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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

As of ~~October 31, 2022,~~August 1, 2023, the registrant had ~~122,893,564~~120,377,903 shares of Class A common stock, $0.0001 par value per share, outstanding, and 8,290,921 shares of Class B common Stock, $0.0001 par value per share, outstanding.

This Quarterly Report on Form 10-Q includes statements that express ~~FiscalNote Holdings Inc.’s (the “Company,” “FiscalNote,” “we,” “us,” or “our”)~~our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors,” and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity; our prospects, growth, strategies and the markets in which FiscalNote operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting FiscalNote. Factors that may impact such forward-looking statements include:

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of this Quarterly Report on Form 10-Q and the other documents filed by us from time to time with the U.S. Securities and Exchange Commission ("SEC"). The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us and our business. There can be no assurance that future developments affecting us will be those that we have anticipated. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.


	September 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	78,010		$	32,168		$	37,260		$	60,388
Restricted cash		830			841			842			835
Accounts receivable, net		12,486			11,174			14,942			14,909
Costs capitalized to obtain revenue contracts, net		2,575			2,787			2,998			2,794
Prepaid expenses		5,285			1,803			3,374			4,315
Other current assets		3,265			5,525			2,751			2,764
Total current assets		102,451			54,298			62,167			86,005

Property and equipment, net		7,368			7,509			6,724			7,325
Capitalized software costs, net		12,673			7,480			15,240			13,946
Noncurrent costs capitalized to obtain revenue contracts, net		3,729			2,709			4,034			3,976
Operating lease assets		22,168			-			18,826			21,005
Goodwill		192,462			188,768			208,077			194,362
Customer relationships, net		58,006			61,644			59,951			56,348
Database, net		21,471			22,357			19,906			21,020
Other intangible assets, net		29,658			33,728			27,610			28,728
Other non-current assets		395			-			425			442
Total assets	$	450,381		$	378,493		$	422,960		$	433,157

Liabilities, Temporary Equity and Stockholders' Equity (Deficit)
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt	$	68		$	13,567		$	68		$	68
Accounts payable and accrued expenses		11,204			15,796			13,299			13,739
Deferred revenue, current portion		38,290			29,569			48,800			35,569
Customer deposits		1,709			3,568			2,019			3,252
Contingent liabilities from acquisitions, current portion		300			1,088			1,082			696
Operating lease liabilities, current portion		7,940			-			3,471			6,709
Other current liabilities		2,288			5,880			2,040			2,079
Total current liabilities		61,799			69,468			70,779			62,112

Long-term debt, net of current maturities		160,047			299,318			214,700			161,980
Convertible notes - related parties		-			18,295
Deferred tax liabilities		796			3,483			2,805			714
Deferred revenue, net of current portion		952			528			1,224			918
Deferred rent		-			8,236
Contingent liabilities from acquisitions, net of current portion		1,309			4,016			1,710			883
Sublease loss liability, net of current portion		-			2,090
Lease incentive liability, net of current portion		-			4,440
Operating lease liabilities, net of current portion		29,577			-			27,561			29,110
Warrant liabilities		13,091			-
Public and private warrant liabilities								6,758			18,892
Other non-current liabilities		1,806			1,453			3,703			13,858
Total liabilities		269,377			411,327			329,240			288,467
Commitment and contingencies (Note 17)
Temporary equity:
Redeemable, convertible preferred stock		-			449,211
Stockholders' equity (deficit):
Class A Common stock ($0.0001 and $0.00001 par value, 1,700,000,000 and 117,592,400 authorized, 122,436,591 and 18,346,466 issued and outstanding at September 30, 2022 and December 31, 2021, respectively)		12			-
Class B Common stock ($0.0001 and zero par value, 9,000,000 and zero authorized, 8,290,921 and zero issued and outstanding at September 30, 2022 and December 31, 2021)		1			-
Stockholders' equity:
Class A Common stock ($0.0001 par value, 1,700,000,000 authorized, 120,284,209 and 123,125,595 issued and outstanding at June 30, 2023 and December 31, 2022, respectively)								11			12
Class B Common stock ($0.0001 par value, 9,000,000 authorized, and 8,290,921 issued and outstanding at June 30, 2023 and December 31, 2022)								1			1
Additional paid-in capital		841,598			-			845,725			846,205
Accumulated other comprehensive loss		(2,408	)		(631	)		(816	)		(785	)
Accumulated deficit		(658,199	)		(481,414	)		(751,201	)		(700,743	)
Total stockholders' equity (deficit)		181,004			(482,045	)
Total liabilities, temporary equity and stockholders' equity (deficit)	$	450,381		$	378,493
Total stockholders' equity								93,720			144,690
Total liabilities and stockholders' equity							$	422,960		$	433,157

See accompanying notes to unaudited condensed consolidated financial statements.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Revenues:
Subscription	$	26,075		$	20,139		$	73,186		$	53,098		$	29,462		$	24,332		$	57,929		$	47,111
Advisory, advertising, and other		2,996			1,635			9,130			5,352			3,380			2,842			6,442			6,134
Total revenues		29,071			21,774			82,316			58,450			32,842			27,174			64,371			53,245
Operating expenses: (1)
Cost of revenues		8,699			5,412			23,581			14,664			9,485			7,712			18,422			14,882
Research and development		5,629			6,433			15,438			17,671			4,510			3,791			9,630			9,809
Sales and marketing		11,830			7,454			31,722			21,258			11,689			10,395			23,987			19,892
Editorial		4,218			3,786			11,240			10,967			4,752			3,346			9,017			7,022
General and administrative		38,945			9,337			59,535			22,199			16,174			10,033			34,395			20,590
Amortization of intangible assets		2,601			2,512			7,818			6,651			2,901			2,609			5,715			5,217
Loss on sublease		-			-			-			1,362
Transaction costs, net		1,275			2,127			1,257			2,985
Impairment of goodwill														-			-			5,837			-
Transaction costs (gains), net														309			1,027			1,717			(18	)
Total operating expenses		73,197			37,061			150,591			97,757			49,820			38,913			108,720			77,394
Operating loss		(44,126	)		(15,287	)		(68,275	)		(39,307	)		(16,978	)		(11,739	)		(44,349	)		(24,149	)

Interest expense, net		42,894			16,261			89,672			46,102			7,154			24,255			13,835			46,778
Change in fair value of warrant and derivative liabilities		(21,910	)		(2,839	)		(18,524	)		9,406
Change in fair value of financial instruments														2,987			2,048			(11,693	)		3,386
Gain on PPP loan upon extinguishment		-			-			(7,667	)		-			-			-			-			(7,667	)
Loss on debt extinguishment, net		45,250			-			45,250			-
Loss on settlement														3,474			-			3,474			-
Other expense, net		928			241			1,543			384			167			494			38			615
Net loss before income taxes		(111,288	)		(28,950	)		(178,549	)		(95,199	)		(30,760	)		(38,536	)		(50,003	)		(67,261	)
Benefit from income taxes		(2,286	)		(992	)		(2,836	)		(6,737	)
Provision (benefit) from income taxes														213			(176	)		243			(550	)
Net loss		(109,002	)		(27,958	)		(175,713	)		(88,462	)		(30,973	)		(38,360	)		(50,246	)		(66,711	)
Other comprehensive loss		(1,003	)		(368	)		(1,777	)		(546	)
Other comprehensive (loss) gain														328			(859	)		(31	)		(774	)
Total comprehensive loss	$	(110,005	)	$	(28,326	)	$	(177,490	)	$	(89,008	)	$	(30,645	)	$	(39,219	)	$	(50,277	)	$	(67,485	)

Net loss	$	(109,002	)	$	(27,958	)	$	(175,713	)	$	(88,462	)	$	(30,973	)	$	(38,360	)	$	(50,246	)	$	(66,711	)
Deemed dividend		(24,351	)		(78,037	)		(26,570	)		(218,250	)		-			(10,614	)		-			(2,219	)
Net loss used to compute basic loss per share	$	(133,353	)	$	(105,995	)	$	(202,283	)	$	(306,712	)
Marked-to-market fair value gain for private warrants		(23,310	)		-			(23,310	)		-
Net loss used to compute diluted loss per share	$	(156,663	)	$	(105,995	)	$	(225,593	)	$	(306,712	)
Net loss used to compute loss per share													$	(30,973	)	$	(48,974	)	$	(50,246	)	$	(68,930	)

Earnings per share attributable to common shareholders:
Basic	$	(1.39	)	$	(6.34	)	$	(4.52	)	$	(20.91	)
Diluted	$	(1.63	)	$	(6.34	)	$	(5.03	)	$	(20.91	)
Weighted average shares used in computing earnings per shares attributable to common shareholders:
Basic		96,117,011			16,724,066			44,757,851			14,671,167
Diluted		96,235,930			16,724,066			44,876,770			14,671,167
Earnings (loss) per share attributable to common shareholders:
Basic and Diluted													$	(0.23	)	$	(2.57	)	$	(0.38	)	$	(3.65	)
Weighted average shares used in computing earnings (loss) per shares attributable to common shareholders:
Basic and Diluted														134,117,122			19,020,367			133,601,798			18,876,752

See accompanying notes to unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)


	Temporary Equity						Equity (Deficit)																	Temporary Equity					Equity (Deficit)
	Preferred Stock						Common Stock					Additional paid-in capital			Accumulated other comprehensive loss			Accumulated deficit			Total stockholders' equity (deficit)			Preferred Stock					Common Stock						Additional paid-in capital			Accumulated other comprehensive loss			Accumulated deficit			Total stockholders' equity (deficit)
	Shares			Amount			Shares			Amount														Shares		Amount			Shares			Amount
Balance at December 31, 2020		38,258,865		$	238,963			10,425,584		$	-	$	5,808		$	(63	)	$	(236,975	)	$	(231,230	)
Retroactive conversion of shares due to Business Combination		7,154,403			-			1,949,584			-		-			-			-			-
Balance at December 31, 2020, as converted		45,413,268		$	238,963			12,375,168		$	-	$	5,808		$	(63	)	$	(236,975	)	$	(231,230	)
Accretion of preferred stock to redemption value		-			213,797			-			-		(57,990	)		-			(155,807	)		(213,797	)
Exercise of stock options		-			-			316,360			-		364			-			-			364
Issuance of preferred stock and warrants		1,481,930			17,045			-			-		252			-			(453	)		(201	)
Shares issued in business acquisitions		-			-			4,954,486			-		32,966			-			-			32,966
Seller convertible notes issued at premium		-			-			-			-		7,178			-			-			7,178
Capital distribution		-			-			-			-		(3,686	)		-			-			(3,686	)
Beneficial conversion feature, net of taxes		-			-			-			-		14,561			-			-			14,561
Stock-based compensation expense		-			-			-			-		547			-			-			547
Net loss		-			-			-			-		-			-			(88,462	)		(88,462	)
Foreign currency translation loss		-			-			-			-		-			(546	)		-			(546	)
Balance at September 30, 2021		46,895,198		$	469,805			17,646,014		$	-	$	-		$	(609	)	$	(481,697	)	$	(482,306	)

Balance at December 31, 2021		41,746,262			449,211			15,456,165			-		-			(631	)		(481,414	)		(482,045	)		41,746,262	$	449,211			15,456,165		$	-		$	-		$	(631	)	$	(481,414	)	$	(482,045	)
Retroactive conversion of shares due to Business Combination		7,806,546						2,890,301			-		-			-			-			-			7,806,546					2,890,301			-			-			-			-			-
Balance at December 31, 2021, as converted		49,552,808			449,211			18,346,466			-		-			(631	)		(481,414	)		(482,045	)		49,552,808	$	449,211			18,346,466		$	-		$	-		$	(631	)	$	(481,414	)	$	(482,045	)
Change in par value		-			-			-			2		(2	)		-			-			-
Accretion of preferred stock to redemption value		-			26,570			-			-		(24,351	)		-			(2,219	)		(26,570	)		-		(8,390	)		-			-			-			-			8,395			8,395
Issuance of Class A common stock upon redemption of preferred stock		(49,552,808	)		(475,781	)		47,595,134			5		475,776			-			-			475,781
Issuance of Class A common stock and Class B common stock in connection with Business Combination, net		-			-			62,664,098			6		346,791			-			-			346,797
Issuance of Class A common stock in connection with business acquisitions		-			-			859,016			-		8,590			-			-			8,590
Issuance of Class A common stock upon exercise of public warrants		-			-			610,548			-		4,732			-			-			4,732
Issuance of Class A common Stock upon vesting of restricted share units		-			-			305,671			-		-			-			-			-
Issuance of Class A common stock upon exercise of stock options		-			-			136,043			-		19			-			367			386
Exercise of stock options																									-		-			54,765			-			-			-			215			215
Stock-based compensation expense																									-		-			-			-			-			-			260			260
Net loss																									-		-			-			-			-			-			(28,351	)		(28,351	)
Foreign currency translation gain																									-		-			-			-			-			85			-			85
Balance at March 31, 2022																									49,552,808	$	440,821			18,401,231		$	-		$	-		$	(546	)	$	(500,895	)	$	(501,441	)
Accretion of preferred stock to redemption value																									-		10,609			-			-			-			-			(10,614	)		(10,614	)
Exercise of stock options																									-		-			73,064			-			-			-			152			152
Repurchase of common stock		-			-			(9,785	)		-		-			-			(88	)		(88	)		-		-			(9,785	)		-			-			-			(88	)		(88	)
Stock-based compensation expense		-			-			220,321			-		30,043			-			868			30,911			-		-			220,321			-			-			-			608			608
Net loss		-			-			-			-		-			-			(175,713	)		(175,713	)		-		-			-			-			-			-			(38,360	)		(38,360	)
Foreign currency translation loss		-			-			-			-		-			(1,777	)		-			(1,777	)		-		-			-			-			-			(859	)		-			(859	)
Balance at September 30, 2022		-		$	-			130,727,512		$	13	$	841,598		$	(2,408	)	$	(658,199	)	$	181,004
Balance at June 30, 2022																									49,552,808	$	451,430			18,684,831		$	-		$	-		$	(1,405	)	$	(549,197	)	$	(550,602	)

Balance at December 31, 2022																									-		-			131,416,516			13			846,205			(785	)		(700,743	)		144,690
Adoption of new accounting standard																									-		-			-			-			-			-			(212	)		(212	)
Issuance of Class A common stock in connection with business acquisitions																									-		-			1,885,149			-			9,539			-			-			9,539
Issuance of Class A common stock upon vesting of restricted share units																									-		-			287,157			-			-			-			-			-
Issuance of Class A common stock upon exercise of stock options																									-		-			194,775			-			264			-			-			264
Issuance of Class A common stock upon settlement of contingent consideration																									-		-			83,393			-			196			-			-			196
Stock-based compensation expense																									-		-			-			-			6,506			-			-			6,506
Withholding taxes on net share settlement of stock-based compensation and option exercises																									-		-			-			-			(917	)		-			-			(917	)
Net loss																									-		-			-			-			-			-			(19,273	)		(19,273	)
Foreign currency translation loss																									-		-			-			-			-			(359	)		-			(359	)
Balance at March 31, 2023																									-	$	-			133,866,990		$	13		$	861,793		$	(1,144	)	$	(720,228	)	$	140,434
Issuance of Class A common stock upon vesting of restricted share units																									-		-			478,619			-			-			-			-			-
Issuance of Class A common stock upon employee stock purchase plan																									-		-			102,807			-			318									318
Issuance of Class A common stock upon exercise of stock options																									-		-			8,437			-			35			-			-			35
Stock-based compensation expense																									-		-			-			-			5,482			-			-			5,482
Withholding taxes on net share settlement of stock-based compensation and option exercises																									-		-			-			-			(494	)		-			-			(494	)
Return of common stock (Note 17)																														(5,881,723	)		(1	)		(21,409	)		-			-			(21,410	)
Net loss																									-		-			-			-			-			-			(30,973	)		(30,973	)
Foreign currency translation gain																									-		-			-			-			-			328			-			328
Balance at June 30, 2023																									-	$	-			128,575,130		$	12		$	845,725		$	(816	)	$	(751,201	)	$	93,720

See accompanying notes to unaudited condensed consolidated financial statements.


		Nine Months Ended September 30,						Six Months Ended June 30,
		2022			2021			2023			2022
Operating Activities:
Net loss		$	(175,713	)	$	(88,462	)	$	(50,246	)	$	(66,711	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			892			870			671			581
Amortization of intangible assets and capitalized software development costs			14,482			10,728			11,373			9,049
Amortization of deferred costs to obtain revenue contracts			1,922			1,820			1,648			1,247
Impairment of goodwill									5,837			-
Non-cash operating lease expense			4,856			-			2,366			3,209
Stock-based compensation			30,868			547			11,988			825
Operating lease asset impairment			378			-			-			378
Contingent compensation expense			195			-
Bad debt expense			90			106
Loss on settlement									3,474			-
Other non-cash expenses									426			488
Bad debt expense (recovery)									229			(93	)
Change in fair value of acquisition contingent consideration			(2,192	)		1,045			(333	)		(1,537	)
Change in fair value of derivative liabilities			3,332			9,406
Change in fair value of warrant liabilities			(21,856	)		-
Deferred income tax benefit			(2,708	)		(5,299	)
Change in fair value of financial instruments									(11,693	)		3,386
Deferred income tax provision (benefit)									214			(513	)
Paid-in-kind interest, net			10,491			26,972			2,042			27,848
Net loss attributable to equity method investment			23			-
Non-cash interest expense			50,512			15,126			2,130			15,072
Loss on debt extinguishment, net			45,250			-
Loss on sublease			-			1,362
Gain on PPP Loan forgiveness			(7,667	)		-			-			(7,667	)
Changes in operating assets and liabilities:
Accounts receivable, net			(4,211	)		1,793			1,644			(2,793	)
Prepaid expenses and other current assets			(1,151	)		(1,432	)		2,284			(4,618	)
Costs capitalized to obtain revenue contracts, net			(2,808	)		(2,140	)		(1,910	)		(2,071	)
Other non-current assets			(395	)		-			18			-
Accounts payable and accrued expenses			3,566			236			(4,914	)		(1,217	)
Deferred revenue			8,581			3,264			9,595			13,019
Customer deposits			(1,917	)		(386	)		(1,233	)		(1,611	)
Other current liabilities			(5,677	)		604			(797	)		(758	)
Deferred rent			-			535
Contingent liabilities from acquisitions, net of current portion			(1,267	)		-			(39	)		(1,267	)
Lease liabilities			(6,296	)		-
Sublease loss liability, net of current portion			-			(458	)
Lease incentive liability, net of current portion			-			(396	)
Operating lease liabilities									(4,974	)		(4,121	)
Other non-current liabilities			921			(20	)		(6	)		1,527
Net cash used in operating activities			(57,499	)		(24,179	)		(20,206	)		(18,348	)

Investing Activities:
Capital expenditures			(8,859	)		(3,931	)		(4,086	)		(6,041	)
Cash paid for business acquisitions, net of cash acquired			1,125			(26,378	)		(5,010	)		-
Net cash used in investing activities			(7,734	)		(30,309	)		(9,096	)		(6,041	)

Financing Activities:
Proceeds from Business Combination			175,000			-
Issuance costs of common stock			(45,242	)		-
Proceeds from long-term debt, net of issuance costs			166,013			33,147			6,000			19,478
Principal payments of long-term debt			(189,023	)		-			(53	)		(30	)
Proceeds from exercise of public warrants			4,469			-
Proceeds from exercise of stock options			386			364
Proceeds from exercise of stock options and ESPP purchases									617			367
Repurchase of common stock			(88	)		-			-			(88	)
Net proceeds from issuance of preferred stock			-			12,481
Net cash provided by financing activities			111,515			45,992			6,564			19,727

Effects of exchange rates on cash			(451	)		40			(383	)		(352	)

Net change in cash, cash equivalents, and restricted cash			45,831			(8,456	)		(23,121	)		(5,014	)
Cash, cash equivalents, and restricted cash, beginning of period			33,009			45,020			61,223			33,009
Cash, cash equivalents, and restricted cash, end of period		$	78,840		$	36,564		$	38,102		$	27,995

Supplemental Noncash Investing and Financing Activities:
Issuance of Class A common stock upon redemption of preferred stock		$	475,781		$	-
Issuance of Class A common stock and Class B common stock in connection with Business Combination		$	346,797		$	-
Acquisition of warrant liabilities		$	34,947		$	-
Accretion of redemption value of preferred stock	��	$	26,570		$	213,797		$	-		$	(8,390	)
Issuance of common stock in connection with business acquisitions		$	8,590		$	32,966
Warrants issued in conjunction with long-term debt issuance		$	436		$	252		$	178		$	436
Issuance of Class A common stock upon exercise of public warrants		$	263		$	-
Fees payable to debt holders settled through increase of debt principal		$	100		$	-		$	-		$	100
Fair value of seller notes issued in connection with business combinations		$	-		$	21,438
Beneficial conversion feature in conjunction with long-term debt issuance, net of taxes		$	-		$	14,561
PIK interest settled through issuance of additional convertible notes to noteholders		$	-		$	7,551		$	-		$	10,734
Issuance of preferred stock in conjunction with debt modification		$	-		$	4,363
Property and equipment purchases included in accounts payable		$	-		$	29		$	343		$	28

Supplemental Cash Flow Activities:
Cash paid for interest		$	28,974		$	3,339		$	9,924		$	3,263
Cash paid for taxes		$	68		$	162		$	49		$	70

See accompanying notes to unaudited condensed consolidated financial statements.

(in thousands, except shares, par value, per share amounts, or as otherwise noted)

1. Summary of Business and Significant Accounting Policies

Description of Business

FiscalNote Holdings, Inc. (“FiscalNote,” or the “Company”) is a leading technology provider of global policy and ~~data company delivering~~market intelligence. It delivers critical, actionable legal ~~data~~ and policy insights in a rapidly evolving ~~economic,~~ political, regulatory and ~~regulatory world.~~macroeconomic environment. By combining artificial intelligence ~~(“AI”), machine learning and~~(AI) technology, other technologies with analytics, workflow tools, and expert ~~research,~~peer insights, FiscalNote ~~seeks~~empowers customers to ~~reinvent the way that organizations minimize risks~~manage policy, address regulatory developments, and ~~capitalize on opportunities associated with rapidly changing legal and policy environments. Through a number of its products,~~mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information ~~that facilitates~~in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management ~~products, coupled with expert research and analysis of markets and geopolitical events, as well as powerful tools to manage workflows, advocacy campaigns, and constituent relationships.~~products. The Company is headquartered in Washington, D.C.

On July 29, 2022 (the “Closing Date”), the Company consummated the transactions contemplated by the Agreement and Plan of ~~Business Combination,~~Merger, dated as of November 7, 2021, and as amended on May 9, 2022, (the “Merger Agreement”), by and among FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), and Grassroots Merger Sub, Inc., a Delaware Corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”). Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”). In connection with the closing of the Transactions (the “Closing”), DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.” (“New FiscalNote”). Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the Closing.

Basis of Presentation and Interim Financial Information

We accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. This determination was primarily based on:

•

Old FiscalNote stockholders having the largest voting interest in New FiscalNote;

•

the board of directors of New FiscalNote having ten members, and Old FiscalNote’s former stockholders having the ability to nominate the majority of the members of the board of directors;

•

Old FiscalNote management continuing to hold executive management roles for the post-combination company and being responsible for the day-to-day operations;

•

the post-combination company assuming the Old FiscalNote name;

•

New FiscalNote maintaining the pre-existing Old FiscalNote headquarters; and

•

the intended strategy of New FiscalNote being a continuation of Old FiscalNote’s strategy.

Accordingly, the Business Combination was treated as the equivalent of Old FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization. The net assets of DSAC are stated at historical cost, with no goodwill or other intangible assets recorded.

While DSAC was the legal acquirer in the Business Combination, because Old FiscalNote was determined as the accounting acquirer, the historical financial statements of Old FiscalNote became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in the accompanying unaudited interim condensed consolidated financial statements reflect (i) the historical operating results of Old FiscalNote prior to the Business Combination; (ii) the combined results of the Company and Old FiscalNote following the closing of the Business Combination; (iii) the assets and liabilities of Old FiscalNote at their historical cost; and (iv) the Company’s equity structure for all periods presented.

In connection with the Business Combination, the Company has converted the equity structure for the periods prior to the Business Combination to reflect the number of shares of New FiscalNote’s common stock issued to Old FiscalNote’s stockholders in connection with the recapitalization ~~transaction.~~transaction based on an exchange ratio of 1.187 (the "Exchange Ratio"), determined pursuant to the terms of the Business Combination. As such, the shares, corresponding capital amounts and earnings per share, as applicable, related to Old FiscalNote’s, convertible preferred stock, and common stock prior to the Business Combination have been retroactively converted as shares by applying the ~~exchange ratio established in the Business Combination.~~Exchange Ratio.

Principles of Consolidation

The ~~accompanying~~ condensed consolidated ~~balance sheets as~~financial statements include the accounts of ~~September 30, 2022~~the Company and December 31, 2021, the condensed consolidated statements of operations and comprehensive loss, the condensed consolidated statements of temporary equity and stockholders' equity (deficit) for the three and nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited.its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes

~~9 |~~ 6

~~P a g e~~

Table of Contents

required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance ~~sheets as of September 30, 2022 and December 31, 2021,~~sheet and its results of operations, including its comprehensive loss, temporary equity, stockholders' equity (deficit) ~~for the three~~, and ~~nine months ended September 30, 2022 and 2021, and its~~ cash ~~flows for the nine months ended September 30, 2022 and 2021.~~flows. All adjustments are of a normal recurring nature. The results for the ~~three and nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, ~~2022.~~2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements ~~and notes thereto~~included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Liquidity

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations and potential other funding sources, in addition to cash on-hand, to meet its obligations as they become due.

The Company received approximately $65.6 million of net cash proceeds from the Transactions. The Company’s cash, ~~and~~ cash equivalents, and restricted cash were $~~78.0~~38.1 million at ~~September~~June 30, ~~2022,~~2023, compared with $~~32.2~~61.2 million at December 31, ~~2021.~~2022. Further, the Company had a negative working capital balance of $~~38.2~~46.7 million (excluding cash) at ~~September~~June 30, ~~2022~~2023 and had an accumulated deficit of $~~658.2~~751.2 million and $~~481.4~~700.7 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and has incurred net losses of $~~175.7~~50.2 million and $~~88.5~~66.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Management expects that significant on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development. The Company's ability to fund its cash interest requirements under its $156.0 million new senior term loan facility (the "New Senior Term Loan"), acquisition strategy, operating expenses, and capital expenditure requirements will depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond the Company's control.

The Company's future capital requirements also depend on many factors, including sales volume, the timing and extent of spending to support research and development (“R&D”) efforts, investments in information technology systems, the expansion of sales and marketing activities, and execution on our acquisition strategy. Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model. The Company believes with the cash on hand at ~~September~~June 30, ~~2022,~~2023, proceeds from expected product sales, and borrowings possibly available ~~borrowings~~ under the New Senior Term Loan, ~~it has~~will be sufficient ~~liquidity~~ to ~~fund operations,~~meet our short-term and long-term operating expenses and capital expenditures ~~and certain capital acquisition activity~~ for at least the next twelve months.

~~The Company's ability~~Pursuant to ~~fund its cash interest requirements under~~the terms of the New Senior Term Loan, acquisition strategy, operating expenses, and capital expenditure requirements will depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond the Company's control. Depending on these and other market conditions, the Company ~~may seek~~is subject to customary covenant requirements (see Note 8, “Debt” and Note 18, "Subsequent Events" for additional ~~financing. Volatility~~details). The Company expects to be in compliance with its amended quarterly financial covenants, but cannot guarantee that will be the case. In the event of non-compliance with any quarterly financial covenants, should the lenders of the New Senior Term Loan accelerate the maturity of the New Senior Term Loan, the Company would not have sufficient cash on hand or available liquidity to repay the outstanding debt in the ~~credit markets may have an adverse effect on the Company's ability to obtain debt financing as interest rates continue to increase. If the Company raises additional funds through the issuance~~event of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of the Company's common stock, or may require the Company to agree to unfavorable terms, and the Company's existing stockholders may experience significant dilution.default.

On April 13, 2020, the Company received funding in the principal amount of $8,000 under the Paycheck Protection Program (the “PPP”) provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (the “PPP Loan”). The PPP Loan provided additional liquidity and instant funding for the Company to meet the unplanned working capital needs in its effort to transition the majority of its workforce into a remote-work setting due to the COVID-19 outbreak. On February 24, 2022, the U.S. Small Business Administration forgave $7,667 of the PPP Loan with the remaining balance of $333 to be repaid over five years. The Company recognized the forgiveness of the PPP Loan as a gain on debt ~~extinguishment.~~

~~Under~~extinguishment during the ~~CARES Act, employers were allowed to defer the deposit and payment~~first quarter of the employer’s share of the Social Security Tax that would otherwise be due on or after March 27, 2020, and before January 1, 2021. Starting in April 2020, on a monthly basis, the Company deferred paying the employer’s share of the Social Security Tax for a total amount of $~~1,326~~ ~~as of December 31, 2020. In compliance with current guidelines, the Company made a payment of $663~~ ~~relating to the deferred Social Security Tax in December 2021, the remaining $663~~ ~~of deferred Social Security Tax will be paid by December 31, 2022 and has been recorded as other current liabilities on the condensed consolidated balance sheets as of September 30,~~ 2022.

