Filed pursuant to Rule 424(b)(3)
Registration No. 333-283416
PROSPECTUS
FISCALNOTE HOLDINGS, INC.
Up to 10,532,463 Shares of Class A Common Stock
This prospectus relates to the resale or other disposition from time to time by the selling stockholders named in this prospectus (together with any of such stockholders’ transferees, pledgees, donees or successors) (each, a “selling stockholder” and, together, the “selling stockholders”) of up to an aggregate of 10,532,463 shares of our Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), including up to 7,333,334 shares of the Class A Common Stock issuable to a selling stockholder pursuant to the terms of a convertible note in an aggregate principal amount of approximately $5.5 million.
We are registering the securities for resale pursuant to (i) the registration rights agreement (the “Registration Rights Agreement”) entered into by and between the Company and EGT 10, LLC (“EGT”) on November 12, 2024 and (ii) the amendment to the engagement letter (the “Northland Amendment Letter”) entered into by and between the Company and Northland Securities, Inc. (“Northland”) on November 12, 2024. Our registration of the securities covered by this prospectus does not mean that the selling stockholders will offer or sell any of the shares of Class A Common Stock registered hereby. The selling stockholders may offer, sell or distribute all or a portion of the shares of Class A Common Stock registered hereby publicly or through private transactions at prevailing market prices or at negotiated prices. We provide more information about how the selling stockholders may sell the shares of Class A Common Stock in the section entitled “Plan of Distribution.”
We will not receive any of the proceeds from any sale of our Class A Common Stock by the selling stockholders.
The information in this prospectus is accurate as of the date on the front cover. Information incorporated by reference into this prospectus is accurate as of the date of the document from which the information is incorporated. You should not assume that information contained in or incorporated by reference into this prospectus is accurate as of any other date.
Our Class A Common Stock is currently listed on the New York Stock Exchange (“NYSE”) and trades under the symbol “NOTE.” On November 21, 2024, the closing price of our Class A Common Stock was $0.87 per share.
We are an “emerging growth company” and a “smaller reporting company” under the federal securities laws and are subject to reduced public company reporting requirements.
INVESTING IN OUR SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE “RISK FACTORS” SECTION BEGINNING ON PAGE 3 OF THIS PROSPECTUS AND IN ANY PROSPECTUS SUPPLEMENT, AND IN ANY OTHER DOCUMENT INCORPORATED BY REFERENCE HEREIN OR THEREIN.
You should rely only on the information contained in or incorporated by reference into this prospectus. No one has been authorized to provide you with different information.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this prospectus or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is December 4, 2024
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This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using the “shelf” registration process. Under this shelf registration process, the selling stockholders may, from time to time, sell the securities offered by them described in this prospectus. We will not receive any proceeds from the sale by such selling stockholders of the securities offered by them described in this prospectus.
Neither we nor the selling stockholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the selling stockholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the selling stockholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus entitled “Where You Can Find More Information” and “Incorporation of Certain Information by Reference.” You should assume that the information appearing in this prospectus and any prospectus supplement is accurate as of the date on the respective covers of such documents, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, such prospectus supplement or any sale of a security, unless we indicate otherwise.
Unless the context indicates otherwise, references in this prospectus to “the Company,” “FiscalNote,” “we,” “us,” “our” and similar terms refer to FiscalNote Holdings, Inc. and its consolidated subsidiaries (including Legacy FiscalNote (as defined below)). References to “DSAC” refer to our predecessor company prior to the consummation of the Business Combination (as defined below).
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference may include forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of FiscalNote. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “forecasts”, “may”, “will”, “should”, “seeks”, “plans”, “scheduled”, “anticipates” or “intends” or similar expressions. The forward-looking statements are based on projections prepared by, and are the responsibility of, our management. RSM US LLP, our independent auditor, has not examined, compiled or otherwise applied procedures with respect to the accompanying forward-looking financial information presented herein and, accordingly, expresses no opinion or any other form of assurance on it. Our audited financial statements for the years ended December 31, 2023 and 2022, incorporated by reference into this prospectus, relate only to our historical financial information. It does not extend to the forward-looking information and should not be read as if it does. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:
| • | our ability to achieve and sustain organic growth; |
| • | changes in our strategy, future operations, financial position, estimated revenue and losses, forecasts, projected costs, prospects and plans; |
| • | our future capital requirements; |
| • | our ability to service our repayment obligations and maintain compliance with covenants and restrictions under our existing debt agreements; |
| • | demand for our services and the drivers of that demand; |
| • | our ability to provide highly useful, reliable, secure and innovative products and services to our customers; |
| • | our ability to attract new customers, retain existing customers, expand our products and service offerings with existing customers, expand into geographic markets or identify areas of higher growth; |
| • | any cost reduction initiatives undertaken by us; |
| • | our ability to successfully integrate acquired businesses and services, and subsequently grow acquired businesses; |
| • | risks associated with international operations, including compliance complexity and costs, increased exposure to fluctuations in currency exchange rates, political, social and economic instability, and supply chain disruptions; |
| • | our ability to develop, enhance, and integrate our existing platforms, products, and services; |
| • | our estimated total addressable market and other industry and performance projections; |
| • | our reliance on third-party systems and data, our ability to integrate such systems and data with our solutions and our potential inability to continue to support integration; |
| • | potential technical disruptions, cyberattacks, security, privacy or data breaches or other technical or security incidents that affect our networks or systems or those of our service providers; |
| • | our ability to obtain and maintain accurate, comprehensive, or reliable data to support our products and services; |
| • | our ability to introduce new features, integrations, capabilities, and enhancements to our products and services; |
| • | our ability to maintain and improve our methods and technologies, and anticipate new methods or technologies, for data collection, organization, and analysis to support our products and services; |
| • | competition and competitive pressures in the markets in which we operate, including larger well-funded companies shifting their existing business models to become more competitive with us; |
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| • | our ability to protect and maintain our brands; |
| • | our ability to comply with laws and regulations in connection with selling products and services to U.S. and foreign governments and other highly regulated industries; |
| • | our ability to retain or recruit key personnel; |
| • | our ability to effectively maintain and grow our research and development team and conduct research and development; |
| • | our ability to adapt our products and services for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to artificial intelligence, machine learning, data privacy and government contracts; |
| • | adverse general economic and market conditions reducing spending on our products and services; |
| • | the outcome of any known and unknown litigation and regulatory proceedings; |
| • | our ability to successfully establish and maintain public company-quality internal control over financial reporting; |
| • | the ability to adequately protect our intellectual property rights; |
| • | the possibility that the strategic review undertaken by the Board of Directors does not result in any transaction or other outcome or that any outcome is disruptive to operations and impacts financial performance; and |
| • | other factors detailed under the section entitled “Risk Factors.” |
These and other factors that could cause actual results to differ from those implied by the forward-looking statements contained or incorporated by reference in this prospectus are more fully described under the heading “Risk Factors” and elsewhere in this prospectus. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this prospectus describe additional factors that could adversely affect our business, financial condition or results of operations. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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This summary highlights selected information included in this prospectus and does not contain all of the information that may be important to you in making an investment decision. This summary is qualified in its entirety by the more detailed information included in this prospectus. Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including the information under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements included elsewhere in this prospectus.
