseProvision from income taxesIncome Tax Expense (Benefit), TotalIncome Tax Expense (Benefit)Benefit from income taxesAnti-dilutive Convertible NotesConvertible Debt Securities [Member]Earn-out payment receivedEarnout PaymentEarnout paymentForeign currency exchange liability fair value disclosure.Foreign Currency Exchange Liability Fair Value DisclosureForeign exchangeResearch and Development Expense [Member]Research and DevelopmentCash contingent consideration earned and subsequently settled.Cash Contingent Consideration Earned and Subsequently SettledCash contingent consideration earned and subsequently settledContingent liabilities from acquisitions, current portionAsset Acquisition, Contingent Consideration, Liability, CurrentShares issued in business acquisitions, sharesStock Issued During Period, Shares, AcquisitionsLessee, Leases [Policy Text Block]LeasesConcentration Risk, PercentageConcentration risk, percentageShare-Based Payment Arrangement, ExpenseTotalStock-based compensation expensesOperating Expense [Member]Operating ExpenseDisaggregation of Revenue [Table]Disaggregation Of Revenue [Table]Measurement Input Type [Domain]Measurement Input TypeEquipment [Member]EquipmentLease liabilitiesIncrease (Decrease) in Operating Lease LiabilityOperating lease liabilitiesGPO FN Noteholder LLC.G P O F N Noteholder L L C [Member]GPO FN Noteholder LLCFinite-Lived Intangible Assets, Net, Ending BalanceFinite-Lived Intangible Assets, Net, Beginning BalanceFinite-Lived Intangible Assets, NetIntangible assets, Net Carrying AmountIntangible assets, net carrying amountAccounting Standards Update 2016-02 [Member]ASU 2016-02Income Taxes PaidCash paid for taxesRevenue from Contract with Customer [Text Block]RevenuesAccounts Payable and Accrued ExpensesAccounts Payable and Accrued Liabilities [Member]Class of warrants, redemption notice period.Class Of Warrants Redemption Notice PeriodClass of warrants, redemption notice periodNumber of votes per share.Number Of Votes Per ShareNumber of votes per sharePublic and private warrant liabilitiesFinancial Instruments Subject to Mandatory Redemption, Settlement Terms, Fair Value of SharesWarrant liabilitiesBusiness combination, recognized identifiable assets acquired and liabilities assumed accrued expenses.Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Accrued ExpensesAccrued expensesSchedule of stock based compensation expense by award type and stock based compensation expense.Schedule Of Stock Based Compensation Expense by Award Type and Stock Based Compensation Expense [Table Text Block]Summary of Stock-Based Compensation Expense by Award Type and Stock-Based Compensation ExpenseIssuance of Class A common stock upon vesting of restricted share units, sharesStock Issued During Period, Shares, Restricted Stock Award, GrossPredata.Predata [Member]PredataReimbursement of transaction expenses.Reimbursement Of Transaction ExpensesReimbursement of transaction expenses on term loanContingent compensation employee retention bonus.Contingent Compensation Employee Retention BonusContingent compensation employee retention bonusDebt Instrument, Face AmountAggregate principal amountDebt instrument amountEarnings per ShareEarnings Per Share, Policy [Policy Text Block]Cumulative Effect, Period of Adoption, Adjustment [Member]Adoption of new accounting standardCumulative-Effect AdjustmentUnrecognized Tax Benefits, Increase Resulting from Current Period Tax PositionsUncertain tax position totalingGross increases - tax positions in current periodsFirst out lender warrant.First Out Lender Warrant [Member]First Out Lender WarrantPaid-in-kind interest, netPaid-in-Kind InterestPaid-in-kind interestOther expense (income), netOther Nonoperating Income (Expense), TotalOther Nonoperating Income (Expense)Sale of Stock, Price Per ShareExericse price per shareLessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]Measurement Input time to maturity.Measurement Input Time To Maturity [Member]Time to MaturityContingent liabilities from acquisitions, net of current portionIncrease decrease in contingent liabilities from acquisitions current portion.Increase Decrease In Contingent Liabilities From Acquisitions Current PortionChange in fair value included in the determination of net (income) lossFair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in EarningsOperating Expenses [Abstract]Operating expenses:Revenue from External Customers by Geographic Areas [Table Text Block]Schedule of Revenue by Geographic OperationsLong-Term Debt, Type [Domain]Long-Term Debt, TypeFinite-Lived Intangible Assets Acquired as Part of Business Combination [Table]Finite Lived Intangible Assets Acquired As Part Of Business Combination [Table]Subsequent Events [Abstract]Fireside.Fireside [Member]FiresideWrite off of debt instrument unamortized discount.Write Off Of Debt Instrument Unamortized DiscountWrite off of debt instrument unamortized discountCommitments and Contingencies Disclosure [Abstract]Other non-current assetsOther Assets, NoncurrentPayment of sublease termination fee.Payment Of Sublease Termination FeePayment of sublease termination FeeCustomer relationships two.Customer Relationships Two MemberCustomer Relationships TwoPaid in kind interest rate.Paid In Kind Interest RatePaid in kind interest rateShare-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, GrossStock options issuedVendorVendor [Member]Vendor.Equity [Text Block]Stockholders’ EquityDepreciation, TotalDepreciationDepreciationDepreciation expenseLegal Entity Type of Counterparty [Domain]Interest Paid, Excluding Capitalized Interest, Operating ActivitiesCash paid for interestEarnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]Earnings Per Share Basic [Line Items]Class A Common Stock and Class B Common StockClass A common stock and Class B common stock [Member]Class A common stock and Class B common stock [Member]2028Finite-Lived Intangible Asset, Expected Amortization, Year Four2025Finite-Lived Intangible Asset, Expected Amortization, Year OneAlternative Investment, Measurement InputMeasurement inputExtension amount of incremental term loan.Extension Amount Of Incremental Term LoanPrincipal amount approvedAdditional Paid in Capital, TotalAdditional Paid in CapitalAdditional paid-in capitalCommon Class B [Member]Common Class BClass B Common StockFinite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]Number of tranches.Number Of TranchesNumber of tranchesFair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, IssuancesFair value at issuance dateEquity, Attributable to Parent [Abstract]Stockholders' equity:Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]Lease, Cost [Table Text Block]Summary of Lease ExpenseEnvironmental, sustainability, and governance.Environmental, Sustainability, and Governance [Member]Environmental, Sustainability, and Governance ("ESG")Developed Technology Rights [Member]Developed TechnologyEntity [Domain]EntityPerformance Stock OptionsPerformance Stock Options [Member]Performance stock options.Line of Credit Facility, Maximum Borrowing CapacityPrincipal amountLessee operating lease liability payments due after year four.Lessee Operating Lease Liability Payments Due After Year FourThereafterAdvertising [Member]AdvertisingEarnings (Loss) per share attributable to common shareholders (Note 14):Earnings Per Share [Abstract]Loss Contingencies [Table]Aicel Convertible NoteAicel Convertible Note [Member]Aicel convertible note.Accounting Policies [Abstract]Segments [Domain]Lessee Disclosure [Abstract]Senior capital term loan refinancing.Senior Capital Term Loan Refinancing [Member]Senior Capital Term Loan RefinancingReporting Unit, Zero or Negative Carrying Amount, NameReporting unit, negative carrying amount, nameLessee, Lease, Description [Table]Lessee Lease Description [Table]Liability Class [Axis]Liability ClassScenario [Axis]ScenarioConcentration Risk, Credit Risk, Policy [Policy Text Block]Concentration RisksShare-Based Compensation Arrangement by Share-Based Payment Award [Line Items]Share Based Compensation Arrangement By Share Based Payment Award [Line Items]Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts PayableAccounts payableBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other AssetsPrepaid expensesBusiness Acquisition, Pro Forma Information [Table Text Block]Summary of Unaudited Pro Forma Financial InformationTotal net assets acquiredBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, NetDebt Instrument, Interest Rate, Effective PercentageAnnual effective interest rateApplicable federal interest rateDebt Instrument, Unamortized Premium, TotalDebt Instrument, Unamortized PremiumDebt instrument, debt premiumContract with customer liability new deferrals, net of amounts recognized.Contract With Customer Liability New Deferrals Net Of Amounts RecognizedNew deferrals, net of amounts recognized in the current periodPrior to July 30, 2025.Prior To July302025 [Member]Prior to July 30, 2025Capitalized Contract Cost, Impairment LossImpairments of costs to obtain revenue contractsBasicBasic Earnings Per ShareEarnings Per Share, Basic, TotalEarnings Per Share, BasicCustomer Concentration Risk [Member]Customer Concentration RiskContract with customer liability increase (decrease) for effects of foreign currency.Contract With Customer Liability Increase Decrease For Effects Of Foreign CurrencyEffects of foreign currencyExec Connect Intermediate LLCExec Connect Intermediate LLC [Member]Exec Connect Intermediate LLC.Commitment and contingencies (Note 17)Commitments and ContingenciesBusiness Combinations [Abstract]Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, YearRevenue, remaining performance obligation, expected timing of satisfaction, yearBusiness Combination, Acquisition Related CostsTransaction costs related to acquired businessesAcquired Finite-Lived Intangible Assets [Line Items]Acquired Finite Lived Intangible Assets [Line Items]Balance as converted, sharesShares Outstanding Converted, sharesShares outstanding converted, shares.Retroactive conversion of share due to business combination.Retroactive Conversion Of Share Due To Business CombinationRetroactive conversion of shares due to Business CombinationRetroactive conversion of shares due to Business CombinationAdvisory.Advisory [Member]AdvisoryRepayments of Senior Debt, TotalRepayments of Senior DebtRepayment of term loanDebt, Current, TotalDebt, CurrentShort-term debt and current maturities of long-term debtAdvisory advertising and other.Advisory Advertising And Other [Member]Advisory, advertising, and otherPrime rate percentage.Prime Rate PercentagePrime rate percentagePerformance Shares [Member]Performance Stock UnitsFN SPV Holdings Pty Ltd.F N S P V Holdings Pty Ltd [Member]FN SPV Holdings Pty LtdContract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]Schedule of Deferred RevenueOperating Lease, CostOperating lease costCosts capitalized to obtain revenue contracts policy.Costs Capitalized To Obtain Revenue Contracts Policy Policy TextblockCosts Capitalized to Obtain Revenue ContractsShort-Term Lease, CostShort-term lease costBusiness Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, LiabilityChange in fair value of acquisition contingent considerationChange in contingent consideration liabilitiesCapitalized Contract Cost, Net, CurrentCosts capitalized to obtain revenue contracts, netMeasurement Input Type [Axis]Measurement Input TypeStatistical Measurement [Domain]Statistical MeasurementLoss Contingencies [Line Items]Net cash provided by (used in) operating activitiesNet Cash Provided by (Used in) Operating ActivitiesProceeds from Issuance of DebtProceeds from issuance of debtGovernment [Member]U.S. Federal GovernmentAccrued paid in kind interest.Accrued Paid In Kind InterestAccrued paid in kind interestDocument Period End DateDocument Period End DateStatistical Measurement [Axis]Statistical MeasurementAccounts Receivable, Allowance for Credit Loss, Beginning BalanceAccounts Receivable, Allowance for Credit Loss, Ending BalanceAccounts Receivable, Allowance for Credit LossAllowance for doubtful accounts receivableCommitments and Contingencies Disclosure [Text Block]Commitments and ContingenciesStockholders' Equity Note [Abstract]Operating Lease, PaymentsCash payment on operating lease liabiltiesEscrow depositEscrow DepositDilutedDiluted Earnings Per ShareEarnings Per Share, Diluted, TotalEarnings Per Share, DilutedProduct and Service [Domain]Product and ServiceBusiness Acquisition, Pro Forma Information.Business Acquisition Pro Forma Information [Table]Business Acquisition Pro Forma Information [Table]Lease, Cost [Abstract]Cost of Sales [Member]Cost of RevenuesUnrecognized Tax BenefitsEnding balancesBeginning balancesConcentration Risk Benchmark [Domain]Concentration Risk BenchmarkDebt Instrument fair value disclosure.Debt Instrument Fair Value Disclosure [Table]Debt Instrument Fair Value Disclosure [Table]Revenue from Contract with Customer [Abstract]Change in redemption value of preferred stock.Change In Redemption Value Of Preferred StockChange in redemption value of preferred stockcash contingent compensation.Cash Contingent CompensationCash contingent compensationSchedule of capitalized software development costs.Schedule Of Capitalized Software Development Costs Table [Text Block]Schedule of Capitalized Software Development CostsDebt Instrument, Name [Domain]Debt Instrument, NameFair Value Hierarchy and NAV [Domain]Fair Value Hierarchy and NAVBusiness combination, recognized identifiable assets acquired and liabilities assumed accrued payroll.Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Accrued PayrollAccrued payrollOther non-current liabilitiesIncrease (Decrease) in Other Noncurrent LiabilitiesRelated Party Transaction [Domain]Anti-dilutive Earnout AwardsAnti-dilutive Earnout Awards [Member]Anti-dilutive earnout awards.Stock based compensation expense related to acquisition earnoutsStock Based Compensation Expense Acquisition EarnoutsStock based compensation expense acquisition earnouts.Debt Instrument, Increase (Decrease), Net, TotalDebt Instrument, Increase (Decrease), NetIncrease in promissory notesFair Value, Recurring [Member]Fair Value, Recurring BasisWarrants associated with Amendment 1.Warrants associated with Amendment 1 [Member]Warrants Associated with Amendment 1Non-cash loss contingencyLoss Contingency, Loss in PeriodBusiness acquisition.Business Acquisition [Member]AcquisitionsSignificant accounting policies.Significant Accounting Policies [Table]Significant Accounting Policies [Table]Gerald YaoGerald Yao [Member]Gerald Yao.Notes Receivable, Fair Value DisclosureFair value of promissory noteIf-converted impact on net income (loss) attributable to common stockholdersImpact on Net Income Loss Attributable to Common StockholdersImpact on net income (loss) attributable to common stockholders.Proceeds from LoansProceeds from loansMr, HwangMr, Hwang [Member]Mr, Hwang.Employee Lease AgreementEmployee Lease Agreement [Member]Employee Lease Agreement.Public policy & issues management.Public Policy & Issues Management [Member]Public Policy & Issues Management ("PPIM")Stockholders equity converted.Stockholders Equity ConvertedBalance, as convertedCo-Founders.Co Founders [Member]Co-FoundersIncrease in interest rate event of default.Increase In Interest Rate Event Of DefaultIncrease in interest rate event of defaultFinite-Lived Intangible Assets, Major Class Name [Domain]Finite-Lived Intangible Assets, Major Class NameCash, Cash Equivalents, and Short-Term Investments, TotalCash, Cash Equivalents, and Short-Term InvestmentsCash, cash equalents, restricted cash, and short-term investmentsShare-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in PeriodExercise of stock options, sharesBusiness combination, contingent compensation.Business Combination Contingent CompensationContingent compensation liabilityContingent compensation liabilityConsolidation, Policy [Policy Text Block]Principles of ConsolidationLiabilities and Equity [Abstract]Liabilities and Stockholders' EquitySale of Board.orgContract With Customer Liability Revenue From Sale of Board.orgContract with customer liability revenue from sale of Board.Org.Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table]Schedule Of Earnings Per Share Basic By Common Class [Table]Transaction costs gains.Transaction Costs Gains [Table]Transaction Costs Gains [Table]Principal and accrued interest converted to common stock shares.Principal And Accrued Interest Converted To Common Stock SharesPrincipal and accrued interest converted to common stock sharesWarrant liability fair value.Warrant Liability Fair ValueWarrant liability fair valueNumerator:Earnings Per Share Reconciliation [Abstract]Shares issued in business acquisitionsStock Issued During Period, Value, AcquisitionsEntity Address, Postal Zip CodeEntity Address, Postal Zip CodePrepayment and exit feesPrepayment And Exit FeesPrepayment and exit fees.Entity Interactive Data CurrentEntity Interactive Data CurrentPrivate Placement [Member]Private Placement WarrantsForge.Forge [Member]ForgeSelling and Marketing Expense, TotalSelling and Marketing ExpenseSales and marketingintangible assets net excluding goodwill customer relationships.Intangible Assets Net Excluding Goodwill Customer RelationshipsCustomer relationships, netIssuance of common stock upon exercise of public warrants.Issuance Of Common Stock Upon Exercise Of Public WarrantsIssuance of Class A Common Stock upon exercise of public warrantsWarrants and Rights Note Disclosure [Abstract]Preferred Stock, Convertible, Shares IssuablePreference shares converted to common stockBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, OtherOther current liabilitiesChange in fair value of financial instruments.Change In Fair Value Of Financial InstrumentsChange in fair value of financial instrumentsMeasurement Input, Discount Rate [Member]Yield2027Finite-Lived Intangible Asset, Expected Amortization, Year ThreeCredit Facility [Domain]US States and Political Subdivisions Debt Securities [Member]Washington, D.CLessee, Operating Lease, Liability, Undiscounted Excess AmountLess: Amounts representing interestSchedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]Summary of Components of Identified Intangible Assets Acquired and Estimated Useful LivesNumber of shares, GrantedNumber of shares issuedStock issuedBusiness Acquisition, Pro Forma Net Income (Loss)Net lossRevision of Prior Period [Axis]Debt instrument, payment descriptionDebt Instrument, Payment TermsEntity Incorporation, State or Country CodeEntity Incorporation, State or Country CodeBoard org convertible notes.Board Org Convertible Notes [Member]Board. Org Convertible NotesEquity Components [Axis]Equity ComponentsIncrease (Decrease) in Accounts ReceivableAccounts receivable, netConversion in connection with the Business Combination.Conversion In Connection With Business CombinationConversion in connection with the Business CombinationExpert network.Expert Network [Member]Expert NetworkCashPayments to Acquire Businesses, GrossCash considerationBusiness Acquisition, Date of Acquisition AgreementAcquisition date:Estimated fair valueFinancial Liabilities Fair Value DisclosureFinancial Liabilities Fair Value Disclosure, TotalCurrent tax liability for federal and state income taxCurrent Federal, State and Local, Tax Expense (Benefit)Current Federal, State and Local, Tax Expense (Benefit), TotalWeighted-average Grant price, ExercisedShare-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair ValueSchedule of Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Axis]Schedule of Financial Instruments Subject to Mandatory Redemption by Settlement TermsLocal Phone NumberLocal Phone NumberBusiness acquisition, pro forma information.Business Acquisition Pro Forma Information [Line Items]Business Acquisition Pro Forma Information [Line Items]Debt Conversion, Converted Instrument, Shares IssuedConvertible notes exchanged for common stockPayments to purchase of preferred stock.Payments To Purchase Of Preferred StockPreferred stock purchasedIncrease (Decrease) in Deferred RevenueDeferred revenueIssuance Of Common Stock Shares Upon Settlement Of Contingent ConsiderationIssuance of Class A common stock upon settlement of contingent consideration, sharesIssuance of common stock shares upon settlement of contingent consideration.One vendor.One Vendor [Member]One VendorNote beneficial conversion value net of tax.Note Beneficial Conversion Value Net Of TaxNote beneficial conversion value net of taxBalance at March 31, 2024Balance at December 31, 2023Goodwill, TotalGoodwillGoodwillAccounts payable and accrued expensesIncrease (Decrease) in Other Accounts Payable and Accrued LiabilitiesRestricted Cash, CurrentRestricted cashMerger agreement.Merger Agreement [Member]Merger AgreementInterest Costs CapitalizedInterest capitalized on capitalized software development costsStatement of Cash Flows [Abstract]Series F Convertible Preferred Stock.Series F Convertible Preferred Stock [Member]Series F Convertible Preferred StockReturn of common stock, sharesStock Repurchased and Retired During Period, SharesReporting Unit, Zero or Negative Carrying Amount, Amount of Allocated GoodwillReporting unit, negative carrying amount, amount of allocated goodwillFirst contingent compensation threshold payment.First Contingent Compensation Threshold PaymentFirst contingent compensation threshold paymentTotal gross debtTotal gross debtGross Long Term DebtGross long term debt.Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start DateEarnout shares liability.Earnout Shares LiabilityEarnout shares liabilityAccumulated other comprehensive income (loss)Accumulated Other Comprehensive Income (Loss), Net of Tax, TotalAccumulated Other Comprehensive Income (Loss), Net of TaxProperty, Plant and Equipment, Policy [Policy Text Block]Property and EquipmentConcentration Risk Benchmark [Axis]Concentration Risk BenchmarkCommon Stock, Par or Stated Value Per ShareCommon stock par valuePar valueEffect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations, TotalEffect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued OperationsEffects of exchange rates on cashDeferred Revenue, Noncurrent, TotalDeferred Revenue, NoncurrentDeferred revenue, net of current portionDebt Instrument, Interest Rate, Stated PercentageInterest rateCumulative Effect, Period of Adoption [Axis]Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for RecognitionUnrecognized compensation expense recognition periodLong-Lived Tangible Asset [Axis]Long-Lived Tangible AssetSenior Term Loan AmendmentSenior Term Loan Amendment [Member]Senior term loan amendment.Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award [Table]Schedule Of Share Based Compensation Arrangements By Share Based Payment Award [Table]Maximum [Member]MaximumInterest PayablePIK Interest AccrualPrincipal and accrued PIK balanceTemporary Equity, Shares OutstandingBalance, sharesBalance, sharesEarnout awards activity.Earnout Awards Activity Table [Text Block]Summary of Activity for Earnout Awards Accounted for As CompensationAmount of amortization for asset, excluding financial asset and goodwill, lacking physical substance with finite life expected to be recognized after fourth fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).Finite Lived Intangible Assets Amortization Expense After Year FourThereafterRelated Party Transaction [Axis]Earned contingent consideration settled.Earned Contingent Consideration SettledEarned contingent consideration settledEarned contingent consideration settledBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived IntangiblesIntangible assetsEstimated Fair ValueRecent accounting pronouncements not yet effective.Recent Accounting Pronouncements Not Yet Effective Policy Policy TextblockRecent Accounting Pronouncements Not Yet EffectiveMinimum liquidity covenantMinimum Liquidity CovenantMinimum liquidity covenant.Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]Summary of Activities Relating to Unrecognized Tax BenefitsDebt Instrument, Increase, Accrued InterestDebt instrument, accrued interestFair Value, Inputs, Level 3 [Member]Level 3Financial Instruments Subject to Mandatory Redemption, Financial Instrument [Domain]Financial Instruments Subject to Mandatory Redemption, Financial InstrumentAPIC, Share-Based Payment Arrangement, Increase for Cost Recognition, TotalAPIC, Share-Based Payment Arrangement, Increase for Cost RecognitionStock-based compensation expenseFair Value, Recurring and Nonrecurring [Table]Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Table]Short-Term Debt, Type [Domain]Non-capitalizable Business Combination costsNon capitalizable Business Combination costsNon capitalizable business combination costs.Change in fair value of warrant liabilitiesChange in fair value of warrant and derivative liabilitiesNon-cash gain (loss) in fair value of warrant liabilitiesCash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate EffectNet change in cash, cash equivalents, and restricted cashDebt Instrument, Convertible, Carrying Amount of Equity ComponentConvertible Notes purchasedGeneral and Administrative Expense [Member]General and AdministrativeForgiven accrued interest write off.Forgiven Accrued Interest Write OffAccrued interest write offNumber of Businesses AcquiredNumber of businesses acquiredNet proceeds from sale of businessProceeds from Divestiture of Businesses, Net of Cash DivestedProceeds from Divestiture of Businesses, Net of Cash Divested, TotalOn or after July 30, 2025.On Or After July302025 [Member]On or After July 30, 2025Board.OrgBoard.Org Business [Member]Board.org business.Tabular disclosure of contingent compensation.Schedule Of Business Acquisitions By Acquisition Contingent Compensation Table [Text Block]Summary of Contingent CompensationSummary of Anti Dilutive Securities Excluded from Calculations of Diluted Per ShareSchedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]Tim HwangTim Hwang [Member]Tim Hwang.City Area CodeCity Area CodeNet Cash Provided by (Used in) Operating Activities [Abstract]Operating Activities:Shares authorized.Shares AuthorizedShares authorizedShare-based compensation award tranche five.Share Based Compensation Award Tranche Five [Member]Share-Based Compensation Award Tranche FiveRelated party transactions.Related Party Transactions Policy Policy TextblockRelated Party TransactionsWarrants exercisable redemption feature.Warrants Exercisable Redemption FeatureWarrants exercisable redemption featureNotes IssuedNotes issuedIssuance of common stock value upon settlement of contingent consideration.Issuance Of Common Stock Value Upon Settlement Of Contingent ConsiderationIssuance of Class A common stock upon settlement of contingent considerationProceeds from Issuance of Long-Term Debt, TotalProceeds from Issuance of Long-Term DebtProceeds from long-term debt, net of issuance costsTransaction cost related to contingent compensation expense.Transaction Cost Related To Contingent Compensation ExpenseContingent compensation (gain) expenseBusiness Acquisition [Line Items]Business Acquisition [Line Items]Common Stock, Voting RightsCommon stock, number of vote per shareCustomer [Domain]CustomerGeneral and Administrative Expense, TotalGeneral and Administrative ExpenseGeneral and administrativeWeighted average common stock outstanding used in basic EPS computationsBasicWeighted Average Number of Shares Outstanding, Basic, TotalWeighted Average Number of Shares Outstanding, BasicShare-Based Payment Arrangement, Noncash Expense [Abstract]Net Cash Provided by (Used in) Financing Activities [Abstract]Financing Activities:Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]Summarizes Restricted Stock Unit ActivityLoss on settlementLoss on settlementLoss on debt extinguishment, netGain (Loss) on Extinguishment of Debt, TotalGain (Loss) on Extinguishment of DebtLoss on debt extinguishment, netStatement [Table]Statement [Table]Dragonfly seller convertible notes.Dragonfly Seller Convertible Notes [Member]Dragonfly Seller Convertible NotesAccounts Receivable [Member]Accounts ReceivableSchedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]Summary of Weighted Average Assumptions Used to Estimate Fair ValueIncrease (Decrease) in Contract with Customer, LiabilityCustomer depositsThird-party lender.Third Party Lender [Member]Third-party LenderDocument Fiscal Period FocusDocument Fiscal Period FocusLessee, Operating Lease, Liability, to be PaidTotal minimum lease paymentsInvestment, Policy [Policy Text Block]InvestmentsUNITED KINGDOMUnited KingdomShares registered holders acquire from class A common stock.Shares Registered Holders Acquire From Class A Common StockShares registered holders acquire from class A common stockEstimated fair value of warrants.Estimated Fair Value Of WarrantsEstimated fair value of warrantsNew Senior Term Loan Amendment.New Senior Term Loan Amendment [Member]New Senior Term Loan AmendmentSenior secured subordinated promissory note.Senior Secured Subordinated Promissory Note [Member]Senior Secured Subordinated Promissory NoteLessee, Operating Lease, Liability, to be Paid, Year Two2024Statement [Line Items]Statement [Line Items]Convertible Debt [Table Text Block]Summary of Principal, Interest and Other Amounts Associated With the Convertible NotesLine of Credit Facility, Periodic Payment, InterestCash interestIssuance of preferred stockStock-based compensation expense, sharesAdjustments To Additional Paid In Capital Share based Compensation Requisite Service Period Recognition SharesAdjustments to additional paid in capital share based compensation requisite service period recognition shares.Timebase convertible notes.Timebase Convertible Notes [Member]Timebase Convertible NotesPayment of deferred financing costsPayment of deferred financing costsPayments of transaction costsPayments of Financing Costs, TotalPayments of Financing CostsSchedule of Long-Term Debt Instruments [Table Text Block]Summary of Carrying Value of DebtDebt Instrument, Fair Value Disclosure, TotalDebt Instrument, Fair Value DisclosureNotes issuance fair valueFair value of debtDiscrete tax charge for impact of sale of Board.orgDiscrete Tax ChargeDiscrete tax charge.Total anti-dilutive securities excluded from diluted loss per share:Antidilutive Securities Excluded from Computation of Earnings Per Share, AmountConvertible preferred stock excluded from the calculation of dilutive earnings per sharesContract with Customer, Asset, after Allowance for Credit Loss, TotalContract with Customer, Asset, after Allowance for Credit LossContract assetsFair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability ValueEnding balanceBeginning balanceSoftware and Software Development Costs [Member]Internal Use SoftwareLease, CostTotal lease costsSubsequent Event 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Benefits, Reduction Resulting from Lapse of Applicable Statute of LimitationsLapses in statutes of limitationsShares outstanding, converted.Shares Outstanding ConvertedBalance as converted, sharesCash and Cash Equivalents, at Carrying Value, TotalCash and Cash Equivalents, at Carrying ValueCash and cash equivalentsStock Repurchased During Period, ValueRepurchase of common stockOther Assets, CurrentOther current assetsMeasurement Input, Risk Free Interest Rate [Member]Risk Free RateRisk Free RateDisclosure of Share-Based Compensation Arrangements by Share-Based Payment Award [Table Text Block]Prepaid Expense, Current, TotalPrepaid Expense, CurrentPrepaid expensesEntity Common Stock, Shares OutstandingEntity Common Stock, Shares OutstandingFair Value of Financial InstrumentsFair Value of Financial Instruments, Policy [Policy Text Block]Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, TotalBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and EquipmentProperty and equipment, netAntidilutive Securities, Name [Domain]Accounting Standards Update 2016-13 [Member]ASU 2016-13Deferred Debt Issuance Cost, WriteoffLoan origination fees wrote offDebt Instrument fair value disclosure.Debt Instrument Fair Value Disclosure [Line Items]Debt Instrument Fair Value Disclosure [Line Items]Stock Issued During Period, Value, Conversion of Convertible SecuritiesIssuance of Class A Common Stock upon redemption of preferred stockPrivate placement warrants.Private Placement Warrants [Member]Private Placement WarrantsPercentage of Interest paid in kind.Percentage Of Interest Paid In KindInterest payable in kindTemporary equity, retroactive conversion of shares due to business combination.Temporary Equity Retroactive Conversion Of Shares Due To Business CombinationRetroactive conversion of shares due to Business Combination, sharesMaturity period for cash equivalentsMaturity Period For Cash EquivalentsMaturity period for cash equivalents.Cover [Abstract]Vesting [Axis]VestingTwo thousand twenty one seller term loans.Two Thousand Twenty One Seller Term Loans [Member]2021 Seller Term LoansDocument Fiscal Year FocusDocument Fiscal Year FocusProceeds from Loan OriginationsProceeds from loan origination feeNotes Payable, Fair Value DisclosureFair value of promissory noteBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-Term DebtDebtPurchases.Purchases [Member]PurchasesXC FiscalNote B LLC.X C Fiscal Note B L L C [Member]XC FiscalNote-B, LLCPreferred Stock [Member]Preferred StockCapitalized Contract Cost, Net, TotalCapitalized Contract Cost, NetCapitalized costExtinguishment of Debt, AmountForgiveness of debtIncrease (decrease) in fair value of contingent consideration.Increase Decrease In Fair Value Of Contingent ConsiderationChanges to the fair value of contingent considerationBusiness Acquisition, Pro Forma Information [Abstract]Legal Entity of Counterparty, Type [Axis]Measurement Input Risk Premium.Measurement Input Risk Premium [Member]Risk PremiumShare-Based Payment Arrangement [Policy Text Block]Stock-Based CompensationShare-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair ValueWeighted-average Grant price, GrantedPatents [Member]PatentsAssets, Total [Member]AssetsCash proceeds from the sale of business, net (Note 4)Proceeds from Sale of Productive AssetsProceeds from Sale of Productive Assets, TotalCash receivedProceeds from Divestiture of BusinessesSecurity Exchange NameSecurity Exchange NameDebt Issuance Cost, Gross, NoncurrentDeferred financing costShare-Based Compensation Arrangement by Share-Based Payment Award, Expiration PeriodExpiration periodTermination of trust’s obligation recognized as capital distribution with offsetting debt premium.Termination Of Trusts Obligation Recognized As Capital Distribution With Offsetting Debt PremiumTermination of trust’s obligation recognized as capital distribution with offsetting debt premiumBusiness combination, recognized identifiable assets acquired and liabilities assumed, current liabilities, accounts payable and accrued expenses.Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Current Liabilities Accounts Payable And Accrued ExpensesAccounts payable and accrued expensesNew Accounting Pronouncements, Policy [Policy Text Block]Recently Adopted Accounting PronouncementsPreferred Stock, Shares IssuedPreferred stock, shares issuedPreferred Stock, Shares AuthorizedPreferred stock, shares authorizedPrincipal and accrued interest.Principal And Accrued InterestPrincipal and accrued interestBeginning on august 15, 2025.Beginning On August152025 [Member]Beginning on August 15, 2025Customer Relationships [Member]Customer RelationshipsSchedule of Finite-Lived Intangible Assets [Table]Schedule Of Finite Lived Intangible Assets [Table]Foreign currency translation lossOther Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax, TotalOther Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before TaxRight-of-Use Asset Obtained in Exchange for Operating Lease LiabilityOperating lease assets obtained in exchange for lease obligationsDebt Instrument, Fair Value Disclosure [Abstract]Business Acquisition, Acquiree [Domain]Business Acquisition, AcquireeLegal Entity [Axis]Legal EntityWeighted average shares used in computing earnings (loss) per share attributable to common shareholders:Denominator:Weighted Average Number of Shares Outstanding, Diluted [Abstract]Class of Warrant or Right [Table]Class Of Warrant Or Right [Table]Business Combination, Separately Recognized Transactions, Expenses and Losses RecognizedTransaction costsStock Issued During Period, Value, Stock Options ExercisedExercise of stock optionsEntity Emerging Growth CompanyEntity Emerging Growth CompanyProceeds from Convertible DebtProceeds from convertible debt financingGross proceeds receivedConvertible Promissory Note [Member]Convertible Promissory Note [Member]Convertible Promissory NoteAmendment FlagAmendment FlagIssuance of Class A common stock upon vesting of restricted share units, valueStock Issued During Period, Value, Restricted Stock Award, GrossDebt Instrument, Convertible, Terms of Conversion FeatureDebt instrument, conversion termsCapitalized Contract Cost, AmortizationCapitalized cost, amortizationBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, OtherOther current assetsSummary of Fair Value Assumptions of Earnout AwardsEarnout Awards Fair Value Assumptions Table [Textblock]Earnout Awards Fair Value AssumptionsPrepayment fee and exit fee percentagePrepayment Fee And Exit Fee PercentagePrepayment fee and exit fee percentage.Change in fair value of earnout liabilitiesChange in Fair Value of Earnout LiabilitiesChange in fair value of earnout liabilities.Accounting Standards Update [Domain]Accounting Standards UpdateMaximum percentage of common stock transferred.Maximum Percentage Of Common Stock TransferredMaximum percentage of common stock transferredSupplier [Axis]SupplierSchedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]Schedule of Expected Future Amortization Expense for Intangible AssetsCapitalized Contract Cost, Net, NoncurrentNoncurrent costs capitalized to obtain revenue contracts, netLeases [Abstract]Performance Stock Options and Stock UnitsPerformance Stock Options and Stock Units [member]Performance stock options and stock units.Dragonfly.Dragonfly [Member]DragonflyVariable Rate [Domain]Variable RateSecurities Act File NumberEntity File NumberFair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table]Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Table]Line of Credit Facility, Expiration DateMaturity dateMr. YaoMr. Yao [Member]Mr. Yao.Accounts Payable [Member]Accounts PayableLessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year2022 (remaining)Goodwill and Intangible Assets Disclosure [Abstract]Unrealized change in fair valueChange in Unrealized Gain (Loss) on Hedged Item in Fair Value HedgeLong-Term Debt, Excluding Current MaturitiesLong-term debt, net of current maturitiesTotalCash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, TotalCash, Cash Equivalents, Restricted Cash, and Restricted Cash EquivalentsCash, cash equivalents, and restricted cash, end of periodCash, cash equivalents, and restricted cash, beginning of periodCash EquivalentsCash Equivalents [Member]Paycheck protection program loan.Paycheck Protection Program Loan [Member]Paycheck Protection ProgramPPP LoanDebt Instrument, Measurement InputConvertible notes measurement inputIncrease (decrease) in contingent compensation.Increase Decrease In Contingent CompensationContingent compensation recognizedShare-Based Payment Arrangement [Abstract]Warrants and Rights Outstanding, Measurement InputWarrants measurement inputDisposal Group ClassificationDisposal Group Classification [Domain]Temporary equity shares outstanding, converted.Temporary Equity Shares Outstanding ConvertedBalance as converted, sharesDebt Instrument [Axis]Debt InstrumentShare-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair ValueWeighted-average exercise price, Ending balanceWeighted-average exercise price, Beginning balanceWeighted-average Grant price, OutstandingExtinguishment and/or settlement upon conversionExtinguishment and/or settlement upon conversionFair value extinguishment and or settlement upon conversionFair value extinguishment and or settlement upon conversion.Debt Instrument, Periodic Payment, TotalDebt Instrument, Periodic PaymentDebt instrument, periodic payment until maturityTwo thousand twenty one