# PSQ Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [PSQ Holdings, Inc.](/companies/psqh.md) (CIK 1847064)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 16:17 ET
- Period: 2025-03-31
- Accession: 0001628280-25-023815
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1847064/000162828025023815/psqh-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1847064/000162828025023815/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $6.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $1.4m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$11.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $8.2k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$4.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 42,953,447 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$6.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $28.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $38.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $66.2m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $8.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $40.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $26.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 47,196 characters.

*The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes hereto included in Part I, Item 1 of this quarterly report on Form 10-Q and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.*

*Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “PublicSquare,” “we”, “us”, “our”, and the “Company.”*

### Cautionary Note Regarding Forward-Looking Statements

This report, including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, the future financial performance of the company, our growth plans and opportunities, our financial performance, our ability to raise additional funds, and any other statements that are not statements of current or historical facts.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our Form 10-K for the year ended December 31, 2024, which are incorporated by reference herein. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. These risks and others described under “Risk Factors” may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

### Overview

PublicSquare is a technology-enabled Marketplace & Payments ecosystem that serves an audience of consumers and merchants who value life, family, and liberty. PublicSquare operates under three segments: Financial Technology, Marketplace, and Brands. The primary mission of the Marketplace segment is to help consumers put purpose behind their purchases by shopping with thousands of small businesses that prioritize quality and classic American values. PublicSquare leverages data and insights from the Marketplace to assess its customers’ and merchants' needs and provide a suite of wholly-owned Financial Technology services and a wholly-owned Direct to Consumer ("D2C") brand. The Financial Technology segment comprises Credova, a "Buy Now Pay Later" ("BNPL") company focused on the outdoors & shooting sports industry, and PSQ Payments, a "cancel-proof" payments processing company. The Brands segment includes EveryLife, a premium D2C life-affirming baby products company.

### Recent Developments

### Board of Director Updates

On February 19, 2025, Board member Kelly Loeffler was confirmed as the Administrator of the Small Business Administration ("SBA") by the United States Senate. Per the Company's Corporate Governance Principles, upon her confirmation, Ms. Loeffler submitted her resignation as a member of the Board, effective on February 19, 2025.

On March 10, 2025, the Board appointed Willie Langston to the Audit Committee. Mr. Langston is an audit committee financial expert as defined in Item 407 of Regulation S-K and is financially literate and has accounting or related financial management expertise as such terms are used in Rule 303A.07 of the NYSE rules.

On April 25, 2025, the Board unanimously approved the following committee appointments:

- Willie Langston was appointed to the Compensation Committee
- Blake Masters was appointed to the Nominating Committee
- Nick Ayers was appointed as Chairman of the Nominating Committee

### Components of Results of Operations

During the three months ended March 31, 2025 and 2024, our net loss was $4.4 million and $12.6 million, respectively. During the three months ended March 31, 2025, our net loss decreased $8.1 million as compared to the three months ended March 31, 2024, due to a $3.3 million increase in revenues, a $0.8 million reduction in operating expenses, a year over year gain of $5.2 million relating to the change in fair value of the warrant liabilities , and a year over year gain of $0.3 million relating to the change in fair value of the earnout liabilities quarter over quarter. This is offset by a $0.7 million increase in interest expense related to the revolving credit facility and convertible promissory notes issued. Since inception, we have financed our operations primarily through financing activities.

### Revenues, net

We generate revenues from our three segments: Financial Technology, Marketplace, and Brands; a summary of each is described below.

#### Financial Technology

The Company principally generates BNPL revenue from five activities: revenue from sale of loan and lease contracts, revenue from interest earned on loans, revenue from rent payments on leased merchandise, revenue from retailer discounts, and origination fees paid by lending institutions (direct revenue) earned in connection with providing financing on consumer goods. Revenue from the Company’s sales of loans and leases is recognized at a point in time when the Company satisfies a performance obligation by transferring control of the loans and leases to a third party. Interest on loans is calculated by the simple-interest method on daily balances of the principal amount outstanding. Revenue from leases is recognized over time when the Company satisfies a performance obligation based on the agreed upon financing terms. Revenue from retailer discounts is recognized at a point in time when the Company satisfies performance obligations by purchasing the contract from the merchant in connection with a merchant-originated consumer financing product. Origination fees from lenders are recognized at time of loan origination.

