NRC 10-K & 10-Q changes, risk factors and insider trading

You should carefully consider each of the risks described below, together with all of the other information contained in this Annual Report on Form 10-K, before making an investment decision with respect to our securities. If any of the following risks develop into actual events, our business, financial conditioncondition, or results of operations could be materially and adversely affectedaffected, and you may lose all or part of your investment. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future.

We depend on contract renewals, including retention of key clients,customers, for a large share of our revenue and our operating results could be adversely affected.

We expect that a substantial portion of our revenue for the foreseeable future will continue to be derived from renewable service contracts. The majority of our contracts are renewable annually at the option of our clients. Client contracts are generally cancelable on short notice without penalty; however we are entitled to payment for services through the cancellation date. To the extent that clientscustomers fail to renew or defer their renewals, we anticipate our results may be materially adversely affected. We rely on a limited number of key clientscustomers for a substantial portion of our revenue. Our ten largest clientscustomers collectively accounted for 20%, 17%, 15%, and 15% of our total revenue in 2025, 2024, 2023 and 2022,2023, respectively. Our ability to secure renewals depends on, among other things, our ability to gather and analyze performance data in a consistent, high-quality, and timely fashion. In addition, the service needs of our clientscustomers are affected by accreditation requirements, enrollment in managed care plans, the level of use of satisfaction measures in healthcare organizations’ overall management and compensation programs, the size of operating budgets, clients’customers’ operating performance, industry and economic conditions, and changes in management or ownership. As these factors are beyond our control, we cannot ensure that we will be able to maintain our renewal rates. Any material decline in renewal rates from existing levels would have an adverse effect on our revenue and a corresponding effect on our operating and net income.

The healthcare analytics and market research services industry is highly competitive. We have traditionally competed with healthcare organizations’ internal marketing, market research and/or quality improvement departments that create their own performance measurement tools, and with other firms that provide survey-based healthcare market research and/or performance assessment. Our primary competitors include Press Ganey and Qualtrics, both of which we believe hashave significantly higher annual revenue than us, and several other firms that provide similar services in the market we serve. We also compete with market research firms and technology solutions which provide survey-based, general market research or voice of the customer feedback capabilities and firms that provide services or products that complement healthcare performance assessments, such as healthcare software or information systems. Although only a few of these competitors have offered specific services that compete directly with our services, many of these competitors have substantially greater financial, information gathering, and marketing resources than us and could decide to increase their resource commitments to our market. Our competitors may increase their resources through organic growth, as well as consolidation with other competitors. Furthermore, we do not have a publicly traded group of peers, which makes it difficult to compare and benchmark performance to other similar companies. There are relatively few barriers to entry into our market, and we expect increased competition in our market which could adversely affect our operating results through pricing pressure, increased marketing expenditures, and market share losses, among other factors. There can be no assurance that we will continue to compete successfully against existing or new competitors.

Because our clientscustomers are concentrated in the healthcare industry, our revenue and operating results may be adversely affected by changes in regulations, a business downturndownturn, or consolidation with respect to the healthcare industry.

Substantially all of our revenue is derived from clientscustomers in the healthcare industry. As a result, our business, financial conditioncondition, and results of operations are influenced by conditions affecting this industry, including changing political, economic, competitivecompetitive, and regulatory influences that may affect the procurement practices and operation of healthcare providers and payers. The healthcare industry is extensively regulated by both state and federal government. Future legislative changes, including additional provisions to control healthcare costs, improve healthcare qualityquality, and expand access to health insurance, could result in lower reimbursement rates and otherwise change the environment in which providers and payers operate. Recently,From time-to-time, members of the U.S. House of Representatives have started to weigh a series ofweighed legislative proposals targeting Medicaid, Medicare, and other entitlement programs as part of a broader campaigncampaigns to reduce federal spending, President Trump has issued a number of executive orders have been issued intended to reduce government spending, and we expect there will be continued proposals targeting reimbursement methodologies and the number of individuals eligible for government healthcare programs. There have also been proposals calling for repeal or reform of the Affordable Care Act. Any of these or related actions by state or federal governments could significantly reduce federal or state spending on the Medicaid and Medicare programs, constitute a fundamental change in the federal role in healthcare, change the nature of the entitlements offered by Medicaid and Medicare, or reduce or delay the payments made to both non-profit and for profit healthcare systems by Medicaid and Medicare, any of which could have a material effect on the revenues of our customers, resulting in harm to the demand for our solutions and our ability to collect subscriptions and fees owed to us, which could negatively impact our business, financial condition, cash flows, and results of operations.

In addition, large private purchasers of healthcare services are placing increasing cost pressure on providers. Healthcare providers may react to these cost pressures and other uncertainties by curtailing or deferring purchases, including purchases of our services. Moreover, there has been consolidation of companies in the healthcare industry, a trend which we believe will continue to grow. Consolidation in this industry, including the potential acquisition of certain of our clients,customers, could adversely affect aggregate clientcustomer budgets for our services, could result in clientscustomers performing more marketing, market research and/or quality improvement functions internallyinternally, or could result in the termination of a client’scustomer’s relationship with us. The impact of these developments on the healthcare industry is difficult to predict and could have an adverse effect on our revenue and a corresponding effect on our operating and net income.

InAny May 2023, the federal government lifted its Federal Public Health Emergency Declaration related to COVID-19. However, the continued spreadoutbreak of COVID-19,contagious includingdiseases, such as COVID-19 or its variants, togetheror with any other outbreak of other contagious diseases oradverse public heath environments could adverselynegatively affect our business, results of operations, financial condition, and stock price. While the risk of such similar outbreaks is unpredictable, and the extent of such risk is highly uncertain, the possibility of future outbreaks remains a risk that could have a material adverse effect on our business and it may also have the effect of heightening many of the other risks described in this Part I, Item 1A of this Form 10-K.

We could be negatively impacted by the global conflicts or similar events.

Global conflicts or any expansion of such conflicts,conflicts could adversely affect our business and operations. From time-to-time we outsource certain software development services to third parties outside of the United States, including in the Ukraine. Historically, our contractors located in areas of conflict (including in the Ukraine) have been able to continue their work. However, those services could be more negatively impacted in the future.

Civil unrest, political instability or uncertainty, military activities (including the conflicts in the Ukraine and the Middle East, and as a result of any escalation of tensions between China and Taiwan),activities, utility service breakdownsbreakdowns, or broad-based sanctions, should they continue for the long term or escalate, could interrupt our contractors’ ability to provide services and require our associates to perform the services or replace the contractors which could have an adverse effect on our operations and financial performance, including higher volatility in foreign currency exchange rates, increased use of less cost-efficient resources and negative impacts to our business resulting from deteriorating general economic conditions. Further, we cannot predict the impact of the military actions and any heightened military conflict or geopolitical instability that may follow, including additional sanctions or countersanctions, heightened inflation, cyber disruptions or attacks, higher energy costs, and supply chain disruptions.