~~Use of Estimates~~

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of:

•

~~revenue recognition;~~

•

~~the average period of benefit associated with costs capitalized to obtain revenue contracts;~~

•

~~the fair value of assets acquired and liabilities assumed for business combinations;~~

•

~~the useful lives of intangible assets;~~

•

~~capitalization of software development costs;~~

•

~~valuation of financial instruments;~~

~~Table of Contents~~

•

~~the fair value of certain stock awards issued;~~

•

~~the fair value of certain consideration issued as part of business combinations;~~

•

~~the recognition, measurement, and valuation of current and deferred income taxes and uncertain tax positions; and~~

•

~~the incremental borrowing rate used to calculate lease balances.~~

Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, which forms the basis for making judgments about the carrying values of assets and liabilities.

~~Principles of Consolidation~~

~~The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances have been eliminated in consolidation.~~

Segments

The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Over the past several years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence, and reach in various market segments. While the Company has offerings in multiple market segments and operates in multiple countries, the Company’s business operates in one operating segment because the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis.

Fair value of Financial Instruments

The Company has elected the fair value option on the subordinated convertible promissory notes issued as part of the Dragonfly acquisition, refer to Note 4, "Business Combinations" for further details, and for the New GPO Note, refer to Note 8, "Debt" for further details. The Company records changes in fair value through the condensed consolidated statement of operations where the portion of the change that results from a change in the instrument-specific credit risk is recorded separately in accumulated other comprehensive income, if applicable. Additionally, under the fair value option, all issuance costs are expensed in the period that the debt is incurred.

Concentrations of Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company generally maintains its cash and cash equivalents with various nationally recognized financial institutions. The Company’s cash and cash equivalents at times exceed amounts guaranteed by the Federal Deposit Insurance Corporation. The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At June 30, 2023, approximately 58% of the Company’s cash and cash equivalents were held at JPMorgan Chase Bank, N.A.

Table of Contents

The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. This allowance is based upon historical loss patterns, the number of days billings are past due, collection history of each customer, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in sales and marketing expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the condensed consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of June 30, 2023, allowance for credit losses of $985 was included in the accounts receivable, net balance.

No single customer accounted for more than 10% of the Company's accounts receivable balance as of ~~September~~June 30, 2023 or December 31, 2022. Revenue derived from the U.S. Federal Government was 15% and 19% of revenue for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023 and December 31, ~~2021. No single customer accounted for~~ 10~~% or more of total revenues during the three and nine months ended September 30,~~ 2022, ~~and 2021. As of September 30, 2022 and December 31, 2021,~~ assets located in the United States were approximately 85% and 92% percent of total ~~assets.~~assets, respectively.

As of June 30, 2023 no vendors accounted for more than 10% of the Company's accounts payable balance. Two vendors individually accounted for more than 10% of the Company’s accounts payable as of ~~September 30, 2022 and~~ December 31, ~~2021.~~2022. During the ~~three and nine~~six months ended ~~September~~June 30, ~~2022 and 2021, one~~2023 no vendors represented more than 10% of the total purchases made. One vendor represented more than 10% of the total purchases ~~made.~~

~~Revenue Recognition~~

~~The Company recognizes revenues upon~~made during the satisfaction of its performance obligation(s) (upon transfer of control of promised goods or services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services. The Company has elected to exclude sales and similar taxes from the transaction price.

~~The Company determines the amount of revenue to be recognized through the application of the following steps:~~

~~(i)~~

~~identification of contracts with customers,~~

~~(ii)~~

~~identification of distinct performance obligations in the contract,~~

~~(iii)~~

~~determination of contract transaction price,~~

~~(iv)~~

~~allocation of contract transaction price to the performance obligations, and~~

~~(v)~~

~~determination of revenue recognition based on timing of satisfaction of the performance obligation(s).~~

~~The Company derives its revenues from subscription revenue arrangements and advisory, advertising, and other revenues.~~

~~Subscription Revenue~~

Subscription revenue consists of revenue earned from subscription-based arrangements that provide customers the right to use the Company’s software and products in a cloud-based infrastructure. Subscription revenue is driven primarily by the number of active licenses,

~~Table of Contents~~

the types of products and the price of the subscriptions. The Company also earns subscription-based revenue by licensing to customers its digital content, including transcripts, news and analysis, images, video, and podcast data. Subscription revenue is generally non-refundable regardless of the actual use and is recognized ratably over the non-cancellable contract term beginning on the commencement date of each contract, which is the date the Company’s service is first made available to customers.

The Company's contracts with customers may include promises to transfer multiple services. For these contracts, the Company accounts for individual promises separately if they are distinct performance obligations. Determining whether services are considered distinct performance obligations may require significant judgment. Judgment is also required to determine the standalone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when the Company does not sell the services separately, the Company determines the SSP using available information, including market conditions and other observable inputs.

The Company typically invoices its customers annually. Typical payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue, depending on whether transfer of control to customers has occurred.

~~Deferred revenue results from amounts billed to or cash received from customers in advance of the revenue being recognized.~~

Contract assets represent a conditional right to consideration for satisfied performance obligations that become a receivable when the conditions are satisfied. Contract assets are generated when contractual billing schedules differ from the timing of revenue recognition or cash collection and are included in other current assets in the accompanying condensed consolidated balance sheets.

~~Advisory, Advertising, and Other Revenues~~

Advisory revenue is typically earned under contracts for specific deliverables and is non-recurring in nature, although the Company may sell different advisory services to repeat customers. One-time advisory revenue is invoiced according to the terms of the contract, usually delivered to the customer over a short period of time, during which revenue is recognized.

Advertising revenue is primarily generated by delivering advertising in its own publications (Roll Call and CQ) in both print and digital formats. Revenue for print advertising is recognized upon publication of the advertisement. Revenue for digital advertising is recognized over the period of the advertisement or, if the contract contains impression guarantees, based on delivered impressions.

Book revenue is recognized when the product is shipped to the customer, which is when control of the product is transferred to the customer. Shipping and handling costs are treated as a fulfillment activity and are expensed as incurred.

~~Events revenue is deferred and only recognized when the event has taken place and is included in other revenues~~.

~~Costs Capitalized to Obtain Revenue Contracts~~

The Company capitalizes incremental costs of obtaining a contract. Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions incurred for obtaining new contracts are deferred and then amortized as selling and marketing expenses on a straight-line basis over a period of benefit that the Company has determined to be approximately ~~four years~~. The four-year amortization period was determined based on several factors, including the nature of the technology and proprietary data underlying the services being purchased, customer contract renewal rates and industry competition. The Company updates its estimate of the period of benefit periodically and whenever events or circumstances indicate that the period of benefit could change significantly. Such changes, if any, are accounted for prospectively as a change in estimate. ~~The Company has elected to use a practical expedient to expense commissions for renewal contracts when the renewal period is 12 months or less. The Company does not have material costs to fulfill contracts with customers.~~

~~Cost of Revenues~~

Cost of revenues primarily consists of expenses related to hosting the Company’s service, the costs of data center capacity, amortization of developed technology and capitalized software development costs, certain fees paid to various third parties for the use of their technology, services, or data, costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with providing professional services and other direct costs of production. Also included in cost of revenues are costs related to develop, publish, print, and deliver publications.

~~Cash, Cash Equivalents, and Restricted Cash~~

~~The Company considers cash on deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents.~~

~~In 2017, as an incentive for entering into a lease and building out the Company’s head office in Washington, D.C., the District granted to the Company $750~~ to finance the security deposit of the new office. The Company is required to meet certain covenants, such as maintaining its headquarters in Washington, D.C., and may have to reimburse the District if the covenants are not met. The amount of the grant is reflected as restricted cash, including any interest earned, in the accompanying condensed consolidated balance sheets.

~~Property and Equipment~~

~~Property and equipment are stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives, which generally are~~ ~~five years~~ ~~for furniture and fixtures,~~ ~~three years~~ ~~for equipment, and the~~ ~~shorter of the useful life or the lease term~~ ~~for leasehold improvements. Software license fees for externally purchased software are capitalized and amortized over the life of the license. Property~~

~~Table of Contents~~

~~and equipment are evaluated for impairment in accordance with management’s policy for finite-lived intangible assets and other long-lived assets (see Note 6).~~

~~Depreciation expense was $311~~ ~~and $297~~ ~~for the three~~six months ended ~~September 30, 2022 and 2021, and $892~~ ~~and $870~~ for the nine months ended September 30, 2022 and 2021, respectively, and is recorded as part of the general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

~~Capitalized Software Development Costs~~

The Company capitalizes costs to develop software for internal use, including website development costs, when it is determined the development efforts will result in new or additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with implementation activities and ongoing maintenance are expensed as incurred and included in operating expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life that the Company has determined to be ~~three years~~. Amortization of capitalized software development costs is included in the costs of revenues in the accompanying condensed consolidated statements of operations and comprehensive loss. Software development costs are evaluated for impairment in accordance with management’s policy for finite-lived intangible assets and other long-lived assets (see Note 6).

~~Business Combinations~~

The Company must estimate the fair value of assets acquired and liabilities assumed in a business combination at the acquisition date. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair values of the tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the condensed consolidated statement of operations and comprehensive loss.

~~Acquisition-Related Intangibles and Other Long-Lived Assets~~

The Company recognizes acquisition-related intangible assets, such as customer relationships and developed technology, in connection with business combinations. The Company amortizes the cost of acquisition-related intangible assets that have finite useful lives generally on a straight-line basis. The Company evaluates acquisition-related intangibles and other long-lived assets 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 are measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the asset group. This includes assumptions about future prospects for the business that the asset group relates to and typically involves computations of the estimated future cash flows to be generated by these businesses. Based on these judgments and assumptions, the Company determines whether the Company needs to take an impairment charge to reduce the value of the asset group stated on the Company’s condensed consolidated balance sheets to reflect its estimated fair value. When the Company considers such assets to be impaired, the amount of impairment the Company recognizes is measured by the amount by which the carrying amount of the asset group exceeds its fair value.

~~Goodwill Impairment~~

Goodwill is not amortized, but is evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For purposes of assessing potential impairment, the Company estimates the fair value of its reporting units based on the price a market participant would be willing to pay in a potential sale of the reporting unit, and compares this amount to the carrying value of the reporting unit. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required. The annual goodwill impairment test is performed on October 1st. There were no ~~impairments of long-lived assets and goodwill during 2021 and the nine months ended September~~June 30, 2022.

~~Leases~~

The Company determines if an arrangement is a lease or contains a lease at the inception of the contract. The Company’s leases include certain variable lease payments associated with non-lease components, such as common area maintenance costs and real estate taxes, which are generally charged based on actual amounts incurred by the lessor. The non-lease components are combined with the lease component to account for both as a single lease component.

Lease liabilities, which represent the Company's obligation to make lease payments arising from the lease, and corresponding right-of-use assets, which represent the Company's right to use an underlying asset for the lease term, are recognized at the commencement date of the lease based on the present value of fixed future payments over the lease term. The Company calculates the present value of future payments using a discount rate equal to the Company’s incremental borrowing rate. For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term and lease expense relating to variable payments is expensed as incurred. The Company did not have any finance leases at both January 1, 2022 (date of adoption) and at September 30, 2022. The Company records costs associated with leases within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company subleases certain leased office spaces to third parties and recognizes sublease income on a straight-line basis over the sublease term as an offset to lease expense as part of the general and administrative expense in the condensed consolidated statements of operations and comprehensive loss.

~~Table of Contents~~

~~Warrant Liabilities~~

The Company evaluates its financial instruments, including its outstanding warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company has outstanding public and private warrants, both of which do not meet the criteria for equity classification and are accounted for as liabilities. Accordingly, the Company recognizes the warrants as liabilities at fair value and adjusts the warrants to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheets date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss.

~~The fair value of the public warrants is estimated based on the quoted market price of such warrants. The fair value of the private warrants is estimated using a binomial option pricing model.~~

~~Stock-Based Compensation~~

Stock-based compensation awards consist of stock options and restricted stock units (collectively “stock-based awards”). The Company has historically issued stock options with exercise prices equal to the fair value of the underlying stock price. Prior to the completion of the Business Combination and listing of the Company’s Class A common stock on the public stock exchange, the fair value of Old FiscalNote common stock underlying the stock options was determined based on then-current valuation estimates at the time of grant. Because such grants occurred prior to the public trading of the Company’s Class A common stock, the fair value of Old FiscalNote common stock was typically determined with assistance of periodic valuation analyses from an independent third-party valuation firm.

The Company calculates the fair value of stock options using the Black-Scholes option-pricing model. For share-based awards with performance conditions, the Company periodically assesses whether the performance conditions have been met or are probable of being met in order to determine the timing and amount of compensation expense to be recognized for each reporting period. Compensation expense for all option awards is recorded on a straight-line basis over the requisite service period of the awards, which is generally the option’s vesting period. These amounts are reduced by the forfeitures as the forfeitures occur.

~~Income Taxes~~

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations and comprehensive loss in the period that includes the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed.

The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision.

~~Foreign Currency Translation~~

The functional currency of the Company’s major foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the condensed consolidated statements of operations and comprehensive loss. Foreign currency transaction gains and losses are included in other expense, net in the condensed consolidated statements of operations and comprehensive loss for the period and historically have not been material.

~~Currency gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are included in accumulated other comprehensive loss.~~

~~Related Party Transactions~~

From time to time the Company has entered into related party transactions with certain of the Company's directors and officers. These transactions have historically included term loans, convertible debt, and convertible preferred stock.

~~Fair Value Measurements~~

~~Table of Contents~~

The Company accounts for assets and liabilities in accordance with accounting standards that define fair value and establish a consistent framework for measuring fair value on either a recurring or a nonrecurring basis. Fair value is an exit price representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

Accounting standards include disclosure requirements relating to the fair values used for certain financial instruments and establish a fair value hierarchy. The hierarchy prioritizes valuation inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of three levels:

~~Level 1: Quoted prices in active markets for identical assets or liabilities.~~

~~Level 2: Assets or liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.~~

Level 3: Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

~~Recent~~Recently Adopted Accounting Pronouncements ~~Not Yet Effective~~

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments("ASU 2016-13") guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate ~~can~~ now ~~reflect~~reflects an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The ~~guidance will be effective for the Company’s year beginning~~Company adopted ASC 2016-13 on January 1, ~~2023. The~~2023 using the modified retrospective transition method. Upon adoption, the Company ~~is currently evaluating the impact~~recorded a $212 cumulative-effect adjustment to accumulated deficit on the condensed consolidated ~~financial statements upon adoption.~~balance sheets, our allowance for doubtful accounts receivable changed from $468 at December 31, 2022 to $680 at January 1, 2023.

In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (ASC 815-40) ("ASU 2020-06") guidance modifying the requirements for the accounting for convertible instruments and contracts in an entity’s own equity. The modifications eliminate certain accounting models for convertible debt instruments, eliminate certain requirements for equity classification of embedded derivatives and align earnings per share calculations for convertible instruments. The ~~guidance is effective for the Company’s year beginning January 1, 2024. The Company is currently evaluating the impact on the condensed consolidated financial statements upon adoption.~~

The Company has evaluated all other issued and unadopted Accounting Standards Updates and believes the adoption of these standards will not have a material impact on its condensed consolidated statements of operations and comprehensive loss, balance sheets, or cash flows.

~~Recently Adopted Accounting Pronouncements~~

~~In February 2016, the FASB issued ASU 2016-02~~ ~~Leases (ASC 842)~~ guidance for the accounting for leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheets for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company adopted ~~ASU 2016-02~~ASC 2020-06 on January 1, ~~2022~~2023 using the effective date method. By applying ASU 2016-02 at the adoption date, as opposed to at the beginning of the earliest period presented, the Company's reporting for periods prior to January 1, 2022 continues to be in accordance with ~~Leases (ASC 840)~~. The Company elected the package of practical expedients which permits carrying forward historical accounting positions around lease identification, lease classification and initial direct costs for all leases commencing prior to January 1, 2022. The Company also made a policy election to not separate lease and non-lease components for all of its leases and to exclude leases with a term of 12 months or less at the commencement date from the lease asset and lease liability recognition and measurement requirements under ASC 842. Adoption of the standard on January 1, 2022 resulted in the recording of $~~25,912~~ ~~of operating lease assets and $42,324~~ of operating lease liabilities. The difference between the operating lease assets and operating lease liabilities at transition represented previously recognized deferred rent, lease incentives, and sublease loss liabilities. The Company did not adjust the prior period balance sheets. Adoption of the standard did not impact our condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of cash flows. See Note 5 for required disclosures related to leases.

~~In December 2019, the FASB issued ASU 2019-12~~ ~~Simplifying the Accounting for Income Taxes~~ guidance modifying the requirements for the accounting for income taxes. The simplifications include changes in the accounting for (i) intra-period tax allocations, (ii) outside basis differences in business combinations, (iii) interim provisions, (iv) step-up in tax basis goodwill and (v) franchise and other taxes partially based on income, among other changes. The Company adopted ASC 2019-12 on January 1, 2022.modified retrospective approach. The adoption of ~~this new guidance did not have a material impact on the Company's condensed consolidated financial statements.~~

~~Table of Contents~~

~~In October 2021, the FASB issued ASU 2021-08~~ ~~Business Combinations (ASC 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~ ~~guidance requiring entities to apply~~ ASC 606 to recognize and measure contract assets and contract liabilities in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASC 606, at fair value on the acquisition date. Under the new guidance the acquirer will recognize contract assets and contract liabilities at the same amounts recorded by the acquiree. The modifications improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The Company adopted ASC 2021-08 on January 1, 2022. The adoption of this new guidance2020-06 did not have a material impact on the Company's condensed consolidated financial statements.

174. Business Combinations

2023 Acquisitions

Dragonfly Acquisition

On January 27, 2023, the Company entered into a Sale and Purchase Agreement for all of the issued and outstanding share capital of Dragonfly Eye Limited ("Dragonfly"), a UK- based SaaS-based geopolitical and security intelligence provider of actionable data and analysis delivered through Dragonfly's SaaS-based, proprietary Security Intelligence and Analysis Service subscription platform and API.

The aggregate purchase price consisted of (i) $5.6 million in cash (£4.5 million pounds sterling), (ii) 1,885,149 shares of the Company’s Class A Common Stock, and (iii) $11.1 million (£8.9 million pounds sterling) in aggregate principal amount of subordinated convertible promissory notes (“Seller Convertible Notes”). The purchase price is subject to customary adjustments based on working capital and the amount of Dragonfly’s transaction expenses and net indebtedness that remain unpaid as of the closing date, and indemnification obligations for certain claims made following the Closing Date. The Company incurred expenses of $1,138 in connection with the transaction during the six months ended June 30, 2023 (inclusive of $446 of amounts paid on January 27, 2023 that were recognized as expense during the three months ended March 31, 2023).

The acquisition date fair value of the consideration transferred for Dragonfly consisted of the following:


Cash	$	5,617
Fair value of Class A common stock		9,539
Fair value of Seller Convertible Notes		8,635
Fair value of contingent consideration		1,445
Total	$	25,236

The Class A common stock issued as consideration as part of the acquisition of Dragonfly represents non-cash activity on the condensed consolidated statement of stockholders equity and condensed consolidated statement of cash flows.

Additionally, the sellers are eligible to receive an additional payment from the Company of up to approximately $4.3 million, £3.5 million pounds sterling, (the “Earnout”) based on the achievement of certain U.S. GAAP revenue targets for 2023 by Dragonfly. In the event any part of the Earnout becomes payable, the Company may satisfy its payment obligations to the sellers with cash or common stock, pursuant to the Sale and Purchase Agreement.

Certain employees of Dragonfly are eligible for employee earnout bonus awards ("Employee Earnout Awards") based on 2024 revenue targets. The Employee Earnout Awards are subject to forfeiture in the event that Dragonfly does not achieve its revenue target or these employees terminate their employment. Any Employee Earnout Awards that are forfeited are reallocated to the other eligible employees.

The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:


Cash and cash equivalents	$	607
Current assets, net		3,443
Property and equipment, net		18
Intangible assets		9,600
Deferred revenues		(3,941	)
Current liabilities		(1,764	)
Deferred tax liabilities		(2,009	)
Total net assets acquired		5,954
Goodwill		19,282
Total purchase price	$	25,236

The following table sets forth the components of identified intangible assets acquired and their estimated useful lives as of the date of acquisition:


	Estimated Fair Value		Estimated Useful Life (Years)
Customer relationships	$	7,300	6,10		(a)
Developed technology		1,750		10
Tradename		550		3
Total intangible assets acquired	$	9,600
(a) Includes two separate customer relationships with two different useful lives

Table of Contents

~~4. Business Combinations~~The estimated fair values of the customer relationships, developed technology and tradename were determined using the income approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.

The purchase price allocation includes UK deferred assets and liabilities for acquired book and tax basis differences.

The fair values assigned to tangible and intangible assets acquired and liabilities assumed combined with the fair value of the purchase consideration are based on management's estimates and assumptions and are preliminary and may change upon completion of the determination of the fair value of assets and liabilities assumed. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

2022 Acquisitions

Aicel Acquisition

On July 29, 2022, the Company acquired all of the outstanding stock of Seoul, South Korea-based Aicel Technologies (“Aicel”), an AI-driven enterprise SaaS company that delivers market intelligence and data insights. The acquisition consideration of $8,678 consisted of 723,684 common shares of Old FiscalNote that were then exchanged into 859,016 Class A common shares of New FiscalNote pursuant to the Exchange Ratio and contingent consideration. Pursuant to the terms of the acquisition agreement, certain of the sellers of Aicel are eligible for additional contingent consideration of 12,491 shares of the Company’s Class A common stock. The Company incurred expenses of approximately $300 in connection with the transaction, of which approximately $96 was recognized during the year ended December 31, 2021. The acquisition date fair value of the consideration transferred for Aicel consisted of the following:


Fair value of Class A common stock	$	8,590
Fair value of contingent consideration		88
Total	$	8,678

The fair value of the Class A common stock issued was estimated based on the fair value of the Company’s common stock on the date of the acquisition. The fair value of the contingent consideration is estimated based on the expected future cash flows and revenues along with the fair value of the Company’s Class A common stock on the date of acquisition.

The contingent consideration consists of shares of the Company’s Class A common stock and is scheduled to be delivered within eighteen months upon achievement of certain revenue targets pursuant to the terms of the ~~prevailing purchase~~acquisition agreement. The contingent consideration is payable to certain selling shareholders and contains no future service conditions. The fair value of the contingent consideration was recorded as equity as the number of shares that ultimately may be issued upon achievement of the revenue targets is fixed. Classification as equity requires fair value measurement initially and there are no subsequent re-measurements. Settlement of equity-classified contingent consideration is accounted for within equity.

The acquisition also includes contingent payments in the form of up to $300 in cash, 28,522 shares of the Company’s Class A common stock on a post-exchange basis and 24,833 of restricted stock upon achievement of certain revenue targets. The common stock, restricted stock and cash portions of the contingent payments will be paid within eighteen months upon achievement of certain revenue ~~targets.~~targets. The contingent payments are payable to certain employees, contingent on them remaining employed through the contingency payout date. The estimated fair value of the contingent payments on the date of acquisition is considered post-combination compensation expense and recognized based on management’s determination of the likelihood of the revenue targets being met. In the event that compensation expense is recognized and the revenue targets are not met, the previously recognized compensation expense is reversed. Post-combination compensation expense of $~~606~~637 was recognized during the ~~third quarter of~~year ended December 31, 2022, $300 of which was accrued as a contingent liability and the remainder recorded as equity-based compensation. In December 2022, the $300 contingent liability was paid. The Company recorded equity-based compensation related to the restricted stock contingent payments of $31 and $62 for the three and six months ended June 30, 2023, respectively.

The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition:


Cash and cash equivalents	$	1,525
Current assets, net		447
Property and equipment, net		53
Equity method investment		45
Intangible assets		3,000
Deferred revenues		(602	)
Other current liabilities		(453	)
Debt		(1,131	)
Total net assets acquired		2,884
Goodwill		5,794
Total purchase price	$	8,678

The excess of the purchase price over the net tangible and intangible assets was recorded as goodwill, which is primarily attributed to the future economic benefits arising from other assets acquired and could not be individually identified and separately recognized including expected synergies and assembled workforce. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions and are preliminary and may change upon completion of the determination of the fair value of assets and liabilities assumed. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

The following table sets ~~for~~forth the components of identified intangible assets acquired and their estimated useful lives as of the date of acquisition:

Estimated Fair Value

Estimated Useful Life (Years)

Developed technology

$
1,200

8

Database

750

8

Customer relationships

650

11

Tradename

400

7

Total intangible assets acquired

$
3,000

Table of Contents


	Estimated Fair Value		Estimated Useful Life (Years)
Developed technology	$	1,200		8
Database		750		8
Customer relationships		650		11
Tradename		400		7
Total intangible assets acquired	$	3,000

The estimated fair values of the developed technology, database, customer relationships, and tradename were determined using the income approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.

For federal income tax purposes, the Company ~~plans to make~~has made a Section 338(g) election ~~which would~~to treat the transaction as an asset acquisition for federal income tax purposes which results in additional tax basis approximately equal to the fair value assigned at the acquisition date. The intangibles and goodwill are to be amortized over 15 years. Additionally, ~~there were no significant~~Korean deferred tax liabilities were recorded during 2022 for the difference between book basis and tax basis of assets orand liabilities ~~identified as part of the transaction to be recorded on the acquisition date. The tax asset allocation will be finalized with the filing of the 2022 return.~~acquired.

DT-Global Asset ~~acquisition~~Acquisition

On September 30, 2022, the Company acquired certain assets of DT-Global Business Consulting, a Vienna, Austria subscription-based market intelligence company which provides in-depth expertise and analysis for Central & Eastern Europe, Commonwealth of Independent States, and Middle East-Africa areas. The aggregate purchase price was $600, which included an upfront cash payment of $400 and purchase price holdbacks of $100, along with $100 of contingent consideration related to operational milestones.

The Company accounted for this acquisition as an asset purchase. In connection with the acquisition, the Company incurred direct transaction costs of approximately $43 which have been classified as costs of acquisition. The costs of acquisition are allocated to the acquired assets and assumed liabilities based on their fair values at the date of acquisition, and any excess is allocated to intangible assets. The costs of acquisition exceeded the fair value of net assets acquired by approximately $~~1,090~~1,012. The Company allocated the $~~1,090~~1,012 excess to the customer relationship intangible asset. The intangible asset will be amortized over 15 years. As of ~~September 30,~~December 31, 2022, the contingent consideration was determined to be probable and reasonably estimable, ~~and thus,~~ the consideration of $52was ~~included in~~attributed to the ~~costs of acquisition~~customer relationship intangible asset with a corresponding liability of $52recorded as part of ~~other current liabilities~~Contingent Liabilities from Acquisitions on the ~~condensed~~ consolidated balance ~~sheets.~~sheets and a payment of the liability of $39 was made in January 2023, resulting in a remaining liability of $13 as of June 30, 2023.

For federal income tax purposes, the Company ~~will obtain~~obtained a tax basis in the assets acquired equal to the purchase price, as adjusted and allocated, pursuant to IRC guidelines. The resulting intangible asset will be amortized over 15 ~~years~~. years. As of ~~September~~June 30, ~~2022,~~2023, $39 of the contingent consideration was ~~not paid and~~paid. The unpaid portion as of June 30, 2023 will be excluded from federal tax asset allocation until paid.

~~2021 Acquisitions~~

During the year ended December 31, 2021 the Company acquired (a) The Oxford Analytica International Group Incorporated (“Oxford Analytica”), (b) Fireside 21, LLC (“Fireside”); (c) TimeBase Pty. Ltd. (“Timebase”); (d) Board.org, LLC (“Board.org”); (e) Equilibrium World Pte. Ltd. (“Equilibrium”); (f) Predata, Inc. (“Predata”), (g) Curate Solutions, Inc. (“Curate”), (h) Forge.ai, Inc. (“Forge”), and (i) FrontierView Strategy Group ("FrontierView") (collectively the “2021 Acquisitions”). In connection with the 2021 Acquisitions, the Company incurred $~~1,418~~ in transaction costs in 2021. The Company financed these acquisitions through a combination of cash, debt, and equity financing including the issuance of seller notes and convertible notes, and the Company’s common stock. The operations of each acquisition have been included in the Company’s condensed consolidated results of operations since the respective closing dates of each acquisition. The Company measures all assets acquired and liabilities assumed at their acquisition-date fair value. The purchase price allocation for the 2021 Acquisitions had been finalized as of December 31, 2021.

~~The following table summarizes the Company’s acquisitions by region for the periods presented:~~


		~~2021~~
~~North America~~		6
~~Europe~~		1
~~Australia~~		1
~~Asia~~		1

~~Purchase Consideration for the 2021 Acquisitions~~

The fair value of the common stock issued was estimated based on the fair value of the Company’s common stock on the date of each acquisition. The fair value of the contingent consideration is estimated based on the expected future cash flows and revenues along with the fair value of the Company’s common stock on the date of acquisition. ~~The table below summarizes the fair value of consideration transferred for the 2021 Acquisitions:~~

Oxford Analytica

Fireside

Timebase

Board.org

Equilibrium

Predata

Curate

Forge

FrontierView

Total

Acquisition date:

2/12/2021

4/30/2021

5/7/2021

6/3/2021

6/25/2021

6/30/2021

8/27/2021

9/9/2021

11/19/2021

Cash

$
3,850

$
7,290

$
2,241

$
10,113

$
833

$
1,925

$
1,120

$
614

$
18,107

$
46,093

Fair value of common stock (a)

2,626

-

-

-

8,271

6,510

6,078

9,481

-

32,966

Fair value of seller notes

-

10,232

2,078

9,128

-

-

-

-

-

21,438

Fair value of contingent consideration (b)

-

-

-

-

-

196

1,206

1,700

-

3,102

Fair value of contributed interests (c)

-

-

-

-

315

-

-

-

-

315

Total

$
6,476

$
17,522

$
4,319

$
19,241

$
9,419

$
8,631

$
8,404

$
11,795

$
18,107

$
103,914

~~Table of Contents~~

~~(a)~~

~~The Company transferred the following shares to certain of the sellers of the 2021 Acquisitions: (i)~~ ~~968,172~~ ~~for Oxford Analytica, (ii)~~ ~~1,260,320~~ ~~for Equilibrium, (iii)~~ ~~991,804~~ ~~for Predata, (iv)~~ ~~677,483~~ ~~for Curate, and (v)~~ ~~1,056,703~~ ~~for Forge, respectively.~~

~~(b)~~

~~Pursuant to the terms of the acquisition agreements, the sellers of certain of the 2021 Acquisitions were eligible for additional contingent consideration consisting of: (i) up to~~ ~~333,660~~ ~~shares for Curate, and (ii)~~ ~~195,834~~ ~~shares for Forge (all of which have been issued to the Forge employees at the closing, and are subject to clawback based on the earnout provisions), respectively.~~

~~(c)~~

The fair value of the contributed interests reflects the Company’s CEO contributing his previously held minority interest in Equilibrium to the Company which is reflected as a capital contribution to the Company.