PSQ Payments generates revenue via its merchant servicer platform to provide its customers with a payments stack to efficiently manage their payment processes. The merchant servicer platform combines the payment processing and gateway into a single, integrated service encompassing all debit and credit card processing and ACH in and out payment processing. The Company recognizes card processing and transaction revenues in connection with customer use of the platform.

#### Marketplace

Marketplace revenues are derived from a mix of advertising and e-commerce revenues.

Advertising revenues are generated from digital advertising fees from both local and national advertisers and also through our newly launched Cost per Mille ("CPM") advertising product which allows businesses to deliver more effective ads to consumers.

E-commerce revenue is derived from a mix of (i) referral fees in the form of commissions, based on the dollar amounts of transactions between the businesses we connect on the PSQ Platform and (ii) transaction-based fees from providing multi-merchant shopping cart and checkout capabilities on the PSQ Platform.

#### Brands

Our brand revenues have been derived primarily from our sale of products.

The Company generates revenue through the sale of diapers, wipes, soaps, lotions, and other baby products to consumers by way of the Company’s Platform. The Company considers customer orders to be the contracts with the customer. There is a single performance obligation, which is the Company’s promise to transfer the Company’s product to customers based on specific payment and shipping terms in the arrangement.

For a description of our revenue recognition policies, see Note 3, Summary of Significant Accounting Policies, in our unaudited condensed consolidated financial statements.

### Cost of Revenue (exclusive of depreciation and amortization)

Cost of revenue (exclusive of depreciation and amortization) consists of underwriting and transaction costs related to the sale of loans and leases, transaction costs incurred in the facilitation of loan and lease origination, and payment processing activities including interchange fees, assessment fees, processing costs and bank settlement charges paid to third-party payment processors and financial institutions in the ordinary course of operations. Additionally, the direct costs incurred in building and running the Marketplace Platform are included in cost of revenue.

### Cost of Goods Sold (exclusive of depreciation and amortization)

Cost of goods sold (exclusive of depreciation and amortization) includes the purchase price of merchandise sold to customers, inbound and outbound shipping and handling costs, freight and duties, shipping and packaging supplies and warehouse fulfillment costs incurred.

### Operating Expenses

Operating expenses primarily include general and administrative, sales and marketing, research and development, and depreciation and amortization. The most significant component of our operating expenses is personnel-related costs such as salaries, benefits, share-based and variable compensation.

As we are a high-growth company with a focus on cost-saving measures including resource reduction and reallocation, we anticipate that each of the following categories of operating expenses will increase in absolute dollar amounts but decline as a percentage of revenue for the foreseeable future.

### General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources and administrative personnel, as well as the costs of information technology, professional services, insurance, travel, and other administrative expenses. We expect to continue incurring expenses associated with operating as a public company, including legal, audit, tax and accounting costs, investor relations costs, insurance premiums and compliance costs. As a result of cost-saving measures, we expect that general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time. Our inability to scale our expenses could negatively impact profitability.

### Sales and Marketing Expenses

Sales and marketing expenses consist primarily of salaries, employee benefits, consultant fees, commissions, and direct marketing costs related to the promotion of PublicSquare’s platforms/solutions. As a result of cost-cutting efforts, we expect that sales and marketing expenses will remain steady in absolute dollars in future periods as we scale back paid marketing efforts and focus on monetizing current customer base, and decline as a percentage of total revenue over time. Our inability to scale our expenses could negatively impact profitability.

