accs_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

ACCESS Newswire Inc.

(Exact name of registrant as specified in its charter)

———————

Delaware

1-10185

26-1331503

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

One Glenwood Avenue, Suite 1001, Raleigh NC 27603

(Address of Principal Executive Office) (Zip Code)

888-808-ACCS (2227)

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001		ACCS		NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

As of August 12, 2025, the number of outstanding shares of the issuer’s common stock was 3,868,826.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	3
	Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	3
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024	4
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2025 and 2024	5
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024	6
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	28
Item 4.	Controls and Procedures.	28

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	29
Item 1A.	Risk Factors.	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	29
Item 3.	Defaults Upon Senior Securities.	29
Item 4.	Mine Safety Disclosure.	29
Item 5.	Other Information.	29
Item 6.	Exhibits.	30
	Signatures	31

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCESS NEWSWIRE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	June 30,			December 31,
	2025			2024
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	4,111		$	4,103
Accounts receivable (net of allowance for doubtful accounts of $1,600 and $1,059, respectively)		3,731			3,351
Other current assets		1,716			1,234
Current assets held for sale		116			1,338
Total current assets		9,674			10,026
Capitalized software (net of accumulated amortization of $3,789 and $3,644, respectively)		811			934
Fixed assets (net of accumulated depreciation of $813 and $914, respectively)		302			365
Right-of-use asset – leases		639			766
Other long-term assets		88			158
Goodwill		19,043			19,043
Intangible assets (net of accumulated amortization of $8,284 and $7,024, respectively)		10,716			11,976
Deferred tax asset		4,280			3,793
Non-current assets held for sale		—			3,577
Total assets	$	45,553		$	50,638

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,478		$	1,423
Accrued expenses		2,394			1,699
Income taxes payable		2,684			56
Current portion of long-term debt		870			4,000
Deferred revenue		4,741			4,743
Current liabilities held for sale		—			893
Total current liabilities		12,167			12,814
Long-term debt (net of debt discount of $61 and $70, respectively)		2,112			11,930
Lease liabilities – long-term		495			668
Deferred Tax Liability		73			—
Other long-term liabilities		18			—
Total liabilities		14,865			25,412
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.		—			—
Common stock $0.001 par value, 20,000,000 shares authorized, 3,868,826 and 3,838,743 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.		4			4
Additional paid-in capital		24,728			24,259
Other accumulated comprehensive loss		(97	)		(178	)
Retained earnings		6,053			1,141
Total stockholders' equity		30,688			25,226
Total liabilities and stockholders’ equity	$	45,553		$	50,638

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

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ACCESS NEWSWIRE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except share and per share amounts)

	For the Three Months Ended						For the Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2025			2024			2025			2024
Revenues	$	5,621		$	6,020		$	11,097		$	11,592
Cost of revenues		1,336			1,373			2,539			2,761
Gross profit		4,285			4,647			8,558			8,831
Operating costs and expenses:
General and administrative		1,752			1,842			3,705			3,481
Sales and marketing expenses		1,462			1,943			3,056			4,014
Product development		655			719			1,388			1,373
Depreciation and amortization		665			674			1,335			1,356
Total operating costs and expenses		4,534			5,178			9,484			10,224
Operating loss		(249	)		(531	)		(926	)		(1,393	)
Interest income (expense), net		11			(303	)		(193	)		(587	)
Other income (loss), net		(10	)		14			(79	)		219
Loss before taxes		(248	)		(820	)		(1,198	)		(1,761	)
Income tax benefit		(9	)		(137	)		(194	)		(295	)
Net loss from continuing operations		(239	)		(683	)		(1,004	)		(1,466	)
Net income (loss) from discontinued operations, net of tax		(236	)		690			5,916			1,334
Net income (loss)	$	(475	)	$	7		$	4,912		$	(132	)
Loss from continuing operations per share – basic	$	(0.06	)	$	(0.18	)	$	(0.26	)	$	(0.38	)
Loss from continuing operations per share – fully diluted	$	(0.06	)	$	(0.18	)	$	(0.26	)	$	(0.38	)
Income (loss) from discontinued operations per share – basic	$	(0.06	)	$	0.18		$	1.54		$	0.35
Income (loss) from discontinued operations per share – fully diluted	$	(0.06	)	$	0.18		$	1.54		$	0.35
Income (loss) per share – basic	$	(0.12	)	$	0.00		$	1.28		$	(0.03	)
Income (loss) per share – fully diluted	$	(0.12	)	$	0.00		$	1.28		$	(0.03	)
Weighted average number of common shares outstanding – basic		3,856			3,821			3,849			3,818
Weighted average number of common shares outstanding – fully diluted		3,857			3,823			3,850			3,821