In addition, the new administration has stated its intention to imposeimposed new or increased tariff rates on imported goods from a number of countries, including China, Canada, Mexico, and the EU.countries. Such trade policies and tariff implementations, and any related retaliatory trade policies and tariff implementations by foreign governmentgovernments may result in increased costs and worsening economic conditions and could have an adverse impact on our results of operations.

Negative changes in general economic conditions, in the geographic areas in which we operate may reduce our profitability. An economic downturn, a rise in interest rates, and inflationary pressures can reduce the demand for our services and result in terminations as well as slower clientcustomer payments or clientcustomer defaults on receivables. Additionally, in recent years, we experienced increased costscosts, including salary and benefits costs in sales and client support,costs, software costs, contracted services, costs associated with our building improvementsimprovements, and equipment purchasespurchases, and we expect inflationary pressures to continue in 2025.2026. Inflation may increase our costs without a corresponding increase in our contract revenue due to fixed contract arrangements, which could result in decreased margins and profitability.

Our ability to provide timely and accurate performance measurement and improvement services to our clientscustomers depends on our ability to collect large quantities of high-quality data through surveys. If survey operations are disrupted and we are unable to process surveys in a timely manner, then our revenue and net income could be negatively impacted. We outsource certain operations and engage third parties to perform work needed to fulfill our clientcustomer services. For example, we use vendors to perform certain outreach and data collection services related to our survey operations. If any of these vendors cease to operate or fail to adequately perform the contracted services and alternative resources and processes are not utilized in a timely manner, our business could be adversely affected. The loss of any of our key vendors could impair our ability to perform our clientcustomer services and result in lower revenues and income. It would also be time-consuming and expensive to replace, either directly or through other vendors, the services performed by these vendors, which could adversely impact revenues, expensesexpenses, and net income. Furthermore, our ability to monitor and direct our vendors’ activities is limited. If their actions and business practices violate policies, regulations or procedures otherwise considered illegal, we could be subject to reputational damage or litigation which would adversely affect our business.

Our success depends in part upon our data collection process, research methods, data analysis techniques, and internal systems and procedures that we have developed specifically to serve clientscustomers in the healthcare industry. We do not hold patents for our intellectual property. Consequently, we rely on a combination of copyright, trade secret lawslaws, and associate nondisclosure agreements to protect our systems, survey instrumentsinstruments, and procedures. We cannot assure you that the steps we have taken to protect our rights will be adequate to prevent misappropriation of such rights, or that third parties will not independently develop functionally equivalent or superior systems or procedures. We believe that our systems and procedures and other proprietary rights do not infringe upon the proprietary rights of third parties. We cannot assure you, however, that third parties will not assert infringement claims against us in the future, or that any such claims will not result in protracted and costly litigation, regardless of the merits of such claims, or whether we are ultimately successful in defending against such claims.

Failures, interruptionsinterruptions, or deficiencies in our information technology and communications systems could negatively impact our business and operating results.

Our ability to provide timely and accurate performance measurement and improvement service to our clientscustomers is dependent, to a significant extent, upon the technology that we develop internally as well as the efficient and uninterrupted operation of our information technology and communication systems, and those of our external service providers. Investment in the enhancement of existing and development of new information technology processes is costly and affects our ability to successfully serve our clients.customers. The failure or deficiency of the technology we develop and implement could negatively impact the willingness or ability for our clientscustomers to use our services and our ability to perform our services. Our failure to anticipate clients’customers’ expectations and needs, adapt to emerging technological trends, or design efficient and effective information technology platforms, could result in lower utilization, loss of customers, damage to customer relationships, reduced revenue and profits, refunds to customerscustomers, and damage to our reputation. Although we have procedures to monitor the efficacy of our information technology platforms, the procedures may not prevent failures or deficiencies in the information technology platforms we develop and implement, we may not adapt quickly enough and may incur significant costs and delays that could harm our business. Additional costs will be incurred to further develop and improve our information technology platforms.

In addition, changing technologies including AI and other emerging technologies may become significant to operational results in the future. Although weWe plan to continue to invest in research and development, including through acquisitions, in order to enhance our technology and new and existing solutions. However, if we are unable to successfully anticipate, develop, implementimplement, and utilize such emerging technologies as effectively as competitors or our customers are able to use AI as a replacement to our services, our results of operations may be negatively affected. Additionally, while AI and other technologies may offer substantial benefits, they may also introduce additional risks and raise ethical, technological, legal, regulatory, and other issues that may negatively affect the demand for our solutions.

Our systems and those of our external service providers could be exposed to damage or interruption from fire, natural disasters, which may increase in frequency and severity due to climate change, energy loss, telecommunication failure, security breachbreach, and computer viruses. An operational failure or outage in our information technology and communication systems or those of our external service providers, could result in loss of customers, damage to customer relationships, reduced revenue and profits, refunds of customer chargescharges, and damage to our reputation and may result in additional expense to repair or replace damaged equipment and recover data loss resulting from the interruption. Although we have taken steps to prevent system failures and have back-up systems and procedures to prevent or reduce disruptions, such steps may not prevent an interruption of servicesservices, and our disaster recovery planning may not account for all contingencies. Additionally, our insurance may not adequately compensate us for all losses or failures that may occur. Any one of the above situations could have a material adverse effect on our business, financial condition, results of operationsoperations, and reputation.

If we or our third-party service providers sustain cyber-attacks or other privacy or data security incidents that result in security breaches that disrupt our operations or result in the unintended dissemination of protected personal information or proprietary or confidential information or AI impacts our demand for, or providing of, services, we could suffer a loss of revenue and increased costs, exposure to significant liability, reputational harmharm, and other serious negative consequences.

