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

•Our use of open sourceopen-source software could negatively affect the performance of our applications and our ability to sell our applications and subject us to possible litigation.

We sell our applications primarily through a direct sales organization comprised of inside sales and field sales personnel. In addition, we have an indirect sales organization that sells through alliances with strategic partners that can leverage our applications with their complementary services and technologies. Growing sales to both new and existing customers is, in part, dependent on our ability to maintain, expand and enhance our sales force. Identifying, recruiting and training additional sales personnel requires significant time, expense, and attention. It can take several quarters or longer before our sales representatives are fully-trainedfully trained and productive. Our business may be adversely affected if our efforts to expand and train our sales organization do not generate a corresponding increase in revenue. In particular, if we are unable to hire, develop, and retain sales personnel, or if our new sales personnel are unable to achieve expected sales productivity levels in a reasonable period of time or at all, our revenue may grow more slowly than expected or decline and our business may be harmed.

As our operations have expanded, we have established andWe currently maintain offices in the United States, Australia, Canada, France, Germany, India, Ireland, Israel, Malaysia, Netherlands, Romania and the United Kingdom. For the year ended December 31, 2024,2025, we generated approximately 29%28% of our total revenue from customers outside of the United States.U.S. As a result, we are subject to a number of risks, including:

•international and regional economic, political and labor conditions, including any instability or security concerns abroad, such as uncertainty caused by economic sanctions, trade disputes, armed conflicts and wars,geopolitical including the Russia-Ukraine and Israeli-Hamas warsuncertainty;

•changes to tax laws (including U.S. taxes on foreign subsidiaries);

We currently incorporate AI capabilities into certain of our offerings, and our research into and continued development ofof, such capabilities remain ongoing. As with many innovations, AI presents risks, challenges, and potential unintended consequences that could affect its adoption, and therefore our business. Many generative AI solutions and implementations rely on third-parties, where ineffective or inadequate AI development or deployment practices by us or others could result in incidents that impair the acceptance of AI solutions or cause harm to our customers, individuals or society. These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm. If we enable or offer AI solutions that result in (i) potential bias or inaccuracy, or (ii) a negative impact on human rights, privacy, employment, or other social, economic, or political issues, we may experience competitive, brand, or reputational harm or legal and/or regulatory action.

Our reputation and ability to attract, retain, and serve our customer is dependent upon the reliable performance of our computer systems and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, power loss, telecommunications failures, vendor limitations, computer viruses, computer denial of service attacks, or other attempts to harm these systems. Supply chain disruptions stemming from the Russia-Ukraine conflict or theglobal conflicts in the Middle East may harm our customers and suppliers and further complicate existing supply chain constraints. Interruptions in these systems, or with the internetInternet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver application data to our customers. Service interruptions, errors in our software, or the unavailability of computer systems used in our operations could diminish the overall attractiveness of our applications to existing and potential customers.

The overall market for software is rapidly evolving and subject to changing technology, shifting customer needs, and frequent introductions of new applications, including without limitationlimitation, AI in its multiple forms. Our ability to attract new customers and increase revenue from existing customers will depend, in large part, on our ability to develop or acquire new applications and enhance and improve existing applications. To achieve market acceptance for our applications, we must effectively anticipate and offer applications that meet changing customer demands in a timely manner. Customers may require features and capabilities not offered by our current applications. We may experience difficulties that could delay or prevent our development, acquisition, or implementation of new applications and enhancements.

If we are unable to successfully develop or acquire new software capabilities and functionality, enhance our existing applications to anticipate and meet customer preferences, sell our applications into new markets, or adapt to changing industry standards in software, our revenue and results of operations would be adversely affected.

Our use of open sourceopen-source software could negatively affect the performance of our applications and our ability to sell our applications and subject us to possible litigation.

A portion of our applications incorporate open sourceopen-source software, and we expect to continue to incorporate open sourceopen-source software in the future. Few of the licenses applicable to open sourceopen-source software have been interpreted by courts, and their application to the open sourceopen-source software integrated into our proprietary software may be uncertain. Moreover, we cannot provide any assurance that we have not incorporated additional open sourceopen-source software in our applications in a manner that is inconsistent with the terms of the license or our current policies and procedures. If we fail to comply with these licenses, we may be subject to certain requirements, including requirements that we offer our applications that incorporate the open sourceopen-source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open sourceopen-source software, and that we license such modifications or derivative works under the terms of applicable open sourceopen-source licenses. If an author or other third party that distributes such open sourceopen-source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our applications that contained the open sourceopen-source software, and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our applications. In addition, there have been claims challenging the ownership of open sourceopen-source software against companies that incorporate open sourceopen-source software into their products. As a result, we could be subject to suits by parties claiming infringement due to the reliance by our applications on certain open sourceopen-source software. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition, or require us to devote additional research and development resources to change our applications.