### Research and Development Expenses

Research and development expenses consist primarily of salaries, employee benefits and consultant fees related to our development activities to originate, develop, and enhance the Platform and build the PSQ Payments ecosystem. As this is a large focus of the Company, we expect that research and development expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time.

### Depreciation and Amortization Expense

Depreciation and amortization expense consists primarily of amortization of capitalized software development costs.

### Non-Operating Income and Other Items

#### Other Income, net

Other income, net primarily relates to interest income earned on the money market accounts for the three months ended March 31, 2025.

#### Change in fair value of earn-out liabilities

Changes in the fair value of earn-out liabilities are recorded in the condensed consolidated statement of operations. The earn-out liabilities represent a financial instrument other than an outstanding share that embodies a conditional obligation that the issuer must or may settle by issuing a variable number of its equity shares. We record the earn-out liability at its fair value at each reporting period.

#### Change in fair value of warrant liabilities

Changes in the fair value of warrant liabilities are recorded in the condensed consolidated statement of operations. The warrant liabilities represent a financial instrument other than an outstanding share that embodies a conditional obligation that the issuer must or may settle by issuing a variable number of its equity shares. We record the warrant liabilities at its fair value at each reporting period.

#### Interest Expense, net

Interest expense incurred consists of interest accrued on revolving line of credit and convertible promissory notes issued.

#### Income Tax (Expense) Benefit

We are subject to income taxes in the United States, but due to our net operating loss (“NOL”) position, we have recognized a minimal provision or benefit in recent years. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. We have established a full valuation allowance to offset our U.S. net deferred tax assets due to the uncertainty of realizing future tax benefits from our NOL carryforwards and other deferred tax assets.

### Key Business Metrics and Selected Financial Data

We use the following key metrics and non-GAAP measures to evaluate our performance, identify trends affecting our business, and make strategic decisions:

- Segment Revenue (see Note 13 for more details);
- Segment non-GAAP operating loss (see discussion below in "Non-GAAP Financial Measures");
- Segment non-GAAP gross profit (see discussion below in "Non-GAAP Financial Measures"); and
- Gross Merchandise Volume ("GMV") of Financial Technology Segment.

For GMV, these metrics are based on internal company data, assumptions, and estimates and are used in managing our business. We believe that these figures are reasonable estimates, and we actively take measures to improve their accuracy, such as eliminating known fictitious or duplicate accounts. There are, however, inherent challenges in gathering accurate data across large online and mobile populations.

### GMV of Financial Technology Segment

In addition to revenue, net loss, and other results under U.S. GAAP, the following table sets forth key operating metrics we use to evaluate our Financial Technology segment. The information below represents proforma information for 2024 as if the Credova Merger closed on January 1, 2024:

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Gross merchandise volume (“GMV”) - Credit | $11,398,052 | $16,893,281 | (33)% |

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Gross merchandise volume (“GMV”) - PSQ Payments | $36,032,985 | $— | 100% |

We measure GMV to assess the volume of transactions that take place on our platform. We define GMV as the total dollar amount of all transactions generated from the Financial Technology segment during the applicable period, net of refunds. GMV does not represent revenue earned by us; however, it is an indicator of the success of our merchants and the strength of our platform.

For the three months ended March 31, 2025, GMV was $11.4 million, which represented an approximate change of (33)%, as compared to the same period in 2024.

For the three months ended March 31, 2025, our top five merchants and platform partners represented approximately 58% of total GMV - Credit, as compared to 40% for the three months ended March 31, 2024. GMV - Credit attributable to our largest merchant during the three months ended March 31, 2025 represented 23% of total GMV - Credit, compared to 15% for the same period in 2024. The shift in volume from our top five merchants is primarily due to the overall reductions in sales across the industry.