In connection with our clientcustomer services, we and our third-party service providers receive, process, storestore, and transmit sensitive business information and, in certain circumstances, personal medical information of our clients’customers’ patients, electronically over the internet. We or our third-party service providers may become the target of attempted cyber-attacks and other security threats and may be subject to breaches of the information technology systems we use. Experienced computer programmers and hackers may be able to penetrate our security controls and access, misappropriate or otherwise compromise protected personal information or proprietary or confidential information or that of third parties, create system disruptionsdisruptions, or cause system shutdowns that could negatively affect our operations. They also may be able to develop and deploy viruses, worms, ransomware, and other malicious software programs that attack our systems or otherwise exploit any security vulnerabilities In addition, the risk of cyber-attacks has increased in connection with the military conflict between Russia and Ukraine and the resulting geopolitical conflict. In light of those and other geopolitical events, nation-state actors or their supporters may launch retaliatory cyber-attacks and may attempt to cause supply chain and other third-party service provider disruptions, or take other geopolitically motivated retaliatory actions that may disrupt our business operations, result in data compromise, or both. Nation-state actors have in the past carried out, and may in the future carry out, cyber-attacks to achieve their aims and goals, which may include espionage, information operations, monetary gain, ransomware, disruption, and destruction. In February 2022, the U.S. Cybersecurity and Infrastructure Security Agency issued a “Shields Up” alert for American organizations noting the potential for Russia’s cyber-attacks on Ukrainian government and critical infrastructure organizations to impact organizations both within and beyond the United States, particularly in the wake of sanctions imposed by the United States and its allies, which is still in effect. These circumstances increase the likelihood of cyber-attacks and/or security breaches.vulnerabilities.

We were the target of a cyber-attack in 2020, which resulted in temporary suspension of our services to clients.customers. One of our third-party service providers was the target of a cyber-attack in December 2022, which resulted in a temporary suspension of certain services to our clients.customers. In both instances no protected data was compromised or exfiltrated. We, and our service providers, will likely continue to be the target of other attempted cyber-attacks and security threats. Such cyber-attacks may subject us to litigation and regulatory risk, civil and criminal penalties, additional costs and diversion of management attention due to investigation, remediation efforts and engagement of third-party consultants and legal counsel in connection with such incidents, payment of “ransoms” to regain access to our systems and information, loss of clients,customers, damage to clientcustomer relationships, reduced revenue and profits, refunds of clientcustomer chargescharges, and damage to our reputation, any of which could have a material adverse effect on our business, cash flows, financial conditioncondition, and results of operations. While we have contingency plans and insurance coverage for potential liabilities of this nature, they may not be sufficient to cover all claims and liabilities and in some cases are subject to deductibles and layers of self-insured retention. Any system failure, inability to upgrade or update, or security breach (including cyber-attacks) related to our information technology systems may also impact third parties that we rely on in our business and could result in a hinderance to the services provided by the Company or such third parties, as the case may be, and may have a material adverse effect on our business.

We cannot ensure that we or our third-party service providers will be able to identify, preventprevent, or contain the effects of cyber-attacks or other cybersecurity risks that bypass our security measures or disrupt our information technology systems or business. The use of AI by bad actors may make cyber-attacks more difficult to anticipate or detect. We have security technologies, processesprocesses, and procedures in place to protect against cybersecurity risks and security breaches. However, hardware, softwaresoftware, or applications we develop or procure from third parties may contain defects in design, manufacturer defectsdefects, or other problems that could unexpectedly compromise information security. In addition, because the techniques used to obtain unauthorized access, disabledisable, or degrade service or sabotage systems change frequently, are becoming increasingly sophisticated, and may not immediately produce signs of intrusion, we may be unable to anticipate these techniques, timely discover or counter them or implement adequate preventative measures.

In addition, we use third-party technology, systemssystems, and services for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to clients,customers, back-office support, and other functions that in some cases involve processing, storingstoring, and transmitting large amounts of data for our business. These third-party providers may also experience security breaches or interruptions to their information technology hardware and software infrastructure and communications systems that could adversely impact us.

Under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, implementing regulations promulgated by the U.S. Department of Health and Human Services, or “HHS,” including what are referred to as the “Privacy Rule” and the “Security Rule” (collectively, “HIPAA”), we face potential liability related to the privacy of health information we obtain. We are required through our contracts with our clientscustomers and by HIPAA to protect the privacy and security of certain health information and to make certain disclosures to our clientscustomers or to the public if this information is unlawfully accessed.

Changes in privacy and information security laws and standards may require that we incur significant expense to ensure compliance due to increased technology investment and operational procedures. Noncompliance with any privacy or security laws and regulations, including, without limitation, HIPPA, or any security breach, cyber-attack or cybersecurity breach, and any incident involving the misappropriation, lossloss, or other unauthorized disclosure or use of, or access to, sensitive or confidential information, whether by us or by one of our third-party service providers, could require us to expend significant resources to continue to modify or enhance our protective measures and to remediate any damage. In addition, this could negatively affect our operations, cause system disruptions, damage our reputation, cause clientcustomer losses and contract breaches, and could also result in regulatory enforcement actions, material fines and penalties, litigationlitigation, or other actions that could have a material adverse effect on our business, cash flows, financial conditioncondition, and results of operations. Even if cyber-attacks or other cybersecurity breaches do not result in noncompliance with privacy or security laws, the perception that such noncompliance may have occurred by our clientscustomers or in the news media may have an adverse impact on our stock price and could result in damage to our reputation or loss of clients,customers, which could have a material adverse effect on our business, cash flows, financial conditioncondition, and results of operations.

We have made substantial investments to develop new solution offerings and technologies, including AI enhancedAI-enabled offerings. We expect to continue investing significant resources in developing new technologies, tools, features, and solutions. At the same time, our competitors are rapidly developing their technologies and services, and our offerings may not be able to compete effectively. Our new solutions have a high degree of risk, as each involves strategies and technologies with which we have limited or no prior development or operating experience. There can be no assurance that customer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that they will generate sufficient revenue to offset any new expenses or liabilities associated with these new investments. Further, our development efforts with respect to new solution offerings and technologies could distract management from current operations and will divert capital and other resources from our more established solution offerings and technologies. Even if we are successful in developing new solution offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that could increase our expenses or prevent us from successfully commercializing new solution offerings or technologies. If we do not invest in commercially successful and innovative technologies, we may not realize the expected benefits of those investments. At the same time, if we do not realize the expected benefits of our investments, our business, financial condition and operating results may be harmed. If we do not invest in commercially successful and innovative technologies, we may not realize the expected benefits of those investments. No assurance can be given that such strategies and offerings will be successful and will not harm our reputation, financial condition, and operating results.

We have, and willexpect to continue to have, a portion of our employee population that works from home full-time or under flexible work arrangements, and we have provided associates with expanded remote network access options which enable them to work outside of our corporate infrastructure and, in some cases, use their own personal devices, which exposes us to additional cybersecurity risks. Our employees working remotely may expose us to cybersecurity risks through: (i) unauthorized access to sensitive information as a result of increased remote access, including our employees’ use of Company-owned and personal devices and videoconferencing functions and applications to remotely handle, access, discuss, or transmit confidential information, and (ii) increased exposure to phishing and other scams as cybercriminals may, among other things, install malicious software and access sensitive information. We believe that the increased number of employees working remotely has incrementally increased our cyber risk profile, but we are unable to predict the extent or impactsimpact of those risks at this time. A significant disruption of our information technology systems, unauthorized access to or loss of confidential information, or legal claims resulting from our violation of privacy laws could each have a material adverse effect on our business.