We have historically experienced seasonality in terms of when we enter into customer agreements. WeTypically we sign a significantly higherhigh percentage of agreements with new customers, and renew agreements with existing customers, in the fourth quarter of each calendar year as our customers tend to follow budgeting cycles at the end of the calendar year. Our cash flow from operations has historically been higher in the first quarter of each calendar year than in other quarters. This seasonality is reflected to a much lesser extent, and sometimes is not immediately apparent, in our revenue, due to the fact that we defer revenue recognition. In addition, seasonality may be difficult to observe in our financial results during periods in which we acquire businesses,or asdivest suchof results typically are most significantly impacted by such acquisitions.businesses. We expect this seasonality to continue, or possibly increase in the future, which may cause fluctuations in our operating results and financial metrics. If our quarterly operating results or outlook fall below the expectations of research analysts or investors, the price of our common stock could decline substantially.

If our competitors’ products, service,services, or technologies become more accepted than our software applications, if they are successful in bringing their products or services to market earlier than ours, or if their products or services are more technologically capable than ours, our revenues could be adversely affected.

Our quarterly operating results may fluctuate as a result of a variety of factors, many of which are outside of our control. Accordingly, the results of any one quarter may not fully reflect the underlying performance of our business and should not be relied upon as an indication of future performance. Because our quarterly operating results may fluctuate, period-to-period comparisons may not be the best indication of the underlying results of our business and should only be relied upon as one factor in determining how our business is performing. This variability and unpredictability could also result in our failure to meet the expectations of research analysts or investors for any period. If our quarterly operating results or outlook fall below the expectations of research analysts or investors, the price of our common stock could decline substantially.

We expect to need to renegotiate the terms of our loan facility as our Credit Facility will terminate on August 6, 2026, and our lender may be unwilling to do so, or may agree to such changes subject to additional restrictive covenants on our operations and ability to raise capital. We have funded our operations since inception primarily through equity financings, cash from operations, and cash available under our loan facility. We may need to raise funds in the future, for example, to expand our business, acquire complementary businesses, develop new technologies, respond to competitive pressures, or react to unanticipated situations. We may try to raise additional funds through public or private financings, strategic relationships, or other arrangements. Our ability to obtain debt or equity funding will depend on a number of factors, including market conditions, our operating performance, and investor interest. In addition, under the terms of our Series A Preferred Stock, holders of our Series A Preferred Stock have certain approval rights over additional financings. Additional funding may not be available to us on acceptable terms or at all. If adequate funds are not available, we may be required to reduce expenditures, including curtailing our growth strategies, reducing our product-development efforts, or foregoing acquisitions. If we succeed in raising additional funds through the issuance of equity or convertible securities, it could result in substantial dilution to existing stockholders. If we raise additional funds through the issuance of debt securities or preferred stock, these new securities would have rights, preferences, and privileges senior to those of the holders of our common stock. In addition, any debt financing obtained by us in the future or issuance of preferred stock could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. For example, our Series A Preferred Stock contains a number of restrictive covenants. See "—Risks Related to Ownership of Our Common Stock.”

WeAt haveDecember floating-to-fixed31, 2025, we had an interest rate swapcap agreementsin place in order to reduce interest rate volatility in connection with $255.8$120.0 million of the outstanding term debt on our Credit Facility, but $37.9$118.5 million of our outstanding term debt is not currently subject to any interest rate instruments.

Our obligations under our Credit Facility are secured by a security interest in substantially all of our assets and assets of the co-borrowers’ and of any guarantors, including intellectual property. The terms of the Credit Facility limit, among other things, our ability to:

As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. Under Section 404 of the Sarbanes-Oxley Act requires thatAct, we evaluateare andrequired determineto furnish a report by management on, among other things, the effectiveness of our internal controls over financial reporting and that our independent registered public accounting firm issue an attestation report annually regarding the effectiveness of ourCompany’s internal control over financial reporting. WeThis haveassessment identifiedmust include disclosure of any material weaknesses inidentified ourby internal controls over financial reportingmanagement in the past and if we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis, and our financial statements may be materially misstated. For example, in 2024 we identified a material weakness in ourCompany’s internal control over financial reporting related to a management review control over prospective financial information used in the Company’s goodwill impairment assessment, and specifically, not sufficiently performing and documenting the reasonableness of significant assumptions used therein.reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. WeAlthough the Company is not currently required to provide an attestation from its auditors on the effectiveness of the Company’s internal control over financial reporting, it may needbecome additional finance and accounting personnel with certain skill setssubject to assistsuch usrequirement within the reporting requirements we will encounter as a public company and to support our anticipated growth. In addition, implementing internal controls may distract our officers and employees, entail substantial costs to modify our existing processes, and take significant time to complete. For additional information, see "Item 9A. Controls and Procedures—Remediation of Prior Material Weakness in Internal Control Over Financial Reporting."future.