GMV - Credit declined year-over-year, primarily due to a broader slowdown in the firearm retail industry and our continued emphasis on disciplined underwriting. Industry-wide sales softness impacted many of our merchant partners, with some reporting sales down over 20% year-over-year, aligning with broader market trends. According to the National Shooting Sports Foundation (“NSSF”), U.S. firearm sales declined for the fourth consecutive year in 2024, with approximately 15.2 million adjusted background checks—a 3.5% decrease from 2023—and a 9% year-over-year drop in February 2025 alone, marking one of the weakest February performances in over a decade. In addition to market pressures, our recent credit policy enhancements—including the broader implementation of machine learning—tightened approval rates as part of a long-term strategy to improve portfolio performance. These factors, along with changes to our origination channels and a shift in sales focus, contributed to the overall reduction in GMV - Credit during the period.

For the three months ended March 31, 2025 and 2024, GMV - PSQ Payments was $36.0 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. PSQ Payments was launched in October 2024.

As PSQ Payments is currently an emerging business and still in the process of onboarding new customers, only a concentrated number of merchants were actively processing through our solution during the period. Therefore, management believes 2025 GMV - Payments breakdown by merchant would not be beneficial to provide.

### Results of Operations

The results of operations presented below should be reviewed in conjunction with the unaudited condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 which can be found elsewhere in this document.

The following table sets forth our condensed consolidated statement of operations for the three months ended March 31, 2025 and 2024, and the dollar and percentage change between the two periods:

|  | For the Three Months Ended March 31, 2025 | 2024 | Variance ($) | Variance (%) |
| --- | ---: | ---: | ---: | ---: |
| **Revenues, net** | **$6,749,621** | **$3,465,889** | **$3,283,732** | **95%** |
| Costs and expenses: |  |  |  |  |
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | 736,245 | 598,361 | 137,884 | 23% |
| Cost of goods sold (exclusive of depreciation and amortization expense shown below) | 2,073,274 | 1,391,408 | 681,866 | 49% |
| General and administrative | 10,524,491 | 10,262,878 | 261,613 | 3% |
| Sales and marketing | 2,456,386 | 4,682,638 | (2,226,252) | (48)% |
| Research and development | 1,437,453 | 1,141,958 | 295,495 | 26% |
| Depreciation and amortization | 1,211,110 | 296,597 | 914,513 | 308% |
| Total costs and expenses | 18,438,959 | 18,373,840 | 65,119 | —% |
| **Operating loss** | **(11,689,338)** | **(14,907,951)** | **3,218,613** | **(22)%** |
| Other income (expense): |  |  |  |  |
| Other income, net | 287,190 | 103,379 | 183,811 | 178% |
| Change in fair value of earn-out liabilities | 450,000 | 120,000 | 330,000 | 275% |
| Change in fair value of warrant liabilities | 7,381,500 | 2,231,500 | 5,150,000 | 231% |
| Interest expense, net | (868,457) | (124,178) | (744,279) | 599% |
| **Loss before income taxes** | **(4,439,105)** | **(12,577,250)** | **8,138,145** | **(65)%** |
| Income tax (expense) benefit | (8,240) | 419 | (8,659) | (2067)% |
| **Net loss** | **$(4,447,345)** | **$(12,576,831)** | **$8,129,486** | **(65)%** |

### Revenues, net

| Revenues, net: Financial Technology | For the three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Direct revenue | $715,767 | $154,607 |
| Interest income on loans | 588,496 | 139,398 |
| Loan and lease contracts sold, net | 1,062,374 | 83,004 |
| Lease merchandise, net | 112,804 | — |
| Payments revenue | 571,344 | — |
| Total Financial Technology revenues, net | 3,050,785 | 377,009 |
| Marketplace |  |  |
| Advertising and e-commerce sales | 428,649 | 945,471 |
| Brands |  |  |
| Product sales | 3,429,562 | 2,350,510 |
| Returns and discounts | (159,375) | (207,101) |
| Total Brand revenues, net | 3,270,187 | 2,143,409 |
| Total revenues, net | $6,749,621 | $3,465,889 |

27

Revenues, net increased by $3.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was driven by an increase in FinTech sales of $2.7 million, an increase in Brands sales of $1.1 million and partially offset by a decrease in Marketplace sales by $0.5 million.