~~Purchase Price Allocation for the 2021 Acquisitions~~

The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill, which is primarily attributed to the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized including expected synergies and assembled workforce, for which there is generally no basis for income tax purposes. ~~The table below summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates:~~

Oxford Analytica

Fireside (a)

Timebase

Board.org (a)

Equilibrium

Predata

Curate

Forge (b)

FrontierView (a)

Total

Cash

$
207

$
51

$
315

$
201

$
149

$
126

$
595

$
40

$
783

$
2,467

Accounts receivable

668

389

185

2,862

-

165

179

-

1,535

5,983

Other assets

274

-

85

229

13

258

20

90

289

1,258

Intangible assets

4,600

3,816

1,474

9,122

4,909

5,336

3,720

3,705

5,557

42,239

Accounts payable and accrued expenses

(1,052
)

(136
)

(220
)

(208
)

(58
)

(245
)

(173
)

(316
)

(1,034
)

(3,442
)
Deferred revenue

(2,340
)

-

(360
)

(4,411
)

-

(95
)

(301
)

(281
)

(2,173
)

(9,961
)
Other liabilities

(237
)

-

-

(613
)

-

(32
)

-

-

-

(882
)
Deferred tax liability

(441
)

-

(475
)

-

(835
)

-

(609
)

-

-

(2,360
)
Total net assets acquired

1,679

4,120

1,004

7,182

4,178

5,513

3,431

3,238

4,957

35,302

Goodwill

4,797

13,402

3,315

12,059

5,241

3,118

4,973

8,557

13,150

68,612

Total purchase price

$
6,476

$
17,522

$
4,319

$
19,241

$
9,419

$
8,631

$
8,404

$
11,795

$
18,107

$
103,914

~~(a)~~

~~The acquired intangible assets and the goodwill (up to $13,430, $11,446, and $13,150~~ ~~in connection with the Fireside, Board.org, and FrontierView acquisitions, respectively) will be deductible for U.S. federal income tax purposes.~~

~~Intangible assets from the 2021 Acquisitions~~

The estimated fair values of developed technology, customer relationships, databases, tradenames, and content library were determined using the income approach. The estimated fair value of the expert network was determined using a “with and without” analysis comparing expected revenues and cash flows with the expert network in place and those that would be expected if the expert network were not in place. The approach used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates and appropriate discount rates. ~~The following table sets forth the components of identifiable intangible assets acquired and liabilities assumed and their estimated useful lives as of the respective acquisition dates:~~

Oxford Analytica

Fireside

Timebase

Board.org

Equilibrium

Predata

Curate

Forge

FrontierView

Total Estimated Fair Value

Estimated
Useful Life (Years)
Developed technology

$
-

$
1,349

$
537

$
-

$
4,909

$
1,195

$
623

$
1,672

$
1,972

$
12,257

4-20
Customer relationships

750

2,314

937

8,855

-

3,477

1,828

2,033

2,754

22,948

3-15
Databases

-

-

-

-

-

-

1,269

-

-

1,269

15
Tradenames

926

153

-

267

-

664

-

-

239

2,249

3-20
Expert network

2,924

-

-

-

-

-

-

-

-

2,924

6
Content library

-

-

-

-

-

-

-

-

592

592

10
Total intangible assets acquired

$
4,600

$
3,816

$
1,474

$
9,122

$
4,909

$
5,336

$
3,720

$
3,705

$
5,557

$
42,239

~~Contingent Consideration for the 2021 Acquisitions~~

~~The contingent consideration consists of the Company’s common stock and restricted stock units and is generally scheduled to be delivered within~~ ~~one~~ to ~~three years~~ upon achievement of certain revenue targets pursuant to the terms of the prevailing purchase agreements. The contingent consideration is payable to all selling shareholders in connection with the Curate and Forge acquisitions, and contains no future service conditions. The amount of fair value attributed to purchase consideration will be adjusted based on changes to the fair value of contingent consideration at each subsequent reporting period with changes being recorded through the condensed consolidated statement of operations and comprehensive loss. ~~The following table summarizes the contingent consideration as of the date of the 2021 Acquisitions, as of December 31, 2021, and as of September 30, 2022, respectively:~~

Predata

Curate

Forge

Total

Fair value of contingent consideration on the respective acquisition dates

$
196

$
1,206

$
1,700

$
3,102

Changes to the fair value of contingent consideration

322

1,348

(1,236
)

434

Fair value of contingent consideration as of December 31, 2021

518

2,554

464

3,536

Changes to the fair value of contingent consideration during the nine months ended September 30, 2022

-

(1,210
)

(455
)

(1,665
)
Earned contingent consideration settled during the nine months ended September 30, 2022

-

(531
)

-

(531
)
Unearned contingent consideration reversal during the nine months ended September 30, 2022

(518
)

-

(9
)

(527
)
Fair value of contingent consideration as of September 30, 2022

$
-

$
813

$
-

$
813

~~Table of Contents~~

~~Contingent Compensation for the 2021 Acquisitions~~

~~Certain of the 2021 Acquisitions also included contingent compensation in the form of cash and/or the Company’s common stock. The contingent compensation is generally scheduled to be delivered in~~ ~~one~~ to ~~three years~~ upon achievement of certain revenue targets per agreed upon terms. The contingent compensation payments are payable to certain employees, contingent on them remaining employed through the contingency payout date. The estimated fair value of the contingent compensation on the date of acquisition is considered post-combination compensation expense and recognized based on management’s determination of the likelihood of the revenue targets being met. In the event that compensation expense is recognized and the revenue targets are not met, the previously recognized compensation expense is reversed. ~~The following table summarizes the fair value of contingent compensation recognized and settled during the periods presented, and the liability balances as of the periods presented:~~

Equilibrium (a)

Predata

Forge (b)

FrontierView (c)

Total

Contingent compensation recognized during 2021

$
861

$
504

$
260

$
93

$
1,718

Contingent compensation settled in 2021

(150
)

-

-

-

(150
)
Contingent compensation liability as of December 31, 2021

711

504

260

93

1,568

Contingent compensation recognized during nine months ended September 30, 2022

(499
)

-

170

1,455

1,126

Contingent compensation settled during the nine months ended September 30, 2022

-

-

(267
)

(1,000
)

(1,267
)
Unearned contingent compensation reversal during the nine months ended September 30, 2022

(183
)

(504
)

(163
)

(81
)

(931
)
Contingent compensation liability as of September 30, 2022

$
29

$
-

$
-

$
467

$
496

~~(a)~~

~~Equilibrium contingent compensation consists of up to $4,000~~ ~~in cash and~~ ~~296,750~~ ~~shares of the Company's common stock.~~

~~(b)~~

~~Forge contingent compensation consists of an employee retention bonus in the amount of $422~~ ~~and up to~~ ~~457,015~~ ~~shares of the Company's common stock. These shares are subject to clawback based on the earnout provisions. As of June 30, 2022, Forge employees earned cash contingent compensation of $417, of which $267~~ ~~was paid in the second quarter of 2022 and the remaining $150~~ ~~was initially scheduled to be paid in the first quarter in 2023 but deemed cancelled and therefore reversed during the third quarter in 2022 due to the departure of the individual employee recipient.~~

~~(c)~~

~~Reflects the first contingent compensation threshold earned by the FrontierView employees as of March 31, 2022 that was settled through the payment of $1,000~~ ~~in the second quarter of 2022. The second contingent compensation threshold is also for $1,000~~ ~~and subject to FrontierView achieving previously agreed upon revenue targets.~~

~~Unaudited Pro Forma Financial Information~~

The unaudited pro forma financial information presented below summarizes the combined results of operations for the Company and the 2021 Acquisitions as though the companies were combined as of January 1, 2021.

The unaudited pro forma financial information for all periods presented includes, among other items, amortization charges from acquired intangible assets, retention and other compensation accounted for separately from purchase accounting, interest expense (including amortization of various discounts) on acquisition debt issued to the various sellers, the impacts of common stock issued to the various sellers, and the related tax effects, but excludes the impacts of any expected operational synergies. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the 2021 Acquisitions been acquired on January 1, 2021.

The unaudited pro forma financial information for the three and nine months ended September 30, 2021 combine the historical results of the Company with the historical results of the 2021 Acquisitions for the period prior to the acquisition dates, and the effects of the pro forma adjustments discussed above. ~~The unaudited pro forma financial information, in aggregate, is as follows:~~

Three Months Ended

Nine Months Ended

September 30, 2021

Revenues:

Subscription

$
22,082

$
64,781

Advisory, advertising, and other

2,079

8,565

Total revenues

24,161

73,346

Net loss

$
(28,204
)

$
(91,067
)

~~Subscription revenue from the 2021 Acquisitions (excluding the deferred revenue haircut) recognized by the Company during the three and nine months ended September 30, 2021 totaled $5,126~~ ~~and $8,426, respectively. Advisory, advertising, and other revenue from the 2021 Acquisitions recognized by the Company during the three and nine months ended September 30, 2021 totaled $692~~ ~~and $1,491~~, respectively. The 2021 Acquisitions did not have a material impact to the Company's net loss during the three and nine months ended September 30, 2021. The 2022 Acquisition did not have a material impact to the Company's revenue and net loss during the three and nine months ended September 30, 2022.

5. Leases

The Company has operating leases, principally for corporate offices under non-cancelable operating ~~leases.~~leases that expire at various dates through 2031. The non-cancellable base terms of these leases typically range from one to nine years. ~~The Company’s~~Certain lease ~~terms may~~agreements include options to ~~extend or terminate the~~

~~Table of Contents~~

~~lease. The period which is subject to an option to extend~~renew or terminate the lease, ~~is included in the lease term~~which if ~~it is~~not reasonably certain ~~that~~to be exercised are therefore not factored into the ~~option will be exercised.~~determination of lease payments.

The following table details the composition of lease expense for the ~~period~~periods presented:


	Three Months Ended			Nine Months Ended			Three Months Ended June 30,						Six Months Ended June 30,
	September 30, 2022						2023			2022			2023			2022
Operating lease cost (a)	$	2,436		$	7,305		$	1,215		$	2,431		$	3,800		$	4,873
Variable lease cost		133			327			242			106			397			194
Short-term lease cost		335			971			161			315			339			636
Total lease costs	$	2,904		$	8,603		$	1,618		$	2,852		$	4,536		$	5,703
Sublease income	$	(1,338	)	$	(4,013	)	$	(26	)	$	(1,337	)	$	(1,390	)	$	(2,675	)

~~(a)~~a)

Excludes operating lease assets impairment charge of $378 related to an unoccupied existing office space lease recorded in the first quarter of 2022.

~~The following tables present the future minimum~~

Cash payments related to operating lease ~~payments~~liabilities were $6,390 (inclusive of $1,682 lease termination fee) and ~~additional information about the Company's lease obligations as of September 30, 2022:~~$

2022 (remaining)

$
3,065

2023

8,943

2024

5,065

2025

5,147

2026

5,262

Thereafter

23,431

Total minimum lease payments

50,913

Less: Amounts representing interest

13,396

Net minimum lease payments

$
37,517


5,793	~~September 30, 2022~~
~~Weighted average remaining lease term (in years)~~		~~7.6~~
~~Weighted average discount rate~~		~~8.3~~	%

~~The following table presents supplemental cash flow information~~ for the ~~period presented:~~six months ended June 30, 2023 and 2022, respectively.

Nine Months Ended

September 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows for operating leases

$
8,752

Supplemental noncash information on lease liabilities arising from obtaining operating lease assets:

Operating lease assets obtained in exchange for lease obligations

$
1,497

In March 2022, the Company ceased use of excess office space under one of its existing leases, with the intent to sublease this space. In accordance with ASC 360, the Company evaluated the asset group for impairment which included the associated operating lease asset for the office space, as the change in circumstances indicated the carrying amount of the asset group may not be recoverable. The Company compared the expected future undiscounted cash flows for the office space to the carrying amount and ~~determined that it was impaired. The Company~~ recognized the excess of the carrying value over the fair value of the asset group, which totaled $378, as an impairment expense as part of general and administrative expenses on the ~~condensed~~ consolidated statements of operations and comprehensive ~~loss. The impairment charge resulted in~~loss and a reduction ~~of $378~~ to the operating lease asset.

In April 2021, the Company entered into a modification of one of its existing subleases. The sublease modification was to confirm exercise of the renewal period but at a reduced rate. As a result of the sublease modification the Company remeasured its existing sublease loss liability to reflect the impact of the modification of the anticipated cash flows. Subsequently, the Company exercised its termination notification right on this lease which resulted in a termination fee payment of $1,682 made on December 31, 2021 (lease termination notice date) and a second termination fee payment of $1,682 ~~due~~made on March 31, 2023 (the lease termination effective date). ~~As of December 31, 2021, the sublease loss liability associated with this lease was $2,621~~.

In November 2021, the Company acquired an office space lease as part of the acquisition of FrontierView. At December 31, 2021 the office space was unoccupied by any Company personnel and the Company intended to sublease the office space. Based on the terms of the existing lease along with an estimate of future cash flows from a proposed sublease, the Company recorded a lease loss liability of $~~401~~ ~~during the year ended December 31, 2021.~~

~~In 2017, as an incentive for entering into a lease and building out the Company’s head office in the District of Columbia, the District authorized a grant to the Company in the amount of $750~~, which has been disclosed as restricted cash, to finance the security deposit of the new office. The Company is required to meet certain covenants, such as maintaining its headquarters in Washington, D.C. and may have to reimburse the District if the covenants are not met. The Company recorded the grant as a grant liability and will relieve the liability if and when all requirements are met.

Table of Contents

6. Intangible Assets

The following table summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets by major class:


	September 30, 2022							December 31, 2021							Weighted Average		June 30, 2023							December 31, 2022							Weighted Average
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Remaining Useful Life (Years) September 30, 2022		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Remaining Useful Life (Years) June 30, 2023
Customer relationships	$	80,869	$	(22,863	)	$	58,006	$	79,474	$	(17,830	)	$	61,644		9.0	$	88,436	$	(28,485	)	$	59,951	$	81,002	$	(24,654	)	$	56,348		8.6
Developed technology		34,818		(16,304	)		18,514		34,123		(12,638	)		21,485		5.7		37,014		(20,306	)		16,708		35,350		(17,673	)		17,677		4.3
Databases		29,812		(8,341	)		21,471		29,142		(6,785	)		22,357		10.1		29,878		(9,972	)		19,906		29,912		(8,892	)		21,020		9.3
Tradenames		11,367		(2,966	)		8,401		11,159		(2,286	)		8,873		10.4		12,058		(3,784	)		8,274		11,480		(3,216	)		8,264		9.3
Expert network		2,359		(640	)		1,719		2,852		(417	)		2,435		4.4		2,672		(1,058	)		1,614		2,559		(800	)		1,759		3.6
Patents		680		(199	)		481		513		(165	)		348		17.9		726		(210	)		516		700		(200	)		500		17.1
Content library		592		(49	)		543		592		(5	)		587		9.2		592		(94	)		498		592		(64	)		528		8.4
Total	$	160,497	$	(51,362	)	$	109,135	$	157,855	$	(40,126	)	$	117,729			$	171,376	$	(63,909	)	$	107,467	$	161,595	$	(55,499	)	$	106,096

Finite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. Amortization of intangible assets, excluding developed technology, was $~~2,600~~2,901 and $~~2,512~~2,609 for the three months ended ~~September~~June 30, 2023 and 2022, ~~and 2021,~~respectively, and $~~7,818~~5,715 and $~~6,651~~5,217 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Amortization of developed technology was recorded as part of cost of revenues in the amount of $~~1,268~~1,327 and $~~1,160~~1,234 for the three months ended ~~September~~June 30, 2023 and 2022 and ~~2021, and~~ $~~3,754~~2,643 and $~~3,024~~2,486 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

The expected future amortization expense for intangible assets as of ~~September~~June 30, ~~2022~~2023 is as follows:


2022 (remainder)	$	3,900
2023		15,598
2023 (remainder)			$	12,095
2024		14,796		15,625
2025		11,608		12,423
2026		11,352		11,987
2027				11,578
Thereafter		51,881		43,759
Total	$	109,135	$	107,467

The Company regularly reviews the remaining useful lives of its intangible assets. In the second quarter of 2023 the Company revised the remaining useful life of certain of its developed technology. Accordingly, the Company will recognize accelerated amortization expense totaling $3,879 during the second half of 2023. This is represented in the weighted average remaining useful life for developed technology assets and future amortization expense presented above.

Capitalized software development costs

Capitalized software development costs are as follows.

September 30, 2022

December 31, 2021

Gross Carrying Amount

Accumulated Amortization

Net
Carrying Amount

Gross Carrying Amount

Accumulated Amortization

Net
Carrying Amount

Capitalized software development costs

$
17,374

$
(4,701
)

$
12,673

$
9,270

$
(1,790
)

$
7,480


	June 30, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Capitalized software development costs	$	24,122	$	(8,882	)	$	15,240	$	19,815	$	(5,869	)	$	13,946

During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company capitalized interest on capitalized software development costs in the amount of $~~529~~247 and $~~207~~341, respectively. Amortization of capitalized software development costs was recorded as part of cost of revenues in the amount of $~~1,564~~1,734 and $~~409~~775 for the three months ended ~~September~~June 30, 2023 and 2022, and ~~2021, and~~ $~~2,910~~3,015 and $~~1,053~~1,346 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The estimated useful life is determined at the time each project is placed in service.

7. Goodwill

Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but are rather tested for impairment at least annually ~~during the fourth quarter.~~as of October 1 of each year.

The changes in the carrying amounts of goodwill, which isare generally not deductible for tax purposes, isare as follows:

Balance at December 31, 2021

$
188,768

Aicel acquisition

5,794

Impact of foreign currency fluctuations

(2,100
)
Balance at September 30, 2022

$
192,462


Balance at December 31, 2022	$	194,362
Acquisition		19,282
Impairment		(5,837	)
Impact of foreign currency fluctuations		270
Balance at June 30, 2023	$	208,077

The Company has the following goodwill reporting units: Public Policy & Issues Management ("PPIM"); Geopolitical & Market Intelligence ("GMI"); Advocacy; Community; AI-Driven Intelligence ("FNAI"); and Environmental, Sustainability, and Governance ("ESG"). The Company performed the required annual impairment test as of October 1, 2022 at the reporting unit level, which resulted in no impairment of goodwill. Subsequent to performing our annual impairment test, we continued to monitor our reporting units for events

Table of Contents

that might indicate an interim impairment. Due to the decline in the Company’s stock price and market capitalization in the first quarter of 2023, and the underperformance of the Company’s ESG reporting unit compared to internal projections, the Company performed a quantitative goodwill impairment assessment as of March 31, 2023. This quantitative assessment resulted in all the goodwill in our ESG reporting unit being impaired; accordingly, an impairment charge of $5,837 was recognized during the three months ended March 31, 2023. Prior to the quantitative goodwill impairment the Company tested the recoverability of its long-lived assets, and concluded that such assets were not impaired.

The fair value estimate of the Company's reporting units was derived based on an income approach. Under the income approach, the Company estimated the fair value of reporting units based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and the uncertainty related to our reporting unit's ability to execute on the projected cash flows. At June 30, 2023 the Company's PPIM reporting unit had a negative carrying value and $84,029 of goodwill.

Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more of these impairment indicators could occur or intensify in the near term, which may result in an impairment of long-lived assets or further impairment of goodwill.

8. Debt

The following presents the carrying value of the Company’s debt as of the respective period ~~ends (in thousands):~~ends:

September 30, 2022

December 31, 2021

New Senior Term Loan

$
150,263

$
-

Convertible notes

11,788

97,917

Aicel Convertible Note

1,030

-

PPP loan

277

8,000

First out term loan

-

56,089

Last out term loan

-

52,603

Senior Secured Subordinated Promissory Note

-

78,154

8090 FV Subordinated Promissory Note

-

10,000

Convertible notes - related parties

-

18,295

2021 seller convertible notes

-

9,405

2021 seller term loans

-

5,524

Debt issuance costs

(3,243
)

(4,807
)
Total

160,115

331,180

Less: Current portion

(68
)

(13,567
)
Total

$
160,047

$
317,613


	June 30, 2023			December 31, 2022
New Senior Term Loan	$	157,421		$	150,647
New GPO Note		36,583			-
Convertible Notes		13,094			12,219
Dragonfly Seller Convertible Notes		9,598			-
Aicel Convertible Note		1,126			1,174
PPP loan		198			251
Debt issuance costs		(3,252	)		(2,243	)
Total		214,768			162,048
Less: Current portion		(68	)		(68	)
Total	$	214,700		$	161,980

New Senior Term Loan

Concurrently with the Closing, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote Holdings, Inc., entered into a senior credit agreement (the "Credit Agreement") providing for a New Senior Term Loan consisting of a fully funded principal amount of $~~150.0~~150,000 ~~million~~ and an uncommitted incremental loan facility totaling $~~100.0~~100,000 ~~million~~ available upon notice if the Company meets certain financial growth criteria and other customary requirements (the “New Incremental Term Facility”) (collectively the “New Senior Credit Facility”). The annual interest of the New Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum ~~and~~or (ii) 9.0% payable monthly in cash, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. Beginning on August 15, 2025, 50% of the outstanding principal amount of the New Senior Term Loan must be repaid in even amounts on a monthly basis over the remaining 24 months, with the final balance due on July 15, 2027. The New Senior Credit Facility will mature on July 29, 2027, the five-year anniversary of the Closing Date.

On March 17, 2023, the Company, entered into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 1 provided for the extension of an incremental term loan by one of the lenders under the facility in the principal amount of $6,000 which was received by the Company on March 31, 2023, on the same terms as the existing term loans (the “Incremental Facility”). In connection with the funding of the Incremental Facility, the Company issued the lender warrants expiring July 15, 2027, to purchase up to 80,000 Class A Common Stock at an exercise price of $0.01 per share, in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation D promulgated thereunder. The lender warrants represent a non-cash financing activity.

On May 16, 2023, the Company, entered into Amendment No. 2 ("Amendment No. 2") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 2 joined Dragonfly Eye Limited and Oxford Analytica Limited (“Oxford Analytica”), each a wholly owned subsidiary of the Company, as Guarantors under the Credit Agreement.

The Prime Rate in effect for the New Senior Term Loan was ~~6.25~~8.25% at ~~September~~June 30, ~~2022.~~2023. For the ~~three and nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company incurred $~~2,001~~9,956 and $~~263~~774 of cash interest and paid-in-kind interest, respectively, on the New Senior Term Loan. Paid-in-kind interest is reflected as a component of the carrying value of the New Senior Term Loan as the payment of such interest will occur upon the settlement of the New Senior Term Loan.

The Company may prepay the New Senior Term Loan in whole, subject to a 2.0% prepayment fee if prepaid prior to July 30, 2024, 1.0% prepayment fee if prepaid after July 30, 2024 but prior to July 30, 2025, and no prepayment fee if prepaid on or after July 30, 2025. ~~The~~Prior to Amendment No. 3 (entered into on August 3, 2023 and further defined in Note 18, "Subsequent Events") the Company ~~must~~was obligated to pay certain of the new lenders deferred debt issuance costs of $1,734 at the earlier of prepayment or July 29, ~~2023.~~2023 (the "July 2023 Deferred Fee"). Pursuant to Amendment No. 3, the July 2023 Deferred Fee was deferred through the earlier of prepayment or July 29, 2024 and was

Table of Contents

increased to $2,034. Accordingly, the Company is recognizing the accretion of the July 2023 Deferred Fee as interest expense, which at June 30, 2023 is $1,590 and is recognized in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company must also pay to the lenders a final payment of $~~6,375~~7,410 (of which $1,035 was incurred pursuant to Amendment No. 1) at the earlier of prepayment or maturity of the New Senior Term Loan. The Company is recognizing the accretion of the final payment as interest expense, which at June 30, 2023 is $1,339 and is recognized in other non-current liabilities in the condensed consolidated balance sheets. The Company incurred $2,435 of lender fees that were paid out of the net proceeds of the New Senior Term Loan on the Closing Date. The Company also incurred $342 of fees paid to third parties. Capitalized debt issuance costs on the Closing Date totaled $2,777. The Company amortizes debt discounts over the term of the New Senior Term Loans using the effective interest method. The amortization recorded for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 is $~~102~~161 and $310, respectively, and is included within interest expense in the condensed consolidated statements of operations and comprehensive loss. The remaining unamortized debt discount at ~~September~~June 30, ~~2022~~2023 is $~~2,675~~2,395, excluding any deferred fees, and is reflected net against debt on the condensed consolidated balance sheets.

The New Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The New Senior Term Loan contains customary ~~conditions~~negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. ~~There is a financial covenant with respect~~In addition to the ~~New Senior Term Loan that requires the Company to maintain~~negative covenants, there were three financial covenants in place at June 30, 2023: a minimum cash balance requirement, minimum annual recurring revenue requirement, and a capital expenditure limitation. Beginning with the third quarter of $~~15,000~~ ~~at all times.~~2023, the Company is also subject to an adjusted EBITDA requirement (as defined in the Credit Agreement, as amended). Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the New Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.

~~The~~At June 30, 2023, the Company was in compliance with the minimum cash balance requirement and capital expenditure limitation. The Company's annual recurring revenue was marginally below the minimum annual recurring revenue for the period. On August 3, 2023 the New Senior Term Loan lenders waived their rights upon default retroactive to June 30, 2023 and entered into Amendment No. 3 ("Amendment No. 3") to the Credit Agreement dated July 29, 2022, further discussed in Note 18, "Subsequent Events".

New GPO Note

On June 30, 2023 (the “Subscription Date”), the Company entered into an Exchange and Settlement Agreement (the “Exchange and Settlement Agreement”) with GPO FN Noteholder LLC (the “Investor”) pursuant to which (i) the Investor returned 5,881,723 shares of Class A Common Stock held by the Investor to the Company for cancellation, (ii) the Company issued to the Investor a subordinated convertible promissory note in an initial principal amount of $46,794 (the “New GPO Note”), and (iii) the parties agreed to a mutual settlement and release of all claims (including, but not limited to, any claims by the Investor for additional shares or money damages resulting from the entry into the Merger Agreement, relating to or arising from the conversion of the Amended and Restated Senior Secured Subordinated Promissory Note, dated December 29, 2020, previously issued by a subsidiary of the pre-business combination FiscalNote Holdings, Inc. to the Investor. The exchange and settlement are non-cash exchanges in the condensed consolidated statement of cash flows. The before mentioned transactions closed on July 3, 2023.

The New GPO Note will mature on July 3, 2028, unless earlier redeemed or repurchased by the Company or converted in accordance with the terms thereof. The New GPO Note bears interest at a rate of 7.50% per annum payable quarterly in arrears, as follows: (i) for the first year following the date of issuance, interest will be payable in kind by adding interest to the principal amount of the New GPO Note; and (ii) for any period thereafter, interest will be payable in cash or freely tradeable shares of Class A Common Stock, at the Company’s option, with the value per share determined with reference to the trailing 30-day volume weighted average trading price prior to the interest payment date, subject to certain exceptions under which the Company will be permitted to pay PIK Interest.

The New GPO Note is subordinate to the Company’s obligations under its ~~required~~New Senior Term Loan which limits certain actions that the Company and the Investor may take under the New GPO Note. At any time prior to the July 3, 2028, the Investor is entitled to convert all or any portion of the principal amount of the New GPO Note and accrued interest thereon into shares of Class A Common Stock at $8.28 per share. The New GPO Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, of the New GPO Note is redeemable by the Company in whole or in part based on certain conditions as defined in the New GPO Note.

The Company elected to account for the New GPO Note using the fair value option. The New GPO Note was recorded at its June 30, 2023 acquisition date fair value of $36,583. The Company initially recorded a loss contingency of $11,700 in its fiscal year 2022 financial ~~covenants as~~statements representing the difference between the fair value of ~~September~~the shares returned by the Investor and the fair value of the New GPO Note on the date of exchange. With the execution of the Exchange and Settlement Agreement and New GPO Note, the Company recorded an additional non-cash loss on settlement with GPO of $3,474 in the condensed consolidated statement of operationsfor the three and six months ended June 30, 2023.

Convertible Notes

At June 30, 2023, the holders of four convertible notes that were previously issued by Old FiscalNote (the “Convertible Notes”) with a principal and accrued PIK balance of $13,094, remained outstanding. The Company incurred total interest expense related to the Convertible Notes, including the amortization of the various discounts, of $522 and $451 during the three months ended June 30, 2023 and 2022, respectively, and $1,037 and $892 for the six months ended June 30, 2023 and 2022, respectively.

