# EDGAR Filing Document

**Accession Number:** 0000843006
**File Stem:** 0001654954-23-000500
**Filing Date:** 2023-1
**Character Count:** 96686
**Document Hash:** 8a555d12c60927901247fa842b988f0b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-23-000500.hdr.sgml**: 20230117

**ACCESSION NUMBER**: 0001654954-23-000500

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 18

**CONFORMED PERIOD OF REPORT**: 20221101

**ITEM INFORMATION**: Completion of Acquisition or Disposition of Assets

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230117

**DATE AS OF CHANGE**: 20230117

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ISSUER DIRECT CORP
- **CENTRAL INDEX KEY:** 0000843006
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMERCIAL PRINTING [2750]
- **IRS NUMBER:** 261331503
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10185
- **FILM NUMBER:** 23531753

**BUSINESS ADDRESS:**
- **STREET 1:** 1 GLENWOOD AVE.
- **STREET 2:** SUITE 1001
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27603
- **BUSINESS PHONE:** 9194611600

**MAIL ADDRESS:**
- **STREET 1:** 1 GLENWOOD AVE.
- **STREET 2:** SUITE 1001
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27603

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DOCUCON INC
- **DATE OF NAME CHANGE:** 20071002

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DOCUCON INCORPORATED
- **DATE OF NAME CHANGE:** 19920703

?xml version="1.0" encoding="utf-8"?isdr_8ka.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**______________**

**FORM 8-K/A**

**Amendment No. 1**

**______________**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): November 1, 2022**

**______________**

---

| |
|:---|
| **Issuer Direct Corporation** |
| *(Exact name of registrant as specified in its charter)* |

---

**______________**

---

| | | |
|:---|:---|:---|
| **Delaware** | **1-10185** | **26-1331503** |
| *(State or other jurisdiction* | *(Commission* | *(I.R.S. Employer* |
| *of incorporation)* | *File Number)* | *Identification No.)* |

---

**<u>One Glenwood Drive, Suite 1001, Raleigh, NC 27603</u>**

*(Address of principal executive offices) (Zip Code)*

Registrant's telephone number, including area code **(919) 481-4000**

**<u>N/A</u>**

*(Former name or former address, if changed since last report)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 | ISDR | NYSE American |

---

**Item 2.01. Completion of Acquisition or Disposition of Assets.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On November 1, 2022, Issuer Direct Corporation, a Delaware corporation (the "Company"), entered into a Membership Interest Purchase Agreement with Lead Capital, LLC, a Delaware limited liability company, whereby the Company purchased all the issued and outstanding membership interests of iNewsWire.com LLC, a Delaware limited liability company ("Newswire"). Newswire is a leading media and marketing communications technology company that provides press release distribution, media databases, media monitoring, and newsrooms through its Media Advantage Platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On November 3, 2022, the Company filed a Current Report on Form 8-K (the "Original Form 8-K") regarding the acquisition of Newswire (the "Acquisition") and stated that the financial statements and pro forma financial information required under Item 9.01 of Form 8-K would be filed within 71 days after the date on which the Original Form 8-K was required to be filed. This Amendment No. 1 to Current Report on Form 8-K (the "Amendment") contains the required financial statements and pro forma financial information related to the Acquisition. Except as set forth herein, no modifications have been made to the information contained in the Original Form 8-K and the Company has not updated any information contained therein to reflect the events that have occurred since the date of the Original Form 8-K. Accordingly, this Amendment should be read in conjunction with the Original Form 8-K.

**Item 9.01. Financial Statements and Exhibits.** 

(a) Financial statements of business acquired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The audited financial statements of iNewsWire.com LLC as of and for the fiscal years ended December 31, 2021 and 2020, and the related notes to the financial statements and the report of the independent auditor thereon are included as Exhibit 99.1 and are hereby incorporated by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The unaudited financial statements of iNewsWire.com LLC as of and for the nine months ended September 30, 2022 and 2021, and the related notes to the financial statements are included as Exhibit 99.2 and are hereby incorporated by reference.

**(**b) Pro forma financial information. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The unaudited pro forma financial information for the Company after giving effect to the Acquisition and the adjustments described therein as of and for the nine months ended September 30, 2022 and the year ended December 31, 2021, and the notes to the unaudited pro forma financial statements are included as Exhibit 99.3 and are hereby incorporated by reference.

(d) Exhibits

---

| | |
|:---|:---|
| [23.1](isdr_ex231.htm) | [Consent of Independent Registered Public Accounting Firm.](isdr_ex231.htm) |
| [99.1](isdr_ex991.htm) | [Audited Financial Statements of iNewswire.com LLC as of and for the fiscal years ended December 31, 2021 and 2020.](isdr_ex991.htm) |
| [99.2](isdr_ex992.htm) | [Unaudited financial statements of iNewsWire.com LLC as of and for the nine months ended September 30, 2022 and 2021 and the related notes to the financial statements.](isdr_ex992.htm) |
| [99.3](isdr_ex993.htm) | [Unaudited pro forma financial information for Issuer Direct Corporation after giving effect to the acquisition of iNewsWire.com LLC and the adjustments described therein as of and for the nine months ended September 30, 2022 and the year ended December 31, 2021](isdr_ex993.htm) |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Issuer Direct Corporation** | **Issuer Direct Corporation** |
| Date: January 17, 2023 | By: | /s/ Brian R. Balbirnie |
|  |  | Brian R. Balbirnie<br>Chief Executive Officer |

---

## Exhibit 23.1

**EXHIBIT 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in each of the Registration Statements on Form S-8 (Nos. 333-212239) and Form S-3 (Nos. 333-226530) of Issuer Direct Corporation of our report dated November 15, 2022, relating to the statements of financial position of iNewswire.com, LLC as of December 31, 2021 and 2020 and the related statements of operations, members' equity (deficit), and cash flows for the years then ended, which is included in the Current Report on Form-8K/A of Issuer Direct Corporation dated January 17, 2023.

/s/ CHERRY BEKAERT LLP

Raleigh, North Carolina <br> January 17, 2023

## Exhibit 99.1

**EXHIBIT 99.1**

**iNewswire.com LLC** 

**Financial Statements**

**Years Ended December 31, 2021 and 2020**

**Contents**

---

| | |
|:---|:---|
| Report of Independent Auditor | 2 |
| Balance Sheets as of December 31, 2021 and 2020 | 3 |
| Statements of Operations for the years ended December 31, 2021 and 2020 | 4 |
| Statements of Changes in Members' Equity (Deficit) for the years ended December 31, 2021 and 2020 | 5 |
| Statements of Cash Flows for the years ended December 31, 2021 and 2020 | 6 |
| Notes to the Financial Statements | 7 |

---

**Report of Independent Auditor**

*Opinion*

We have audited the accompanying financial statements of iNewswire.com LLC (the "Company"), which comprise the balance sheet as of December 31, 2021 and 2020, and the related statements of operations, changes in members' equity (deficit), and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

*Basis of Opinion*

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

*Responsibilities of Management for the Financial Statements*

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

*Auditor's Responsibility for the Audit of the Financial Statements*

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not absolute assurance, and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepting auditing standards, we:

· Exercise professional judgement and maintain professional skepticism throughout the audit.

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

· Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls. Accordingly, no such opinion is expressed.

· Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

· Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters we identified during the audit.