Effective internal controls are necessary to provide reliable financial reporting and prevent fraud. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting,effective investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or regulatory investigations. If we do not successfully remediate any material weakness, or if other material weaknesses or other deficiencies arise in the future, we may be unable to accurately report our financial results, specifically potential goodwill impairments,results which could cause our financial results to be materially misstated. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, which could adversely affect investor confidence in us, our business, results of operations and financial condition, the trading price of our common stock, and our ability to remain listed on Nasdaq.

As of December 31, 2024,2025, the Company had total net operating loss carryforwards of approximately $244.5$216.7 million consisting of $200.6$195.4 million and $43.9$21.3 million related to the U.S. federal and foreign net operating loss carryforwards, respectively. $138.8$136.5 million of the U.S. federal net operating loss carryforwards are related to yearyears prior to 2018 and begin to expire in 2025.2026. The remaining $61.9$58.9 million carryforward without expiration in accordance with provisions of the Tax Act (as described below in the risk factor titled "Tax laws, regulations, and compliance practices are evolving and may have a material adverse effect on our results of operations, cash flows and financial position."). $43.9$21.3 million of foreign net operating loss carryforwards carry forward indefinitely, and the remainder, if any, will expire beginning in 2041.indefinitely. In addition, as of December 31, 2024,2025, the Company had research and development credit carryforwards of approximately $4.1$4.2 million. The U.S. federal net operating loss and credit carryforwards will expire beginning in 2025,2026, if not utilized.

Accounting principles generally accepted in the United States of America (“GAAP”) require us to assess goodwill for impairment at least annually. In addition, we assess our goodwill and intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Depending on the results of our review, we could be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets wereis determined,identified, negatively impacting our results of operations. As a result of the decline of our stock price impacting our market capitalization during the quarters ended March 31, 2024, March 31, 2023 and December 31, 2022, we performed quantitative impairment evaluations, which resulted in goodwill impairments of $87.2 million, $128.8 million and $12.5 million during the quarters ended March 31, 2024, March 31, 2023 and December 31, 2022, respectively. We will continue to evaluate goodwill for impairment in 2025 and future impairments of goodwill could occur if our stock price declines.

TaxThe laws,tax regulations,regimes we are subject to or operate under, including income and administrativenon-income practices in various jurisdictionstaxes, are evolvingunsettled and may be subject to significant change. Changes in tax laws or tax rulings, or changes duein tointerpretations economic,of politicalexisting laws, could materially affect our results of operations, cash flows and otherfinancial conditions.position. ThereIn addition, there are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Governments are increasingly focused on ways to increase tax revenues, particularly from multinational corporations, which may lead to an increase in audit activity and harsher positions taken by tax authorities. We are currently subject to tax audits in various jurisdictions and these jurisdictions may assess additional tax liabilities against us.

The regulatory framework for privacy and data security matters around the world is rapidly evolving and is likely to remain volatile for the foreseeable future. We are subject to privacy and data security obligations in the United States, United Kingdom, European Union and other foreign jurisdictions relating to the collection, use, sharing, retention, security, transfer and other handling of personal data about individuals, including our users and employees around the world. Data protection, consumer protection and privacy laws may differ, conflict and be interpreted and applied inconsistently, from country to country. In many cases, these laws apply not only to user data, employee data and third-party transactions, but also to transfers of personal data between or among ourselves, our subsidiaries, and other parties with which we have commercial relations, in addition to methods of communication and consent for such communication. These laws continue to develop in the U.S. and around the globe, including through regulatory and legislative action and judicial decisions, in ways we cannot predict and that may harm our business. For example, a new QuebecQuebec’s data protection law took effect in September 2023,2023 and is fully in force, and updates to Canadian federal privacy legislation are pending. India passed the Digital Personal Data Protection ActAct, which was enacted in 2023.2023 with implementing rules and guidance continuing to develop. In addition, the United States, through the Federal Communications Commission, recentlyhas implementedadopted newand begun enforcing enhanced lead generation “robot-text” and “robo-calls” regulations under the Telephone Consumer Protection Act (TCPA). AsThese theregulations particularsinclude ofheightened consent, disclosure and recordkeeping requirements for certain automated and semi-automated communications, and their scope and interpretation continue to evolve through regulatory guidance and judicial decisions. Compliance with these regulations are unknown at this time, these new consumer protection regulationsrequirements could impact our organization’s corporate go-to-market sales initiatives, as well as certain feature sets in our current product stack.

