10-Q: FiscalNote Faces Financial Distress Amidst Delisting

FiscalNote Holdings, Inc. reported significant financial deterioration in its Q2 2026 Form 10-Q, marked by substantial net losses, a going concern warning, and a recent delisting from the NYSE, signaling severe operational and financial challenges.

Summary

• FiscalNote Holdings, Inc. reported a net loss of $27.8 million for the three months ended June 30, 2026, and $71.4 million for the six months ended June 30, 2026.
• Total revenues decreased by 15.8% to $19.6 million for the three months ended June 30, 2026, and by 22.0% to $39.6 million for the six months ended June 30, 2026, compared to the prior year periods.
• The company has a going concern warning due to insufficient cash flows, accumulated deficits, and the inability to meet financial covenants.
• FiscalNote's Class A common stock was delisted from the New York Stock Exchange on April 13, 2026.
• The company is actively pursuing plans to renegotiate debt, sell assets, and conduct equity offerings to address its liquidity concerns.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to significant financial distress, including substantial net losses, a going concern warning, and a recent stock exchange delisting, indicating severe operational and financial challenges.

Positives

• The company is actively pursuing multiple plans to address its liquidity and going concern issues, including debt renegotiation, asset sales, and equity offerings.
• Cost reduction measures have been implemented, leading to decreases in operating expenses such as cost of revenues, R&D, sales and marketing, and general and administrative expenses.
• Net Revenue Retention (NRR) was 98% for the three months ended June 30, 2026, indicating strong retention from existing customers despite overall revenue decline.

Negatives

• Significant net loss of $27.8 million for Q2 2026 and $71.4 million for the first six months of 2026.
• Total revenues declined by 15.8% to $19.6 million in Q2 2026 and by 22.0% to $39.6 million for the first six months of 2026.
• The company has a going concern warning, indicating substantial doubt about its ability to continue as a going concern within one year.
• Class A common stock delisted from the NYSE on April 13, 2026, leading to events of default on convertible notes.
• The company failed to meet its minimum Adjusted EBITDA covenant requirement for the twelve months ended June 30, 2026, under its 2025 Senior Term Loan.
• Goodwill impairment of $54.7 million was recorded in the first six months of 2026.
• Negative working capital balance of $135.0 million (excluding cash and short-term investments) as of June 30, 2026.
• Accumulated deficit of $943.6 million as of June 30, 2026.

Risks

• Risk of creditors enforcing their rights to call an event of default based on Class A Common Stock no longer being listed on NYSE.
• FiscalNote's ability to successfully execute its strategy to achieve and sustain organic growth, including developing and integrating platforms, attracting and retaining customers, and expanding product offerings.
• Future capital requirements and the ability to service debt obligations and maintain compliance with debt covenants.
• Potential for further declines in market capitalization and the impact on the company's ability to raise capital.
• The company's ability to meet its financial covenants under the 2025 Senior Term Loan, particularly after March 31, 2027, if not amended.
• The forbearance agreements with subordinated creditors expire on August 21, 2026, after which defaults may be triggered.
• The company's ability to successfully implement its plans to renegotiate debt, sell assets, or conduct equity offerings.

Future Outlook

The company is focused on cross-selling and upselling to existing clients, expanding its client base with a focus on enterprise and government customers, and entering adjacent markets like political prediction markets. Investments are planned for innovative products and go-to-market strategies. Divestitures of non-core business lines may also occur. However, the company faces significant liquidity challenges and potential defaults on its debt obligations.

Management Comments

• Management has identified plans to alleviate substantial doubt about the company's ability to continue as a going concern, including renegotiating debt, pursuing asset sales, and conducting equity offerings.
• Management believes its cost-saving measures provide flexibility to fund future operations and a path toward generating positive cash flows.
• Management will continue evaluating for additional rationalization opportunities to further reduce complexity and operating expenses.

Industry Context

StockSavvy.ai notes that FiscalNote operates in the policy and regulatory intelligence sector, which is increasingly leveraging AI. However, the company's severe financial distress, including its delisting and going concern warning, overshadows its technological positioning and suggests significant challenges in executing its strategy amidst broader industry trends.

Comparison to Industry Standards

• The company's revenue decline of 22.0% for the first six months of 2026 is significantly worse than the typical growth expected in the AI-driven policy intelligence sector.
• The substantial goodwill impairment of $54.7 million in the first six months of 2026 indicates a significant overvaluation of past acquisitions or a severe decline in the value of its reporting units, which is not a standard occurrence for healthy companies in the sector.
• The going concern warning and delisting from NYSE are critical indicators of financial instability, a situation not typically observed in established or growing companies within the competitive regulatory technology market.

Management Changes

Legal Proceedings

• The company is not currently a party to any litigation or regulatory proceeding that it expects to have a material adverse effect on its business, results of operations, financial conditions or cash flows.

Related Party Transactions

• Income received from sublease agreement with Nitra, where the Company's Co-Founder and Executive Chairman is also a board member at Nitra. Income was $58,000 for Q2 2026 and $93,000 for the first six months of 2026.

Stakeholder Impact

• Shareholders: Significant dilution risk from potential equity offerings; potential loss of investment due to financial distress and delisting.
• Creditors: Risk of default on debt obligations due to missed covenants and potential acceleration of repayment.
• Employees: Impacted by workforce reductions and uncertainty regarding the company's future.
• Suppliers: Potential for delayed payments or reduced business due to financial instability.

Next Steps

• Renegotiating or amending existing debt obligations.
• Pursuing the sale of assets or business units.
• Conducting one or more equity offerings.
• Continuing to implement cost-saving measures and streamline operations.
• Evaluating opportunities for divestitures of non-core businesses.
• Investing in building innovative products and attracting new customers.

Key Dates

Recommendation

The severe financial distress, including a going concern warning, substantial net losses, and delisting from the NYSE, coupled with the failure to meet debt covenants, presents an extremely high-risk investment profile. The company's ability to continue as a going concern is in doubt, making it a strong sell.

Keywords

FiscalNote, Form 10-Q, Quarterly Report, Financial Statements, Results of Operations, Going Concern, Delisting, Debt Covenants