# PSQ Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [PSQ Holdings, Inc.](/companies/psqh.md) (CIK 1847064)
- Form: 10-Q
- Filed: 2025-08-12
- Accepted by EDGAR: Aug 12, 2025, 20:16 ET
- Period: 2025-06-30
- Accession: 0001628280-25-039892
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1847064/000162828025039892/psqh-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1847064/000162828025039892/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $7.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $13.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $1.3m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $2.7m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$8.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$19.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | −$63 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $8.2k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$8.4m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$12.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.18 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.29 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.18 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.29 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 45,253,319 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 44,104,601 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$11.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $20.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $32.2m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $65.5m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $10.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $43.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $22.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 43,938 characters.

### Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, 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 the Private Securities Litigation Reform Act of 1995. 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 Annual Report on 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.

*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."*

### 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 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

On June 1, 2025, James Rinn was appointed as the Company's Chief Financial Officer. Mr Rinn previously served as a member of the Compensation Committee and Chair of the Audit Committee. Effective June 1, 2025, upon the commencement of his service to the Company as Chief Financial Officer, Mr. Rinn resigned as the Chair of the Audit Committee, from his position on the Audit Committee, and from his position on the Compensation Committee and such resignations created vacancies. On May 22, 2025, the Board unanimously approved Nick Ayers to fill the vacancy on the Compensation Committee and Willie Langston to fill the Chair of the Audit Committee vacancy.

On July 28, 2025, the Company appointed Caitlin Long to its Board of Directors. Ms. Long is a renowned Bitcoin and crypto finance expert with over 30 years of experience in financial services, specializing in traditional finance, digital assets, and financial technology infrastructure. She is the Founder and CEO of Custodia Bank, a US chartered bank designed to offer a compliant bridge between US dollars and digital assets. For over 20 years, she previously held senior roles on Wall Street for over 20 years at firms including Morgan Stanley, Credit Suisse, and Salomon Brothers. Ms. Long is also recognized as an authority on blockchain policy and financial innovation and participated in Wyoming's Blockchain Task Force, where she helped draft and pass 13 crypto-friendly laws which positioned Wyoming as the de facto standard for policy innovation around digital assets.

### Expansion Updates

In June 2025, the Company expanded its Brands footprint into South Korea, bringing its premium products and its pro-family, "Make More Babies" mission to a nation facing one of the world's lowest fertility rates.

### Strategic Updates

On August 12, 2025, the Company announced a strategic repositioning of its business to accelerate the growth of its FinTech segment. As part of this repositioning, the Company plans to monetize its Brands segment and pursue a sale or strategic partnership of its Marketplace segment.

### Components of Results of Operations

During the three months ended June 30, 2025 and 2024, our net loss was $8.4 million and $11.2 million, respectively. During the three months ended June 30, 2025, our net loss decreased $2.8 million as compared to the three months ended June 30, 2024, due to a $1.1 million increase in revenues and a $4.9 million reduction in expenses. This is offset by a quarter over quarter loss of $3.0 million relating to the change in fair value of the warrant liabilities, and a quarter over quarter loss of $0.2 million relating to the change in fair value of the earnout liabilities.

### Revenues, net

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

#### Financial Technology

Credova 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, training pants, soaps, lotions, and other baby products to consumers by way of EveryLife's website and 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 of amortization of capitalized software development costs and depreciation of leased assets.

### Non-Operating Income and Other Items

#### Other Income, net

Other income, net relates to interest income earned on the money market accounts and a gain resulting from a settlement on an outstanding payable for the three and six months ended June 30, 2025.

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

Changes in 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.

#### Changes in Fair Value of Warrant Liabilities

Changes in 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 Benefit (Expense)

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 14 to the Condensed Consolidated Financial Statements 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 June 30, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Gross merchandise volume (“GMV”) - Credit | $10,713,373 | $13,277,530 | (19)% |
| Gross merchandise volume (“GMV”) - PSQ Payments | $68,171,847 | $— | 100% |

|  | Six Months Ended June 30, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Gross merchandise volume (“GMV”) - Credit | $22,111,425 | $30,170,811 | (27)% |
| Gross merchandise volume (“GMV”) - PSQ Payments | $104,204,832 | $— | 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 and six months ended June 30, 2025, GMV was $10.7 million and $22.1 million, respectively, which represented an approximate change of (19)% and (27)%, respectively, as compared to the same period in 2024.

