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What changed in ACCESS Newswire Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ACCESS Newswire Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+199 added−247 removedSource: 10-K (2025-03-25) vs 10-K (2024-03-07)

Top changes in ACCESS Newswire Inc.'s 2024 10-K

199 paragraphs added · 247 removed · 132 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThis also allows our customers to have one media platform to manage all their assets, brands and outreach. 6 Table of Contents Webcasting & Events Our webcasting and events business is comprised of our earnings call webcasting solutions and our virtual meeting and events software (such as annual meetings, deal/non-deal road shows, analyst days and shareholder days).
Biggest changeOur webcasting and events business is comprised of our earnings call webcasting solutions and our virtual meeting and events software (such as deal/non-deal road shows, analyst days and shareholder days). Our Webcasting Platform is a cloud-based webcast, webinar and virtual meeting platform that delivers live and on-demand streaming of events to audiences of all sizes.
Media Monitoring – a brand Monitoring solution is extremely important, and every company should consider monitoring not only their brands, but their products, executives and competitors mentioned in all mediums – print, broadcast media and television, web, radio, video, blogs and social media.
A brand monitoring solution is extremely important, and every company should consider monitoring not only their brands, but their products, executives and competitors mentioned in all mediums – print, broadcast media and television, web, radio, video, blogs and social media.
Customers can subscribe to one or more of these data feeds or as a component of a fully designed and hosted website for pre-IPO companies, SEC reporting companies and partners seeking to display our content on their corporate sites. The clear benefit to our investor relations content network is its integration with our other Communications offerings.
Customers can subscribe to one or more of these data feeds or as a component of a fully designed and hosted website for pre-IPO companies, SEC reporting companies and partners seeking to display our content on their corporate sites. The clear benefit to our investor relations content network is its integration with our other offerings.
Additionally, within the interface we made it easy to see each article published by every journalist a user may want to connect with, making Media Suite a compelling combination of the right features and intelligence between database, pitching, and monitoring.
Additionally, within the interface we made it easy to see each article published by every journalist a user may want to connect with, making our media suite a compelling combination of the right features and intelligence between database, pitching, and monitoring. Media Pitching .
Our dataset includes only the journalists that are actively writing and publishing articles. We built this component in reverse, looking at the tens of millions of articles published annually and sorted articles by industry, publication and journalist, then human curated the most accurate data of each contact and made them available within our media database.
Our dataset includes only the journalists that are actively writing and publishing articles. We built this component in reverse, looking at the tens of millions of articles published annually and sorted articles by industry, publication and journalist, then curated the most accurate data of each contact and made it available within our media database.
Media Pitching – Pitching is a critical part of the Media Suite because it allows the user to contact and connect the most active journalists in their industry.
Pitching is a critical part of our media suite because it allows the user to contact and connect with the most active journalists in their industry.
Our Media Room suite addresses the needs of our customers looking to build connections with media, journalists, customers and if applicable the investment community. According to a survey from TekGroup, a majority of journalists and media professionals indicated the importance of newsrooms that include digital media, press kits and video.
Our media room addresses the needs of our customers looking to build connections with media, journalists, customers and if applicable the investment community. According to a survey from TekGroup, a majority of journalists and media professionals indicated the importance of media rooms that include digital media, press kits and video.
It is possible that information we post on some of these channels could be deemed to be material information. Therefore, we encourage investors, the media and others interested in Issuer Direct to review the information we post to all our channels, including our social media accounts.
It is possible that information we post on some of these channels could be deemed to be material information. Therefore, we encourage investors, the media and others interested in ACCESS to review the information we post to all our channels, including our social media accounts.
As a supported and subsidized bundle product of the New York Stock Exchange (“NYSE”) offerings, we are introduced to new IPO customers and other larger cap customers listed on the NYSE. Since 2014, we have been a named NYSE subsidy provider of this Whistleblower solution.
As a supported and subsidized bundle product of the New York Stock Exchange (“NYSE”) offerings, we are introduced to new IPO customers and other larger cap customers listed on the NYSE. Since 2014, we have been a named NYSE subsidy provider of this incident response and management solution.
We announce material financial information to our investors using our investor relations website, SEC filings, investor events, news and earnings releases, public conference calls, webcasts, and social media. We use these channels to communicate with our investors and the public about our company, our products and services and other related matters.
Company Overview Both the Company and its executive officers, announce material financial information to our investors using our investor relations website, SEC filings, investor events, news and earnings releases, public conference calls, webcasts, and social media. We use these channels to communicate with our investors and the public about our company, our products and services and other related matters.
Our monitoring solution offers many of these mediums and we will continue to undergo expansion in each of these mediums with a goal of being a comprehensive media monitoring solution by the end of 2024. Our media monitoring solution ties together our journalist contacts and mention analytics into and with a customer’s dashboard of daily activity.
Our monitoring solution offers many of these mediums and we will continue to undergo expansion in each of these mediums with a goal of being a comprehensive media monitoring solution within the next year. Our media monitoring solution ties together our journalist contacts and mention analytics into and with a customer’s dashboard of daily activity. Media Room.
Media Room A natural addition to our ACCESSWIRE and investor relations website business is our corporate Media Room. This product offering can be an add-on to any customer’s ACCESSWIRE or Communications subscription account. The Media Room suite includes a custom newsroom page builder, a brand asset manager and contact manager.
A natural addition to our public relations and investor relations website business. This product offering can be an add-on to any customer’s subscription. The media room suite includes a custom newsroom page builder, a brand asset manager and contact manager.
Investor Relations Websites Our investor relations content network is another component of our Communications offering, which is used to create the investor relations’ tab of a company’s website.
Our investor relations content network is another component of our platform, which is used to create the investor relations’ tab of a company’s website.
Since our platform, systems and operations are built to handle growth, we can leverage them to produce consistently high margins and increased cash flows without a proportional increase in our capital or operating expenses. Our sales organization is responsible for generating new customer opportunities and expanding our current customers.
Since our platform, systems and operations are built to handle growth, we have been leveraging them to produce reasonable gross margins and cash flows without a proportional increase in our capital or operating expenses. Our sales organization is responsible for generating new customer opportunities and expanding our current customers.
Professional Conference and Events Software Our professional conference and events software is a subscription offering we currently license to investor conference organizers. This software, which is also available as a native mobile app, offers organizers, issuers and investors the ability to register, request and approve one-on-one meetings, manage schedules, perform event promotion and sponsorship, print attendee badges and manage lodging.
This software, which is also available as a native mobile app, offers organizers, issuers and investors the ability to register, request and approve one-on-one meetings, manage schedules, perform event promotion and sponsorship, print attendee badges and manage lodging.
Media Suite not only gives you the professionals to pitch, it also offers AIMee, our AI writing and recommendation engine, to enhance your message, write a new message and highlight engageable content to help bring your pitch to the forefront.
Our media suite not only gives the user the professionals to pitch, it also offers AIMee, our AI writing and recommendation engine, to enhance the user’s message, write a new message and highlight engage-able content to help bring their pitch to the forefront. Media Monitoring .
The success of our products and services are generally based on price, quality, and the ability to service customer demands. Management has been focused on offsetting the risks relating to competition as well as the seasonality by introducing our cloud-based subscription platform, with higher margins, clear competitive advantages, higher customer stickiness and scalability to withstand market and pricing pressures.
Management has been focused on offsetting the risks relating to competition as well as the seasonality by introducing our cloud-based subscription platform, with higher margins, clear competitive advantages, higher customer stickiness and scalability to withstand market and pricing pressures.
There are a handful of our competitors that can offer this integrated full-service solution today, however, we believe our real-time event setup and integrated approach offers a more effective way to manage the process.
Our platform incorporates other elements of the earnings event, including earnings date/call announcement, and earnings press release. There are a handful of our competitors that can offer this integrated full-service solution today, however, we believe our real-time event setup and integrated approach offers a more effective way to manage the process.
At the federal level, the SEC regulates the securities industry, along with the Financial Industry Regulatory Authority, or FINRA, formally known as NASD, and NYSE market regulations, various stock exchanges, and other self-regulatory organizations (“SRO”). 12 Table of Contents We operate our filing agent business and transfer agent business under the supervision and regulations of the SEC.
At the federal level, the SEC regulates the securities industry, along with the Financial Industry Regulatory Authority, or FINRA, formally known as NASD, and NYSE market regulations, various stock exchanges, and other self-regulatory organizations (“SRO”). 10 Table of Contents
In 2020, NYSE renewed and extended the initial subsidy term to four years from two years, whereby the first two years are provided under subsidy and the added two years are at our standard subscription rates. Recently, we have been working on upgrading the incident response and management component of the workflow, which is expected to be deployed this year.
In 2020, NYSE renewed and extended the initial subsidy term to four years from two years, whereby the first two years are provided under subsidy and the added two years are at our standard subscription rates. We continue to innovate as well as upgrade our incident response and management system which is expected to be deployed this year.
This cloud-based product can be used in a virtual or in person conference setting and is integrated within our Communications subscription offerings of newswire, newsrooms, webcasting and shareholder targeting. We believe this integration gives us a unique offering for professional conference organizers that is not available elsewhere in the market.
This cloud-based product can be used in a virtual or in person conference setting and is integrated within other offerings of press release distribution, media rooms and webcasting and events. We believe this integration gives us a unique offering for professional conference organizers that is not available elsewhere in the market. Investor Relations Websites .
Through its PR Optimizer (”PRO”) offering, formally Media Advantage Platform, Newswire automates media and marketing communications for large and small businesses seeking to deliver the right message to the right audience at the right time for the right purpose.
Our PRO offering, formally Media Advantage Platform, automates media and marketing communications for businesses seeking to deliver the right message to the right audience at the right time for the right purpose.
We did not have any customers during the year ended December 31, 2023 that accounted for more than 10% of our revenue or more than 10% of our year end accounts receivable balance as of December 31, 2023.
We did not have any customers during the year ended December 31, 2024 that accounted for more than 10% of our revenue or more than 10% of our year end accounts receivable balance as of December 31, 2024. 9 Table of Contents Human Capital and Culture As of December 31, 2024, we had 113 employees and independent contractors.
Whistleblower Hotline Our whistleblower hotline is an add-on product within our platform. This system delivers secure notifications and basic incident workflow management processes that align with a company’s corporate governance whistleblower policy.
This add-on requires a recurring annual subscription and is delivered fully integrated into and with our investor relations website offering. Incident Hotline . Formally our whistleblower hotline offering, is an add-on product within our subscription platform. This system delivers secure notifications and basic incident workflow management processes that align with a company’s corporate governance policies.
Industry Overview According to a 2022 Burton-Taylor Media Intelligence report, the global communications technology market is more than $5.5 billion in annual revenue. This total includes spending on social media solutions, media monitoring, press release targeting and distribution, and investor relations platforms globally. A key driver of growth in our industry is the introduction of new innovative technologies and solutions.