The Company
We are a leading technology provider of global policy and market intelligence. We deliver critical, actionable legal and policy insights in a rapidly evolving political, regulatory and macroeconomic environment. By combining artificial intelligence (AI) technology, other technologies with analytics, workflow tools, and expert peer insights, we empower customers to manage policy, address regulatory developments, and mitigate global risk. We ingest unstructured legislative and regulatory data, and employ AI and data science to deliver structured, relevant and actionable information in order to facilitate key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. We deliver that intelligence through our suite of public policy and issues management products, including the FiscalNote core product, CQ Federal, EU Issue Tracker and Curate. Our products incorporate workflow tools that enable our clients to monitor, manage, collaborate and efficiently organize for action on the issues that matter most to them, integrating global policy and market intelligence seamlessly into their daily activities. In addition, we offer our customers expert and customized analysis through our geopolitical and market intelligence businesses, including FrontierView, a market intelligence advisory firm for global business professionals, Oxford Analytica, which provides strategic geopolitical intelligence analysis of world events, and Dragonfly Eye, a geopolitical and security intelligence service. The FiscalNote portfolio also includes advocacy and constituent management services that connect citizens with their government representatives and vice versa, as well as AI products and services.
For more information, see the section entitled “Risk Factors.”
Background
The Company was originally known as DSAC.
DSAC, a Cayman Islands exempted company, previously entered into the Business Combination Agreement (as defined below).
On July 28, 2022, DSAC filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of domestication with the Secretary of State of the State of Delaware, pursuant to which DSAC’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware (the “Domestication”). As used herein, “New DSAC” refers to DSAC after the Domestication but prior to the consummation of the Business Combination (as defined below).
On July 29, 2022, New DSAC, now known as FiscalNote Holdings, Inc., consummated a business combination pursuant to that certain Agreement and Plan of Merger, dated as of November 7, 2021, by and among DSAC, Grassroots Merger Sub Inc., a wholly owned subsidiary of DSAC (“Merger Sub”), and FiscalNote Intermediate Holdco, Inc. (formerly FiscalNote Holdings, Inc.) (“Legacy FiscalNote”) (as amended, supplemented and/or restated from time to time, including by the First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022, the “Business Combination Agreement”). On the terms and subject to the conditions set forth in the Business Combination Agreement, Merger Sub merged with and into Legacy FiscalNote, with Legacy FiscalNote surviving the merger as a wholly owned subsidiary of New DSAC (the “Business Combination”). In addition, in connection with the consummation of the Business Combination, New DSAC changed its name to “FiscalNote Holdings, Inc.”
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Effective upon consummation of the Business Combination, we adopted a dual-class stock structure, each as described in the section of this prospectus titled “Description of Securities.” Shares of FiscalNote Class B Common Stock have the same economic terms as shares of FiscalNote Class A Common Stock, except that shares of FiscalNote Class A Common Stock have one vote per share and shares of FiscalNote Class B Common Stock have twenty-five (25) votes per share.
Stock Exchange Listing
Our Class A Common Stock is currently listed on the New York Stock Exchange (“NYSE”) and trades under the symbol “NOTE.” On November 21, 2024, the closing price of our Class A Common Stock was $0.87 per share.
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of FiscalNote’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of DSAC’s initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
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Investing in our securities involves a high degree of risk. Before making an investment decision, in addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should consider carefully the risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in any subsequent Quarterly Report on Form 10-Q, together with all of the other information contained in this prospectus and any applicable prospectus supplement, and under similar headings in other documents that are incorporated by reference herein or therein. Our business, operating results, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, operating results, financial condition and prospects could be adversely affected. In that event, the market price of our Securities could decline, and you could lose part or all of your investment.
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All of the Class A Common Stock offered by the selling stockholders pursuant to this prospectus will be sold by the selling stockholders for their respective accounts. We will not receive any of the proceeds from these sales. We will bear the costs associated with the sale of any shares of Class A Common Stock under this prospectus by the selling stockholders, other than underwriting fees, discounts and commissions; provided, that we will pay the ordinary brokerage commissions of EGT in connection with the sale of its shares.