seller convertible notes.Two Thousand Twenty One Seller Convertible Notes [Member]2021 Seller Convertible NotesTwo vendors.Two Vendors [Member]Two VendorsSecond tranche commitment fee.Second Tranche Commitment FeeSecond tranche commitment feeDue from the buyerOther ReceivablesOperating ExpensesTotal operating expensesOther Intangible Assets, NetOther intangible assets, netCapitalized Computer Software, AmortizationAmortization of capitalized software development costsEmbedded redemption features on convertible notes.Embedded Redemption Features On Convertible Notes [Member]Embedded Redemption Features on Convertible NotesShare-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected TermExpected life (years)Warrants exercised.Warrants ExercisedWarrants exercisedEntity Small BusinessEntity Small BusinessEntity Shell CompanyEntity Shell CompanyNumber of Operating SegmentsNumber of operating segmentsTitle of Individual [Axis]Title of IndividualSale of Stock, Number of Shares Issued in TransactionPurchase of common stockDatabase Rights [Member]DatabaseSignificant accounting policies.Significant Accounting Policies [Line Items]Significant Accounting Policies [Line Items]Debt issuance costs capitalizedProceeds from Debt, Net of Issuance CostsClass of Warrant or Right, Exercise Price of Warrants or RightsExercise priceClass of Warrant or Right [Domain]Class of Warrant or RightEarnings (Loss) Per ShareEarnings Per Share [Text Block]Loss Per ShareRevenues [Abstract]Revenues:Dragonfly eye limited.Dragonfly Eye Limited [Member]Dragonfly Eye LimitedEntity Address, Address Line OneEntity Address, Address Line OneRevenue Benchmark [Member]RevenueGoodwill Disclosure [Text Block]GoodwillCustomer-Related Intangible Assets [Member]Customer Relationship Intangible AssetIntangible assets disclosure.Intangible Assets Disclosure [Table]Intangible Assets Disclosure [Table]Non-cash interest expense.Non Cash Interest ExpenseNon-cash interest expenseMeasurement Input, Share Price [Member]Share PriceCommon Stock Share PriceAntidilutive Securities [Axis]Other Liabilities, CurrentOther current liabilitiesBusiness Acquisition, Contingent Consideration [Line Items]Business Acquisition Contingent Consideration [Line Items]Term LoansTerm Loan Facility [Member]Term loan facility.Measurement Input, Price Volatility [Member]Revenue VolatilityExpected VolatilityFinite-Lived Intangible Assets, Gross, TotalFinite-Lived Intangible Assets, GrossIntangible assets, Gross Carrying AmountAnti-dilutive Contingently Issuable SharesAnti-dilutive contingently issuable shares [Member]Anti-dilutive contingently issuable shares [Member]Liquidity and Going Concern, Policy [Policy Text Block]Disclosure of accounting policy for liquidity and going concern.Liquidity and Going ConcernSubsequent Event Type [Domain]Fireside convertible notes.Fireside Convertible Notes [Member]Fireside Convertible NotesIncome Statement Location [Axis]Income Statement LocationNew GPO NoteNew GPO NoteNew GPO Note [Member]New GPO note.Customer depositsCustomer Deposits Liability CurrentCustomer deposits liability current.Variable Lease, CostVariable lease costAmortization of Debt Discount (Premium)Amortization of Deferred Debt DiscountAmortization of debt discountAdditional fees on transaction expenses.Additional Fees On Transaction ExpensesAdditional fees on transaction expensesClass A common stock equals or exceeds dollar six point three six.Class A Common Stock Equals Or Exceeds Dollar Six Point Three Six [Member]Class A Common Stock Equals or Exceeds $6.36 per ShareTransaction (gains) costs, netTransaction costs (gains).Transaction Costs GainsTotal transaction costs (gains), netCARES Act.C A R E S Act [Member]CARES ActShare-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend RateExpected dividend yieldContract with Customer, Liability [Abstract]Long-Term Debt, Type [Axis]Long-Term Debt, Type8090 FV subordinated promissory note.Eight Zero Nine Zero F V Subordinated Promissory Note [Member]8090 FV Subordinated Promissory NoteFair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]Fair Value, Nonrecurring [Member]Fair Value, NonrecurringLine of Credit Facility, Lender [Domain]Line of Credit Facility, LenderFair Value, Inputs, Level 2 [Member]Level 2Payment of related prepaymentPayment Of Related PrepaymentPayment of related prepayment.Subscription.Subscription [Member]SubscriptionIssuance of Class A common stock upon exercise of employee stock purchase planShare-Based Compensation Arrangement by Share-Based Payment Award, Shares Issued in PeriodNumber of shares issuedValuation date share priceShare PriceStock priceEra Convertible NotesEra Convertible NoteEra Convertible Note [Member]Era convertible note.Carrying value of convertible notesLong-Term Debt, GrossCarrying value of convertible notesProduct and Service [Axis]Product and ServiceNumber of consecutive trading days for determining share price.Number Of Consecutive Trading Days For Determining Share PriceNumber of consecutive trading days for determining share priceTitle of 12(b) SecurityTitle of 12(b) SecurityPreviously Reported [Member]Previously ReportedFinite-Lived Intangible Assets, Accumulated AmortizationIntangible assets, Accumulated AmortizationRedeemable, convertible preferred stockStockholders' equity (deficit):Temporary Equity, Carrying Amount, Attributable to ParentBalanceBalanceEarn out payment proceeds percentageEarn Out Payment Proceeds PercentageEarn out payment proceeds percentage.Prime Rate [Member]Prime RateSchedule of Finite-Lived Intangible Assets [Table Text Block]Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major ClassFireside promissory notes.Fireside Promissory Notes [Member]Fireside Promissory NotesTwo thousand twenty two employee stock purchase plan.Two Thousand Twenty Two Employee Stock Purchase Plan [Member]2022 Employee Stock Purchase PlanAccounting Standards Update [Axis]Accounting Standards UpdateAdjustments to Additional Paid in Capital, Dividends in Excess of Retained EarningsCapital distributionLast out term loans.Last Out Term Loans [Member]Last Out Term LoanTimebase.Timebase [Member]TimebaseDeferred fees outstandingDeferred Fees OutstandingDeferred fees outstanding.Net Cash Provided by (Used in) Investing Activities [Abstract]Investing Activities:Amortization of Debt Issuance CostsAmortizationAmortization of Deferred Financing FeesTransaction costs gains.Transaction Costs Gains [Line Items]Transaction Costs Gains [Line Items]Percentage of payment in kind fees.Percentage Of Payment In Kind FeesPayment-in-Kind feesAccounts payable and accrued expensesAccounts Payable and Accrued Liabilities, CurrentAccounts Payable and Accrued Liabilities, Current, TotalAicel convertible bond.Aicel Convertible Bond [Member]Aicel Convertible BondGoodwill, Impairment LossImpairment of goodwillImpairmentImpairmentSegment Reporting, Policy [Policy Text Block]SegmentsWeighted average effect of dilutive securitiesWeighted Average Number of Shares Outstanding, Diluted, Adjustment, TotalWeighted Average Number of Shares Outstanding, Diluted, AdjustmentDilutive effect of private warrants8090 FV subordinated promissory note.F V Subordinated Promissory Note [Member]8090 FV Subordinated Promissory NoteLong-Lived Tangible Asset [Domain]Long-Lived Tangible AssetFair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]Subsequent Event [Table]Write-offs in connection with the Business Combination.Write Offs In Connection With Business CombinationWrite-offs in connection with the Business CombinationCash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]Cash, Cash Equivalents, and Restricted CashSales [Member]RevenueIncrease (Decrease) in Deferred ChargesCosts capitalized to obtain revenue contracts, netShare-Based Payment Arrangement, Tranche Three [Member]Share-Based Compensation Award Tranche ThreeContract with Customer, Liability, TotalContract with Customer, LiabilityEnding balanceBeginning balanceTemporary Equity, Accretion to Redemption ValueAccretion of preferred stock to redemption valueConvertible notes payableConvertible Notes Payable, TotalConvertible Notes PayableConvertible notes - related partiesOther Operating Activities, Cash Flow StatementOther non-cash expensesCash and Cash Equivalents [Axis]Cash and Cash EquivalentsCash equivalentsTransaction costs (gains).Transaction Costs Gains [Abstract]2024 (remainder)Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal YearInterest expenseInterest Expense, Debt, TotalInterest Expense, DebtInterest expense, netCommon Stock, Shares, Outstanding, Ending BalanceCommon Stock, Shares, Outstanding, Beginning BalanceCommon Stock, Shares, OutstandingCommon stock, shares, outstandingShare-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest RateRisk-free interest rateShare-Based Payment Arrangement [Text Block]Stock-Based CompensationShare-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair ValueWeighted-average Grant price, ForfeitedGoodwill [Roll Forward]Change in fair value of debt instruments (Note 16)Change in Fair Value of Debt InstrumentsChange in fair value of debt instruments.Number of shares issued for settlement of contingent consideration.Number of Shares Issued for Settlement of Contingent ConsiderationNumber of shares issued for settlement of contingent considerationSupplier Concentration Risk [Member]Supplier Concentration RiskAnti-dilutive Earnout AwardsEarnout awards.Earnout Awards [Member]Earnout AwardsShort-Term Debt, TotalShort-Term DebtShort-term debtSchedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]Summary of Contingent ConsiderationSummary of Contingent Consideration and Compensation Related to AcquisitionsBusiness Combinations Policy [Policy Text Block]Business CombinationsSecond contingent compensation threshold payment.Second Contingent Compensation Threshold PaymentSecond contingent compensation threshold paymentShare-Based Compensation Arrangement by Share-Based Payment Award, Discount from Market Price, Purchase DateEmployee payroll deductionsConcentration Risk Type [Domain]Concentration Risk TypeAmounts held in escrow related to the sale of Board.orgEscrow Deposits Related to Property SalesConvertible notes related parties.Convertible Notes Related Parties [Member]Convertible Notes - Related PartiesIncome Statement Location [Domain]Income Statement LocationDocument TypeDocument TypeStock Issued During Period, Shares, Conversion of Convertible SecuritiesIssuance of Class A Common Stock upon redemption of preferred stock, sharesIntangible Assets, Net (Excluding Goodwill) [Abstract]Debt Instrument, Fee AmountDebt instrument, final payment feeCost of revenuesCost of revenues.Fair Value by Liability Class [Domain]Fair Value by Liability ClassNet cash provided by (used in) investing activitiesNet Cash Provided by (Used in) Investing ActivitiesOxford Analytica.Oxford Analytica [Member]Oxford AnalyticaWarrants issued in conjunction with long-term debt issuance.Warrants Issued In Conjunction With Long Term Debt IssuanceWarrants issued in conjunction with long-term debt issuanceDocument Quarterly ReportDocument Quarterly ReportPurchase AgreementPurchase Agreement [Member]Purchase agreement.Counterparty Name [Domain]Counterparty NameWarrants and Rights OutstandingWarrants outstandingOld fiscalnote warrants.Old Fiscal Note Warrants [Member]Old FiscalNote WarrantsTemporary equity stock issued during period shares new issues.Temporary Equity Stock Issued During Period Shares New IssuesIssuance of preferred stock, sharesNon-cash deferred tax chargeNon cash Deferred Tax ChargeNon cash deferred tax charge.Disposal Group ClassificationDisposal Group Classification [Axis]Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in PeriodNumber of shares, ForfeitedNumber of shares, Cancelled and forfeitedNet cash (used in) provided by financing activitiesNet Cash Provided by (Used in) Financing ActivitiesDebt Instrument, Redemption, Period [Domain]Debt Instrument, Redemption, PeriodIncrease in share reserveShare-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares AuthorizedShort-Term Investments [Member]Short-term InvestmentsEntity Filer CategoryEntity Filer CategoryCash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]Supplemental Noncash Investing and Financing Activities:Balance Sheet Location [Domain]Balance Sheet LocationOther non-current assetsIncrease (Decrease) in Other Noncurrent AssetsOperating Lease, Impairment LossOperating lease asset impairmentGeographic Concentration Risk [Member]Geographic Concentration RiskPrincipal and accrued PIK InterestPrincipal And Accrued P I K InterestPrincipal and accrued PIK interestContingent compensation settled.Contingent Compensation SettledContingent compensation settledVariable Rate [Axis]Variable RateShort-Term Investments, TotalShort-Term InvestmentsShort-term investmentsEditorial.Editorial [Member]EditorialAicel Technologies.Aicel Technologies [Member]Aicel TechnologiesTrade Names [Member]TradenameCustomer One.Customer One [Member]Customer OneCapital Expenditures Incurred but Not yet PaidProperty and equipment purchases included in accounts payableProperty and equipment purchases included in accounts payableLiabilitiesTotal liabilitiesPrepayment fee percentage.Prepayment Fee PercentagePrepayment feeEstimated post-closing purchase price adjustmentBusiness Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration TransferredFinite-Lived Intangible Asset, Useful LifeWeighted Average Remaining Useful Life (Years)Capitalized Computer Software, Accumulated AmortizationCapitalized software development costs, Accumulated AmortizationDSAC.D S A C [Member]DSACOther Current Liabilities [Member]Other Current LiabilitiesEquity, Attributable to ParentEnding BalanceBeginning BalanceTotal stockholders' equityAcquired Finite-Lived Intangible Assets, Weighted Average Useful LifeEstimated Useful Life (Years)Intangible assets amortization periodLine of credit uncommitted incremental facility.Line Of Credit Uncommitted Incremental FacilityUncommitted incremental loan facilityNet income (loss)Net income (loss)Net income (loss) attributable to common stockholdersInterest Expense, TotalInterest ExpenseInterest expenseCustomer Relationships One MemberCustomer relationships one.Customer Relationships OneCash and Cash Equivalents [Domain]Cash and Cash EquivalentsUnearned contingent consideration reversalUnearned contingent consideration reversal.Description of business policy.Description Of Business Policy Policy TextblockDescription of BusinessCurrent assets, netBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current AssetsBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, TotalFair Value Measurement, Policy [Policy Text Block]Fair Value MeasurementBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax LiabilitiesDeferred tax liabilitiesStatement of Financial Position [Abstract]Weighted average common stock outstanding used in diluted EPS computationsDilutedWeighted Average Number of Shares Outstanding, DilutedBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, TotalBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current LiabilitiesCurrent liabilitiesPrepayment fee.Prepayment FeePrepayment feeCredit Facility [Axis]Convertible Notes - Related PartiesConvertible Notes Payable [Member]Convertible NotesEffective Income Tax Rate Reconciliation, Percent, TotalEffective Income Tax Rate Reconciliation, PercentEffective tax rates (as a percent)Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]Schedule of Fair Value on a Recurring BasisPaid-in-kind interest rateDebt instrument paid in kind interest.Debt Instrument Paid In Kind InterestInterest ratePayments to Acquire Productive Assets, TotalPayments to Acquire Productive AssetsCapital expendituresPay down amountPayments for Deposits Applied to Debt RetirementsThe Economist Group.The Economist Group [Member]The Economist GroupGovernment Assistance, Type [Axis]Government Assistance, TypeOperating Lease, Weighted Average Remaining Lease TermWeighted average remaining lease term (in years)Era Convertible NoteEra Convertivle Note [Member]Era convertivle note.Income Tax Disclosure [Text Block]Provision (Benefit) from Income TaxesPayment for Debt Extinguishment or Debt Prepayment CostPrepayment feeEarlier of prepayment or july 29, 2023.Earlier Of Prepayment Or July292023 [Member]Earlier of Prepayment or July 29, 2023Value of shares issued in exchange of termination of trust’s obligation.Value Of Shares Issued In Exchange Of Termination Of Trusts ObligationValue of shares issued in exchange of termination of Trust’s obligationOther revenue.Other Revenue [Member]Other RevenueBoard.org.Board Org [Member]Board.orgFinite-Lived Intangible Assets [Line Items]Finite Lived Intangible Assets [Line Items]Note beneficial conversion value.Note Beneficial Conversion ValueNote beneficial conversion valueFrontierView Strategy Group.Frontier View Strategy Group [Member]FrontierView Strategy GroupSchedule of Earnings Per Share, Basic and Diluted [Table Text Block]Components of Basic and Diluted Loss Per SharesPerformance Based Restricted Stock Units [Member]Performance Based Restricted Stock Units [Member]Performance Based Restricted Stock UnitsDT Global.DT Global [Member]DT GlobalDisaggregation of Revenue [Line Items]Disaggregation Of Revenue [Line Items]Leasehold Improvements [Member]Leasehold ImprovementsChange in par valueChange in par valueChange in par value.Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]Stock and Warrants Issued During Period, Value, Preferred Stock and WarrantsIssuance of preferred stock and warrantsFair Value Disclosures [Abstract]Percentage of shares issued from outstanding number of sharesShare-Based Compensation Arrangement by Share-Based Payment Award, Percentage of Outstanding Stock MaximumSchedule of Business Acquisitions, by Acquisition [Table Text Block]Summary of Fair Value of Consideration TransferredTotal comprehensive income (loss)Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling InterestFair Value Hierarchy and NAV [Axis]Fair Value Hierarchy and NAVAdjustment to Additional Paid-in Capital, Convertible Debt Instrument Issued at Substantial PremiumSeller convertible notes issued at premiumMeasurement Frequency [Domain]Measurement FrequencyBusiness Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred RevenueDeferred revenuesOther Non-current LiabilitiesOther Noncurrent Liabilities [Member]Trust’s obligation to issue capital stock to holder as capital contribution.Trusts Obligation To Issue Capital Stock To Holder As Capital ContributionTrust’s obligation to issue capital stock to holder as a capital contributionRevision of Prior Period [Domain]Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in PeriodNumber of shares, VestedNumber of shares, ExercisedShares issuedStock Issued During Period, Shares, New IssuesFair value of promissory noteBusiness Acquisition [Axis]Business AcquisitionDeferred Revenue, Current, TotalDeferred Revenue, CurrentDeferred revenue, current portionClass of Warrant or Right [Axis]Class of Warrant or RightIncome Tax Disclosure [Abstract]Finite-Lived Intangible Assets by Major Class [Axis]Finite-Lived Intangible Assets by Major ClassNorth America [Member]North AmericaImpairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]Acquisition-Related Intangibles and Other Long-Lived AssetsPercentage of gain on realization of preferred stock.Percentage Of Gain On Realization Of Preferred StockPercentage of gain on realization of preferred stockDT-Global Asset Acquisition.D T Global Asset Acquisition [Member]DT-Global Asset AcquisitionNet operating loss carryforwardsOperating Loss CarryforwardsTemporary equity retroactive conversion of share due to business combination.Temporary Equity Retroactive Conversion of Share Due to Business CombinationRetroactive conversion of shares due to Business Combination, sharesRetroactive conversion of shares due to Business Combination, sharesXML
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Fiscal period values are FY, Q1, Q2, and Q3. 1st, 2nd and 3rd quarter 10-Q or 10-QT statements have value Q1, Q2, and Q3 respectively, with 10-K, 10-KT or other fiscal year statements having FY.