This total includes spending on social media solutions, media monitoring, press release targeting and distribution, and investor relations platforms globally. A key driver of growth in our industry is the introduction of new innovative technologies and solutions.
In the United States, corporate issuers are subject to regulation under both federal and state laws, which often require public disclosure and regulatory filings.
Regulatory policies in the United States and the rest of the world are tasked with safeguarding the integrity of the securities and financial markets and with protecting the interests of both issuers and shareholders. In the United States, corporate issuers are subject to regulation under both federal and state laws, which often require public disclosure and regulatory filings.
Through the PRO offering, we provide content and media communications services that provide customers the opportunity to optimize their content and increase their media visibility, therefore building their brand awareness and engaging a larger audience. With the flexibility of these offerings, customers have the ability to choose between support with content optimization, increased media visibility, or both for optimal results.
Through the PRO offering, we provide content and media communications services that provide customers the opportunity to optimize their content and increase their media visibility, therefore building their brand awareness and engaging a larger audience.
We also maintain key person life insurance on our C level executives, and one other key individual. We obtained a representation and warranty insurance policy in connection with our acquisition of Newswire relating to potential indemnification claims under the purchase agreement up to an aggregate amount of $12.9 million subject to a retention of $0.4 million.
We obtained a representation and warranty insurance policy in connection with our acquisition of Newswire relating to potential indemnification claims under the purchase agreement up to an aggregate amount of $12.9 million subject to a retention of $0.4 million. Regulations The securities and financial services industries generally are subject to regulation in the United States and elsewhere.
The communications industry also benefits from increased regulatory requirements and the need for platforms and systems to manage these new regulations. Additionally, the industry, along with cloud-based technologies, have matured considerably over the past several years, whereby corporate issuers and communication professionals are seeking platforms and systems to do some, if not all the work themselves.
Additionally, the industry, along with cloud-based technologies, have matured considerably over the past several years, whereby corporate issuers and communication professionals are seeking platforms and systems to do some, if not all the work themselves. We believe we are well positioned in this new environment to benefit from subscriptions and further advancements of our platform.
Insurance We maintain a general business liability, cyber-security and an errors and omissions policies specific to our industry and operations. We believe that our insurance policies provide adequate coverage for all reasonable risks associated with operating our business. Additionally, we maintain a Directors and Officers insurance policy, which is standard for our industry and size.
We believe that our insurance policies provide adequate coverages for all reasonable risks associated with operating our business. Additionally, we maintain a Directors and Officers insurance policy, which is standard for our industry and size. We also maintain key person life insurance on our C level executives.
However, there are positions where we have strong competition in hiring, such as research and development and qualified sales individuals with communications industry experience. Customers Our customers include a wide variety of public and private companies, mutual funds, law firms, brokerage firms, investment banks, individuals, and other institutions.
However, there are positions where we have strong competition in hiring, such as research and development and qualified sales individuals with communications industry experience. Customers Our customers include a wide variety of public and private companies. For the year ended December 31, 2024, we worked with 12,349 customers, compared to 11,924 for the year ended December 31, 2023.
Sales and Marketing During 2023, we continued to strengthen our brands in the market by working aggressively to expand our customer footprint and continue to cross sell to increase average revenue per customer.
Our last acquisition was the Newswire brand, which was acquired on November 1, 2022, as part of the iNewswire, LLC transaction. Sales and Marketing . During 2024, we continued to strengthen our brands in the market by working aggressively to expand our customer footprint and continue to cross sell to increase average revenue per customer.
We believe our Media Room suite accomplishes this by making it a part of our new Media Suite, giving us a further competitive advantage in the market.
We believe our media room accomplishes this by making it a part of our media suite, giving us a further competitive advantage in the market. This also allows our customers to have one media platform to manage all their assets, brands and outreach. Webcasting & Events .
As such, companies can produce content for public distribution and it is automatically linked to their corporate website, distributed to targeted groups and placed into our data feed partners. 7 Table of Contents During 2023 we released significant upgrades to our investor relations website, that included ADA Compliance (Americans with Disabilities Act) which ensures that people with disabilities have the same access to all areas of a business's premises.
During 2023, we released significant upgrades to our investor relations website that included ADA Compliance (Americans with Disabilities Act) and AODA Compliance (Accessibility for Ontarians with Disabilities Act) which ensures that people with disabilities have the same access to all areas of a business's premises, specifically, customers’ websites.
The platform architecture gives us the ability to host thousands of webcasts each year, expanding and diversifying our webcast business from our historical earnings-based events to include any type of virtual event. As we expand our platform, it is vital for us to have solutions that service both our core public companies but also a growing segment of private customers.
Our solution allows customers to create, produce and deliver events, which we feel has significantly strengthened our webcasting product and overall offering. The platform architecture gives us the ability to host thousands of webcasts each year, expanding and diversifying our webcast business from our historical earnings-based events to include any type of virtual event.
We estimate there are approximately 5,000 companies in North America conducting earnings events each quarter that include a teleconference, webcast or both as part of their events. Our platform incorporates other elements of the earnings event, including earnings date/call announcement, earnings press release and SEC Form 8-K filings.
Traditional earnings calls and webcasts are a highly competitive market with the majority of the business being driven from practitioners in investor relations and communications firms. We estimate there are approximately 5,000 companies in North America conducting earnings events each quarter that include a teleconference, webcast or both as part of their events.
We recognize and value our people as our most important asset in achieving our strategic goals and growing an industry leading communications and compliance company.
None of our workforce is represented by a union. Our employees are based either at our corporate offices in North Carolina or work remotely in designated regions worldwide. We recognize and value our people as our most important asset in achieving our strategic goals and growing an industry leading communications company.
The total compensation packages for these teams are heavily weighted with commission compensation to incent sales and retention. All members of the sales team have quotas. As of December 31, 2023, we employed 35 full-time equivalent sales and marketing personnel compared to 40 as of December 31, 2022.
We believe this new approach will be the most efficient and effective way for us to reach new customers and grow our current install base. The total compensation packages for these teams are heavily weighted with commission compensation to incent sales and retention. All members of the sales team have quotas.
We believe that in early 2024 we will have released fully our new Media Suite subscriber offering, which adds new products in our offering, media monitoring, media database, and pitching. We believe our expanded technology and solutions will help us gain market share within the industry as well as further expand our news distributions brands.
We believe by expanding our technology and products will help us gain market share within the industry as well as further expand our news distributions brands. The communications industry also benefits from increased regulatory requirements and the need for platforms and systems to manage these new regulations.
ITEM 1. DESCRIPTION OF BUSINESS. Company Overview Overview Issuer Direct Corporation and its subsidiaries are hereinafter collectively referred to as “Issuer Direct”, the “Company”, “We” or “Our” unless otherwise noted. Our corporate headquarters are located at One Glenwood Ave., Suite 1001, Raleigh, North Carolina, 27603.
ITEM 1. DESCRIPTION OF BUSINESS. Company History ACCESS Newswire Inc. and its subsidiaries are hereinafter collectively referred to as “ACCESS”, “ACCESS Newswire”, the “Company”, “We” or “Our” unless otherwise noted. We are a Delaware corporation formed in October 1988 under the name Docucon Incorporated.
We ended 2023 with a multi-tier organization of sales personnel, consisting of Business Development Managers, Customer Service Managers and strategic agency and reseller executives. We believe this approach is the most efficient and effective way to reach new customers and grow our current install base.
We ended 2024 with a multi-tier organization of sales personnel, consisting of Client Success Managers, Account Executives, and strategic agency and reseller executives. We have planned to unify our territories and geographic regions we serve into and with a singular Client Success Managers per region that do both account development and new business.
We continue to expand our distribution points, improve our targeting and enhance our analytics reporting. We also offer an e-commerce element to our ACCESSWIRE product, whereby customers can self-select their distribution, register, and then upload their press release for editorial review in minutes.
Our platform also includes a seamless e-commerce experience, allowing customers to self-select distribution options, register, and upload their press releases for editorial review within minutes . These innovations have contributed to historical growth of press release distribution products , a trend we anticipate will continue in the coming years.
Media Suite is a recurring subscription product, with three subscription options available: Media Suite Starter, Media Suite Plus, and Media Suite Enterprise, each providing different combinations of our solutions to help our customers reach their goals. Media Database – Our media database is based on the idea that pitching the media should be a targeted endeavor.
With the flexibility of these offerings, customers have the ability to now choose to add a PRO solution to any of their ACCESS subscriptions. 5 Table of Contents Media Database . Our media database is based on the idea that pitching the media should be a targeted endeavor.
We believe this offering affords us the ability to reduce our revenue seasonality and provide a new baseline of recurring annualized revenue. 10 Table of Contents Competition Despite some significant consolidation in recent years, the communications and compliance industries remain both highly fragmented and extremely competitive.
Competition Despite some significant consolidation in recent years, the communications industry remains both highly fragmented and extremely competitive. The success of our products and services are generally based on price, quality, and the ability to service customer demands.
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We are a leading communications and compliance company, providing solutions for both public relations and investor relations professionals. Our comprehensive solutions are used by thousands of customers from emerging startups to multi-billion-dollar global brands, ensuring their most important moments are reaching the right audiences, via our industry leading newswire, IR website solutions, events technology and compliance solutions.
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In December 2007, we changed our name to Issuer Direct Corporation, and then on January 23, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to change our name from Issuer Direct Corporation to ACCESS Newswire Inc, effective as of January 27, 2025.
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Our platform efficiently and effectively helps our customers manage their events when seeking to distribute their messaging to key constituents, investors, markets and regulatory systems around the globe. Our platform consists of several related but distinct Communications and Compliance modules that companies and customers utilize every quarter.
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Our principal executive offices are located at One Glenwood Ave., Suite 1001, Raleigh, North Carolina, 27603, and our main telephone number is 888-808-ACCS (2227). Our website address is https://www.accessnewswire.com.
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As such, we disclose our revenue in the following two main categories: (i) Communications and (ii) Compliance.
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We offer a dynamic customer platform that empowers businesses to connect, engage and build their brands. Our platform streamlines Public Relations (PR) and Investor Relations (IR), helping organizations manage events, enhance communication and strategically distribute their messaging to key stakeholders, including investors, media professionals, markets, and regulatory systems worldwide.
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Set forth below is an infographic depicting the products included in each of these two main categories we provide today: In the future, we expect the Communications portion of our business to continue to increase, both in terms of overall revenue and as compared to the Compliance portion of our business.
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Today, thousands of customers—from emerging startups to multi-billion-dollar global brands—trust our ACCESS platforms to elevate their reach and impact. Specifically, the core products that encompass our platform are Press Release Distribution, Media Monitoring, Database and Pitching, as well as Investor Relations Websites and Earnings and Event technologies.
