Form 4: FiscalNote Director and 10% Owner Sells Shares to Cover Tax Obligations

FiscalNote Holdings, Inc. Director and 10% Owner Tim Hwang sold 40,998 shares of Class A Common Stock for $0.6442 per share to satisfy tax obligations related to RSU vesting, as part of a pre-arranged 10b5-1 trading plan.

Summary

• Tim Hwang, a Director and 10% Owner of FiscalNote Holdings, Inc. (NOTE), reported the sale of Class A Common Stock.
• On June 2, 2025, a total of 40,998 shares were sold in two separate transactions: 30,895 shares and 10,103 shares.
• The shares were sold at a uniform price of $0.6442 per share.
• These sales were conducted as "sell-to-cover" transactions to satisfy tax obligations arising from the vesting of 119,207 restricted stock units (89,832 and 29,375 RSUs, respectively).
• The transactions were executed pursuant to a Rule 10b5-1 trading plan adopted on August 11, 2023.
• Following these transactions, Tim Hwang beneficially owns 2,793,762 shares of Class A Common Stock indirectly through the Timothy T. Hwang Revocable Trust.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While insider selling can sometimes be viewed negatively, this specific transaction is a routine 'sell-to-cover' for tax obligations upon RSU vesting, executed under a pre-arranged 10b5-1 plan. This indicates a planned and non-discretionary sale, which is generally not a strong indicator of negative sentiment towards the company's future prospects by the insider.

Positives

• The transaction was conducted under a pre-arranged Rule 10b5-1 trading plan, indicating a planned and transparent sale rather than an immediate reaction to market conditions.
• The sale was specifically for tax obligations upon RSU vesting, which is a common and expected event for executives receiving equity compensation and does not necessarily reflect a negative outlook on the company.

Negatives

• A director and 10% owner selling shares, even for tax purposes, can sometimes be perceived negatively by the market as it reduces insider ownership.
• The sale price of $0.6442 per share is relatively low, potentially indicating a low valuation for the company's stock at the time of the transaction.

Risks

• Potential negative market perception due to insider selling, even if for tax purposes, which could lead to short-term stock price volatility.
• The low share price ($0.6442) at the time of the transaction could reflect underlying concerns about the company's performance or broader market conditions for FiscalNote.

Future Outlook

The document does not provide forward-looking statements or guidance regarding the company's future performance or strategic direction. It solely reports an insider transaction.

Industry Context

This Form 4 filing reports an insider transaction, which is a routine disclosure for publicly traded companies. It does not provide specific insights into broader industry trends for the legal tech or government affairs software sector. However, insider selling, even for tax purposes, is a common occurrence across industries for executives receiving equity compensation.

Comparison to Industry Standards

• This document reports a standard 'sell-to-cover' transaction, which is a common practice for executives to meet tax obligations upon the vesting of equity awards. This practice is consistent with compensation structures across many publicly traded companies, such as those in the software or information services industry like Thomson Reuters or Bloomberg Government, where equity compensation is a significant component of executive pay.
• The use of a Rule 10b5-1 plan is also a standard compliance measure to avoid accusations of insider trading, aligning with best practices in corporate governance for executive stock transactions.

Stakeholder Impact

• Shareholders: The sale of shares by a director and 10% owner, even for tax purposes, slightly reduces the insider's direct ownership stake, though the overall beneficial ownership remains substantial.
• Employees: The vesting of RSUs indicates that equity compensation is a part of the company's remuneration strategy, which can be a positive for employee retention and alignment with company performance.

Key Dates

Recommendation

Keywords

FiscalNote Holdings, NOTE, Form 4, Insider Trading, Stock Sale, Restricted Stock Units, RSU Vesting, Sell-to-Cover, 10b5-1 Plan, Tim Hwang, Director, 10% Owner