For the six months ended June 30, 2025, our top five merchants and platform partners represented approximately 58% of total GMV - Credit, as compared to 41% for the six months ended June 30, 2024. GMV - Credit attributable to our largest merchant during the three months ended June 30, 2025 represented 24% of total GMV - Credit, compared to 16% 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, driven by a broader slowdown in the firearm retail industry and our continued focus on disciplined underwriting practices. Industry-wide softness impacted many of our merchant partners, with some reporting sales down more than 20% year-over-year, consistent with national trends. According to the National Shooting Sports Foundation (“NSSF”), U.S. firearm sales fell for the fourth consecutive year in 2024, totaling approximately 15.2 million adjusted background checks—a 3.5% decline from 2023. This downward trend persisted into 2025, with Q2 adjusted checks decreasing approximately 3.4% compared to the prior year, and February 2025 marking one of the weakest months in over a decade with a 9% year-over-year decline. The decline in overall firearm demand has been influenced by reduced consumer urgency under a pro-Second Amendment federal administration, as well as macroeconomic factors such as inflationary pressures and constrained discretionary spending, which have affected purchasing behavior across the retail sector. Despite these headwinds, the industry continues to demonstrate resilience, with each month in 2025 exceeding one million NSSF-adjusted background checks—a threshold that has been maintained for more than five years—underscoring a historically strong baseline level of demand. 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.

In response to these market conditions, the Company is actively executing strategic initiatives designed to diversify and strengthen future growth. These include expanding into new and tangential retail verticals to reduce concentration risk, developing innovative financial products tailored to a broader consumer base, and enhancing our underwriting processes through the use of advanced AI models and other data-driven tools. These efforts aim to improve credit decisioning, drive incremental transaction volume, and position the company for long-term resilience despite current industry softness.

For the three months ended June 30, 2025 and 2024, GMV - PSQ Payments was $68.2 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. For the six months ended June 30, 2025 and 2024, GMV - PSQ Payments was $104.2 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 and six months ended June 30, 2025 and 2024. See "Part I - Financial Information - Item 1. Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited)," and "- Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2025 and 2024 (Unaudited)."

The following table sets forth our condensed consolidated statement of operations for the three months ended June 30, 2025 and 2024, and the dollar and percentage change between the two periods:

|  | For the Three Months Ended June 30, 2025 | 2024 | Variance ($) | Variance (%) |
| --- | ---: | ---: | ---: | ---: |
| **Revenues, net** | **$7,082,868** | **$5,985,228** | **$1,097,640** | **18%** |
| Costs and expenses: |  |  |  |  |
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | 1,142,764 | 531,098 | 611,666 | 115% |
| Cost of goods sold (exclusive of depreciation and amortization expense shown below) | 2,231,290 | 1,438,843 | 792,447 | 55% |
| General and administrative | 5,976,081 | 10,993,793 | (5,017,712) | (46)% |
| Sales and marketing | 2,807,172 | 5,090,331 | (2,283,159) | (45)% |
| Research and development | 1,299,799 | 1,031,794 | 268,005 | 26% |
| Depreciation and amortization | 1,682,502 | 930,874 | 751,628 | 81% |
| Total costs and expenses | 15,139,608 | 20,016,733 | (4,877,125) | (24)% |
| **Operating loss** | **(8,056,740)** | **(14,031,505)** | **5,974,765** | **(43)%** |
| Other income (expense): |  |  |  |  |
| Other income, net | 434,153 | 52,599 | 381,554 | 725% |
| Changes in fair value of earn-out liabilities | 10,000 | 220,000 | (210,000) | (95)% |
| Changes in fair value of warrant liabilities | 115,000 | 3,091,000 | (2,976,000) | (96)% |
| Interest expense, net | (868,456) | (553,303) | (315,153) | 57% |
| **Loss before income taxes** | **(8,366,043)** | **(11,221,209)** | **2,855,166** | **(25)%** |
| Income tax benefit (expense) | 63 | (14,037) | 14,100 | (100)% |
| **Net loss** | **$(8,365,980)** | **$(11,235,246)** | **$2,869,266** | **(26)%** |