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Therefore, we plan to continue to invest in offerings we intend to incorporate into and complement our Communications product lineup. Within most of our target markets, customers require several individual services and/or software providers to meet their communications and investor relations needs.
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We focus on selling to small and mid-market business-to-business (“B2B”) companies, which we define as companies that have between 2 and 2,000 employees. Beginning in late 2024, we launched our new subscription platform to existing customers only, and at the beginning of 2025, officially released it as part of our rebrand to ACCESS Newswire.
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We believe our platform can address all these needs in a single, secure, cloud-based platform - one that offers a customer control, increases efficiencies, demonstrates clear value and, most importantly, delivers consistent and compliant messaging from one centralized platform. 4 Table of Contents We work with a diverse customer base, which includes not only corporate issuers and private companies, but also investment banks, professional firms, such as investor relations and public relations firms, as well as the accounting and legal communities.
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As of December 31, 2024, we had 1,124 subscription with an annual recurring revenue (“ARR”) of approximately $12 million. Sale of our Compliance Business During the fourth quarter of 2024, the Company began actively marketing the sale of its Compliance business.
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Our customers and their service providers utilize our platform and related solutions from document creation all the way to dissemination to regulatory bodies, news outlets, financial platforms, and our customers’ shareholders. Private companies primarily use our news distribution, newsroom and webcasting products and services to disseminate their message globally.
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On February 28, 2025 (the “Closing Date”), the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s Compliance business (the “Purchased Assets”).
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We also work with several select stock exchanges by making available certain parts of our platform under agreements to integrate our offerings within their products. We believe such partnerships will continue to yield increased exposure to a targeted customer base that could impact our revenue and overall brand in the market.
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The Purchased Assets consist of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services).
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Communications Our Communications platform consists of our press release distribution businesses branded as ACCESSWIRE and Newswire, our webcasting and events business, professional conference and events software, as well as our investor relations website technology.
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Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings.
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Our ACCESSWIRE and Newswire news distribution platforms have been integrated into one dissemination platform that will give our customers all the distribution benefits of our global distribution footprint. These products are sold as the leading part of our Communications subscription, as well as individually to customers around the globe and are further described below.
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Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “Compliance revenue” will be retained by the Company. The Buyer will only assume certain liabilities related to the Purchased Assets, which includes certain accounts payable, accrued liabilities and deferred revenue.
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Acquisition of iNewswire.com LLC On November 1, 2022, we acquired iNewswire.com LLC (“Newswire”). Newswire is a media technology company that provides customers press release distribution, media databases, media monitoring, and newsrooms for greater brand awareness through earned media, increased online visibility through greater search engine optimization recognition, and more sales inquiries through targeted digital marketing campaigns.
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As a result, assets associated with our Compliance business, and revenue and expenses associated with the assets, have been categorized as discontinued operations in our financial statements for the year ended December 31, 2024 while the remaining assets associated with our Communications business are included in continuing operations 4 Table of Contents Our Platform In previous periods we have sold our products in different bundles and names, such as Media Suite and/or as a Communications platform.
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We believe Newswire strengthens our entire communications portfolio and combined with our ACCESSWIRE business, grows our press release distribution business to now be one of North America’s largest press release distribution platforms.
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As part of our rebrand, in January 2025 we have consolidated the naming conventions, product sets and subscriptions to be less onerous on the customers, easier to subscribe to and significantly clearer to the investment community. Our communications platform consists of the following subscriptions: ACCESS PR – a subscription that includes press release distribution, media monitoring, pitching and database.
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Newswire customers also benefit from the global footprint ACCESSWIRE has built over the last nine years, whereas Issuer Direct’s customers will have access to Newswire’s media database platform, pitching and monitoring capabilities, as well as its PRO offering.
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ACCESS IR – a subscription that includes investor relations website, quarterly earnings call, and press release distribution to cover the announcement of your earnings date and actual earnings releases. ALL ACCESS – encompasses the best of both ACCESS PR and ACCESS IR into a customized platform for each customer.
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We believe the PRO product offering provides the most effective and efficient integrated media and content communication program available in the market today. ACCESSWIRE Our existing press release offering, which is marketed under the brand ACCESSWIRE , is a news dissemination and media outreach service.
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As an option, the Company provides customers the ability to purchase stand-alone solutions to try each of its products before subscribing to our platform. For example, a small company looking to build their brand and tell their story would utilize the press release distribution product from ACCESS Newswire in a pay-as-you-go option. Products in the Platform Press Release Distribution.
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The ACCESSWIRE product offering focuses on press release distribution for both private and public companies globally. We believe ACCESSWIRE is becoming a competitive alternative in the newswire industry because we have been able to use our technological advancements to allow customers to self-edit releases or use our editorial staff as desired to edit releases.
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Our flagship press release distribution service—marketed under the brands ACCESS Newswire, Newswire.com, and PressRelease.com — offers comprehensive news dissemination and media outreach solutions for both private and public companies worldwide. We believe ACCESS is emerging as a competitive force in the newswire industry, leveraging advanced technology to provide customers with greater control and flexibility.
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We believe these enhancements have helped increase ACCESSWIRE revenues each year compared to the prior year, a trend we expect to continue over the next several years.
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Users can choose self-publishing or AI-assisted creations of their press releases, which is reviewed by our expert editorial team for compliance and professional review. We continue to expand our distribution network, refine targeting capabilities, and enhance analytics reporting to maximize impact.
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We have also been able to maintain high gross margins while providing our customer flexible pricing, with options to pay per release or enter longer-term agreements for a designated package of releases. 5 Table of Contents Like other newswires globally, ACCESSWIRE and Newswire are dependent upon several key partners for its news distribution.
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Additionally, we maintain high gross margins while offering flexible pricing options , enabling customers to pay per release or opt for long-term contract commitments. Looking ahead to 2025, our core press release distribution service will be integrated into all three ACCESS subscription plans , ensuring even greater value for our customers. Press Release Optimizer (”PRO”) .
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Disruption in any of our partnerships could have a materially adverse impact on our overall business. Media Suite As part of the iNewswire acquisition, we acquired certain assets that with further development resulted in our ability to release a subscription add-on to our Newswire and ACCESSWIRE brands, which we call Media Suite.
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As we expand our platform, it is vital for us to have solutions that service both our core public companies but also a growing segment of private customers. 6 Table of Contents Professional Conference and Events Software . Our professional conference and events software is a subscription offering we currently license to investor conference organizers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeACCESSWIRE and Newswire are dependent upon several key partners for news distribution, some of which are also partners that we rely on for other shareholder communications services. During the second quarter of 2019, one of our key partners made an industry-wide decision to no longer accept investor commentary content.
Biggest changeIt is expected that our recent acquisition of Newswire will also add significant revenue to our Communications business in the future. These two brands, combined into our new brand of ACCESS Newswire, is dependent upon several key partners for news distribution, some of which are also partners that we rely on for other shareholder communications services.
Events of default under the Credit Agreement include, but are not limited to the following: our failure to timely make payments due under the Credit Agreement; material misrepresentations or misstatements in any representation or warranty of any of the Loan Parties; failure by the Company or any of its subsidiaries to comply with their covenants under the Credit Agreement and other related agreements, subject in certain cases to rights to cure; certain defaults under other indebtedness of the Loan Parties; insolvency or bankruptcy-related events with respect to Issuer Direct or any of its subsidiaries; if the Credit Agreement or certain related agreements or security interests created by them cease to be in full force and effect; and the occurrence of a change in control, each as discussed in greater detail in the Credit Agreement, and subject to certain cure rights.
Events of default under the Credit Agreement include, but are not limited to the following: our failure to timely make payments due under the Credit Agreement; material misrepresentations or misstatements in any representation or warranty of any of the Loan Parties; failure by the Company or any of its subsidiaries to comply with their covenants under the Credit Agreement and other related agreements, subject in certain cases to rights to cure; certain defaults under other indebtedness of the Loan Parties; insolvency or bankruptcy-related events with respect to the Company or any of its subsidiaries; if the Credit Agreement or certain related agreements or security interests created by them cease to be in full force and effect; and the occurrence of a change in control, each as discussed in greater detail in the Credit Agreement, and subject to certain cure rights.
These risks include, among other things: ● the difficulty of integrating the operations and personnel of the acquired businesses into our ongoing operations; ● the potential disruption of our ongoing business and distraction of management; ● the potential for new cyber-security risks to existing operations that weren’t previously mitigated: ● the difficulty in incorporating acquired technology and rights into our products and technology; ● unanticipated expenses and delays relating to completing acquired development projects and technology integration; ● a potential increase in our indebtedness and contingent liabilities, which could restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy; ● the management of geographically remote units; ● the establishment and maintenance of uniform standards, controls, procedures and policies; ● the impairment of relationships with employees and customers as a result of any integration of new management personnel; ● risks of entering markets or types of businesses in which we have either limited or no direct experience; ● the potential loss of key employees and/or customers of the acquired businesses; and ● potential unknown liabilities, such as liability for hazardous substances, or other difficulties associated with acquired businesses.
These risks include, among other things: · the difficulty of integrating the operations and personnel of the acquired businesses into our ongoing operations; · the potential disruption of our ongoing business and distraction of management; · the potential for new cyber-security risks to existing operations that weren’t previously mitigated: · the difficulty in incorporating acquired technology and rights into our products and technology; · unanticipated expenses and delays relating to completing acquired development projects and technology integration; · a potential increase in our indebtedness and contingent liabilities, which could restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy; · the management of geographically remote units; · the establishment and maintenance of uniform standards, controls, procedures and policies; · the impairment of relationships with employees and customers as a result of any integration of new management personnel; · risks of entering markets or types of businesses in which we have either limited or no direct experience; 11 Table of Contents · the potential loss of key employees and/or customers of the acquired businesses; and · potential unknown liabilities, such as liability for hazardous substances, or other difficulties associated with acquired businesses.
If any event of default occurs and is continuing under the Credit Agreement, the lenders may terminate their commitments, and may require the Company and its subsidiaries to repay outstanding debt. 19 Table of Contents A breach of any of the covenants of the Credit Agreement or any future agreements, if uncured or unwaived, could lead to an event of default under any such document, which in some circumstances could give our creditors the right to demand that we accelerate repayment of amounts due and/or enforce their security interests over substantially all of our assets.
If any event of default occurs and is continuing under the Credit Agreement, the lenders may terminate their commitments and may require the Company and its subsidiaries to repay outstanding debt. 17 Table of Contents A breach of any of the covenants of the Credit Agreement or any future agreements, if uncured or unwaived, could lead to an event of default under any such document, which in some circumstances could give our creditors the right to demand that we accelerate repayment of amounts due and/or enforce their security interests over substantially all of our assets.
A weak global economy could also contribute to extreme volatility of the markets, which may have an effect on the market price of our common stock. 20 Table of Contents There can be no assurances that dividends will be paid in the future.