Any failure to comply with applicable laws, regulations or contractual obligations may harm our business, results of operations and financial condition. If we are subject to an investigation or litigation or suffer a breach of security of personal data, we may incur costs or be subject to forfeitures and penalties that could reduce our profitability. In addition, compliance with these laws may restrict our ability to provide services to our customers that they may find to be valuable. For example, theThe General Data Protection Regulation (“GDPR”) became effective in May 2018.2018 in the EU, and a separate but substantially similar data protection regime applies in the United Kingdom. The GDPR,GDPR whichand appliesUK GDPR apply to personal data collected in the context of all of our activities conducted from an establishment in the European Union,Union and United Kingdom, related to products and services offered to individuals in the European Union and United Kingdom or related to the monitoring of individuals’ behavior in Europe,Europe or the United Kingdom, imposes a range of significant compliance obligations regarding the handling of personal data. These obligations include requirements relating to lawful bases for processing, transparency, data subject rights, data security, breach notification, cross-border data transfers and accountability. Actions required to comply with these obligations depend in part on how particular and strict regulators interpret and apply them.them and continue to evolve through regulatory guidance and judicial decisions. If we fail to comply with the GDPR, or if regulators assert we have failed to comply with the GDPR, we may be subject to, for example, regulatory enforcement actions,actions that can result in monetary penalties of up to 4% of our annual worldwide revenue or EUR 20 million (whichever is higher), orders restricting or prohibiting data processing, private lawsuits, class actions, regulatory orders to stop processing and delete data, and reputational damage. In June 2021, the European Commission published new versions of the Standard Contractual Clauses, which are used as a legal cross-border mechanism allowing companies to transfer/allow access to personal data outside the European Economic Area. Use of the previous versions of the Standard Contractual Clauses is no longer allowed and all contracts that include the earlier versions should have been amended to replace them with the new versions by December 27, 2022.allowed. Also in June 2021, the European Data Protection Board finalized its recommendations regarding supplemental transfer measures to protect personal data during cross-border transfers. We must incur costs and expenses to comply with the newthese requirements, which may impact the cross-border transfer of personal data throughout our organization and to/from third parties. In some circumstances, data localization requirements or restrictions on cross-border data transfers in certain jurisdictions may further limit our ability to transfer personal data or require changes to our technical, contractual or business practices.

Further, U.S. states continue to adopt new laws or amendingamend existing laws related to data privacy, requiring attention to frequently changing regulatory requirements. For example, the California Consumer Privacy Act of 2018 (“CCPA”) requirerequires businesses to provide specific disclosures in their privacy notices and honor residents' privacy rights. The CCPA provides for civil penalties of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Although the CCPA does not apply to certain data that we processprocessed in specific contexts may be exempt from the context of clinical trials,CCPA, efforts to comply with the CCPA may increase our annual compliance costs and subject us to potential liability with respect to other personal information we may maintain about California residents. In addition, the California Privacy Rights Act of 2020 (“CPRA”), which camebecame into effectoperative on January 1, 2023, expanded the CCPA's requirements, extending it to cover personal information of business representatives and employees and the CPRA established a new regulatory agency to implement and enforce the law. Other states, such as Virginia, Nevada, Connecticut, Utah, TexasTexas, Colorado, Oregon, Montana, Iowa, Indiana, Tennessee, Delaware, and Colorado,New Jersey, have also passedenacted comprehensive privacy laws,laws that have taken effect or are scheduled to take effect, and similar laws are being considered in several other states, as well as at the federal and local levels, which impose similar obligations to those in the CCPA. These laws may increase our potential liability related to our data processing activities, complicate our compliance efforts, and increase both legal risk and compliance costs for us and the third parties upon whom we rely.

Compliance with the GDPR, the newU.S. state consumer privacy laws, and other current and future applicable U.S. and international privacy, data protection, cybersecurity, artificial intelligence and other data-related laws can be costly and time-consuming. Complying with these varying requirements could cause us to incur substantial costs and/or require us to change our business practices in a manner adverse to our business. Violations of applicable data and privacy-related laws can result in significant penalties that could adversely affect our business, financial condition, reputation, and results of our operations. Furthermore, conflicting requirements across applicable privacy and data security laws wouldmay complicate our compliance efforts and increase both legal risk and compliance costs for us and the third parties upon whom we rely.

Australia recentlyhas amended its Privacy Act, increasing the maximum penalties available for serious or repeated data breaches from AUSAUD 2.2 million to the greater of: (i) AUSAUD 50 million; (ii) three times the value of any benefit obtained through misuse of the information; or (iii) 30% of a company’s adjusted turnover in the relevant period.

We post on our websites our privacy notices and practices concerning the collection, use, sharing, disclosure, deletion and retention of our user data. Any failure, or perceived failure, by us to comply with our posted privacy notices or with any regulatory requirements or orders or other federal, state or international privacy -relatedprivacy-related laws and regulations, including the GDPR, CCPA and CPRA, could result in proceedings or actions against us by governmental entities or others (e.g., class action plaintiffs), subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and adversely affect our business. We may also experience security breaches and likely will in the future,breaches, which themselves may result in a violation of these laws and give rise to regulatory enforcement and/or private litigation.

You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Item 1A. Risk Factors.” See “Part 1 - Special Note Regarding Forward Looking Statements”.

Sunset Assets and Divestitures

In connection with periodic reviews of our business, we decided to discontinue the availability of certain non-strategic product offerings and a limited number of non-strategic customer contracts (collectively referred to as “Sunset Assets”). As a result of the discontinuation of these Sunset Assets, we established end of life targets and reduced certain expenditures related to the sales and marketing of the Sunset Assets. It is possible that during future periodic reviews of our business we may determine to add additional non-strategic product offerings or non-strategic customer contracts to Sunset Assets or remove certain product offerings or customer contracts from the classification of Sunset Assets. In either case, we will adjust the revenues attributable to Sunset Assets for the then current period and properly reflect the year over year change for such addition or removal.