Reputational harm could have a material adverse effect on our business, financial conditioncondition, and results of operations.

Our ability to maintain a positive reputation is critical to selling our services. Our reputation could be adversely impacted by any of the following (whether or not valid): the failure to maintain high ethical and social standards; the failure to perform our clientcustomer services in a timely manner; violations of laws and regulations; failure to adequately preserve information security; and the failure to maintain an effective system of internal controls or to provide accurate and timely financial information. Damage to our reputation or loss of our clients’customers’ confidence in our services for any of these, or any other reasons, could adversely impact our business, revenues, financial condition, and results of operations, as well as require additional resources to rebuild our reputation.

Due to the nature of the services we offer, we are subject to significant commercial, tradetrade, and privacy regulations. We cannot predict the nature, scopescope, or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted, which could have a material and negative impact on our business and our results of operation. For example, recent years have seen an increase in the development or enforcement of legislation related to healthcare reform, privacy, and trade compliance and anti-corruption.compliance. Additionally, some of the services we provide include information our clientscustomers need to fulfill regulatory reporting requirements. If our services result in errors or omissions in our clients’customers’ regulatory reporting, we may be subject to loss of clients,customers, reputational harmharm, or litigation, each potentially adversely impacting our business. Furthermore, although we maintain a variety of internal policies and controls designed to educate, discourage, preventprevent, and detect violations of such laws, we cannot guarantee that such actions will be effective or sufficient or that individual employees will not engage in inappropriate behavior in breach of our policies. Such conduct, or even an allegation of misbehavior, could result in material adverse reputational harm, costly investigations, severe criminal or civil sanctions, or could disrupt our business, and could negatively affect our results of operations or financial condition.

Our growth strategy includes future acquisitions, partnershipspartnerships, and/or investments which involve inherent risk.

In order to expand services or technologies to existing clientscustomers and increase our clientcustomer base, we have historically, and may in the future, make strategic business acquisitions, partnerships with other organizationsorganizations, and/or investments that we believe complement our business.

Acquisitions have inherent risks which may have material adverse effects on our business, financial condition, or results of operations, including, among other things: (1) failure to successfully integrate the purchased operations, technologies, productsproducts, or services and maintain uniform standard controls, policiespolicies, and procedures; (2) substantial unanticipated integration costs; (3) loss of key associates including those of the acquired business; (4) diversion of management’s attention from other operations; (5) failure to retain the customers of the acquired business; (6) failure to achieve any projected synergies and performance targets; (7) additional debt and/or assumption of known or unknown liabilities; (8) dilutive issuances of equity securities; and (9) a write-off of goodwill, software development costs, clientcustomer lists, other intangibles and amortization of expenses.expenses; and (10) an acquisition target may have differing or inadequate cybersecurity, data protection, or financial reporting. If we fail to successfully complete acquisitions or integrate acquired businesses, we may not achieve projected results and there may be a material adverse effect on our business, financial conditioncondition, and results of operations. In addition, volatility in the equity markets could impair our financial position in general terms and our ability to effectively capitalize on potential merger and acquisition opportunities.

We have established a strategic partnership and intend to continue to establish strategic partnerships with third parties to enhance our solution offering. We currently depend on our partner’s technology to perform certain services for our customers. As a result, these services may not be provided in the manner or on the time schedule we currently expect, which may negatively impact our business operations. In addition, we cannot control the amount and timing of resources our partners may devote to their technology enhancements. Furthermore, there is no assurance that our partner-provided services will be purchased by our customers. Our partners may terminate their agreements with us for cause under certain circumstances and may elect not to renew our agreements, which could discontinue our ability to use their technologies and could result in our partners pursuing competing solutions. If our partners terminate or breach our agreements with them or otherwise fail to complete their obligations in a timely manner, it may have a detrimental effect on our financial position by reducing or eliminating the potential for us to receive technology access and perform our contractual obligations to our customers. These factors could have a material adverse effect on our business, financial conditioncondition, and results of operations.

If we are unable to achieve a proper revenue to cost ratio our profitability could decreasedecrease.

Our ability to achieve our goals and earnings growth depends on our ability to grow our revenue and achieve the appropriate cost structure for our revenues. Our revenue and margins have decreased in recent years. We have invested in product development, leadershipsales, and recruitingleadership in an effort to increase revenue. During the second quarter of 2025 we expect to recognize compensation expense of $4.9 million (based on the price of our common stock on February 28, 2025) for Mr. Green's signing bonus. In addition, we expect to recognize compensation expense of approximately $608,000 (based on the price of our common stock on February 28, 2025) per quarter for Mr. Green's equity grant beginning in June 2025 and continuing through the third anniversary of the grant. In light of Mr. Green's hiring and compensation, we expect to terminate the existing long-term incentive program for our executive leadership team with the consent of the impacted participants and adopt a new incentive program during the second quarter of 2025, which could result in additional expenses. We have also adjusted spending in certain areas to reduce costs. If we are unsuccessful in increasing our revenue or we do not reduce costs sufficiently, our margins will continue to be compressed.

A majority of our common stock and voting power was historically owned and/or held by Michael D. Hays, our ChiefChairman Executiveof Officerthe and President.Board. However, over the years Mr. Hays, for estate planning purposes, gifted and/or transferred almost all of his directly owned shares to trusts for the benefit of his family. Currently, the principal holder of shares previously owned by Mr. Hays is the Common Property Trust (the “Trust”).

As of February 28, 2025,2026, approximately 37.5% of our outstanding common stock was owned by the Trust and approximately 46.8% of our outstanding common stock was held by the Trust and other entities controlled by trustees or special power holders for the benefit of members of Mr. Hays’ family. As a result, the Trust and these other entities, through the trustees or special power holders, have the power to indirectly control and significantly influence decisions such as whether to issue additional shares or declare and pay dividends and can control matters requiring shareholder approval, including the election of directors and the approval of significant corporate matters such as change of control transactions. The effects of such influence could be to delay or prevent a change of control of the Company unless the terms are approved by the Trust and these other entities.

Our overall operating results may fluctuate as a result of a variety of factors, including the size and timing of orders from clients,customers, clientcustomer demand for our services (which, in turn, is affected by factors such as accreditation requirements, enrollment in managed care plans, operating budgetsbudgets, and clients’customers’ operating performance), the hiring and training of additional staff, expense increases, and industry and general economic conditions. Because a significant portion of our overhead is fixed in the short-term,short term, particularly some costs associated with owning and occupying our building and full-time personnel expenses, our results of operations may be materially adversely affected in any particular period if revenue falls below our expectations. These factors, among others, make it possible that in some future period our operating results may be below the expectations of securities analysts and investorsinvestors, which would have a material adverse effect on the market price of our common stock.