A weak global economy could also contribute to extreme volatility of the markets, which may have an effect on the market price of our common stock. 18 Table of Contents There can be no assurances that dividends will be paid in the future.
As a result, our failure to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act on a timely basis could result in us being subject to regulatory action and a loss of investor confidence in the reliability of our financial statements, both of which in turn could cause the market value of our common stock to decline and affect our ability to raise capital. 21 Table of Contents Because we are a smaller reporting company, our independent registered public accounting firm was not required to and did not perform an audit of our internal control over financial reporting for the fiscal year ended December 31, 2023.
As a result, our failure to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act on a timely basis could result in us being subject to regulatory action and a loss of investor confidence in the reliability of our financial statements, both of which in turn could cause the market value of our common stock to decline and affect our ability to raise capital. 19 Table of Contents Because we are a smaller reporting company, our independent registered public accounting firm was not required to and did not perform an audit of our internal control over financial reporting for the fiscal year ended December 31, 2024.
Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, financial condition, results of operations and prospects. 17 Table of Contents New and existing laws make determining our sales and use taxes and income tax rate complex and subject to uncertainty.
Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, financial condition, results of operations and prospects. New and existing laws make determining our sales and use taxes and income tax rate complex and subject to uncertainty.
If that occurs, customers could elect not to renew, could delay or withhold payment to us or may make claims against us, which could result in an increase in our provision for doubtful accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation. We could also lose future sales.
If that occurs, customers could elect not to renew, could delay or withhold payment to us or may make claims against us, which could result in an increase in our provision for credit losses, an increase in collection cycles for accounts receivable or the expense and risk of litigation. We could also lose future sales.
If we are required to change our business activities or revise or eliminate services, or to implement costly compliance measures, our business and results of operations could be harmed. If potential customers take a long time to evaluate the use of our products, we could incur additional selling expenses and decrease our profitability.
If we are required to change our business activities or revise or eliminate services, or to implement costly compliance measures, our business and results of operations could be harmed. 16 Table of Contents If potential customers take a long time to evaluate the use of our products, we could incur additional selling expenses and decrease our profitability.
In addition, any decline in our customer renewals or failure to convince our customers to broaden their use of our products would harm our future operating results. We are subject to general litigation and regulatory requirements that may materially adversely affect us.
In addition, any decline in our customer renewals or failure to convince our customers to broaden their use of our products would harm our future operating results. 15 Table of Contents We are subject to general litigation and regulatory requirements that may materially adversely affect us.
Further disruption in any of these partnerships could have a material adverse impact on our business and financial results and the inability to procure new key partners could impact the growth of the ACCESSWIRE brand, particularly with respect to public company news distribution.
Further disruption in any of these partnerships could have a material adverse impact on our business and financial results and the inability to procure new key partners could impact the growth of the ACCESS Newswire brand, particularly with respect to public company news distribution.
We must adapt to rapid changes in technology and customer requirements to remain competitive. The market and demand for our products and services, to a varying extent, have been characterized by: ● technological change; ● frequent product and service introductions; and ● evolving customer requirements. We believe that these trends will continue into the foreseeable future.
We must adapt to rapid changes in technology and customer requirements to remain competitive. The market and demand for our products and services, to a varying extent, have been characterized by: · technological change; · frequent product and service introductions; and · evolving customer requirements. 14 Table of Contents We believe that these trends will continue into the foreseeable future.
To manage our future growth, we must continue to scale our business functions, improve our financial and management controls and our reporting systems and procedures and expand and train our work force. In particular, we grew from 24 employees and contractors as of December 31, 2012 to 136 (including 32 independent contractors) as of December 31, 2023.
To manage our future growth, we must continue to scale our business functions, improve our financial and management controls and our reporting systems and procedures and expand and train our work force. In particular, we grew from 24 employees and contractors as of December 31, 2012 to 113 (including 32 independent contractors) as of December 31, 2024.
The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected.
Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected.
Our revenue growth rate in past periods relating to our Communications revenue stream may not be indicative of its future performance. With respect to our Communications revenue stream, we have experienced an annual revenue growth rate ranging from 13% to 55% between 2016 and 2023.
Our revenue growth rate in past periods relating to our historical Communications revenue stream may not be indicative of its future performance. With respect to our historical Communications revenue stream, we have experienced an annual revenue growth rate ranging from 13% to 55% between 2016 and 2023, however in 2024 it decreased 7%.
Risks Related to Our Credit Agreement Our obligations under the Credit Agreement are secured by a first priority security interest in substantially all of our assets. Additionally, all of our subsidiaries agreed to guarantee our obligations under the Credit Agreement.
Risks Related to Our Credit Agreement Our obligations under the Credit Agreement, as amended, with Pinnacle Bank are secured by a first priority security interest in substantially all of our assets. Additionally, all of our subsidiaries agreed to guarantee our obligations under the Credit Agreement.
Additionally, ACCESSWIRE and Newswire are highly dependent on technology and any performance issues with this technology could have a material impact on our ability to serve our customers and thus our ability to generate revenue. Failure to manage our growth may adversely affect our business or operations.
Additionally, ACCESS Newswire is highly dependent on technology and any performance issues with this technology could have a material impact on our ability to serve our customers and thus our ability to generate revenue. 12 Table of Contents Failure to manage our growth may adversely affect our business or operations.
ITEM 1A. RISK FACTORS. Forward-Looking and Cautionary Statements Investing in our common stock involves a high degree of risk. Prospective investors should carefully consider the following risks and uncertainties and all other information contained or referred to in this Annual Report on Form 10-K before investing in our common stock.
ITEM 1A. RISK FACTORS. Forward-Looking and Cautionary Statements Investing in our common stock involves a high degree of risk. Prospective investors should carefully consider the following risks and uncertainties and all other information contained or referred to in this Form 10-K before investing in our common stock. The risks and uncertainties described below are not the only ones facing us.
If potential customers take longer than we expect to decide whether to use our services and require that we travel to their sites, present more marketing material, or spend more time in completing the sales process, our selling expenses could increase, and decrease our profitability. The seasonality of business makes it difficult to predict future results based on specific quarters.
If potential customers take longer than we expect to decide whether to use our services and require that we travel to their sites, present more marketing material, or spend more time in completing the sales process, our selling expenses could increase, and decrease our profitability.
We may not: ● be successful in developing product and service enhancements or new products and services on a timely basis, if at all; or ● be able to successfully market these enhancements and new products once developed.
We may not: · be successful in developing product and service enhancements or new products and services on a timely basis, if at all; or · be able to successfully market these enhancements and new products once developed. Further, our products and services may be rendered obsolete or uncompetitive by new industry standards or changing technology.
In the past few years, we have expended significant resources to develop and introduce new technology-based products and improve and enhance our existing technology-based products in an attempt to maintain or increase our sales.
If we are unable to successfully develop and timely introduce new technology-based products or enhance existing technology-based products, our business may be adversely affected. In the past few years, we have expended significant resources to develop and introduce new technology-based products and improve and enhance our existing technology-based products in an attempt to maintain or increase our sales.
Further, competitors and other entities have in the past recruited and may in the future attempt to recruit our employees, particularly our sales personnel.
We may not succeed in identifying and retaining the appropriate personnel in key positions. Further, competitors and other entities have in the past recruited and may in the future attempt to recruit our employees, particularly our sales personnel.
Further, our products and services may be rendered obsolete or uncompetitive by new industry standards or changing technology. 16 Table of Contents Revenue from subscriptions and many of our service contracts is recognized ratably over the term of the contract or subscription period. As a result, downturns or upturns in sales may not be immediately reflected in our operating results.
Revenue from subscriptions and many of our service contracts is recognized ratably over the term of the contract or subscription period. As a result, downturns or upturns in sales may not be immediately reflected in our operating results.
In addition, a security breach of our solutions could result in our future business prospects being materially adversely impacted. 14 Table of Contents A substantial portion of our business is derived from our press release distribution business, which is dependent on technology and key partners.
In addition, a security breach of our solutions could result in our future business prospects being materially adversely impacted. A substantial portion of our business is derived from our press release distribution business, which is dependent on technology and key partners. As noted, our ACCESSWIRE brand has been vital to the increase in revenue associated with our Communications business.
Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations. 15 Table of Contents If we are unable to retain our key employees and attract and retain other qualified personnel, our business could suffer.
Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations. There are risks and uncertainties associated with the sale of our Compliance business.
These competitive pressures to any aspect of our business could reduce our revenue and earnings. 13 Table of Contents Our business could be harmed if we do not successfully manage the integration of any business that we have acquired or may acquire in the future, particularly in light of our recent acquisition of Newswire.
Our business could be harmed if we do not successfully manage the integration of any business that we have acquired or may acquire in the future.
The environment in which we compete is highly competitive, which creates adverse pricing pressures and may harm our business and operating results if we cannot compete effectively. Competition across all of our businesses is intense.
In that case, the trading price of our common stock could decline, and you could lose some or all your investment. Risks related to our business The environment in which we compete is highly competitive, which creates adverse pricing pressures and may harm our business and operating results if we cannot compete effectively.
As a result, they may be able to respond more quickly and effectively than we can to new or changing market demands and requirements. We could also be negatively impacted if our competitors reduce prices, add new features, form strategic alliances with other companies, or are acquired by other companies with greater available resources.
We could also be negatively impacted if our competitors reduce prices, add new features, form strategic alliances with other companies, or are acquired by other companies with greater available resources. These competitive pressures to any aspect of our business could reduce our revenue and earnings.
A significant portion of our historical ACCESSWIRE revenue was generated from this type of content, which significantly affected revenue going forward.
During the second quarter of 2019, one of our key partners made an industry-wide decision to no longer accept investor commentary content. A significant portion of our historical ACCESSWIRE revenue was generated from this type of content, which significantly affected revenue going forward.
The speed and accuracy with which we can meet customers’ needs, the price of our services and the quality of our products and supporting services are factors in this competition. Some of our competitors have longer operating histories, greater name recognition, more established customer bases and significantly greater financial, technical, marketing and other resources than we do.
Competition across all of our businesses is intense. The speed and accuracy with which we can meet customers’ needs, the price of our services and the quality of our products and supporting services are factors in this competition.
In addition, the Credit Agreement contains financial covenants, tested quarterly, that require a Fixed Charge Ratio (as defined in the Credit Agreement) of no less than 1:20:1.00 measured on a trailing twelve-month basis and a Leverage Ratio (as defined in the Credit Agreement) no greater than 2.5:1.0 measured on a trailing twelve-month basis.
In addition, the Credit Agreement contains financial covenants, tested quarterly, that require a Fixed Charge Ratio (as defined in the Credit Agreement) and a Leverage Ratio (as defined in the Credit Agreement) to be maintained at certain levels.
Their departure, if unexpected and unplanned, could cause a disruption to our business. Our competition for these individuals is intense in certain areas of our business. We may not succeed in identifying and retaining the appropriate personnel in key positions.