/s/ Cherry Bekaert LLP

Raleigh, North Carolina

November 15, 2022

**iNewswire.com LLC**

**Balance Sheets**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $55997 | $1699227 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments  | 51930 | 1111425 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets | 15159 | 45080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 123086 | 2855732 |
| Indefinite-lived intangible assets | 768968 | 768968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $892054 | $3624700 |
| **Liabilities and Members' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $829588 | $203657 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 165154 | 36034 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investor liability |  | 245175 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 2128982 | 1311228 |
| &nbsp;&nbsp;&nbsp;&nbsp; Paycheck Protection Program loan |  | 174500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Due to members | 3203 | 3203 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities**  | 3126927 | 1973797 |
| Members' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Members' equity (deficit) | (2234873) | 1650903 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total members' equity (deficit) | (2234873) | 1650903 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and members' equity** | $892054 | $3624700 |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Operations**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **Years Ended** <br> December 31, | **Years Ended** <br> December 31, |
|  | **2021** | **2020** |
| Revenues: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Single press release distribution | $6967389 | $6218057 |
| &nbsp;&nbsp;&nbsp;&nbsp; Value pack press release distribution | 1637459 | 490842 |
| &nbsp;&nbsp;&nbsp;&nbsp; Media advantage plan | 1429088 | 422627 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenues | 10033936 | 7131526 |
| Cost of revenues | 2857020 | 1954504 |
| Gross margin | 7176916 | 5177022 |
| Operating costs and expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 2919608 | 2175484 |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing | 2632204 | 1878759 |
| &nbsp;&nbsp;&nbsp;&nbsp; Product development | 778477 | 376305 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating costs and expenses | 6330289 | 4430548 |
| Operating income | 846627 | 746474 |
| Other income, net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment income | 215680 | 366250 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on forgiveness of Paycheck Protection Program loan | 174500 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other income (expense), net | (40147) | 40222 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other income, net | 350033 | 406472 |
| Income before income taxes | 1196660 | 1152946 |
| Income tax expense | 29436 | 25287 |
| Net income | $1167224 | $1127659 |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Members' Equity (Deficit)**

(in whole dollars)

---

| | |
|:---|:---|
|  | **Total** <br> **Stockholders'** <br> **Equity (Deficit)** |
| **Balance on December 31, 2019** | $1021472 |
| Net income | 1127659 |
| Members' contributions | 175000 |
| Members' distributions | (673228) |
| **Balance on December 31, 2020** | $1650903 |
| Net income | 1167224 |
| Members' contributions | 200000 |
| Members' distributions | (5253000) |
| **Balance on December 31, 2021** | $(2234873) |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Cash Flows**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| **Cash flows from operating activities** |  |  |
| Net income | $1167224 | $1127659 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gains (losses) on investments | (215680) | (419029) |
| &nbsp;&nbsp;&nbsp;&nbsp; Unrealized gains (losses) on investments |  | 52779 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on forgiveness of Paycheck Protection Program loan | (174500) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in other current assets | 29921 | (36700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in accounts payable | 625931 | 54868 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in accrued expenses | 129120 | (94623) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in deferred revenue | 817754 | 1083335 |
| Net cash provided by operating activities | $2379770 | $1768289 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net proceeds from (purchase of) investments | 1030000 | (500000) |
| &nbsp;&nbsp;&nbsp;&nbsp; Intangible asset acquisitions and maintenance |  | (207776) |
| Net cash provided by (used in) investing activities | $1030000 | $(707776) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from Paycheck Protection Program loan |  | 174500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Net repayments to affiliate loans payable |  | (19848) |
| &nbsp;&nbsp;&nbsp;&nbsp; Contributions from members | 200000 | 175000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions to members | (5253000) | (673228) |
| Net cash used in financing activities  | $(5053000) | $(343576) |
| Net change in cash | $(1643230) | $716937 |
| Cash – beginning | 1699227 | 982290 |
| Cash – ending | 55997 | 1699227 |

---

The accompanying notes are an integral part of these financial statements.

**Note 1. Description of Operations** 

*Nature of Operations* 

iNewswire.com LLC ("Newswire", the "Company") is a limited liability company incorporated in Delaware. Newswire is a media technology company that provides software delivered as a service to power press release distribution, media databases, media distribution networks, media monitoring, analytics, newsrooms, and earned media to generate brand awareness, increase online visibility, secure marketing inquiries, and increase sales for customers worldwide. The Company combines science, process, and technology to provide its customers the ability to deliver the right message to the right audience at the right time to maximize their returns on media and marketing communications spend.

**Note 2. Summary of Significant Accounting Policies** 

*Basis of Accounting*

The Company reports income and expenses on the accrual basis of accounting in conformance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recorded when earned and expenses are recorded when incurred.

*Use of Estimates*

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allocation of transaction prices in bundled Media Advantage Platform ("MAP") contracts with customers, valuation of indefinite-lived intangible assets (e.g., domain names), and allocation of operating expenses between cost of revenues, general and administrative, sales and marketing, and product development functional categories. Actual results could differ from those estimates.

*Cash Equivalents*

For purposes of Newswire's financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents.

*Accounts Receivable and Allowance for Doubtful Accounts*

The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. Credit is granted on an unsecured basis. The allowance for doubtful accounts is estimated based on an assessment of the Company's ability to collect on customer accounts receivable. There is judgement involved with estimating the allowance for doubtful accounts and if the financial condition of the Company's customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. Given the current environment of the COVID-19 pandemic, additional attention has been paid to the financial viability of its customers. The Company generally writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection.

Due to the nature of the Company's revenue recognition, as described below, the Company is typically in a position of recognizing deferred revenue on its contracts with customers. Collections of cash for the Company's contracts generally occurs upfront, thus resulting in the lack of existence of accounts receivable at any point in time. As such, the accompanying balance sheets reflect no value for accounts receivable as of December 31, 2021 and 2020. Similarly, there was no value for the related allowance for doubtful accounts as of December 31, 2021 and 2020.

*Investments*

Investments in marketable securities are carried at their fair values in the balance sheet. The net realized and unrealized gains (losses) on investments are included as investment income in the statements of operations. Cash held in brokerage accounts is included as part of investments in the balance sheets.

*Fair Value Measurements*

GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

· Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes debt and equity securities that are traded in an active market. Cash and cash equivalents are quoted at Level 1.

· Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.

· Level 3 – Unobservable inputs that are supporting by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgement or estimation.

The determination of where an asset or liability falls in the hierarchy requires significant judgement. The Company evaluates its hierarchy disclosures annually. It is possible that an asset or liability may be classified differently from year to year, however the Company expects changes in classifications between levels to be rare. Further, the Company believes the fair value of its financial instruments approximate their carrying amounts as of December 31, 2021 and 2020.

*Indefinite-Lived Intangible Assets*

Indefinite-lived intangible assets consist of domain names and are not subject to amortization; instead, they are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of indefinite-lived intangible assets may be impaired or if a decision is made to sell a business. Management has determined that there were no events or circumstances indicating that indefinite-lived assets were impaired during the years ended December 31, 2021 and 2020.

*Long-Lived Assets*

In accordance with the authoritative guidance for accounting for long-lived assets, assets such as capitalized software are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair

value of the asset group. An impairment loss would be measured by comparing the amount by which the carrying value exceeds fair value (estimated discounted future cash flows or appraisals of assets) of the long-lived asset. Management has determined that there were no events or circumstances indicating long-lived assets were impaired during the years ended December 31, 2021 and 2020.

*Property and Equipment*

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets, principally using the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The range of estimated useful lives used to calculate depreciation for principal items of fixed assets are as follows:

---

| | |
|:---|:---|
| **Asset Categories** | **Useful Lives** |
| Computer equipment | 3 years |
| Furniture and fixtures | 3 to 7 years |
| Leasehold improvements | Term of lease |

---

As of December 31, 2021 and 2020, fixed assets were considered immaterial and/or fully disposed of/depreciated, and thus are not presented in the accompanying balance sheets.

*Capitalized Software*

Costs incurred to develop the Company's cloud-based platform products are capitalized when the preliminary project phases are complete, management commits to fund the projects, and it is probable that the projects will be completed and used for their intended purposes. Once the software is substantially complete and ready for its intended use, the software is amortized over its estimated useful life, which is typically four years. Costs related to design or maintenance of the software are expensed as incurred. During the years ended December 31, 2021 and 2020, all software development costs were expensed as incurred, as the criteria for capitalization above were not met. Previously capitalized costs have been fully amortized prior to the years ended December 31, 2021 and 2020.