Our future performance may depend, to a significant extent, upon the efforts and ability of our key personnel who have expertise in gathering, interpretinginterpreting, and marketing survey-based performance information for healthcare markets. Although clientcustomer relationships are managed at many levels within our company, the loss of the services of MichaelTrent D. Hays,Green, our Chief Executive Officer and President,Officer, or one or more of our other executive officers,officers or Chairman, could have a material adverse effect, at least in the short to medium term, on most significant aspects of our business, including strategic planning, product development, and salessales, and customer relations. Our success will also depend on our ability to hire, traintrain, and retain skilled personnel in all areas of our business. Competition for qualified personnel in our industry is intense, and many of the companies that compete with us for qualified personnel have substantially greater financial and other resources than us. Furthermore, we expect competition for qualified personnel to become more intense as competition in our industry increases. We cannot assure you that we will be able to recruit, retainretain, and motivate a sufficient number of qualified personnel to compete successfully. While we expect Mr. Green will begin serving as our Chief Executive Officer and as a director on June 1, 2025, his start date may be delayed or may never occur.

Like many other companies, we experienced higher attrition rates in the last several years. We may incur higher costs to attract, traintrain, and retain these associates. Attrition in our sales and service areas can also impact our ability to retain and attract new business. We may need to develop or adapt to new ways of doing business that challenge our leadership, our associate training, our human resources, and our business practices, and we cannot assure you that we will be successful in doing so. The short and long-term costs associated with these potential changes are difficult to quantify.

We are subject to income tax in the United States. Our overall effective income tax rate is a function of the federal and local tax rates and the geographic mix of our income before taxes in the jurisdictions in which we operate. The newU.S. administration hasand certain members of Congress have indicated a desire to amend the federal tax laws. Changes in tax rates could negatively impact our net income. Tax laws and regulations, including rates of taxation, are subject to revisions by individual taxing jurisdictions. It is possible that these types of changes could materially impact our net income and cash flows. Significant judgment is required in determining our annual income tax expense and in evaluating our tax positions. Although we believe our tax estimates are reasonable, the final determination of tax audits could materially differ from our historical income tax provisions, estimatesestimates, and accruals and could materially adversely impact our financial statements for the period or periods which the statute of limitations is open.

As a public company, we are subject to the reporting requirements of the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act Wall Street Reform and Consumer Protection Act, the listing requirements of NASDAQNASDAQ, and other applicable securities rules and regulations. Additionally, laws, regulations and standards relating to corporate governance and public disclosure are subject to varying interpretations and continue to develop and change. If we misinterpret or fail to comply with these rules and regulations, our legal and financial compliance costs and net income may be adversely affected.

Our purpose is to humanize healthcare and support organizations in their understanding of each unique individual. Our commitment to Human Understanding® helps leading healthcare systems getimprove totheir knowoperations through understanding each person they serve not as point-in-time insights, but as an ongoing relationship. Our end-to-end solutions enable our clientscustomers to understand what matters most to each person they serve – before, during, after, and beyond clinical encounters – to gain a longitudinal understanding of how life and health intersect, with the goal of developing lasting, trusting relationships. Our ability to measure what matters most and systematically capture, analyze, and deliver insights based on self-reported information from patients, families, and consumers is critical in today’s healthcare market. We believe access toto, analysis of, and analysisacting ofon our extensive consumer-drivenindividual-driven information is increasingly valuable as healthcare providers need to better understand and engage the people they serve to create long-term relationshipsrelationships, build loyalty, and buildimprove loyalty.processes.

Our portfolio of subscription-based solutions provides actionable information and analysis to healthcare organizations across a range of mission-critical, constituent-related elements, including patient experience, service recovery, care transitions, employee engagement, reputation management, and brand loyalty. We partner with clientscustomers across the continuum of healthcare services and believe this cross-continuum positioning is a unique and an increasingly important capability as the evolving payment models drive healthcare providerslandscape anddrives payersits constituents towards a more collaborative and integrated service model.

The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported therein. The following areasarea areis considered a critical accounting estimatesestimate because theyit involveinvolves significant judgments or assumptions, involveinvolves complex or uncertain matters or they areis susceptible to changechange, and the impact could be material to our financial condition or operating results:

We derive a majority of our revenue from annually renewable subscription-based service agreements with our customers. Such agreements are generally cancelable on short or no notice without penalty. We also derive revenue from fixed, non-subscription arrangements. Our revenue recognition policy requires management to estimate, among other factors, the future contract consideration we expect to receive under variable consideration subscription arrangements as well as future total estimated contract costs over the contract term with respect to fixed, non-subscription arrangements. If management made different judgments and estimates, then the amount and timing of revenue for any period could differ from the reported revenue. See Notes 1 and 3 to our consolidated financial statements for a description of our revenue recognition policies.

Revenue.Total RevenueRecurring inContact 2024Value decreased compared to 2023 by $5.5 million. This was mainly from decreased recurring revenue in our existing client base. Of this decrease, 34% was from our non-core solutions.(TRCV). We view total Recurring Contract Value, or TRCV, a measure of revenue under all renewable contracts for their respective annual renewal periods,TRCV as a leading indicator of revenue expectations. TRCV declinedincreased forin several2025 quarters priorcompared to the2024 fourthprimarily quarterdue ofto 2024,sales whento it increased slightly. We believe the expansion of our productnew and servicesexisting portfoliocustomers, during 2024, along with a broader sales effort, ledand to improved salesretention of contracts with existing customers. Our TRCV metric represents the amount of revenue projected to be recognized over the next 12 months from renewable contracts and retentionis inmeasured as of the fourthmost recent quarter comparedend. withTRCV assumes no upsells, downsells, price increases, or cancellations, unless we have been notified by a customer of any such change as of the priorrelevant several quarters.date. There is a lag between changes in TRCV (next twelve months) and revenue (trailing twelve months). Generally, if we are able to sustain growth in TRCV, we would expect revenue growth to follow within the next few quarters (and vice versa). However, intervening events may affect this general expectation.

Operating income and margin. Operating income and margin decreased in 20242025 compared to 2023 primarily2024 due to the decline in revenue while direct expenses and depreciation and amortization increased. In the nearincreased term,compensation weexpense expect operating income and marginrelated to increaseour dueexecutive toleadership revenue and cost initiatives, excluding the impact of the compensation charge described above.transition.