In addition, many of our individual technical and sales personnel have extensive experience in our business operations and/or have valuable customer relationships that would be difficult to replace. Their departure, if unexpected and unplanned, could cause a disruption to our business. Our competition for these individuals is intense in certain areas of our business.
Our ability to grow and our future success will depend to a significant extent on the continued contributions of our key executives, managers and employees. In addition, many of our individual technical and sales personnel have extensive experience in our business operations and/or have valuable customer relationships that would be difficult to replace.
If we are unable to retain our key employees and attract and retain other qualified personnel, our business could suffer. Our ability to grow and our future success will depend to a significant extent on the continued contributions of our key executives, managers and employees.
Removed
In that case, the trading price of our common stock could decline, and you could lose some or all your investment. Risks related to our business Legislative and regulatory changes can influence demand for our solutions and could adversely affect our business. The market for our solutions depends in part on the requirements of the SEC and other regulatory bodies.
Added
Some of our competitors have longer operating histories, greater name recognition, more established customer bases and significantly greater financial, technical, marketing and other resources than we do. As a result, they may be able to respond more quickly and effectively than we can to new or changing market demands and requirements.
Removed
Any legislation or rulemaking substantially affecting the content or method of delivery of documents to be filed with these regulatory bodies could have an adverse effect on our business. In addition, evolving market practices in light of regulatory developments could adversely affect the demand for our solutions.
Added
On February 28, 2025, we sold our Compliance business to the Buyer for aggregate cash consideration of $12,500,000, with $12,000,000 of the purchase price paid at closing and $500,000 retained by the Buyer as a holdback for a period of 12 months post-closing to satisfy potential indemnification claims by the Buyer under the Purchase Agreement if any.
Removed
New legislation, or a significant change in rules, regulations, directives or standards could reduce demand for our products and services.
Added
We used the entire $12,000,000 in closing cash to reduce our indebtedness to Pinnacle Bank. As such, we did not receive any cash at closing as a result of the sale of our Compliance business. Our Compliance business has historically provided strong revenue and cash flow at high gross margins.
Removed
Regulatory changes could also increase expenses as we modify our products and services to comply with new requirements and retain relevancy, impose limitations on our operations, and increase compliance or litigation expense, each of which could have a material adverse effect on our business, financial condition and results of operations.
Added
While we believe our Communications business, which has been our primary focus for approximately the last 10 years, will be a strong stand-alone business, there can be no guaranty that it will be able to replace the revenue and cash flow of the Compliance business, which would result in a material adverse effect on our business, financial condition and results of operations.
Removed
As noted, our ACCESSWIRE brand has been vital to the increase in revenue associated with our Communications business. It is expected that our recent acquisition of Newswire will also add significant revenue to our Communications business in the future.
Added
Additionally, the sale of our Compliance business required us to separate and allocate specific assets to the business, including some shared assets. We could face disputes with the Buyer regarding whether or not certain assets were included in the sale.
Removed
A greater portion of our printing, distribution and solicitation of proxy materials business will be processed during the second quarter of our fiscal year.
Added
Moreover, we agreed, for a period of time after the sale pursuant to a Transition Services Agreement, to continue to perform certain services that we historically performed for the Compliance business, and we also undertook other customary obligations associated with a disposition of a business by means of asset sale.
Removed
Therefore, the seasonality of our revenue makes it difficult to estimate future operating results based on the results of any specific quarter and could affect an investor’s ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
Added
The attention of our management may be directed toward closing or post-closing matters relating to the sale of our Compliance business, including the services required by the Transition Services Agreement, and their focus may be diverted from the day-to-day business operations of our company.
Removed
To balance the seasonal activity of print, distribution and solicitation of proxy materials, we will attempt to continue to grow other revenues linked to predictable periodic activity that is not cyclical in nature. 18 Table of Contents If we are unable to successfully develop and timely introduce new technology-based products or enhance existing technology-based products, our business may be adversely affected.
Added
We have also agreed to indemnify the Buyer against certain losses suffered as a result of certain breaches of our representations, warranties, covenants and agreements in the Purchase Agreement and related documents.
Added
Any event that results in a right for the Buyer to seek indemnity from us could result in substantial liability to us and could adversely affect our financial position and results of operations.
Added
Although the Buyer agreed to assume certain liabilities associated with the Compliance business, it did not assume all such liabilities, which could lead to a dispute. 13 Table of Contents Any disputes with the Buyer related to the sale of our Compliance business could divert the attention of our management or otherwise have a material adverse effect on our business, financial condition and results of operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe independent members of the Board, through the Board’s nominating procedures and requirements, considers cyber expertise in vetting nominees for the Board and recommending Board committee appointments, and the Board has determined that one of its independent Board members has cybersecurity expertise.
Biggest changeThe independent members of the Board, through the Board’s nominating procedures and requirements, considers cyber expertise in vetting nominees for the Board and recommending Board committee appointments.
Risk Factors of this Annual Report. 22 Table of Contents Cybersecurity Governance Cybersecurity is a significant part of our risk management processes and an area of focus of our Board of Directors and management. Our CTO is primarily responsible for assessing and managing material risks from cybersecurity threats. Our CTO has six years of cybersecurity experience.
Risk Factors of this Annual Report. 20 Table of Contents Cybersecurity Governance Cybersecurity is a significant part of our risk management processes and an area of focus of our Board of Directors and management. Our CTO is primarily responsible for assessing and managing material risks from cybersecurity threats. Our CTO has six years of cybersecurity experience.
The full Board is responsible for oversight of cybersecurity risk and receives regular reports from the CTO or CEO. Our CTO also present his assessment of material risks from cybersecurity threats to the Board at least annually.
The full Board is responsible for oversight of cybersecurity risk and receives regular reports from the CTO or CEO. Our CTO also presents his assessment of material risks from cybersecurity threats to the Board at least annually.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCOLSURES. Not applicable. 23 Table of Contents PART II
Biggest changeITEM 4. MINE SAFETY DISCOLSURES. Not applicable. 21 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 PART II Item 5. Market for Common Equity and Related Stockholder Matters 24 Item 6. Select Financial Data 25 Item 7. Management’s Discussion and Analysis and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8. Financial Statements and Supplementary Data 36
Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for Common Equity and Related Stockholder Matters 22 Item 6. Select Financial Data 22 Item 7. Management’s Discussion and Analysis and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31 Item 8. Financial Statements and Supplementary Data 31

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Holders of Record As of December 31, 2023, there were approximately 150 registered holders of record of our common stock and 3,815,212 shares outstanding. Dividends We did not pay any dividends during the year ended December 31, 2023 and 2022.
Biggest changeITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Holders of Record As of December 31, 2024, there were approximately 150 registered holders of record of our common stock and 3,838,743 shares outstanding. Dividends We did not pay any dividends during the year ended December 31, 2024 and 2023.
Removed
COMPARISON OF CUMULATIVE TOTAL RETURN Performance Comparison Graph The graph below compares the cumulative 5-Year total return of shareholders of Issuer Direct Corporation's common stock relative to the cumulative total returns of the Russell MicroCap index and a customized peer group of four companies that includes: Innodata Inc, Meltwater Nv, Srax Inc and Q4 Inc.
Removed
The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2018 and tracks it through December 31, 2023.
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We make no representation to the peer group market caps being similar to that of Issuer Direct, however these peers do represent a fair and accurate list of the companies that Issuer Direct competes with that are in fact public. 24 Table of Contents 12/18 12/19 12/20 12/21 12/22 12/23 Issuer Direct Corporation 100.00 103.00 154.27 259.48 220.62 159.74 Russell MicroCap 100.00 122.43 148.10 176.73 137.93 150.80 Peer Group 100.00 92.01 257.26 310.51 125.08 232.12 The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest change“Financial Statements and Supplementary Data.” The data shown below are not necessarily indicative of results to be expected for any future period. Summary of Operations for the periods ended December 31, 2023 and 2022 (in 000’s).
Biggest change“Financial Statements and Supplementary Data.” The data shown below are not necessarily indicative of results to be expected for any future period. The data below is comprised of results from continuing operations only and does not include results from discontinued operations.
Removed
Year Ended December 31, 2023 2022 Statement of Operations Revenue $ 33,378 $ 23,514 Cost of revenues 7,929 5,684 Gross margin 25,449 17,830 Operating costs 22,633 15,161 Operating income 2,816 2,669 Other expense (1,507 ) (11 ) Income before taxes 1,309 2,658 Income tax expense 543 724 Net income $ 766 $ 1,934 Concentrations: For the years ended December 31, 2023 and 2022, we generated revenues from the following revenue streams as a percentage of total revenue: 2023 2022 Revenue Communications 72.6 % 68.5 % Compliance 27.4 % 31.5 % Total 100.0 % 100.0 % Percentages : Change expressed as a percentage increase for the years ended December 31, 2023 and 2022 ($ in 000’s): 2023 2022 % change Revenue Communications $ 24,224 $ 16,115 50.3 % Compliance 9,154 7,399 23.7 % Total $ 33,378 $ 23,514 41.9 % 25 Table of Contents
Added
For more information regarding continuing and discontinued operations, see Note 3 to our Consolidated Financial Statements for the year ended December 31, 2024. 22 Table of Contents Summary of Operations for the periods ended December 31, 2024 and 2023 (in 000’s).
Added
Year Ended December 31, 2024 2023 Statement of Operations Revenue $ 23,057 $ 24,522 Cost of revenues 5,617 5,607 Gross margin 17,440 18,915 Operating costs 19,609 21,654 Impairment loss on intangible assets 14,150 — Operating loss (16,319 ) (2,739 ) Other expense (1,026 ) (1,640 ) Loss before taxes (17,345 ) (4,379 ) Income tax benefit (4,064 ) (938 ) Loss from continuing operations $ (13,281 ) $ (3,441 )

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

47 edited+13 added−37 removed36 unchanged
Biggest changeWe will also continue to focus on the following key strategic initiatives during 2024: ● Expanding our Communications products and adapting to this changing industry, ● Evaluating and completing acquisitions in areas of strategic focus, ● Expanding our Communications sales and marketing teams and digital marketing strategy, ● Expanding customer base, ● Expanding our newswire distribution, ● Investing in technology advancements and upgrades, ● Generating profitable sustainable growth ● Generating cash flows from operations. 33 Table of Contents We believe there is demand for our products around the world, led by our ACCESSWIRE and Newswire brands, as companies seek to find better platforms and tools to disseminate and communicate their messages in a more efficient and collaborative way.
Biggest changeWe will also continue to focus on the following key strategic initiatives during the remainder of 2025: · Expanding our products and adapting to this changing industry, · Expanding customer base, · Expanding our newswire distribution, · Investing in technology advancements and upgrades, · Evaluating acquisitions in areas of strategic focus, · Generating profitable sustainable growth · Generating cash flows from operations.