*Revenue Recognition*

Substantially all of the Company's revenue comes from contracts with customers for news distribution and marketing plans. Customers consist of private companies. Newswire accounts for a contract with a customer when there is an enforceable contract between Newswire and the customer, the rights of the parties are identified, the contract has economic substance, and collectability of the contract consideration is probable. The Company's revenues are measured based on consideration specified in the contract with each customer.

The Company's contracts include either a subscription to its MAP or agreements to perform services, or any combination thereof, and often contain multiple subscriptions and services. For these bundled contracts, the Company accounts for individual subscriptions and services as separate performance obligations if they are distinct – which is when a product or service is separately identifiable from other items in the bundled package, and a customer can benefit from it on its own or with other resources that are readily available to the customer.

The Company separates revenue from its contracts into three revenue streams: (i) single press release distribution, (ii) value pack press release distribution, and (iii) MAP subscriptions. Performance obligations of single press release distribution contracts include providing press release distributions on a limited ad hoc basis for customers. Performance obligations of value pack press release distribution contracts include providing on-demand distribution of a fixed number of press releases for customers over a period of twelve months. MAP subscription contracts include two performance obligations: (i) a series of distinct services that include, but are not limited to, developing specific media plans and creating content to be distributed, and (ii) access to the MAP platform along with the distribution of press releases, with ongoing support and assessment of performance as a stand-ready obligation. The Company's MAP contracts are generally for one year, with automatic renewal clauses included within the contracts until they are canceled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all related revenue is expected to be recognized within one year form the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.

For all services delivered on a per-period or per-press release basis, the revenue is recognized at the time of distribution of each release. For MAP contracts, the Company recognized revenue over the contract period as individual performance obligations are satisfied. Transaction prices are allocated to performance obligations in MAP contracts based on standalone pricing for individual components and an estimate of relative value. The Company recognized $8,604,848 and $6,708,899 of revenue at a point in time, and $1,429,088 and $422,627 of revenue over time for the years ended December 31, 2021 and 2020, respectively. Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices at least annually and updates these estimates if necessary.

The Company invoices its customers based on the billing schedules designated in its contracts, typically upfront on either an individual or annual basis, or per transaction prior to the completion of the performance obligation. Deferred revenue for the years presented was primarily related to press releases which have been prepaid, however the releases had not yet been disseminated. The associated deferred revenue is generally recognized as release are disseminated for press release packages. Deferred revenue for the years presented also includes amounts received in advance of services rendered under MAP contracts. Deferred revenue as of December 31, 2021 and 2020 was $2,128,982 and $1,311,228, respectively, and is expected to be recognized within one year. Revenue recognized for the years ended December 31, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each reporting period was $1,311,228 and $277,893, respectively. Since substantially all of the contracts have terms of one year or less, the Company has elected to use the practical expedient regarding the existence of significant financing.

Costs to obtain contracts with customers consist primarily of sales commissions. All contract costs are expected to be amortized in less than one year. As such, the Company has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense when incurred. The Company has considered historical renewal rates, expectations of future renewals, and economic factors in making these determinations.

*Advertising*

The Company uses advertising to promote its services among the audiences it serves. The production costs of advertising are expensed as incurred. During the years ended December 31, 2021 and 2020, advertising expense was $1,076,661 and $973,963, respectively. These costs are included as part of sales and marketing expenses in the accompanying statements of operations.

*Income Taxes*

The Company is treated as a partnership for tax purposes. As a partnership, the Company is generally not subject to federal or state income taxes. The members are allocated their shares of taxable income on an annual basis. The members are individually responsible for reporting their shares of the Company's taxable income on their respective tax returns. For the years ended December 31, 2021 and 2020, the Company's income tax expense included franchise taxes and minimum filing fees imposed by the states and localities in which the Company files. Temporary differences between tax and book treatment of income and expenses are not material to the financial statements. As such, no provision for deferred taxes has been made in the accompanying financial statements.

The Company has adopted the recognition requirements for uncertain income tax positions as required by GAAP, with no cumulative effect adjustment required. Income tax benefits are recognized for income tax positions taken or expected to be taken in a tax return, only when it is determined that the income tax position will more likely than not be sustained upon examination by taxing authorities. The Company has analyzed tax positions taken for filing with the Internal Revenue Service and all state and local jurisdictions where it operates. The Company believes that income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse effect on the Company's financial condition, results of operations, or cash flows. The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2021, 2020, 2019, and 2018 are open to audit by federal and state taxing authorities. Accordingly, the Company has not recorded any reserves or related accruals for interest and penalties for uncertain income tax positions. The Company has filed in all states in which it believes it is required to.

*Sales Tax*

Sales tax is collected on applicable sales and recorded under the liability method.

*Concentration of Credit Risk*

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and investments. The Company places its cash and temporary cash investments with a quality credit institution. On occasion, such cash balances may exceed the Federal Depositors Insurance Corporation ("FDIC") insurance limit of $250,000 per banking institution. The Company places its investments in marketable securities with a quality credit institution as well. On occasion, such investment balances may exceed the Securities Investor Protection Corporation ("SIPC") insurance limit of $500,000 per financial institution. To reduce its risk associated with the potential failure of such banking and financial institutions, quarterly, the Company evaluates the rating of the financial institutions in which it holds deposits and investments. As of December 31, 2021, cash and investments holdings were fully insured by the FDIC and SIPC, respectively.

*Recent Accounting Pronouncements*

For the year ending December 31, 2022, the Company will be required to adopt ASC Topic 842, *Leases*, for all material, long-term operating leases. Under this new accounting pronouncement, the Company would recognize a right-of-use asset and a lease liability calculation based on the present value of the lease payments not yet paid, discounted using an approximate discount rate at the lease commencement date. The right-of-use asset would initially be equal to the lease liability plus any initial direct costs and prepaid lease payments, less any lease incentives received. Under this approach, amortization of right-of-use assets is charged to amortization expense, which is recorded on the straight-line basis over the term of each lease, unless another systemic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property, in which chase that basis would be used. As the Company's leases are short-term in nature, the Company does not expect a significant impact from the adoption of ASC Topic 842.

Other recently adopted and effective new accounting pronouncements either have no or an immaterial impact on the Company and are thus not specifically disclosed.

*Subsequent Events*

The Company has evaluated events and transactions that occurred between January 1, 2022 and November 15, 2022, which is the date the financial statements were available to be issued, for possible disclosure and recognition in the financial statements. Relevant and significant subsequent events are disclosed throughout these notes to the financial statements.

On November 1, 2022, the Company entered into a Membership Interest Purchase Agreement with Issuer Direct Corporation (the "Buyer"), whereby the Company sold all of the issued and outstanding membership interest. Under the terms of the Purchase Agreement and on the Closing Date, the Buyer paid to the Company aggregate consideration of approximately $43.9 million, consisting of the following: (i) a cash payment of $18 million subject to a 60-day escrow to secure the payment of any working capital adjustments or any employee bonus obligations of the Company, (ii) the issuance of a Secured Promissory Note in the principal amount of $22 million, and (iii) the issuance of 180,181 shares of the Buyer's common stock, par value $0.001, valued at approximately $3.9 million based on the Buyer's closing price of $21.60 on the Closing Date.

**Note 3. Investments** 

The Company invests in equity securities of public and non-public companies for business and strategic purposes. Investments in public companies are measured and recorded at fair value on a recurring basis based on quoted market prices and totaled $1,111,425 at December 31, 2020. As of December 31, 2020, the investment balance also included a $245,175 investor liability. As of December 31, 2021, cash invested in investment accounts totaled $1,930. Changes in fair values, whether realized or unrealized, are recorded in the statements of operations, and totaled $215,680 and $366,250, net of investment advisory fees, during the years ended December 31, 2021 and 2020, respectively. Investments in public companies are considered Level 1 investments in the fair value hierarchy described above.