Cost of product revenue. Cost of product revenue consists primarily of hosting costs, personnel-related costs of our customer success and cloud operations teams, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, and allocated overhead, as well as software license fees, internet connectivity, depreciation expenses, amortization of acquired intangible assets, specifically developed technology, as a result of business combination purchase accounting adjustments and pass-through costs directly related to delivering our applications. We expect that cost of revenues may increase in the future depending on the growth rate of our new customers and billings and our need to support the implementation, hosting and support of those new customers. We intend to continue to invest additional resources in expanding the delivery capability of our applications. As we add hosting infrastructure capacity and support personnel in advance of anticipated growth, our cost of product revenue will increase, and if such anticipated revenue growth does not occur, our product gross profit will be adversely affected both in terms of absolute dollars and as a percentage of total revenues in any particular quarterly or annual period. Our cost of product revenue is generally expensed as the costs are incurred. DevelopedAcquired developed technology is valued using a cost-to-recreate approach and is generally amortized over a four- to nine-year period.

Cost of professional services revenue. Cost of professional services revenue consists primarily of personnel-related costs, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and allocated overhead, as well as the costs of contracted third-party vendors and reimbursable expenses. As most of our personnel are employed on a full-time basis, our cost of professional services revenue is largely fixed in the short-term, while our professional services revenue may fluctuate, leading to fluctuations in professional services gross profit. We expect that cost of professional services as a percentage of total revenues could fluctuate from period to period depending on the growthlevel of our professional services business, the timing of sales of applications, and any associated costs relating to the delivery of services. Our cost of professional services revenue is generally expensed as costs are incurred.

Research and development. Research and development expenses primarily consist of personnel-related costs of our research and development staff, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, and allocated overhead and costs of certain third-party contractors.overhead. Research and development costs related to the development of our software applications are generally recognized as incurred. We have devoted our product development efforts primarily to enhancing the functionality, and expanding the capabilities, of our applications. Investment tax credits are included as a reduction of research and development costs. Investment tax credits are recorded in the year in which the research and development costs of the capital expenditures are incurred, provided that we are reasonably certain that the credits will be received. The investment tax credit must be examined and approved by the tax authorities, and it is possible that the amounts granted will differ from the amounts recorded.

General and administrative. General and administrative expenses primarily consist of personnel-related costs for our executive, administrative, accounting and finance, information technology, legal, accounting and human resource staff, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, allocated overhead, professional fees and other corporate expenses. We have recently incurred, and expect to continue to incur, additional expenses as we grow our operations, including potentially higher legal, corporate insurance, accounting and auditing expenses and the additional costs of enhancing and maintaining our internal control environment. General and administrative expenses may fluctuate as a percentage of revenue, and overtimeover time we expect that general and administrative expenses will decrease as a percent of revenue due to operational efficiencies.

Impairment of goodwill.goodwill and other intangibles. Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of ourthe Company (which is our only reporting unit) exceeds the estimated fair value of ourthe Company as determined by reference to a number of factors and assumptions, including the spot closing price of our Commoncommon Stockstock as of a certain reporting or measurement date. We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of ourthe Company to exceed the estimated fair value of the Company. We periodically review the estimated useful lives of our Company.identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. See “Note 5.4. Goodwill and Other Intangible Assets” in the notes to our consolidated financial statements for more information regarding our first quarter 2024, our first quarter 2023 and our fourth quarter 2022 goodwill impairment charges. We will continue to evaluate goodwill and other intangibles for impairment in future periods.

Total other expense consists primarily of amortization of debt issuance costs over the term of the related term loan, revaluation of foreign subsidiaries, interest expense on outstanding debt, partially offset by amounts recognized related to our interest rate derivatives and interest income on our interest-bearing cash balances held in money market accounts. We participate in interest rate swap agreements for the purpose of reducing variability in interest rate payments on the Company’s outstanding term loans. These interest rate swaps fix a portion of the Company's interest rate (including the hedge premium) at 5.4% for the term of the Credit Facility (as hereinafter defined in “Liquidity and Capital Resources—Credit Facility”). In addition, gains/losses on divested assets that meet the definition of a business under ASC 805-10, Business Combination—Overall,805 are included in Totaltotal other expense.