Concurrently with the Closing, the Company repaid or converted to shares of Class A Common Stock of New FiscalNote all other previously outstanding debt instruments. The Company recorded $23,900 and $41,976 of interest expense during the three and six months ended June 30, 2022, respectively, related to debt that was extinguished during 2022.

b)15

Table of Contents

Dragonfly Seller Convertible Notes

In connection with the Company's acquisition of Dragonfly, the Company financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Notes were issued in a principal amount of £8.9 million pounds sterling (approximately $11,050 on the closing date of the acquisition), with interest at an annual rate of 8%, which can be paid in cash or paid-in-kind. The paid-in-kind interest will be annually credited to the principal amount. All principal and accrued interest are due upon maturity on January 27, 2028.

At any time after August 2, 2023, the Company can convert any portion of the principal and accrued interest at the volume weighted-average price for the five consecutive trading day period ending on the last trading day of the calendar month preceding the date the Company provides notice of conversion to the Sellers.

At any time after the 18 month anniversary of the Dragonfly acquisition closing date, the lender has the right to convert the outstanding principal and accrued interest for FiscalNote common stock at $10.00 per share, subject to adjustment in the event of any stock dividend, stock split, reverse stock split, combination or other similar recapitalization with respect to common stock.

The Company elected to account for the Dragonfly Seller Convertible Notes using the fair value option. The Dragonfly Seller Convertible Notes were recorded at their acquisition date fair value of $8,635. The fair market value at June 30, 2023 was $9,598. The non-cash gain was recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive loss in the amount of a loss of $981 and a gain of $407 for the three and six months ended June 30, 2023, respectively. The Company incurred total interest expense related to the Dragonfly Seller Convertible Notes of $226 and $379 during the three and six months ended June 30, 2023, respectively.

Aicel Convertible Note

In connection with the Company’s acquisition of Aicel, the Company assumed a convertible note (“Aicel Convertible Note”) issued by Aicel in a private placement to a third-party lender dated July 27, 2022. The Aicel Convertible Note was issued in a principal amount of $1,131, with paid-in-kind interest at an annual rate of 1%. All principal and accrued and unpaid interest are due on maturity at July 27, 2027. The Aicel Convertible Note provides for no prepayments until maturity without written consent of the lender.

The Aicel Convertible Note can be converted upon the occurrence of certain events, including (i) Aicel initial public offering (“IPO”), (ii) change in control of Aicel (the acquisition of Aicel by FiscalNote did not constitute a change in control as defined in the purchase agreement), or (iii) sale of substantially all of Aicel’s assets (collectively, a “Conversion Event”). The Company has the right to convert the

~~Table of Contents~~

Aicel Convertible Note into shares of common stock issued in an IPO, if (a) the Conversion Event is an IPO and (b) the price per share paid in an IPO is greater than the stipulated initial conversion price. The lender has the right to elect to convert the Aicel Convertible Note into shares of common stock upon the occurrence of a Conversion Event.

At any time after the second anniversary of the Aicel acquisition closing date until the earlier of (a) the Aicel Convertible Note maturity date, or (b) the occurrence of any liquidity event, the lender has the right to require FiscalNote to repurchase the outstanding principal in exchange for FiscalNote common stock. The lender will receive a number of shares of FiscalNote equal to the outstanding principal plus accrued interest divided by the FiscalNote common stock price and rounded to the nearest whole share.

Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the Aicel Convertible Note due and payable the lenders can elect to increase the paid-in-kind interest rate to 12.0% per annum.

The Company concluded that the contingent default interest provision was required to be bifurcated and treated as an embedded derivative liability. The associated value was immaterial and required no initial amount to be recorded. The Company determined that the remaining embedded features were clearly and closely related to the debt host and did not require bifurcation from the debt host.

The Aicel Convertible Note was recorded at its acquisition fair value of $1,131. The Company incurred total interest expense related to the Aicel Convertible Note of $23 ~~for the three~~ and ~~nine months ended September 30, 2022. The Aicel Convertible Note had a carrying balance of~~ $~~1,030~~ ~~as of September 30, 2022~~.

~~Convertible Notes~~

~~During the year ended December 31, 2021, the Company received gross proceeds of $59,680~~ from the issuance of convertible promissory notes (the "2021 Notes" and along with the convertible notes issued in 2019 and 2020, collectively the “Convertible Notes”) in various private placements to accredited investors. Certain of the 2021 Notes contain a beneficial conversion feature ("BCF") initially valued at $~~15,252~~ ($~~14,561~~ net of taxes) as of December 31, 2021. This has been recorded as a credit to additional paid-in capital and resulted in a debt discount to be amortized as additional interest expense over the term of the applicable 2021 Notes.

~~The Convertible Notes were classified into four distinct groupings with similar terms. The Convertible Notes had maturities between one and~~ ~~five years, earned PIK interest ranging from~~ 6-15% per annum and were convertible at the option of the holders or upon certain contingent events, including defined future qualified financings, into shares of senior capital stock or the specific capital stock issued in any such contingent events. The holders also had various contingent redemption rights, including upon default and changes in control, and registration rights and are subordinated to defined senior indebtedness.

Certain embedded contingent redemption rights were reflected as derivative liabilities and were accounted for at fair value with changes in fair value reflected in the condensed consolidated statement of operations and comprehensive loss. The discount to the Convertible Notes created by such embedded derivatives was amortized as additional interest expense over the terms of the Convertible Notes.

~~The issuance costs with respect to the Convertible Notes, which are recorded as a debt discount, were deferred and amortized as additional interest expense over the terms of the Convertible Notes.~~

~~The following table details the principal, interest and other amounts associated with the Convertible Notes as described above as of December 31, 2021:~~

December 31, 2021

Principal

Deferred Financing Fees

PIK Interest Accrual

Debt Discount

Amortization of Deferred Financing Fees

Amortization of Deferred Debt Discount

Derivative Liabilities

Total

2019 Notes

$
17,320

$
(3,454
)

$
4,639

$
(986
)

$
862

$
848

$
2,031

$
21,260

2020 Notes

59,680

(1,027
)

15,640

(14,111
)

237

3,117

-

63,536

2021 Notes

23,841

(214
)

2,437

(21,224
)

31

2,488

2,197

9,556

Total

$
100,841

$
(4,695
)

$
22,716

$
(36,321
)

$
1,130

$
6,453

$
4,228

$
94,352

~~The holder of $4,000~~ of Convertible Notes issued in 2019 entered into an agreement with a revocable trust (the “Trust”), the trustee of which is the Company’s Chief Executive Officer. The Trust agreed to purchase the 2019 Convertible Notes from the holder on its one-year anniversary for $~~4,000~~ ~~in cash and $4,000~~ ~~worth of shares of the Company’s capital stock held by the Trust, for a total value of $8,000. The Company reflected the Trust’s obligation to issue the $4,000~~ worth of shares of capital stock to the holder as a capital contribution in 2019 with an offsetting charge to interest expense. On March 1, 2021 (the “Effective Date”), the parties entered into an agreement providing for the Company to issue ~~652,237~~ ~~shares of Series F Preferred Stock valued at $4,363~~ ~~in exchange for the termination of the Trust’s obligation and amendment of the $4,000~~ ~~Convertible Notes (the “Letter Agreement”). The Letter Agreement provided for, among other things, a reduced interest rate from~~ 15~~% to~~ 1~~% and waiving all accrued interest through the Effective Date. The Letter Agreement was accounted for as a debt modification with (i) $4,000~~ ~~related to termination of the Trust’s obligation being recognized as a capital distribution with an offsetting debt premium, (ii) writing off $1,056~~ ~~of accrued interest that was forgiven, and (iii) recording deferred financing fees of $3,307~~ reflecting the net balance of the Series F Preferred Stock and the forgiven interest. The deferred financing fee was amortized as additional interest expense over the term of the note using the effective interest method.

~~Concurrent with the Closing, certain convertible noteholders elected to convert their holdings of $120,599, representing principal and accrued PIK interest, into~~ ~~15,386,379~~ ~~common shares of Old FiscalNote which were then exchanged for~~ ~~18,263,755~~ ~~shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio. The Company recognized additional interest expense of $32,100~~ ~~related to the derecognition of the unamortized contingent BCF that was recorded on the issuance date and re-evaluated upon redemption of certain~~

~~Table of Contents~~

of the convertible notes. As certain of the convertible notes were treated as redemptions for accounting purposes as the holder converted pursuant to the variable-share conversion option, the Company recognized an aggregate loss of $~~2,070~~ ~~due to early extinguishment of those redeemed convertible notes~~ during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022. Convertible notes representing a net carrying value of $10,688~~ ~~(consisting of a principal balance of $8,132, $3,656~~ ~~of PIK Interest, and $1,099~~ ~~of unamortized debt discount) remain outstanding at September 30, 2022.~~2023, respectively.

~~The Company incurred total interest expense related to the Convertible Notes, including the amortization of the various discounts, of $26,620~~ ~~and $5,375~~ ~~for the three months ended September 30, 2022 and 2021, and $38,711~~ ~~and $14,328~~ ~~for the nine months ended September 30, 2022 and 2021, respectively.~~PPP Loan

~~PPP loan~~

On April 13, 2020, the Company received funding in the principal amount of $8,000 under the CARES Act. Interest accrues annually at 1%. On February 14, 2022, the SBA forgave $7,667 of the PPP Loan with the remaining balance of $333 to be repaid over five ~~years~~.years. The Company recognized the forgiveness of PPP Loan as a gain on debt extinguishment onin the condensed consolidated statements of operations and comprehensive loss. As of ~~September~~June 30, ~~2022,~~2023, the Company recorded $68 of the remaining PPP Loan as short-term debt and $~~209~~130 as long-term debt onin the condensed consolidated balance sheets.

~~Senior Capital Term Loan Refinancing~~

In October 2020, FiscalNote, Inc., CQ Roll Call, VoterVoice, and Sandhill (all wholly-owned subsidiaries of FiscalNote Holdings, Inc. and collectively the “Borrower”), FiscalNote Holdings, Inc. and FiscalNote Holdings II, Inc. (collectively the “Guarantors”), Midcap Financial and Apollo ("Apollo"), Runway Growth Credit Fund Inc. as Agent (“Agent” or “Runway”), Arrowroot Capital IV, L.P. (“Arrowroot”), Corbel Capital Partners SBIC, L.P. (“Corbel”) and CFIC Partners II, LLC (“CFIC”) (collectively the “Old FiscalNote Lenders”) entered into various agreements ultimately providing for the Company to refinance its then existing long-term debt agreement. The transactions are collectively referred to as the “Old FiscalNote Refinancing” and the amended debt as the “Old FiscalNote Senior Term Loan.”

~~Pursuant to the terms of the New Senior Term Loan and concurrently with the Closing, the Company was required to repay the full outstanding balance of the Old FiscalNote Senior Term Loan of $136,713. In connection with the repayment, the Company incurred a prepayment fee of $1,500, legal costs associated with the repayment of $~~31 ~~and wrote off loan origination fees of $1,000. This resulted in an aggregate loss of $685~~ ~~due to early extinguishment of the Old FiscalNote Senior Term Loan during the three and nine months ended September 30, 2022.~~

~~The Old FiscalNote Senior Term Loan consisted of the First Out Term Loan and the Last Out Term Loan. Each of these loans had differing terms and conditions as outlined below.~~

~~First Out Term Loan~~

On September 30, 2021, the Company entered into Amendment No. 9 to the Old FiscalNote Senior Term Loan (“Amendment No. 9”). As a result of Amendment No. 9, certain of the Company’s financial covenants were updated to reflect the impact of recent acquisitions, the Company’s recently acquired domestic subsidiaries were joined as subsidiary guarantors of the facility, and certain restrictive covenants were modified in light of the Company’s current operations, among other matters. The Company also increased its principal balance of the Old FiscalNote Senior Term Loan with the First Out Lender by $~~10,000~~ ~~and received loan proceeds of $9,555~~ ~~net of origination fee and reimbursement of certain transaction expenses of $445. The Company incurred $~~75 ~~of additional fees, totaling $520~~, which were expensed during the third quarter of 2021. In addition, on September 30, 2021, the Company entered into Amendment No. 2 to the Subordinated Promissory Note with GPO FN Noteholder LLC, which effected corresponding modifications to the financial and restrictive covenants thereunder. The Company accounted for Amendment No. 9 as a debt modification where the increased principal was recorded as an increase to the loan carrying value and all incurred fees were considered third-party fees and expensed as incurred.

On March 25, 2022 the Company entered into Amendment No. 11 to the Old FiscalNote Senior Term Loan (“Amendment No. 11”). As a result of Amendment No. 11, certain of the Company’s financial covenants were updated to reflect the Company's 2022 budget, FrontierView joined as a subsidiary guarantor of the facility, and certain restrictive covenants were modified in light of the Company’s current operations, among other matters. The Company also increased its principal balance of the Old FiscalNote Senior Term Loan by $~~20,000~~ ~~less an origination fee and reimbursement of certain transaction expenses totaling $522~~ ($~~403~~ ~~of which were expensed during the three months ended March 31, 2022 with the remaining $119~~ ~~capitalized as debt issuance costs). Accordingly, pursuant to Amendment No. 11, the Company received net proceeds of $19,478~~. In addition, on March 25, 2022 the Company entered into Amendment No. 3 to the Subordinated Promissory Note with GPO FN Noteholder LLC, which effected corresponding modifications to the financial and restrictive covenants thereunder. As part of Amendment No. 11, the Company issued the Last Out Lenders warrants to purchase common stock of the Company that have been accounted for as additional deferred financing costs and recorded as a liability. The grant date fair value of the warrants issued to the Last Out Lenders was $~~436. The Company accounted for Amendment No. 11 as a debt modification where the increased principal was recorded as an increase to the loan carrying value and third-party fees expensed as incurred.~~

~~The Company was required to pay the First Out Lender monthly cash interest on the First Out Term Loan.~~

The First Out Term Loan contained a contingent default interest provision and a variable interest credit basis swap that were required to be bifurcated and treated as embedded derivative liabilities. An evaluation of the embedded features led to the conclusion that any associated value was immaterial and required no initial amount to be recorded.

~~Table of Contents~~

~~A warrant to purchase~~ ~~231,076~~ shares of common stock (the “First Out Lender Warrant”) was issued to the First Out Lender. The First Out Lender Warrant was issued as an additional fee in connection with the Old FiscalNote Refinancing. The Company has classified the First Out Lender Warrant as equity and it has been recorded at its initial fair value, with an offset to deferred financing costs, in the amount of $~~562. In connection with the Closing, the First Out Lender exercised its First Out Lender Warrant and at September 30, 2022 there are~~ no ~~outstanding First Out Lender Warrants.~~

~~The First Out Term Loan had a carrying balance of $55,307~~ ~~as of December 31, 2021.~~

~~Last Out Term Loans~~

~~The Company was required to pay the Last Out Lenders Payment-in-Kind (“PIK”) interest at~~ 13~~%, accrued monthly, as well as PIK fees of~~ 12~~% per annum. The Company was also required to pay an exit fee of $1,500~~ ~~at the earlier of the maturity date or repayment of the outstanding amount.~~

~~The Last Out Term Loans contained a $193~~ original issue discount. This discount was recorded at issuance against the loan principal and was subsequently amortized as additional interest expense using the effective interest method over the term of the Last Out Term Loans.

The Last Out Term Loan contained a lender default put and contingent default interest that are required to be bifurcated and treated as embedded derivative liabilities. An evaluation of the embedded features led to the conclusion that any associated value was immaterial and required no initial amount to be recorded.

The Last Out Lenders purchased Series F Preferred Stock from Apollo concurrently with the purchase of the outstanding loans as part of the Old FiscalNote Refinancing. The preferred stock was accounted for as temporary equity at its redemption value up until the Closing Date. On the Closing Date, all of the Series F Preferred Stock was converted into Class A Common Stock of New FiscalNote pursuant to the terms of the Business Combination Agreement.

~~Warrants to purchase a total of~~ ~~118,700~~ shares of common stock (the “Last Out Lender Warrants”) were issued to the three Last Out Lenders, Arrowroot, CFIC, and Corbel as an additional fee in connection with the Refinancing under Amendment No. 11. The Company has classified the Last Out Lender Warrants as a liability and recorded them at their initial fair values, with offsetting deferred financing costs, in the aggregated amount of $~~436. The Last Out Lender Warrants remained outstanding subsequent to the Closing of the Business Combination.~~

~~The Last Out Term Loan had a carrying balance of $52,276~~ ~~as of December 31, 2021.~~

~~Senior Secured Subordinated Promissory Note~~

~~The Economist Group (“TEG”) Seller Note & Equity Sale~~

On December 29, 2020, (the "TEG" Closing Date), TEG, the Company, FN SPV Holdings Pty Ltd (“SPV”) and GPO FN Noteholder LLC (“GPO”) entered into various agreements (the “TEG Transactions”) to effect TEG’s divestiture of its investment in, and amounts due from, the Company.

~~On the TEG Closing Date, SPV purchased~~ ~~11,139,995~~ ~~shares of Series E Preferred Stock (“Series E PS”) from TEG for $23,040. In consideration for facilitating the transaction, the Company received a right to~~ 5~~% of any gains realized by SPV upon liquidation of their Series E PS. GPO purchased the Original TEG Seller Note from TEG with a balance of $78,427~~ ~~(the “New GPO Note”), which included the principal and accrued paid-in-kind interest of $48,960~~.

The Company did not receive any payment as a result of the TEG Transactions. The New GPO Note also amended and restated the Original TEG Seller Note to provide for, among other things, the addition of various conversion options. The New GPO Note continued to bear PIK interest at ~~12.577~~%.

~~The New GPO Note was convertible into common shares upon certain specified circumstances (the “Conversion Shares”).~~ First, if a Qualifying IPO occurs prior to the payment in full of the New GPO Note, the Company shall have the right to require conversion of the total outstanding amount then due on the New GPO Note so long as GPO receives at the time of the Qualifying IPO at least $50,000 in cash in exchange for such Conversion Shares or prepayment of an amount of the New GPO Note, in each case representing an amount equal to the equivalent value of selling $50,000 of Conversion Shares in the Qualifying IPO. Second, GPO had the optional right immediately prior to or at any time subsequent to a Nonqualifying IPO to convert the outstanding principal amount of the New GPO Note into Conversion Shares at a certain conversion price. Third, GPO had the optional right, during the 90-day period prior to the maturity date of the New GPO Note, to convert the outstanding amount of the New GPO Note into Conversion Shares at a certain conversion price. Fourth, GPO had the optional right, immediately prior to a liquidation or reorganization event, or a change of control, to convert the outstanding amount of the New GPO Note into Conversion Shares at a certain conversion price. Certain of the Company's directors are affiliated with SPV, GPO, and Urgent.

~~Promissory Note~~

The embedded conversion option (“ECO”) in the New GPO Note contained both fixed and variable share settlement conditions. The conditions requiring settlement in fixed shares are evaluated as a conversion feature while those settleable in a variable number of shares are evaluated as a redemption feature.

~~The New GPO Note contained a BCF initially valued at $34,078~~ ($~~33,228~~ ~~net of taxes). This was recorded as a credit to additional paid-in capital and resulted in a debt discount to be amortized as additional interest expense over the term of the New GPO Note.~~

~~Table of Contents~~

~~The redemption feature was required to be bifurcated as an embedded derivative liability. The redemption feature was initially recorded at its fair value of $19,607~~. This resulted in a debt discount to be amortized as additional interest expense over the term of the New GPO Note. The derivative liability was revalued at each reporting period with changes being recorded as a non-operating gain or loss in the condensed consolidated statements of operations and comprehensive loss.

~~The New GPO Note had a carrying balance of $78,154, net of unamortized discount of $38,999~~ ~~and fair value of embedded derivatives of $28,058, as of December 31, 2021.~~

~~Pursuant to the terms of the New GPO Note and concurrent with the Closing, the Company repaid $50,000~~ ~~of cash towards the outstanding balance due to the holder of the New GPO Note. The remaining principal and accrued interest balance of $45,900~~ ~~was satisfied through the issuance of~~ ~~6,555,791~~ ~~common shares in Old FiscalNote which were then converted into~~ ~~7,781,723~~ ~~shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio. In connection with the settlement of the New GPO Note, the Company wrote off unamortized debt discount of $29,554~~ ~~and recognized an aggregate loss of $29,554~~ due to early extinguishment of the New GPO Note during the three and nine months ended September 30, 2022, as a result of the unpaid balance converting into shares pursuant to the variable-share conversion option. The loss on the early extinguishment of the new GPO note was recorded as a non-operating loss in Loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~Series E Preferred Shares~~

The SPV purchase of outstanding Series E PS from TEG was a transaction between Company shareholders and as such there was no financial statement adjustment required. There was a contingent arrangement fee which did not require an adjustment to the condensed consolidated financial statements until such time as the occurrence is deemed probable and estimable. In accordance with the terms of the Series E PS, the Company received ~~250,000~~ shares of Old FiscalNote common stock that was retired in conjunction with the conversion of the Series E PS into Class A common stock of New FiscalNote pursuant to the terms of the Business Combination agreement on the Closing Date of the Transaction.

~~8090 FV Subordinated Promissory Note~~

~~On December 29, 2021 the Company entered into a subordinated promissory note for $10,000~~ ~~with 8090 FV LLC (the “8090 Note”) that would also allow the Company to increase the subordinated promissory notes by $8,000~~ ~~on the same terms and conditions. The 8090 Note earned PIK interest of~~ ~~12.5~~% beginning on March 1, 2022. The 8090 Note was subject to an exit fee in the same amount of accrued PIK interest. The exit fee together with unpaid principal and PIK interest was collectively "the Payoff Amount". The 8090 Note matures on the earlier of (i) a Deemed Liquidation Event and (ii) September 30, 2024. Upon maturity the 8090 FV LLC shall receive the greater of (i) the Payoff Amount and (ii) the mandatory buyback amount which is equal to the sum of (y) 150% of the original principal amount and (z) the amount of interest that has accrued. ~~The Company incurred transaction expenses of $192~~ which were recorded as deferred financing costs to be amortized as additional interest expense using the effective interest method over the term of the 8090 FN Note. The Company started accruing for the ongoing interest and exit fee as interest expense each period on March 1, 2022 and recorded monthly interest expense to accrete for the final payment fee of $~~5,000~~ ~~beginning on January 1, 2022. The Company recorded the second tranche commitment fee of $~~26 ~~and $186~~ ~~as an operating expense during the three and nine months ended September 30, 2022.~~

The Company concluded that the mandatory repayment upon an event of default and the mandatory buyback events required bifurcation as embedded derivative liabilities (put rights) and was accounted for as a single combined derivative liability recorded at fair value. The embedded derivative liabilities were initially valued at $~~2,400~~ ~~as of December 31, 2021. At December 31, 2021, the Company recorded the derivative liabilities of $2,400~~ as a debt discount to be amortized as additional interest expense over the expected term using the effective interest method. The liability was marked-to-market each balance sheets period with the change being recorded as a non-operating gain or loss in the condensed consolidated statements of operations and comprehensive loss.

~~The 8090 Note had a carrying balance of $9,867, net of unamortized discount of $2,533~~ ~~and fair value of embedded derivatives of $2,400, as of December 31, 2021.~~

~~Pursuant to the terms of the New Senior Term Loan and concurrent with the Closing, the Company was required to repay the full outstanding balance of the 8090 Note of $16,256~~ ~~(including $186~~ ~~of accrued and unpaid interest on the amount of additional borrowings up to $8,000~~ ~~the Company was entitled to). In connection with the repayment, the Company recognized an aggregate gain of $3,115~~ due to early extinguishment of the 8090 Note during the three and nine months ended September 30, 2022. The gain on the early extinguishment of the 8090 Note was recorded as a non-operating gain in Loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~The Company recorded interest expense of $100~~ ~~and $8,113~~ ~~during the three and nine months ended September 30, 2022, respectively.~~

~~FrontierView Convertible Notes~~

~~Concurrent with, and in order to finance the acquisition of FrontierView on November 19, 2021, the Company entered into a $15,000~~ ~~convertible note with XC FiscalNote-B, LLC and a $3,000~~ convertible note with Skyone Capital Pty Limited, (collectively the “FrontierView Convertible Notes”). Keith Nilsson, a director of FiscalNote, is managing director of XC FiscalNote-B, LLC and Conrad Yiu, a director of FiscalNote, is director of Skyone Capital Pty Limited, respectively. Both lenders in the transaction are existing members of the board of directors of the Company as well as equity investors in the Company. Accordingly, the Company has presented the FrontierView Convertible Notes as a related party balance on the condensed consolidated balance sheets at December 31, 2021. The FrontierView Convertible Notes were subordinate to the Old FiscalNote Senior Term Loan and the New GPO Note, accrued no interest, did not provide for voluntary prepayment, mature at $~~27,000~~ ~~in the event the conversion events had not occurred by September 30, 2024, and provided for automatic~~

~~Table of Contents~~

~~conversion as defined within the agreement at $27,000. The Company did not incur third party expenses related to the issuance of the FrontierView Convertible Notes.~~

The FrontierView Convertible Notes contained embedded features including automatic conversion upon a conversion event (both fixed and variable), optional conversion upon a change of control (both fixed and variable), optional redemption feature upon a change of control and redemption features upon an event of default. The conditions requiring settlement in fixed shares are evaluated as conversion features while those settleable in a variable number of shares are evaluated as redemption features.

The Company determined that the embedded conversion options were not clearly and closely related to the debt host. As the Company was a private company and its shares were not tradable, the shares would not be readily convertible to cash. Consequently, the embedded conversion options did not meet the net settlement criteria and thus, they did not meet the definition of a derivative. Upon settlement of the FrontierView Convertible Notes the Company determined there was no contingent beneficial conversion features.

