Domo, Chapter 2: Behind Its $400 Million Asset Sale, Domo Was Preparing for a Possible Chapter 11 Bankruptcy Filing

EXECUTIVE SUMMARY

✅ Domo's Preliminary Schedule 14C (PREM-14C) filing reveals that the Utah software company was in default under its credit agreement, operating under lender forbearance, and preparing for a possible Chapter 11 bankruptcy filing while negotiating its $400 million asset sale to Progress Software.

✅ This was no quick sale. Domo's strategic advisor, Jefferies, contacted 68 potential counterparties, including 27 strategic buyers and 41 financial sponsors. Of those, 22 signed confidentiality agreements and four submitted, non-binding proposals.

✅ Progress once offered $432 million, but cut its price by $32 million following due diligence that uncovered worse-than-expected declines in total revenue and Annual Recurring Revenue (ARR), pricing and margin compression, and larger-than-expected spending commitments.

20 August 2026 — AMERICAN FORK, Utah — We now know that Domo (NASDAQ:DOMO) was apparently closer to the financial edge than most outsiders knew when it agreed last month to sell substantially all of its operating assets to Progress Software for $400 million.

How close? In simplest terms,

🔴  Domo had defaulted on a financial covenant;

🔴  Its lenders had threatened to exercise their remedies;

🔴  The company was operating under a temporary forbearance agreement; and

🔴  Its board had authorized bankruptcy counsel to prepare for a possible Chapter 11 bankruptcy filing.

Those are among the most important revelations buried inside the 80-plus-page Preliminary Schedule 14C (PREM-14C) filed by Domo with the U.S. Securities and Exchange Commission last week.

Together, they put Domo's proposed $400 million asset sale to Progress in a much different light.

The Domo Announcement and What Happened Behind the Scenes

As previously reported by Utah Money Watch in "Domo, Chapter 1: Utah’s Domo Agrees to Sell Substantially All of Its Operating Assets to Progress Software for $400 Million," Progress is not buying Domo itself.

Instead, Progress is acquiring substantially all of its operating assets and employees.

After paying its debt and other obligations, Domo expects the surviving public company to retain approximately $246 million in net cash, plus more than $900 million in Net Operating Loss carryforwards (NOLs), regardless of the name or stock symbol after the sale is completed.

While the "Chapter 1" writeup explained what Domo was doing, we now know considerably more about what, and why, happened in the months leading up to the announcement of the asset sale because of the Domo's Preliminary Schedule 14C filing with the SEC.

{AUTHOR'S NOTE: To be clear, the PREM-14C "TRANSACTIONS" section is a fairly dry yet detailed (and fascinating) calendar-like 16 pages worth of step-by-step internal and external actions by Domo, its advisors, and other parties leading, eventually, to the 22 July 2026 publication of the news release announcing the asset sale. This is what is summarized below.}

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Beginning in 2025, Domo attempted to refinance its credit facility, eventually negotiating a proposed $150 million senior secured loan.

That financing fell apart in June after the prospective lender's investment committee refused to provide enough money to refinance Domo's existing facility completely; it even cited, among other concerns, the possible impact of enterprise AI developments on Domo's business.

At roughly the same time, Domo was determining whether it had violated a financial covenant with its lender.

Its existing lender had already warned that if a breach occurred, it intended to exercise its available remedies unless Domo expected to complete a strategic transaction quickly.

Such remedies included the ability to foreclose on Domo assets and, potentially, shut-down the company.

On June 4, the Domo board authorized management to seek a forbearance agreement.

It also authorized the hiring of bankruptcy counsel to prepare for a potential Chapter 11 bankruptcy filing if acceptable forbearance terms could not be obtained.

Four days later, those preparations were underway.

Eventually, Domo secured its forbearance, but they came with a condition; a clock, if you will.

Namely, Domo needed a strategic transaction, so it began testing the market. Extensively.

At the board's direction, the company retained the services of Jefferies in late January 2026, a leading independent global investment bank providing mergers and acquisitions (M&A) advisory firm.

For its part, from then until the deal was announced, Jefferies contacted, and led serious interactions with, 68 potential counterparties, including

▪️ 27 strategic buyers; and

▪️ 41 financial sponsors,

most of which are not named by name in the PREM-14C filing.

Of these, 22 signed confidentiality agreements and four submitted non-binding proposals.

One offer in particular would have combined Domo with an aerospace-and-defense company in a transaction structured partly around preserving Domo's NOLs.

Eventually, Progress ultimately emerged as the buyer, but its interest wasn't new.

In fact, Progress CEO, Yogesh Gupta, had first approached Domo CEO and Founder, Josh James, about the company in 2023.

By spring 2026, however, these discussions had become serious.

And on 1 June 2026, Progress offered $432 million, calling the proposal its “best and final” offer.

Then Progress got deeper into the Domo "books" and the price went down.

On July 6th, Progress cut its offer to $400 million. Why?

The reasons disclosed by Domo are noteworthy:

🟥 Greater-than-expected deterioration in Domo's revenue and ARR;

🟥 Greater-than-expected pricing and margin compression at Domo; and

🟥 Larger-than-expected noncancelable spending and capacity commitments with key partners.

To be clear, Domo challenged some of Progress' conclusions.

Nevertheless, the $32 million price cut was final, as shown in the July 22nd news release and SEC filing.

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Ultimately, the Domo board concluded that $400 million was the highest price reasonably obtainable for the company's assets.

The reason? Because this wasn't a board comparing $400 million against some theoretical, un-pressured future for Domo.

It was instead comparing $400 million against what had become a shrinking collection of alternatives:

✔️ The refinancing had failed;

✔️ The credit covenant had been breached;

✔️ The lenders had threatened remedies; and

✔️ Chapter 11 preparations had begun.

What's Next for Domo, Its Employees, and Progress Software?

In reality, asset sales are not uncommon. They just don't happen a lot, especially when they involve publicly traded companies, but especially if two or more parties are involved.

So what's next?

STEP ONE: Now that Domo has filed its PREM-14C, federal securities rules generally require at least 10 calendar days to pass before final/definitive copies of this Information Statement can first be sent to shareholders. During that period, the SEC may review and comment on the preliminary filing, potentially requiring revisions before Domo files its "final" DEF-14C.

STEP TWO: Although James and his owned/controlled entity (Cocolalla, LLC) have over 75% of the Domo shareholder votes, Domo must still

▪️ Mail all shareholders a copy of the DEF-14C filing, and

▪️ Wait at least 20 calendar days after the mailing before the asset sale can close.

STEP THREE: The sale must pass the Hart-Scott-Rodino (HSR) Act antitrust waiting period before the assets can change hands.

How soon will the sale close?

As reported in its PREM-14C, Domo and Progress both expect the deal to close by 30 November 2026.

Will it take that long? Probably not.

But in the end,

🟢  Progress gets the operating company and essentially all of its employees, and

🟢  Josh James (and the remainder of the surviving Domo) get another shot.

At what? That is not clear yet.

However, subject to final adjustments and expenses, Domo is expected to emerge with approximately $246 million in net cash, or an estimated $4.84 per diluted share, plus more than $900 million in NOLs.

And the company isn't planning to liquidate.

Instead, the board expects to consider buying other businesses or assets that could potentially generate taxable earnings against which some of those NOLs might eventually be used.

The surviving company is also expected to remain publicly traded, although it must abandon both the Domo name and ticker as a condition of closing.

So what happens next?

Let's see what the DEF-14C filing looks like.

Publisher's Note

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