### Cost of revenue (exclusive of depreciation and amortization)

Cost of revenue (exclusive of depreciation and amortization) increased by $0.1 million, or 23%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to an increase of $0.6 million in FinTech transaction fees, offset by a $0.3 million reduction in employee compensation and $0.2 million reduction in other transaction costs.

### Cost of goods sold (exclusive of depreciation and amortization)

Cost of goods sold (exclusive of depreciation and amortization) increased by $0.7 million, or 49% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to an increase in the sale of products.

### General and Administrative Expense

General and administrative expense increased by $0.3 million, or 3%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to an increase of $1.5 million in employee and variable compensation, primarily due to the addition of the Credova team. The increase was offset by a decrease in share-based compensation of $0.9 million and a decrease of $0.3 million in other administrative costs.

### Sales and Marketing Expense

Sales and marketing expense decreased by $2.2 million, or 48%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was due to a $1.5 million decrease in share-based compensation expense, a $0.6 million decrease in brand awareness and advertising campaigns, partially offset by a $0.1 million increase in employee and contractor compensation.

### Research and Development Expense

Research and development expense increased by $0.3 million, or 26%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily due to contractor expenses for development of operating software in the FinTech segment.

### Depreciation and Amortization

Depreciation and amortization expense increased $0.9 million, or 308%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily related to the amortization of capitalized software development costs.

### Other Income, net

Other income, net increased by $0.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to interest income earned on the money market accounts.

### Change in Fair Value of Earn-out Liabilities

Changes in the fair value of earn-out liabilities increased by $0.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to a decrease in the fair value of the earn-out liabilities at the end of the reporting period.

### Change in Fair Value of Warrant Liabilities

Changes in the fair value of warrant liabilities increased by $5.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to a decrease in the fair value of the warrant liabilities at the end of the reporting period.

### Interest Expense, net

Interest expense, net increased by $0.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to the interest payable in relation to the convertible promissory notes recorded as of the reporting date, along with interest paid on the revolving line of credit.

### Income Tax (Expense) Benefit

Income tax expense increased by an insignificant amount for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily due to state income tax.

### Liquidity and Capital Resources

Historically, our primary sources of liquidity have been funds from financing activities. We have reported net losses of $4.4 million and $12.6 million for the three months ended March 31, 2025 and 2024, respectively, and had negative cash flows from operations of $6.4 million and $6.5 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, the Company had aggregate unrestricted cash and cash equivalents, of $28.0 million and $36.3 million and net working capital of $30.2 million and $38.2 million, respectively.

During the quarter, management made a strategic decision to invest in its FinTech segment and began taking assignment and holding closed-end consumer leases. This will result in increased revenues in the medium term while negatively impacting cash flow from operations in the short term.

We believe through our existing cash and cash equivalents, the Company will be able to fund operations and capital needs for the next year from the date these condensed consolidated financial statements were available to be issued.

Our future capital requirements will depend on many factors including our revenue growth rate and the timing and extent of spending to support further sales and marketing and research and development efforts. In order to finance these opportunities, we may need to raise additional financing. While there can be no assurances, the Company may need to pursue additional equity raises and debt rounds of financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to the Company or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition would be materially and adversely affected.

### Comparison of the Three Months Ended March 31, 2025 and 2024

The following table shows our cash flows used in operating activities, investing activities and financing activities for the stated periods:

|  | For the three months ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Net cash used in operating activities | $(6,432,267) | $(6,524,740) | $92,473 |
| Net cash used in investing activities | $(1,807,609) | $(358,574) | $(1,449,035) |
| Net cash used in financing activities | $(72,876) | $(215,865) | $142,989 |

### Net Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2025 was $6.4 million compared to $6.5 million used in operating activities for the three months ended March 31, 2024. The decrease in cash used in operating activities was due primarily to a decrease of $8.1 million in net loss, offset by an increase in fair value of warrant liabilities of $5.2 million, an increase in fair value of earn-out liabilities of $0.3 million, an increase in the net cash used by operating assets and liabilities of $1.9 million and a decrease of $0.6 million in non-cash related expenses.