The Company determined that the embedded redemption features were not clearly and closely related to the debt host and were required to be bifurcated from the debt host, and therefore were combined and accounted as a single embedded derivative liability. The Company determined that the fair value of the redemption features approximated ~~zero~~ ~~and therefore did not assign any value to the embedded redemption features as of December 31, 2021.~~

~~The FrontierView Convertible Notes had a carrying balance of $18,295~~ ~~as of December 31, 2021.~~

~~Pursuant to the terms of the FrontierView Convertible Note and concurrently with the Closing, in exchange for $27,000~~ ~~of the amount due upon automatic conversion, the holders of the FrontierView Convertible Note received~~ ~~2,274,642~~ ~~common shares in Old FiscalNote which were then converted into~~ ~~2,700,000~~ ~~shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio. In connection with the repayment, the Company recognized an aggregate loss of $7,138~~ due to early extinguishment of the FrontierView Convertible Notes, as a result of the balance converting into shares pursuant to the variable-share conversion option. The loss on the early extinguishment of the FrontierView Convertible Notes was recorded as a non-operating loss in loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~During the three and nine months ended September 30, 2022, the Company recorded $237~~ ~~and $1,567~~ ~~of interest expense to accrete for the final payment fee of $9,000~~ ~~at a computed annual effective interest rate of~~ ~~15.2%, respectively.~~

~~2021 Seller Convertible Notes and Term Loans~~

~~During the year ended December 31, 2021, the Company issued notes to certain sellers in conjunction with the 2021 Acquisitions (the “2021 Seller Notes”):~~

~~Fireside21~~

~~On April 30, 2021, the Company issued the Fireside sellers: (i) $7,350~~ ~~of subordinated, unsecured promissory notes (the “Fireside Promissory Notes”) and (ii) $2,911~~ ~~of convertible subordinated promissory notes (the “Fireside Convertible Notes”).~~

~~The Fireside Promissory Notes (i) provided for interest at the applicable federal rate (“AFR”) (0.89% at issuance), (ii) provided for maturity on the earlier of~~ ~~May 31, 2024~~ ~~or upon an event of default, (iii) provided for~~ no payments until maturity, (iv) allowed the Company to prepay in whole or in part from time to time, and (v) were subordinate to the Company’s Senior Term Loan and New GPO Note. The Company did not incur a material amount of issuance costs with respect to the Fireside Promissory Notes. The Fireside Promissory Notes were recorded at their issuance fair value of $~~4,971~~ ~~with a debt discount of $2,379~~ ~~to be amortized as additional interest expense over the term.~~

~~The Fireside Convertible Notes (i) provided for interest at the AFR (0.89% at issuance), (ii) provided for automatic conversion into~~ ~~1,007,247~~ ~~shares of Company common stock on the earlier of~~ ~~May 31, 2024~~ ~~or a conversion event, (iii) provided for~~ no payments until maturity, and (v) were subordinate to the Company’s Senior Term Loan and New GPO Note. Conversion events included closing of a firm commitment public offering or a change in control event. The Company did not incur a material amount of issuance costs with respect to the Fireside Convertible Notes. The Company recorded the Fireside Convertible Notes at its principal amount of $~~2,911~~ ~~and recorded the debt premium of $2,350~~ ~~as an increase to additional paid-in capital.~~

~~Pursuant to the terms of the Fireside Promissory Notes and concurrently with the Closing, the Company was required to repay the full outstanding balance of the Fireside Promissory Notes of $7,432~~ ~~(including $~~82 ~~of accrued and unpaid interest). In connection with the repayment, the Company recognized an aggregate loss of $1,422~~ due to early extinguishment of the Fireside Promissory Notes during the three and nine months ended September 30, 2022. The loss on the early extinguishment of the Fireside Promissory Notes was recorded as a non-operating loss in Loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~Pursuant to the terms of the Fireside Convertible Notes and concurrently with the Closing, in exchange for $2,943~~ ~~of the outstanding principal and accrued interest of the Fireside Convertible Notes, the holders received~~ ~~848,564~~ ~~common shares in Old FiscalNote which were then converted into~~ ~~1,007,246~~ ~~shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio.~~ No ~~gain or loss on the settlement of the Fireside Convertible Notes was recognized as the Fireside Convertible Notes converted pursuant to their original conversion features.~~

~~The Company incurred total interest expense related to the Fireside Promissory Notes and the Fireside Convertible Notes, of $~~72 ~~and $501~~ ~~for the three and nine months ended September 30, 2022, and $214~~ ~~and $356~~ ~~for the three and nine months ended September 30, 2021, respectively.~~

~~Table of Contents~~

~~Timebase~~

~~On May 7, 2021, the Company issued the Timebase sellers AUD~~ ~~2,800~~ ~~(USD equivalent of $2,185~~ ~~on the date of issuance) of subordinated, convertible promissory notes (the “Timebase Convertible Notes”).~~

~~The Timebase Convertible Notes (i) provided for PIK interest of~~ 4~~%, (ii) provided for maturity on the earlier of~~ ~~July 31, 2024~~ ~~or an event of default, (iii) provided for automatic conversion upon a conversion event, (iv) provided for~~ no payments until maturity, and (v) were subordinate to the Company’s Senior Term Loan and New GPO Note. Conversion events included closing of a firm commitment public offering or a change in control event. Upon a conversion event, the Timebase Convertible Notes shall convert into the same class and series of shares issued in the conversion event at the midpoint of the price range anticipated in such event. The Company did not incur a material amount of issuance costs with respect to the Timebase Convertible Notes. The Timebase Convertible Notes were recorded at their issuance fair value of $~~2,078~~ ~~with a debt discount of $107~~ ~~to be amortized as additional interest expense over the term.~~

~~Pursuant to the terms of the Timebase Convertible Notes and concurrently with the Closing, in exchange for $2,036~~ ~~of the outstanding principal and accrued interest of the Timebase Convertible Notes, the holders received~~ ~~173,120~~ ~~common shares in Old FiscalNote which were then converted into~~ ~~205,495~~ shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio. The settlement of the Timebase Convertible Notes was treated as a redemption for accounting purposes, as a result of the balance converting into shares pursuant to the variable-share conversion option; accordingly, the Company recognized an aggregate gain of $~~0.1~~ million due to early extinguishment of those redeemed convertible notes during the three and nine months ended September 30, 2022. The gain on the early extinguishment of the Timebase Convertible Notes was recorded as a non-operating gain in loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~The Company incurred total interest expense related to the Timebase Convertible Notes of $~~9 ~~and $~~65 ~~for the three and nine months ended September 30, 2022, and $~~28 ~~and $~~45 ~~for the three and nine months ended September 30, 2021, respectively.~~

~~Board.org~~

~~On June 3, 2021 the Company issued the Board.org sellers $4,300~~ ~~of subordinated, convertible promissory notes (the “Board.org Convertible Notes”).~~

~~The Board.org Convertible Notes (i) provided for interest at the AFR (1.02% at issuance), (ii) provided for automatic conversion upon the earlier of~~ ~~May 31, 2024, an event of default and a conversion event, (iii) provided for~~ no payments until maturity, and (iv) were subordinate to the Company’s Senior Term Loan and New GPO Note. Conversion events included closing of a firm commitment public offering or a change in control event. Upon conversion, the Board.org Convertible Notes provided for conversion into shares of the Company’s common stock at a conversion price of $~~4.30. The Company did not incur a material amount of issuance costs with respect to the Board.org Convertible Notes. The Company recorded the Board.org Convertible Notes at its principal amount of $4,300~~ ~~and recorded the debt premium of $4,828~~ ~~as an increase to additional paid-in capital.~~

~~Pursuant to the terms of the Board.org Convertible Notes and concurrently with the Closing, in exchange for $4,348~~ ~~of the outstanding principal and accrued interest of the Board.org Convertible Notes, the holders received~~ ~~1,011,749~~ ~~common shares in Old FiscalNote which were then converted into~~ ~~1,200,948~~ shares of Class A Common Stock of New FiscalNote based on the Exchange Ratio. The settlement of the Board.org Convertible Notes was treated as a redemption for accounting purposes, as a result of the balance converting into shares pursuant to the variable-share conversion option; accordingly, the Company recognized an aggregate loss of $~~7.6~~ million due to early extinguishment of those redeemed convertible notes during the three and nine months ended September 30, 2022. The loss on the early extinguishment of the Board.org Convertible Notes was recorded as a non-operating loss in Loss on debt extinguishment, net in the condensed consolidated statements of operations and comprehensive loss.

~~The Company incurred total interest expense related to the Board.org Convertible Notes of $~~4 ~~and $~~26 ~~for the three and nine months ended September 30, 2022, and $~~11 ~~and $~~14 ~~for the three and nine months ended September 30, 2021, respectively.~~

Total Debt

~~The Company was in compliance with all debt covenants as of September 30, 2022.~~

The following table summarizes the total estimated fair value of the Company's debt as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. These fair values are deemed Level 3 liabilities within the fair value measurement framework.

September 30, 2022

December 31, 2021

New Senior Term Loan

$
137,703

$
-

Convertible notes

18,328

198,179

Aicel Convertible Note

1,030

-

First out term loan

-

56,960

Last out term loan

-

47,358

Senior secured subordinated promissory note

-

73,274

8090 FV Subordinated Promissory Note

-

14,597

Convertible notes - related parties

-

25,510

2021 seller convertible notes

-

23,648

Total

$
157,061

$
439,526


	June 30, 2023		December 31, 2022
New Senior Term Loan	$	161,151	$	165,540
New GPO Note		36,583		-
Convertible Notes		13,419		16,942
Dragonfly Seller Convertible Notes		9,598		-
Total	$	220,751	$	182,482

At June 30, 2023, 118,700 warrants (previously issued by Old FiscalNote to lenders prior to the New Senior Term Loan) with an exercise price of $8.56, remain outstanding. These warrants are accounted for as a liability with a fair value of $68 at June 30, 2023, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.

On March 17, 2023, in connection with Amendment No. 1 discussed above, the Company issued 80,000 warrants with an exercise price of $0.01. These warrants are accounted for as a liability with a fair value of $291 at June 30, 2023, and are included as part of the other non-current liabilities within the condensed consolidated balance sheets.

Awards outstanding under the 2013 Plan were assumed by New FiscalNote upon the Closing and continue to be governed by the terms and conditions of the 2013 Plan and applicable award agreement. Shares of the Company's common stock subject to awards granted under the 2013 Plan that expire unexercised or are cancelled, terminated, or forfeited in any manner without issuance of shares thereunder following the effective date of the 2022 Plan (as defined below), will not become available for issuance under the 2022 Plan.19

~~In connection with the completion of the Business Combination and the adoption of the 2022 Plan,~~ no ~~additional awards will be granted under the 2013 Plan.~~

In determining related stock-based compensation expense for any award under the 2013 Equity Plan, the Company made an accounting policy election to account for forfeitures of awards as they occur and therefore stock-based compensation expense presented below has not been adjusted for any estimated forfeitures.

In February and July 2021, the shareholders of the Company approved amendments to the Company’s amended and restated Certificate of Incorporation to increase the number of authorized shares of common stock reserved for use under the 2013 Equity Incentive Plan from ~~8,912,023~~ to ~~12,294,973~~ ~~shares of common stock.~~

The Company has historically issued stock options with exercise prices equal to the fair value of the underlying stock price. Prior to the completion of the Business Combination and listing of the Company’s common stock on the public stock exchange, the fair value of Old FiscalNote common stock that underlies the stock options was determined based on then-current valuation estimates at the time of grant. Because such grants occurred prior to the public trading of the Company’s common stock, the fair value of Old FiscalNote common stock was determined with assistance of periodic valuation analyses from an independent third-party valuation firm.

~~In 2021 and 2022, the Company granted various executives~~ ~~2,673,751~~ ~~performance stock options and~~ ~~756,812~~ performance stock units that vest upon the occurrence of a successful public company listing and the Company’s stock price achieving certain price targets. The aggregate grant-date fair value of these executive performance stock options and stock units was estimated to be $~~7,295. As of September 30, 2022, there were~~ ~~2,673,751~~ ~~performance stock options and~~ ~~424,041~~ ~~performance stock units outstanding, respectively. The Company recognized $4,994~~ ~~of share-based compensation expense for performance stock options and stock units, for which the related performance condition was met upon consummation of the Business Combination on July 29, 2022.~~

~~At September 30, 2022, there was $5,437~~ of total unrecognized compensation cost related to outstanding unvested stock option awards including performance stock units that is expected to be recognized over a weighted-average period of approximately ~~three years~~.

~~As of September 30, 2022, there were~~ ~~653,079~~ ~~restricted stock units outstanding under the 2013 Equity Plan.~~ ~~The following table summarizes the Company’s restricted stock unit activity for the period presented:~~

~~At September 30, 2022, there was $2,688~~ ~~of total unrecognized compensation cost related to outstanding unvested restricted stock units that are expected to be recognized over a weighted-average period of approximately~~ ~~two years~~.

14. Earnings (Loss) Per Share

~~Table of Contents~~

The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty-five votes per share. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net loss per share. As a result, basic and diluted net income (loss) per share of Class A common stock and Class B common stock are equivalent.

Earnings (loss) per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period on a basic and diluted basis. The Company’s net loss used in computing basic and diluted earnings per share is adjusted for the deemed dividends resulting from the accretion of Old FiscalNote's preferred shares to redemption value and beneficial conversion features, as applicable. The ~~Company’s net loss used in computing diluted earnings per share is further adjusted for the marked-to-market fair value gain recognized for private warrants. The~~ Old FiscalNote preferred shares were outstanding ~~during the three and nine months ended September~~as of June 30, ~~2021 and from January 1, 2022 to July 29, 2022, respectively.~~2023. At the closing of the Business Combination, all of Old FiscalNote’s preferred shares were exchanged for Class A common stock of New FiscalNote. Diluted earnings (loss) per share considers the impact of potentially dilutive securities.

The components of basic and diluted earnings (loss) per shares are as follows:


(in thousands, except per share data)	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
Numerator:	2022			2021			2022			2021			2023			2022			2023			2022
Net loss	$	(109,002	)	$	(27,958	)	$	(175,713	)	$	(88,462	)	$	(30,973	)	$	(38,360	)	$	(50,246	)	$	(66,711	)
Deemed dividend - change in redemption value of preferred stock of Old FiscalNote		(24,351	)		(78,037	)		(26,570	)		(213,797	)		-			(10,614	)		-			(2,219	)
Deemed dividend - in conjunction with convertible debt modification		-			-			-			(4,000	)
Deemed dividend - preferred stock issuance		-			-			-			(453	)
Net loss used to compute basic loss per share	$	(133,353	)	$	(105,995	)	$	(202,283	)	$	(306,712	)
Marked-to-market fair value gain for private warrants		(23,310	)		-			(23,310	)		-
Net loss used to compute diluted loss per share	$	(156,663	)	$	(105,995	)	$	(225,593	)	$	(306,712	)
Net loss used to compute basic and diluted loss per share													$	(30,973	)	$	(48,974	)	$	(50,246	)	$	(68,930	)
Denominator:
Weighted average common stock outstanding, basic		96,117,011			16,724,066			44,757,851			14,671,167
Dilutive effect of private warrants		118,919			-			118,919			-
Weighted average common stock outstanding, diluted		96,235,930			16,724,066			44,876,770			14,671,167
Weighted average common stock outstanding, basic and diluted														134,117,122			19,020,367			133,601,798			18,876,752

Net loss per shares, basic	$	(1.39	)	$	(6.34	)	$	(4.52	)	$	(20.91	)
Net loss per shares, diluted	$	(1.63	)	$	(6.34	)	$	(5.03	)	$	(20.91	)
Net loss per share, basic and diluted													$	(0.23	)	$	(2.57	)	$	(0.38	)	$	(3.65	)

Anti-dilutive securities excluded from diluted loss per share:
Anti-dilutive Earnout Awards		19,195,100			-			19,195,100			-			19,195,100			-			19,195,100			-
Anti-dilutive liability-classified public warrants		13,139,424			-			13,139,424			-
Anti-dilutive stock options		8,537,454			8,483,289			8,537,454			8,483,289			923,973			8,592,685			1,461,303			8,474,016
Anti-dilutive Convertible Notes		1,630,604			21,676,486			1,630,604			21,676,486			2,148,810			24,325,180			2,148,810			24,201,372
Anti-dilutive contingently issuable shares		1,477,517			783,288			1,477,517			783,288			1,339,924			1,481,922			1,339,924			1,481,922
Anti-dilutive restricted stock units		653,079			267,075			653,079			267,075			7,136,940			773,385			7,136,940			731,769
Anti-dilutive other liability - classified warrants		118,700			133,542			118,700			133,542			-			252,242			-			252,242
Anti-dilutive equity classified warrants														-			320,490			-			320,490
Anti-dilutive New GPO Note														5,651,436			-			5,651,436			-
Anti-dilutive Aicel Convertible Notes		102,208			-			102,208			-			112,051			-			112,051			-
Anti-dilutive convertible preferred stock		-			46,895,197			-			46,895,197			-			50,032,289			-			50,032,289
Anti-dilutive convertible senior debt		-			17,724,461			-			17,724,461			-			16,729,349			-			17,304,072
Anti-dilutive equity-classified warrants		-			320,490			-			320,490
Total anti-dilutive securities excluded from diluted loss per share:		44,854,086			96,283,828			44,854,086			96,283,828
Total anti-dilutive securities excluded from diluted loss per share														36,508,234			102,507,542			37,045,564			102,798,172

The weighted-average common shares and thus the net loss per share calculations and potentially dilutive security amounts for all periods prior to the Business Combination have been retrospectively adjusted to the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. Historically reported weighted average shares outstanding have been multiplied by the Exchange Ratio (see Note 2)2, "Business Combination with DSAC").

~~At December 31, 2021, the Company had gross U.S. net operating loss carryforwards available to reduce future taxable income in the amount of $140,794, of which a portion is subject to annual limitation. Based on estimates as of September 30, 2022, the Company expects that approximately $30,355~~ of the gross U.S. net operating loss carryforwards would be available to offset taxable income in 2022. This estimate may change based on changes to actual results reported on the 2021 U.S. tax return.

16. Fair Value Measurements and Disclosures

The carrying value of cash and cash equivalents (including investments with an original maturity of three months or less at the date of purchase), restricted cash, accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments.

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of ~~September~~June 30, ~~2022~~2023 by level within the fair value hierarchy:


	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Liabilities:
Public warrants	$	7,141	$	-	$	-	$	7,141		$	3,678	$	-	$	-	$	3,678
Private placement warrants		-		5,950		-		5,950			-		3,080		-		3,080
Contingent liabilities from acquisitions		-		-		1,609		1,609			-		-		2,792		2,792
Liability classified warrants(a)		-		-		208		208			-		-		103		103
New GPO Note															36,583		36,583
Dragonfly Seller Convertible Notes											-		-		9,598		9,598
(a) - Included in other non-current liabilities on the condensed consolidated balance sheets									(a) - Included in other non-current liabilities on the condensed consolidated balance sheets

The following table presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, ~~2021~~2022 by level within the fair value hierarchy:

Level 1

Level 2

Level 3

Total

Liabilities:

Contingent liabilities from acquisitions

$
-

$
-

$
5,104

$
5,104

Liability classified warrants

-

-

1,021

1,021

Embedded redemption features on Convertible Notes

-

-

4,228

4,228

Embedded redemption features on Promissory Note

-

-

28,058

28,058

Embedded redemption features on 8090 FV Note

-

-

2,400

2,400


	Level 1		Level 2		Level 3		Total
Liabilities:
Public warrants	$	10,282	$	-	$	-	$	10,282
Private placement warrants		-		8,610		-		8,610
Contingent liabilities from acquisitions		-		-		1,579		1,579
Liability classified warrants (a)		-		-		182		182
(a) - Included in other non-current liabilities on the condensed consolidated balance sheets

Table of Contents

The following table summarizes changes in fair value of the Company’s level 3 liabilities during the periods presented:

Contingent
Liabilities from Acquisitions

Liability Classified Warrants

Embedded Redemption
Features on Convertible
Notes

Embedded Redemption
Features on Promissory
Note

Embedded Redemption
Features on 8090 FV
Note

Balance at December 31, 2020

$
276

$
330

$
10,805

$
19,607

$
-

Derivative liabilities at issuance date

-

-

5,972

-

-

Contingent considerations and compensation at acquisition date

3,102

-

-

-

-

Settlement

(276
)

-

-

-

-

Change in fair value included in the determination of net loss(a)

1,045

694

2,365

6,347

-

Balance at September 30, 2021

$
4,147

$
1,024

$
19,142

$
25,954

$
-

Balance at December 31, 2021

$
5,104

$
1,021

$
4,228

$
28,058

$
2,400

Liability classified warrants at issuance date

-

436

-

-

-

Private placement warrants at the Closing of the Business Combination

-

-

-

-

-

Contingent consideration at acquisition date

300

-

-

-

-

Contingent compensation recognized

622

-

-

-

-

Change in fair value included in the determination of net loss(a)

(2,192
)

(89
)

(2,097
)

3,923

1,264

Earned contingent consideration settled

(531
)

-

-

-

-

Cash contingent compensation earned and subsequently settled

(1,267
)

-

-

-

-

Unearned contingent compensation reversal

(427
)

-

-

-

-

Extinguishment and/or settlement upon conversion

-

(1,160
)

(2,131
)

(31,981
)

(3,664
)
Balance at September 30, 2022

$
1,609

$
208

$
-

$
-

$
-


	Contingent Liabilities from Acquisitions			Liability Classified Warrants			New GPO Note		Dragonfly Seller Convertible Notes
Balance at December 31, 2022	$	1,579		$	182		$	-	$	-
Fair value at issuance date		-			-			36,583		8,635
Contingent consideration at acquisition date		1,445			-			-		-
Contingent compensation recognized		337			-			-		-
Change in fair value included in the determination of net loss(a)		(334	)		(79	)		-		407
Earned contingent consideration settled		(196	)		-			-		-
Cash contingent consideration earned and subsequently settled		(39	)		-			-		-
Paid in kind interest		-			-			-		387
Foreign exchange		-			-			-		169
Balance at June 30, 2023	$	2,792		$	103		$	36,583	$	9,598

(a)

The change in contingent liabilities from acquisitions is recorded as transaction costs on the condensed consolidated statements of operations and comprehensive loss.

Public Warrants

The fair value of the public warrants is ~~estimated~~ based on the quoted market price of such warrants on the valuation date. ~~The public warrants were initially recognized as a liability in connection with the Business Combination on July 29, 2022 at a fair value of $5,688~~. As of ~~September~~June 30, 2023 and December 31, 2022, the estimated fair value of the public warrants was $~~7,141~~3,678. and $10,282, respectively. The Company recognized a non-cash loss of $~~1,453~~1,003 during the three months ended June 30, 2023 and a non-cash gain of $6,604 during the six months ended June 30, 2023 resulting from the change in fair value of the public ~~warrants between July 29, 2022 and September 30, 2022~~warrants. The change in fair value is recorded in change in fair value of ~~warrant liabilities~~financial instruments in ~~our~~the condensed consolidated statements of operations and comprehensive loss.

Private Placement Warrants

As of June 30, 2023 and December 31, 2022, the estimated fair value of the private warrants was $3,080 and $8,610, respectively. The Company recognized a non-cash loss of $840 during the three months ended June 30, 2023 and a non-cash gain of $5,530 during the six months ended June 30, 2023 resulting from the change in fair value of the private warrants. The change in fair value is recorded in change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive loss.

New GPO Note

The New GPO Note was recognized as a liability in connection with the settlement of litigation on the Subscription Date at its estimated fair value of $36,583. The estimated fair value of the New GPO Note was determined based on a trinomial lattice model. The following table presents the assumptions used to determine the fair value of the New GPO Note at June 30, 2023:


	June 30, 2023
Common stock share price	$	3.64
Risk free rate		4.1	%
Yield		15.5	%
Expected volatility		39.0	%
Expected term (years)		5.0

Dragonfly Seller Convertible Notes

The Dragonfly Seller Convertible Notes were recognized as a liability in connection with the acquisition on January 27, 2023 at a fair value of $8,635. As of June 30, 2023, the estimated fair value of the Dragonfly Seller Convertible Notes were $9,598. The non-cash loss of $968 and $395 is recorded in the change in fair value of financial instruments in the condensed consolidated statements of operations and comprehensive loss during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022.~~

~~Private Placement Warrants~~

~~The private placement warrants were initially recognized as a liability in connection with the Business Combination on July 29, 2022 at a fair value of $29,259. As of September 30, 2022, the estimated fair value of the private warrants was $5,950. The non-cash gain of $23,310~~ resulting from the change in fair value of the public warrants between July 29, 2022 and September 30, 2022 is recorded in change in fair value of warrant liabilities in our condensed consolidated statements of operations and comprehensive loss during the three and nine months ended September 30, 2022. The fair value of the private placement warrants was estimated using a binomial options pricing model.2023, respectively. The following table presents the assumptions used to determine the fair value of the ~~private placement warrants~~Dragonfly Seller Convertible Notes at ~~July 29, 2022~~June 30, 2023 and ~~September 30, 2022:~~January 27, 2023:

September 30, 2022

July 29, 2022

Valuation date share price

$
6.37

$
8.43

Risk-free interest rate

4.1
%

2.7
%
Expected volatility

12.7
%

40.0
%
Expected dividends

0.0
%

0.0
%
Expected term (years)

4.83

5.00

Fair value (in dollars)

$
0.85

$
2.66


	June 30, 2023			January 27, 2023
Common stock share price	$	3.64		$	5.06
Risk free rate		4.2	%		3.6	%
Yield		17.0	%		17.5	%
Expected volatility		42.0	%		40.0	%
Expected term (years)		4.6			5.0

As of June 30, 2023, the difference between the aggregate fair value and the unpaid principal balance of the Dragonfly Seller Convertible Notes is $2,071.

Contingent Liabilities from acquisitions

The contingent liabilities from acquisitions are classified as Level 3 in the fair value hierarchy. At ~~September~~June 30, 2023 and December 31, 2022, the contingent consideration and compensation relates to the ~~acquisition~~following acquisitions:

Table of ~~Curate.~~ Contents


	June 30, 2023		December 31, 2022
Dragonfly	$	1,310	$	-
Curate		489		883
FrontierView		866		600
Equilibrium		113		43
DT Global		14		53
Total contingent liabilities from acquisitions	$	2,792	$	1,579

The Company settled part of the Curate contingent consideration and compensation through an issuance of 83,393 additional shares in a non-cash transaction during the first quarter of 2023 on the consolidated statement of cash flows.

The Company estimated the fair value of the ~~Equilibrium, Predata,~~Dragonfly and Curate ~~Forge, and FrontierView~~ contingent consideration and compensation using a Monte Carlo simulation. These fair value measurements are based on significant inputs not observable in the market and thus represents Level 3 measurements as defined in ASC 820. Significant changes in the key assumptions and inputs could result in a significant change in the fair value measurement of the contingent consideration.

The following inputs and assumptions were used to value contingent liabilities from acquisitions as of ~~September~~June 30, ~~2022:~~2023:


	~~Curate~~
~~Risk premium~~		~~10.00~~	%
~~Risk free rate~~		~~4.14~~	%
~~Revenue volatility~~		~~25.00~~	%
~~Expected life (years)~~		~~1.5~~

~~Table of Contents~~

~~The following inputs and assumptions were used to value contingent liabilities from acquisitions as of December 31, 2021:~~


	Equilibrium			Predata			Curate			Forge			FrontierView			Dragonfly			Curate
Risk premium		8.00	%		6.00	%		9.00	%		11.00	%		8.00	%		19.5	%		13.0	%
Risk free rate		0.53	%		0.06	%		0.62	%		0.73	%		0.38	%		5.4	%		5.4	%
Revenue volatility		30.00	%		20.00	%		30.00	%		40.00	%		30.00	%		21.0	%		25.0	%
Expected life (years)		1.4			0.1			1.7			2.0			1.6			0.5			0.8

~~The Comerica Warrants and Eastward Warrants were recorded in other current liabilities at December 31, 2021 and were~~Liability classified ~~as Level 3 in the fair value hierarchy. In connection with the Closing, the holders of the Comerica Warrants and the Eastward Warrants exercised their~~ warrants ~~and at September 30, 2022 there are~~ no ~~outstanding Comerica Warrants and Eastward Warrants.~~

~~The fair value of the Comerica Warrants was calculated using the Black-Scholes calculation with the following inputs.~~

December 31, 2021

Series B preferred stock fair value

$
9.39

Time to maturity (years)

3.5

Risk-free interest rate

1.04
%
Volatility

56
%
Exercise price

$
2.02

~~The fair value of the Eastward Warrants was calculated using the Black-Scholes calculation with the following inputs:~~

December 31, 2021

Common stock fair value

$
8.98

Time to maturity (years)

5.0

Risk-free interest rate

1.26
%
Volatility

49
%
Exercise price

$
1.47

The Last Out Lender Warrants are classified as Level 3 in the fair value hierarchy. The fair value of the Last Out Lender Warrants ~~(see Note 8)~~ is calculated using the Black-Scholes calculation with the following inputs:

September 30, 2022

Common stock fair value

$
6.37

Time to maturity (years)

2.8

Risk-free interest rate

4.24
%
Volatility

52
%
Exercise price

$
8.56

The Company used a probability-weighted expected return method (“PWERM”) for estimating the fair value of the embedded redemption features. Key assumptions used to estimate the fair value of the embedded redemption features included selected discount rates, enterprise value, and probability and timing of possible exit scenarios. Based on the terms and provisions of the Convertible Notes, the New GPO Note, the 8090 FV Note, and the FrontierView Convertible Notes, the Company utilized a PWERM to estimate the fair value of the embedded derivative features requiring bifurcation as of the respective issuance dates and on December 31, 2021. The respective amounts of the embedded redemption liabilities were reflected on a combined basis with the notes in the consolidated balance sheet as of December 31, 2021.

The fair value of the respective notes with the derivative features was compared to the fair value of a note excluding the derivative features, which was calculated based on the present value of the future cash flows (a “with and without” methodology). The difference between the two values represents the fair value of the bifurcated derivative features as of each respective valuation date.

~~The key inputs to the valuation models that were utilized to estimate the fair value of the derivative liabilities included:~~

•

The probability-weighted conversion discount was based on the contractual terms of the respective notes agreement and the expectation of the pre-money valuation of the Company as of the estimated date that the next equity financing event might occur.

•

~~The remaining term was determined based on the remaining time period to maturity of the related respective notes with embedded features subject to valuation (as of the respective valuation date).~~

•

The Company’s equity volatility estimate was based on the historical equity volatility of a selection of the Company’s comparable guideline public companies, based on the remaining term of the respective notes.

•

~~The risk rate was the discount rate utilized in the valuation and was determined based on reference to market yields for debt instruments with similar credit ratings and terms.~~

•

~~The probabilities and timing of the next financing event and default event were based on management’s best estimate of the future settlement of the respective notes.~~


	June 30, 2023
Common stock fair value	$	3.64
Time to maturity (years)		2.0
Risk free rate		4.83	%
Volatility		80	%
Exercise price	$	8.56

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s long-lived assets, including property and equipment, intangible assets and goodwill are measured at fair value on a non-recurring basis when an impairment has occurred. ~~Excluding~~The Company has recognized an impairment of goodwill as disclosed in Note 7, "Goodwill" during the three months ended March 31, 2023. The company recognized an impairment of an operating lease asset related to certain unoccupied office space as disclosed in Note 5, ~~no other impairment events were identified~~"Leases" during the ~~nine~~three months ended ~~September~~March 31, 2022. The Company has not identified any additional impairments to be recorded during the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022.

~~Table of Contents~~

Excluding a total of $~~1,267~~2,500 earned cash contingent compensation related to ~~FrontierView~~Predata and ~~Forge~~FrontierView being transferred from Level 3 to Level 1 during the ~~nine~~three months ended ~~September 30,~~March 31, 2022, there were no other transfers of assets or liabilities between levels during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022.

Changes to fair value are recognized as income or expense in the condensed consolidated statements of operations and comprehensive loss.

issue to the Disputing Lender a subordinated convertible promissory note in an initial principal amount of $46,794 (the “New Note”), and (iii) the parties shall enter into a mutual settlement and release of all claims (including, but not limited to, any claims by the Disputing Lender for additional shares or money damages resulting from the entry into the Merger Agreement), relating to or arising from the conversion of the Original Note.

As discussed in Note 8, "Debt", on June 30, 2023, the Company entered into the Exchange and Settlement Agreement and New GPO Note. Pursuant thereto, on July 3, 2023, (i) the Disputing Lender returned 5,881,723 shares of Class A Common Stock, which the Company subsequently cancelled, (ii) the Company issued the New GPO Note, and (iii) the parties agreed to a mutual settlement and release of all claims (including, but not limited to, any claims by the Investor for additional shares or money damages resulting from the entry into the Merger Agreement), relating to or arising from the conversion of the Amended and Restated Senior Secured Subordinated Promissory Note, dated December 29, 2020, previously issued by a subsidiary of the pre-business combination FiscalNote Holdings, Inc. to the Investor.