This is focus fiscal year of the document report in YYYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006.
For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument.
Indicate 'Yes' or 'No' whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure.
Indicate if an emerging growth company has elected not to use the extended transition period for complying with any new or revised financial accounting standards.
Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
Indicate whether the registrant is one of the following: Large Accelerated Filer, Accelerated Filer, Non-accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure.
Boolean flag that is true when the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Sum of the carrying values as of the balance sheet date of obligations incurred through that date and due within one year (or the operating cycle, if longer), including liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received, taxes, interest, rent and utilities, accrued salaries and bonuses, payroll taxes and fringe benefits.
Amount, after allowance for credit loss, of right to consideration from customer for product sold and service rendered in normal course of business, classified as current.
Amount of excess of issue price over par or stated value of stock and from other transaction involving stock or stockholder. Includes, but is not limited to, additional paid-in capital (APIC) for common and preferred stock.
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
Amount, after accumulated amortization and accumulated impairment loss, of asset recognized from cost incurred to obtain or fulfill contract with customer; classified as current.
Amount, after accumulated amortization and accumulated impairment loss, of asset recognized from cost incurred to obtain or fulfill contract with customer; classified as noncurrent.
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur.
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity.
Amount of deferred income and obligation to transfer product and service to customer for which consideration has been received or is receivable, classified as current.
Amount of deferred income and obligation to transfer product and service to customer for which consideration has been received or is receivable, classified as noncurrent.
Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future.
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.
Amount of asset related to consideration paid in advance for costs that provide economic benefits within a future period of one year or the normal operating cycle, if longer.
Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.
Amount of cash restricted as to withdrawal or usage, classified as current. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits.
The fair value of shares that would be issued, determined under the conditions specified in the contract if the settlement were to occur at the reporting date.
Amount of investments including trading securities, available-for-sale securities, held-to-maturity securities, and short-term investments classified as other and current.
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method.
Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.
The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.
Amount of gain (loss) from sale and disposal of integrated set of activities and assets capable of being conducted and managed for purpose of providing return in form of dividend, lower cost, or other economic benefit to investor, owner, member and participant.
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line.
Amount of loss from the write-down of an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense.
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use.
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period.
Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period.
Amount before tax, after reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature.
Amount of increase (decrease) in the value of a contingent consideration liability, including, but not limited to, differences arising upon settlement.
Amount of cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage. Excludes amount for disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Amount of increase (decrease) in cash, cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including effect from exchange rate change. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Amount of unrealized gain (loss) on investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale), investment in debt security measured at amortized cost (held-to-maturity) and investment in debt security measured at fair value with change in fair value recognized in net income (trading).
The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation.
Amount of increase (decrease) from effect of exchange rate changes on cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; held in foreign currencies; including, but not limited to, disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Amount of gain (loss) from sale and disposal of integrated set of activities and assets capable of being conducted and managed for purpose of providing return in form of dividend, lower cost, or other economic benefit to investor, owner, member and participant.
Amount of loss from the write-down of an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
The increase (decrease) during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services.
The increase (decrease) during the reporting period in the value of expenditures made during the current reporting period for benefits that will be received over a period of years. Deferred charges differ from prepaid expenses in that they usually extend over a long period of time and may or may not be regularly recurring costs of operation.
Amount of increase (decrease) in deferred income and obligation to transfer product and service to customer for which consideration has been received or is receivable.
Amount of cash paid for interest, excluding capitalized interest, classified as operating activity. Includes, but is not limited to, payment to settle zero-coupon bond for accreted interest of debt discount and debt instrument with insignificant coupon interest rate in relation to effective interest rate of borrowing attributable to accreted interest of debt discount.
Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.
Amount of cash inflow (outflow) from investing activities, including discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.
Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.
Other cash or noncash adjustments to reconcile net income to cash provided by (used in) operating activities that are not separately disclosed in the statement of cash flows (for example, cash received or cash paid during the current period for miscellaneous operating activities, net change during the reporting period in other assets or other liabilities).
Interest paid other than in cash for example by issuing additional debt securities. As a noncash item, it is added to net income when calculating cash provided by or used in operations using the indirect method.
The cash outflow for purchases of and capital improvements on property, plant and equipment (capital expenditures), software, and other intangible assets.
Tim Hwang, the Company’s Chairman, Chief Executive Officer and Co-Founder, adopted a trading plan on March 20, 2024, and Gerald Yao, the Company’s Chief Strategy Officer, Global Head of ESG, and Co-Founder, adopted a trading plan on March 19, 2024 (each, a "Trading Plan"). Each Trading Plan is intended to satisfy the Rule 10b5-1 affirmative defense. Mr, Hwang's Trading Plan covers the disposition of up to 25,000 shares per month of the Company’s Class A common stock, and will terminate on May 30, 2025, unless earlier
terminated in accordance with its terms. Mr. Yao's Trading Plan covers the disposition of up to 2,750 shares per month of the Company's Class A common stock, and will terminate on May 30, 2025, unless earlier terminated in accordance with its terms.
1. Summary of Business and Significant Accounting Policies
Description of Business
FiscalNote Holdings, Inc. (“FiscalNote,” or the “Company”) is a leading technology provider of global policy and market intelligence. It delivers critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products. The Company is headquartered in Washington, D.C.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit), and cash flows. All adjustments are of a normal recurring nature. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Liquidity and Going Concern
Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company funded operations through raising equity and debt. The Company's ability to maintain its minimum cash requirement, fund its future cash interest requirements under its senior term loan and fund its operations depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond the Company's control. Accordingly, the Company continues to closely monitor expenses to assess whether any immediate, or long-term changes, are necessary to maintain compliance with its financial covenants.
The Company’s cash, cash equivalents, restricted cash, and short-term investments were $44.5 million at March 31, 2024, compared with $24.4 million at December 31, 2023. Further, the Company had a negative working capital balance of $38.5 million (excluding cash and short-term investments) at March 31, 2024 and had an accumulated deficit of $765.8 million and $816.4 million as of March 31, 2024 and December 31, 2023, respectively. The Company has incurred net losses of $21.0 million (excluding the effect of the gain on sale of business) and $19.3 million for the three months ended March 31, 2024 and 2023, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development.
In addition, as disclosed in Note 8, “Debt”, the Company is subject to certain financial covenants. The Company’s ability to maintain compliance with these financial covenants are based on the Company’s current expectations regarding continued growth in revenues, collections, cost structure, current cash burn rate and other operating assumptions. The Company believes our cash on hand at March 31, 2024, proceeds from our expected product sales, and available borrowings under our Senior Term Loan for certain acquisition activity, will be sufficient to meet our obligations and our required covenants for at least the next twelve months from the date of this filing.
Segments
The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Over the past several years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence, and reach in various market segments. While the Company has offerings in multiple market segments and operates in multiple countries, the Company’s business operates in one operating segment because the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis.
Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements).
For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
Fair Value of Financial Instruments
The Company has elected the fair value option on the subordinated convertible promissory notes issued as part of the Dragonfly acquisition, refer to Note 4, "Business Combinations" and Note 8, "Debt" for further details, and for the New GPO Note and Era Convertible Notes, refer to Note 8, "Debt" for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.
Investments
The Company has invested in highly liquid investments that have investment-grade ratings. These investments are accounted for at fair value through the condensed consolidated statement of operations. The Company is able to easily liquidate these into cash; accordingly, the Company has presented these investments as available for current operations and are presented as short-term investments within current assets in the condensed consolidated balance sheets. Purchases and sales of short-term investments are classified in the investing section of our consolidated statement of cash flows.
Concentrations of Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At March 31, 2024, approximately 77% of the Company’s cash and cash equivalents were held at JPMorgan Chase Bank, N.A.
The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of March 31, 2024 and December 31, 2023, allowance for credit losses of $1,120 and $1,252, respectively, was included in the accounts receivable, net balance.
No single customer accounted for more than 10% of the Company's accounts receivable balance as of March 31, 2024 and December 31, 2023. Revenue derived from the U.S. Federal Government was17% of revenue for both of the three months ended March 31, 2024 and 2023, respectively. As of both of March 31, 2024 and December 31, 2023, assets located in the United States were approximately 85% percent of total assets.
As of March 31, 2024 one vendor accounted for more than 10% of the Company's accounts payable balance. No vendors individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2023. During the three months ended March 31, 2024 and March 31, 2023, one vendor represented more than 10% of the total purchases made.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments("ASU 2016-13") guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate now reflects an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The Company adopted ASC 2016-13 on January 1, 2023 using the modified retrospective transition method. Upon adoption, the Company recorded a $212 cumulative-effect adjustment to accumulated deficit on the condensed consolidated balance sheets, our allowance for doubtful accounts receivable changed from $468 at December 31, 2022 to $680 at January 1, 2023.
In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (ASC 815-40) ("ASU 2020-06") guidance modifying the requirements for the accounting for convertible instruments and contracts in an entity’s own equity. The modifications eliminate certain accounting models for convertible debt instruments, eliminate certain requirements for equity classification of embedded derivatives and align earnings per share calculations for convertible instruments. The Company adopted ASC 2020-06 on January 1, 2023 using the modified retrospective approach. The adoption of ASC 2020-06 did not have a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280) guidance for segment reporting. The new guidance amends segment reporting to include significant segment expenses. The guidance is effective for the Company beginning with our annual
report for the year ended December 31, 2024, and the subsequent interim periods and is required to be disclosed retrospectively to all prior periods presented. The Company does not expect that this guidance will have a significant impact on our disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU enhance income tax disclosures, primarily through standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed. We are currently evaluating the impact of adoption on our financial disclosures.
On March 11, 2024, the Company entered into an agreement (the "Purchase Agreement") to sell the equity of the Company's subsidiary owning and operating its Board.org business ("Board.org") with Exec Connect Intermediate LLC (the “Buyer”). On March 11, 2024, after adjustments based on Board.org’s working capital, indebtedness and transaction expenses, as well as retention payments payable to certain employees of Board.org, the Company received $90,905 in cash (excluding $785 of the purchase price that was deposited into escrow to satisfy certain potential post-closing purchase price adjustments and indemnification claims and including $21 of cash acquired by the Buyer). The Company is entitled to receive an earn-out payment of up to $8,000, less the amount of certain retention payments potentially owing to the former Board.org employees, if the Board.org business achieves specified revenue targets for fiscal year 2024. The Purchase Agreement contains representations, warranties and indemnification obligations of the parties customary for transactions similar to those contemplated by the Purchase Agreement. As a result of the sale of Board.org, the Company recorded a pre-tax gain on disposal of $71,599, inclusive of the $785 of funds placed in escrow that the Company anticipates receiving and $50 of estimated post-closing purchase price adjustment which are included in other current assets.
The proceeds from the sale of Board.org were used in part to prepay $65,700 of term loans under the Company’s Credit Agreement, and pay $7,068 of related prepayment and exit fees associated with the retired amount. The remaining $18,137 of net proceeds were retained by the Company for general corporate purposes. As part of the sale the Company recorded a current tax liability for federal and state income tax of $1,448 and a non-cash deferred tax charge of $280.
The Company determined that Board.org was not a significant subsidiary, and the disposition of Board.org did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Board.org were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Pursuant to the Employee Lease Agreement entered into in connection with the closing of the sale of Board.org, the Company is the employer of record for the Board.org employees. Under the terms of the Employee Lease agreement, the Company is responsible for the payment of salaries and benefits to the Board.org employees at the direction of the buyer, until the buyer legally assumes those employees. The Company will be reimbursed by the buyer for the actual costs incurred pursuant to the Employee Lease Agreement. Accordingly, at March 31, 2024 the Company is due $378 from the buyer for payroll and benefit costs paid by the Company during the period from March 11, 2024 to March 31, 2024, which has been presented in other current assets on the condensed consolidated balance sheet.
Additionally, the Company entered into a Transition Services Agreement in connection with the closing of the sale of Board.org whereby the Company will provide certain transitional support services for a period of time following the closing and the buyer will reimburse FiscalNote for certain direct costs of those services. No material costs were incurred under the Transition Services Agreement during the period from March 11, 2024 to March 31, 2024.
2023 Acquisition
Dragonfly Acquisition
On January 27, 2023, the Company entered into a Sale and Purchase Agreement for all of the issued and outstanding share capital of Dragonfly Eye Limited ("Dragonfly"), a UK- based SaaS-based geopolitical and security intelligence provider of actionable data and analysis delivered through Dragonfly's SaaS-based, proprietary Security Intelligence and Analysis Service subscription platform and API.
The aggregate purchase price consisted of (i) $5.6 million in cash (£4.5 million pounds sterling), (ii) 1,885,149 shares of the Company’s Class A Common Stock, and (iii) $11.1 million (£8.9 million pounds sterling) in aggregate principal amount of subordinated convertible promissory notes (“Seller Convertible Notes”). The Company incurred expenses of $1,272 in connection with the transaction during the year ended December 31, 2023 (inclusive of $446 of amounts paid on January 27, 2023 that were recognized as expense during the three months ended March 31, 2023).
The acquisition date fair value of the consideration transferred for Dragonfly consisted of the following:
Cash
$
5,617
Fair value of Class A common stock
9,539
Fair value of Seller Convertible Notes
8,635
Fair value of contingent consideration
1,445
Total
$
25,236
The Class A common stock issued as consideration as part of the acquisition of Dragonfly represents non-cash activity on the condensed consolidated statement of stockholders equity and condensed consolidated statement of cash flows.
Certain employees of Dragonfly are eligible for employee earnout bonus awards ("Employee Earnout Awards") based on 2024 revenue targets. The Employee Earnout Awards are subject to forfeiture in the event that Dragonfly does not achieve its revenue target or these employees terminate their employment. Any Employee Earnout Awards that are forfeited are reallocated to the other eligible employees.
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:
Cash and cash equivalents
$
607
Current assets, net
3,690
Property and equipment, net
18
Intangible assets
9,600
Deferred revenues
(3,933
)
Current liabilities
(1,764
)
Deferred tax liabilities
(1,517
)
Total net assets acquired
6,701
Goodwill
18,535
Total purchase price
$
25,236
The following table sets forth the components of identified intangible assets acquired and their estimated useful lives as of the date of acquisition:
Estimated Fair Value
Estimated Useful Life (Years)
Customer relationships
$
7,300
6,10
(a)
Developed technology
1,750
10
Tradename
550
3
Total intangible assets acquired
$
9,600
(a) Includes two separate customer relationships with two different useful lives
The fair values of the customer relationships, developed technology and tradename were determined using the income approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.
The purchase price allocation includes UK deferred income tax assets and liabilities for acquired book and tax basis differences. Goodwill recorded for this acquisition is not tax deductible.
On July 29, 2022, the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the closing on July 29, 2022. Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
In connection with the closing of the Business Combination Agreement, FiscalNote also entered into the Credit Agreement with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC (together the “New Senior Lenders”), pursuant to which a new senior term loan was consummated simultaneously with the Closing (the "Senior Term Loan").