Investments in equity securities of non-public entities without readily determinable fair values are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes, and totaled $50,000 at December 31, 2021. The Company held no such investments at December 31, 2020. Investments in non-public entities are considered Level 2 investments in the fair value hierarchy described above. The carrying value of those equity securities is adjusted for qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer. Determining whether an observed transaction is similar to a security within the Company's portfolio requires judgement based on the rights and preferences of the securities. Recording upward and downward adjustments to the carrying value of these equity securities as a result of observable price changes requires quantitative assessments of the fair value of the securities using various valuation methodologies and involves the use of estimates. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, the Company considers the investee's cash position, earnings, and revenue outlooks, liquidity, and management ownership, among other factors. If management's assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes, in current earnings, an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount.

Subsequent to year-end, the Company wrote down to fair value certain equity security investments. The write-down amounted to $37,256. In determining the amount of the impairment subsequent to year-end, management considered relevant known transactions that occurred and the different rights and obligations of the securities subject to the impairment assessment. Factors that significantly influenced the determination of the impairment loss included the equity security's voting rights, distribution rights and preferences, and conversion features.

Investments are exposed to risks such as interest rate and market risks. Due to the level of risk associated with certain investment vehicles, it is possible that changes in the values of investment holdings could occur in the near term, and that change could materially affect the amounts reported in the balance sheets.

**Note 4. Intangible Assets**

The components of intangible assets are as follows as of December 31, 2021 and 2020 (in whole dollars):

---

| | | | |
|:---|:---|:---|:---|
| **Intangible Asset Category** | **Gross Carrying**<br> **Amount** | **Accumulated** <br> **Amortization** | **Net Carrying**<br> **Amount** |
| Internet domain names | $768968 | $– $| 768968 |

---

The Company performed its annual assessment for impairment of intangible assets and determined there was no impairment as of and for the years ended December 31, 2021 and 2020.

**Note 5. Accrued Expenses**

The components of accrued expenses were as follows (in whole dollars):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| Commissions and bonuses | $51608 | $28208 |
| Credit card liabilities | 46138 | (28944) |
| Sales tax liabilities  | 11189 | 5200 |
| Income tax liabilities | 54723 | 25287 |
| Other | 1496 | 6283 |
| Total accrued expenses | $165154 | $36034 |

---

**Note 6. Notes Payable**

The components of notes payable were as follows (in whole dollars):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2020** |
| Paycheck Protection Program loan | $— | $174500 |
| Total notes payable | $— | $174500 |

---

As a result of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, in April 2020 the Company applied for and received a forgivable loan from the United States Small Business Administration ("SBA") for a total of $174,500. The loan was granted as part of the Paycheck Protection Program ("PPP") to help businesses impacted by the COVID-19 pandemic. Under the terms of the loan, the loan may have been forgiven, with the ultimate amount payable depending on the uses of the loan and the criteria set forth in the CARES Act, subsequent guidance, and regulations. In January 2021, the SBA approved forgiveness for the full loan balance. As such, loan forgiveness income was recognized during the year ended December 31, 2021.

**Note 7. Members' Equity (Deficit)**

The Company was formed in March 2013 with two members. In March 2021, a settlement was reached whereby the managing member acquired the remaining membership interests of the Company. Member distributions during the year ended December 31, 2021 were used to fund and facilitate this acquisition. As of December 31, 2021, the Company was a single-member limited liability company.

Effective January 1, 2022, the Company amended its operating agreement, resulting in the authorization of the following levels and classes of membership interests:

---

| | |
|:---|:---|
| **Membership Classes** | **Authorized Units** |
| Class A voting | 3000000 |
| Class B nonvoting | 500000 |
| Class C nonvoting | 1500000 |
| Total authorized units | 5000000 |

---

Commensurate with the amendments to its operating agreement, the Company issued 500,000 Class A voting units to its founding member. Subsequent to year-end, a total of 54,500 Class C nonvoting units were issued to multiple employees. Class C nonvoting units are considered profits-only interest that ratably vest over a four-year period, beginning one year from their grant dates.

**Note 8. Revenue**

The Company considers itself to be in a single reportable segment under the authoritative guidance for segment reporting, specifically a media technology company for various companies. The Company generated revenues from the following revenue streams as a percentage of total revenue for the years ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2021** | **2021** | **2020** | **2020** |
|  | **Revenue** | **Percent of**<br> **Total Revenue** | **Revenue** | **Percent of**<br> **Total Revenue** |
| Revenue streams: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Single press releases | $6967389 | 69.4% | $6218057 | 87.2% |
| &nbsp;&nbsp;&nbsp;&nbsp; Value pack press releases | 1637459 | 16.3% | 490842 | 6.9% |
| &nbsp;&nbsp;&nbsp;&nbsp; Media advantage plans | 1429088 | 14.3% | 422627 | 5.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenue | $10033936 | 100.0% | $7131526 | 100.0% |

---

The Company did not have any customers during the years ended December 31, 2021 and 2020 that accounted for more than 10% of total revenue.

**Note 9. Related Party Transactions**

The Company contracts with E4 LLC for senior management and corporate oversight services. E4 LLC's President and Chief Executive Officer is the father of the President and Chief Executive Officer of the Company's majority member since inception, and sole member since March 2021. The Company incurred costs related to this relationship with E4 LLC totaling $540,000 and $481,367 for the years ended December 31, 2021 and 2020, respectively. As of both December 31, 2021 and 2020, the Company owed $45,000 to E4 LLC.

**Note 10. Commitments and Contingencies**

*Litigation*

From time to time, , the Company may be involved in litigation that arises through the normal course of business. The Company is neither a party to any litigation nor is it aware of any such threatened or pending litigation that might result in a material adverse effect to the Company's business or finances.

*Lease Obligations*

The Company took possession of office space in Sarasota, Florida in January 2017. The initial terms of the lease required monthly payments of approximately $4,500 with set escalations through its expiration in December 2018. Since its expiration, the lease has continued on a month-to-month basis.

The Company took possession of office space in Hackensack, New Jersey in May 2017. The initial terms of the lease required monthly payments of approximately $4,200 with set escalations through its expiration in April 2019. Since its expiration, the lease continued on a month-to-month basis until October 2020, when the space was vacated, and the lease was terminated.

The Company is a party to other leases in the ordinary course of business operations whose terms have not been disclosed due to immateriality.

*Retirement Plan*

The Company sponsors a 401(k) plan that covers all employees over the age of 21 who have completed three consecutive months of service and have worked 1,000 hours during the plan year. The Company matches 100% of the first 1% of employees' contributions and 50% of the next 5% of employees' contributions. During the years ended December 31, 2021 and 2020, the Company incurred plan contribution expenses totaling $58,374 and $28,942, respectively.

*Contractors*

The Company enters into independent contractor arrangements during the ordinary course of its business operations. Most arrangements are short-term in nature and cancelable given proper written notice from either contracted party.

*Bonus Arrangements* 

The Company enters into performance-related bonus arrangements with certain key employees and independent contractors. The terms of these arrangements generally provide for a profit-sharing bonus of 3-5% calculated based on cash basis profit. The bonuses vest ratably over the course of three-year periods of time. Bonuses earned but not yet paid as of December 31, 2021 and 2020 are included as part of accrued expenses in the accompanying balance sheets.