### Net Cash Used in Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 was $1.8 million compared to $0.4 million used in investing activities for the three months ended March 31, 2024. Net cash used in investing activities for the three months ended March 31, 2025 primarily related to $1.1 million of additions to lease merchandise, $0.7 million of software development costs and $45,000 of net decrease in loans held for investment. Net cash used in investing activities for the three months ended March 31, 2024 primarily related to $0.8 million of software development costs partially offset by an increase of $0.3 million of net loans held for investment.

### Net Cash Used in Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 was $0.1 million compared to $0.2 million used in financing activities for the three months ended March 31, 2024. The decrease was due to an increase of $2.3 million in proceeds from revolving line of credit partially offset by an increase of $2.1 million of repayments on the line of credit.

### Non-GAAP Financial Measures

The non-GAAP financial measures below have not been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Therefore, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.

Our management uses these non-GAAP financial measures, in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things: (i) monitor and evaluate the performance of our business operations and financial performance; (ii) facilitate internal comparisons of the historical operating performance of our business operations; (iii) facilitate external comparisons of the results of our overall business to the historical operating performance of other companies that may have different capital structures and debt levels; (iv) review and assess the operating performance of our management team; (v) analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (vi) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments.

For the periods presented, we define non-GAAP operating loss as GAAP operating loss, adjusted to exclude, as applicable, certain expenses as presented in the table below:

| Reconciliation: | For the three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| GAAP operating loss | $(11,689,338) | $(14,907,951) |
| Non-GAAP adjustments |  |  |
| Corporate costs not allocated to segments | (1,971,372) | (5,355,542) |
| Transaction costs incurred in connection with acquisitions | — | (2,293,594) |
| Share-based compensation (exclusive of what is included in transaction costs above) | (3,622,845) | (4,999,014) |
| Depreciation and amortization | (1,211,110) | (296,597) |
| Non-GAAP operating loss | $(4,884,011) | $(1,963,204) |

**Off-Balance Sheet Arrangements.**

None.

### Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. The preparation of consolidated financial statements also requires we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, balance sheet, results of operations and cash flows will be affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our management’s judgments and estimates. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our balance sheet and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Our significant accounting policies are described in Note 3 to our Unaudited Condensed Consolidated Financial Statements for the three-month period ended March 31, 2025 included elsewhere in this report. Our critical accounting policies are described below.

### Revenue Recognition

### \[1\]Financial Technology Revenues

#### Financing Revenues

The Company principally generates financial technology revenues from five activities: revenue from sale of loan and lease contracts, revenue from interest earned on loans, revenue from retailer discounts, and origination fees paid by lending institutions (direct revenue) earned in connection with providing financing on consumer goods. Revenue from leases is recognized over time when the Company satisfies a performance obligation based on the agreed upon financing terms. Revenue from the Company’s sales of loans and leases is recognized at a point in time when the Company satisfies a performance obligation by transferring control of the loans and leases to a third party. Interest on loans is calculated by the simple-interest method on daily balances of the principal amount outstanding. Revenue from retailer discounts is recognized at a point in time when the Company satisfies performance obligations by purchasing the contract from the merchant in connection with a merchant-originated consumer financing product. Origination fees from lenders are recognized at time of loan origination.

PSQ Payments generates revenue via its merchant servicer platform to provide its customers with a payments stack to efficiently manage their payment processes. The merchant servicer platform combines the payment processing and gateway into a single, integrated service encompassing all debit and credit card processing and ACH in and out payment processing. The Company recognizes card processing and transaction revenues in connection with customer use of the platform.