The following table sets forth our condensed consolidated statement of operations for the six months ended June 30, 2025 and 2024, and the dollar and percentage change between the two periods:

|  | For the Six Months Ended June 30, 2025 | 2024 | Variance ($) | Variance (%) |
| --- | ---: | ---: | ---: | ---: |
| **Revenues, net** | **$13,832,489** | **$9,451,117** | **$4,381,372** | **46%** |
| Costs and expenses: |  |  |  |  |
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | 1,879,009 | 1,129,459 | 749,550 | 66% |
| Cost of goods sold (exclusive of depreciation and amortization expense shown below) | 4,304,564 | 2,830,251 | 1,474,313 | 52% |
| General and administrative | 16,500,572 | 21,256,671 | (4,756,099) | (22)% |
| Sales and marketing | 5,263,558 | 9,772,969 | (4,509,411) | (46)% |
| Research and development | 2,737,252 | 2,173,752 | 563,500 | 26% |
| Depreciation and amortization | 2,893,612 | 1,227,471 | 1,666,141 | 136% |
| Total costs and expenses | 33,578,567 | 38,390,573 | (4,812,006) | (13)% |
| **Operating loss** | **(19,746,078)** | **(28,939,456)** | **9,193,378** | **(32)%** |
| Other income (expense): |  |  |  |  |
| Other income, net | 721,343 | 155,978 | 565,365 | 362% |
| Changes in fair value of earn-out liabilities | 460,000 | 340,000 | 120,000 | 35% |
| Changes in fair value of warrant liabilities | 7,496,500 | 5,322,500 | 2,174,000 | 41% |
| Interest expense, net | (1,736,913) | (677,481) | (1,059,432) | 156% |
| **Loss before income taxes** | **(12,805,148)** | **(23,798,459)** | **10,993,311** | **(46)%** |
| Income tax benefit (expense) | (8,177) | (13,618) | 5,441 | (40)% |
| **Net loss** | **$(12,813,325)** | **$(23,812,077)** | **$10,998,752** | **(46)%** |

### Revenues, net

| Revenues, net: Financial Technology | For the three months ended June 30, 2025 | 2024 | For the six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Direct revenue | $441,386 | $967,260 | $1,157,153 | $1,121,867 |
| Interest income on loans | 607,123 | 961,518 | 1,195,619 | 1,100,916 |
| Loan and lease contracts sold, net | 495,748 | 1,039,238 | 1,558,122 | 1,122,242 |
| Lease merchandise, net | 857,531 | — | 970,335 | — |
| Payments revenue | 1,030,088 | — | 1,601,432 | — |
| Total Financial Technology revenues, net | 3,431,876 | 2,968,016 | 6,482,661 | 3,345,025 |
| Marketplace |  |  |  |  |
| Advertising and e-commerce sales | 318,997 | 726,638 | 747,646 | 1,672,109 |
| Brands |  |  |  |  |
| Product sales | 3,536,549 | 2,478,455 | 6,966,111 | 4,828,965 |
| Other sales | — | 18,738 | — | 18,738 |
| Returns and discounts | (204,554) | (206,619) | (363,929) | (413,720) |
| Total Brand revenues, net | 3,331,995 | 2,290,574 | 6,602,182 | 4,433,983 |
| Total revenues, net | $7,082,868 | $5,985,228 | $13,832,489 | $9,451,117 |

32

Revenues, net increased by $1.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was driven by an increase in FinTech sales of $0.5 million, an increase in Brands sales of $1.0 million, and partially offset by a decrease in Marketplace sales of $0.4 million.