Legal fees are recognized as incurred when the legal services are provided, and therefore are not recognized as part of the loss contingency.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion ~~and analysis provide~~provides information that FiscalNote’s management believes is relevant to an assessment and understanding of FiscalNote’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Certain monetary amounts, percentages and other figures included below have been subject to rounding adjustments as amounts are presented in thousands or millions, as the context describes. Percentage amounts included below have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “FiscalNote,” “we,” “us,” or “our” refer to the business of Old FiscalNote, which became the business of New FiscalNote and its subsidiaries following the Closing.

Certain monetary amounts, percentages and other figures included below have been subject to rounding adjustments as amounts are presented in thousands. Percentage amounts included below have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere herein. Certain other amounts that appear below may not sum due to rounding.

FiscalNote is a leading technology provider of global policy and ~~data company delivering~~market intelligence. It delivers critical, actionable legal ~~data~~ and policy insights in a rapidly evolving ~~economic,~~ political, regulatory and ~~regulatory world.~~macroeconomic environment. By combining ~~AI, machine learning and~~artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert ~~research,~~peer insights, FiscalNote ~~seeks~~empowers customers to ~~reinvent the way that organizations minimize risks~~manage policy, address regulatory developments, and ~~capitalize on opportunities associated with rapidly changing legal and policy environments. Through a number of our products,~~mitigate global risk. FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information ~~that facilitates~~in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products, coupled with expert research and analysis of markets and geopolitical events, as well as powerful tools to manage workflows, advocacy campaigns and constituent relationships.

On ~~July 29, 2022 (the “Closing Date”),~~the Closing Date, we consummated the transactions contemplated by the Merger Agreement, ~~and Plan of Business Combination, dated November 7, 2021, as amended on May 9, 2022 (the “Merger Agreement”),~~ by and among Old FiscalNote, ~~Holdings, Inc., a Delaware corporation (“Old FiscalNote”), Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”),~~DSAC, and ~~Grassroots~~ Merger ~~Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”).~~Sub. Pursuant to these transactions, Merger Sub merged with and into Old FiscalNote, with Old FiscalNote becoming a wholly owned subsidiary of ~~DSAC (the “Business Combination” and, collectively with the other transactions described in the Business Combination Agreement, the “Transactions”).~~DSAC. On the Closing Date, and in connection with the ~~closing of the Transactions (the “Closing”),~~Closing, DSAC domesticated and continued as a Delaware corporation under the name of “FiscalNote Holdings, Inc.~~” (“New FiscalNote”).~~"

We accounted for the Business Combination as a reverse recapitalization whereby Old FiscalNote was determined as the accounting acquirer and DSAC as the accounting acquiree. While DSAC was the legal acquirer in the Business Combination, because Old FiscalNote was determined as the accounting acquirer, the historical financial statements of Old FiscalNote became the historical financial statements of the combined company, upon the consummation of the Business Combination. Accordingly, New FiscalNote, as the parent company of the combined business, is the successor SEC registrant, meaning that our financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC.

The Business Combination had a significant impact on our reported financial position and results as a result of the reverse recapitalization. The most significant change in our reported financial position and results was an increase in net cash of $65.6 million from gross cash proceeds of $325.0 million, including $114.0 million from the backstop agreement with the sponsor of DSAC, $61.0 million from DSAC’s trust account from its initial public offering, and $150.0 million from the New Senior Term ~~Loan.~~Loan (as defined below). Such gross proceeds were offset by $45.2 million transaction costs, which principally consisted of advisory, legal and other professional fees, and were recorded in Additional Paid-in Capital, net of proceeds from the DSAC trust and $3.5 million of debt issuance costs paid out of the proceeds of the New Senior Term Loan on the Closing Date, of which $2.8 was capitalized and $0.7 million included in the loss on debt extinguishment. Cumulative debt repayments, inclusive of accrued but unpaid interest, of $210.7 million were paid in conjunction with the close, which consisted of a $75.3 million repayment of the First ~~out term loan,~~Out Term Loan, $61.7 million repayment of the Last ~~out term loan,~~Out Term Loan, a $50.0 million payment used to retire the non-converting portion of the Senior Secured Subordinated Promissory Note, a $16.3 million repayment of the 8090 FV Subordinated Promissory Note, and $7.4 million repayment of the 2021 Seller Notes. Please refer to Note 8, "Debt - Senior Capital Term Loan Refinancing" to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for information regarding our indebtedness outstanding prior to the Business Combination and the refinancing thereof.

In connection with the Business Combination, we recognized a $34.9 million warrant liability on our ~~condensed~~ consolidated balance sheets for the fair value of the public warrants and private placement warrants that were previously issued by DSAC and assumed by New FiscalNote in the Business Combination, along with the additional private placement warrants that were issued upon the closing of the Business Combination. We adjust the liability-classified warrants to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our ~~unaudited~~ condensed consolidated statement of operations. As a result of the recurring fair value measurement, our future financial statements and results of

operations may fluctuate quarterly, based on factors that are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the warrants each reporting period and that the amount of such gains or losses could be material.

In connection with the Business Combination, we recognized (a) $28.9 million of incremental stock-based compensation charges that consisted of $5.0 million related to certain awards that vested as a result of the Business Combination, $6.2 million related to awards issued to our CEO, COO, and CFO pursuant to their respective employment agreements, and $17.7 million related to the Earnout Awards that may

be issued to shareholders and equity award holders that for accounting purposes are treated as compensation awards (See Note 14, Earnings (Loss) Per Share, of our condensed consolidated financial statements), (b) $45.3 million of loss on debt extinguishment as a result of repayment of certain of our outstanding debt, as well as the conversion of our convertible debt as part of the Business Combination, and (c) $32.1 million interest charge related to the derecognition of the beneficial conversion feature associated with our converted debt.

As a consequence of the Business Combination, we became an SEC-registered and NYSE-listed company, which may require us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Upon Closing, we began to incur additional public company expenses for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources.

The outbreak of the novel coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization on March 11, 2020, led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s operations, vendors, and customer demand. The COVID-19 pandemic has impacted, and could further impact, the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The ultimate extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our long-term revenue growth and profitability, is uncertain and depends on factors, including the duration of the pandemic and any resurgences or new variants (such as the recent surge of the Delta and Omicron variants), the severity of the disease, responsive actions taken by public health officials or by us, the development, distribution and public acceptance of treatments and vaccines, the impacts on our customers and our sales cycles, our ability to generate new business leads, the impacts on our customers, employee and industry events, and the effects on our vendors, all of which are uncertain and currently cannot be predicted with any degree of certainty. Due to our primarily subscription-based business model, the effect of the COVID-19 pandemic may not be fully reflected in our results of operations until future periods. If the COVID-19 pandemic has a substantial impact on our employees’, business partners’ or customers’ productivity, our results of operations and overall financial performance may be harmed. In addition, the global macroeconomic effects of the COVID-19 pandemic and related impacts on our customers’ business operations and their demand for our products and services may persist for an indefinite period, even after the COVID-19 pandemic has subsided.

Acquisitions affect the comparability of our financial statements from period to period. Acquisitions completed during one period impact comparability to a prior period in which we did not own the acquired entity.

On January 27, 2023, we completed the acquisition of Dragonfly for up to $25.2 million (the "2023 Acquisition"), which included a combination of cash, stock, convertible notes and contingent payments.

During the year ended December 31, ~~2021,~~2022, we completed the following ~~nine acquisitions:~~acquisitions that are referred to as the "2022 Acquisitions" (and collectively with the 2023 Acquisition, the "Acquisitions"):

In addition, we acquired FactSquared on December 31, 2020 for $4.3 million consisting of cash and stock. Unless noted otherwise, we refer to the acquisition of FactSquared and the acquisitions in calendar year 2021 as the “2021 Acquisitions.”

~~On July 29, 2022 we completed the acquisition of Aicel Technologies for $8.7 million, consisting of stock. On~~ September 30, 2022 ~~we completed the asset acquisition of DT-Global~~ for ~~approximately~~ $0.6 million. We refer to these two acquisitions as the “2022 Acquisitions”, respectively. The 2022 Acquisitions did not have a material impact on our condensed consolidated statement of operations for the three and nine months ended September 30, 2022. The 2021 Acquisitions and Aicel contributed approximately $8.5 million and $4.4 million of subscription revenue, net of a deferred revenue adjustment of approximately $0.1 million and $1.2 million, during the three months ended September 30, 2022 and 2021, respectively, and $22.4 million and $7.3 million, net of a deferred revenue adjustment of approximately $1.9 million and $1.5 million, during the nine months ended September 30, 2022 and 2021, respectively. The 2021 Acquisitions and Aicel contributed Advisory, advertising and other revenue of approximately $0.7 million during the three months ended September 30, 2022 and 2021, and $4.0 million and $1.5 million during the nine months ended September 30, 2022 and 2021, respectively.

The consideration transferred in exchange for the 2021 Acquisitions and Aicel included a combination of cash, stock, seller notes, and contingent payments that may be settled in cash, stock, or a combination of both cash and stock. We account for contingent payments in accordance with ASC 805 which requires us to determine whether the contingent payment is considered a component of the fair value of

the consideration paid to the seller (e.g., “purchase price”) or as post-combination compensation expense, generally due to employee conditions associated with the contingent payments. In either case, the use of contingent payments may introduce future non-cash earnings volatility due to the requirement to fair value certain contingent payments each balance sheet date until the contingent payment has either been earned, or the earnout period expires. During the nine months ended September 30, 2022, we recognized non-cash gains associated with our contingent payments totaling $2.2 million, primarily related to a reversal of previously recognized contingent liabilities that expired unearned during the period. During the year ended December 31, 2021, we incurred non-cash fair value charges associated with our contingent payments totaling $2.2 million. We believe that the use of contingent payments benefits both the Company and the sellers from whom we acquire companies by enabling all parties to participate in the upside of the acquired companies achieving their contingent payment requirements. We will continue to evaluate the aggregate amount, mix and structure of consideration we offer to acquire companies as we execute on our corporate development strategy in the future, in order to achieve the best possible return for the Company.

As a result of our acquisitions, ~~in 2021 and 2022,~~ respectively, we have, and will continue to incur, significant non-cash amortization expense related to the amortization of purchased intangibles, which have reduced our operating income by approximately ~~$1.7~~$2.4 million and ~~$1.3~~$0.9 million during the three months ended ~~September~~June 30, 2023 and 2022, respectively, and ~~2021, and $5.0~~$4.6 million and ~~$2.6~~$1.9 million during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

From time to time, management reviews the Company’s existing products and services based on their financial profile (e.g., revenue, margin) ~~profile~~ and strategic factors. In connection with such a review in 2020 and 2021 management decided to cease selling certain non-core subscription products representing subscription revenue of approximately ~~$0.3~~$0.1 million and ~~$0.5~~$0.3 million during the three months ended ~~September~~June 30, 2023 and 2022 and ~~2021, and $0.9~~$0.3 million and ~~$1.8~~$0.6 million during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

We continue to invest for future growth. We are focused on several key growth levers, including cross-selling and upselling opportunities at existing clients, expanding our client base with a focus on enterprise and government customers, expansion into adjacent markets and deepening our offerings for regulated industries or sectors, and continuing to execute on our acquisition strategy. Several of these growth drivers require investment in and refinement of our go-to-market approach and, as a result, we may continue to incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses specific to subscription revenue.

We plan to invest a ~~significant~~ portion of the ~~net proceeds from the Business Combination~~available capital resources in building innovative products, acquiring complementary businesses, attracting new customers and expanding our leadership role in the legal and regulatory information market. We drive growth both organically and through acquisitions. We regularly evaluate acquisitions and investment opportunities in complementary businesses to supplement our existing platform, enable us to enter new markets and ensure that we are well positioned to provide critical insights to the regulated sectors of the future. Past acquisitions have enabled us to deliver innovative solutions in new categories, such as global risk analysis and ~~environmental, social and governance (“ESG”) automation software, analytics and integration,~~AI-enabled new products, and new data sets to enhance the functionality of our existing products. Strategic acquisitions will remain a core component of our strategy in the future.

Our cash flows from operations are primarily generated from payments from subscription customers with a standard term of 12 months. When a customer enters into a new subscription agreement, or submits a notice to renew their subscription, we typically invoice for the full amount of the subscription period, record the balance to deferred revenues and ratably recognize the deferral throughout the subscription period. As a result, we experience cash flow seasonality throughout the year, with a heavier weighting of operating cash inflows occurring during the first and fourth quarters of the year, when most subscription invoices are sent, as compared to the second and third quarters of the year. Accordingly, the subscription revenue we earn in the second half of the calendar year is usually greater than the first half of the calendar year, with the fourth quarter normally our largest quarter of revenue recognition during the calendar year.

In addition to our GAAP results further described and discussed below in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we monitor the following key performance indicators to evaluate growth trends, prepare financial projections, make strategic decisions, and measure the effectiveness of our sales and marketing efforts. Our management team assesses our performance based on these key performance indicators because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance.

Approximately 90% of our revenues are subscription based, which leads to high revenue predictability. Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for subsequent periods. We use ARR as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring subscription customer contracts. We calculate ARR on ana parent account level by annualizing the contracted subscription revenue, and our total ARR as of the end of a period is the aggregate thereof. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades, or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to timing of the revenue bookings during the period, cancellations, upgrades, or downgrades and pending renewals. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.

Our ARR at September 30, 2022 and December 31, 2021, was $108 million and $97 million, respectively. Our ARR at September 30, 2022 and 2021, excluding the 2021 Acquisitions and 2022 Acquisitions, was $69 million and $63 million, respectively. ARR of the 202127

~~Acquisitions,~~Our ARR at June 30, 2023 and December 31, 2022, was $120.2 million and $113.3 million, respectively. Our ARR at June 30, 2023 and 2022 excluding the 2022 and 2023 Acquisitions, was $110.3 million and $103.5 million, respectively. ARR of the 2022 and 2023 Acquisitions, was approximately ~~$39~~$9.9 million and ~~$32~~$8.4 million as of ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, including pre-acquisition ARR performance of the ~~2021 Acquisition companies~~2022 and ~~2022~~2023 Acquisitions on the basis reported to FiscalNote in connection with such company’s acquisition.

Management also monitors Run-Rate Revenue, which we define as ARR plus non-subscription revenue earned during the last twelve months. We believe Run-Rate Revenue is an indicator of our total revenue growth, incorporating the non-subscription revenue that we believe is a meaningful contribution to our business as a whole. Although our non-subscription business is non-recurring, we regularly sell different advisory services to repeat customers. The amount of actual subscription and non-subscription revenue that we recognize over any 12-month period is likely to differ from Run-Rate Revenue at the beginning of that period, sometimes significantly. Our Run-Rate Revenue at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, including ~~our 2021 Acquisitions and 2022~~ Acquisitions, was approximately ~~$121~~$135.0 million and ~~$109~~$126.7 million, respectively. Our Run-Rate Revenue at ~~September~~June 30, 2023 and 2022, excluding the 2022 and ~~2021, excluding the 2021 Acquisitions and 2022~~2023 Acquisitions, was approximately ~~$76~~$123.0 million and ~~$68~~$115.4 million, respectively. Run-Rate Revenue of the ~~2021~~2022 and 2023 Acquisitions was approximately ~~$45~~$12.0 million and ~~$38~~$9.8 million as of ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, including pre-acquisition Run-Rate Revenue performance of the ~~2021 Acquisition companies and 2022~~ Acquisitions on the basis reported to FiscalNote in connection with such company’s acquisition.

Our NRR, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our NRR for a given period as ARR at the end of the period minus ARR contracted from new clients for which there is no historical revenue booked during the period, divided by the beginning ARR for the period. ~~For~~We calculate NRR at our federal government clients, we consider subdivisions of the same executive branch department or independent agency (for example, divisions of a single federal department or agency) to be a single customer for purposes of calculating our account-level ARR and NRR. For our commercial clients, we consider subdivisions of the same legal entity as separate customers.parent account level. Customers from acquisitions are not included in NRR until they have been part of our condensed consolidated results for 12 months. Accordingly, the 2023 and 2022 Acquisitions are not included in our NRR for the three and six months ended June 30, 2023. Our calculation of NRR for any fiscal period includes the positive recurring revenue impacts of selling additional licenses and services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our NRR may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, the timing of renewals, and our ability to retain our customers. Our calculation of NRR may differ from similarly titled metrics presented by other companies. NRR was 98% and 99% for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. While we believe that these non-GAAP financial measures provide useful supplemental information, non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in their financing and accounting methods, the book value of their assets, their capital structures, the method by which their assets were acquired and the manner in which they define non-GAAP measures.

Adjusted revenue represents revenue adjusted to include amounts that would have been recognized if deferred revenue was not adjusted to fair value in connection with ~~the 2021 Acquisitions.~~acquisition accounting. Adjusted revenue is presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful for investors as an indicator of the underlying performance of our business. Adjusted revenue is not a recognized term under U.S. GAAP. Adjusted revenue does not represent revenues, as that term is defined under GAAP, and should not be considered as an alternative to revenues as an indicator of our operating performance. Adjusted revenue as presented herein is not necessarily comparable to similarly titled measures presented by other companies.

We define Adjusted Gross Profit as Adjusted Revenue minus cost of revenues, before amortization of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Adjusted Revenues.

We use Adjusted Gross Profit and Adjusted Gross Profit Margin to understand and evaluate our core operating performance and trends. We believe these metrics are useful measures to us and to our investors to assist in evaluating our core operating performance because ~~it provides~~they provide consistency and direct comparability with our past financial performance and between fiscal periods, as the metrics eliminate the non-cash effects of amortization of intangible assets and deferred revenue, which are non-cash impacts that may fluctuate for reasons unrelated to overall operating performance.

Adjusted Gross Profit and Adjusted Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under ~~GAAP and~~GAAP. They should not be considered as replacements for gross profit and gross profit margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes. Adjusted Gross Profit and Adjusted Gross Profit Margin as presented herein isare not necessarily comparable to similarly titled measures presented by other companies.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items that management believes are not indicative of ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Revenue.

We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in this Quarterly Report on Form 10-Q because these non-GAAP measures are key measures used by management to evaluate our business, measure our operating performance and make strategic decisions. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful for investors and others in understanding and evaluating our operating results in the same manner as management. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for net loss, net loss before income taxes, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in our industry may report measures titled EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate non-GAAP financial measures, which reduces their comparability. Because of these limitations, you should consider EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP.

We derive our revenues from subscription revenue arrangements and advisory, advertising and other revenues. Subscription revenues account for approximately 90% of our total revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and 2021. No single customer accounted for more than 5% of revenues during the three and nine months ended September 30, 2022 and 2021, and our 10 largest customers represented less than 10% of our total revenues for the for the same periods. In calculating the aforementioned revenue concentration, (i) for our federal government clients, we consider subdivisions of the same executive branch department or independent agency (for example, divisions of a single federal department or agency) to be separate customers; and (ii) for our commercial clients, we consider subdivisions of the same legal entity as separate customers.2022.

Subscription revenues consist of revenue earned from subscription-based arrangements that provide customers the right to use the Company’s software and products in a cloud-based infrastructure. Subscription revenues are driven primarily by the number of active licenses, the types of products and the price of the subscriptions. The Company also earns ~~subscription-based~~subscription revenues by licensing to customers its digital content, including transcripts, news and analysis, images, video and podcast data.

Our subscription arrangements generally have contractual terms of 12 months or more and are non-refundable regardless of the actual use of the service. Subscription revenues are recognized ratably over the non-cancellable contract terms beginning on the commencement date of each contract, which is the date our service is first made available to customers.

Advisory revenue is typically earned under contracts for specific deliverables and are non-recurring in nature, although we regularly sell different advisory services to repeat customers. One-time advisory revenues are invoiced according to the terms of the contract, usually delivered to the customer over a short period of time, during which revenues are recognized.

Advertising revenue is primarily generated by delivering advertising in our own publications (Roll Call and CQ) in both print and digital formats. Revenue for print advertising is recognized upon publication of the advertisement. Revenue for digital advertising is recognized over the period of the advertisement or, if the contract contains impression guarantees, based on delivered impressions.

Book revenue is recognized when the product is shipped to the customer, which is when control of the product transfers to the customer. Shipping and handling costs are treated as a fulfillment activity and are expensed as incurred.

Events revenue is deferred and only recognized when the event has taken place and is included in other revenues.

Cost of revenues primarily consists of expenses related to hosting our service, the costs of data center capacity, amortization of developed technology and capitalized software development costs, certain fees paid to various third parties for the use of their technology, services, or data, costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with providing professional services and other direct costs of production. Also included in cost of revenues are our costs related to the preparation of contracted advisory deliverables, as well as costs to develop, publish, print and deliver our publications underlying our books revenue.

Research and development expenses include the costs of compensation, including bonuses, stock compensation, benefits and other expenses for employees associated with the creation and testing of the products we offer, related software subscriptions, consulting and contractor fees and allocated overhead.

Sales and marketing expenses consist primarily of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for our sales and marketing staff, including commissions, related software subscriptions, consulting fees, marketing programs

and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities.

Editorial expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses for the editorial team involved in acquiring, creating, and distributing content and allocated overhead.

General and administrative expenses are primarily related to our executive offices, finance and accounting, human resources, legal, internal operations and other corporate functions. These expenses consist of salaries and related expenses, including bonuses, stock compensation, benefits and other expenses, along with professional fees, depreciation and other allocated overhead.

Amortization expense relates to our finite-lived intangible assets, including developed technology, customer relationship, databases and tradenames. These assets are amortized over periods of between three and twenty years. ~~Definite-lived~~Finite-lived intangible assets are tested for impairment when indicators are present, and, if impaired, are written down to fair value. No impairment of intangible assets has been identified during any financial period included in our accompanying ~~audited~~condensed consolidated financial statements.

Goodwill is tested for impairment when indicators are present, and if impaired are written down to fair value. An impairment of goodwill has been identified for the three months ended March 31, 2023 and is included in our accompanying condensed consolidated financial statements.

Transaction costs consist of acquisition related costs (including due diligence, accounting, legal, and other professional fees, incurred from acquisition activity), fair value adjustments to contingent consideration due to sellers, and non-capitalizable costs.

Interest expense, net, consists of expense related to interest on our borrowings, the amortization and write off of debt issuance costs and original discount, and interest related to certain derivative instruments.

The fair value of ~~warrant~~warrants, debt accounted for under the fair value option, and derivative liabilities are accounted for in accordance with ASC 815, ASC 825, and ASC 480. ~~The warrant and derivative liabilities~~These financial instruments are marked to market each reporting period in accordance with ASC 820 with all gains and losses being recorded within the condensed consolidated statement of operations and comprehensive ~~loss.~~loss, with the exception of any gains or losses recorded due to changes in the fair value of instrument-specific credit risk being recorded as a component of accumulated other comprehensive income in the condensed consolidated balance sheets.

We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the condensed consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations and comprehensive loss in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence.

The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our condensed consolidated financial statements. ~~We have derived this data from annual condensed consolidated financial statements and the~~The following discussion should be read in conjunction with those condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the Consolidated Results for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022 Compared to Three~~2023 and ~~Nine Months Ended September~~June 30, ~~2021~~2022

The following table presents our results of operations for the periods indicated:


	Three Months Ended September 30,						Change						Nine Months Ended September 30,						Change						Three Months Ended June 30,						Change						Six Months Ended June 30,						Change
(In thousands)	2022			2021			$			%			2022			2021			$			%			2023			2022			$			%			2023			2022			$			%
Revenues:
Subscription	$	26,075		$	20,139		$	5,936			29.5	%	$	73,186		$	53,098		$	20,088			37.8	%	$	29,462		$	24,332		$	5,130			21.1	%	$	57,929		$	47,111		$	10,818			23.0	%
Advisory, advertising, and other		2,996			1,635			1,361			83.2	%		9,130			5,352			3,778			70.6	%		3,380			2,842			538			18.9	%		6,442			6,134			308			5.0	%
Total revenues		29,071			21,774			7,297			33.5	%		82,316			58,450			23,866			40.8	%		32,842			27,174			5,668			20.9	%		64,371			53,245			11,126			20.9	%

Operating expenses: ~~(1)~~
Cost of revenues		8,699			5,412			3,287			60.7	%		23,581			14,664			8,917			60.8	%		9,485			7,712			1,773			23.0	%		18,422			14,882			3,540			23.8	%
Research and development		5,629			6,433			(804	)		(12.5	)%		15,438			17,671			(2,233	)		(12.6	)%		4,510			3,791			719			19.0	%		9,630			9,809			(179	)		(1.8	)%
Sales and marketing		11,830			7,454			4,376			58.7	%		31,722			21,258			10,464			49.2	%		11,689			10,395			1,294			12.4	%		23,987			19,892			4,095			20.6	%
Editorial		4,218			3,786			432			11.4	%		11,240			10,967			273			2.5	%		4,752			3,346			1,406			42.0	%		9,017			7,022			1,995			28.4	%
General and administrative		38,945			9,337			29,608			317.1	%		59,535			22,199			37,336			168.2	%		16,174			10,033			6,141			61.2	%		34,395			20,590			13,805			67.0	%
Amortization of intangible assets		2,601			2,512			89			3.5	%		7,818			6,651			1,167			17.5	%		2,901			2,609			292			11.2	%		5,715			5,217			498			9.5	%
Loss on sublease		-			-			-		NM%				-			1,362			(1,362	)		(100.0	)%
Transaction costs, net		1,275			2,127			(852	)		(40.1	)%		1,257			2,985			(1,728	)		(57.9	)%
Impairment of goodwill																										-			-			-			0	%		5,837			-			5,837			100.0	%
Transaction costs (gains), net																										309			1,027			(718	)		(69.9	)%		1,717			(18	)		1,735		NM%
Total operating expenses		73,197			37,061			36,136			97.5	%		150,591			97,757			52,834			54.0	%		49,820			38,913			10,907			28.0	%		108,720			77,394			31,326			40.5	%
Operating loss		(44,126	)		(15,287	)		(28,839	)		188.7	%		(68,275	)		(39,307	)		(28,968	)		73.7	%		(16,978	)		(11,739	)		(5,239	)		44.6	%		(44,349	)		(24,149	)		(20,200	)		83.6	%

Interest expense, net		42,894			16,261			26,633			163.8	%		89,672			46,102			43,570			94.5	%		7,154			24,255			(17,101	)		(70.5	)%		13,835			46,778			(32,943	)		(70.4	)%
Change in fair value of warrant and derivative liabilities		(21,910	)		(2,839	)		(19,071	)		671.8	%		(18,524	)		9,406			(27,930	)		(296.9	)%
Change in fair value of financial instruments																										2,987			2,048			939			45.8	%		(11,693	)		3,386			(15,079	)	NM%
Gain on PPP loan upon extinguishment		-			-			-		NM%				(7,667	)		-			(7,667	)	NM%				-			-			-			0	%		-			(7,667	)		7,667		NM%
Loss on debt extinguishment, net		45,250			-			45,250		NM%				45,250			-			45,250		NM%
Loss on settlement																										3,474			-			3,474			100.0	%		3,474			-			3,474		NM%
Other expense, net		928			241			687			285.1	%		1,543			384			1,159			301.8	%		167			494			(327	)	NM%				38			615			(577	)	NM%
Net loss before income taxes		(111,288	)		(28,950	)		(82,338	)		284.4	%		(178,549	)		(95,199	)		(83,350	)		87.6	%		(30,760	)		(38,536	)		7,776			(20.2	)%		(50,003	)		(67,261	)		17,258			(25.7	)%
Benefit from income taxes		(2,286	)		(992	)		(1,294	)		130.4	%		(2,836	)		(6,737	)		3,901			(57.9	)%
Provision (benefit) from income taxes																										213			(176	)		389			(221.0	)%		243			(550	)		793			(144.2	)%
Net loss	$	(109,002	)	$	(27,958	)	$	(81,044	)		289.9	%	$	(175,713	)	$	(88,462	)	$	(87,251	)		98.6	%	$	(30,973	)	$	(38,360	)	$	7,387			(19.3	)%	$	(50,246	)	$	(66,711	)	$	16,465			(24.7	)%

(1) Amounts include stock-based compensation expenses, as follows:
	Three Months Ended September 30,						Change						Nine Months Ended September 30,						Change
	2022			2021			$			%			2022			2021			$			%

Cost of revenues	$	13		$	4		$	9			225	%	$	36		$	9		$	27			300	%
Research and development		504			55			449			816	%		609			216			393			182	%
Sales and marketing		721			27			694		NM%				828			97			731			754	%
Editorial		513			24			489		NM%				560			67			493			736	%
General and administrative		28,292			77			28,215		NM%				28,835			158			28,677		NM%

Subscription revenue of ~~$26.1~~$29.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$5.9~~$5.1 million, or ~~29%~~21%, from ~~$20.1~~$24.3 million for the three months ended ~~September~~June 30, ~~2021.~~2022. Subscription revenue of ~~$73.2~~$57.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$20.1 million, or 38%, from $53.1~~$10.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

The comparability of our revenues between periods was impacted by the ~~2021~~ Acquisitions ~~and Aicel~~ described under “Factors Impacting the Comparability of Our Results of Operations” above. The table below presents the primary items that impacted the comparability of our subscription revenues between periods.