### \[2\]Marketplace Revenues

#### E-commerce Revenues

The Platform features a single cart shopping experience where consumers can purchase a variety of products from multiple vendors in one transaction. The Company is not the seller of record in these transactions. The commissions revenue earned from these arrangements are recognized on a net basis, which equates to the commission and processing fees earned in exchange for the seller marketplace services. The commission and processing fees are recognized when the corresponding transaction is confirmed by the buyer and seller. The Company does not take title to inventory sold or assume risk of loss at any point in time during the transaction and is authorized to collect consideration from the buyer and remit net consideration to the seller to facilitate the processing of the confirmed purchase transaction. The Company currently records processing fees from its merchant service providers as a component of Cost of sales - services on the consolidated statement of operations.

#### Advertising Services

The Company enters into advertising subscription arrangements with its customers. Revenue is recognized over-time as the ads are displayed over the subscription period. The Company is providing a service and the service is being consumed by the customer simultaneously over the period of service. In general, the Company reports advertising revenue on a gross basis, since the Company controls the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory before it is transferred to customers.

The Company also sells push notifications and email blasts and recognizes revenue at a point in time when delivered. Push notifications and email blasts are considered delivered when an ad is displayed to users. When a customer enters into an advertising subscription arrangement that includes push notifications and/or email blasts, the Company allocates a portion of the total consideration to the push notification and email blast performance obligations based on the residual approach.

In June 2024, the Company launched its CPM advertising model. The advertising revenue related to CPM is recognized based on the number of impressions received based on advertising on websites or mobile device applications or as the advertiser’s previously agreed-upon performance criteria are satisfied.

### \[3\]Brand Revenues

#### Product Sales

The Company generates revenue through the sale of diapers, wipes and other baby products to consumers by way of the Company’s website. The Company considers customer orders to be the contracts with the customer. There is a single performance obligation, which is the Company’s promise to transfer the Company’s product to customers based on specific payment and shipping terms in the arrangement. The entire transaction price is allocated to this single performance obligation. Product revenue is recognized when a customer obtains control of the Company’s product, which occurs at shipment. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products.

The Company evaluated principal versus agent considerations to determine whether it is appropriate to record third-party logistics provider fees paid as an expense. These fees are recorded as shipping and handling expenses within cost of goods sold and are not recorded as a reduction of revenue because the Company owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct the third-party logistics provider to return the Company’s inventories to any location specified by the Company. It is the Company’s responsibility to make any returns made by customers directly to logistic providers and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e., credit card chargebacks), establishes prices of its products, fulfills the goods to the customer and can limit quantities or stop selling the goods at any time.

#### Product Returns

Consistent with industry practice, the Company generally offers customers a limited right of return for products purchased. The Company reviews its receivables quarterly and records a reserve, if necessary.

### Loans Held for Investment, net

Loans are unsecured and are stated at the amount of unpaid principal. Interest on loans is calculated by the simple-interest method on daily balances of the principal amount outstanding. Accrued interest on loans is discontinued when management believes that, after considering collection efforts and economic and business conditions, the collection of interest is doubtful. The Company’s policy is to stop accruing interest when the loan becomes 120 days delinquent.

All interest accrued but not collected for loans that are placed on non-accrual status or subsequently charged-off is reversed against interest income. Income is subsequently recognized on the cash basis until, in management’s judgment, the borrower’s ability to make periodic principal and interest payments returns and future payments are reasonably assured, in which case the loan is returned to accrual status. The Company classifies its loans as either current or past due. Amounts are considered past due if a scheduled payment is not paid on its due date. The Company does not modify the terms of its existing loans with customers.

### Lease Merchandise, net

The Company leases goods, consisting primarily of sporting goods, to its customers under certain terms agreed to by the customer and recognizes revenue straight-line over the lease term in accordance with Accounting Standards Codification ("ASC") 842, Leases ("ASC 842"). The customer has the right to acquire ownership either through a purchase option or through payment of all required lease payments. Leases typically range between 12 and 24 months. All the Company's customer agreements are considered operating leases. The consumer goods under operating leases are initially recorded at cost and depreciated on a straight-line basis over the term of the related leases to the consumer goods estimated residual value. All lease assets are purchased concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Upon transfer of ownership of merchandise to customers, resulting from satisfaction of their lease obligations, the related cost an accumulated depreciation are eliminated from lease merchandise. Amounts shown in the condensed consolidated balance sheets are net of accumulated depreciation and allowances for lease losses.

