NOTE

FiscalNote is a broken SPAC (July 2022 Business Combination) whose story has inverted. Revenue fell to $95.4M in FY2025, down 20.7% YoY, and the trend is now clearly negative: after peaking at $133M in FY2023, the top line has contracted two straight years. The one profitable year (FY2024 net income $9.5M) proved to be a one-off — FY2025 swung back to a -$65.2M loss, a -785.6% reversal, with a -51.9% operating margin and -68.4% net margin. Operating cash flow turned negative again at -$11.4M. This is not a business finding operating leverage; it is one losing customers and cash simultaneously. R&D was cut 25.4% to $9.6M, which starves the very 'AI-powered' product roadmap (PolicyNote, agentic API, prediction markets) management pitches in the MD&A.

The balance sheet is where the equity thesis dies. Total liabilities of $193M sit against just $62M of equity (3.12x leverage), and long-term debt of $126M dwarfs the $24.3M cash pile and the entire market cap. The MD&A's 'Significant Events' confirms the distress: in August 2025 the company retired ~$62.7M of prior senior debt and replaced it with a larger $75.0M term loan due 2029, plus $21.0M of YA convertible debentures issued for only $18.9M cash, and a $27.0M cash payment to redeem $30.0M of a GPO convertible note. That is refinancing to buy time, adding convertible instruments that dilute the tiny equity base — and shares outstanding already grew 22.6% in a year. Accumulated deficit stands at -$872M. Retained earnings that deeply negative against a shrinking revenue line means the equity value rests entirely on out-executing a debt load the company cannot currently service from operations.