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
The following table depicts the Company's disaggregated revenue for the periods presented:
Three Months Ended March 31,
2024
2023
Subscription
$
29,626
$
28,467
Advisory
1,257
1,113
Advertising
514
418
Books
148
584
Other revenue
567
947
Total
$
32,112
$
31,529
Revenue by Geographic Locations
The following table depicts the Company’s revenue by geographic operations for the periods presented:
Three Months Ended March 31,
2024
2023
North America
$
25,997
$
26,152
Europe
5,269
4,100
Australia
303
289
Asia
543
988
Total
$
32,112
$
31,529
Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. North America revenue consists solely of revenue attributed to the United States. For the three months ended March 31, 2024 and 2023, revenue attributed to the United Kingdom represented approximately thirteen percent and ten percent of total revenues, respectively. No other foreign country represented more than five percent of total revenue during the three months ended March 31, 2024 and 2023.
Contract Assets
The Company had contract assets of $1,044 and $1,183, as of March 31, 2024 and December 31, 2023, respectively. Contract assets are generated when contractual billing schedules differ from the timing of revenue recognition or cash collections. They represent a conditional right to consideration for satisfied performance obligations that becomes a receivable when the conditions are satisfied. They are recorded as part of other current assets on the condensed consolidated balance sheets.
Deferred Revenue
Details of the Company’s deferred revenue for the periods presented are as follows:
Balance at December 31, 2022
$
36,487
Acquired deferred revenue
4,013
Revenue recognized in the current period from amounts in the prior balance
(16,610
)
New deferrals, net of amounts recognized in the current period
25,928
Effects of foreign currency
32
Balance at March 31, 2023
$
49,850
Balance at December 31, 2023
$
44,405
Sale of Board.org
(9,117
)
Revenue recognized in the current period from amounts in the prior balance
(19,249
)
New deferrals, net of amounts recognized in the current period
29,502
Effects of foreign currency
(118
)
Balance at March 31, 2024
$
45,423
Costs to Obtain
During the three months ended March 31, 2024 and 2023, the Company capitalized $941 and $1,114 of costs to obtain revenue contracts. The Company amortized costs to obtain revenue contracts in the amount of $1,009 and $832 to sales and marketing expense during the three months ended March 31, 2024 and 2023, respectively. There were no impairments of costs to obtain revenue contracts for the three months ended March 31, 2024 and 2023.
Unsatisfied Performance Obligations
At March 31, 2024, the Company had $90,981 of remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations. The Company expects to recognize this over the next fiveyears.
The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.
On March 11, 2024, the Company entered into an agreement (the "Purchase Agreement") to sell the equity of the Company's subsidiary owning and operating its Board.org business ("Board.org") with Exec Connect Intermediate LLC (the “Buyer”). On March 11, 2024, after adjustments based on Board.org’s working capital, indebtedness and transaction expenses, as well as retention payments payable to certain employees of Board.org, the Company received $90,905 in cash (excluding $785 of the purchase price that was deposited into escrow to satisfy certain potential post-closing purchase price adjustments and indemnification claims and including $21 of cash acquired by the Buyer). The Company is entitled to receive an earn-out payment of up to $8,000, less the amount of certain retention payments potentially owing to the former Board.org employees, if the Board.org business achieves specified revenue targets for fiscal year 2024. The Purchase Agreement contains representations, warranties and indemnification obligations of the parties customary for transactions similar to those contemplated by the Purchase Agreement. As a result of the sale of Board.org, the Company recorded a pre-tax gain on disposal of $71,599, inclusive of the $785 of funds placed in escrow that the Company anticipates receiving and $50 of estimated post-closing purchase price adjustment which are included in other current assets.
The proceeds from the sale of Board.org were used in part to prepay $65,700 of term loans under the Company’s Credit Agreement, and pay $7,068 of related prepayment and exit fees associated with the retired amount. The remaining $18,137 of net proceeds were retained by the Company for general corporate purposes. As part of the sale the Company recorded a current tax liability for federal and state income tax of $1,448 and a non-cash deferred tax charge of $280.
The Company determined that Board.org was not a significant subsidiary, and the disposition of Board.org did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Board.org were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements."
Pursuant to the Employee Lease Agreement entered into in connection with the closing of the sale of Board.org, the Company is the employer of record for the Board.org employees. Under the terms of the Employee Lease agreement, the Company is responsible for the payment of salaries and benefits to the Board.org employees at the direction of the buyer, until the buyer legally assumes those employees. The Company will be reimbursed by the buyer for the actual costs incurred pursuant to the Employee Lease Agreement. Accordingly, at March 31, 2024 the Company is due $378 from the buyer for payroll and benefit costs paid by the Company during the period from March 11, 2024 to March 31, 2024, which has been presented in other current assets on the condensed consolidated balance sheet.
Additionally, the Company entered into a Transition Services Agreement in connection with the closing of the sale of Board.org whereby the Company will provide certain transitional support services for a period of time following the closing and the buyer will reimburse FiscalNote for certain direct costs of those services. No material costs were incurred under the Transition Services Agreement during the period from March 11, 2024 to March 31, 2024.
2023 Acquisition
Dragonfly Acquisition
On January 27, 2023, the Company entered into a Sale and Purchase Agreement for all of the issued and outstanding share capital of Dragonfly Eye Limited ("Dragonfly"), a UK- based SaaS-based geopolitical and security intelligence provider of actionable data and analysis delivered through Dragonfly's SaaS-based, proprietary Security Intelligence and Analysis Service subscription platform and API.
The aggregate purchase price consisted of (i) $5.6 million in cash (£4.5 million pounds sterling), (ii) 1,885,149 shares of the Company’s Class A Common Stock, and (iii) $11.1 million (£8.9 million pounds sterling) in aggregate principal amount of subordinated convertible promissory notes (“Seller Convertible Notes”). The Company incurred expenses of $1,272 in connection with the transaction during the year ended December 31, 2023 (inclusive of $446 of amounts paid on January 27, 2023 that were recognized as expense during the three months ended March 31, 2023).
The acquisition date fair value of the consideration transferred for Dragonfly consisted of the following:
Cash
$
5,617
Fair value of Class A common stock
9,539
Fair value of Seller Convertible Notes
8,635
Fair value of contingent consideration
1,445
Total
$
25,236
The Class A common stock issued as consideration as part of the acquisition of Dragonfly represents non-cash activity on the condensed consolidated statement of stockholders equity and condensed consolidated statement of cash flows.
Certain employees of Dragonfly are eligible for employee earnout bonus awards ("Employee Earnout Awards") based on 2024 revenue targets. The Employee Earnout Awards are subject to forfeiture in the event that Dragonfly does not achieve its revenue target or these employees terminate their employment. Any Employee Earnout Awards that are forfeited are reallocated to the other eligible employees.
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:
Cash and cash equivalents
$
607
Current assets, net
3,690
Property and equipment, net
18
Intangible assets
9,600
Deferred revenues
(3,933
)
Current liabilities
(1,764
)
Deferred tax liabilities
(1,517
)
Total net assets acquired
6,701
Goodwill
18,535
Total purchase price
$
25,236
The following table sets forth the components of identified intangible assets acquired and their estimated useful lives as of the date of acquisition:
Estimated Fair Value
Estimated Useful Life (Years)
Customer relationships
$
7,300
6,10
(a)
Developed technology
1,750
10
Tradename
550
3
Total intangible assets acquired
$
9,600
(a) Includes two separate customer relationships with two different useful lives
The fair values of the customer relationships, developed technology and tradename were determined using the income approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.
The purchase price allocation includes UK deferred income tax assets and liabilities for acquired book and tax basis differences. Goodwill recorded for this acquisition is not tax deductible.
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
The Company has operating leases, principally for corporate offices under non-cancelable operating leases that expire at various dates through 2031. The non-cancellable base terms of these leases typically range from one to nine years. Certain lease agreements include
options to renew or terminate the lease, which if not reasonably certain to be exercised are therefore not factored into the determination of lease payments.
The following table details the composition of lease expense for the periods presented:
Three Months Ended March 31,
2024
2023
Operating lease cost
$
1,238
$
2,585
Variable lease cost
94
155
Short-term lease cost
37
178
Total lease costs
$
1,369
$
2,918
Sublease income
$
(26
)
$
(1,364
)
Cash payments related to operating lease liabilities were $1,499 and $4,797 (inclusive of $1,682 lease termination fee) for the three months ended March 31, 2024 and 2023, respectively.
The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.
The following table summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets by major class:
March 31, 2024
December 31, 2023
Weighted Average
Gross Carrying Amount
Accumulated Amortization
Accumulated Impairment
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Impairment
Net Carrying Amount
Remaining Useful Life (Years) March 31, 2024
Customer relationships
$
76,071
$
(27,116
)
$
(2,235
)
$
46,720
$
88,544
$
(32,392
)
$
(2,235
)
$
53,917
8.5
Developed technology
29,968
(20,338
)
(1,909
)
7,721
37,205
(26,743
)
(1,909
)
8,553
6.7
Databases
29,864
(11,590
)
-
18,274
29,895
(11,057
)
-
18,838
8.6
Tradenames
11,119
(3,789
)
(579
)
6,751
12,077
(4,367
)
(579
)
7,131
8.2
Expert network
2,669
(1,391
)
-
1,278
2,692
(1,291
)
-
1,401
2.9
Patents
803
(213
)
(8
)
582
784
(217
)
(8
)
559
17.5
Content library
592
(138
)
-
454
592
(123
)
-
469
7.7
Total
$
151,086
$
(64,575
)
$
(4,731
)
$
81,780
$
171,789
$
(76,190
)
$
(4,731
)
$
90,868
Finite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. Amortization of intangible assets, excluding developed technology, was$2,685 and $2,814 for the three months ended March 31, 2024 and 2023, respectively.
Amortization of developed technology was recorded as part of cost of revenues in the amount of $765 and $1,316 for the three months ended March 31, 2024 and 2023, respectively.
The expected future amortization expense for intangible assets as of March 31, 2024 is as follows:
2024 (remainder)
$
8,800
2025
10,441
2026
10,183
2027
9,774
2028
9,427
Thereafter
33,155
Total
$
81,780
Capitalized software development costs
Capitalized software development costs are as follows.
March 31, 2024
December 31, 2023
Gross Carrying Amount
Accumulated Amortization
Accumulated Impairment
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Impairment
Net Carrying Amount
Capitalized software development costs
$
27,008
$
(11,754
)
$
(1,492
)
$
13,762
$
27,659
$
(12,795
)
$
(1,492
)
$
13,372
During the three months ended March 31, 2024 and 2023, the Company capitalized interest on capitalized software development costs in the amount of $132 and $117, respectively. Amortization of capitalized software development costs was recorded as part of cost of revenues in the amount of $1,663 and $1,281 for the three months ended March 31, 2024 and 2023, respectively. The estimated useful life is determined at the time each project is placed in service.
Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but are rather tested for impairment at least annually as of October 1 of each year.
The changes in the carrying amounts of goodwill, which are generally not deductible for tax purposes, are as follows:
Balance at December 31, 2023
$
187,703
Sale of Board.org
(23,022
)
Impact of foreign currency fluctuations
(347
)
Balance at March 31, 2024
$
164,334
Due to the decline in the Company’s stock price and market capitalization in the first quarter of 2023, and the underperformance of the Company’s ESG reporting unit compared to internal projections, the Company performed a quantitative goodwill impairment assessment as of March 31, 2023. This quantitative assessment resulted in all the goodwill in our ESG reporting unit being impaired; accordingly, an impairment charge of $5,837 was recognized during the three months ended March 31, 2023. Prior to the quantitative goodwill impairment the Company tested the recoverability of its long-lived assets, and concluded that such assets were not impaired.
The fair value estimate of the Company's reporting units was derived based on an income approach. Under the income approach, the Company estimated the fair value of reporting units based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and the uncertainty related to our reporting unit's ability to execute on the projected cash flows.
Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more of these impairment indicators could occur or intensify in the near term, which may result in an impairment of long-lived assets or further impairment of goodwill.
The following presents the carrying value of the Company’s debt as of the respective period ends:
March 31, 2024
December 31, 2023
Senior Term Loan
$
92,891
$
158,228
New GPO Note
33,252
36,954
Convertible Notes
14,557
14,052
Dragonfly Seller Convertible Notes
7,857
9,002
Era Convertible Note
8,461
5,977
Aicel Convertible Note
1,114
1,156
PPP loan
117
144
Total gross debt
158,249
225,513
Debt issuance costs
(5,220
)
(3,098
)
Total
153,029
222,415
Less: Current portion
(67
)
(105
)
Total
$
152,962
$
222,310
Senior Term Loan
On July 29, 2022, concurrent with the closing of the Company's Business Combination, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote Holdings, Inc., entered into a senior credit agreement (the "Credit Agreement") providing for a Senior Term Loan consisting of a fully funded principal amount of $150,000 and an uncommitted incremental loan facility totaling $100,000 available upon notice if the Company meets certain financial growth criteria and other customary requirements (the “Incremental Term Facility”) (collectively the “Senior Credit Facility”). The annual interest of the Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum or (ii) 9.0% payable monthly, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. The Senior Credit Facility will mature on July 29, 2027.
On March 17, 2023, the Company entered into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 1 provided for the extension of an incremental term loan by one of the lenders under the facility in the principal amount of $6,000 which was received by the Company on March 31, 2023, on the same terms as the existing term loans (the “Incremental Facility”). In connection with the funding of the Incremental Facility, the Company issued the lender warrants expiring July 15, 2027, to purchase up to 80,000 Class A Common Stock at an exercise price of $0.01 per share, in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation D promulgated thereunder. The lender warrants represented a non-cash financing activity.
On May 16, 2023, the Company entered into Amendment No. 2 ("Amendment No. 2") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 2 joined Dragonfly Eye Limited and Oxford Analytica Limited (“Oxford Analytica”), each a wholly owned subsidiary of the Company, as Guarantors under the Credit Agreement.
On August 3, 2023, the Company entered into Amendment No. 3 ("Amendment No. 3") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 3 provided for: (a) the extension of the July 2023 Deferred Fee from July 29, 2023 to July 29, 2024, (b) the increase of the July 2023 Deferred Fee from $1,734 to $2,034, (c) an increase of the Restatement Date Final Agreement from $7,410
to $8,970 and (d) the revision to the minimum annual recurring revenue ("ARR") and adjusted EBITDA covenants (as both are defined in the Credit Agreement).
In connection with the completion of the sale of Board.org on March 11, 2024, the Company also entered into Amendment No. 4 to the Credit Agreement (the “Amendment No. 4”), pursuant to which, among other things, the lenders consented to the release of the liens on Board.org’s assets and permitted the consummation of the sale in exchange for the permanent prepayment of $65,700 of term loans under the Credit Agreement. The Company also made a payment of $1,314 and $5,754 of related prepayment and exit fees, respectively. Amendment No. 4 also requires that upon receipt of any earn-out payment pursuant to the equity purchase agreement underlying the sale of Board.org, the Company will prepay outstanding obligations under the Credit Agreement in an amount equal to 70% of the net proceeds received from such earn-out payment, together with a prepayment fee and an exit fee, equal to 5.75% of the amount of such prepayment.
In addition, Amendment No. 4 extended the commencement of amortization payments under the Credit Agreement from August 15, 2025 to August 15, 2026, with such payments to fully amortize the term loans by the maturity date of July 15, 2027. Amendment No. 4 also increased the Company’s minimum liquidity covenant to $22,500 and modified the Company’s minimum ARR and adjusted EBITDA (as defined in the Credit Agreement, as amended) in order to appropriately reflect the sale of Board.org and the absence of its future contributions to the Company’s overall financial performance and position.
The Prime Rate in effect for the Senior Term Loan was8.50% at March 31, 2024. For the three months ended March 31, 2024, the Company incurred $4,911 of cash interest and $364 of paid-in-kind interest, respectively, on the Senior Term Loan. Paid-in-kind interest is reflected as a component of the carrying value of the Senior Term Loan as the payment of such interest will occur upon the settlement of the Senior Term Loan.
The Company may prepay the Senior Term Loan in whole, subject to a 2.0% prepayment fee if prepaid prior to July 30, 2024, 1.0% prepayment fee if prepaid after July 30, 2024 but prior to July 30, 2025, and no prepayment fee if prepaid on or after July 30, 2025. The July 2023 Deferred Fee, as previously amended, of $2,034 was paid as part of Amendment No. 4. Accordingly, the Company recognized the accretion of the July 2023 Deferred Fee as interest expense through March 11, 2024. Prior to Amendment No. 4, the Company had $8,970 of deferred fees due at the earlier of prepayment or maturity of the Senior Term Loan which were amortized over the term of the Senior Term Loan using the effective interest method. On March 11, 2024, and as a result of Amendment No. 4, the Company had $5,250 of deferred fees outstanding which the Company recognized the accretion of these deferred fees as interest expense. The $1,134 of prepayment fee paid on March 11, 2024 was treated as a debt discount. The amortization recorded for the three months ended March 31, 2024 and March 31, 2023 is $646 and $149, respectively, and is included within interest expense in the condensed consolidated statements of operations and comprehensive income (loss). The remaining unamortized debt discount at March 31, 2024 is $4,629, excluding any deferred fees, and is reflected net against debt on the condensed consolidated balance sheets.
The Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The Senior Term Loan contains customary negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. In addition to the negative covenants, there were four financial covenants in place at March 31, 2024: a minimum cash balance requirement, minimum ARR requirement, an adjusted EBITDA requirement and a capital expenditure limitation. As of, and for the three months ended March 31, 2024, the Company was in compliance with all required financial covenants. Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.