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This prospectus relates to the resale from time to time by the selling stockholders of up to an aggregate of 10,532,463 shares of Class A Common Stock, subject to any appropriate adjustment as a result of any stock dividend, stock split or distribution, or in connection with a combination of shares, and any security into which such shares of Class A Common Stock shall have been converted or exchanged in connection with a recapitalization, reorganization, reclassification, merger, consolidation, exchange, distribution or otherwise.
We cannot advise you as to whether the selling stockholders will sell any or all of the 10,532,463 shares of Class A Common Stock. In particular, the selling stockholders identified below may have sold, transferred or otherwise disposed of all or a portion of its securities after the date on which they provided us with information regarding their securities in transactions exempt from registration under the Securities Act.
The following table sets forth certain information provided by or on behalf of the selling stockholders as of November 21, 2024, concerning the shares of Class A Common Stock that may be offered from time to time by each such selling stockholder with this prospectus. See “Plan of Distribution.” In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, the shares of Class A Common Stock they hold in transactions exempt from the registration requirements of the Securities Act after the date on which the selling stockholders provided the information set forth on the table below. For the purposes of the following table, we have assumed that the selling stockholders will have sold all of the securities covered by this prospectus upon the completion of the offering. The percentage ownership of voting securities in the following table is based on 141,216,180 shares of common stock outstanding as of November 4, 2024, consisting of 132,925,259 shares of our Class A Common Stock and 8,290,921 shares of our Class B Common Stock outstanding as of that date.
| Number Beneficially Owned Prior to Offering | Number of Shares of Class A Common Stock Being Offered | Number Beneficially Owned After Offering | % of Common Stock | % of Total Voting Power After this Offering | ||||||||||||||||||||||||
| Name of Selling Stockholder | Class A | Class B | Class A | Class B | ||||||||||||||||||||||||
EGT 10, LLC(1) | 2,549,129 | (2) | — | 9,882,463 | (3) | — | — | — | — | |||||||||||||||||||
Northland Securities, Inc. (4) | 650,000 | (5) | — | 650,000 | — | — | — | — | ||||||||||||||||||||
| (1) | EGT is an investment vehicle managed by Era Global Technologies LLC (“Era Global”). Jasper Lau is the manager of Era Global and may be deemed to have voting and dispositive power over the shares held by EGT. The business address of EGT is 30 East 23rd Street, 12th Floor, New York, NY 10016. |
| (2) | Pursuant to the Securities Purchase Agreement (as defined below), EGT’s (together with Era Global) beneficial ownership of the Class A Common Stock shall not exceed 4.99% of the total number of shares of Class A Common Stock outstanding (the “Ownership Limitation”), however, EGT may elect to increase the Ownership Limitation to 9.99% of the total number of shares of Class A Common Stock outstanding by providing 61 days’ written notice to the Company. The “Number Beneficially Owned Prior to Offering” column excludes an estimated 7,333,334 Underlying Shares (as defined below), none of which are issuable within 60 days of November 21, 2024. In addition, the Company may not issue any Underlying Shares or Additional Shares (as defined below), if any, if EGT’s beneficial ownership would exceed 19.99% of the number of shares of Class A Common Stock and Class B Common Stock, in the aggregate, outstanding prior to the Issuance Date (as defined below), without first obtaining the approval of the Company’s stockholders as required by Section 312.03(c) of the NYSE Listed Company Manual. |
| (3) | Includes an estimated 7,333,334 Underlying Shares based on a $0.75 price per share of Class A Common Stock. |
| (4) | Northland is a registered broker-dealer. The business address of Northland is 150 South Fifth Street, Suite 3300, Minneapolis, MN 55402. Dustin Alden is the Chief Financial Officer of Northland and may be deemed to have voting and dispositive power over the shares held by Northland. |
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| (5) | These shares of Class A Common Stock (the “Brokerage Fee Shares”) were issued to Northland to cover the estimated brokerage costs associated with liquidating (i) the Success Fee Shares and any Underlying Shares issued pursuant to the Optional Conversion Right (each as defined below) and (ii) the shares of Class A Common Stock previously issued to EGT-East in connection with the EGT-East Purchase Agreement (each as defined below). |
Listing of FiscalNote Class A Common Stock
Our Class A Common Stock is currently listed on the NYSE and trades under the symbol “NOTE”. On November 21, 2024, the closing price of our Class A Common Stock was $0.87 per share.
Material Relationships and Transactions with the Selling Stockholders
Transactions with EGT
Convertible Note and Securities Purchase Agreement
On November 12, 2024 (the “Issuance Date”), the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with EGT pursuant to which the Company issued a senior subordinated convertible note (the “Convertible Note”) in an aggregate principal amount of $5.5 million to EGT (the “Principal Amount”). The Convertible Note matures on November 12, 2027 (the “Maturity Date”).
Unless earlier converted or repaid, commencing on May 12, 2024 (the “Initial Conversion Date”), the Convertible Note will bear cash interest at a rate equal to the applicable federal rate published by the Internal Revenue Service. The Convertible Note is contractually subordinated to the Company’s obligations under its senior secured indebtedness, and accordingly the Company’s right to make certain cash payments in connection therewith is limited by the terms of such subordination agreement (the “Subordination Agreement”). Commencing on the Initial Conversion Date, EGT may convert the Convertible Note into shares of Class A Common Stock (the “Underlying Shares”) based on the 30-day volume-weighted average price of the Class A Common Stock (the “30-day VWAP”) prior to the conversion. In addition, the Company may elect to convert all or a portion of the Convertible Note into the Underlying Shares (the “Optional Conversion Right”) under certain circumstances.