Provision for income taxes and effective tax rate. Provision for income taxes decreased in 20242025 compared to 20232024 primarily due to decreased taxable income.income, offset by an increase in the effective tax rate. The effective tax rate increased primarily due to anexecutive increasecompensation inexceeding theSection effective162(m) ratelimits related toand state income taxes which fluctuatesfluctuate based on various apportionment factors and rates for the states we operate in, increased provision for uncertain tax positions and decreased tax benefits from the share-based compensation awards.factors. See Note 7,6, “Income Taxes,” to our Consolidated Financial Statements contained in this report for additional information on the change in the effective tax rates.

Our business historically has generated significant cash for allocation in accordance with corporate priorities. Our Board of Directors has established priorities for capital allocation, which prioritizeinclude funding of innovation and growth investments, including merger and acquisition activity as well as internal projects.projects, Theand secondary priority isreturning capital allocationto forshareholders quarterlythrough dividends and share repurchases.

As of December 31, 2024,2025, our principal sources of liquidity included $4.2$4.1 million of cash and cash equivalents, up to $30 million of unused borrowings under our LineRevolving of CreditLoan and an additional $24$27.6 million on our Delayed Draw Term Loan.

Our cash flows from operating activities consist of net income adjusted for non-cash items including depreciation and amortization, deferred income taxes, share-based compensation and related taxes, reserve for uncertain tax positions, change in fair value of contingent consideration, amortization of debt issuance costs, loss on disposal of property and equipmentequipment, and the effect of working capital changes. Cash provided by operating activities decreased primarily due to decreased net income net of non-cash items, partially offset by working capital changes. Working capital changes mainly consisted of changes in deferred contract costs primarily due to the timing of commissions and incentives and related amortization and changesaccrued in prepaid expenseswages and other current and noncurrent assets primarily due to the timing of our annual business insurance and other service agreements.incentives.

Cash used in investing activities primarily consisted of payments for the acquisition of Nobl Health and purchases of property and equipment including computer software and hardware, building improvements, and furniture and equipment.

Cash used in financing activities consisted of payments for borrowings under the Term Loan, Delayed Draw Term Loan, Line of CreditLoan and financeRevolving lease obligations.Loan. We also used cash to repurchase shares of our common stock for treasury, to pay dividends on common stock and for payment of payroll tax withholdings on options exercised. This was partially offset by cash provided from borrowings on the LineRevolving of CreditLoan and Delayed Draw Down Term loan.

Cash dividends in the aggregate amount of $11.8 million, $11.3 million, $36.3 million and $20.9$36.3 million were declared in 2025, 2024, 2023 and 20222023, respectively. Dividends were paid from cash on hand and borrowings on our line of credit. The payment and amount of future dividends, if any, is at the discretion of our Board of Directors and will depend on our future earnings, financial condition, general business conditions, alternative uses of our earnings and cash and other factors. In the fourth quarter of 2025, our Board of Directors increased the quarterly cash dividend payable from 12 cents per share to 16 cents per share commencing with the dividend payable in January 2026.

We paid cash of $15.4$10.7 million for capital expenditures in the year ended December 31, 2024.2025. These expenditures consisted mainly of building improvements, furniture and equipment, computer hardware, and costs related to software development for our Human Understanding® solutions and building renovations to our headquarters. We estimate future costs related to our headquarters building renovations to be $5.8 million in 2025, which we expect to fund through operating cash flows and borrowings on the Line of Credit and Delayed Draw Term Loan.solutions.

In February 2025, we entered into a new credit agreement (the “New Credit Agreement”), withwhich a group of lenders and FNB that amends and restates the terms of our existing Credit Facility, as amended. The New Credit Agreement provides forincludes (i) a $30,000,000$30.0 million revolving credit facility (the “Revolving Loan”) and (ii) a $110,000,000$110.0 million delayed draw-down term facility (“the “New Delayed Draw Term Loan” and, together with the Revolving Loan, the “New Credit Facilities”). The New Delayed Draw Term Loan includes an accordion feature that, so long as no event of default exists or would exist after giving effect to such increase, allows us to request an increase in the New Delayed Draw Term Loan of up to the lesser of (x) $25,000,000$25.0 million and (y) our EBITDA as of the preceding four fiscal quarters, exercisable in increments of $10,000,000$10.0 million (or the remaining available amount of the accordion, if less). We may use the Delayed Draw Term Loan to fund permitted future business acquisitions, repurchases of our common stock, capital expenditures, or payment of dividends and the Revolving Loan to fund ongoing working capital needs and for other general corporate purposes.

InterestThe accruesoutstanding and is payable monthlybalance on the New Delayed Draw Term Loan andwas the$79.4 Revolving Loanmillion at aDecember floating31, rate equal to the one-month Term SOFR plus a percentage per annum determined by our cash flow leverage ratio, ranging from 2.25% to 2.75%.2025. Principal amounts outstanding under the Revolving Loan are due and payable in full at maturity at February 6, 2028. Principal amounts outstanding under the New Delayed Draw Term Loan are due and payable monthly during the term of the New Delayed Draw Term Loan, in equal monthly installments to amortize the aggregate outstanding principal balance by (i) 5% during each of the first three years and (ii) 7.5% during each of the fourth and fifth years following the date of such loan. All outstanding principal and interest on the New Delayed Draw Term Loan are due and payable in full at the maturity date, February 6, 2030. TheWe had the availability to borrow an additional $27.6 million on the Delayed Draw Term Loan canat onlyDecember be31, used2025, toexcluding refinancethe certainaccordion existing term indebtedness, fund dividends, capital expenditures, permitted future business acquisitions, or repurchasing our common stock.feature.

We are obligated to pay ongoing unused commitment fees quarterly in arrears at a percentage per annum determined by our cash flow leverage ratio, ranging from 0.15% to 0.30%, based on the actual daily unused portions of the Revolving Loan and the New Delayed Draw Term Loan, respectively.

The New Credit Agreement is collateralized by substantially all of our assets, subject to permitted liens and other agreed exceptions, and contains customary representations, warranties, affirmative and negative covenants (including financial covenants), and events of default. The negative covenants include, among other things, restrictions regarding the incurrence of indebtedness and liens, repurchases of our Commoncommon Stockstock, and acquisitions, subject in each case to certain exceptions. ThePursuant Newto the Credit AgreementAgreement, also contains certain financial covenants with respect to minimum fixed charge coverage ratio and maximum cash flow leverage ratio. Wewe are required to maintain a minimum fixed charge coverage ratio of 1.10x for all testing periods throughout the terms of the New Credit Facilities, which calculation excludes certain specified items, unless our liquidity falls below a specified threshold. We are also required to maintainand a cash flow leverage ratio of 3.50x or less for all testing periods throughout the termsterm of the New Credit Facilities. As of December 31, 2025, we were in compliance with our financial covenants.

