Key Highlights

  • FiscalNote published its PolicyNote connector in Anthropic's Claude Connectors Directory, putting its regulatory database inside a major AI assistant while retaining commercial control over pricing and access.
  • The company's Debt forbearance agreement, covering events of default triggered by its March 2026 NYSE delisting, expires August 22, 2026, after being rolled forward in short increments four times already.
  • Despite cutting full-year guidance and reporting a widened $27.8 million net loss driven by a $19.1 million Goodwill impairment, quarterly net Revenue retention improved nine points sequentially to 98%.

FiscalNote Holdings, Inc. (OTCID:NOTE) is running two stories at once, and they point in opposite directions. On 13 August 2026 the Washington-based policy-intelligence company said its PolicyNote MCP connector had been published in Anthropic's Claude Connectors Directory, putting its regulatory database inside a widely used enterprise AI assistant. Three days earlier it had cut full-year guidance.

FiscalNote is also no longer a New York Stock Exchange listing. It received a delisting notice on 25 March 2026 for failing to keep a $1.00 average closing price over 30 consecutive trading days, and moved to the OTCID market on 6 April.

That delisting was not cosmetic. It triggered events of default under FiscalNote's subordinated convertible notes, and the company has operated since on a series of short-term forbearance agreements. The current one expires on 22 August 2026.

What Happened

PolicyNote MCP uses the Model Context Protocol, an open standard that lets AI assistants and software agents query an external data source directly rather than through a bespoke integration. FiscalNote says setup takes under 15 minutes and that the connector covers Congress, all 50 US states and more than 100 countries.

Crucially, FiscalNote keeps commercial control. It sets pricing and access terms, customers transact directly with it, and it says its proprietary data is not available for model training. PolicyNote is already listed in OpenAI's app store, making it reachable across both dominant assistant platforms.

FiscalNote also disclosed new API licences with Siemens and an unnamed US technology and cloud infrastructure company, and has cited Lumen Technologies and ICE Data Services as early production users. Enterprises are not standardising on one AI platform, Chief Executive Key Compton said, so the data must be available everywhere teams work.

Why It Matters

FiscalNote's core problem is that its seat-based subscription Business is shrinking and its largest exposure, the federal and broader public sector, is under budget pressure. An API and agent-based model changes the shape of the opportunity, because consumption can grow inside an existing account without selling more licences.

It also addresses the obvious threat to a policy-research vendor: that general-purpose Chatbots absorb the use case outright. By becoming the permissioned source a chatbot calls rather than a destination users leave the chatbot to visit, FiscalNote is trying to turn a competitor into a channel. Whether that converts into enough revenue, fast enough, is the open question.

The Numbers

Second-quarter revenue, reported on 10 August 2026, was $19.6 million, down roughly 16% year on year and inside the $19.5 million to $20.5 million guidance range. Subscription revenue was $18.8 million, or 96% of the total; non-subscription revenue, largely Advertising and events, fell about 59%. Annual Recurring Revenue ended at $74.9 million, down about 13%.

Adjusted EBITDA was $2.3 million against $2.5 million of guidance, an 11.9% margin, with adjusted gross Margin improving to 88% from 86%. The GAAP net loss widened to $27.8 million from $13.3 million on a $19.1 million non-cash goodwill impairment; diluted loss per share was $1.06. Operating expenses fell 12% and headcount dropped by 27 to about 343.

The Balance Sheet is the pressure point. FiscalNote held $17.95 million of cash at 30 June 2026 against roughly $119.2 million of debt, of which $106.8 million sits in current maturities because Default Risk forced reclassification. Full-year guidance was cut to $75 million to $78 million of revenue and $9 million to $11 million of adjusted EBITDA.

What It Means for the Company

One genuine bright spot was retention. Quarterly net revenue retention, a measure of how much revenue the existing customer base generates versus the prior period, improved nine points sequentially to 98%, which management attributed to lower churn after legacy products were folded into PolicyNote. The trailing twelve-month figure is still a weak 81%.

FiscalNote has spent two years shrinking to its core, selling Oxford Analytica and Dragonfly to Dow Jones and divesting TimeBase, which is why many comparisons are stated pro forma. The board says it continues to evaluate all value-maximising options, including further divestitures. Compton became chief executive in June 2026 after Josh Resnik departed.

Risks Investors Should Watch

The most immediate risk is the debt. FiscalNote's first-quarter filing disclosed substantial doubt about its ability to continue as a going concern, citing recurring losses, negative working capital, covenant breaches requiring waivers and delisting-triggered cross-defaults. Forbearance from subordinated creditors GPO FN Noteholder and YA II PN, Ltd. has been rolled forward in short increments to 21 May, 21 June, 21 July and now 22 August 2026.

The senior Facility has its own constraints. The 2025 senior term Loan of $72.0 million matures in August 2029 at SOFR plus 8%, and a March 2026 amendment requires a $20 million prepayment by 31 March 2027, which management has said it cannot currently satisfy.

The Equity is a fraction of its former size. After a 1-for-12 reverse split in 2025 the stock has traded near $0.10, a Market Capitalisation of roughly $3 million on about 29 million shares, so any restructuring or raise implies severe dilution. Federal budget softness and competition from general-purpose AI platforms also remain live.

What Comes Next

The near-term calendar is short. The forbearance expiry on 22 August 2026 is the first checkpoint; absent a further extension or a negotiated restructuring, creditors regain the right to act on the delisting defaults. FiscalNote says it intends to pursue a listing on other tiers or exchanges, which would in principle cure that default, but has given no timeline.

Third-quarter guidance calls for $19 million to $20 million of revenue and about $3.5 million of adjusted EBITDA. Investors will watch whether 98% retention holds, whether MCP and API consumption produces disclosable revenue, and whether the strategic review yields an asset sale.

Conclusion

FiscalNote's AI integration strategy is a genuinely smart response to an existential threat, turning general-purpose chatbots into a distribution channel rather than a competitor could meaningfully change the shape of its business if consumption-based revenue materializes. The retention improvement to 98% is a real signal that the core product still has customer value. None of that changes what's happening on the same calendar: a debt forbearance agreement that has already been extended four times in short increments expires August 22, and the company's own filing discloses substantial doubt about its ability to continue as a going concern. Whether MCP and API consumption produces disclosable revenue fast enough to matter, the debt situation will determine FiscalNote's near-term survival well before any AI strategy pays off.