Pursuant to the Purchase Agreement, on the Issuance Date, the Company also issued, as a success fee, 2,549,129 shares of Class A Common Stock to EGT (the “Success Fee Shares”). EGT is not permitted to sell the Success Fee Shares before the Initial Conversion Date; provided, however, that if the Company elects to convert any portion of the Convertible Note into Underlying Shares pursuant to its Optional Conversion Right, then EGT may sell a pro-rata portion of the Success Fee Shares.
The Purchase Agreement also requires the Company to issue additional shares of Class A Common Stock (“Additional Shares”) to EGT if EGT sells the Success Fee Shares and Underlying Shares within 12 months after the earlier of (i) issuance of all Underlying Shares issued pursuant to the Optional Conversion Right or (ii) the Initial Conversion Date (the “Sell-Off Period”), to the extent such sales of the Success Fee Shares and the Underlying Shares during the Sell-Off Period do not generate aggregate cash proceeds to EGT that equal or exceed $8.25 million. In the event EGT sells the Underlying Shares, Success Fee Shares and/or any Additional Shares for an amount equal to $8.25 million, EGT shall be required to return any remaining Underlying Shares, Success Fee Shares and/or Additional Shares, as applicable, and cancel any remaining amount of the Principal Amount owed by the Company.
If the Company were to complete a change of control, merger, combination or similar transaction (a “Fundamental Change”) prior to the expiration of the Sell-Off Period, the Company’s obligation to issue Additional Shares shall be terminated and EGT shall have the right to accelerate the maturity date of the Convertible Note. In addition, the Company, in lieu of its obligation to issue Additional Shares, shall be required to repurchase the Success Fee Shares then-held by EGT for cash consideration equal to $2.75 million minus the net cash proceeds received by EGT from any prior sales of the Success Fee Shares in the event that any of the following occur: (i) a Fundamental Change results in the Company’s shares not being listed for trading on a national stock exchange, (ii) the Company were to repay the Convertible Note prior to the Maturity Date and prior to the expiration of the Sell-Off Period, or (iii) the Company were to file for bankruptcy or experience a similar insolvency event prior to the expiration of the Sell-Off Period.
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Registration Rights Agreement
On the Issuance Date, in connection with the Purchase Agreement, the Company also entered into a registration rights agreement with EGT (the “Registration Rights Agreement”), requiring the Company to register for resale the Underlying Shares and Success Fee Shares by filing with the SEC an initial resale registration statement under the Securities Act. Additionally, the Company is required to register for resale the Additional Shares, if any, by filing with the SEC a second resale registration statement within seven days of the issuance of any Additional Shares.
AI Co-Pilot Partnership Agreement
On December 8, 2023 (the “Prior Issuance Date”), the Company entered into an artificial intelligence copilot agreement (the “Co-Pilot Agreement”) with FiscalNote, Inc. and EGT-East, LLC (“EGT-East”), an investment vehicle managed by Era Global. Pursuant to the Co-Pilot Agreement, on April 11, 2024, the Company issued 1,991,960 shares of Class A Common Stock to EGT-East.
EGT-East Convertible Note and Securities Purchase Agreement
In connection with entering into the Co-Pilot Agreement, on the Prior Issuance Date, the Company entered into a securities purchase agreement (the “EGT-East Purchase Agreement”) with EGT-East, pursuant to which the Company issued approximately $6.3 million in aggregate principal amount of senior subordinated convertible notes to EGT-East (the “EGT-East Convertible Notes”).
As of June 25, 2024, the EGT-East Convertible Notes had fully converted into shares of Class A Common Stock and the Company had no remaining obligations under the EGT-East Convertible Notes or the EGT-East Purchase Agreement.
EGT-East Registration Rights Agreement
On the Prior Issuance Date, in connection with the EGT-East Purchase Agreement and the Co-Pilot Agreement, the Company also entered into a registration rights agreement with EGT-East (the “EGT-East Registration Rights Agreement”), requiring the Company to register for resale the shares of Class A Common Stock issued or issuable to EGT-East under the Co-Pilot Agreement, the EGT-East Convertible Notes and the EGT-East Purchase Agreement. The Company has satisfied such obligations under the EGT-East Registration Rights Agreement pursuant to the resale registration statement on Form S-3, as amended, which became effective on April 18, 2024.
Transactions with Northland
On August 8, 2024, the Company entered into an engagement letter with Northland (the “Northland Letter”) pursuant to which the Company engaged Northland to serve as a placement agent in connection with any future offerings of the Company’s securities. The fees for Northland’s services pursuant to the Northland Letter are contingent upon the type of offering. The Northland Letter also confirmed the Company’s obligation to pay for brokerage commissions of EGT-East in selling its shares of Class A Common Stock received pursuant to the Co-Pilot Agreement, EGT-East Purchase Agreement and EGT-East Convertible Notes. On November 12, 2024, the Company entered into the Northland Amendment Letter to issue, and agree to register for resale, the Brokerage Fee Shares. The Northland Amendment Letter also confirmed the Company’s obligation to pay for brokerage commissions of EGT in selling its shares of Class A Common Stock received pursuant to the Purchase Agreement and the Convertible Note.
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We are registering 10,532,463 shares of Class A Common Stock to permit the resale of these shares of Class A Common Stock by the selling stockholders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of Class A Common Stock. We will, or will procure to, bear all fees and expenses incident to our obligation to register the shares of Class A Common Stock.