## Exhibit 99.2

**EXHIBIT 99.2**

**iNewswire.com LLC** 

**Unaudited Financial Statements**

**Nine Months Ended September 30, 2022 and 2021**

**Contents**

---

| | |
|:---|:---|
| Balance Sheets as of September 30, 2022 and 2021 | 2 |
| Statements of Operations for the nine months ended September 30, 2022 and 2021 | 3 |
| Statements of Changes in Members' Equity (Deficit) for the nine months ended September 30, 2022 and 2021 | 4 |
| Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 | 5 |
| Notes to the Financial Statements | 6 |

---

**iNewswire.com LLC**

**Balance Sheets (Unaudited)**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $300774 | $223480 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments  | 14674 | 51930 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets |  | 11369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 315448 | 286779 |
| Indefinite-lived intangible assets | 768968 | 768968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $1084416 | $1055747 |
| **Liabilities and Members' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $640601 | $796258 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 179740 | 117107 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 2853752 | 2295737 |
| &nbsp;&nbsp;&nbsp;&nbsp; Notes payable | 26135 | 29206 |
| &nbsp;&nbsp;&nbsp;&nbsp; Due to members | 3203 | 3203 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities**  | 3703431 | 3241511 |
| Members' equity (deficit): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Members' equity (deficit) | (2619015) | (2185764) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total members' equity (deficit) | (2619015) | (2185764) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and members' equity (deficit)** | $1084416 | $1055747 |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Operations (Unaudited)**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended** <br> **September 30,**  | **For the Nine Months Ended** <br> **September 30,**  |
|  | **2022** | **2021** |
| Revenues: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Single press release distribution | $5738614 | $4936459 |
| &nbsp;&nbsp;&nbsp;&nbsp; Value pack press release distribution | 2041303 | 1109315 |
| &nbsp;&nbsp;&nbsp;&nbsp; Media advantage plan | 1378172 | 786529 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenues | 9158089 | 6832303 |
| Cost of revenues | 1871195 | 1945401 |
| Gross margin | 7286894 | 4886902 |
| Operating costs and expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 3545445 | 1959277 |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing | 2623389 | 1766408 |
| &nbsp;&nbsp;&nbsp;&nbsp; Product development | 1176536 | 522417 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating costs and expenses | 7345370 | 4248102 |
| Operating income | (58476) | 638800 |
| Other income, net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment income (expense) | (37256) | 215680 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loan forgiveness income |  | 174500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other income (expense), net | 8 | (40147) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other income (expense), net | (37248) | 350033 |
| Income (loss) before income taxes | (95724) | 988833 |
| Income tax expense | 22575 | 22500 |
| Net income (loss) | $(118299) | $966333 |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Members' Equity (Deficit) (Unaudited)**

(in whole dollars)

---

| | |
|:---|:---|
|  | **Total Members'** <br> **Equity (Deficit)** |
| **Balance on December 31, 2020** | $1650903 |
| Net income | 966333 |
| Members' contributions | 50000 |
| Members' distributions | (4853000) |
| **Balance on September 30, 2021** | $(2185764) |
| **Balance on December 31, 2021** | $(2234873) |
| Net loss | (118299) |
| Members' contributions | 1088344 |
| Members' distributions | (1354187) |
| **Balance on September 30, 2022** | $(2619015) |

---

The accompanying notes are an integral part of these financial statements.

**iNewswire.com LLC**

**Statements of Cash Flows (Unaudited)**

(in whole dollars)

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended** <br> September 30, | **For the Nine Months Ended** <br> September 30, |
|  | **2022** | **2021** |
| **Cash flows from operating activities** |  |  |
| Net income (loss) | $(118299) | $966333 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gains (losses) on investments |  | (215680) |
| &nbsp;&nbsp;&nbsp;&nbsp; Unrealized gains (losses) on investments | 37256 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in other current assets | 15159 | 33711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in accounts payable | (188987) | 592601 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in accrued expenses | 60724 | 52129 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in deferred revenue | 724770 | 984509 |
| Net cash provided by operating activities | $530623 | $2413603 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net proceeds from investments |  | 1030000 |
| Net cash provided by (used in) investing activities | $— | $1030000 |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net repayments to affiliate loans payable | (20003) | (116350) |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions to members | (1354187) | (4853000) |
| &nbsp;&nbsp;&nbsp;&nbsp; Contributions from members | 1088344 | 50000 |
| Net cash used in financing activities  | $(285846) | $(4919350) |
| Net change in cash | $244777 | $(1475747) |
| Cash – beginning | 55997 | 1699227 |
| Cash – ending | 300774 | 223480 |

---

The accompanying notes are an integral part of these financial statements.

**Note 1. Description of Operations** 

*Nature of Operations* 

iNewswire.com LLC ("Newswire", the "Company") is a limited liability company incorporated in Delaware. Newswire is a media technology company that provides software delivered as a service to power press release distribution, media databases, media distribution networks, media monitoring, analytics, newsrooms, and earned media to generate brand awareness, increase online visibility, secure marketing inquiries, and increase sales for customers worldwide. The Company combines science, process, and technology to provide its customers the ability to deliver the right message to the right audience at the right time to maximize their returns on media and marketing communications spend.

**Note 2. Summary of Significant Accounting Policies** 

*Basis of Accounting*

The Company reports income and expenses on the accrual basis of accounting in conformance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recorded when earned and expenses are recorded when incurred.

*Use of Estimates*

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allocation of transaction prices in bundled Media Advantage Platform ("MAP") contracts with customers, valuation of indefinite-lived intangible assets (e.g., domain names), and allocation of operating expenses between cost of revenues, general and administrative, sales and marketing, and product development functional categories. Actual results could differ from those estimates.

*Cash Equivalents*

For purposes of Newswire's financial statements, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents.

*Accounts Receivable and Allowance for Doubtful Accounts*

The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. Credit is granted on an unsecured basis. The allowance for doubtful accounts is estimated based on an assessment of the Company's ability to collect on customer accounts receivable. There is judgement involved with estimating the allowance for doubtful accounts and if the financial condition of the Company's customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. Given the current environment of the COVID-19 pandemic, additional attention has been paid to the financial viability of its customers. The Company generally writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection.

Due to the nature of the Company's revenue recognition, as described below, the Company is typically in a position of recognizing deferred revenue on its contracts with customers. Collections of cash for the Company's contracts generally occurs upfront, thus resulting in the lack of existence of accounts receivable at any point in time. As such, the accompanying balance sheets reflect no value for accounts receivable as of September 30, 2022 and 2021. Similarly, there was no value for the related allowance for doubtful accounts as of September 30, 2022 and 2021.

*Investments*

Investments in marketable securities are carried at their fair values in the balance sheet. The net realized and unrealized gains (losses) on investments are included as investment income in the statements of operations. Cash held in brokerage accounts is included as part of investments in the balance sheets.

*Fair Value Measurements*

GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

· Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes debt and equity securities that are traded in an active market. Cash and cash equivalents are quoted at Level 1.

· Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.

· Level 3 – Unobservable inputs that are supporting by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgement or estimation.

The determination of where an asset or liability falls in the hierarchy requires significant judgement. The Company evaluates its hierarchy disclosures annually. It is possible that an asset or liability may be classified differently from year to year, however the Company expects changes in classifications between levels to be rare. Further, the Company believes the fair value of its financial instruments approximate their carrying amounts as of September 30, 2022 and 2021.

*Indefinite-Lived Intangible Assets*

Indefinite-lived intangible assets consist of domain names and are not subject to amortization; instead, they are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of indefinite-lived intangible assets may be impaired or if a decision is made to sell a business. Management has determined that there were no events or circumstances indicating that indefinite-lived assets were impaired during nine months ended September 30, 2022 and 2021, respectively.

*Long-Lived Assets*

In accordance with the authoritative guidance for accounting for long-lived assets, assets such as capitalized software are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair

value of the asset group. An impairment loss would be measured by comparing the amount by which the carrying value exceeds fair value (estimated discounted future cash flows or appraisals of assets) of the long-lived asset. Management has determined that there were no events or circumstances indicating long-lived assets were impaired during nine months ended September 30, 2022 and 2021, respectively.