The Company applies depreciation to lease merchandise as follows: (i) straight-line over the life of the lease term; (ii) accelerated deprecation for impaired leases and (iii) accelerated depreciation for leases when an early purchase option (buyout) is exercised.

The Company sells certain lease contracts to third parties and records the undepreciated cost of lease merchandise at the time of the sale within the net gain on lease contracts sold on the condensed consolidated statement of operations.

### Allowance for Credit Losses - Loans Held for Investment

The Company estimates expected credit losses over the contractual term of loans, incorporating adjustments for anticipated prepayments and defaults when applicable. The contractual term excludes expected extensions, renewals, and modifications unless one of the following conditions is met: (i) management has a more likely than not expectation at the reporting date that an extension or renewal option is included in the original or modified contract, and (ii) such options are not unconditionally cancellable by the Company.

The foundation for the discount rate used in our credit loss estimation is the Secured Overnight Financing Rate ("SOFR"), a widely accepted benchmark for the cost of overnight borrowing collateralized by United States Treasury securities. SOFR is commonly used by traditional credit and warehouse facilities to account for interest rate variability. In addition to SOFR, our discount rate incorporates an interest rate floor, which reflects the minimum rate a market investor would require for a pool of unsecured consumer receivables. This rate is further adjusted based on prevailing market and macroeconomic conditions. The combination of SOFR and the interest rate floor determines the overall discount rate applied to calculate the net present value of expected credit losses. Management reviews the discount rate at each reporting period and updates when applicable.

The discount rate fluctuates in response to macroeconomic market cycles, as determined by management’s assessment of future economic conditions. The macroeconomic cycle is influenced by changes in money supply growth and contraction, which are inversely correlated with the discount rate. This inverse relationship allows for an adjusted present value assessment that accounts for the broader economic environment. Our cash flow model represents historical financial performance, while the discounted cash flow methodology projects future credit losses by adjusting the present value of historical data.

When management determines that loans are uncollectible, identified amounts are charged against the allowance for credit losses. Loans are written off in accordance with our charge-off policy, which stipulates charge-offs at 120 days past due or when other specific criteria are met. Any subsequent recoveries of previously charged-off amounts are credited back to the allowance for credit losses.

### Allowance for Credit Losses - Lease Merchandise

The allowance for lease losses is established through a provision for lease losses charged to expense. Leases are charged against the allowance for leases losses when management believes the collectibility of the book value of the lease is unlikely. The allowance is an amount management believes will be adequate to absorb possible losses on existing leases that may become uncollectible, based on evaluations of the collectibility of lease payments and prior lease loss experience.

## Controls and procedures

As filed, 2,453 characters.

#### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) as of March 31, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of that date, due to the material weakness in our internal control over financial reporting, including controls surrounding the preparation of the unaudited condensed consolidated statement of cash flows. As a result, we performed additional analysis as deemed necessary to ensure that our condensed consolidated financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Management is actively implementing remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting. Specifically, we have expanded and improved our review process for complex transactions. We further improved this process by enacting continuing education seminars for the accounting team, automating processes and systems around complex financial areas such as stock-based compensation expense, and the hiring of additional staff with the requisite experience and training to supplement our existing accounting team.

#### Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2025, the Company onboarded additional staff with requisite experience as accounting professionals, as well as identified and retained third-party professionals with whom to consult regarding complex accounting applications. Management believes these actions will enhance our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act). Except as noted above, and in the preceding two sentences, there was no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 183 characters.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-023815. Last ingested by Listed: Nov 6, 2026, 11:20 ET. No prices; not investment advice.