(2) For the year ended December 31, 2023, this adjustment gives effect to a $370,000 payment related to the early extinguishment of our Seller Note, one-time non-recurring expenses of $45,000 and a loss on the change in fair value of our interest rate swap of $21,000.
For the year ended December 31, 2023, this adjustment gives effect to $370,000 payment related to early extinguishment of our Seller Note and one-time non-recurring expenses of $45,000 and a loss on the change in fair value of our interest rate swap of $21,000.
(2) The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services. Although we expect to continue to award stock in exchange for services, the amount of stock-based compensation is excluded as it is subject to change as a result of one-time or non-recurring projects.
(3) The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services. Although we expect to continue to award stock in exchange for services, the amount of stock-based compensation is excluded as it is subject to change as a result of one-time or non-recurring projects.
PRO subscription contracts contain two performance obligations of which the first is a series of distinct services that include, but are not limited to, developing specific media plans, and creating content to be distributed and the second performance obligation being access to the PRO platform along with distribution of press releases, ongoing support, and assessment of performance as a stand-ready obligation.
PRO subscription contracts contain two performance obligations: (i) the first is a series of distinct services that include, but are not limited to, developing specific media plans, and creating content to be distributed and (ii) the second performance obligation being access to the PRO platform along with distribution of press releases, ongoing support, and assessment of performance as a stand-ready obligation.
Market factors like the current military conflicts in Ukraine and Israel, instability in global energy markets, global inflation and the increase of interest rates have contributed to significant global economic uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets.
Market factors like the current military conflicts in Ukraine, Israel and the Middle East, instability in global energy markets, global inflation and the increase of interest rates have contributed to significant global economic and political uncertainty, disrupted global trade and supply chains, adversely impacted many industries, and contributed to significant volatility in financial markets.
If we are successful in this effort, we believe we can further increase our market share as we move forward. Critical Accounting Policies and Estimates The consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. Significant intercompany accounts and transactions are eliminated in consolidation.
If we are successful in this effort, we believe we can further increase our market share as we move forward. Critical Accounting Policies and Estimates The consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries.
Overall, despite many uncertainties in the market regarding the economic outlook, the demand for our platforms and services continues to be stable in a majority of the markets we serve.
Overall, despite many uncertainties in the market regarding the economic and political outlook, we believe the demand for our platforms and services is stable in a majority of the markets we serve.
Deferred Revenue As of December 31, 2023, our deferred revenue balance was $5,412,000, which we expect to recognize over the next twelve months, compared to $5,405,000 as of December 31, 2022. Deferred revenue primarily consists of advance billings for packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products and annual service contracts.
Deferred Revenue As of December 31, 2024, our deferred revenue balance was $4,743,000, which we expect to recognize primarily over the next twelve months, compared to $4,750,000 as of December 31, 2023. Deferred revenue primarily consists of advance billings for packages of our news distribution products as well as advance billings for subscriptions of our cloud-based products.
The client relationships (5-10 years), customer lists (3 years), distribution partner relationships (10 years), non-compete agreements (5 years) and software and technology (3-7 years) are amortized over their estimated useful lives. Lease Accounting The Company determines if an arrangement is a lease at inception.
The client relationships (5-10 years), customer lists (3 years), distribution partner relationships (10 years), non-compete agreements (5 years) and software and technology (3-7 years) are amortized over their estimated useful lives.
The new model is based on the credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balances sheet date through analyzing historical customer data as well as taking into consideration current economic trends. The Company adopted Topic 326 and determined it did not have a material financial impact.
The model is based on the credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balances sheet date through analyzing historical customer data as well as taking into consideration current economic trends.
For the years ended December 31, 2023 and 2022, free cash flow and adjusted free cash flow were as follows: Year Ended December 31, 2023 2022 Net cash provided by operating activities (US GAAP) $ 3,060 $ 4,019 Payments for purchase of fixed assets and capitalized software (503 ) (66 ) Free cash flow (Non-GAAP) 2,557 3,953 Cash paid for acquisition and integration related items (1) 373 1,060 Cash paid for other unusual items (2) 395 109 Adjusted free cash flow (Non-GAAP) $ 3,325 $ 5,122 (1) For the year ended December 31, 2023, this adjustment gives effect to one-time corporate projects, including acquisition and/or integration related expenses, paid during the period.
For the years ended December 31, 2024 and 2023, free cash flow and adjusted free cash flow were as follows: Year Ended December 31, 2024 2023 Net cash provided by (used in) operating activities of continuing operations (US GAAP) $ 400 $ (741 ) Payments for purchase of fixed assets and capitalized software (616 ) (503 ) Free cash flow (Non-GAAP) (216 ) (1,244 ) Cash paid for acquisition and integration related items (1) 23 373 Cash paid for other unusual items (2) 219 395 Adjusted free cash flow (Non-GAAP) $ 26 $ (476 ) (1) This adjustment gives effect to one-time corporate projects, including acquisition and/or integration related expenses, paid during the periods.
The Company separates revenue from its contracts into two revenue streams: i) Communications and ii) Compliance. Performance obligations of Communications contracts include providing subscriptions to certain modules or our entire Communications platform, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis.
Performance obligations of include providing subscriptions to certain modules or our entire platform, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis.
(3) For the year ended December 31, 2023, this adjustment gives effect to one-time corporate projects, including acquisition and/or integration related expenses incurred during the period of $546,000 and a $370,000 payment related to the early extinguishment of our Seller Note, $45,000 of one-time, non-recurring expenses as well as a loss on the change in fair value of our interest rate swap of $21,000.
For the year ended December 31, 2023, this adjustment gives effect to $370,000 payment related to early extinguishment of our Seller Note and one-time non-recurring expenses, including acquisition and/or integration expenses of $591,000 and a loss on the change in fair value of our interest rate swap of $21,000. 28 Table of Contents (5) This adjustment gives effect to the tax impact of all non-GAAP adjustments at the current Federal tax rate of 21%.
Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.
As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.
Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices, at least annually, and updates these estimates if necessary.
For bundled contracts, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service.
Capitalized Software Costs incurred to develop the Company’s cloud-based platform products are capitalized when the preliminary project phase is complete, management commits to fund the project and it is probable the project will be completed and used for its intended purposes.
The Company’s policy regarding the classification of interest and penalties is to classify them as income tax expense in the financial statements, if applicable. 30 Table of Contents Capitalized Software Costs incurred to develop the Company’s cloud-based platform products are capitalized when the preliminary project phase is complete, management commits to fund the project and it is probable the project will be completed and used for its intended purposes.
Management believes that by excluding these infrequent or unusual items from free cash flow, it better portrays our ability to generate cash, as such items are not indicative of the Company’s operating performance for the period.
Management believes that by excluding these infrequent or unusual items from free cash flow, it better portrays our ability to generate cash, as such items are not indicative of the Company’s operating performance for the period. 26 Table of Contents The uses of these non-GAAP financial measures are not intended to be considered in isolation of, or as substitute for, the financial information prepared and presented in accordance with US GAAP.
Interest expense, net was partially offset by interest income of $168,000 for the year ended December 31, 2023, from deposit and money market accounts.
For the year ended December 31, 2023, interest expense is also attributed to the $22,000,000 Seller Note to finance the acquisition of Newswire. Interest expense, net was partially offset by interest income of $60,000 and $35,000 for the year ended December 31, 2024, and 2023, respectively, from deposit and money market accounts.
Disclosure about Off-Balance Sheet Arrangements We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.
See Note 6 to our financial statements regarding information on our Credit Agreement. Disclosure about Off-Balance Sheet Arrangements We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.
As a percentage of revenue, sales and marketing expenses were 25% for both the year ended December 31, 2023 and 2022. Product Development Expenses Product development expenses consist primarily of salaries, stock-based compensation, bonuses and licenses to develop new products and technology to complement and/or enhance tour platform .
Product Development Expenses Product development expenses consist primarily of salaries, stock-based compensation, bonuses and licenses to develop new products and technology to complement and/or enhance tour platform . Product development expenses increased $277,000, or 11%, to $2,821,000 during the year ended December 31, 2024, as compared to $2,544,000 in 2023.
Set up fees for the transfer agent module and investor relations content management module are immaterial. The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled. The contracts do not contain any rights of returns, guarantees, or warranties.
The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date.
Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.
Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Business Combinations, Goodwill, and Intangible Assets The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill.
By eliminating potential differences in results of operations between periods caused by factors such as acquisition-related expenses and other items as described below, we believe adjusted EBITDA and adjusted net income can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated. 30 Table of Contents Management uses free cash flow, which is defined as net cash flows provided by operating activities less payments for purchases of fixed assets and capitalized software, in reviewing the financial performance and cash generation by our various business groups and evaluating cash levels.
By eliminating potential differences in results of operations between periods caused by factors such as acquisition-related expenses and other items as described below, we believe adjusted EBITDA and adjusted net income can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated.
Results of Operations The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue, and the change in those amounts from fiscal year 2023 compared to 2022. This information should be read together with the consolidated financial statements and accompanying notes.
Results of Operations The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue, and the change in those amounts from fiscal year 2024 compared to 2023. The data below is comprised of results from continuing operations only and does not include results from discontinued operations.
As a percentage of revenue, General and administrative expenses were 27% for the year ended December 31, 2023, as compared to 30% for 2022. Sales and Marketing Expenses Sales and marketing expenses consist primarily of salaries, stock-based compensation, sales commissions, advertising expenses and other marketing expenses.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of salaries, stock-based compensation, sales commissions, advertising expenses and other marketing expenses. Sales and marketing expenses were $7,080,000 for the year ended December 31, 2024, a decrease of $948,000, or 12%, as compared to $8,028,000 in the prior year.
Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be considered as a substitute for analysis of our results as reported under US GAAP.
Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be considered as a substitute for analysis of our results as reported under US GAAP. These measures are defined differently by different companies, and accordingly, such measures may not be comparable to similarly titled measures of other companies, and have important limitations as an analytical tool.
For the Newswire acquisition (see Note 4), the Company determined the trademarks acquired were considered a definite lived asset which will be amortized over a period of 15 years. The goodwill and intangible assets are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified.
The goodwill and intangible assets are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified.
Revenue Recognition Substantially all the Company’s revenue comes from contracts with customers for subscriptions to its cloud-based products or contracts for Communications and Compliance products and services. Customers consist of public corporate issuers and professional firms, such as investor and public relations firms. In the case of news distribution and webcasting offerings, customers also include private companies.
Customers consist of public corporate issuers and professional firms, such as investor and public relations firms. In the case of news distribution and webcasting offerings, customers also include private companies.
(5) This adjustment eliminates discrete items impacting income tax expense. For the year ended December 31, 2022, the discrete items relate to a return to provision adjustment as well as additional tax expense resulting from stock-based compensation recorded in income tax for the period.