The selling stockholders may sell all or a portion of the shares of Class A Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If any selling stockholder sells its shares of Class A Common Stock through underwriters, such selling stockholder will be responsible for any underwriting discounts. If any selling stockholder sells its shares of Class A Common Stock through broker-dealers, such selling stockholder will be responsible for any brokerage commissions; provided, however, we have agreed to reimburse EGT for the Brokerage Commission (as defined below). The shares of Class A Common Stock may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling stockholders may use any one or more of the following methods when selling shares:
| • | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| • | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| • | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| • | an over-the-counter distribution in accordance with the rules of the applicable exchange; |
| • | privately negotiated transactions; |
| • | settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
| • | to or through underwriters or broker-dealers; |
| • | through trading plans entered into by the selling stockholders, including any trading plans pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their shares on the basis of parameters described in such trading plans; |
| • | distribution to employees, members, partners or stockholders of the selling stockholders; |
| • | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
| • | in privately negotiated transactions; |
| • | through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
| • | a combination of any such methods of sale; or |
| • | any other method permitted pursuant to applicable law. |
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The selling stockholders also may resell all or a portion of the shares of Class A Common Stock in open market transactions in reliance upon Rule 144 under the Securities Act as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.
Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. If the selling stockholders effect such transactions by selling shares of Class A Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of Class A Common Stock for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2121.01.
If at the time of any offering made under this prospectus a member of FINRA participating in the offering has a “conflict of interest” as defined in FINRA Rule 5121 (“Rule 5121”), that offering will be conducted in accordance with the relevant provisions of Rule 5121.
The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of Class A Common Stock owned by them and, if any such selling stockholder defaults in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Class A Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of Class A Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of Class A Common Stock from time to time under the prospectus or an amendment to the registration statement or supplement to the prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the transferee or other successors in interest as selling stockholders under the prospectus, as appropriate.
The selling stockholders and any broker-dealer or agents participating in the distribution of the shares of Class A Common Stock may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales; Northland is a registered broker-dealer. Northland may be deemed an underwriter with respect to the Brokerage Fee Shares, as well as the any shares of EGT sold pursuant to this prospectus. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Any selling stockholder who is an “underwriter” within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
Northland is a registered broker-dealer and may engage in sales of up to 650,000 shares of Class A Common Stock for its own account pursuant to this prospectus, a portion of which such shares were acquired as compensation for the Brokerage Services (as defined below) in satisfaction of the Brokerage Commission (as defined below). EGT has informed the Company that it is neither a registered broker-dealer, nor an affiliate of a broker-dealer. Each of the selling stockholders has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the shares of Class A Common Stock; provided, that Northland will be engaged by EGT to sell EGT’s shares on an ordinary brokerage basis (the “Brokerage Services”) for which it will receive compensation equal to 3.0% of the gross proceeds raised from the sale of the shares (the “Brokerage Commission”). In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed eight percent (8.0%).
Under the securities laws of some U.S. states, the shares of Class A Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some U.S. states the shares of Class A Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
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There can be no assurance that the selling stockholders will sell any or all of the shares of Class A Common Stock registered pursuant to the registration statement, of which this prospectus forms a part.
The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of Class A Common Stock by the selling stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Class A Common Stock to engage in market-making activities with respect to the Class A Common Stock. All of the foregoing may affect the marketability of the Class A Common Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Class A Common Stock.
In addition, we will make copies of this prospectus available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
We will pay all expenses of the registration of the shares of Class A Common Stock pursuant to the Registration Rights Agreement and the Northland Amendment Letter, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, each selling stockholder shall pay all underwriting discounts and selling commissions, if any, and any related legal expenses incurred by it; provided further, we have agreed to reimburse EGT for the Brokerage Commission. We will indemnify EGT against certain liabilities, including some liabilities under the Securities Act, in accordance with the Registration Rights Agreement, or EGT will be entitled to contribution. We may be indemnified by EGT against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by EGT specifically for use in this prospectus, in accordance with the Registration Rights Agreement, or we may be entitled to contribution.
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Your rights as stockholders are governed by Delaware law and by our certificate of incorporation (our “Charter”) and bylaws (our “Bylaws”). The following description of the material terms of our securities, including our classes of common stock, reflects the state of affairs since completion of the Business Combination. We urge you to read the applicable provisions of Delaware law and the Charter and the Bylaws carefully and in their entirety because they describe your rights as a holder of shares of our Class A Common Stock. Capitalized terms used in this “Description of Securities” but not defined in this registration statement shall have the meanings ascribed to them in the Charter or the Bylaws, as applicable.
Authorized and Outstanding Capital Stock
Our Charter authorizes the issuance of 1,809,000,000 shares of all classes of our capital stock, consisting of:
| • | 1,700,000,000 shares of Class A Common Stock, par value $0.0001 per share; |
| • | 9,000,000 shares of Class B Common Stock, par value $0.0001 per share; and |
| • | 100,000,000 shares of preferred stock, par value $0.0001 per share. |
As of November 4, 2024, there were outstanding approximately 132,925,259 shares of our Class A Common Stock, approximately 8,290,921 shares of our Class B Common Stock, and approximately 15,358,964 Warrants to purchase 24,135,506 shares of our Class A Common Stock.
Class A Common Stock
We have two classes of authorized common stock: our Class A Common Stock and our Class B Common Stock. Holders of our Class A Common Stock and our Class B Common Stock generally have the same rights except for voting and conversion.
Voting Rights
Class A Common Stock
Holders of our Class A Common Stock are entitled to one (1) vote for each share of Class A Common Stock held of record by such holder at all meetings of our stockholders and on all matters properly submitted to a vote of our stockholders generally.
Class B Common Stock
Holders of our Class B Common Stock are entitled to twenty-five (25) votes for each share of Class B Common Stock held of record by such holder at all meetings of our stockholders and on all matters properly submitted to a vote of our stockholders generally.