New GPO Note
On June 30, 2023 (the “Subscription Date”), the Company entered into an Exchange and Settlement Agreement (the “Exchange and Settlement Agreement”) with GPO FN Noteholder LLC (the “Investor”) pursuant to which (i) the Investor returned 5,881,723 shares of Class A Common Stock held by the Investor to the Company for cancellation, (ii) the Company issued to the Investor a subordinated convertible promissory note in an initial principal amount of $46,794 (the “New GPO Note”), and (iii) the parties agreed to a mutual settlement and release of all claims including, but not limited to, any claims by the Investor for additional shares or money damages resulting from the entry into the Merger Agreement, relating to or arising from the conversion of the Amended and Restated Senior Secured Subordinated Promissory Note, dated December 29, 2020, previously issued by a subsidiary of the pre-business combination FiscalNote Holdings, Inc. to the Investor. The exchange and settlement are non-cash exchanges in the condensed consolidated statement of cash flows. The before mentioned transactions closed on July 3, 2023.
The New GPO Note will mature on July 3, 2028, unless earlier redeemed or repurchased by the Company or converted in accordance with the terms thereof. The New GPO Note bears interest at a rate of 7.50% per annum payable quarterly in arrears, as follows: (i) for the first year following the date of issuance, interest will be payable in kind by adding interest to the principal amount of the New GPO Note; and (ii) for any period thereafter, interest will be payable in cash or freely tradeable shares of Class A Common Stock, at the Company’s option, with the value per share determined with reference to the trailing 30-day volume weighted average trading price prior to the interest payment date, subject to certain exceptions under which the Company will be permitted to pay PIK Interest.
The New GPO Note is subordinate to the Company’s obligations under its Senior Term Loan which limits certain actions that the Company and the Investor may take under the New GPO Note. At any time prior to the July 3, 2028, the Investor is entitled to convert all or any portion of the principal amount of the New GPO Note and accrued interest thereon into shares of Class A Common Stock at $8.28 per share (adjusted to $6.89 on April 11, 2024 pursuant to the terms of the New GPO Note as a result of the issuance of the Additional Fee Shares to Era as described in Note 18, "Subsequent Events"). The New GPO Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, of the New GPO Note is redeemable by the Company in whole or in part based on certain conditions as defined in the New GPO Note.
The Company elected to account for the New GPO Note using the fair value option. The New GPO Note was recorded at its June 30, 2023 acquisition date fair value of $36,583. The Company initially recorded a loss contingency of $11,700 in its fiscal year 2022 financial statements representing the difference between the fair value of the shares returned by the Investor and the fair value of the New GPO Note on the date of exchange. With the execution of the Exchange and Settlement Agreement and New GPO Note, the Company recorded an additional non-cash loss on settlement with GPO of $3,474 in the condensed consolidated statement of operationsfor the year ended December 31, 2023. The fair market value at March 31, 2024 and December 31, 2023 was $33,252 and $36,954, respectively. The unrealized change in the fair value of the New GPO Note of $4,443 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $180 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024. The Company incurred total interest expense related to the new GPO note of $921 for the three months ended March 31, 2024.
Convertible Notes
At March 31, 2024, the holders of four convertible notes that were previously issued by Old FiscalNote (the “Convertible Notes”) with a principal and accrued PIK balance of $14,557 remain outstanding. The Company incurred total interest expense related to the Convertible Notes, including the amortization of the various discounts, of $598 and $515 during the three months ended March 31, 2024 and 2023, respectively.
Dragonfly Seller Convertible Notes
In connection with the Company's acquisition of Dragonfly, the Company financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Notes were issued in a principal amount of £8.9 million pounds sterling (approximately $11,050 on the closing date of the acquisition), with interest at an annual rate of 8%, which can be paid in cash or paid-in-kind. The paid-in-kind interest will be annually credited to the principal amount. All principal and accrued interest are due upon maturity on January 27, 2028.
At any time after August 2, 2023, the Company can convert any portion of the principal and accrued interest at the volume weighted-average price for the five consecutive trading day period ending on the last trading day of the calendar month preceding the date the Company provides notice of conversion to the Sellers.
At any time after the 18 month anniversary of the Dragonfly acquisition closing date, the lender has the right to convert the outstanding principal and accrued interest for FiscalNote common stock at $10.00 per share, subject to adjustment in the event of any stock dividend, stock split, reverse stock split, combination or other similar recapitalization with respect to common stock.
The Company elected to account for the Dragonfly Seller Convertible Notes using the fair value option. The Dragonfly Seller Convertible Notes were recorded at their acquisition date fair value of $8,635. The fair market value at March 31, 2024 and at December 31, 2023 was $7,857 and $9,002.The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $47 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024 and a non-cash gain of $574 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2023, respectively. The Company incurred total interest expense related to the Dragonfly Seller Convertible Notes of $241 and $153during the three months ended March 31, 2024 and March 31, 2023, respectively.
Era Convertible Notes
In connection with the Company’s strategic commercial partnership, the Company issued a convertible note to Era, a third-party lender, dated December 8, 2023 for $5,500 on December 8, 2023 (the "Issuance Date"). Pursuant to the terms of the December 8, 2023 convertible note, the Company issued that same third-party lender a second convertible note for $801 on January 5, 2024 (collectively, the "Era Convertible Notes"). The Era Convertible Notes were issued in a principal amount of $6,301, with cash interest at a rate equal to the applicable federal rate published by the Internal Revenue Service beginning on the six-month anniversary of the Issuance Date. All principal and unpaid interest are due on maturity at December 8, 2027.
The Era Convertible Notes are contractually subordinated to the Company’s obligations under its senior secured indebtedness, and accordingly, the Company’s right to make certain cash payments in connection therewith is limited by the terms of such subordination agreement (the “Subordination Agreement”). Era may convert the Notes into shares of Common Stock (the “Underlying Shares”), beginning on the six-month anniversary of the Issuance Date based on the volume weighted average price of the trailing 30 trading day period prior to the conversion. In addition, the Company may elect to convert the Era Convertible Notes into the Underlying Shares if the Underlying Shares are registered for resale under the Securities Act of 1933, as amended (the “Securities Act”).
Pursuant to the copilot agreement (the "Co-Pilot Agreement") entered into by and among the Company, FiscalNote Inc., a subsidiary of the Company, and Era on December 8, 2023, the Company agreed to issue Era up to an additional $3,105,105 in the form of shares of the Company's Class A Common Stock no later than June 2024 (the "Partnership Shares"). The Co-Pilot Agreement requires the Company to issue additional shares of Common Stock (“Additional Shares”) to Era if Era’s sales of the Partnership Shares and the Underlying Shares do not generate aggregate cash proceeds to Era that equal or exceed approximately $9.5 million during the sell-off period set forth in the Co-Pilot Agreement. Any such Additional Shares would be valued based on the volume weighted average price of the trailing 30 trading day period, calculated prior to the date of any such issuance.
The Company elected to account for the Era Convertible Notes using the fair value option. The Era Convertible Note dated December 8, 2023 was recorded at its acquisition date fair value of $5,500. The Era Convertible Note Dated January 5, 2024 was recorded at its acquisition date fair value of $801. The fair market value of the Era Convertible Note dated December 8, 2023 was $5,977 at December 31, 2023. The fair market value of the two Era Convertible Notes was $8,461 at March 31, 2024. The non-cash loss was recorded in the change
in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) in the amount of a loss of $1,683 for the three months ended March 31, 2024.
Aicel Convertible Note
In connection with the Company’s acquisition of Aicel, the Company assumed a convertible note (“Aicel Convertible Note”) issued by Aicel in a private placement to a third-party lender dated July 27, 2022. The Aicel Convertible Note was issued in a principal amount of $1,131, with paid-in-kind interest at an annual rate of 1%. All principal and accrued and unpaid interest are due on maturity at July 27, 2027. The Aicel Convertible Note provides for no prepayments until maturity without written consent of the lender.
The Aicel Convertible Note can be converted upon the occurrence of certain events, including (i) Aicel initial public offering (“IPO”), (ii) change in control of Aicel (the acquisition of Aicel by FiscalNote did not constitute a change in control as defined in the purchase agreement), or (iii) sale of substantially all of Aicel’s assets (collectively, a “Conversion Event”). The Company has the right to convert the Aicel Convertible Note into shares of common stock issued in an IPO, if (a) the Conversion Event is an IPO and (b) the price per share paid in an IPO is greater than the stipulated initial conversion price. The lender has the right to elect to convert the Aicel Convertible Note into shares of common stock upon the occurrence of a Conversion Event.
At any time after the second anniversary of the Aicel acquisition closing date until the earlier of (a) the Aicel Convertible Note maturity date, or (b) the occurrence of any liquidity event, the lender has the right to require FiscalNote to repurchase the outstanding principal in exchange for FiscalNote common stock. The lender will receive a number of shares of FiscalNote equal to the outstanding principal plus accrued interest divided by the FiscalNote common stock price and rounded to the nearest whole share.
Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Aicel Convertible Note due and payable the lenders can elect to increase the paid-in-kind interest rate to 12.0% per annum.
The Company concluded that the contingent default interest provision was required to be bifurcated and treated as an embedded derivative liability. The associated value was immaterial and required no initial amount to be recorded and continues to be immaterial as of the reporting date . The Company determined that the remaining embedded features were clearly and closely related to the debt host and did not require bifurcation from the debt host.
The Aicel Convertible Note was recorded at its acquisition fair value of $1,131. The Company incurred total interest expense related to the Aicel Convertible Note of $19 and $3 during the three months ended March 31, 2024 and March 31, 2023, respectively.
PPP Loan
On April 13, 2020, the Company received funding in the principal amount of $8,000 under the CARES Act. Interest accrues annually at 1%. On February 14, 2022, the SBA forgave $7,667 of the PPP Loan with the remaining balance of $333 to be repaid over five years. The Company recognized the forgiveness of PPP Loan as a gain on debt extinguishment in the condensed consolidated statements of operations and comprehensive income (loss) in 2022. As of March 31, 2024, the Company recorded $67 of the remaining PPP Loan as short-term debt and $50 as long-term debt in the condensed consolidated balance sheets.
Total Debt
The following table summarizes the total estimated fair value of the Company's debt as of March 31, 2024 and December 31, 2023, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.
March 31, 2024
December 31, 2023
Senior Term Loan
$
92,497
$
168,702
New GPO Note
33,252
36,954
Convertible Notes
13,709
13,992
Dragonfly Seller Convertible Notes
7,857
10,407
Era Convertible Notes
8,461
5,977
Total
$
155,776
$
236,032
Warrants
Old FiscalNote Warrants
At March 31, 2024, 118,700 warrants (previously issued by Old FiscalNote to lenders prior to the Senior Term Loan) with an exercise price of $8.56, remain outstanding. These warrants are accounted for as a liability with a fair value of $0 at March 31, 2024, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.
Warrants associated with Amendment No. 1
On March 17, 2023, in connection with Amendment No. 1 discussed above, the Company issued 80,000 warrants with an exercise price of $0.01. These warrants are accounted for as a liability with a fair value of $106at March 31, 2024, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
The Company’s charter authorizes the issuance of 1,809,000,000 shares, which includes Class A common stock, Class B common stock, and preferred stock.
Class A Common Stock
Subsequent to the Closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. Pursuant to the Company’s charter, the Company is authorized to issue 1,700,000,000 shares of Class A common stock, par value $0.0001 per share. As of March 31, 2024, the Company had122,749,497 shares of Class A common stock issued and outstanding.
Additionally, the Company has outstanding warrants to purchase shares of New FiscalNote Class A common stock that became exercisable upon the Closing of the Business Combination. Refer to Note 11, "Warrant Liabilities."
Class B Common Stock
Pursuant to the Company’s charter, the Company is authorized to issue 9,000,000 shares of Class B common stock, par value $0.0001 per share.
In connection with the Closing of the Business Combination, the Co-Founders, or entities controlled by the Co-Founders, received Class B shares of New FiscalNote common stock as consideration (see further details in Note 2, "Business Combination with DSAC").
As of March 31, 2024, the Company had 8,290,921 shares of Class B common stock issued and outstanding.
Preferred Stock
Pursuant to the Company’s charter, the Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of March 31, 2024, there were no shares of preferred stock issued and outstanding.
Dividends
The Company's Class A and Class B common stock are entitled to dividends if and when any dividend is declared by the Company's board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of the Company's business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of the Company's board of directors and will depend on, among other things, the Company's financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as the Company's board of directors may deem relevant.
The shareholders and other equity holders of Old FiscalNote as described below are entitled to receive up to 19,195,100 additional shares of Class A common stock of New FiscalNote (the “Earnout Awards”) in the form of Earnout Shares or as shares reserved for issuances upon settlement of Earnout RSUs, as described below. The Earnout Awards are split into five tranches each consisting of 3,839,020 shares of Class A common stock in New FiscalNote. Certain Old FiscalNote equity holders will receive Earnout Restricted Stock Units (the “Earnout RSUs”), which are settled in Class A common stock. The right to receive Earnout Awards will expire five years after the Closing Date (the “Earnout Period”). Each tranche of the Earnout Awards will be issued only when the dollar volume-weighted average price of one share of New FiscalNote Class A common stock is greater than or equal to $10.50, $12.50, $15.00, $20.00, or $25.00, respectively, for any 10 trading days within any period of 20 consecutive trading days during the Earnout Period (collectively, the “Triggering Events”).
Pursuant to the terms of the Business Combination Agreement, the holders of Old FiscalNote common stock, Old FiscalNote warrants, vested Old FiscalNote options and vested Old FiscalNote RSUs outstanding immediately prior to the Closing Date will be entitled to receive their proportionate allocation of Earnout Shares subject to achievement of the Triggering Event. Holders of unvested Old FiscalNote options and unvested Old FiscalNote RSUs outstanding immediately prior to the Closing Date will be entitled to receive their proportionate allocation of Earnout Shares in the form of Earnout RSUs subject to achievement of the Triggering Event. To the extent the equity award issued upon New FiscalNote's assumption of such any Old FiscalNote Option or Old FiscalNote RSU (each a “Converted Award”) is outstanding and has vested as of the occurrence of a Triggering Event, the holder thereof will receive a proportionate allocation of Earnout Shares in lieu of Earnout RSUs.
If a Converted Award is forfeited after the Closing Date but prior to the Triggering Event, no Earnout RSUs will be issued for such Converted Award. The right to receive Earnout RSUs that have been forfeited shall be reallocated pro-rata to the remaining holders of vested Converted Awards in the form of Earnout Shares and unvested Converted Awards in the form of Earnout RSUs in the manner described above. Reallocated Earnout RSUs are subject to the remaining vesting schedule and conditions of the Converted Award held by such equity holder. The forfeiture and subsequent reallocation of the Earnout RSUs are accounted for as the forfeiture of the original award and the grant of a new award.
A portion of the Earnout Shares that may be issued to Old FiscalNote common stockholders, Old FiscalNote vested option holders and Old FiscalNote warrant holders and all of the Earnout RSUs were determined to represent additional compensation for accounting purposes pursuant to ASC 718, “Compensation-Stock Compensation”. The Company recognizes stock-compensation expense based on the fair value of the Earnout Awards over the requisite service period for each tranche. Upon Closing, the Company recognized $17,712 of share-based compensation expense for vested Earnout Awards. The Company recognized $131 and $1,124 of share-based compensation expense during the three months ended March 31, 2024 and March 31, 2023, respectively. The remaining Earnout Shares were determined to represent an equity transaction in conjunction with the reverse recapitalization and were evaluated pursuant to ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. These remaining Earnout Shares will be accounted for as a liability as the arrangement is indexed to something other than the Company’s stock. The liability is revalued at each reporting period with changes being recorded as a non-operating gain or loss in the condensed consolidated statements of operations and comprehensive income (loss). The liability of $68 was recorded in other non-current liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.
As of March 31, 2024, there was $546 of unrecognized compensation expense related to the Earnout Awards to be recognized over a weighted-average period of approximately one and a half years. As of March 31, 2024, no Earnout Shares and no Earnout RSUs have been issued as no Triggering Events have occurred.
Upon the Closing of the Business Combination, the Company assumed 8,750,000 public warrants and 7,000,000 private placement warrants that were previously issued by Old DSAC. Each public warrant and private placement warrant is exercisable for 1.571428 shares of New FiscalNote Class A common stock (or an aggregate of up to 24,750,000 shares of New FiscalNote Class A common stock).
During the three months ended March 31, 2024, no public warrants were exercised into shares of Class A common stock. No private placement warrants have been exercised to date. Accordingly, as of March 31, 2024, the Company had 8,358,964public warrants and 7,000,000private placement warrants outstanding with a per share fair value of $0.44. These warrants are accounted for as a liability and have a fair value of $3,840 at March 31, 2024.
Public Warrants
Each public warrant entitles the registered holder to acquire 1.571428 shares of the Company’s Class A common stock at a price of $7.32 per share, subject to adjustment as discussed below. The warrants became exercisable on August 29, 2022. Warrants may only be exercised for a whole number of shares of Class A common stock. The public warrants will expire on July 29, 2027, or earlier upon redemption or liquidation.
Redemption of warrants for cash
The Company may call the public warrants for redemption for cash:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $11.45 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company’s Class A common stock and equity-linked securities) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company for cash, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants for shares of Class A common stock
The Company may redeem the outstanding warrants for shares of Class A common stock:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares determined by reference to an agreed table, based on the redemption date and the “fair market value” of Class A common stock (as defined below) except as otherwise described below;
•
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $6.36 per share (as adjusted per stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of the Company’s Class A common stock and equity-linked securities) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
•
if and only if, the private placement warrants are also concurrently exchanged at the same price (equal to a number of shares of our Class A common stock) as the outstanding public warrants, as described above.
•
The “fair market value” of the Class A common stock shall mean the average of the last reported sales price for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.567 shares of Class A common stock per warrant (subject to adjustment).