(6) This adjustment eliminates discrete items impacting income tax expense. For the year ended December 31, 2024 and 2023, discrete items relate to additional income tax expense recorded during the period related to the exercise of stock compensation.
(2) For the year ended December 31, 2023, this adjustment gives effect to a one-time payment of $370,000 related to the early payment of the Seller Note. For the year ended December 31, 2022, this adjustment relates to $49,000 of termination benefits and $60,000 paid for executive recruiting expenses during the period.
(2) For the year ended December 31, 2024, this adjustment gives effect to payments for one-time accounting fees, termination benefits and other non-recurring or unusual expenses. During the year ended December 31, 2023, this adjustment is primarily related to a one-time payment of $370,000 related to the early termination of the note payable associated with the Newswire acquisition.
Gross margin percentage from our Compliance business was 77% for the year ended December 31, 2023, compared to 74% for 2022. 27 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of salaries, stock-based compensation, insurance, fees for professional services, general corporate expenses (including bad debt expense) and facility and equipment expenses.
General and Administrative Expenses General and administrative expenses consist primarily of salaries, stock-based compensation, insurance, fees for professional services, general corporate expenses (including bad debt expense) and facility and equipment expenses. General and administrative expenses were $7,000,000 for the year ended December 31, 2024, a decrease of $1,354,000 or 16%, as compared to the prior year.
Liquidity and Capital Resources As of December 31, 2023, we had $5,714,000 in cash and cash equivalents and $4,368,000 in net accounts receivable. Current liabilities as of December 31, 2023, totaled $12,650,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.
Current liabilities from continuing operations as of December 31, 2024, totaled $12,814,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses. As of December 31, 2024, our current liabilities from continuing operations exceeded our current assets from continuing operations by $2,788,000.
A reconciliation of net income to adjusted net income for the years ended December 31, 2023 and 2022 is presented in the following table (in 000’s): Year Ended December 31, 2023 2022 Amount Per diluted share Amount Per diluted share Net income: $ 766 $ 0.20 $ 1,934 $ 0.52 Adjustments: Amortization of intangible assets (1) 2,741 0.72 816 0.22 Stock-based compensation expense (2) 1,365 0.35 763 0.20 Other unusual items (3) 982 0.26 402 0.11 Tax impact of adjustments (4) (1,068 ) (0.28 ) (416 ) (0.11 ) Impact of discrete items impacting income tax expense (5) 103 0.03 49 0.01 Non-GAAP net income: $ 4,889 $ 1.28 $ 3,548 $ 0.95 Weighted average number of common shares outstanding – diluted 3,816 3,740 32 Table of Contents (1) The adjustments represent the amortization of intangible assets related to acquired assets and companies.
A reconciliation of net income to adjusted net income for the years ended December 31, 2024 and 2023 is presented in the following table (in 000’s): Year Ended December 31, 2024 2023 Amount Per diluted share Amount Per diluted share Net loss from continuing operations: $ (13,281 ) $ (3.47 ) $ (3,441 ) $ (0.90 ) Adjustments: Impairment loss on intangible assets (1) 14,150 3.70 — — Amortization of intangible assets (2) 2,559 0.67 2,559 0.67 Stock-based compensation expense (3) 728 0.19 1,365 0.35 Other unusual items (4) 327 0.08 982 0.26 Tax impact of adjustments (5) (3,730 ) (0.97 ) (1,030 ) (0.27 ) Impact of discrete items impacting income tax expense (6) 38 0.01 103 0.03 Non-GAAP net income: $ 791 $ 0.21 $ 538 $ 0.14 Weighted average number of common shares outstanding – diluted 3,829 3,816 (1) This adjustment represents the impairment loss on intangible assets that was recognized for the year ended December 31, 2024.
The increase in cost of revenues and gross margin were primarily the result of the acquisition of Newswire in November 2022. Overall gross margin percentage remained flat at 76% during the year ended December 31, 2023, as compared to the prior year.
The decrease in gross margin is primarily the result of the decrease in Newswire revenue noted earlier. Overall gross margin percentage decreased 1% to 76% during the year ended December 31, 2024, as compared to the prior year.
For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event.
For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.
These measures are defined differently by different companies, and accordingly, such measures may not be comparable to similarly titled measures of other companies, and have important limitations as an analytical tool. 31 Table of Contents A reconciliation of net income to adjusted EBITDA for the years ended December 31, 2023 and 2022 is presented in the following table (in 000’s): Year Ended December 31, 2023 2022 Amount Amount Net income: $ 766 $ 1,934 Adjustments: Depreciation and amortization 2,956 1,033 Interest expense, net 1,116 11 Income tax expense 543 724 EBITDA 5,381 3,702 Acquisition and/or integration costs (1) 546 263 Other non-recurring expenses (2) 436 139 Stock-based compensation expense (3) 1,365 763 Adjusted EBITDA: $ 7,728 $ 4,867 (1) This adjustment gives effect to one-time corporate projects, including acquisition and integration related expenses, incurred during the periods.
A reconciliation of net income to adjusted EBITDA for the years ended December 31, 2024 and 2023 is presented in the following table (in 000’s): Year Ended December 31, 2024 2023 Amount Amount Net loss from continuing operations: $ (13,281 ) $ (3,441 ) Adjustments: Impairment loss on intangible assets 14,150 — Depreciation and amortization 2,928 2,788 Interest expense, net 1,107 1,249 Income tax benefit (4,064 ) (938 ) EBITDA 840 (342 ) Acquisition and/or integration costs (1) 189 546 Other non-recurring expenses (2) 138 436 Stock-based compensation expense (3) 728 1,365 Adjusted EBITDA: $ 1,895 $ 2,005 27 Table of Contents (1) This adjustment gives effect to one-time corporate projects, including acquisition and integration related expenses, incurred during the periods.
Interest Expense, net We recognized interest expense of $1,284,000 during the year ended December 31, 2023, related to our new, long-term credit agreement, interest rate swap agreement, as well as our settled $22,000,000 note payable associated with the acquisition of Newswire “Seller Note”.
There was no impairment loss recorded as of and for the year ended December 31, 2023. Interest Expense, net We recognized interest expense of $1,167,000 and $1,284,000 during the years ended December 31, 2024 and 2023, respectively, related to our long-term Credit Agreement.
We believe the transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth.
We believe there is demand for our products around the world as companies seek to find better platforms and tools to disseminate and communicate their messages in a more efficient and collaborative way. We also believe the continued transition to a platform subscription model has been and will continue to be key for our long-term sustainable growth.
Cost of revenues increased by $2,245,000, or 39%, during the year ended December 31, 2023, as compared to the same period of 2022. Overall gross margin increased $7,619,000, or 43%, during the year ended December 31, 2023, compared to 2022.
Cost of Revenues Cost of revenues consists primarily of direct labor costs, newswire distribution costs, teleconferencing costs and third-party licensing costs. Cost of revenues increased by $10,000 during the year ended December 31, 2024, as compared to the same period of 2023. Overall gross margin decreased $1,475,000, or 8%, during the year ended December 31, 2024, compared to 2023.
For the year ended December 31, 2022, this adjustment gives effect to a one-time executive recruiting fee of $90,000 and termination benefits of $49,000. (3) The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services.
(2) The adjustments represent the amortization of intangible assets related to acquired assets and companies. (3) The adjustments represent stock-based compensation expense related to awards of stock options, restricted stock units, or common stock in exchange for services.
If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group. 35 Table of Contents Business Combinations, Goodwill, and Intangible Assets The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill.
If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group. Lease Accounting The Company determines if an arrangement is a lease at inception.
Depreciation and Amortization Expenses During the year ended December 31, 2023, depreciation and amortization expenses increased by $1,926,000 or 199%, to $2,896,000, as compared to $970,000 during 2022. The increase is due to additional amortization of intangible assets related to the Newswire acquisition.
As a percentage of revenue, product development expenses increased to 12% for the year ended December 31, 2024, as compared to 10% for 2023. Depreciation and Amortization Expenses During the year ended December 31, 2024, depreciation and amortization expenses decreased by $20,000 or 1%, to $2,708,000, as compared to $2,728,000 during 2023.
General and administrative expenses were $8,935,000 for the year ended December 31, 2023, an increase of $1,972,000 or 28%, as compared to the prior year. The increase is primarily driven by additional expenses associated with costs to operate Newswire, employee-related costs, stock compensation expense, one-time transaction costs and bad debt expense, partially offset by a reduction in executive recruiting fees.
The decrease is primarily due to a benefit to stock compensation expense as a result of the resignation of an executive officer, a decrease in corporate headcount, as well as, lower one-time transaction and integration costs, partially offset by an increase in the provision for credit losses. 24 Table of Contents As a percentage of revenue, General and administrative expenses were 30% for the year ended December 31, 2024, as compared to 34% for 2023.
There was no other expense during the year ended December 31, 2022. Income Taxes We recorded income tax expense of $543,000 during the year ended December 31, 2023, compared to $724,000 during the year ended December 31, 2022.
For the year ended December 31, 2023, this also includes $370,000 paid to extinguish the Seller Note. 25 Table of Contents Income Taxes We recorded income tax benefit of $4,064,000 during the year ended December 31, 2024, compared to $938,000 during the year ended December 31, 2023.
For the year ended December 31, 2022, the difference between our effective tax rate of 27% and the federal statutory rate of 21% was primarily attributable to state income taxes, foreign taxes and the impact of stock-based compensation.
The difference in our effective tax rate of 23.0% and the statutory rate of 21% is primarily attributable to state income taxes, partially offset by the impact of stock-based compensation and return to provision adjustments. Liquidity and Capital Resources As of December 31, 2024, we had $4,103,000 in cash and cash equivalents and $3,351,000 in net accounts receivable.
Sales and marketing expenses were $8,251,000 for the year ended December 31, 2022, an increase of $2,329,000, or 39%, as compared to $5,922,000 in the prior year. This increase is primarily due to incremental costs associated with operating the Newswire business.
This decrease is primarily due to a decrease in employee-related expenses due to lower headcount as well as lower advertising expense. As a percentage of revenue, sales and marketing expenses were 31% for the year ended December 31, 2024, as compared to 33% for 2023.
For the year ended December 31, 2022, this adjustment gives effect to one-time corporate projects, including acquisition and integration related expenses, incurred during the period of $263,000, one-time executive recruiting fee of $90,000 and termination benefits paid of $49,000. (4) This adjustment gives effect to the tax impact of all non-GAAP adjustments at the current Federal tax rate of 21%.
(4) For the year ended December 31, 2024, this adjustment gives effect to a gain recorded on the change in fair value of our interest rate swap of $81,000, as well as, one-time accounting fees, termination benefits and other non-recurring or unusual expenses, including acquisition and/or integration expenses of $408,000.