Revenues, net increased by $4.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was driven by an increase in FinTech sales of $3.1 million, an increase in Brands sales of $2.2 million and partially offset by a decrease in Marketplace sales of $0.9 million.

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

Cost of revenue (exclusive of depreciation and amortization) increased by $0.6 million, or 115%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was due to an increase of $1.0 million in FinTech transaction fees, offset by a $0.2 million decrease in employee compensation, a $0.1 million decrease in hosting costs, and $0.1 million decrease in other costs.

Cost of revenue (exclusive of depreciation and amortization) increased by $0.7 million, or 66%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was due to an increase of $1.5 million in FinTech transaction fees, offset by a $0.5 million decrease in employee compensation, a $0.2 million decrease in hosting costs, and $0.1 million decrease in other costs.

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

Cost of goods sold (exclusive of depreciation and amortization) increased by $0.8 million, or 55% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was due to an increase in the sale of products.

Cost of goods sold (exclusive of depreciation and amortization) increased by $1.5 million, or 52% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was due to an increase in the sale of products.

### General and Administrative Expenses

General and administrative expenses decreased by $5.0 million, or 46%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was due to the reduction in share-based compensation expense of $4.3 million, a decrease in legal fees of $0.4 million, and a decrease of employee and contractor compensation and benefits of $0.3 million. The share-based compensation reduction is primarily due to a Type III modification caused by a change in role and responsibilities of the former Chief Financial Officer.

General and administrative expenses decreased by $4.8 million, or 22%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was due to the reduction in share-based compensation expense of $4.3 million, a decrease in consulting services of $0.5 million, a decrease in legal fees of $0.3 million, and an increase of employee and contractor compensation and benefits of $0.3 million. The share-based compensation expense reduction is primarily due to a Type III modification caused by a change in role and responsibilities of the former Chief Financial Officer.

### Sales and Marketing Expenses

Sales and marketing expenses decreased by $2.3 million, or 45%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was due to a $1.2 million decrease in brand awareness and advertising campaigns, a decrease in share-based compensation expense of $0.9 million, and a decrease of $0.2 million of other sales and marketing expenses.

Sales and marketing expenses decreased by $4.5 million, or 46%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was due to a $2.4 million decrease in share-based compensation expense, a decrease in brand awareness and advertising campaigns of $1.9 million, and a decrease of $0.2 million in employee and contractor compensation and benefits.

### Research and Development Expenses

Research and development expenses increased by $0.3 million, or 26%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily due to employee and contractor compensation and benefits expenses for development of operating software.

Research and development expense increased by $0.6 million, or 26%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was due to employee and contractor compensation and benefits expenses of $0.5 million and an increase of $0.1 million in share-based compensation expense.

### Depreciation and Amortization Expense

Depreciation and amortization expense increased by $0.8 million, or 81%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was related to the depreciation of leased assets of $0.6 million and the amortization of capitalized software development costs of $0.2 million.

Depreciation and amortization expense increased by $1.7 million, or 136%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was related to the amortization of capitalized software development costs of $1.1 million and the depreciation of leased assets of $0.6 million.

### Other Income, net

Other income, net increased by $0.4 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was due to a $0.2 million gain resulting from a settlement on an outstanding payable and interest income of $0.2 million earned on the money market accounts.

Other income, net increased by $0.6 million for the six months ended June 30, 2025, respectively, compared to the six months ended June 30, 2024. The increase was due to a $0.2 million gain resulting from a settlement on an outstanding payable and interest income of $0.4 million earned on the money market accounts.

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

Changes in fair value of earn-out liabilities decreased by $0.2 million and increased by $0.1 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024. The change was due to the fluctuation in the fair value of the earn-out liabilities at the end of the reporting period.

### Changes in Fair Value of Warrant Liabilities

Changes in fair value of warrant liabilities decreased by $3.0 million and increased by $2.2 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024. The change was due to the fluctuation in the fair value of the warrant liabilities at the end of the reporting period.