Private Placement Warrants
The private placement warrants are not redeemable by the Company so long as they are held by the sponsor of DSAC or its permitted transferees, except in certain limited circumstances. The DSAC Sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis and the DSAC Sponsor and its permitted transferees has certain registration rights related to the private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants). Except as described in this section, the private placement warrants have terms and provisions that are identical to those of the public warrants. If the private placement warrants are held by holders other than the DSAC Sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants.
In connection with the Business Combination, the Company's board of directors adopted, and its stockholders approved, the 2022 Long-Term Incentive Plan (the “2022 Plan”) under which 20,285,600 shares of Class A common stock were initially reserved for issuance. The 2022 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, other stock-based awards and cash-based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2022 Plan increases on the first day of each calendar year, starting on January 1, 2023 and continuing through and including January 1, 2027, by the lesser of (a) 13,523,734, (b) three percent (3%) of the total number of shares of Class A Common Stock outstanding on December 31st of the immediately preceding fiscal year or (c) a lesser number determined by the Company’s board of directors prior to January 1 of a given year. In accordance with this provision, on each of January 1, 2023 and January 1, 2024, the number of shares authorized for issuance under the 2022 Plan increased by 3,693,767 and 3,650,394, respectively.
During the three months ended March 31, 2024, the Company issued1,271,410 stock options and 239,663 restricted stock units. At March 31, 2024, 7,868,951 stock options, 2,601,649 performance stock options, 5,499,350 restricted stock units, and 75,000 performance based restricted stock units remain outstanding. As of March 31, 2024, the Company had 4,219,656 shares of Class A common stock available for issuance under the 2022 Plan.
The Company recognized $5,776 and $6,404 of stock-based compensation expense for all long term incentive plans in effect during the three months ended March 31, 2024 and 2023, respectively. The Company recognized $169 of stock-based compensation expense related to acquisition earnouts during the three ended March 31, 2024 and 2023, respectively.
2022 Employee Stock Purchase Plan
In connection with the Business Combination, the Company’s board of directors adopted, and its stockholders approved, the 2022 Employee Stock Purchase Plan (the “ESPP”) whereby eligible employees may authorize payroll deductions of up to 15% of their regular base salary to purchase shares at the lower of 85% of the fair market value of the common stock on the date of commencement of the offering period or on the last day of the six-month offering period. The plan is defined as compensatory, and accordingly, a stock-based compensation charge of $99 and $102 was recorded as the difference between the fair market value and the discounted purchase price of the Company's common stock for the three months ended March 31, 2024 and 2023, respectively. The number of shares of Common Stock reserved for issuance under the ESPP will automatically increase on January 1st each year, starting on January 1, 2023 and continuing through and including January 1, 2027, by the lesser of (a) 3,267,760, (b) one percent (1%) of the total number of shares of all classes of Common Stock outstanding on December 31st of the preceding fiscal year, or (c) a lesser number determined by the Board prior to January 1 of a given year. Pursuant to this provision, on each of January 1, 2023 and January 1, 2024, the number of shares authorized for issuance under the ESPP increased by 1,231,255 and 1,299,707, respectively. During the three months ended March 31, 2024, 202,327 shares have been issued under the ESPP and the Company had 5,493,588 shares of Class A common stock available for issuance under the ESPP.
Withholding Taxes on Equity Awards
In connection with the settlement of equity awards, the Company records a non-cash liability and corresponding APIC adjustment for the withholding taxes on net share settlement of stock-based compensation and option exercises until such time as those taxes have been remitted to the respective taxing authorities.
The Company incurred the following transaction costs related to businesses acquired and the consummation of the Business Combination during the periods presented:
The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty-five votes per share. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net loss per share. As a result, basic and diluted net income (loss) per share of Class A common stock and Class B common stock are equivalent.
The following is a calculation of the basic and diluted earnings per share for the Company's common stock, including a reconciliation between net income attributable to common stockholders used for Basic EPS and Diluted EPS for the three months ended March 31, 2024 and 2023:
(in thousands, except per share data)
Three Months Ended March 31,
2024
2023
Basic Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Basic Earnings Per Share
$
0.39
$
(0.14
)
Diluted Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
If-converted impact on net income (loss) attributable to common stockholders
3,673
-
Net income (loss) attributable to common stockholders for diluted EPS
$
54,272
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Weighted average effect of dilutive securities
15,315,053
-
Weighted average common stock outstanding used in diluted EPS computations
146,027,085
133,082,639
Diluted Earnings Per Share
$
0.37
$
(0.14
)
Since the Company was in a net loss position during the three months ended March 31, 2023, basic net loss per share attributable to common stockholders is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive.
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Three Months Ended March 31,
Anti-dilutive securities excluded from diluted loss per share:
2024
2023
Anti-dilutive Earnout Awards
19,195,100
19,195,100
Anti-dilutive stock options
-
2,033,574
Anti-dilutive Convertible Notes
-
2,075,225
Anti-dilutive contingently issuable shares
-
1,339,924
Anti-dilutive restricted stock units
5,569,966
7,022,744
Anti-dilutive Aicel Convertible Notes
-
112,899
Total anti-dilutive securities excluded from diluted loss per share
The Company computes its quarterly and year-to-date provisions for income taxes by applying the estimated effective tax rates to the quarterly and year-to-date pre-tax income or losses and adjusting the provisions for discrete tax items recorded in the periods. For the three months ended March 31, 2024 the Company reported tax expense of $1,426 on pre-tax income of $52,025, which resulted in an effective tax rate of 2.74 percent. The Company’s effective tax rate differed from the U.S. statutory rate of 21 percent primarily due to the impact of a valuation allowance on the Company’s deferred tax assets. During the three months ended March 31, 2024, the Company recorded a discrete tax charge for the impact of the sale of Board.org of $1,729.
For the three months ended March 31, 2023, the Company reported tax expense of $30 on a pre-tax loss of $19,243, which resulted in an effective tax rate of (0.16) percent. The Company's effective tax rate differed from the U.S. statutory rate of 21 percent primarily due to the impact of a valuation allowance on the Company’s deferred tax assets. During the three months ended March 31, 2023, the Company had discrete items relating to goodwill impairment, unrecognized tax benefits and the tax impact of interest expense on unrecognized tax benefits.
Unrecognized Tax Benefits and Other Considerations
The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company's tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for
income taxes in the future. For the three months ended March 31, 2024, the Company reported an uncertain tax position totaling $639 relating to a state tax filing position. The Company has the following activities relating to unrecognized tax benefits for the periods presented:
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments.
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2024 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,157
$
-
$
-
$
3,157
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,090
$
-
$
-
$
2,090
Private placement warrants
-
1,750
-
1,750
Contingent liabilities from acquisitions
-
-
113
113
New GPO Note
-
-
33,252
33,252
Dragonfly Seller Convertible Notes
-
-
7,857
7,857
Era Convertible Note
-
-
8,461
8,461
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2023 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,044
$
-
$
-
$
3,044
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,591
$
-
$
-
$
2,591
Private placement warrants
-
2,170
-
2,170
Contingent liabilities from acquisitions
-
-
130
130
Liability classified warrants (a)
-
-
23
23
New GPO Note
-
-
36,954
36,954
Dragonfly Seller Convertible Notes
-
-
9,002
9,002
Era Convertible Note
-
-
5,977
5,977
(a) - Included in other non-current liabilities on the condensed consolidated balance sheets
The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:
Contingent Liabilities from Acquisitions
Liability Classified Warrants
New GPO Note
Dragonfly Seller Convertible Notes
Era Convertible Note
Balance at December 31, 2023
$
130
$
23
$
36,954
$
9,002
$
5,977
Fair value at issuance date
-
-
-
-
801
Change in fair value included in the determination of net (income) loss(a)
(3
)
(23
)
(180
)
(47
)
1,683
Change in fair value included in accumulated other comprehensive income
-
-
(4,443
)
(1,264
)
-
Cash contingent consideration earned and subsequently settled
(14
)
-
-
-
-
Paid in kind interest
-
-
921
241
-
Foreign exchange
-
-
-
(75
)
-
Balance at March 31, 2024
$
113
$
-
$
33,252
$
7,857
$
8,461
(a)
The change in contingent liabilities from acquisitions is recorded as transaction costs on the condensed consolidated statements of operations and comprehensive income (loss).
Short-Term Investments
The fair value of the short-term investments is based on the quoted market price of the securities on the valuation date. As of March 31, 2024, the estimated fair value of the short-term investments was $7,134. The Company recognized a non-cash loss of $49 for the three
months ended March 31, 2024 resulting from the change in fair value of the short-term investments. The change in fair value is recorded in the condensed consolidated statements of operations and comprehensive income (loss).
Public Warrants
The fair value of the public warrants is based on the quoted market price of such warrants on the valuation date. As of March 31, 2024 and December 31, 2023, the estimated fair value of the public warrants was $2,090 and $2,591, respectively. The Company recognized a non-cash gain of $501 and $7,607 during the three months ended March 31, 2024 and 2023, respectively, resulting from the change in fair value of the public warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).
Private Placement Warrants
As of March 31, 2024 and December 31, 2023, the estimated fair value of the private warrants was $1,750and $2,170, respectively. The Company recognized a non-cash gain of $420and $6,370 during the three months ended March 31, 2024 and March 31, 2023, respectively, resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss).
New GPO Note
The New GPO Note was recognized as a liability in connection with the settlement of litigation on June 30, 2023 at its estimated fair value of $36,583. As of March 31, 2024 and December 31, 2023, the estimated fair value of the New GPO Note was $33,252 and $36,954, respectively. The unrealized change in the fair value of the New GPO Note of $4,443 is recorded in accumulated other comprehensive income for the period ended March 31, 2024 and the non-cash gain of $180 was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024. The estimated fair value of the New GPO Note was determined based on a trinomial lattice model.The following table presents the assumptions used to determine the fair value of the New GPO Note at March 31, 2024 and at December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.3
%
3.9
%
Yield
18.5
%
14.5
%
Expected volatility
50.0
%
50.0
%
Expected term (years)
4.3
4.5
Dragonfly Seller Convertible Notes
The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of March 31, 2024 and December 31, 2023, the estimated fair value of the Dragonfly Seller Convertible Notes were $7,857 and $9,002, respectively. The unrealized change in the fair value of the Dragonfly Seller Convertible Note of $1,264 is recorded in accumulated other comprehensive income for the period ended March 31, 2024, a non-cash gain of $47 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2024 and a non-cash gain of $573 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive income (loss) during the three months ended March 31, 2023, respectively. The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at March 31, 2024 and December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.3
%
3.9
%
Yield
20.0
%
15.5
%
Expected volatility
50.0
%
50.0
%
Expected term (years)
3.8
4.1
As of March 31, 2024, the difference between the aggregate fair value and the unpaid principal balance of the Dragonfly Seller Convertible Notes is $4,490.
Era Convertible Note
The Era Convertible Note was recognized as a liability associated with the Company’s strategic commercial partnership on December 8, 2023 at a fair value of $5,500. During the first quarter of 2024, the Company issued $801 of new debt related to the new Era Convertible Note. At March 31, 2024 and December 31, 2023 the fair value of the Era Convertible Note was $8,461 and $5,977, respectively. The non-cash loss of $1,684 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations
and comprehensive income (loss) during the three months ended March 31, 2024. The following table presents the assumptions used to determine the fair value of the Era Convertible Note at March 31, 2024 and December 31, 2023:
March 31, 2024
December 31, 2023
Common stock share price
$
1.33
$
1.14
Risk free rate
4.8
%
4.17
%
Yield
156.1
%
153.24
%
Expected volatility
51.0
%
63.00
%
Expected term (years)
3.7
3.9
Contingent Liabilities from acquisitions
The contingent liabilities from acquisitions are classified as Level 3 in the fair value hierarchy. At March 31, 2024 and December 31, 2023, the contingent consideration and compensation relates to the following acquisitions:
March 31, 2024
December 31, 2023
Curate
$
-
$
4
Equilibrium
113
112
DT Global
-
14
Total contingent liabilities from acquisitions
$
113
$
130
The Company settled part of the Curate contingent consideration and compensation through an issuance of 83,393 additional shares in a non-cash transaction during the first quarter of 2023.
Liability classified warrants
The Last Out Lender Warrants are classified as Level 3 in the fair value hierarchy. The fair value of the Last Out Lender Warrants is calculated using the Black-Scholes calculation with the following inputs:
March 31, 2024
Common stock fair value
$
1.33
Time to maturity (years)
1.3
Risk free rate
4.88
%
Volatility
52
%
Exercise price
$
8.56
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. The Company has recognized an impairment of goodwill as disclosed in Note 7, "Goodwill" during the three months ended March 31, 2023. The Company has not identified any additional impairments to be recorded during both the three months ended March 31, 2024 and 2023.
There were no other transfers of assets or liabilities between levels during both the three months ended March 31, 2024 and 2023.
Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive income (loss).
The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.
From time to time the Company is a party to various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved.
Legal fees are recognized as incurred when the legal services are provided, and therefore are not recognized as part of the loss contingency.
The Company has evaluated subsequent events through May 10, 2024, the date that the financial statements were available to be issued.
Era Convertible Note
On April 11, 2024, the “Company entered into a letter agreement (the “Letter Agreement”) with Era modifying certain provisions of the Era Convertible Notes and the Co-Pilot Agreement. The Letter Agreement permitted and required the Company to convert approximately
$1.6 million in aggregate principal amount of the Era Convertible Notes (the “Early Converted Notes”) into a portion of the Underlying Shares. Pursuant to the Letter Agreement, the Company was also required to issue to Era the Partnership Shares. Pursuant to the Letter Agreement, Era has the right to convert the aggregate principal amount of the remaining Era Convertible Notes (the “Remaining Notes”), but only on or after June 30, 2024, if such conversion right is not cancelled by the terms of the Letter Agreement. In addition, the Letter Agreement terminates the Company’s obligation to issue the Additional Shares under the circumstances specified therein. On April 11, 2024 and pursuant to the Letter Agreement, the Company issued the Investor an aggregate of 3,003,268 shares of Common Stock to satisfy its obligations with respect to the Partnership Shares and a portion of the Underlying Shares.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
FiscalNote Holdings, Inc. (“FiscalNote,” or the “Company”) is a leading technology provider of global policy and market intelligence. It delivers critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products. The Company is headquartered in Washington, D.C.
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit), and cash flows. All adjustments are of a normal recurring nature. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model and the Company funded operations through raising equity and debt. The Company's ability to maintain its minimum cash requirement, fund its future cash interest requirements under its senior term loan and fund its operations depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond the Company's control. Accordingly, the Company continues to closely monitor expenses to assess whether any immediate, or long-term changes, are necessary to maintain compliance with its financial covenants.
The Company’s cash, cash equivalents, restricted cash, and short-term investments were $44.5 million at March 31, 2024, compared with $24.4 million at December 31, 2023. Further, the Company had a negative working capital balance of $38.5 million (excluding cash and short-term investments) at March 31, 2024 and had an accumulated deficit of $765.8 million and $816.4 million as of March 31, 2024 and December 31, 2023, respectively. The Company has incurred net losses of $21.0 million (excluding the effect of the gain on sale of business) and $19.3 million for the three months ended March 31, 2024 and 2023, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development.
In addition, as disclosed in Note 8, “Debt”, the Company is subject to certain financial covenants. The Company’s ability to maintain compliance with these financial covenants are based on the Company’s current expectations regarding continued growth in revenues, collections, cost structure, current cash burn rate and other operating assumptions. The Company believes our cash on hand at March 31, 2024, proceeds from our expected product sales, and available borrowings under our Senior Term Loan for certain acquisition activity, will be sufficient to meet our obligations and our required covenants for at least the next twelve months from the date of this filing.
The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Over the past several years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence, and reach in various market segments. While the Company has offerings in multiple market segments and operates in multiple countries, the Company’s business operates in one operating segment because the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis.
Basic earnings per share (EPS) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the if-converted method (convertible debt instruments) or treasury-stock method (warrants and share-based payment arrangements).
For purposes of this calculation, common stock issuable upon conversion of debt, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.
The Company has elected the fair value option on the subordinated convertible promissory notes issued as part of the Dragonfly acquisition, refer to Note 4, "Business Combinations" and Note 8, "Debt" for further details, and for the New GPO Note and Era Convertible Notes, refer to Note 8, "Debt" for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.
The Company has invested in highly liquid investments that have investment-grade ratings. These investments are accounted for at fair value through the condensed consolidated statement of operations. The Company is able to easily liquidate these into cash; accordingly, the Company has presented these investments as available for current operations and are presented as short-term investments within current assets in the condensed consolidated balance sheets. Purchases and sales of short-term investments are classified in the investing section of our consolidated statement of cash flows.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At March 31, 2024, approximately 77% of the Company’s cash and cash equivalents were held at JPMorgan Chase Bank, N.A.
The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of March 31, 2024 and December 31, 2023, allowance for credit losses of $1,120 and $1,252, respectively, was included in the accounts receivable, net balance.
No single customer accounted for more than 10% of the Company's accounts receivable balance as of March 31, 2024 and December 31, 2023. Revenue derived from the U.S. Federal Government was17% of revenue for both of the three months ended March 31, 2024 and 2023, respectively. As of both of March 31, 2024 and December 31, 2023, assets located in the United States were approximately 85% percent of total assets.
As of March 31, 2024 one vendor accounted for more than 10% of the Company's accounts payable balance. No vendors individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2023. During the three months ended March 31, 2024 and March 31, 2023, one vendor represented more than 10% of the total purchases made.
In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments("ASU 2016-13") guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate now reflects an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The Company adopted ASC 2016-13 on January 1, 2023 using the modified retrospective transition method. Upon adoption, the Company recorded a $212 cumulative-effect adjustment to accumulated deficit on the condensed consolidated balance sheets, our allowance for doubtful accounts receivable changed from $468 at December 31, 2022 to $680 at January 1, 2023.