We have lease arrangements for certain computer, office, printing and inserting equipmentequipment, as well asand office and data center space. As of December 31, 2024,2025, we had fixed lease payments of $624,000$505,000 and $10,000 for operating and finance leases, respectively payable within 12 months. A summary of our operating and finance lease obligations as of December 31, 20242025, can be found in Note 10,9, "Leases", to the Consolidated Financial Statements contained in this report.

The liability for gross unrecognized tax benefits related to uncertain tax positions was $2.2$2.4 million as of December 31, 2024.2025. See Note 7,6, "Income TaxesTaxes,", to the Consolidated Financial Statements contained in this report for income tax related information.

In May 2022, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to 2,500,000 shares of common stock (the “2022 Program”). During 2024,2025, we repurchased 1,154,595307,709 shares of our common stock for an aggregate purchase price of $30.8$5 million under the 2022 Program.Program, Asand of December 31, 2024, the remaining number ofno shares ofremained commonavailable stockfor that could be purchasedpurchase under the 2022 Program wasas 307,709of shares.December 31, 2025.

Three Months Ended MarchJune 31,30, 2026, Compared to Three Months Ended MarchJune 31,30, 2025

Revenue. Revenue in the 2026 period increased compared to the 2025 period by $1.3$1.4 million. This was mainly from $0.6$1.2 million higher recurring revenue from existing customers compared to the prior year, and $0.5$0.9 million higher revenue from new customers, compared to the prior year.year, partially offset by new contra-revenue of $0.7 million related to sales where we act as an agent in the delivery of third-party solutions.

Direct expenses. Direct expenses consist primarily of salaries and employee benefits, employee travel and lodging, materials, contract labor, third party software subscription costs, hosted customer conferences, and other direct expenses associated with revenue. Personnel costs within direct expenses are associated with individuals in product delivery, customer support, thought leadership, conference support, technology infrastructure, and product development. Direct expenses represented 39%38% of revenue for both the 2026 and 2025.2025 periods. Direct expenses increased to $13.6 million infor the 2026 period from $13.1$13.0 million for the same period in 2025, primarily driven by higher third‑partysurvey softwaredelivery subscription costsservices and increased spending on IT contractor services and computer subscription costs related to continued investments in technology and development.

Selling, general, and administrative expenses. Selling, general, and administrative expenses consist of salaries and employee benefits, commissioncommissions and amortization of deferred commission,commissions, stock-based compensation, employee travel and lodging, third party software subscription and platform costs, marketing costs, facility expenses, office expenses, fees for professional services, provision for credit losses, and other operational expenses. Personnel costs within selling, general, and administrative expenses are associated with individuals in sales, marketing, finance, accounting, business development, human resources, administrative, product development, internal information systems, and executive management. Selling, general, and administrative expenses increased to $13.4$22.9 million for the three2026 months ended March 31, 2026,period, from $10.4$17.7 million for the same period in 2025. The increase was primarily driven by $1.4$7.1 million of higher stock‑basedstock-based compensation expense related to executive leadershipleadership. andThis increase in stock-based compensation expense primarily related to previously disclosed amendments to certain executive equity awards. We do not expect similar amendments to be recurring events. Accordingly, the increase in stock-based compensation expense in the reported period is not necessarily indicative of such expense in future periods. The increase was also driven by approximately $0.5 million of executivehigher salary expense thatfor wasexecutives who were not present infor the prior‑yearsame period in 2025. These increases were partially offset by $3.2 million of lower executive leadership transition bonus expense compared to the prior-year period. The remaining increase was attributable to higher travel and computer software subscription expenses to support ongoingcontinued technologyinvestment investments,in regulatory-related accruals, and the timing of corporate‑related expenses.technology.

Operating income (loss) and margin. Operating income decreasedswung to a loss in the 2026 period compared to the 2025 period due to the increased compensation related to our executive leadership transition and increased investment in technology.technology, partially offset by revenue growth.

Total other expense. Total other expense increased in the 2026 period compared to the 2025 period due to higher interest expense due to a higher balance on thelong Delayedterm Draw Term Loan.debt.

Provision for income taxes and effective tax rate. Provision for income taxes decreasedchanged to a benefit in the 2026 period from an expense in the 2025 period, primarily due to a pre-tax loss in the 2026 period compared to thepre-tax 2025 period primarily due to decreased taxable income, partially offset by an increaseincome in the effective2025 tax rate.period. The effective tax rate increaseddecreased in the 2026 period dueprimarily tobecause the 2025 rate reflected a small pre-tax income base that magnified the impact of nondeductible items, specifically executive compensation subject to thenondeductible deductibilityexecutive limitationscompensation under IRC Section 162(m), which did not affect the effective tax ratewhereas in the first2026 quarterperiod, the pre-tax loss minimized the impact of 2025.these nondeductible items.

Total Recurringrecurring Contractcontract Valuevalue (TRCV). TRCV at MarchJune 31,30, 2026,2026 was higher compared to MarchJune 31,30, 2025, primarily due to sales to new and existing customers and to improved retention of contracts with existing customers. We view TRCV as a leading indicator of our future revenue trends. TRCV represents the total annualized contract value of recurring amounts under customer contracts that are in effect or contractually committed as of the most recent quarter-end and are expected to be in force over the subsequent 12 months, based on contractual pricing and term provisions. TRCV is calculated using contracted recurring fees and assumes no upsells, downsells, price changes, early terminations, or non-renewals, unless we have been notified of such changes by the customer as of the measurement date. TRCV is an operating metric and is not a measure of revenue recognized under U.S. GAAP. The timing and amount of revenue we recognize under ASC 606 may differ from the pattern implied by TRCV due to allocation of transaction price and the timing of satisfaction of performance obligations. As a result, there is typically a lag between changes in TRCV and changes in our reported revenue. Generally, if we are able to sustain growth in TRCV, we would expect revenue growth to follow within subsequent periods, although intervening factors may affect this relationship.

We believe Adjusted Net Income, Adjusted Earnings per Share, Adjusted EBITDA, and Adjusted EBITDA Margin are helpful supplemental measures to assist management and investors in evaluating our operating results as (i) they exclude certain items that are unusual in nature or whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business, and (ii) the exclusion of non-cash stock compensation is useful for investors applying certain valuation metrics and is consistent with the leverage ratio for our credit facility. Adjusted Net Income represents net income adjusted to add back certain management bonuses and non-cash stock compensation and the related tax. Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization, certain management bonuses, and non-cash stock compensation items. Adjusted EBITDA Margin represents Adjusted EBITDA divided by our revenue.