### Interest Expense, net

Interest expense, net increased by $0.3 million and $1.1 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 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 Benefit (Expense)

Income tax benefit (expense) increased by an insignificant amount for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 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 $12.8 million and $23.8 million for the six months ended June 30, 2025 and 2024, respectively, and had negative cash flows from operations of $11.3 million and $16.9 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, the Company had aggregate unrestricted cash and cash equivalents of $20.6 million and $36.3 million and net working capital of $21.3 million and $38.2 million, respectively.

During the first quarter, management made a strategic decision to invest in its FinTech segment and began taking assignment and holding closed-end consumer leases. We expect 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 Six Months Ended June 30, 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 six months ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Net cash used in operating activities | $(11,285,556) | $(16,939,551) | $5,653,995 |
| Net cash (used in) provided by investing activities | $(4,698,645) | $52,272 | $(4,750,917) |
| Net cash provided by financing activities | $278,824 | $8,191,167 | $(7,912,343) |

### Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2025 was $11.3 million compared to $16.9 million used in operating activities for the six months ended June 30, 2024. The decrease in cash used in operating activities was due primarily to a decrease of $11.0 million in net loss, offset by an increase in fair value of warrant liabilities of $2.2 million, an increase in fair value of earn-out liabilities of $0.1 million, an increase in the net cash used by operating assets and liabilities of $2.0 million and a decrease of $5.0 million in non-cash related expenses.

### Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities for the six months ended June 30, 2025 was $4.7 million compared to $0.1 million net cash provided by investing activities for the six months ended June 30, 2024. Net cash used in investing activities for the six months ended June 30, 2025 primarily related to $2.2 million of additions to lease merchandise, $1.6 million of software development costs, $0.5 million of licensing purchases and $0.5 million of net decrease in loans held for investment. Net cash provided by investing activities for the six months ended June 30, 2024 primarily related to $1.8 million of software development costs partially offset by an increase of $1.7 million of net loans held for investment.

### Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 was $0.3 million compared to $8.2 million provided by financing activities for the six months ended June 30, 2024. The decrease was due to a decrease in raised capital of $10.0 million partially offset by an increase of $2.0 million in the revolving line of credit balance.

### 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 June 30, 2025 | 2024 | For the Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| GAAP operating loss | $(8,056,740) | $(14,031,505) | $(19,746,078) | $(28,939,456) |
| Non-GAAP adjustments |  |  |  |  |
| Corporate costs not allocated to segments | (1,174,818) | (3,078,332) | (3,146,191) | (8,433,875) |
| Transaction costs incurred in connection with acquisitions | — | (1,908) | — | (2,295,502) |
| Share-based compensation (exclusive of what is included in transaction costs above) | 69,861 | (5,171,761) | (3,552,984) | (10,170,774) |
| Depreciation and amortization | (1,682,502) | (930,874) | (2,893,612) | (1,227,471) |
| **Non-GAAP operating loss** | **$(5,269,281)** | **$(4,848,630)** | **$(10,153,291)** | **$(6,811,834)** |

**Off-Balance Sheet Arrangements.**

None.

### Critical Accounting Policies and 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 six-month period ended June 30, 2025 included elsewhere in this report. There were no material changes in the Company's critical accounting policies and estimates during the six months ended June 30, 2025. For a description of the Company's critical accounting policies, estimates and assumptions used in preparation of the Company's financial statements included in Part II. Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

## Controls and procedures

As filed, 2,550 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 Rule 13a-15(e)) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") as of June 30, 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. 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. Although the Company believes these efforts will improve its internal controls over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the material weakness in internal control over financial reporting until a sustained period of time has passed to allow management to rest the design and operational effectiveness of the remediation steps management has taken.

#### Changes in Internal Control Over Financial Reporting

Except for the material weakness described above and the related remediation measures being implemented, there was no change in our internal control over financial reporting during the fiscal quarter ended June 30, 2025 from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024, 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 Aug 12, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-039892. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.