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

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ACESS NEWSWIRE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands)

	For the Three Months Ended						For the Six Months Ended
	June 30,			June 30,			June 30,		June 30,
	2025			2024			2025		2024
Net income (loss)	$	(475	)	$	7		$	4,912	$	(132	)
Foreign currency translation adjustment		79			(13	)		81		(47	)
Comprehensive (loss) income	$	(396	)	$	(6	)	$	4,993	$	(179	)

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

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ACCESS NEEWSWIRE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share and per share amounts)

	Common Stock				Additional Paid-in			Accumulated Other Comprehensive Income			Retained			Total Stockholders’
	Shares		Amount		Capital			(Loss)			Earnings			Equity
Balance at December 31, 2023		3,815,212	$	4	$	23,531		$	(49	)	$	11,934		$	35,420
Stock-based compensation expense		—		—		(67	)		—			—			(67	)
Exercise of stock awards, net of tax		2,167		—		—			—			—			—
Foreign currency translation		—		—		—			(34	)		—			(34	)
Net loss		—		—		—			—			(139	)		(139	)
Balance at March 31, 2024		3,817,379	$	4	$	23,464		$	(83	)	$	11,795		$	35,180
Stock-based compensation expense		—		—		267			—			—			267
Exercise of stock awards, net of tax		14,332		—		—			—			—			—
Foreign currency translation		—		—		—			(13	)		—			(13	)
Net income		—		—		—			—			7			7
Balance at June 30, 2024		3,831,711	$	4	$	23,731		$	(96	)	$	11,802		$	35,441

Balance at December 31, 2024		3,838,743	$	4	$	24,259		$	(178	)	$	1,141		$	25,226
Stock-based compensation expense		—		—		280			—			—			280
Exercise of stock awards, net of tax		9,000		—		—			—			—			—
Foreign currency translation		—		—		—			2			—			2
Net income		—		—		—			—			5,387			5,387
Balance at March 31, 2025		3,847,743	$	4	$	24,539		$	(176	)	$	6,528		$	30,895
Stock-based compensation expense		—		—		189			—			—			189
Exercise of stock awards, net of tax		21,083		—		—			—			—			—
Foreign currency translation		—		—		—			79			—			79
Net loss		—		—		—			—			(475	)		(475	)
Balance at June 30, 2025		3,868,826	$	4	$	24,728		$	(97	)	$	6,053		$	30,688

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

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ACCESS NEWSWIRE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	For the Six Months Ended
	June 30,			June 30,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	4,912		$	(132	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on disposal of business		(8,974	)		—
Depreciation and amortization		1,509			1,540
Provision for credit losses		976			595
Deferred income taxes		(415	)		(72	)
Stock-based compensation expense		469			200
Non-cash interest adjustment on note payable		9			8
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		(680	)		(928	)
Decrease (increase) in other assets		226			52
Increase (decrease) in accounts payable		131			(230	)
Increase (decrease) in income tax payable		2,626			12
Increase (decrease) in accrued expenses		419			(341	)
Increase (decrease) in deferred revenue		(326	)		92
Net cash provided by operating activities		882			796

Cash flows from investing activities:
Proceeds from Sale of Compliance Business		12,000			—
Capitalized software		(23	)		(400	)
Purchase of fixed assets		(12	)		(16	)
Net cash provided by (used in) investing activities		11,965			(416	)

Cash flows from financing activities:
Payment of long-term debt		(12,957	)		(2,000	)
Net cash used in financing activities		(12,957	)		(2,000	)

Net change in cash and cash equivalents		(110	)		(1,620	)
Cash and cash equivalents – beginning		4,103			5,714
Currency translation adjustment		118			(74	)
Cash and cash equivalents – ending	$	4,111		$	4,020

Supplemental disclosures:
Cash paid for income taxes	$	387		$	101
Cash paid for interest	$	317		$	754

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

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ACCESS NEWSWIRE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Basis of Presentation

The unaudited interim Consolidated Balance Sheet as of June 30, 2025 and Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows for the three and six-month periods ended June 30, 2025 and 2024 included herein, have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act. In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the financial statements. Results of operations reported for the interim periods are not necessarily indicative of results for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The interim financial information should be read in conjunction with the 2024 audited financial statements of ACCESS Newswire Inc. (the “Company”, “We”, or “Our”) filed on Form 10-K for the year ended December 31, 2024.