*Property and Equipment*

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets, principally using the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The range of estimated useful lives used to calculate depreciation for principal items of fixed assets are as follows:

---

| | |
|:---|:---|
| **Asset Categories** | **Useful Lives** |
| Computer equipment | 3 years |
| Furniture and fixtures | 3 to 7 years |
| Leasehold improvements | Term of lease |

---

As of September 30, 2022 and 2021, fixed assets were considered immaterial and/or fully disposed of/depreciated, and thus are not presented in the accompanying balance sheets.

*Capitalized Software*

Costs incurred to develop the Company's cloud-based platform products are capitalized when the preliminary project phases are complete, management commits to fund the projects, and it is probable that the projects will be completed and used for their intended purposes. Once the software is substantially complete and ready for its intended use, the software is amortized over its estimated useful life, which is typically four years. Costs related to design or maintenance of the software are expensed as incurred. During nine months ended September 30, 2022 and 2021, all software development costs were expensed as incurred, as the criteria for capitalization above were not met. Previously capitalized costs have been fully amortized prior to the nine months ended September 30, 2022 and 2021.

*Revenue Recognition*

Substantially all of the Company's revenue comes from contracts with customers for news distribution and marketing plans. Customers consist of private companies. Newswire accounts for a contract with a customer when there is an enforceable contract between Newswire and the customer, the rights of the parties are identified, the contract has economic substance, and collectability of the contract consideration is probable. The Company's revenues are measured based on consideration specified in the contract with each customer.

The Company's contracts include either a subscription to its MAP or agreements to perform services, or any combination thereof, and often contain multiple subscriptions and services. For these bundled contracts, the Company accounts for individual subscriptions and services as separate performance obligations if they are distinct – which occurs when a product or service is separately identifiable from other items in the bundled package, and a customer can benefit from it on its own or with other resources that are readily available to them.

The Company separates revenue from its contracts into three revenue streams: (i) single press release distribution, (ii) value pack press release distribution, and (iii) MAP subscriptions. Performance obligations of single press release distribution contracts include providing press release distributions on a limited ad hoc basis for customers. Performance obligations of value pack press release distribution contracts include providing on-demand distribution of a fixed number of press releases for customers over a period of twelve months. MAP subscription contracts include two performance obligations: (i) a series of distinct services that include, but are not limited to, developing specific media plans and creating content to be distributed, and (ii) access to the MAP platform along with the distribution of press releases, with ongoing support and assessment of performance as a stand-ready obligation. The Company's MAP contracts are generally for one year, with automatic renewal clauses included within the contracts until they are canceled. The contracts do not contain any rights of returns, guarantees, or warranties. Since contracts are generally for one year, all related revenue is expected to be recognized within one year form the contract start date. As such, the Company has elected the optional exemption that allows the Company not to disclose the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of each reporting period.

For all services delivered on a per-period or per-press release basis, the revenue is recognized at the time of distribution of each release. For MAP contracts, the Company recognized revenue over the contract period as individual performance obligations are satisfied. Transaction prices are allocated to performance obligations in MAP contracts based on standalone pricing for individual components and an estimate of relative value. The Company recognized $7,779,917 and $6,045,774 of revenue at a point in time, and $1,378,172 and $786,529 of revenue over time for the nine months ended September 30, 2022 and 2021, respectively. Standalone selling prices are based on observable prices at which the Company separately sells the subscription or service. If a standalone selling price is not directly observable, the Company uses the residual method to allocate any remaining price to that subscription or service. The Company reviews standalone selling prices at least annually and updates these estimates if necessary.

The Company invoices its customers based on the billing schedules designated in its contracts, typically upfront on either an individual or annual basis, or per transaction prior to the completion of the performance obligation. Deferred revenue for the years presented was primarily related to press releases which have been prepaid, however the releases had not yet been disseminated. The associated deferred revenue is generally recognized as release are disseminated for press release packages. Deferred revenue for the nine months presented also includes amounts received in advance of services rendered under MAP contracts. Deferred revenue as of September 30, 2022 and 2021 was $2,853,752 and $2,295,737, respectively, and is expected to be recognized within one year. Revenue recognized for the nine months ended September 30, 2022 and 2021 that was included in the deferred revenue balance at the beginning of each reporting period was $1,490,287 and $917,860, respectively. Since substantially all of the contracts have terms of one year or less, the Company has elected to use the practical expedient regarding the existence of significant financing.

Costs to obtain contracts with customers consist primarily of sales commissions. All contract costs are expected to be amortized in less than one year. As such, the Company has elected to use the practical expedient allowing the recognition of incremental costs of obtaining a contract as an expense when incurred. The Company has considered historical renewal rates, expectations of future renewals, and economic factors in making these determinations.

*Advertising*

The Company uses advertising to promote its services among the audiences it serves. The production costs of advertising are expensed as incurred. During the nine months ended September 30, 2022 and 2021, advertising expense was $891,593 and $672,770, respectively. These costs are included as part of sales and marketing expenses in the accompanying statements of operations.

*Income Taxes*

The Company is treated as a partnership for tax purposes. As a partnership, the Company is generally not subject to federal or state income taxes. The members are allocated their shares of taxable income on an annual basis. The members are individually responsible for reporting their shares of the Company's taxable income on their respective tax returns. For the nine months ended September 30, 2022 and 2021, the Company's income tax expense included franchise taxes and minimum filing fees imposed by the states and localities in which the Company files. Temporary differences between tax and book treatment of income and expenses are not material to the financial statements. As such, no provision for deferred taxes has been made in the accompanying financial statements.

The Company has adopted the recognition requirements for uncertain income tax positions as required by GAAP, with no cumulative effect adjustment required. Income tax benefits are recognized for income tax positions taken or expected to be taken in a tax return, only when it is determined that the income tax position will more likely than not be sustained upon examination by taxing authorities. The Company has analyzed tax positions taken for filing with the Internal Revenue Service and all state and local jurisdictions where it operates. The Company believes that income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse effect on the Company's financial condition, results of operations, or cash flows. The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2021, 2020, 2019, and 2018 are open to audit by federal and state taxing authorities. Accordingly, the Company has not recorded any reserves or related accruals for interest and penalties for uncertain income tax positions. The Company has filed in all states in which it believes it is required to.

*Sales Tax*

Sales tax is collected on applicable sales and recorded under the liability method.

*Concentration of Credit Risk*

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and investments. The Company places its cash and temporary cash investments with a quality credit institution. On occasion, such cash balances may exceed the Federal Depositors Insurance Corporation ("FDIC") insurance limit of $250,000 per banking institution. The Company places its investments in marketable securities with a quality credit institution as well. On occasion, such investment balances may exceed the Securities Investor Protection Corporation ("SIPC") insurance limit of $500,000 per financial institution. To reduce its risk associated with the potential failure of such banking and financial institutions, quarterly, the Company evaluates the rating of the financial institutions in which it holds deposits and investments. As of September 30, 2022, cash and investments holdings were fully insured by the FDIC and SIPC, respectively.

*Recent Accounting Pronouncements*

For the year ending December 31, 2022, the Company will be required to adopt ASC Topic 842, *Leases*, for all material, long-term operating leases. Under this new accounting pronouncement, the Company would recognize a right-of-use asset and a lease liability calculation based on the present value of the lease payments not yet paid, discounted using an approximate discount rate at the lease commencement date. The right-of-use asset would initially be equal to the lease liability plus any initial direct costs and prepaid lease payments, less any lease incentives received. Under this approach, amortization of right-of-use assets is charged to amortization expense, which is recorded on the straight-line basis over the term of each lease, unless another systemic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property, in which chase that basis would be used. As the Company's leases are short-term in nature, the Company does not expect a significant impact from the adoption of ASC Topic 842.

Other recently adopted and effective new accounting pronouncements either have no or an immaterial impact on the Company and are thus not specifically disclosed.