Stockholder Votes
Holders of our common stock generally will vote together as a single class on all matters submitted to a vote of our stockholders (including the election and removal of directors), unless otherwise provided in our Charter or required by applicable law. Any action or matter submitted to a vote of our stockholders will be approved if the number of votes cast in favor of the action or matter exceeds the number of votes cast in opposition to the action or matter, except that our directors will be elected by a plurality of the votes cast and that an affirmative vote of the holders of two-thirds (2/3) of the outstanding shares of our Class A Common Stock and Class B Common Stock, voting together as a single class, is required to amend our Charter or approve any change of control transaction. Our stockholders will not be entitled to cumulate their votes in the election of our directors.
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Delaware law could require holders of a class of our capital stock to vote separately as a class on any proposed amendment of our Charter if the amendment would increase or decrease the par value of the shares of that class or would alter or change the powers, preferences or special rights of the shares of that class in a manner that affects them adversely.
Holders of our common stock will not be entitled to vote on any amendment to our Charter that relates solely to the terms of one or more series of our preferred stock and on which the holders of such affected series are entitled to vote, either separately as a class or together with the holders of one or more other series of our preferred stock, pursuant to our Charter or by applicable law.
Conversion
Optional Conversion
Each share of our Class B Common Stock is convertible on a one-to-one basis at the option of the holder thereof into a share of our Class A Common Stock upon written notice to us.
Automatic Conversion
Each share of our Class B Common Stock will automatically convert on a one-to-one basis into a share of our Class A Common Stock upon any of the following:
| • | Transfer by the holder, other than a Permitted Transfer (as defined in our Charter); |
| • | the death or permanent disability of the holder; |
| • | the first date on which the number of outstanding shares of our Class B Common Stock represents less than fifty percent (50%) of the number of shares of our Class B Common Stock that were outstanding as of the consummation of the Business Combination; |
| • | the date specified by the affirmative vote of the holders of more than fifty percent (50%) of the then outstanding shares of our Class B Common Stock, voting as a separate class; and |
| • | the date that is seven (7) years from the consummation of the Business Combination. |
Economic Rights
Except as otherwise expressly provided in our Charter or required by applicable law, shares of our Class A Common Stock and our Class B Common Stock have the same rights, powers and preferences and rank equally, share ratably and be identical in all respects as to all matters, including the following:
Dividends and Distributions; Rights upon Liquidation
Shares of our Class A Common Stock and our Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board out of any of our assets or funds of legally available therefor; provided, however, that, if a dividend is paid in the form of our shares (or options, warrants or other rights to acquire shares) common stock, then holders of our Class A Common Stock will receive shares (or options, warrants or other rights to acquire shares) of our Class A Common Stock and holders of our Class B Common Stock will receive shares (or options, warrants or other rights to acquire shares) of our Class B Common Stock.
Notwithstanding the foregoing, the Board may pay or make a disparate dividend or distribution per share of our Class A Common Stock or our Class B Common Stock (whether in the amount of such dividend or distribution payable per share, the form in which such dividend or distribution is payable, the timing of the payment, or otherwise) if such disparate dividend or distribution is approved by the affirmative vote of the holders of a majority of the outstanding shares of our Class A Common Stock and our Class B Common Stock, each voting separately as a class.
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Upon the dissolution, distribution of assets, liquidation or winding up of the Company, whether voluntary or involuntary, after payment or provision for payment of our debts and other liabilities, holders of our Class A Common Stock and our Class B Common Stock will be entitled to receive ratably all of our assets available for distribution to our stockholders unless disparate or different treatment is approved by the affirmative vote of the holders of a majority of the outstanding shares of our Class A Common Stock and our Class B Common Stock, each voting separately as a class.
Subdivisions, Combinations and Reclassifications
If we subdivide or combine any class of our common stock with any other class of our common stock, then each class of our common stock must be subdivided or combined in the same proportion and manner, unless otherwise approved by the affirmative vote of the holders of a majority of each of the outstanding shares of our Class A Common Stock, and the outstanding shares of our Class B Common Stock, each voting separately as a class.
Mergers and Other Extraordinary Transactions
Our Charter provides that, in the case of any distribution or payment in respect of the shares of our Class A Common Stock or our Class B Common Stock, or any consideration into which such shares are converted, upon our consolidation or merger with or into any other entity, such distribution, payment or consideration that the holders of shares of our Class A Common Stock or Class B Common Stock have the right to receive, or the right to elect to receive, shall be made ratably on a per share basis among the holders of our Class A Common Stock and our Class B Common Stock as a single class; provided, however, that shares of such classes may receive, or have the right to elect to receive, different or disproportionate distribution, payment or consideration in connection with such consolidation, merger or other transaction in order to reflect the special rights, powers and privileges of holders of shares of our Class B Common Stock, or such other rights, powers, privileges or other terms that are no more favorable, in the aggregate, to the holders of our Class B Common Stock relative to the holders of our Class A Common Stock than those contained in our Charter.
Additionally, our Charter prohibits us from entering into any agreement with respect to a tender or exchange offer by a third party unless such agreement provides for consideration to be paid or distributed to, or rights to be received by, our stockholders in the manner provided in the paragraph immediately above.
Registration Rights
Certain of our stockholders were parties to a registration rights agreement with us that became effective upon the consummation of the Business Combination. The registration rights agreement grants certain of our stockholders the right to require, subject to certain conditions and limitations, that we register for resale securities held by such stockholders and certain “piggyback” registration rights with respect to registrations initiated by us. The registration of shares of our Class A Common Stock pursuant to the exercise of the registration rights provided under the registration rights agreement would enable the applicable stockholders to resell such shares without restriction under the Securities Act when the applicable registration statement is declared effective. We will bear the expenses incurred in connection with the filing of any registration statements pursuant to the registration rights agreement.
In addition, in connection with the Purchase Agreement, the Company also entered into the Registration Rights Agreement with EGT, requiring the Company to register for resale the Underlying Shares and the Success Fee Shares. Under the Registration Rights Agreement, the Company may also be required to file an additional resale registration statement if any Additional Shares were issued to EGT in the future.