Our organic growth ~~during~~(determined based on FiscalNote ownership over a full calendar year) has grown through the ~~period is primarily due to~~successful integration of our 2021 Acquisitions (defined as the ~~increase~~acquisition of FactSquared LLC and the acquisitions in ~~new revenue bookings made in 2021~~calendar year 2021) as evidenced by the growth in our organic ARR from ~~which we subsequently derived additional revenues as well as~~$103.0 million at June 30, 2022 compared to $110.2 million at June 30, 2023. Also contributing towards our ~~continued focus on increasing~~growth in revenue is a realignment of our ~~NRR.~~business development team, strategic price increases, and rollout of new products. Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 reflects a full ~~nine~~six months of revenue from the ~~2021~~2022 Acquisitions as well as a partial period of revenue contribution from the 2023 Acquisition, whereas revenue

for the ~~nine~~six months ended ~~September~~June 30, ~~2021 only reflects~~2022 does not reflect any revenue ~~contributions from certain of the 2021 Acquisitions commencing~~contribution from the date of such acquisition through the remainder of the period. As of September 30, 2021, we had acquired Oxford Analytica on February 12, 2021, Fireside on April 30, 2021, Timebase on May 7, 2021, Board.org on June 3, 2021, Equilibrium on June 25, 2021, Predata on June 30, 2021, Curate on August 27, 2021,2022 and ~~Forge.ai on September 9, 2021. The remaining 2021 Acquisition, FrontierView was acquired in the fourth quarter of 2021.~~2023 Acquisitions.

Advisory, advertising, and other revenue was ~~$3.0~~$3.4 million for the three months ended ~~September~~June 30, ~~2022,~~2023, as compared to ~~$1.6~~$2.8 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$1.4~~$0.5 million, or ~~83%~~19%, was primarily due to ~~$1.1 million increase in other one-time~~timing of revenue ~~and $0.3 million increase in events revenue.~~recognition for certain contracts.

Advisory, advertising, and other revenue was ~~$9.1~~$6.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, as compared to ~~$5.4~~$6.1 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$3.7~~$0.3 million, or ~~71%~~5%, was primarily due to ~~$2.5 million~~timing of ~~incremental~~ revenue ~~from our 2021 Acquisitions, as well as an increase~~recognition for certain contracts.

The below tables present our revenues split by geographic region for the periods presented:

Revenues by geography are determined based on the region of the FiscalNote contracting entity, which may be different than the region of the customer. North America revenues increased primarily ~~due to our acquisitions of FactSquared, Fireside, Board.org, Predata, Curate, Forge, and FrontierView.~~for the reasons stated above. Revenues outside of North America increased primarily due to our acquisitions of ~~Oxford Analytica~~Dragonfly (included in Europe) and ~~Timebase~~Aicel (included in ~~Australia)~~Asia).

Cost of revenues was ~~$8.7~~$9.5 million for the three months ended ~~September~~June 30, ~~2022,~~2023, as compared to ~~$5.4~~$7.7 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$3.3~~$1.8 million, or ~~61%~~23%, was primarily attributable to ~~$1.0 million of increased costs (excluding amortization expense) from our 2021 Acquisitions and Aicel,~~ an increase ~~in amortization expense~~ of ~~approximately $0.2~~$0.9 million related to ~~capitalized software development costs~~the 2022 and ~~developed technology from our 2021~~2023 Acquisitions ~~and Aicel, $1.0 million of increased costs related to the growth in our business, and $1.1 million of an increase in amortization expense related to our capitalized software development costs.~~

Cost of revenues was $23.6 million for the nine months ended September 30, 2022, as compared to $14.7 million for the nine months ended September 30, 2021. The increase of $8.9 million, or 61%, was primarily attributable to $5.2 million of increased costs (excluding amortization expense) from our 2021 Acquisitions and Aicel,combined with an increase in amortization expense of approximately $1.0 million related to capitalized software development costs and developed ~~technology from our 2021 Acquisitions and Aicel, $1.0~~technology.

Cost of revenues was $18.4 million for the six months ended June 30, 2023, as compred to $14.9 million for the six months ended June 30, 2022. The increase of ~~increased costs~~$3.5 million, or 24%, was primarily attributable to an increase of $1.9 million related to the ~~growth in our business,~~2022 and ~~$1.6 million of~~2023 Acquisitions combined with an increase in amortization expense of approximately $1.7 million related to ~~our~~ capitalized software development ~~costs.~~costs and developed technology.

Research and development expense was ~~$5.6~~$4.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$6.4~~$3.8 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The ~~decrease~~increase of ~~$0.8~~$0.7 million, or ~~12%~~19%, was primarily attributable to ~~a decrease~~$0.3 million of ~~$1.5 million primarily related to compensation and benefits, offset by $0.4 million~~ incremental share-based compensation ~~triggered by the Business Combination~~ and $0.3 million of research and development costs incurred by our ~~2021 Acquisitions~~2022 and ~~Aicel.~~2023 Acquisitions.

Research and development expense was ~~$15.4~~$9.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$17.7~~$9.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The decrease of ~~$2.2~~$0.2 million, or ~~13%~~2%, was primarily attributable to a decrease of ~~$4.7~~$1.4 million

~~primarily related to~~ compensation and benefits, offset by ~~$0.5~~$0.6 million incremental share-based compensation ~~triggered by the Business Combination,~~ and ~~$2.1~~$0.5 million of research and development costs incurred by our ~~2021~~2022 and 2023 Acquisitions.

Sales and marketing expense was ~~$11.8~~$11.7 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$7.5~~$10.4 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$4.3~~$1.3 million, or ~~59%~~12%, was primarily attributable to an increase of ~~$3.1~~$0.8 million ~~in sales~~from our 2022 and ~~marketing costs incurred by our 2021~~2023 Acquisitions, $0.5 million of commission amortization, and ~~Aicel,~~ an increase of ~~$0.6 million in salary costs as we increased our sales team headcount in the second and third quarter of 2022, as well as $0.7~~$0.2 million of ~~incremental~~ share-based ~~compensation triggered by the Business Combination.~~compensation.

Sales and marketing expense was ~~$31.7~~$24.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$21.3~~$19.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$10.4~~$4.1 million, or ~~49%~~21%, was primarily attributable to an increase of ~~$9.7~~$0.7 million in compensation and benefits stemming from an increase in our sales team headcount, build out of our sales leadership, an increase of $1.4 million from our 2022 and ~~marketing costs incurred by our 2021~~2023 Acquisitions, ~~and Aicel, as well as $0.7~~$0.8 million ~~incremental~~of commission amortization, an increase of $0.5 million of share-based compensation, ~~triggered by the Business Combination.~~an increase of $0.4 million related to software, and an increase of $0.2 million of bad debt expense relating to implementation of new accounting guidance.

Editorial expense was ~~$4.2~~$4.8 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$3.8~~$3.3 million for the three months ended ~~September~~June 30, ~~2021. Editorial~~2022. The increase was primarily the result of an increase of our 2022 and 2023 Acquisitions and headcount realignment within the Company.

Editoral expense was ~~$11.2~~$9.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$11.0~~$7.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021. Editorial expense remained relatively flat during~~2022. The increase was primarily the ~~first three quarters in 2022 as compared to the same periods in 2021 as a~~ result of an increase of our ~~continued focus on monitoring costs.~~2022 and 2023 Acquisitions and headcount realignment within the Company.

General and administrative expense was ~~$38.9~~$16.2 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$9.3~~$10.0 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$29.6~~$6.1 million, or ~~317%~~61%, was primarily attributable to ~~$17.7~~$4.2 million of incremental non-cash stock based compensation expense, $1.2 million associated with ~~the earnout shares issued to employees who held equity ownership in old FiscalNote through ownership~~incremental public costs such as insurance, build out of ~~common stock, vested options, or unvested options on the closing date of the Business Combination (see Note 10 in our unaudited condensed consolidated financial statements), $6.2~~investor relations and people teams, and $0.8 million of ~~non-cash stock based compensation associated with~~incremental costs from the ~~issuance of stock options~~2022 and RSUs to our CEO, COO, and CFO pursuant to their employment agreements with New FiscalNote, $5.0 million of non-cash stock-based compensation associated with certain stock options whereby their vesting was triggered by the closing of the Business Combination, and $1.0 million increase in general and administrative expenses primarily related to incremental salary, benefits and bonus expense we incurred as we increased our headcount in preparation of becoming a public company.2023 Acquisitions.

General and administrative expense was ~~$59.5~~$34.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$22.2~~$20.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$37.3~~$13.8 million, or ~~168%~~67%, was primarily attributable to ~~$17.7~~$9.7 million of incremental non-cash stock based compensation expense, $2.4 million associated with ~~the earnout shares issued to employees who held equity ownership in old FiscalNote through ownership~~incremental public costs such as insurance, build out of common stock, vested options, or unvested options on the closing date of the Business Combination (see Note 10 in our unaudited condensed consolidated financial statements), $6.2 million of non-cash stock based compensation associated with the issuance of stock optionsinvestor relations and ~~RSUs to our CEO, COO,~~people teams, and CFO pursuant to their employment agreements with New FiscalNote, $5.0 million of non-cash stock-based compensation associated with certain stock options whereby their vesting was triggered by the closing of the Business Combination, and $3.5 million of general and administrative costs incurred by our 2021 Acquisitions and Aicel. The remaining increase in general and administrative expenses is primarily related to $4.7$1.7 million of incremental ~~salary, benefits~~costs from the 2022 and ~~bonus expense we incurred as we increased our headcount~~2023 Acquisitions.

Impairment of goodwill was $5.8 million recognized during the first quarter of 2023 related to the impairment of goodwill in ~~preparation of becoming a public company, and $0.4 million of non-cash lease asset impairment charges.~~the ESG reporting unit.

Amortization of intangibles was $2.9 million for the three months ended June 30, 2023 as compared to $2.6 million for the three months ended ~~September~~June 30, ~~2022 as compared to $2.5 million for the three months ended September 30, 2021.~~2022. The increase of ~~$0.1~~$0.3 million, or 4%11%, is primarily due to the increase in amortizable intangible assets from the ~~2021 Acquisitions~~2022 and ~~Aicel.~~2023 Acquisitions.

Amortization of intangibles was ~~$7.8~~$5.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$6.7~~$5.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase of ~~$1.1~~$0.5 million, or ~~18%~~10%, is primarily due to the the increase in amortizable intangible assets from the ~~2021 Acquisitions~~2022 and ~~Aicel totaling $1.6 million offset by a $0.4 million reduction in amortization expense related to intangible assets from our VoterVoice and Shungham acquisitions becoming fully amortized in 2021.~~2023 Acquisitions.

Transaction costs were ~~$1.3~~$0.3 million for the three months ended ~~September~~June 30, ~~2022,~~2023, as compared to transaction costs of ~~$2.1~~$1.0 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The ~~decrease~~change of ~~$0.9~~$0.7 million ~~, or 40%, is primarily due~~relates to ~~$2.0~~a $0.3 million decrease in transactions costs related to business acquisitions primarily related to the acquisition of Dragonfly in 2023 offset by transaction costs related to the 2022 acquisitions combined with a contingent compensation and earnout liabilities recognized in 2022 related to our 2021 Acquisitions.

Transaction costs were $1.7 million for the six months ended June 30, 2023, as compared to transaction gains of $0.0 million for the six months ended June 30, 2022. The change of $1.7 million relates to a $0.8 million increase in transactions costs related to business acquisitions primarily related to the acquisition of ~~Equilibrium, Forge,~~Dragonfly offset by 2022 Acquisition costs combined with a $1.0 million gain from contingent compensation and ~~FrontierView~~earnout liabilities recognized for the six months ended June 30, 2022 related to our 2021 Acquisitions and the reversing of previously recognized earnout liabilities related to our Predata acquisitions, $0.1 million increase in transaction costs related to acquired businesses, offset by $1.3 million increase in non-capitalized costs related to the Business Combination.

Transaction costs were $1.3 million for the nine months ended September 30, 2022, as compared to transaction costs of $3.0 million for the nine months ended September 30, 2021. The decrease of $1.7 million, or 58%, is primarily due to $3.0 million decrease in contingent compensation and earnout liabilities related to our acquisitions of Equilibrium, Forge, and FrontierView and the reversing of previouslyliabilities.

~~recognized earnout liabilities related to our Predata acquisitions, offset by $1.4 million increase in non-capitalized costs related to the Business Combination.~~

Interest expense was ~~$42.9~~$7.2 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to ~~$16.3~~$24.3 million for the three months ended ~~September~~June 30, ~~2021. Interest expense was $89.7 million for the nine months ended September 30, 2022 as compared to $46.1 million for the nine months ended September 30, 2021.~~2022. The ~~increase~~decrease in interest expense ~~during the three and nine months ended September 30, 2022~~of $17.1 million was primarily due ~~to a $32.1 million charge to~~ interest expense we recorded related to the ~~derecognition of beneficial conversion features embedded within the~~ convertible notes that ~~went~~converted into equity as part of the ~~Company's public listing~~Business Combination as well as ~~incremental~~ interest expense incurred related to the ~~$18~~$18.0 million related party convertible note issued in the fourth quarter of ~~2021, and $20~~2021.

Interest expense was $13.8 million ~~increase in our Senior Term Loan in~~for the ~~first quarter of 2022 that was not incurred during the three and nine~~six months ended ~~September~~June 30, ~~2021 based on~~2023 as compared to $46.8 million for the ~~issuance dates.~~

~~On July 29, 2022~~six months ended June 30, 2022. The decrease in interest expense of $33.0 million was primarily due interest expense we entered into a $150.0 million senior term loan that accrues PIK interest at 1%, compounded monthly, and has cash only interest payments of the greater of (a) 9% and (b) the Prime Rate plus 5%. Immediately priorrecorded related to the ~~consummation~~convertible notes that converted into equity as part of the Business Combination all of our convertible debt, excluding four convertible notes with a principal balance of $8.1 million, converted into common stock of Old FiscalNote, which were entitled to be exchanged for shares of Class A common shares of New FiscalNote at the Exchange Ratio. As a result of this conversion, we recognized a one-timeas well as interest ~~charge of $32.1 million~~expense incurred related to the ~~derecognition~~$18.0 million related party convertible note issued in the fourth quarter of ~~the beneficial conversion feature associated with the aforementioned convertible notes.~~2021.

Change in fair value of ~~warrant and derivative liabilities~~financial instruments

Change in fair value of ~~warrant liabilities~~financial instruments was a ~~$21.9~~$3.0 million ~~gain~~loss for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to a ~~$2.8~~$2.0 million ~~gain~~loss for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in loss of ~~$19.1~~$1.0 million primarily represents a ~~$21.9~~loss that was recorded as a result of the fair value adjustment of the warrant liabilities that were assumed in connection with the Business Combination and a loss on the Dragonfly Seller Convertible Notes, offset by the loss resulting from the final fair value adjustment of the embedded derivative liabilities that were settled as part of the Business Combination.

Change in fair value of financial instruments was a $11.7 million gain for the six months ended June 30, 2023 as compared to a $3.4 million loss for the six months ended June 30, 2022. The increase of $15.1 million primarily represents a gain that was recorded as a result of the fair value adjustment of the warrant liabilities that were assumed in connection with the Business Combination offset by ~~$3.1 million~~a loss on the Dragonfly Seller Convertible Notes and the loss resulting from the final fair value adjustment of the embedded derivative liabilities that were settled ~~upon conversion of the associated convertible notes~~ as part of the Business Combination.

Change in fair value of warrant liabilities was a $18.5 million gain for the nine months ended September 30, 2022 as compared to a $9.4 million loss for the nine months ended September 30, 2021. The increase of $27.9 million, or 297%, primarily represents a $21.9 million gain that was recorded as a result of the fair value adjustment of the warrant liabilities that were assumed in connection with the Business Combination, and a $6.0 million gain resulting from the fair value adjustment of the derivative liabilities that were settledGain on PPP loan upon ~~conversion of the associated convertible notes as part of the Business Combination.~~extinguishment

~~Loss~~The Company recognized the forgiveness of the PPP Loan as a gain on debt extinguishment ~~net~~during the first quarter of 2022 for $7.7 million.

~~Change in loss on debt extinguishment, net for the three and nine months ended September 30, 2022 represents a $45.3 million loss that was recorded as a result~~33

Income tax benefit was $2.3 million for the three months ended September 30, 2022 as compared to an income tax benefit of $1.0 million for the three months ended September 30, 2021. The increase of $1.3 million in income tax benefit was primarily driven by related impacts on the Company’s valuation allowance.

Income tax benefit was $2.8 million for the nine months ended September 30, 2022 as compared to $6.7 million for the nine months ended September 30, 2021. The decrease of $3.9 million in income tax benefit was primarily driven by related impacts on the Company’s valuation allowance and return to provision adjustments.

We present certain non-GAAP financial measures including Adjusted Revenues, Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA. Our management team assesses our performance based on these non-GAAP measures because it believes they reflect the underlying trends and indicators of our business and serve as meaningful indicators of our continuous operational performance. We believe these measures are useful for investors for the same reasons. Investors should be aware that these measures are not a substitute for GAAP financial measures or disclosures. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure.

The following table presents our calculation of Adjusted Revenues for the periods presented, and a reconciliation of this measure to our GAAP revenues for the same periods:

The following table presents our calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin for the periods presented:

The following table presents our calculation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the periods presented:

~~On July 29, 2022 the Company consummated~~We have incurred losses and negative cash flows from operations since inception. Through June 30, 2023, we have funded our operations with proceeds from the Business Combination ~~with DSAC~~ as well as the closing of the New Senior Term Loan whereby the Company received $65.6 million of net cash ~~proceeds.~~proceeds, additional borrowings under debt facilities, and receipts from the sale of our products to customers in the ordinary course of business. At ~~September~~June 30, ~~2022,~~2023, the Company’s cash, ~~and~~ cash equivalents, and restricted cash was ~~$78.0 million.~~$38.1 million compared to $61.2 million at December 31, 2022.

The Company had a negative working capital balance of ~~$38.2~~$46.7 million (excluding cash) at ~~September~~June 30, ~~2022~~2023 and had an accumulated deficit of ~~$658.2~~$751.2 million and ~~$481.4~~$700.7 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and has incurred net losses of ~~$175.7~~$50.2 million and ~~$88.5~~$66.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Management expects that significant

on-going operating and capital expenditures will be necessary to continue to implement the Company’s business plan of entering new markets, future acquisitions, and infrastructure and product development. Historically the Company’s cash flows from operations have not been sufficient to fund its current operating model.

Our capital requirements depend on many factors, including sales volume, the timing and extent of spending to support R&D efforts, investments in information technology systems, the expansion of sales and marketing activities, and execution on our acquisition strategy. We believe our cash on hand, proceeds from our expected product sales, and available borrowings under our New Senior Term Loan for certain acquisition activity, will be sufficient to meet our short-term and long-term operating expenses and capital expenditures for at least the next twelve months.

However, our ability to fund our operating expenses and capital expenditure requirements will depend in part on general economic, financial, competitive, legislative, regulatory and other conditions that may be beyond our control. Depending on these and other market conditions, we may seek additional financing. Volatility in the credit markets may have an adverse effect on our ability to obtain debt financing. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

Our historical financing activities included borrowings under senior secured credit facilities, senior secured promissory notes, convertible debt, and preferred share issuances. Our principal debt plus paid-in kind interest outstanding ~~immediately after the closing~~as of ~~the Business Combination~~June 30, 2023 and ~~at September 30,~~December 31, 2022 consisted of the following (excluding any fair value adjustments and debt discounts, as applicable):

In connection with the Closing, FiscalNote entered into a $150.0 million ~~new~~ senior ~~term loan facility~~credit agreement (the ~~“New Senior Term Loan”~~“Credit Agreement”) with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC (together the “New Senior Lenders”). The ~~New Senior Term Loan includes~~Credit Agreement also provides for an uncommitted incremental loan facility totaling $100.0 million available upon notice if the Company meets certain financial growth criteria and other customary requirements (the “New Incremental Term Facility”) (collectively the “New Senior Credit Facility”). The annual interest of the New Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum and (ii) 9.0% payable monthly in cash, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. The New Senior Credit Facility will mature on July 29, 2027. Beginning on August 15, 2025, 50% of the outstanding principal amount of the Senior Term Loan must be repaid in even amounts on a monthly basis over the remaining 24 months, with the final balance due on July 15, 2027. Borrowings under our New Senior Credit Facility are collateralized by substantially all assets of the ~~Company’s assets.~~ borrowers and guarantors party thereto.

On May 16, 2023, the Company, entered into Amendment No. 2 ("Amendment No. 2") to the Credit Agreement dated July 29, 2022. Among other things, Amendment No. 2 joined Dragonfly Eye Limited (“Dragonfly”) and Oxford Analytica Limited (“Oxford Analytica”), each a wholly owned subsidiary of the Company, as Guarantors under the Credit Agreement.

During the ~~three and nine~~six months ended ~~September~~June 30, ~~2022~~2023, we made cash interest payments totaling ~~$2.1~~$9.9 million related to the New Senior Term Loan.

The New Senior Term Loan is senior to all other debt and has a first priority lien on substantially all of the Company’s assets. The New Senior Term Loan contains customary negative covenants related to borrowing, events of default and covenants, including certain non-financial covenants and covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire stock, and make investments, in each case subject to certain exceptions. In addition to the negative covenants, there were three financial

covenants in place at June 30, 2023: a minimum cash balance, minimum annual recurring revenue requirement, and a capital expenditure limitation. At June 30, 2023, the Company was in compliance with the minimum cash balance requirement and capital expenditure limitation. The Company's annual recurring revenue was marginally below the minimum annual recurring revenue for the period. On August 3, 2023 the New Senor Term Loan lenders waived their rights upon default retroactive to June 30, 2023. Beginning with the third quarter of 2023, the Company is subject to an adjusted EBITDA requirement (as defined in the New Senior Term Loan, as amended). Upon the occurrence of an event of default, in addition to the lenders being able to declare amounts outstanding under the New Senior Term Loan due and payable the lenders can elect to increase the interest rate by 5.0% per annum.

See Note 8 “Debt” and Note 18 "Subsequent Events" to the condensed consolidated financial statements included elsewhere herein.

The New GPO Note is subordinate to the Company’s obligations under its New Senior Term Loan which limits certain actions that the Company and the Investor may take under the New GPO Note. At any time prior to the July 3, 2028, the Investor is entitled to convert all or any portion of the principal amount of the New GPO Note and accrued interest thereon into shares of Class A Common Stock at $8.28 per share. The New GPO Note is subject to customary anti-dilution adjustments for stock splits and similar transactions and, subject to standard exceptions, weighted average anti-dilution protection. The principal amount, together with accrued interest thereon, of the New GPO Note is redeemable by the Company in whole or in part based on certain conditions as defined in the New GPO Note.

The Company elected to account for the New GPO Note using the fair value option. The New GPO Note was recorded at its June 30, 2023 acquisition date fair value of $36,583. The Company initially recorded a loss contingency of $11,700 in its fiscal year 2022 financial statements representing the difference between the fair value of the shares returned by the Investor and the fair value of the New GPO Note on the date of exchange. With the execution of the Exchange and Settlement Agreement and New GPO Note, the Company recorded an additional loss on settlement with GPO of $3,474 in the condensed consolidated statement of operations for the three and six months ended June 30, 2023.

Four convertible noteholders with an aggregate principal amount (including accrued paid in kind interest) of $10.5 million as of the Closing Date elected not to convert their notes into shares of capital stock of the Company in conjunction with Closing. The convertible notes are unsecured, earn payable in kind interest of 15% per annum, payable in kind monthly, and mature in 2025.

On January 27, 2023, we acquired Dragonfly and financed part of the purchase with the issuance of convertible notes. The Dragonfly Convertible Note is subordinate to our New Senior Credit Facility, accrues interest of 8% per annum, payable in kind or in cash, and matures in January 2028.

On July 29, 2022, we acquired Aicel Technologies and assumed its $1.0 million convertible note. The Aicel Convertible Note is subordinate to our New Senior Credit Facility, ~~payable in kind~~accrues interest of 1%, per annum, payable in kind monthly, and matures in July 2027. ~~The Aicel Convertible Note is subordinate to our New Senior Credit Facility.~~

The PPP Loan requires monthly principal and interest payments of approximately $9 thousand until maturity in 2027.

Capital expenditures primarily consist of purchases of capitalized software costs and property and equipment. Our capital expenditures program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment to grow our business. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. Our total capital expenditures were $4.1 million and $6.0 million for the six months ended June 30, 2023 and 2022, respectively.

Cash used in operating activities consists of net loss adjusted for certain non-cash items including depreciation and amortization, stock based compensation, changes in fair value of warrant liabilities, non-cash interest expense, and loss on debt extinguishment, as well as the effect of changes in working capital and other activities.

Cash used in operating activities in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$57.5~~$20.2 million, an increase of ~~$33.3~~$1.9 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021. Cash used in~~2022. The primary factors affecting our net operating ~~activities~~cash flows during this period was ~~driven by a~~our net loss of ~~$175.7~~$50.3 million, ~~as adjusted for the exclusion of~~which includes non-cash expenses ~~and other adjustments~~items totaling ~~$128.9~~$30.4 million, including impairment of goodwill of $5.8 million, non-cash and paid-in kind interest expense of ~~$50.5 million, loss on debt extinguishment of $45.3~~$4.2 million, stock-based compensation expense of ~~$30.9~~$12.0 million, a gain due to the change in fair value of ~~warrant liabilities~~financial instruments of ~~$21.9~~$11.7 million, non-cash lease expense of $2.4 million, loss on settlement with GPO of $3.5 million, and amortization and depreciation of ~~$17.3~~$13.8 million, other non-cash items of $0.4 million and the effect of changes in operating assets and liabilities that resulted in cash outflows of ~~$10.4~~$0.3 million.

The increase in cash used in operating activities of $33.3 million in the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 was primarily due to a $25.3 million increase in cash paid for interest mainly attributable to the payment of paid in kind interest as part of the debt prepayment paid by the Company as part of the Closing. Also contributing to the increase in netNet cash used in operating activities was ~~an unfavorable~~$18.3 million during the six months ended June 30, 2022. The primary factors affecting our operating cash flows during this period was our net loss of $66.7 million adjusted for non-cash items of $52.3 million, primarily consisting of $9.6 million of depreciation and amortization, $0.8 million of stock-based compensation, $42.9 million of non-cash interest expense, $3.2 million of non-cash operating lease expense, $1.2 million of amortization of deferred costs to obtain contracts, non-cash charge of $3.4 million resulting from the change in fair value of financial instruments, offset by $7.7 million gain on PPP Loan forgiveness, non-cash gain of $1.5 million resulting from the change of fair value of contingent consideration, $0.5 million of deferred income tax benefit and the effect of changes in operating assets and liabilities that resulted in cash outflows of ~~$10.4~~$3.9 million. ~~Cash used by operating activities can be impacted by factors such as new acquisitions, timing of cash receipts from customers, vendor payment terms, and timing of payments to vendors.~~

Net cash used in investing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$7.7~~$9.1 million compared to ~~$30.3~~$6.0 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Net cash used in investing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 primarily consisted of cash paid for acquisitions, net of cash acquired of $5.0 million and cash paid of ~~$8.1 million of software development costs and $0.7~~$4.1 million of capital expenditures ~~offset by $1.1 million cash acquired from the acquisition of Aicel, net of cash paid for the assets acquisition of DT-Global.~~primarily related to software development costs. Net cash used in investing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$30.3 million, primarily consisted of $26.4 million of cash paid for the acquisitions of Oxford Analytica, Fireside, Timebase, Board.org, Equilibrium, and Predata, and $3.9~~$6.0 million of capital expenditures.

Net cash provided by financing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$111.5~~$6.6 million, compared to ~~$46.0~~$19.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Net cash provided by financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 primarily consisted of ~~$325.0 million in gross proceeds from the Business Combination (inclusive of (a) the net receipts from $150.0 million proceeds from the issuance of our New Senior Term Loan, (b) $61.0~~$6.0 million from ~~DSAC’s trust,~~Amendment 1 to the Credit Agreement and ~~(c) $114.0~~$0.6 million from the ~~backstop agreement with the sponsor of DSAC), and $4.5 million cash~~ proceeds from the exercise of ~~public warrants, $0.4 million from the exercise of~~ stock options, offset by a total of $48.7 million in transaction costs related to the Business Combination and New Senior Term Loan, $189.0 million in principal repayments of First Out Term Loan, Last Out Term Loan, Fireside Promissory Notes, 8090 FV Subordinated Promissory Note, and the New GPO Note.options. Net cash provided by financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$46.0~~$19.7 million, primarily consisted of ~~$33.1~~$19.5 million of ~~net cash received from~~ the ~~issuance of convertible notes~~increase in ~~2021, $12.5 million from~~our senior debt attributable to the ~~issuance of shares of Series G preferred stock in 2021,~~New Senior Term Loan and $0.4 million offrom proceeds from the exercise of stock options.

Our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 5 “Leases” to the condensed consolidated financial statements included elsewhere herein. For more information regarding our debt service obligations, see Note 8 “Debt” to the condensed consolidated financial statements included elsewhere herein.

During the periods presented, we did not engage in any off-balance sheet financing activities or other arrangements that have or are reasonably likely to have a current or future material effect on our financial condition or results of operations.

For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, if any, refer to Note 1 of the notes to our ~~condensed consolidated~~ financial statements ~~as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021.~~included in this Quarterly Report on Form 10-Q.

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

We believe that of our significant accounting policies, which are described in Note 1 “~~Summary~~“Summary of Business and Significant Accounting ~~Policies~~”Policies” to our condensed consolidated financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.

There were no significant and material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2023, as compared to those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates and Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 28, 2023 except for the change in one intangible asset discussed in Note 6, "Intangible Assets".

Subscription revenues are recurring in nature and include subscription fees from customers accessing our company’s cloud-based infrastructure, digital content, transcripts, news and analysis, images, video and podcast data. Advisory, advertising and other revenue includes revenues derived from non-recurring activities where we deliver specific deliverables for clients as well as where we provide advertising in our own publications (Roll Call and CQ) in both print and digital formats, the sale of various publications, and sponsorship revenue for events organized by the Company. Our company’s subscription arrangements are generally non-cancelable and do not contain refund-type provisions. Our company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised goods or services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services.