**Note 3. Revenue**

The Company considers itself to be in a single reportable segment under the authoritative guidance for segment reporting, specifically a media technology company for various companies. The Company generated revenues from the following revenue streams as a percentage of total revenue for the nine months ended September 30, 2022 and 2021 (in whole dollars):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Revenue** | **Percent of**<br> **Total Revenue** | **Revenue** | **Percent of**<br> **Total Revenue** |
| Revenue streams: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Single press releases | $5738614 | 63% | $4936459 | 72% |
| &nbsp;&nbsp;&nbsp;&nbsp; Value pack press releases | 2041303 | 22% | 1109315 | 16% |
| &nbsp;&nbsp;&nbsp;&nbsp; Media advantage plans | 1378172 | 15% | 786529 | 12% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenue | $9158089 | 100% | $6832303 | 100% |

---

The Company did not have any customers during the nine months ended September 30, 2022 and 2021 that accounted for more than 10% of total revenue.

**Note 4. Related Party Transactions**

The Company contracts with E4 LLC for senior management and corporate oversight services. E4 LLC's President and Chief Executive Officer is the father of the President and Chief Executive Officer of the Company's majority member since inception, and sole member since March 2021. The Company incurred costs related to this relationship with E4 LLC totaling $405,000 for the nine months ended September 30, 2022 and 2021. As of September 30, 2022, the Company owed $20,000 to E4 LLC.

**Note 5. Commitments and Contingencies**

*Litigation*

On occasion, the Company may be involved in litigation that arises through the normal course of business. The Company is neither a party to any litigation nor is it aware of any such threatened or pending litigation that might result in a material adverse effect to the Company's business or finances.

*Lease Obligations*

The Company took possession of office space in Sarasota, Florida in January 2017. The initial terms of the lease required monthly payments of approximately $4,500 with set escalations through its expiration in December 2018. Since its expiration, the lease has continued on a month-to-month basis.

The Company is a party to other leases in the ordinary course of business operations whose terms have not been disclosed due to immateriality.

*Retirement Plan*

The Company sponsors a 401(k) plan that covers all employees over the age of 21 who have completed three consecutive months of service and have worked 1,000 hours during the plan year. The Company matches 100% of the first 1% of employees' contributions and 50% of the next 5% of employees' contributions. During the nine months ended September 30, 2022 and 2021, the Company incurred plan contribution expenses totaling $70,316 and $38,887 respectively.

*Contractors*

The Company enters into independent contractor arrangements during the ordinary course of its business operations. Most arrangements are short-term in nature and cancelable given proper written notice from either contracted party.

*Bonus Arrangements* 

The Company enters into performance-related bonus arrangements with certain key employees and independent contractors. The terms of these arrangements generally provide for a profit-sharing bonus of 3-5% calculated based on cash basis profit. The bonuses vest ratably over the course of three-year periods of time. Bonuses earned but not yet paid as of September 30, 2022 and 2021 are included as part of accrued expenses in the accompanying balance sheets.

## Exhibit 99.3

**EXHIBIT 99.3**

**Issuer Direct Corporation**

**Unaudited Pro Forma Combined Financial Statements**

On November 1, 2022, Issuer Direct Corporation ("ISDR", the "Company", "we", "us", and "our") completed the acquisition of iNewswire.com LLC ("Newswire, the "Seller"), a Delaware limited liability company, whereby the Company purchased all of the Seller's issued and outstanding membership interests (in the "Acquisition"). Issuer Direct paid to the Seller aggregate consideration of approximately $43.9 million, consisting of the following: (i) a cash payment of $18.0 million, (ii) the issuance of a Secured Promissory Note (the "Secured Note") in the principal amount of $22.0 million, and (iii) the issuance of 180,181 shares of the Company's common stock, par value $0.001 (the "Equity Payment").

The following unaudited pro forma Condensed Consolidated Balance Sheet as of September 30, 2022, and the unaudited pro forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022, and for the year ended December 31, 2021, present the combination of the financial information of Newswire and Issuer Direct after giving effect to the acquisition and related adjustments as described in the accompanying notes. The unaudited pro forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022 and for the year ended December 31, 2021, give pro forma effect to the acquisition as if it had occurred on January 1, 2021. The unaudited pro forma Condensed Consolidated Balance Sheet gives pro forma effect to the acquisition as if it was completed on September 30, 2022.

The unaudited pro forma condensed consolidated financial statements of the Company are based on currently available information and assumptions that we believe are reasonable, that reflect the impact of events directly attributable to the Acquisition that are factually supportable, and for purposes of the unaudited pro forma Condensed Consolidated Statement of Operations, that are expected to have a continuing impact on us. The unaudited pro forma consolidated financial statements are intended for informational purposes only, and do not purport to represent what our financial position and results of operations actually would have been had the Acquisition and related events occurred on the dates indicated, or to project our financial performance for any future period. Specifically, among other things, the pro forma financial information does not include working capital and other post-closing adjustments related to items affecting comparability, the effects of transition services arrangements with the buyers, final purchase accounting attributed to the transaction, or the impact of any future action we may take to align our cost structure with our business.

The unaudited pro forma condensed consolidated financial statements are subject to the assumptions and adjustments described herein. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial information and accompanying notes should be read in conjunction with our historical financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, and our Quarterly Report on Form 10-Q for the period ended September 30, 2022.

**Issuer Direct Corporation**

**Unaudited Pro Forma Condensed Consolidated Statement of Operations**

(in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Nine Months Ended** <br> **September 30, 2022** | **For the Nine Months Ended** <br> **September 30, 2022** | **For the Nine Months Ended** <br> **September 30, 2022** | **For the Nine Months Ended** <br> **September 30, 2022** |
|  | **Issuer Direct as** <br> **Reported** | **Newswire as** <br> **Reported** | **Adjustments** | **Pro Forma** <br> **Combined** <br> **Operations** |
| Revenues | $16375 | $9158 | $— | $25533 |
| Cost of revenues | 3808 | 1871 |  | 5679 |
| Gross profit | 12567 | 7287 |  | 19854 |
| Operating costs and expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 4903 | 3545 | (723)a | 7725 |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing expenses | 3866 | 2623 | (488)a | 6001 |
| &nbsp;&nbsp;&nbsp;&nbsp; Product development | 734 | 1177 | (486)a | 1425 |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 439 |  | 3327 b | 3766 |
| Total operating costs and expenses | 9942 | 7345 | 1630 | 18917 |
| Operating income | 2625 | (58) | (1630) | 937 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment income (expense) |  | (37) |  | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest income (expense) | 99 |  | (990)c | (891) |
| Income (loss) before taxes | 2724 | (95) | (2620) | 9 |
| Income tax expense (benefit) | 681 | 23 | (702)d | 2 |
| Net income (loss) | $2043 | $(118) | $(1918) | $7 |
| Income per share – basic | $0.55 | $— | $— | $0.00 |
| Income per share – fully diluted | $0.55 | $— | $— | $0.00 |
| Weighted average number of common shares outstanding - basic | 3717 |  | 180 e | 3897 |
| Weighted average number of common shares outstanding – fully diluted | 3738 |  | 180 | 3918 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended**<br> **December 31, 2021** | **For the Year Ended**<br> **December 31, 2021** | **For the Year Ended**<br> **December 31, 2021** | **For the Year Ended**<br> **December 31, 2021** |
|  | **Issuer Direct as** <br> **Reported** | **Newswire as** <br> **Reported** | **Adjustments** | **Pro Forma** <br> **Combined** <br> **Operations** |
| Revenues | $21883 | 10034 | $— | $31917 |
| Cost of revenues | 5748 | 2857 |  | 8605 |
| Gross profit | 16135 | 7177 |  | 23312 |
| Operating costs and expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 5491 | 2920 | (809)a | 7602 |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing expenses | 5079 | 2632 | (255)a | 7456 |
| &nbsp;&nbsp;&nbsp;&nbsp; Product development | 1219 | 778 | (295)a | 1702 |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 603 |  | 4437 b | 5040 |
| Total operating costs and expenses | 12392 | 6330 | 3078 | 21800 |
| Operating income | 3743 | 847 | (3078) | 1512 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other income (expense) | 366 | (41) |  | 325 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment income (expense) |  | 216 |  | 216 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain (loss) on forgiveness of Paycheck Protection Program loan |  | 175 |  | 175 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest income (expense) | 3 |  | (1320)c | (1317) |
| Income before taxes | 4112 | 1197 | (4398) | 911 |
| Income tax expense (benefit) | 821 | 30 | (669)d | 182 |
| Net income (loss) | $3291 | 1167 | $(3729) | $729 |
| Income per share – basic | $0.87 |  | $— | $0.18 |
| Income per share – fully diluted | $0.86 |  | $— | $0.18 |
| Weighted average number of common shares outstanding - basic | 3780 |  | 180 e | 3960 |
| Weighted average number of common shares outstanding – fully diluted | 3820 |  | 180 | 4000 |

