FiscalNote(NOTE) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenues for Q3 2023 were $34,009,000, an increase of 17.5$29,071,000 in Q3 2022[12] - Subscription revenues reached $30,057,000, up from$26,075,000, reflecting a growth of 15.2% year-over-year[12] - Operating loss for Q3 2023 was $13,461,000, a significant improvement from the loss of$44,126,000 in Q3 2022[12] - Net loss for Q3 2023 was $14,467,000, compared to a net loss of$109,002,000 in Q3 2022[12] - For the nine months ended September 30, 2023, the net loss was $64.713 million, a significant improvement from a net loss of$175.713 million in the same period of 2022, representing a reduction of 63.2%[21] - For the nine months ended September 30, 2023, the company reported a net loss of $64,713 thousand, down from$175,713 thousand in the same period of 2022[163] - The basic net loss per share for Q3 2023 was $(0.11), compared to$(1.39) in Q3 2022, indicating a reduction in losses per share[163] Assets and Liabilities - Total assets decreased to $400,863,000 as of September 30, 2023, down from$433,157,000 at the end of 2022[11] - Cash and cash equivalents dropped to $16,489,000 from$60,388,000 at the end of 2022, indicating a decrease of 72.7%[11] - Long-term debt increased to $213,157,000 from$161,980,000, representing a rise of 31.6%[11] - Total stockholders' equity fell to $83,569,000 from$144,690,000, a decline of 42.2%[11] - As of September 30, 2023, the company's cash, cash equivalents, restricted cash, and short-term investments totaled $24.4 million, a decrease from$61.2 million at December 31, 2022[34] - The company reported a negative working capital balance of $41.4 million (excluding cash and short-term investments) and an accumulated deficit of$765.7 million as of September 30, 2023[34] Revenue and Deferred Revenue - The company reported a deferred revenue increase of $6.141 million, compared to an increase of$8.581 million in the prior year, indicating a slowdown in revenue recognition[21] - Subscription revenue for the nine months ended September 30, 2023, was $87.986 million, up from$73.186 million in 2022, indicating a year-over-year increase of about 20%[53] - Revenue from North America for the three months ended September 30, 2023, was $27.025 million, compared to$25.139 million in 2022, reflecting an increase of approximately 7.5%[54] - The balance of deferred revenue increased to $46,706 million as of September 30, 2023, up from$36,487 million at the end of 2022, with new deferrals of $39,551 million recognized in the current period[58] Cash Flow and Expenditures - The company reported net cash used in operating activities of$31.940 million, an improvement compared to $57.499 million in the prior year, indicating a 44.4$5.957 million, down from $8.859 million in 2022, reflecting a 32.5$18.212 million, down from $30.868 million in the previous year, a decrease of 41.0$25.2 million on January 27, 2023, which included cash, stock, convertible notes, and contingent payments[203] - The acquisition of Dragonfly includes an additional earnout payment of up to $4.3 million based on revenue targets for 2023[64] - The acquisition of Aicel Technologies was valued at$8,678 million, consisting of 859,016 Class A common shares and contingent consideration[69] - The company plans to invest in innovative products and complementary businesses to expand its leadership in the legal and regulatory information market[207] Stock and Equity - The company issued Class A common stock upon vesting of restricted share units amounting to 313,090 shares during the quarter[17] - The total number of shares outstanding increased to 128,895,749 as of September 30, 2023[17] - The balance of common stock as of June 30, 2023, was 128,575,130 shares, indicating a stable share count[17] - The Company had 120,604,828 shares of Class A common stock issued and outstanding as of September 30, 2023[132] Debt and Interest - The Company’s total debt as of September 30, 2023, is $213,157, an increase from$161,980 as of December 31, 2022, indicating a growth of approximately 31.6%[97] - The New Senior Term Loan has a principal amount of $157,825 as of September 30, 2023, with an annual interest rate based on the greater of Prime Rate plus 5.0$15,341 in cash interest on the New Senior Term Loan, reflecting a significant financial obligation[102] - The Company incurred total interest expense related to the New GPO Note of $868 million for the three and nine months ended September 30, 2023[110] Legal and Compliance - The company has expressed substantial doubt about its ability to continue as a going concern within one year from the date of the filing due to potential non-compliance with financial covenants[31] - Legal fees are recognized as incurred, and no loss contingency amounts are included in the financial statements[189] Market Strategy - The company is focused on leveraging AI technology to provide actionable legal and policy insights, enhancing its market intelligence offerings[23] - The company aims to deepen offerings for regulated industries and execute on its acquisition strategy to drive growth[206]