We consider Free Cash Flow to be a measure that provides useful information to management and investors about our liquidity. Free Cash Flow does not represent residual cash flow available for discretionary expenditures. We define Free Cash Flow as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin represents Free Cash Flow divided by our revenue.

As of MarchJune 31,30, 2026, our principal sources of liquidity included $2.5$3.3 million of cash and cash equivalents, up to $30.0$17.0 million of unused borrowings under our Revolving Loan and an additional $27.6 million on our Delayed Draw Term Loan.

Our cash flows from operating activities primarily consist of net income adjusted for non-cash items including depreciation and amortization, deferred income taxes, share-based compensation, and the effect of working capital changes. CashFor the six months ended June 30, 2026, cash provided by operating activities increased compared to the same period in 2025 primarily due to higher net income net of non-cash items and working capital changes, partially offset by a decrease in net income.changes. Working capital changes were mainly driven by trade accounts receivable and prepaid expenses primarily due to timing of billings and payments, and higher deferred revenue. Cash provided by operating activities was alsorevenue, partially offset by anthe increasetiming in netof income nettax ofpayments non-cashand items.lower accrued expense balances.

We had a working capital deficit of $18.5$12.2 million and $16.4 million on MarchJune 31,30, 2026, and December 31, 2025, respectively. The change was primarily due to an increase in income taxes receivable and prepaid expenses, together with decreases in accrued wages and bonuses, income taxes payable, and other current liabilities. These favorable changes were partially offset by decreases in cash and cash equivalents and increasestrade accounts receivable, and by an increase in accounts payable, deferred revenue, and income taxes payable.revenue. Cash and cash equivalents decreased mainly due to the payment of dividends and the repurchase of shares of our common stock for treasury. The decrease in cash and cash equivalents wastreasury, partially offset by cash from operating activities. Our working capital is significantly impacted by our large deferred revenue balancesbalances, which will vary based on the timing and frequency of billings on annual agreements. Notwithstanding our working capital deficit on MarchJune 31,30, 2026, we believe that our existing sources of liquidity, including cash and cash equivalents, borrowing availability, and operating cash flows will be sufficient to meet our projected capital and debt maturity needs for the foreseeable future.

Cash used in financing activities consisted of payments of dividends on our common stock, payments and borrowings on our Delayed Draw Term Loan and Revolving Loan, repurchases of common stock, and cash to pay contingent consideration related to our 2024 acquisition of Nobl Health.

Cash dividends of $3.6 million were paid in the threesix months ended MarchJune 31,30, 2026. Additional dividends of $3.6$3.5 million were declared in the three months ended MarchJune 31,30, 2026, and paid in AprilJuly 2026. The dividends were paid from cash on hand and borrowings on our Revolving Loan. Our Board of Directors considers whether to declare a dividend and the amount of any dividends declared on a quarterly basis.

We paid cash of $1.8$3.2 million for capital expenditures in the threesix months ended MarchJune 31,30, 2026. These expenditures consisted primarily of computer hardware and softwaresoftware, and costs related to software development for our Human Understanding® solutions.

Interest accrues and is payable monthly at a floating rate equal to the one-month Term SOFR plus a percentage per annum determined by our cash flow leverage ratio, ranging from 2.25% to 2.75% (6.02%5.97% at MarchJune 31,30, 2026).

The outstanding balance on the Delayed Draw Term Loan was $78.4$77.3 million at MarchJune 31,30, 2026. Principal amounts outstanding are due and payable monthly during the term of the Delayed Draw Term Loan, in equal monthly installments to amortize the aggregate outstanding principal balance by (i) 5% during each of the first three years and (ii) 7.5% during each of the fourth and fifth years following the date of such loan. All outstanding principal and interest on the Delayed Draw Term Loan are due and payable in full at the maturity date, February 6, 2030. We had the availability to borrow an additional $27.6 million on the Delayed Draw Term Loan at MarchJune 31,30, 2026, excluding the accordion feature.

Principal amounts outstanding under the Revolving Loan are due and payable in full at maturity at February 6, 2028. As of MarchJune 31,30, 2026, we had no$13.0 borrowingsmillion outstanding and the availability to borrow $30.0$17.0 million on the Revolving Loan. Our weighted average short-term borrowings for the three-month periods ended MarchJune 31,30, 2026, and 2025 were $1.9$5.9 million and $2.0$8.2 million, respectively. Our weighted average borrowings for the six-month periods ended June 30, 2026, and 2025 were $4.7 million and $5.1 million, respectively. The weighted average interest rate on short-term borrowings during the three-month periods ended MarchJune 31,30, 2026, and 2025 was 6.04%5.99% and 6.67%, respectively, and 6.01% and 6.67% during the six-month periods ended June 30, 2026, and 2025, respectively.

The Credit Agreement is collateralized by substantially all of our assets, subject to permitted liens and other agreed exceptions, and contains customary representations, warranties, affirmative and negative covenants (including financial covenants), and events of default. The negative covenants include, among other things, restrictions regarding the incurrence of indebtedness and liens, repurchases of our common stock, and acquisitions, subject in each case to certain exceptions. Pursuant to the Credit Agreement, we are required to maintain a minimum fixed charge coverage ratio of 1.10x and a cash flow leverage ratio of 3.50x or less for all testing periods throughout the term of the Credit Facilities. As of MarchJune 31,30, 2026, we were in compliance with our financial covenants.

We have lease arrangements for certain computer, office, printing, and mail inserting equipment as well as office and data center space. As of MarchJune 31,30, 2026, we had fixed lease payments of $493,000$413,000 and $8,000$5,000 for operating and finance leases, respectivelyrespectively, payable within 12 months.

The liability for gross unrecognized tax benefits related to uncertain tax positions was $2.3$2.4 million as of MarchJune 31,30, 2026. SeeThere Notewere 3,no "Incomematerial Taxes",changes toin our unrecognized tax benefits during the Condensedsix Consolidatedmonths Financialended StatementsJune contained30, in this report for income tax related information.2026.

In March 2026, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $60.0 million of our outstanding common stock through March 31, 2028 (the “2026 Program”). Under this authorization, we may repurchase shares from time to time in the open market, through privately negotiated transactions, and/or other means in compliance with the Securities and Exchange Act of 1934 and the rules and regulations thereunder. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 under the Exchange Act. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares of common stock under this authorization. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion, and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. The repurchase program may be suspended or discontinued at any time.

During the three months ended MarchJune 31,30, 2026, we repurchased 109,701397,381 shares of our common stock for an aggregate of $1.9$7.4 million.