Because we have not generated domestic net income in any period to date, we have recorded a full valuation allowance against our domestic net deferred tax assets, exclusive of tax deductible goodwill. We have historically not recorded any materialsignificant provision for federalU.S.federal or state income taxes, other than deferred taxes related to tax deductible goodwill and current taxes in certain separate company filing states and states in which loss carryforwards do not fully offset taxable income. The balance of the tax benefit (provision) for the years ended December 31, 2024,2025, 20232024 and 2022,2023, outside of tax deductible goodwill and current taxes in separate filing states, is related to foreign income taxes, primarily operations of our subsidiaries in Canada and Ireland, and to the release of valuation allowances associated with acquisitions of domestic entities with a benefit generated in the UK and Australia fully offset by valuation allowances. Realization of any of our domestic deferred tax assets depends upon future earnings, the timing and amount of which are uncertain. Based on analysis of acquired net operating losses, utilization of our net operating losses will be subject to annual limitations due to the ownership change rules under the Internal Revenue Code of 1986, as amended, or the Code, and similar state provisions. In the event we have subsequent changes in ownership, the availability of net operating losses and research and development credit carryovers could be further limited.

CostSubscription ofand professional servicessupport revenue was $5.1$205.1 million in the year ended December 31, 2025, compared to $260.7 million in the year ended December 31, 2024, compared to $7.5 million in the year ended December 31, 2023, a decrease of $2.4$55.6 million, or 32%.21%. The decrease is primarily due to the expected declines in costsubscription ofand professional servicessupport revenue is related to adivested decreaseproduct lines and Sunset Assets of $53.1 million and $3.3 million, respectively. These decreases are offset by an increase in personnel-relatedsubscription costsand resultingsupport fromrevenue decreasedof professional$0.8 servicesmillion delivered.related to our core product lines.

Acquisition-relatedAcquisition Expenseand Divestiture related Expenses

Impairment of goodwill and other intangibles

Other expense, net was $0.7 million in the year ended December 31, 2025, compared to other income, net wasof $1.1 million in the year ended December 31, 2024, compared to other income of $0.2 million in 2023, a change $0.9of $1.8 million. The differencechange in other expense is primarily due to an increase in foreign currency exchange gains compared to 2023.fluctuations.

BenefitProvision fromfor Income Taxes

Our common stock is listed on the NASDAQ Global Market, or Nasdaq. In order to maintain this listing, we must satisfy the continued listing requirements and standards of Nasdaq, including a minimum closing bid price requirement for our common stock of $1.00 per share.share and that the market value of publicly held shares of our common stock is at least $15 million. On April 7, 2026, we received a notification letter from Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our common stock has been below the minimum $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5450(a)(1) (“Rule 5450(a)(1)”). WeAs haveprovided in the notification letter from Nasdaq, we had 180 calendar days, or until October 5, 2026,days to regain compliance with Rule 5450(a)(1) by maintaining a closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days, subject to Nasdaq’s discretion. If we do notTo regain compliance with Rule 5450(a)(1), bywe Octobereffected 5,the Reverse Stock Split. On July 8, 2026, we mayreceived benotification affordedfrom Nasdaq that we had regained compliance with the minimum closing bid price requirement and, as a secondresult, 180the calendar day period to regain compliance, subject to meeting applicable listing standards and written noticematter of our intentionnoncompliance tohad curebeen the deficiency during the second compliance period, including by effecting a reverse stock split if necessary.closed.

If we are unable to regain compliance withinby the applicableCompliance cure period,Date, including any available extension, our common stock would be subject to delisting from Nasdaq. Further, even if we regain compliance, we may not be able to sustain compliance with Rulethe 5450(a)(1)MVPHS Requirement in the long term.term or with the additional continued listing requirements and standards of Nasdaq. A delisting could significantly reduce the liquidity and market price of our common stock, limit investors’ ability to buy and sell our common stock, reduce analyst coverage, and negatively affect our ability to access the capital markets or complete strategic transactions on favorable terms, or at all. Delisting could also trigger certain contractual provisions or investor concerns that may further adversely affect us.

Forward LookingForward-Looking Statements

For the three-month period ended MarchJune 31,30, 2026, our Core Organic Growth Rate was 0.25%.negative 0.39%.

Because of these limitations, you should consider Adjusted EBITDA together with other financial performance measures, including various cash flow metrics, net lossloss, and our other GAAP results.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

See Note 12. Divestitures regarding product lines divested in the three and six months ended MarchJune 31,30, 2025.

Total revenue was $48.7$49.1 million in the three months ended MarchJune 31,30, 2026, compared to $63.7$53.4 million in the three months ended MarchJune 31,30, 2025, a decrease of $15.0$4.3 million, or 24%.8%. This decrease is primarily due to the expected declines in revenue related to divested product lines of $14.0$3.8 million and Sunset Assets of $0.5 million. DeclinesAn increase in perpetual license revenue of $0.3$0.5 million andrelated to core products was offset by a decrease in professional services revenue of $0.3$0.4 million in core products wereand partiallya offset by an increasedecrease in subscription and support revenue of $0.1 million related to core products.

Cost of subscription and support revenue was $11.1$10.9 million in the three months ended MarchJune 31,30, 2026, compared to $17.0$12.4 million in the three months ended MarchJune 31,30, 2025, a decrease of $5.9$1.5 million, or 34%.12%. The decrease related to divested product lines was $5.7$1.5 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles. The decrease related to Sunset assetsAssets was $0.2 million, primarily attributable to personnel-related costs. A decrease of $0.3 million in non-cash amortization of intangibles in our on-goingcore product lines was offset by a $0.3$0.5 million increase in infrastructure costs.