Our company’s contracts with customers may include promises to transfer multiple services. For these contracts, our company accounts for individual promises separately if they are distinct performance obligations. Determining whether services are considered distinct performance obligations may require significant judgment. Judgment is also required to determine the standalone selling price (“SSP”) for each distinct performance obligation. In instances where SSP is not directly observable, such as when our company does not sell the services separately, our company determines the SSP using available information, including market conditions and other observable inputs.

Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years, which, although longer than the typical initial contract period, reflects the average period of benefit, including expected contract renewals. Significant judgment is required in arriving at this average period of benefit. Therefore, we evaluate both qualitative and quantitative factors, including the estimated life cycles of our offerings and our customer attrition.

Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to tangible and intangible assets acquired and liabilities assumed and pre-acquisition contingencies. We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets.

Critical estimates in valuing certain of the intangible assets and goodwill we have acquired are:

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

~~Amortization~~Significant judgment is required to estimate the fair value of ~~acquired intangible assets~~our reporting units. Accordingly, we typically obtain the assistance of third-party valuation specialists for significant reporting units for purposes of determining whether there is ~~dependent upon~~goodwill impairment. The fair value estimates ~~of useful lives, which~~ are ~~determined through~~based on available historical information and on future expectations. We typically estimate the ~~exercise of judgment. The assessment of any impairment~~fair value of these assets using the income method, which is based on the present value of estimated future cash flows attributable to the respective assets. The valuations used to establish and to test goodwill for impairment are dependent on a number of significant estimates and assumptions, including macroeconomic conditions, overall growth rates, competitive activities, cost containment and margin progression, Company business plans and the discount rate applied to cash flows.

Goodwill is not amortized, but tested at least annually for impairment. Our ongoing annual impairment testing for goodwill occurs on October 1st. Assumptions used in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections and operating plans. We believe these estimates and assumptions are reasonable and comparable to those that would be used by other marketplace participants. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. For example, future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets, including discount and tax rates or future cash flow projections, could result in significantly different estimates of the fair values. In addition, changes to or a failure to achieve business plans

or deterioration of macroeconomic conditions could result in reduced cash flows or higher discount rates, leading to a lower valuation that would trigger an impairment of the goodwill of these businesses.

If the fair value of the reporting unit is less than its carrying value, that difference represents an impairment.

Determining the useful life of an intangible asset also requires judgment. Acquired intangible assets (customer relationships, patents and technologies, and tradenames) are expected to have determinable useful lives. Finite-lived intangible assets are amortized to expense over their estimated lives. An impairment assessment for finite-lived intangibles is only required when an event or change in circumstances indicates that the carrying amount of the asset may not be recoverable.

Based on our annual impairment testing as of October 1, 2022, the fair value of all of our reporting units exceeded their carrying values by more than 50%. The most significant assumptions utilized in the determination of the estimated fair values of our reporting units are the net sales and earnings growth rates (including residual growth rates) and discount rate. The residual growth rate represents the expected rate at which the reporting units are expected to grow beyond the shorter-term business planning period. The residual growth rate utilized in our fair value estimates is consistent with the reporting unit operating plans and approximates expected long-term market growth rates. The residual growth rate is dependent on overall market growth rates, the competitive environment, inflation, and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth or an increased competitive environment. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon ~~estimates~~industry required rates of ~~recoverable amounts~~return, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors.

Future sustained depression of our stock price may indicate that ~~take into account factors such as economic~~a triggering event has occurred that may require us to reassess our goodwill for impairment and may trigger future impairment charges of one or all of our reporting units. Further, changes in operating plans or adverse changes in the business or in the macroeconomic environment in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of our reporting units.

Due to the decline in the Company’s stock price and market ~~conditions~~capitalization in the first quarter of 2023, and the ~~useful lives~~underperformance of ~~assets.~~the Company’s ESG reporting unit compared to internal projections, the Company performed a quantitative goodwill impairment assessment as of March 31, 2023. This quantitative assessment resulted in all the goodwill in our ESG reporting unit being impaired; accordingly, a non-cash impairment charge of $5.8 million was recognized during the three months ended March 31, 2023. Prior to the quantitative goodwill impairment the Company tested the recoverability of its long-lived assets, and concluded that such assets were not impaired.

See Note 7, “Goodwill” to the condensed consolidated financial statements for additional discussion on goodwill.

at fair value and adjusts the warrants to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statement of operations.

The fair value of the public warrants is estimated based on the quoted market price of such warrants. The fair value of the private warrants is estimated using a binomial option pricing model.

The Company accounts for certain of its debt obligations at fair value. Accordingly, the Company recognizes the debt obligations upon inception at fair value. The debt obligations are subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statement of operations. The Company estimates the fair value of the debt obligation using a lattice model.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate as the discount rate to measure the operating lease assets and liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease and includes considerations of both the market, our current capital structure and exiting debt borrowings. We perform an incremental borrowing rate analysis on a quarterly basis, or upon execution of any individually material agreement, to ensure that the rates being applied to newly acquired leases are still accurate.

We are exposed to market risks in the ordinary course of our business. These risks primarily consist of inflation risk and fluctuations in interest rates and foreign currency exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

We use the U.S. Dollar ("USD") as our reporting currency. Our local subsidiaries transact generally in their local currency, considered the functional currency for that subsidiary. Our foreign currency exchange rate risk is related to translation of our assets and liabilities from the subsidiaries' functional currencies to USD. These adjustments are recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound Sterling and Australian Dollar. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States as well as the European Union, United Kingdom, Australia, South Korea, ~~Hong Kong~~ and India. Our results of operations and cash flows in the future may be adversely affected due to an expansion of non-U.S. dollar denominated contracts, growth of our international entities and changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our cash denominated in foreign currency. To date, we have not engaged in any hedging strategies. As our international operations grow, we will continue to reassess our approach to manage the risk relating to fluctuations in currency rates.

Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenue ~~during~~for the three and six months ended ~~September~~June 30, ~~2022,~~2023, was negatively impacted by approximately ~~2.2%~~1.0% compared to the three and six months ended June 30, 2022.

We are subject to market risk associated with changing interest rates within our variable rate New Senior Term Loan. Our exposure to changes in interest rates is associated with the Prime Rate.

As of ~~September~~June 30, ~~2022,~~2023, we had outstanding borrowings on our New Senior Term Loan of ~~$150.3~~$157.0 million, ~~that~~which bears cash interest at a floating rate based on the Prime Rate plus an applicable margin. At ~~September~~June 30, ~~2022~~2023, the interest rate on our New Senior Term Loan was ~~11.25%~~13.25%. Assuming no change in the outstanding borrowings on our New Senior Term Loan, we estimate that a one percentage point increase in the Prime Rate would increase our annual cash interest expense by approximately ~~$1.5~~$1.6 million.

Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our business.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~June 30, ~~2022,~~2023, due to the material weakness ~~described below and~~identified in ~~Part II, Item 1A. of this report,~~the prior year, our disclosure controls and procedures were not effective as of ~~September~~June 30, ~~2022.~~2023. Notwithstanding the material weaknesses, our management has concluded that the financial statements included elsewhere in this report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.

In connection with the audits and reviews of our consolidated financial statements, we identified material weaknesses in our internal control over financial reporting. The material weaknesses related to the accounting for the Business Combination transaction, accounting for tax provision, abandonment of software development costs, EPS calculations, fair valuation of convertible notes and fair valuation of seller notes issued in business combinations, accounting for convertible promissory notes - embedded derivatives, accounting for related party transactions, the implementation of new revenue accounting standard ASC 606, and accounting for contract costs, as well as internal controls over administrative access to our accounting and finance systems and system change management.

We initiated and implemented several remediation measures including, but not limited to hiring additional accounting leadership and staff with requisite background and knowledge, engaging third parties to assist us in complying with the accounting and financial reporting

requirements related to significant and complex transactions, and assist us with formalizing our business processes, accounting policies and internal control documentation, strengthening supervisory reviews by our management, and evaluating the effectiveness of our internal controls in accordance with the framework established by Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. We believe the measures described above should remediate the material weaknesses identified and strengthen our internal control over financial reporting. The remediation initiatives outlined above are estimated to take place over the next 12 to 18 months. While we continue the challenging and costly process to implement our plan to remediate the material weaknesses, we cannot predict the success of such plan or the outcome of our assessment of this plan until the remediation initiatives have been completed and have been operating effectively for a sufficient period of time. We can give no assurance that these measures will remediate the deficiencies in internal control or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that may lead to a restatement of our financial statements or cause us to fail to meet our reporting obligations for the period ended September 30, 2022.

Other than the material weaknesses identified in prior year and material weakness remediation activities, ~~described above,~~ there were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may become involved in legal or regulatory proceedings, including intellectual property claims, commercial contract matters or employment-related disputes. Such cases may raise complex factual and legal issues, may subject us to material risks and uncertainties, could require significant management time and corporate resources to defend, could result in significant media coverage and negative publicity, and could be harmful to our reputation and our brand. We are not currently a party to any litigation or regulatory proceeding that we expect to have a material adverse effect on our business, results of operations, financial conditions or cash flows.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Current Report on Form ~~8-K~~10-K filed with the SEC on ~~August 2, 2022.~~March 28, 2023. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

WeOther than as reported on each of our Current Reports on Form 8-K filed on July 3, 2023, we did not have any unregistered sales of equity securities during the three months ended ~~September~~June 30, ~~2022.~~2023.

We did not repurchase shares of our common stock during the three months ended ~~September~~June 30, ~~2022.~~2023.

On August 3, 2023, FiscalNote, Inc., a wholly owned subsidiary of the Company, entered into Amendment No. 3 (“Amendment No. 3”) to its Second Amended and Restated Credit and Guaranty Agreement dated July 29, 2022 (the “Existing Credit Agreement,” as amended by Amendment No. 1 and Amendment No. 2, the “Credit Agreement”). Capitalized terms used but not defined in this Part II – Item 5 have the meanings given to such terms in the Credit Agreement.

Among other things, Amendment No. 3 (1) modifies the Minimum Adjusted EBITDA and Minimum ARR levels that the Loan Parties are obligated to attain on a quarterly basis, (2) postpones by 12 months the payment of the Original Final Payment, which otherwise would have been due on July 29, 2023, and (3) modifies the amounts of the Original Final Payment and Restatement Date Final Payment, in each case in the manner set forth in Amendment No. 3.

Amendment No. 3 was entered into by and among FiscalNote, Inc., as Borrower Representative, CQ-Roll Call, Inc., Capitol Advantage LLC, VoterVoice, L.L.C. and Sandhill Strategy LLC as Borrowers, the Company, FiscalNote Intermediate Holdco, Inc., FiscalNote Holdings II, Inc., Fireside 21, LLC, Factsquared, LLC, The Oxford Analytica International Group, LLC, Oxford Analytica Inc., FiscalNote Boards LLC, Predata, Inc., Curate Solutions, Inc., Forge.AI, Inc., Frontier Strategy Group LLC, Oxford Analytica Ltd. and Dragonfly Eye Ltd., as Guarantors, Runway Growth Finance Corp., as administrative agent and collateral agent, and each lender party thereto.

A copy of Amendment No. 3 is filed as Exhibit 10.8 to this Quarterly Report on Form 10-Q and is incorporated herein by reference. The above description of the material terms of Amendment No. 3 are qualified in their entirety by reference to such exhibit.

Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	001-396972	88-3772307
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
1201 Pennsylvania Avenue NW, 6th Floor, Washington, D.C. 20004
(Address of principal executive offices, including zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	NOTE	NYSE
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share	NOTE.WS	NYSE


FISCALNOTE HOLDINGS, INC. FORM 10-Q TABLE OF CONTENTS

	Page No.
Cautionary Note Regarding Forward-Looking Statements	~~3-4~~1

PART I. Financial Information (Unaudited):
Financial Statements
Condensed Consolidated Balance Sheets	52
Condensed Consolidated Statements of Operations and Comprehensive Loss	63
Condensed Consolidated Statements of Changes in ~~Temporary Equity and~~ Stockholders' Equity (Deficit)	74
Condensed Consolidated Statements of Cash Flows	85
Notes to Condensed Consolidated Financial Statements	~~9-40~~6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	~~41-55~~26
Item 3. Quantitative and Qualitative Disclosures About Market Risks	5640
Item 4. Controls and Procedures	5640

Part II. OTHER INFORMATION	5841

Item 1. Legal Proceedings	5841
Item 1A. Risk Factors	5841
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5841
Item 3. Defaults upon Senior Securities	5841
Item 4. Mine Safety Disclosures	5841
Item 5. Other Information	5841
Item 6. Exhibits	5841

SIGNATURES	6043


Balance at December 31, 2020	$	17,521
Balance at December 31, 2021				$	30,097
Revenue recognized in the current period from amounts in the prior balance					(21,924	)
New deferrals, net of amounts recognized in the current period					34,988
Effects of foreign currency					(388	)
Balance at June 30, 2022				$	42,773

Balance at December 31, 2022				$	36,487
Acquired deferred revenue		7,788			3,941
Revenue recognized in the current period from amounts in the prior balance		(15,411	)		(27,128	)
New deferrals, net of amounts recognized in the current period		18,681			36,503
Effects of foreign currency		(130	)		221
Balance at September 30, 2021	$	28,449

Balance at December 31, 2021	$	30,097
Acquired deferred revenue		1,112
Revenue recognized in the current period from amounts in the prior balance		(28,226	)
New deferrals, net of amounts recognized in the current period		37,066
Effects of foreign currency		(807	)
Balance at September 30, 2022	$	39,242
Balance at June 30, 2023				$	50,024


Stock Options awards	Number of shares			Weighted-average exercise price		Weighted-average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2021		8,695,002		$	3.07		7.3	$	52,941
Granted		380,251			8.66
Exercised		(136,788	)		2.12
Cancelled and forfeited		(401,011	)		4.53
Outstanding at September 30, 2022		8,537,454		$	6.06		12.8	$	28,402
Vested and exercisable as of September 30, 2022		4,659,611		$	2.26		6.0	$	19,347
Vested and expected to vest as of September 30, 2022		8,537,454


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


	Oxford Analytica		Fireside		Timebase		Board.org		Equilibrium		Predata		Curate		Forge		FrontierView		Total
Acquisition date:	2/12/2021		4/30/2021		5/7/2021		6/3/2021		6/25/2021		6/30/2021		8/27/2021		9/9/2021		11/19/2021
Cash	$	3,850	$	7,290	$	2,241	$	10,113	$	833	$	1,925	$	1,120	$	614	$	18,107	$	46,093
Fair value of common stock (a)		2,626		-		-		-		8,271		6,510		6,078		9,481		-		32,966
Fair value of seller notes		-		10,232		2,078		9,128		-		-		-		-		-		21,438
Fair value of contingent consideration (b)		-		-		-		-		-		196		1,206		1,700		-		3,102
Fair value of contributed interests (c)		-		-		-		-		315		-		-	-			-		315
Total	$	6,476	$	17,522	$	4,319	$	19,241	$	9,419	$	8,631	$	8,404	$	11,795	$	18,107	$	103,914


	Oxford Analytica			Fireside (a)			Timebase			Board.org (a)			Equilibrium			Predata			Curate			Forge (b)			FrontierView (a)			Total
Cash	$	207		$	51		$	315		$	201		$	149		$	126		$	595		$	40		$	783		$	2,467
Accounts receivable		668			389			185			2,862			-			165			179			-			1,535			5,983
Other assets		274			-			85			229			13			258			20			90			289			1,258
Intangible assets		4,600			3,816			1,474			9,122			4,909			5,336			3,720			3,705			5,557			42,239
Accounts payable and accrued expenses		(1,052	)		(136	)		(220	)		(208	)		(58	)		(245	)		(173	)		(316	)		(1,034	)		(3,442	)
Deferred revenue		(2,340	)		-			(360	)		(4,411	)		-			(95	)		(301	)		(281	)		(2,173	)		(9,961	)
Other liabilities		(237	)		-			-			(613	)		-			(32	)		-			-			-			(882	)
Deferred tax liability		(441	)		-			(475	)		-			(835	)		-			(609	)		-			-			(2,360	)
Total net assets acquired		1,679			4,120			1,004			7,182			4,178			5,513			3,431			3,238			4,957			35,302
Goodwill		4,797			13,402			3,315			12,059			5,241			3,118			4,973			8,557			13,150			68,612
Total purchase price	$	6,476		$	17,522		$	4,319		$	19,241		$	9,419		$	8,631		$	8,404		$	11,795		$	18,107		$	103,914


	Equilibrium (a)			Predata			Forge (b)			FrontierView (c)			Total
Contingent compensation recognized during 2021	$	861		$	504		$	260		$	93		$	1,718
Contingent compensation settled in 2021		(150	)		-			-			-			(150	)
Contingent compensation liability as of December 31, 2021		711			504			260			93			1,568
Contingent compensation recognized during nine months ended September 30, 2022		(499	)		-			170			1,455			1,126
Contingent compensation settled during the nine months ended September 30, 2022		-			-			(267	)		(1,000	)		(1,267	)
Unearned contingent compensation reversal during the nine months ended September 30, 2022		(183	)		(504	)		(163	)		(81	)		(931	)
Contingent compensation liability as of September 30, 2022	$	29		$	-		$	-		$	467		$	496


	Three Months Ended			Nine Months Ended
	September 30, 2021
Revenues:
Subscription	$	22,082		$	64,781
Advisory, advertising, and other		2,079			8,565
Total revenues		24,161			73,346
Net loss	$	(28,204	)	$	(91,067	)


2022 (remaining)	$	3,065
2023		8,943
2024		5,065
2025		5,147
2026		5,262
Thereafter		23,431
Total minimum lease payments		50,913
Less: Amounts representing interest		13,396
Net minimum lease payments	$	37,517


	Nine Months Ended
	September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	8,752
Supplemental noncash information on lease liabilities arising from obtaining operating lease assets:
Operating lease assets obtained in exchange for lease obligations	$	1,497


	December 31, 2021
	Principal		Deferred Financing Fees			PIK Interest Accrual		Debt Discount			Amortization of Deferred Financing Fees		Amortization of Deferred Debt Discount		Derivative Liabilities		Total
2019 Notes	$	17,320	$	(3,454	)	$	4,639	$	(986	)	$	862	$	848	$	2,031	$	21,260
2020 Notes		59,680		(1,027	)		15,640		(14,111	)		237		3,117		-		63,536
2021 Notes		23,841		(214	)		2,437		(21,224	)		31		2,488		2,197		9,556
Total	$	100,841	$	(4,695	)	$	22,716	$	(36,321	)	$	1,130	$	6,453	$	4,228	$	94,352


Valuation date share price	$	8.43
Risk-free interest rate		2.7	%
Expected volatility		40.0	%
Expected dividends		0.0	%
Expected term (years)		5


Restricted Stock Units	Number of shares			Weighted-average Grant Date Fair Value		Weighted-average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2021		773,063		$	6.26		7.5	$	6,943
Granted		252,705			8.91
Vested		(305,671	)		3.16
Cancelled and forfeited		(67,018	)		8.42
Outstanding at September 30, 2022		653,079		$	8.51		8.2	$	3,505
Vested as of September 30, 2022		-		$	-		-	$	-
Vested and expected to vest as of September 30, 2022		653,079




Beginning balances at December 31, 2022 and 2021	$	639	$	728
Lapses in statutes of limitations		-		(89	)
Ending balances at June 30, 2023 and 2022	$	639	$	639


	Contingent Liabilities from Acquisitions			Liability Classified Warrants			Embedded Redemption Features on Convertible Notes			Embedded Redemption Features on Promissory Note			Embedded Redemption Features on 8090 FV Note
Balance at December 31, 2020	$	276		$	330		$	10,805		$	19,607		$	-
Derivative liabilities at issuance date		-			-			5,972			-			-
Contingent considerations and compensation at acquisition date		3,102			-			-			-			-
Settlement		(276	)		-			-			-			-
Change in fair value included in the determination of net loss(a)		1,045			694			2,365			6,347			-
Balance at September 30, 2021	$	4,147		$	1,024		$	19,142		$	25,954		$	-

Balance at December 31, 2021	$	5,104		$	1,021		$	4,228		$	28,058		$	2,400
Liability classified warrants at issuance date		-			436			-			-			-
Private placement warrants at the Closing of the Business Combination		-			-			-			-			-
Contingent consideration at acquisition date		300			-			-			-			-
Contingent compensation recognized		622			-			-			-			-
Change in fair value included in the determination of net loss(a)		(2,192	)		(89	)		(2,097	)		3,923			1,264
Earned contingent consideration settled		(531	)		-			-			-			-
Cash contingent compensation earned and subsequently settled		(1,267	)		-			-			-			-
Unearned contingent compensation reversal		(427	)		-			-			-			-
Extinguishment and/or settlement upon conversion		-			(1,160	)		(2,131	)		(31,981	)		(3,664	)
Balance at September 30, 2022	$	1,609		$	208		$	-		$	-		$	-


	September 30, 2022			July 29, 2022
Valuation date share price	$	6.37		$	8.43
Risk-free interest rate		4.1	%		2.7	%
Expected volatility		12.7	%		40.0	%
Expected dividends		0.0	%		0.0	%
Expected term (years)		4.83			5.00
Fair value (in dollars)	$	0.85		$	2.66


	December 31, 2021
Series B preferred stock fair value	$	9.39
Time to maturity (years)		3.5
Risk-free interest rate		1.04	%
Volatility		56	%
Exercise price	$	2.02


	December 31, 2021
Common stock fair value	$	8.98
Time to maturity (years)		5.0
Risk-free interest rate		1.26	%
Volatility		49	%
Exercise price	$	1.47


	Change for the Three Months Ended						Change for the Nine Months Ended						Change for the Three Months Ended						Change for the Six Months Ended
	September 30, 2022 vs September 30, 2021						September 30, 2022 vs September 30, 2021						June 30, 2023 vs June 30, 2022						June 30, 2023 vs June 30, 2022
(In thousands)	$			%			$			%			$			%			$			%
Revenue change driver:
Increase from 2021 Acquisitions	$	2,975			54	%	$	15,084			171	%
Impact of 2021 Acquisitions deferred revenues adjustment		1,036			(89	)%		(322	)		21	%
Impact of 2021 Acquisitions deferred revenue adjustment													$	737			100	%		1,730			100	%
Increase from 2022 Acquisitions		270			100	%		270			100	%		501			100	%		978			100	%
Increase from 2023 Acquisitions														1,771			100	%		2,921			100	%
Decrease from discontinued products		(276	)		(51	)%		(913	)		(51	)%		(126	)		(46	)%		(270	)		(45	)%
Increase from organic business		1,931			13	%		5,969			14	%		2,247			9	%		5,459			11	%
Revenues, net (total change)	$	5,936			29	%	$	20,088			38	%	$	5,130			21	%	$	10,818			23	%


Exhibit Number	Description	Incorporation by Reference (where a report is indicated below, that document has been previously filed with the SEC and the applicable exhibit is incorporated by reference thereto)
2.1	Agreement and Plan of Merger, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).	Annex A to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483).
2.2	First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022, by and among Duddell Street Acquisition Corp. (renamed “FiscalNote Holdings, Inc.”), Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (renamed “FiscalNote Intermediate Holdco, Inc.”).	Annex A-2 to the Proxy Statement/Prospectus filed on July 5, 2022 (File No.333-261483).
3.1	Certificate of Incorporation of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.).	Exhibit 3.1 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972)
3.2	Bylaws of FiscalNote Holdings, Inc. (f/k/a/ Duddell Street Acquisition Corp.).	Exhibit 3.2 to the Current Report on Form 8-K filed on August 2, 2022 (File No. 001-396972)
~~10.1~~4.1	~~Amended and Restated Registration Rights~~Warrant Agreement, dated as of ~~July 29, 2022,~~Octobe 28, 2020, by and among ~~FiscalNote Holdings, Inc. (f/k/a/~~ Duddell Street Acquisition ~~Corp.), Duddell Street Holdings Limited and the other Holders signatory thereto.~~Corp ad Continental Stock Transfer & Trust Company, as warrant agent.	Exhibit ~~10.5 to~~4.1 of DSAC’s Current Report on Form 8-K filed with the SEC on ~~August~~November 2, ~~2022~~2020 (File No. ~~001-396972)~~333-249207).
4.2	Form of Restricted Stock Agreement, dated as of March 25, 2022, pursuant to the Membership Interest Purchase Agreement, dated as of November 19, 2021, by and among FiscalNote, Inc., the unitholders listed on the Appendix 1 thereto and Legacy FiscalNote.	Exhibit 4.6 of DSAC’s Form S-4/A filed with the SEC on June 27,2022 (File No. 333-261483).
10.1	Sale and Purchase Agreement, dated as of January 27, 2023, by and between FiscalNote Holdings, Inc. and Dragonfly Eye Limited.	Exhibit 10.16 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed with the SEC on May 5, 2023 (File No. 333-267098).
10.2	Form of ~~Indemnification Agreements.~~8% Convertible Note	Exhibit ~~10.6~~10.17 to Post-Effective Amendment No. 1 to the ~~Current Report~~Registration Statement on Form ~~8-K~~S-1 filed with the SEC on ~~August 2, 2022~~May 5, 2023 (File No. ~~001-396972)~~333-267098).
10.3	Amendment No. 1 to Second Amended and ~~Restatement~~Restated Credit and Guaranty Agreement ~~dated as of July 29, 2022,~~ by and among FiscalNote, Inc., CQ-Roll Call, Inc., Capitol Advantage LLC, VoterVoice, L.L.C. and Sandhill Strategy LLC as Borrowers, the ~~other borrowers party thereto, the guarantors party thereto,~~Company, FiscalNote Intermediate Holdco, Inc., FiscalNote Holdings II, Inc., Fireside 21, LLC, Factsquared, LLC, The Oxford Analytica International Group, LLC, Oxford Analytica Inc., FiscalNote Boards LLC, Predata, Inc., Curate Solutions, Inc., Forge.AI, Inc., and Frontier Strategy Group LLC, as Guarantors, Runway Growth Finance Corp., as administrative agent and collateral agent, and ~~the lenders~~each lender party ~~thereto.~~thereto	Exhibit ~~10.7~~10.1 to the Current Report on Form 8-K filed on ~~August 2, 2022~~March 20, 2023 (File No. ~~001-396972)~~001-39672).
10.4	~~Amended and Restated Security Agreement, dated as~~Form of October 19, 2020, by and among the persons listed on the signature pages thereto as "Grantors" and those additional entities that thereafter become parties thereto by executing the form of Joinder attached thereto as Annex 1, and Runway Growth Credit Fund Inc. as administrative agent and collateral agent for the lenders.Warrant	Exhibit ~~10.8~~10.2 to Current Report on Form 8-K filed on March 20, 2023 (File No. 001-39672).
10.5	Executive Severance Plan, effective as of April 3, 2023.	Exhibit 10.1 to the Current Report on Form 8-K filed on ~~August 2, 2022~~April 6, 2023 (File No. ~~001-396972)~~001-39672).
~~10.5~~10.6	Joinder and Amendment No. 2 to Second Amended and Restated Credit and Guaranty Agreement by and among FiscalNote, ~~Holdings,~~ Inc. ~~2022 Long-Term Incentive Plan.~~, CQ-Roll Call, Inc., Capitol Advantage LLC, VoterVoice, L.L.C. and Sandhill Strategy LLC as Borrowers, Dragonfly Eye Limited and Oxford Analytica Limited as New Guarantors, Runway, as administrative agent and collateral agent, and each lender party thereto.	Exhibit ~~10.9~~10.1 to the Current Report on Form 8-K filed on ~~August 2, 2022 (File~~May 17,2023(File No. ~~001-396972)~~001-39672)
~~10.6~~10.7	~~FiscalNote Holdings, Inc. 2022 Employee Stock Purchase Plan.~~Exchange and Settlement Agreement (the “Exchange and Settlement Agreement”) with GPO FN Noteholder LLC	Exhibit ~~10.10~~10.1 to the Current Report on Form 8-K filed on ~~August 2, 2022~~July 3,2023 (File No. ~~001-396972)~~001-39672)
10.8	Amendment No. 3 to Second Amended and Restated Credit and Guaranty Agreement by and among FiscalNote, Inc., CQ-Roll Call, Inc., Capitol Advantage LLC, VoterVoice, L.L.C. and Sandhill Strategy LLC as Borrowers, the Company, FiscalNote Intermediate Holdco, Inc., FiscalNote Holdings II, Inc., Fireside 21, LLC, Factsquared, LLC, The Oxford Analytica International Group, LLC, Oxford Analytica Inc., FiscalNote Boards LLC, Predata, Inc., Curate Solutions, Inc., Forge.AI, Inc., Frontier Strategy Group LLC, Oxford Analytica Ltd. and Dragonfly Eye Ltd., as Guarantors, Runway Growth Finance Corp., as administrative agent and collateral agent, and each lender party thereto.	Filed with this report.
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).	Filed with this report.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).	Filed with this report.
32	Section 1350 Certifications.	Furnished with this report.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.	Submitted electronically with this report.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	Submitted electronically with this report.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	Submitted electronically with this report.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	Submitted electronically with this report.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	Submitted electronically with this report.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Submitted electronically with this report.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).	Submitted electronically with this report.


	FISCALNOTE HOLDINGS, INC.

Date: ~~November 14, 2022~~August 9, 2023	By:	/s/ Jon Slabaugh
		Name: Jon Slabaugh
		Title: Chief Financial Officer

Date: ~~November 14, 2022~~August 9, 2023	By:	/s/ Timothy Hwang
		Name: Timothy Hwang
		Title: Chief Executive Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company