---

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

**Issuer Direct Corporation**

**Unaudited Pro Forma Condensed Consolidated Balance Sheet**

(in thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** |
|  | **Issuer Direct as** <br> **Reported** | **Newswire as** <br> **Reported** | **Adjustments** | **Pro Forma** <br> **Combined** <br> **Balance Sheet** |
| **Assets** |  |  |  |  |
| Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $21812 | $301 | $(18264) f  | $3849 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 3062 |  |  | 3062 |
| &nbsp;&nbsp;&nbsp;&nbsp; Income tax receivable | 285 |  |  | 285 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets | 807 | 14 | 90 g | 911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 25966 | 315 | (18174) | 8107 |
| Capitalized software | 153 |  |  | 153 |
| Fixed assets | 649 |  |  | 649 |
| Right-of-use asset – leases | 1341 |  |  | 1341 |
| Other long-term assets | 110 |  |  | 110 |
| Goodwill and other intangible assets | 6376 |  | 19232 h | 25608 |
| Intangible assets | 2123 | 769 | 27332 h | 30224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $36718 | $1084 | $28390 | $66192 |
| **Liabilities and Stockholders' Equity** |  |  |  |  |
| Current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $691 | $640 | $5 i | $1336 |
| &nbsp;&nbsp;&nbsp;&nbsp; Notes payable |  | 26 | (26) i |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 1638 | 180 | (105) j | 1713 |
| &nbsp;&nbsp;&nbsp;&nbsp; Income taxes payable | 198 |  |  | 198 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 3429 | 2854 |  | 6283 |
| &nbsp;&nbsp;&nbsp;&nbsp; Due to Newswire member |  | 3 | (3) k |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 5956 | 3703 | (129) | 9530 |
| Deferred income tax liability | 96 |  |  | 96 |
| Notes payable – long-term |  |  | 22000 l | 22000 |
| Lease liabilities – long-term | 1422 |  |  | 1422 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | 7474 | 3703 | 21871 | 33048 |
| Commitments and contingencies |  |  |  |  |
| Stockholders' equity: |  |  |  |  |
| Preferred stock |  |  |  |  |
| Common stock | 4 |  |  | 4 |
| Additional paid-in capital | 18051 |  | 3900 m | 21951 |
| Other accumulated comprehensive loss | (88) |  |  | (88) |
| Retained earnings | 11277 |  |  | 11277 |
| Newswire members' equity (deficit) |  | (2619) | 2619 k |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total stockholders' equity (deficit)** | 29244 | (2619) | 6519 | 33144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and stockholders' equity** | $36718 | $1084 | $28390 | $66192 |

---

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

**Note 1. Description of the Transaction**

*Newswire Acquisition* 

On November 1, 2022, in connection with the Acquisition, Issuer Direct Corporation (the "Company") paid to Lead Capital LLC (the "Seller"), aggregate consideration of approximately $43.9 million, consisting of the following: (i) a cash payment of $18.0 million subject to a 60-day escrow to secure the payment of any working capital adjustments or any employee bonus obligations of Newswire, (ii) the issuance of a Secured Promissory Note in the principal amount of $22.0 million, and (iii) the issuance of 180,181 shares of the Company's common stock, par value $0.001.

**Note 2. Basis of Presentation**

The Acquisition will be accounted for under the acquisition method of accounting in accordance with ASC 805, *Business Combinations*. Under the acquisition method, the consideration transferred is measured at the acquisition closing date. The assets of Newswire have been measured based on preliminary estimates using assumptions that the Company's management believes are reasonable utilizing information currently available. Use of different estimates and judgements could yield different results.

The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates. The excess of the acquisition consideration over the estimated amounts of identifiable assets of Newswire as of the effective date of the acquisition was allocated to goodwill in accordance with accounting guidance. The acquisition accounting is subject to finalization of the Company's analysis of the fair value of the assets and liabilities of Newswire as of the acquisition date. Accordingly, the acquisition accounting in the unaudited pro forma combined financial statements is preliminary and will be adjusted upon completion of the final valuation. Such adjustments could be material.

**Note 3. Pro Forma Adjustments** 

A summary of the fair value consideration transferred for the Acquisition and the preliminary allocation to the fair value of the assets and liabilities of Newswire are as follows (in $000s):

---

| | |
|:---|:---|
|  | **As of** <br> September 30, 2022 |
| **Consideration transferred:** |  |
| Cash payment | $18000 |
| Secured promissory note | 22000 |
| Shares of Issuer Direct common stock based on closing market price prior to the Acquisition  | 3900 |
| Total consideration transferred | $43900 |
| **Preliminary allocation:** |  |
| Goodwill | $19232 |
| Customer relationships | 15740 |
| Technology | 3945 |
| Other definite-lived intangible assets | 8416 |
| Assets assumed | 141 |
| Liabilities assumed | (3574) |
|  | $43900 |

---

The pro forma adjustments included in the unaudited pro forma combined financial statements are as follows:

(a) Represents salaries and benefits payments of $1.7 million and $1.3 million during the nine months ended September 30, 2022 and twelve months ended December 31, 2021, respectively, to Newswire employees and contractors who left the organization before the Acquisition and will not impact our business in the future.

(b) Represents amortization of intangible assets acquired in the Acquisition based on their preliminary fair values and useful lives. Estimated useful lives of the customer relationships and other definite-lived intangible assets are approximately 7 years and estimated useful lives of the technology intangible assets are approximately 4 years. Amortization is calculated on a straight-line basis.

(c) Represents interest payments on the $22 million secured promissory note with an annual interest rate of 6%, issued as part of the consideration transferred in the Acquisition.

(d) Represents the tax implications of the total pro forma adjustments.

(e) Represents the issuance of 180,181 shares of Issuer Direct common stock, par value $0.001 as part of the consideration transferred in the Acquisition.

(f) Represents payment of $18 million as part of the consideration transferred in the Acquisition, coupled with an adjustment for the difference between cash and cash on hand on the Newswire balance sheet as of September 30, 2022.

(g) Represents an adjustment for Newswire credit card receivables.

(h) Represents the difference between the estimated purchase price and the preliminary estimated fair values of the identified assets acquired and liabilities assumed.

(i) Represents the reversal of Newswire accounts and notes payable not assumed in the Acquisition.

(j) Represents the reversal of liabilities of $105 thousand in Newswire accrued expenses not assumed in the Acquisition.

(k) Represents the elimination of Newswire members' equity.

(l) Represents the issuance of the $22 million secured promissory note as part of the consideration transferred in the Acquisition.

(m) Represents the issuance of 180,181 shares of Issuer Direct common stock in connection with the Acquisition, valued based on the closing market price at the time of the Acquisition.