Cost of professional services and other revenue was $0.8 million in the three months ended MarchJune 31,30, 2026, compared to $1.1$1.0 million in the three months ended MarchJune 31,30, 2025, a decrease of $0.3$0.2 million, or 25%.22%. The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.1 million in our divested product lines and $0.2 million in our on-goingcore product lines due to lower professional services revenue in our core products.

Sales and marketing expense was $9.5 million in the three months ended MarchJune 31,30, 2026, compared to $13.8$10.8 million in the three months ended MarchJune 31,30, 2025, a decrease of $4.3$1.3 million, or 31%.12%. The decrease related to divestedcore product lines was $2.9$0.7 million in personnel-related costs. The remaining decrease was due to declines in personnel-related costs of $0.5 million related to divested product lines and $0.1 million related to our Sunset Assets, and declines in personnel-related costs of $1.3 million related to our core product lines.Assets.

Research and development expense was $8.0$7.8 million in the three months ended MarchJune 31,30, 2026, compared to $11.5$9.8 million in the three months ended MarchJune 31,30, 2025, a decrease of $3.5$2.0 million, or 30%.21%. The decrease in research and development expense iswas primarily attributable to a $2.1 million decrease in personnel-related costs in our divested product lines and a $1.4$1.5 million decrease in personnel-related and contractor costs in our remainingcore product lines and a $0.5 million decrease in personnel-related costs in our divested product lines. The decrease in research and development expense in our core product lines reflects the 2025 termination of our out-sourced research and development contract and the continued use of our India Center of Excellence.

General and administrative expense was $8.5$9.1 million in the three months ended MarchJune 31,30, 2026, compared to $11.6$10.2 million in the three months ended MarchJune 31,30, 2025, a decrease of $3.1$1.1 million, or 27%.11%. This decrease iswas primarily due to a decrease of $2.5$1.9 million in personnel-related costs related to our on-goingcore product lines due to decreased headcount including a decrease of $1.2$1.9 million in non-cash stock-based compensation expense.expense Softwareand costs$0.1 million in third party software and equipment costs. This decrease was partially offset by the effects of $0.6 million in TSA fees related to coredivestitures productreceived linesin declined2025 $0.2with no such fees received in 2026, an increase of $0.1 million duein toboard costof savingsdirector fees, an increase of $0.1 million of other taxes and professionalan feesincrease declinedof $0.1 million.million Theof decreasepublic relatedcompany to our divested product lines was $0.3 million.costs.

Depreciation and amortization expense was $5.6 million in the three months ended MarchJune 31,30, 2026, compared to $8.0$6.9 million in the three months ended MarchJune 31,30, 2025, a decrease of $2.4$1.3 million, or 30%.19%. The decrease was primarily driven by lower amortization expense of $0.7 million ofrelated the decrease resulted from the decline in amortization fromto intangible assets associated with Sunset AssetsAssets, and $1.7$0.5 million ofrelated the decrease resulted from the decline in amortization fromto intangible assets associated with our divested product lines.lines, and $0.1 million decline related to intangible assets associated with our core product line.

Divestiture-related expenses were nominalnil in the three months ended MarchJune 31,30, 2026, compared to $1.7$6.9 million in the three months ended MarchJune 31,30, 2025. In conjunction with the divestitures completed in the first quarterhalf of 2025, we incurred $1.7$5.2 million in legal,fees accountingrelated to a legacy vendor contract for out-sourced research and otherdevelopment that was terminated in 2025. Also, the divestiture-related expenses incurred in the three months ended June 30, 2025 consisted of $0.9 million in professional fees.services Limitedfees and $0.8 million in severance costs related to the divestitures completed in the three months ended June 30, 2025. No divestiture-related expenses were incurred in the three months ended MarchJune 31,30, 2026 as final expenses were incurred related to the 2025 divestitures and no divestitures werehave been executed in 2026.

Interest expense, net was $4.5 million in the three months ended MarchJune 31,30, 2026 compared to $2.4$4.1 million in the three months ended MarchJune 31,30, 2025, an increase of $2.1$0.4 million in net interest expense. This was primarily due to the effects of our interest rate derivatives which reduced interest expense by $1.2$1.1 million in the three months ended MarchJune 31,30, 2026 and by $3.4$1.5 million in the three months ended MarchJune 31,30, 2025, resulting in a $2.2$0.4 million year over year increase in interest expense.expense recognized. In addition, interest income for the three months ended MarchJune 31,30, 2026 declinedincreased $0.1 million from interest income in the three months ended MarchJune 31,30, 2025 due to lowerinterest cashincome andrecognized cashon equivalents.seller Thesenote increasesin werethe three months ended June 30, 2026 that did not exist in the three months ended June 30, 2025. This was offset by aan $0.1increase of $0.3 million decline in interest expense,expense on our outstanding debt, driven by higher effective interest rates during the decreasequarter, partially offset by lower debt balance in our outstanding debt balance, which more than offset the impact of higher interest rates,2026, as well as a $0.2 million reduction in interest expense related to the amortization of deferred financing costs.