Pursuant to the Northland Amendment Letter, we agreed to register for resale the Brokerage Fee Shares pursuant to the registration statement of which this prospectus forms a part.
Other Rights
Our Charter and Bylaws do not provide for any preemptive or subscription rights with respect to our common stock, and there are no redemption or sinking fund provisions applicable to our common stock. All the outstanding shares of our common stock are validly issued, fully paid and non-assessable.
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Preferred Stock
Our Charter authorizes the Board, to the fullest extent permitted by applicable law, to issue up to an aggregate of 100,000,000 shares of our preferred stock in one or more series from time to time by resolution, without further action by our stockholders, and to fix the powers (which may include full, limited or no voting power), designations, preferences and relative, participating, optional or other special rights, if any, of the shares of each such series (which rights may be greater than the rights of any or all of the classes of our common stock) and any qualifications, limitations or restrictions thereof. The issuance of our preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments or payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deterring or preventing a change of control or other corporate action. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future.
Election, Appointment and Removal of Directors
Our Charter provides for the election of directors at a meeting of stockholders in which a quorum is present by the affirmative vote of a plurality of the votes cast by stockholders entitled to vote.
Subject to the rights of holders of any series of preferred stock to elect directors, our number of directors of shall be fixed from time to time by the Board, provided that unless otherwise approved by the Requisite Stockholder Consent (as defined in our Charter), the number of directors shall be no less than five (5) and not exceed twelve (12).
Subject to the rights of the holders of any series of preferred stock, no director may be removed from office except for cause and only with and immediately upon the Requisite Stockholder Consent.
Our Charter provides that vacant directorships, including vacancies resulting from any increase in the total number of directors constituting the Board, may be filled (i) prior to the Voting Threshold Date (as defined in our Charter), solely by our stockholders with the Requisite Stockholder Consent unless any such vacancy remains unfilled for at least sixty (60) days, in which case it may also be filled by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director; or (ii) on or after the Voting Threshold Date solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director.
Committees of the Board of Directors
Pursuant to our Bylaws, the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent permitted by law. The Board established and will maintain an audit committee, a governance committee and a compensation committee, and may establish such other committees as it determines from time to time.
Anti-Takeover Effects of our Charter and Bylaws
Our Charter and Bylaws contain certain provisions that may delay, discourage or impede efforts by another person or entity to acquire control of us. We believe that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons or entities seeking to acquire control of us to first negotiate with the Board, which we believe may result in improvement of the terms of any such acquisition in favor of our stockholders. However, these provisions also give the Board the power to discourage acquisitions that some stockholders may favor.
These provisions may have the effect of deterring hostile takeovers or delaying or preventing changes of control of the Company or our management such as a merger, reorganization or tender offer. These provisions are intended to enhance the likelihood of continued stability in the composition of the Board and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of the Company and to reduce our vulnerability to an unsolicited acquisition proposal. These provisions are also intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, may inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in management.
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Authorized but Unissued Capital Stock
The authorized but unissued shares of our common stock and our preferred stock will be available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of the securities exchange on which our equity securities are then listed for trading. These additional shares of capital stock may be used for a variety of corporate purposes, including growth acquisitions, corporate finance transactions, and issuances under our 2022 Long-Term Incentive Plan, our 2022 Employee Stock Purchase Plan and our 2024 Inducement Equity Incentive Plan. The existence of authorized but unissued and unreserved capital stock could discourage or impede an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.
Amendment of Charter or Bylaws
The Delaware General Corporation Law, as amended (the “DGCL”) generally provides that the affirmative vote of a majority of the outstanding shares entitled to vote on amendments to a corporation’s certificate of incorporation or bylaws is required to approve such amendment, unless a corporation’s certificate of incorporation or bylaws, as applicable, imposes a higher voting standard.
Our Charter provides that an affirmative vote of the holders of two-thirds (2/3) of the outstanding shares of our Class A Common Stock and our Class B Common Stock, voting together as a single class, is required to amend the Charter or approve any change of control transaction.
Dual-Class Structure
As described above, our Charter provides for a dual-class stock structure, which gives the holders of Class B Common Stock and certain of their affiliated entities and trusts, for so long as they continue to collectively beneficially own shares representing a majority of the voting power of all of the outstanding shares of our capital stock , significant influence over all matters requiring stockholder approval, including the election of our directors and significant corporate transactions, such as a merger or other sale of the Company or all or substantially all of our assets. See “ — Class A Common Stock — Voting Rights.”
Classified Board
The Board is divided into three classes, designated as Class I, Class II and Class III. The directors elected to Class I will hold office for a term expiring at the annual meeting of stockholders in 2026; the directors elected to Class II will hold office for a term expiring at the annual meeting of stockholders in 2027; and the directors elected to Class III will hold office for a term expiring at the annual meeting of stockholders in 2025. This may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Special Meetings of Stockholders
Our Charter permits special meetings of our stockholders to be called only by the Board, the chairman of the Board, our chief executive officer, or, at any time at the request of our stockholders collectively holding voting power sufficient to provide the Requisite Stockholder Consent. These provisions might delay the ability of our stockholders to force consideration of a proposal or to take any action, including with respect to the removal of any of our directors from office.
Advance Notice Requirement for Stockholder Proposals and Director Nominations
The Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to the Board. In order for any matter to be “properly brought” before a meeting (and thereby considered or acted upon at such meeting), a stockholder will
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have to comply with certain advance notice requirements and provide us with certain information. Stockholders at an annual meeting will only be permitted to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the Board or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and has delivered a timely notice, in the form and manner specified in the Bylaws, of such stockholder’s intention to bring such business before the meeting. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from nominating candidates for election to the Board, or might discourage or impede an attempt by a potential acquirer of the Company to conduct a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise obtain control of us.