Note 2. Summary of Significant Accounting Policies

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Significant intercompany accounts and transactions are eliminated in consolidation.

Cash Equivalents

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

Accounts Receivable and Allowance for Credit Losses

The Company calculates its allowance for credit losses using an expected losses model rather than using incurred losses. The model is based on the credit losses expected to arise over the life of the asset based on the Company’s expectations as of the balances sheet date through analyzing historical customer data as well as taking into consideration current economic trends. The Company generally writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection.

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

	For the Three Months Ended					For the Six Months Ended
	June 30,		June 30,			June 30,			June 30,
	2025		2024			2025			2024

Beginning balance	$	1,321	$	780		$	1,059		$	721
Provision for credit losses		279		190			556			490
Write-offs		—		(258	)		(15	)		(499	)
Ending Balance		1,600		712			1,600			712

Concentration of Credit Risk

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable. The Company places its cash and temporary cash investments with credit quality institutions. As of June 30, 2025, the Company’s domestic cash balance is spread among different depository institutions such that there is no balance which exceeds the FDIC insurance limit of $250,000. The Company also had cash-on-hand of $10,000 in Europe and $2,196,000 in Canada as of June 30, 2025.

The Company believes it did not have any financial instruments that could have potentially subjected us to significant concentrations of credit risk for any relevant period.

The Company did not have any customers during the three months ended June 30, 2025 or 2024 that accounted for more than 10% of revenue.

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Revenue Recognition

Substantially all the Company’s revenue comes from contracts with customers for its press release distribution and related products, investor relations website hosting or data feeds, events and webcast offerings and subscriptions to its incident hotline. Customers consist of public corporate issuers and professional firms, such as investor and public relations firms. In the case of news distribution and webcasting offerings, customers also include private companies. The Company accounts for a contract with a customer when there is an enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has economic substance, and collectability of the contract consideration is probable. The Company's revenues are measured based on consideration specified in the contract with each customer.

The Company's contracts include either a subscription to its entire platform, certain modules within the platform or to its Press Release Optimizer Plan (“PRO”), or an agreement to perform services, or any combination thereof, and often contain multiple subscriptions and services. For these bundled contracts, the Company accounts for individual subscriptions and services as separate performance obligations if they are distinct, which is when a product or service is separately identifiable from other items in the bundled package, and a customer can benefit from it on its own or with other resources that are readily available to the customer. Performance obligations include providing subscriptions to certain modules or our entire platform, distributing press releases on a per release basis or conducting webcasts, virtual annual meetings, or other events on a per event basis. PRO subscription contracts contain two performance obligations: (i) the first is a series of distinct services that include, but are not limited to, developing specific media plans, and creating content to be distributed and (ii) the second performance obligation being access to the PRO platform along with distribution of press releases, ongoing support, and assessment of performance as a stand-ready obligation. The Company’s subscription and service contracts are generally for one year, with automatic renewal clauses included in the contract until the contract is cancelled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all the revenue is expected to be recognized within one year from the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.

The Company recognizes revenue for subscriptions evenly over the contract period, upon distribution for pay per release or packages of press releases and upon event completion for webcasting and virtual annual meeting events. For service contracts that include stand-ready obligations, revenue is recognized evenly over the contract period. For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.

For bundled contracts, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices, at least annually, and updates these estimates if necessary.

The Company invoices its customers based on the billing schedules designated in its contracts, typically upfront on either a monthly, quarterly or annual basis or per transaction at the completion of the performance obligation. Deferred revenue for the periods presented was primarily related to press release packages which have been invoiced or paid, however the releases have not yet been disseminated, as well as, subscription and service contracts, which are billed upfront, quarterly, or annually, however the revenue has not yet been recognized. The associated deferred revenue is generally recognized as releases are disseminated for press release packages and ratably over the billing period for subscriptions. Deferred revenue as of June 30, 2025 and December 31, 2024, was $4,741,000 and $4,743,000, respectively, and is expected to be recognized primarily within one year. Approximately $817,000 of the deferred revenue balance as of June 30, 2025, relates to contracts for press release packages with an expiration date after June 30, 2026, however the customer may use the balance within one year. As of January 1, 2024, deferred revenue was $4,750,000. Revenue recognized for the six months ended June 30, 2025 and 2024, which was included in the deferred revenue balance at the beginning of each reporting period, was approximately $3,569,000 and $4,629,000, respectively. Accounts receivable, net of allowance for credit losses, related to contracts with customers was $3,731,000 and $3,351,000 as of June 30, 2025 and December 31, 2024, respectively. As of January 1, 2024, accounts receivable, net of allowance for credit losses was $3,005,000. Since substantially all the contracts have terms of one year or less, the Company has elected to use the practical expedient regarding the existence of significant financing.