No divestitures were closedoccurred in the three months ended MarchJune 31,30, 2026. In the three months ended MarchJune 31,30, 2025, we finalized the divestitures of certain product lines in order to focus on our higher margin and higher growth potential product lines.

Other income (expense), net recognized during the three months ended MarchJune 31,30, 2026 and 2025 was related primarily to foreign currency exchange fluctuations.

BenefitExpense from Income Taxes

The provision for income taxes was $1.0$0.8 million in the three months ended MarchJune 31,30, 2026, compared to a benefit from income taxes of $1.3$0.2 million in the three months ended MarchJune 31,30, 2025, resulting in an additional expense from income taxes of $2.3$1.0 million. The provision for income taxes for the three months ended MarchJune 31,30, 2026 relates primarily to income tax from non-U.S. operations. The benefit from income taxes in the three months ended MarchJune 31,30, 2025 relates primarily to the deferred tax benefit from the business divestitures in the first quarter of 2025.2025 Thiswhich tax benefit iswas partially offset by the income tax from non-U.S. and U.S. operations.

We have financedfinance our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock,activities and borrowings under credit facilities.

As of MarchJune 31,30, 2026, we had $30.4$31.7 million of cash, cash equivalents and restricted cash and $233.7$229.6 million of debt outstanding under our Credit Agreement. As of December 31, 2025, we had $30.0 million of cash, cash equivalents and restricted cash and $238.5 million of borrowings outstanding under our previous senior secured credit facility. The $0.4$1.7 million increase in cash, cash equivalents and restricted cash from December 31, 2025 to MarchJune 31,30, 2026 was primarily due to $5.6$11.0 million in cash inflows from operations netted with $4.8$8.9 million in debt repayments made in the threesix months ended MarchJune 31,30, 2026. Other uses of cash included $0.1$0.2 million in purchases of leasehold improvements and equipment and $0.2 million negative effect of exchange rates during the threesix months ended MarchJune 31,30, 2026.

Our cash and cash equivalents held by our foreign subsidiaries was $13.2$9.3 million as of MarchJune 31,30, 2026 and $10.0 million as of December 31, 2025. Our intent is to either permanently reinvest these funds outside the U.S. or use these funds to repay certain long-term intercompany loans. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.

Cash provided by operating activities was $5.6$11.0 million for the threesix months ended MarchJune 31,30, 2026 compared to cash provided by operating activities of $8.3$11.6 million for the threesix months ended MarchJune 31,30, 2025, a decrease of approximately $2.7$0.6 million. This decrease was primarily due to a reduction in accrued compensation and other accrued expenses combinedoffset with reduced accounts receivable due to the divestitures completed in 2025.receivable.

Cash provided by investing activities was $0.1$0.2 million for the threesix months ended MarchJune 31,30, 2026 compared to cash provided by investing activities of $3.8$8.0 million for the threesix months ended MarchJune 31,30, 2025, a decrease of $3.7$7.8 million. Cash activity consisted of $0.2$0.4 million in collections on the note receivable related to divestitures and $0.1$0.2 million in purchases of leasehold improvements and equipment for the threesix months ended MarchJune 31,30, 2026 compared to cash proceeds from divestitures of businesses of $4.2$9.1 million and $0.4$1.1 million in purchases of leasehold improvements and equipment for the threesix months ended MarchJune 31,30, 2025.

Cash used in financing activities was $5.1$9.3 million for the threesix months ended MarchJune 31,30, 2026 compared to $34.7$36.3 million for the threesix months ended MarchJune 31,30, 2025, a decrease of $29.6$27.0 million of cash used primarily due to $4.8$8.9 million in payments on our outstanding debt in the threesix months ended MarchJune 31,30, 2026 as compared to $34.2$35.6 million in payments made in the threesix months ended MarchJune 31,30, 2025.

As we operate as one reporting unit, the goodwill impairment evaluation is performed at the consolidated entity level by comparing the estimated fair value of the Company to its carrying value. We first assess qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Qualitative factors considered include: industry and market considerations; macroeconomic conditions; and other relevant events and factors. Based on the qualitative assessment, if it is determined that it is more likely than not that the Company's fair value is less than its carrying value, then we perform a quantitative analysis using a fair-value-based approach to determine if the fair value of our reporting unit is less than its carrying value. Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions. These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, weighted average cost of capital, and future economic and market conditions. See “Note 4. Goodwill and Other Intangible Assets for more information.

We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of MayAugust 1,14, 2026, the date of issuance of this Quarterly Report on Form 10-Q. Estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Our unaudited interim financial statements and other financial information for the three and six months ended MarchJune 31,30, 2026, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.