Exclusive Forum
Our Charter provides that, unless we otherwise consent in writing, the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have subject matter jurisdiction, another state or federal court located within the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for resolution of (a) any derivative action or proceeding brought on our behalf (b) any action asserting a claim of breach of a fiduciary duty owed by, or any other wrongdoing by, any current or former director, officer, other employee or stockholder of ours, (c) any action asserting a claim against us arising pursuant to any provision of the DGCL, our Charter or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery, (d) any action to interpret, apply, enforce or determine the validity of any provisions of our Charter or the Bylaws, or (e) any other action asserting a claim governed by the internal affairs doctrine.
Notwithstanding the foregoing, unless we otherwise consent in writing, the federal district courts of the United States will be the exclusive forum for the resolution of any action, claim or proceeding arising under the Securities Act.
This provision will not apply to claims arising under the Exchange Act or other federal securities laws for which there is exclusive federal jurisdiction.
Limitations on Liability and Indemnification of Officers and Directors
The DGCL authorizes corporations to limit or eliminate the personal liability of directors and stockholders of corporations for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. Our Charter includes a provision that eliminates, to the fullest extent permitted by the DGCL (as currently in effect or as it may in the future be amended), the personal liability of our directors for damages for any breach of fiduciary duty as a director.
Our Charter provides that, to the fullest extent permitted by the DGCL (as currently in effect or as it may in the future be amended), we must indemnify and hold harmless and advance expenses to any of its directors and officers who is involved in any action, suit or proceeding by reason of the fact that he or she is or was a director or officer of ours or, while serving as a director or officer of ours, is or was serving at our request as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity. We also are expressly authorized to carry directors’ and officers’ liability insurance providing indemnification for our directors, officers, and certain employees for some liabilities. We believe that these indemnification and advancement provisions and insurance are useful to attract and retain qualified directors and executive officers.
The limitation of liability, advancement and indemnification provisions in our Charter and Bylaws may discourage stockholders from bringing lawsuits against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment in us may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officer pursuant to these indemnification provisions.
There is currently no pending material litigation or proceeding involving any of our directors, officers, or employees for which indemnification is sought.
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Dissenters’ Rights of Appraisal and Payment
Under the DGCL, with certain exceptions, our stockholders have appraisal rights in connection with a merger or consolidation of the Company. Pursuant to the DGCL, stockholders who properly demand and perfect appraisal rights in connection with such merger or consolidation will have the right to receive payment of the fair value of their shares as determined by the Delaware Court of Chancery.
Stockholders’ Derivative Actions
Under the DGCL, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of our shares at the time of the transaction to which the action relates or such stockholder’s stock thereafter devolved by operation of law.
This section describes the general terms and provisions of our capital stock and does not purport to be complete. It is subject to, and qualified in its entirety by reference to, the applicable provisions of our Charter and Bylaws. We encourage you to read our Charter, our Bylaws and the applicable provisions of the DGCL for more information.
Transfer Agent and Warrant Agent
Continental Stock Transfer & Trust Company is the transfer agent for our Class A Common Stock and the warrant agent for our Warrants.
Listing of Our Class A Common Stock
Our Class A Common Stock is currently listed on the NYSE and trades under the symbol “NOTE.” On November 21, 2024, the closing price of our Class A Common Stock was $0.87 per share.
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Polsinelli PC, Washington, District of Columbia, has passed upon the validity of any securities offered by this prospectus.
The consolidated financial statements of FiscalNote Holdings, Inc. as of December 31, 2023 and 2022 and for each of the years in the two-year period ended December 31, 2023 incorporated in this Prospectus by reference from the FiscalNote Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2023 have been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report thereon which report expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of ASC 326, Financial Instruments – Credit Losses, incorporated herein by reference, and have been incorporated in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
The registration statement of which this prospectus and any applicable prospectus supplement forms a part, including the attached exhibits and schedules, contains additional relevant information about us and our capital stock. This prospectus does not contain all of the information included in the registration statement. For further information pertaining to us and our securities, you should refer to the registration statement and our exhibits.
In addition, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public on a website maintained by the SEC located at www.sec.gov. We also maintain a website at www.fiscalnote.com. Through our website, we make available, free of charge, annual, quarterly and current reports, proxy statements and other information as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus or any applicable prospectus supplement is considered to be part of this prospectus and any prospectus supplement. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus and any applicable prospectus supplement. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus, any prospectus supplement or in any document previously incorporated by reference herein or therein have been modified or superseded. This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents not deemed to be filed) until the offering of the securities offered hereby is terminated or completed:
| • | our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2024, June 30, 2024 and September 30, 2024, filed with the SEC on May 10, 2024, August 8, 2024 and November 12, 2024, respectively; |
| • | our Current Reports on Form 8-K, filed with the SEC on March 15, 2024, April 12, 2024, May 31, 2024, June 14, 2024, October 31, 2024, November 15, 2024 (Item 5.02) and November 29, 2024; and |
| • | the description of our common stock which is contained in a registration statement on Form 8-A filed on July 29, 2022 under the Exchange Act, including any amendment or report filed for the purpose of updating such description. |
In addition, all reports and other documents we may file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the registration statement of which this prospectus forms a part, and prior to effectiveness of such registration statement, shall be deemed to be incorporated by reference into this prospectus.
You may request a free copy of these filings (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) by writing or telephoning us as follows:
FiscalNote Holdings, Inc.
Timothy Hwang
1201 Pennsylvania Avenue, N.W., 6th Floor
Washington, D.C. 20004
(202) 793-5300
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