Costs to obtain contracts with customers consist primarily of sales commissions. As of June 30, 2025 and December 31, 2024, the Company has capitalized $60,000 and $69,000, respectively, of costs to obtain contracts that are expected to be amortized over more than one year. For contract costs expected to be amortized in less than one year, the Company has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense when incurred. The Company has considered historical renewal rates, expectations of future renewals and economic factors in making these determinations.

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Earnings Per Share (EPS)

Earnings per share accounting guidance requires that basic net income per common share be computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Shares issuable upon the exercise of stock options totaling 53,750 were excluded in the computation of diluted earnings per common share during the three and six months ended June 30, 2025 because their impact was anti-dilutive. Shares issuable upon the exercise of stock options totaling 70,750 and 68,750 were excluded in the computation of diluted earnings per common share during the three and six months ended June 30, 2024, respectively, because their impact was anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for credit losses and the valuation of goodwill, intangible assets, deferred tax assets, and stock-based compensation. Actual results could differ from those estimates.

Income Taxes

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. For any uncertain tax positions, the Company recognizes the impact of a tax position, only if it is more likely than not of being sustained upon examination, based on the technical merits of the position. The Company’s policy regarding the classification of interest and penalties is to classify them as income tax expense in the financial statements, if applicable.

Capitalized Software

Costs incurred to develop the Company’s cloud-based platform products are capitalized when the preliminary project phase is complete, management commits to fund the project and it is probable the project will be completed and used for its intended purposes. Once the software is substantially complete and ready for its intended use, the software is amortized over its estimated useful life, which is typically four years. Costs related to design or maintenance of the software are expensed as incurred. Amortization for the three and six-month periods ended June 30, 2025 and 2024, is as follows (in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2025		2024		2025		2024

Capitalized software development costs	$	—	$	155	$	23	$	400
Amortization included in cost of revenues		72		54		145		100

Impairment of Long-lived Assets

In accordance with the authoritative guidance for accounting for long-lived assets, assets such as property and equipment, trademarks, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

Lease Accounting

The Company determines if an arrangement is a lease at inception. Operating lease agreements are primarily for office space and are included within lease right-of-use (“ROU”) assets and lease liabilities on the Consolidated Balance Sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments consist of non-lease services related to the lease and payments under operating leases classified as short-term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. ROU assets include any lease payments due and exclude lease incentives. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.

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Fair Value Measurements

Accounting Standards Codification (“ASC”) Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes debt and equity securities that are traded in an active market. Cash and cash equivalents are quoted at Level 1.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The fair value of the Company’s long-term debt and interest rate swap are quoted at Level 2.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

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

Stock-based Compensation

The authoritative guidance for stock compensation requires that companies estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The associated cost is recognized over the period during which an employee or director is required to provide service in exchange for the award.

Translation of Foreign Financial Statements

The financial statements of the foreign subsidiaries of the Company have been translated into U.S. dollars. All assets and liabilities have been translated at current rates of exchange in effect at the end of the period. Income and expense items have been translated at the average exchange rates for the year or the applicable interim period. The gains or losses that result from this process are recorded as a separate component of other accumulated comprehensive income until the entity is sold or substantially liquidated.

Comprehensive Loss

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

Business Combinations, Goodwill, and Intangible Assets

The authoritative guidance for business combinations specifies the criteria for recognizing and reporting intangible assets apart from goodwill. The Company records the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recorded as goodwill. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets consist of client relationships, customer lists, distribution partner relationships, software, technology, non-compete agreements and trademarks that are initially measured at fair value. At the time of the business combination, trademarks may be considered an indefinite-lived asset and, as such, are not amortized as there may be no foreseeable limit to cash flows generated from them. For the Newswire acquisition, the Company originally determined the trademarks acquired were considered a definite lived asset which will be amortized over a period of 15 years, however upon the re-brand of the Company to ACCESS Newswire and subsequent review of the trademarks associated with Newswire, determined the life to be 5 years remaining. The goodwill and intangible assets are assessed annually for impairment, or whenever conditions indicate the asset may be impaired, and any such impairment will be recognized in the period identified. The client relationships (5-10 years), customer lists (3 years), distribution partner relationships (10 years), non-compete agreements (5 years) and software and technology (3-7 years) are amortized over their estimated useful lives.