Removed
The financial results presented below for 2023 have been affected by the acquisition of Newswire in November 2022: Comparison of results of operations for the years ended December 31, 2023 and 2022 (in 000’s): Percentage of Revenue (1) 2023 2022 2023 2022 Revenue: Communications revenue $ 24,224 $ 16,115 73 % 69 % Compliance revenue 9,154 7,399 27 % 31 % Total revenue 33,378 23,514 100 % 100 % Cost of revenue: Communications cost of revenue 5,801 3,735 24 % 23 % Compliance cost of revenue 2,128 1,949 23 % 26 % Total cost of revenue 7,929 5,684 24 % 24 % Gross Margin: Communications gross margin 18,423 12,380 76 % 77 % Compliance gross margin 7,026 5,450 77 % 74 % Total gross margin 25,449 17,830 76 % 76 % Operating Expenses: General and administrative 8,935 6,963 27 % 30 % Sales and marketing 8,251 5,922 25 % 25 % Product development 2,551 1,306 8 % 6 % Depreciation and amortization 2,896 970 9 % 4 % Total operating expenses 22,633 15,161 68 % 64 % Operating income 2,816 2,669 8 % 11 % Interest expense, net (1,116 ) (11 ) (3 )% 0 % Other expense (391 ) — (1 )% 0 % Income before income taxes 1,309 2,658 4 % 11 % Income tax provision 543 724 2 % 3 % Net income $ 766 $ 1,934 2 % 8 % (1) Percentage of revenue is calculated as the relevant revenue, expense, income amount divided by total revenue, except for communications and compliance cost of revenue and communications and compliance gross margin, which are divided by the related component of revenue. 26 Table of Contents Revenues Total revenue increased by $9,864,000, or 42%, to $33,378,000 during the year ended December 31, 2023, as compared to $23,514,000 in 2022.
Added
For more information regarding continuing and discontinued operations, see Note 3 to our Consolidated Financial Statements for the year ended December 31, 2024. 23 Table of Contents Comparison of results of operations for the years ended December 31, 2024 and 2023 (in 000’s): Percentage of Revenue 2024 2023 2024 2023 Revenues $ 23,057 $ 24,522 Cost of revenue 5,617 5,607 24 % 23 % Gross margin 17,440 18,915 76 % 77 % Operating Expenses: General and administrative 7,000 8,354 30 % 34 % Sales and marketing 7,080 8,028 31 % 33 % Product development 2,821 2,544 12 % 10 % Depreciation and amortization 2,708 2,728 12 % 11 % Impairment loss on intangible assets 14,150 — 61 % — Total operating expenses 33,759 21,654 146 % 88 % Operating loss (16,319 ) (2,739 ) (71 )% (11 )% Interest expense, net (1,107 ) (1,249 ) (5 )% (5 )% Other income (expense) 81 (391 ) — % (2 )% Loss before income taxes (17,345 ) (4,379 ) (75 )% (18 )% Income tax benefit (4,064 ) (938 ) (18 )% (4 )% Net loss from continuing operations $ (13,281 ) $ (3,441 ) (58 )% (14 )% Revenues Total revenue decreased by $1,465,000, or 6%, to $23,057,000 during the year ended December 31, 2024, as compared to $24,522,000 in 2023.
Removed
The increase is primarily related to revenue attributed to the acquisition of Newswire on November 1, 2022 and an increase in Compliance revenue. Communications revenue increased $8,109,000, or 50%, to $24,224,000 for the year ended December 31, 2023, as compared to $16,115,000 during 2022.
Added
The decrease is primarily due to a 15% decrease in revenue from our previously branded Newswire business due to a decrease in volume. Revenue from our investor relations website subscriptions and webcasting and events business decreased slightly as well.
Removed
The increase is primarily related to additional revenue from our acquisition of Newswire as noted above, which is all included in Communications revenue. Revenue from our ACCESSWIRE newswire brand increased 10% from the prior year.
Added
This increase is primarily due to an increase headcount, as we continue to invest in our products and technology. During the year ended December 31, 2024, we capitalized $597,000 of costs related to the development our news distribution systems and internal reporting platforms. During the year-end December 31, 2023, we capitalized costs of $478,000.
Removed
These increases were partially offset by a decrease in revenue from our events and webcasting business, primarily due to less virtual events, conferences and annual meetings. Communications revenue represented 73% of total revenue during the year compared to 69% in the prior year.
Added
Impairment loss on intangible assets The Company performed its annual assessment for impairment of intangible assets and determined an impairment charge of $14,150,000 associated with the Newswire trademarks was necessary for the year ended December 31, 2024.
Removed
Compliance revenue increased $1,755,000, or 24%, to $9,154,000 for the year ended December 31, 2023, as compared to $7,399,000 during 2022.
Added
As a result of the Company’s rebranding to ACCESS Newswire, management determined the useful life of the Newswire trademarks to be 5 years as opposed to the original 15 years upon the initial valuation in 2022. This decrease caused a decrease in the expected cashflows the assets will generate, which resulted in the impairment charge.
Removed
The increase is primarily related to an increase in revenue from our print and proxy fulfillment services due to a few significant transactions which occurred during the year, as well as an increase in revenue from our transfer agent services due to an increase in corporate actions and directives during the year.
Added
Other income (expense) Other income (expense) represents the change in fair value of our interest rate swap.
Removed
Cost of Revenues Communications cost of revenues consists primarily of direct labor costs, newswire distribution costs, teleconferencing costs and third-party licensing costs. Compliance cost of revenues consists primarily of direct labor costs, warehousing, logistics, print production materials, postage, and amortization of capitalized software costs related to our disclosure software.
Added
While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement and ability to continue to generate cash will benefit us in the future.
Removed
Cost of revenues associated with Communications revenues increased $2,066,000, or 55%, as compared to the prior year primarily due to an increase in costs associated with operating the Newswire business as well as an increase in distribution costs associated with ACCESSWIRE as we continue to expand our distribution.
Added
See Note 15 (Subsequent Events) to our Consolidated Financial Statements relating to the sale of our Compliance business and the repayment of $12,000,000 of our long-term debt as of February 28, 2025. As a result of the repayment, the Company expects to no longer have negative working capital for the foreseeable future.
Removed
Gross margin percentage associated with our Communications revenues was 76% for the year ended December 31, 2023, compared to 77% for 2022. Cost of revenues associated with our Compliance revenues increased $179,000, or 9%, as compared to the prior year.
Added
Management uses free cash flow, which is defined as net cash flows provided by operating activities less payments for purchases of fixed assets and capitalized software, in reviewing the financial performance and cash generation by our various business groups and evaluating cash levels.
Removed
The increase in Compliance cost of revenues is primarily the result of an increase in print and postage costs associated with the increase in revenues from print and proxy fulfillment services.
Added
(2) For the year ended December 31, 2024, this adjustment gives effect to a gain recorded on the change in fair value of our interest rate swap of $81,000, as well as, one-time accounting fees, termination benefits and other non-recurring or unusual expenses of $219,000.
Removed
Product development expenses increased $1,245,000, or 95%, to $2,551,000 during the year ended December 31, 2023, as compared to $1,306,000 in 2022. This increase is directly attributed to incremental costs associated with operating the Newswire business as well as hiring our new Chief Technology Officer.
Added
Significant intercompany accounts and transactions are eliminated in consolidation. 29 Table of Contents Substantially all the Company’s revenue comes from contracts with customers for its press release distribution and related products, investor relations website hosting or data feeds, events and webcast offerings and subscriptions to its incident hotline.
Removed
During the year ended December 31, 2023, we capitalized $478,000 of costs related to the development of our new artificial intelligence and media database products. No costs were capitalized during the year ended December 31, 2022. As a percentage of revenue, product development expenses increased to 8% for the year ended December 31, 2023, as compared to 6% for 2022.
Added
The Company reviews standalone selling prices, at least annually, and updates these estimates if necessary. Accounts Receivable and Allowance for Credit Losses The Company calculates its allowance for credit losses using an expected losses model rather than using incurred losses.
Removed
Interest expense, net for the year ended December 31, 2022, represents accrued interest associated with the Seller note offset by interest income associated with deposit and money market accounts. 28 Table of Contents Other expense Other expense represents $370,000 paid to extinguish the Seller Note as well as a loss on the change in fair value of our interest rate swap agreement.
Added
For the Newswire acquisition (see Note 4), the Company originally determined the trademarks acquired were considered a definite lived asset which will be amortized over a period of 15 years, however upon the re-brand of the Company to ACCESS Newswire and subsequent review of the trademarks associated with Newswire, determined the life to be 5 years remaining.
Removed
The difference in our effective tax rate of 41.5% and the statutory rate of 21% is primarily attributable to state income taxes, the impact of stock-based compensation as well as additional tax expense associated with the purchase accounting related to the acquisition of Newswire.
Removed
As of December 31, 2023, our current liabilities exceeded our current assets by $1,146,000. On March 20, 2023 (the “Closing Date”), the Company entered into a $25 million credit agreement (the “Credit Agreement”) with Pinnacle Bank (“Pinnacle”).
Removed
The Credit Agreement provides for the following: (i) term loan facility in an aggregate principal amount of $20 million (the “Term Loan”), and (ii) revolving letter of credit in an up to aggregate principal amount of $5 million (the “Revolving LOC”), subject to an 85% limit based on the current eligible accounts receivable (as defined in the Credit Agreement).
Removed
Pursuant to the terms of the Credit Agreement, the per annum interest rate of the Term Loan is variable based on the one-month secured overnight financing rate (“SOFR”) plus 2.35%, subject to a minimum SOFR of 2.00%.
Removed
However, the Term Loan issued on the Closing Date has a per annum interest rate of 6.217%, which was fixed with respect to the entire principal amount as a result of an interest rate swap agreement entered into between the Company and Pinnacle on the Closing Date in accordance with the terms of the Credit Agreement.
Removed
The Company began making monthly interest-only payments on the Term Loan on April 1, 2023. Beginning on January 1, 2024, the Company will make monthly principal payments of $333,333 plus interest payments on the Term Loan until the maturity date of December 28, 2028.
Removed
The proceeds of the Term Loan along with certain cash on hand of the Company were used to repay in its entirety the one-year Secured Promissory Note (the “Secured Note”) issued to Lead Capital, LLC in connection with the Company’s November 1, 2022 acquisition of iNewswire.com LLC for a lump sum payment of $22,880,000.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We do not believe that we face material market risk with respect to our cash or cash equivalents, which totaled $5,714,000 and $4,832,000 at December 31, 2023 and 2022, respectively. We did not hold any marketable securities as of December 31, 2023 or 2022.
Biggest changeITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We do not believe that we face material market risk with respect to our cash or cash equivalents, which totaled $4,103,000 and $5,714,000 at December 31, 2024 and 2023, respectively. We did not hold any marketable securities as of December 31, 2024 or 2023.

Other ACCS 10-K year-over-year comparisons