In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (ASC 815-40) ("ASU 2020-06") guidance modifying the requirements for the accounting for convertible instruments and contracts in an entity’s own equity. The modifications eliminate certain accounting models for convertible debt instruments, eliminate certain requirements for equity classification of embedded derivatives and align earnings per share calculations for convertible instruments. The Company adopted ASC 2020-06 on January 1, 2023 using the modified retrospective approach. The adoption of ASC 2020-06 did not have a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280) guidance for segment reporting. The new guidance amends segment reporting to include significant segment expenses. The guidance is effective for the Company beginning with our annual
report for the year ended December 31, 2024, and the subsequent interim periods and is required to be disclosed retrospectively to all prior periods presented. The Company does not expect that this guidance will have a significant impact on our disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU enhance income tax disclosures, primarily through standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed. We are currently evaluating the impact of adoption on our financial disclosures.
Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.
Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.
Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact.
Tabular disclosure of receivable, contract asset, and contract liability from contract with customer. Includes, but is not limited to, change in contract asset and contract liability.
Tabular disclosure of disaggregation of revenue into categories depicting how nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factor.
Tabular disclosure of revenue from external customers by geographic areas attributed to the entity's country of domicile and to foreign countries from which the entity derives revenue.
The contingent liabilities from acquisitions are classified as Level 3 in the fair value hierarchy. At March 31, 2024 and December 31, 2023, the contingent consideration and compensation relates to the following acquisitions:
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Tabular disclosure of contingent payment arrangements including the terms that will result in payment and the accounting treatment that will be followed if such contingencies occur, including the potential impact on earnings per share if contingencies are to be settled in common stock of the entity. The description also may include the period over which amounts are expected to be paid, and changes in the amount since the previous reporting period. This also includes contingent options and commitments.
Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts.
Tabular disclosure of finite-lived intangible assets acquired as part of a business combination or through an asset purchase, by major class and in total, including the value of the asset acquired, any significant residual value (the expected value of the asset at the end of its useful life) and the weighted-average amortization period.
Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.
Tabular disclosure of lessee's lease cost. Includes, but is not limited to, interest expense for finance lease, amortization of right-of-use asset for finance lease, operating lease cost, short-term lease cost, variable lease cost and sublease income.
Tabular disclosure of assets, excluding financial assets and goodwill, lacking physical substance with a finite life, by either major class or business segment.
The following table summarizes the total estimated fair value of the Company's debt as of March 31, 2024 and December 31, 2023, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.
Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.
The Company incurred the following transaction costs related to businesses acquired and the consummation of the Business Combination during the periods presented:
The following is a calculation of the basic and diluted earnings per share for the Company's common stock, including a reconciliation between net income attributable to common stockholders used for Basic EPS and Diluted EPS for the three months ended March 31, 2024 and 2023:
(in thousands, except per share data)
Three Months Ended March 31,
2024
2023
Basic Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Basic Earnings Per Share
$
0.39
$
(0.14
)
Diluted Earnings Per Share
Numerator:
Net income (loss) attributable to common stockholders
$
50,599
$
(19,273
)
If-converted impact on net income (loss) attributable to common stockholders
3,673
-
Net income (loss) attributable to common stockholders for diluted EPS
$
54,272
$
(19,273
)
Denominator:
Weighted average common stock outstanding used in basic EPS computations
130,712,032
133,082,639
Weighted average effect of dilutive securities
15,315,053
-
Weighted average common stock outstanding used in diluted EPS computations
Tabular disclosure of securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) in the future that were not included in the computation of diluted EPS because to do so would increase EPS amounts or decrease loss per share amounts for the period presented, by antidilutive securities.
Tabular disclosure of an entity's basic and diluted earnings per share calculations, including a reconciliation of numerators and denominators of the basic and diluted per-share computations for income from continuing operations.
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2024 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,157
$
-
$
-
$
3,157
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,090
$
-
$
-
$
2,090
Private placement warrants
-
1,750
-
1,750
Contingent liabilities from acquisitions
-
-
113
113
New GPO Note
-
-
33,252
33,252
Dragonfly Seller Convertible Notes
-
-
7,857
7,857
Era Convertible Note
-
-
8,461
8,461
The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2023 by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents
$
3,044
$
-
$
-
$
3,044
Short-term investments
-
7,134
-
7,134
Liabilities:
Public warrants
$
2,591
$
-
$
-
$
2,591
Private placement warrants
-
2,170
-
2,170
Contingent liabilities from acquisitions
-
-
130
130
Liability classified warrants (a)
-
-
23
23
New GPO Note
-
-
36,954
36,954
Dragonfly Seller Convertible Notes
-
-
9,002
9,002
Era Convertible Note
-
-
5,977
5,977
(a) - Included in other non-current liabilities on the condensed consolidated balance sheets
The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:
Contingent Liabilities from Acquisitions
Liability Classified Warrants
New GPO Note
Dragonfly Seller Convertible Notes
Era Convertible Note
Balance at December 31, 2023
$
130
$
23
$
36,954
$
9,002
$
5,977
Fair value at issuance date
-
-
-
-
801
Change in fair value included in the determination of net (income) loss(a)
(3
)
(23
)
(180
)
(47
)
1,683
Change in fair value included in accumulated other comprehensive income
-
-
(4,443
)
(1,264
)
-
Cash contingent consideration earned and subsequently settled
(14
)
-
-
-
-
Paid in kind interest
-
-
921
241
-
Foreign exchange
-
-
-
(75
)
-
Balance at March 31, 2024
$
113
$
-
$
33,252
$
7,857
$
8,461
(a)
The change in contingent liabilities from acquisitions is recorded as transaction costs on the condensed consolidated statements of operations and comprehensive income (loss).
The contingent liabilities from acquisitions are classified as Level 3 in the fair value hierarchy. At March 31, 2024 and December 31, 2023, the contingent consideration and compensation relates to the following acquisitions:
The following table presents the assumptions used to determine the fair value of the Dragonfly Seller Convertible Notes at March 31, 2024 and December 31, 2023:
The Last Out Lender Warrants are classified as Level 3 in the fair value hierarchy. The fair value of the Last Out Lender Warrants is calculated using the Black-Scholes calculation with the following inputs:
Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.
Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.
Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.
Tabular disclosure of contingent payment arrangements including the terms that will result in payment and the accounting treatment that will be followed if such contingencies occur, including the potential impact on earnings per share if contingencies are to be settled in common stock of the entity. The description also may include the period over which amounts are expected to be paid, and changes in the amount since the previous reporting period. This also includes contingent options and commitments.
Cash includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid Investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Short-term investments, exclusive of cash equivalents, generally consist of marketable securities intended to be sold within one year (or the normal operating cycle if longer) and may include trading securities, available-for-sale securities, or held-to-maturity securities (if maturing within one year), as applicable.
For an entity that discloses a concentration risk in relation to quantitative amount, which serves as the "benchmark" (or denominator) in the equation, this concept represents the concentration percentage derived from the division.
Number of operating segments. An operating segment is a component of an enterprise: (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same enterprise), (b) whose operating results are regularly reviewed by the enterprise's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and (c) for which discrete financial information is available. An operating segment may engage in business activities for which it has yet to earn revenues, for example, start-up operations may be operating segments before earning revenues.
Subsequent to the closing of the Business Combination, the Company's Class A common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “NOTE” and “NOTE WS,” respectively. The Company accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.
With respect to a business combination completed during the period, this element provides a description of the business, other than the name, which may include the industry, size, products and other important information.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
Amount, after accumulated amortization and accumulated impairment loss, of asset recognized from cost incurred to obtain or fulfill contract with customer.
For an entity that discloses a concentration risk in relation to quantitative amount, which serves as the "benchmark" (or denominator) in the equation, this concept represents the concentration percentage derived from the division.
Amount, after allowance for credit loss, of right to consideration in exchange for good or service transferred to customer when right is conditioned on something other than passage of time.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount of increase (decrease) in obligation to transfer good or service to customer for which consideration from customer has been received or is due, from business combination.
Amount of revenue recognized that was previously included in balance of obligation to transfer good or service to customer for which consideration from customer has been received or is due.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Period in which remaining performance obligation is expected to be recognized as revenue, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
This element represents the amount of any measurement period adjustment (as defined) realized during the reporting period to items of consideration transferred in connection with a business combination for which the initial accounting was incomplete.
The expenses and losses recorded for each transaction with the acquiree that was recognized separately from the acquisition of assets and assumptions of liabilities in the business combination.
Amount of current federal, state, and local tax expense (benefit) attributable to income (loss) from continuing operations. Includes, but is not limited to, current national, regional, territorial, and provincial tax expense (benefit) for non-US (United States of America) jurisdiction.
Amount, before unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but is not limited to, notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt.
The designation of funds furnished by a borrower to a lender to assure future payments of the borrower's real estate taxes and insurance obligations with respect to a mortgaged property. Escrow deposits may be made for a variety of other purposes such as earnest money and contingent payments. This element excludes replacement reserves which are an escrow separately provided for within the US GAAP taxonomy.
Amount of gain (loss) from sale and disposal of integrated set of activities and assets capable of being conducted and managed for purpose of providing return in form of dividend, lower cost, or other economic benefit to investor, owner, member and participant.
The cash inflow associated with the amount received from the sale of a portion of the company's business, for example a segment, division, branch or other business, during the period.
Acquisitions and Dispositions - Summary of Fair Value of Consideration Transferred (Details) - Jan. 27, 2023 - Dragonfly Eye Limited $ in Thousands, £ in Millions
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount of consideration transferred, consisting of acquisition-date fair value of assets transferred by the acquirer, liabilities incurred by the acquirer, and equity interest issued by the acquirer.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount of consideration transferred, consisting of acquisition-date fair value of assets transferred by the acquirer, liabilities incurred by the acquirer, and equity interest issued by the acquirer.
Amount of currency on hand as well as demand deposits with banks or financial institutions, acquired at the acquisition date. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Amount of assets that are expected to be realized or consumed within one year or the normal operating cycle, if longer, acquired at the acquisition date.
Amount of deferred revenue expected to be recognized as such within one year or the normal operating cycle, if longer, assumed at the acquisition date.
Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Acquisitions and Dispositions - Summary of Components of Identified Intangible Assets Acquired and Estimated Useful Lives (Details) - Dragonfly Eye Limited $ in Thousands
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Weighted average amortization period of finite-lived intangible assets acquired either individually or as part of a group of assets, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Term of lessee's operating lease, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days.
Amount of single lease cost, calculated by allocation of remaining cost of lease over remaining lease term. Includes, but is not limited to, single lease cost, after impairment of right-of-use asset, calculated by amortization of remaining right-of-use asset and accretion of lease liability.
Intangible Assets - Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major Class (Details) - USD ($) $ in Thousands
Useful life of finite-lived intangible assets, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
The amount of impairment loss recognized in the period resulting from the write-down of the carrying amount of a finite-lived intangible asset to fair value.
The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method.
Amount of amortization for asset, excluding financial asset and goodwill, lacking physical substance with finite life expected to be recognized after fourth fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of amortization for assets, excluding financial assets and goodwill, lacking physical substance with finite life expected to be recognized in next fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of amortization for assets, excluding financial assets and goodwill, lacking physical substance with finite life expected to be recognized in remainder of current fiscal year.
Amount of amortization for assets, excluding financial assets and goodwill, lacking physical substance with finite life expected to be recognized in fourth fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of amortization for assets, excluding financial assets and goodwill, lacking physical substance with finite life expected to be recognized in third fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount of amortization for assets, excluding financial assets and goodwill, lacking physical substance with finite life expected to be recognized in second fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach).
Amount before accumulated amortization of capitalized costs for computer software, including but not limited to, acquired and internally developed computer software.
Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Amount of foreign currency translation gain (loss) which increases (decreases) an asset representing future economic benefits from other assets acquired in a business combination that are not individually identified and separately recognized.
Amount of loss from the write-down of an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount, after accumulated amortization, of debt issuance costs. Includes, but is not limited to, legal, accounting, underwriting, printing, and registration costs.
Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt classified as noncurrent. Excludes lease obligation.
The annual interest of the Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum or (ii) 9.0% payable monthly, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount, after accumulated amortization, of debt issuance costs. Includes, but is not limited to, legal, accounting, underwriting, printing, and registration costs.
Description of the terms of a credit facility arrangement. Terms typically include interest rate, collateral required, guarantees required, repayment requirements, and restrictions on use of assets and activities of the entity.
Maximum borrowing capacity under the credit facility without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility.
Interest paid other than in cash for example by issuing additional debt securities. As a noncash item, it is added to net income when calculating cash provided by or used in operations using the indirect method.
Fair value portion of borrowing which can be exchanged for a specified number of another security at the option of the issuer or the holder, for example, but not limited to, the entity's common stock.
Amount, before unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but is not limited to, notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
The amount of loss pertaining to the specified contingency that was charged against earnings in the period, including the effects of revisions in previously reported estimates.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Fair value portion of borrowing which can be exchanged for a specified number of another security at the option of the issuer or the holder, for example, but not limited to, the entity's common stock.
Amount, before unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but is not limited to, notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Maximum borrowing capacity under the credit facility without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility.
Interest paid other than in cash for example by issuing additional debt securities. As a noncash item, it is added to net income when calculating cash provided by or used in operations using the indirect method.
Including the current and noncurrent portions, carrying amount of debt identified as being convertible into another form of financial instrument (typically the entity's common stock) as of the balance sheet date, which originally required full repayment more than twelve months after issuance or greater than the normal operating cycle of the company.
Fair value portion of borrowing which can be exchanged for a specified number of another security at the option of the issuer or the holder, for example, but not limited to, the entity's common stock.
The number of shares issued in exchange for the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or payments in the period.
Amount, before unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but is not limited to, notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Maximum borrowing capacity under the credit facility without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility.
Fair value portion of borrowing which can be exchanged for a specified number of another security at the option of the issuer or the holder, for example, but not limited to, the entity's common stock.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Maximum borrowing capacity under the credit facility without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Period of time between issuance and maturity of debt instrument, in PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days.
Including the current and noncurrent portions, aggregate carrying value as of the balance sheet date of loans payable (with maturities initially due after one year or beyond the operating cycle if longer).
Reflects the total carrying amount as of the balance sheet date of debt having initial terms less than one year or the normal operating cycle, if longer.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
The fair value of shares that would be issued, determined under the conditions specified in the contract if the settlement were to occur at the reporting date.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws.
Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt.
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased.
Weighted-average period over which cost not yet recognized is expected to be recognized for award under share-based payment arrangement, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days.
The number of grants made during the period on other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan).
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
The difference between the maximum number of shares (or other type of equity) authorized for issuance under the plan (including the effects of amendments and adjustments), and the sum of: 1) the number of shares (or other type of equity) already issued upon exercise of options or other equity-based awards under the plan; and 2) shares (or other type of equity) reserved for issuance on granting of outstanding awards, net of cancellations and forfeitures, if applicable.
Period from grant date that an equity-based award expires, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days.
In no event will the warrants be exercisable in connection with this redemption feature for more than 0.567 shares of Class A common stock per warrant (subject to adjustment).
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Number of securities into which the class of warrant or right may be converted. For example, but not limited to, 500,000 warrants may be converted into 1,000,000 shares.
Expiration date of outstanding warrant and right embodying unconditional obligation requiring redemption by transferring asset at specified or determinable date or upon event certain to occur, in YYYY-MM-DD format.
The number of grants made during the period on other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan).
The number of non-vested equity-based payment instruments, excluding stock (or unit) options, that validly exist and are outstanding as of the balance sheet date.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Transaction (Gains) Costs, net - Summary of Transaction Costs Related to Businesses Acquired and Consummation of Business Combination (Details) - USD ($) $ in Thousands
This element represents acquisition-related costs incurred to effect a business combination which costs have been expensed during the period. Such costs include finder's fees; advisory, legal, accounting, valuation, and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and may include costs of registering and issuing debt and equity securities.
Amount of increase (decrease) in the value of a contingent consideration liability, including, but not limited to, differences arising upon settlement.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.
Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.
The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period.
Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period.
Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Amount of gain (loss) recognized in other comprehensive income (OCI) from liability measured at fair value on recurring basis using unobservable input (level 3).
Amount of issuances of financial instrument classified as a liability measured using unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing.
Fair value of financial instrument classified as a liability measured using unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing.
Indicates line item in statement in which net income is reported that includes gain (loss) from liability measured at fair value using unobservable input (level 3).
Interest paid other than in cash for example by issuing additional debt securities. As a noncash item, it is added to net income when calculating cash provided by or used in operations using the indirect method.
Including the current and noncurrent portions, carrying amount of debt identified as being convertible into another form of financial instrument (typically the entity's common stock) as of the balance sheet date, which originally required full repayment more than twelve months after issuance or greater than the normal operating cycle of the company.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Fair value of financial obligations, including, but not limited to, debt instruments, derivative liabilities, federal funds purchased and sold under agreements to repurchase, securities loaned or sold under agreements to repurchase, financial instruments sold not yet purchased, guarantees, line of credit, loans and notes payable, servicing liability, and trading liabilities.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Fair Value Measurements and Disclosures - Summary of Contingent Consideration and Compensation Related to Acquisitions (Details) - Level 3 - USD ($) $ in Thousands
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Value of input used to measure outstanding warrant and right embodying unconditional obligation requiring redemption by transferring asset at specified or determinable date or upon event certain to occur.
Amount, before unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but is not limited to, notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt.
Detail information of subsequent event by type. User is expected to use existing line items from elsewhere in the taxonomy as the primary line items for this disclosure, which is further associated with dimension and member elements pertaining to a subsequent event.