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Advertising

The Company expenses advertising as incurred. During the three and six-month periods ended June 30, 2025, advertising expense was $330,000 and $631,000, respectively. Additionally, during the six-month period ended June 30,2025, the Company incurred $132,000 in costs associated with its corporate re-brand. During the three and six-month periods ended June 30, 2024, advertising expense was $339,000 and $778,000, respectively.

Liquidity and Capital Resources

As of June 30, 2025, we had $4,111,000 in cash and cash equivalents and $3,731,000 in net accounts receivable. Current liabilities from continuing operations as of June 30, 2025, totaled $12,167,000 including the current portion of our long-term debt, accounts payable, deferred revenue, accrued payroll liabilities, income taxes payable, current portion of lease liabilities and other accrued expenses.

As of June 30, 2025, our current liabilities from continuing operations exceeded our current assets from continuing operations by $2,609,000. While our current liabilities from continuing operations exceed current assets from continuing operations, we believe our ability to renegotiate our Credit Agreement (see Note 8 below) and ability to continue to generate cash will benefit us in the future.

Accounting Pronouncements Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 is effective for the Company for the year ending December 31, 2025. The guidance allows for adoption using either a prospective or retrospective transition method. The Company does not believe the adoption of this standard will have a significant impact on the Company’s financial position, results of operations or cash flows, however, is evaluating the impact that the updated standard will have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. This update requires enhanced disclosures of certain costs and expenses in the notes to the financial statements. This update is applicable to all public entities and is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied prospectively; however, retrospective application is permitted. The Company is currently evaluating the impact the new accounting guidance will have on its disclosures.

Note 3: Discontinued Operations

On February 28, 2025 (the “Closing Date”), the Company and Direct Transfer, LLC, its wholly owned subsidiary entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Equiniti Trust Company, LLC (the “Buyer”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Buyer purchased certain assets related to the Company’s compliance business (the “Purchased Assets”). The Purchased Assets consisted of certain accounts receivable, prepaid assets, contracts and intellectual property, among other things, related to the Company’s services of providing i) disclosure software and services for financial reporting, ii) stock transfer services, iii) annual meeting, print and shareholder distribution and fulfillment services and iv) virtual annual meeting services (but not the intellectual property relating to the virtual annual meeting services). Revenue related to these services was previously included in the Company’s “compliance revenue” stream as reported with the SEC in previous filings, except revenue related to virtual annual meeting services, which was previously reported in “communications revenue” stream in previous SEC filings. Additionally, revenue related to providing SEDAR services and revenue related to our whistleblower hotline, which was previously reported as “compliance revenue” was retained by the Company. The Buyer assumed certain liabilities related to the Purchased Assets, which included certain accounts payable, accrued liabilities and deferred revenue.

The Company reviewed ASC 205-20-45, which provides guidance over the disposal of a component of an entity and determined that the criteria were met to classify the assets of the compliance business as held-for-sale as of December 31, 2024. Further guidance states that once a group of assets are determined to be held-for-sale, then they should be recorded as discontinued operations in the financial statements of the entity.

Performance obligations of contracts included in discontinued operations include providing subscriptions to certain modules of our compliance software or other stand-ready obligations to deliver services and annual report printing and distribution. Additionally, services are provided on a per project basis. Set up fees for disclosure services are considered a separate performance obligation and are satisfied upfront. Set up fees for the transfer agent module and investor relations content management module are immaterial. For service contracts that include stand ready obligations, revenue is recognized evenly over the contract period. For all other services delivered on a per project or event basis, the revenue is recognized at the completion of the event. The Company believes recognizing revenue for subscriptions and stand ready obligations using a time-based measure of progress, best reflects the Company’s performance in satisfying the obligations.

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As of the Closing Date, there was $1,227,000 of gross accounts receivable that did not transfer to the Buyer as a result of the Purchase Agreement. The following table sets forth the assets and liabilities included in discontinued operations as of June 30, 2025 and December 31, 2024 as presented in the Consolidated Balance Sheets (in thousands):

	June 30, 2025		December 31, 2024
Accounts Receivable (net of provision for credit losses of $1,016 and $559 as of June 30, 2025 and December 31, 2024)	$	116	$	1,321
Other current assets		—		17
Total current assets		116		1,338
Goodwill		—		2,885
Intangible Assets (net of accumulated amortization $5,265 as of December 31, 2024)		—		637
Other non-current assets		—		55
Total assets	$	116	$	4,915

Accounts Payable	$	—	$	107
Accrued Expenses		—		168
Deferred Revenue

SEC Form 10-Q filed by ACCESS Newswire Inc.