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What changed in PSQ Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PSQ Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+594 added−564 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-14)

Top changes in PSQ Holdings, Inc.'s 2024 10-K

594 paragraphs added · 564 removed · 368 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+107 added−74 removed12 unchanged
Biggest changeWe aim to serve this large unaddressed market with our high-quality Platform of values-aligned products and business members, along with our wholly owned subsidiaries such as EveryLife. ● Value Proposition for Business Members: ● By connecting business members with like-minded consumer members, we are able to fill a gap in the market that we believe has been purposefully ignored by our larger competitors.
Biggest changeThis makes for an environment where the FinTech and Brands segments can achieve customer acquisition costs dramatically lower than our competitors. • Value Proposition for Consumers: ◦ We provide consumers with options to purchase from thousands of third party, unique small businesses that prioritize a value for life, family, and freedom through the PSQ Platform, we provide financing options to make the products in our ecosystem, especially firearms and ammunition, more accessible through Credova, and we aim to serve this large unaddressed market with our high-quality Platform of values-aligned products and businesses, along with our wholly owned subsidiaries, such as EveryLife. 9 Table of Contents • Value Proposition for Business Owners: ◦ By connecting business owners with a suite of business solutions, including advertising, financing, and payment solutions, we are able to fill a gap in the market that we believe has been purposefully ignored by our larger competitors.
To a lesser extent, we also have prioritized digital advertising on platforms such as Rumble and Meta, and podcast advertising on shows such as Allie Stuckey’s “Relatable”, The “Charlie Kirk Show”, Steve Bannon’s “War Room”, and others.
To a lesser extent, we also have prioritized digital advertising on platforms such as Rumble and Meta, and advertising on shows such as Allie Stuckey’s “Relatable”, The “Charlie Kirk Show”, Steve Bannon’s “War Room”, and others.
(“EveryLife”), a Delaware corporation, in exchange for 1,071,229 shares of common stock, par value $0.001 per share, of Private PSQ (“Private PSQ Common Stock”). On July 19, 2023 (the “Closing Date”), we consummated the transactions contemplated by that Agreement and Plan of Merger, dated as of February 27, 2023 (the “Merger Agreement”), each by and among PublicSq. Inc.
(“EveryLife”), a Delaware corporation, in exchange for 1,071,229 shares of common stock, par value $0.001 per share, of Private PSQ. On July 19, 2023 (the “Closing Date”), we consummated the transactions contemplated by that Agreement and Plan of Merger, dated as of February 27, 2023 (the “Merger Agreement”), each by and among PublicSq. Inc.
EveryLife diapers are carefully made to limit and eliminate harsh chemicals to help protect baby’s developing brain and body. EveryLife’s diapers are made without fragrances, dyes, lotions, latex, parabens, phthalates, or elemental chlorine . ● Wipes: EveryLife’s baby wipes are made with 99% purified water and with only five, clean ingredients.
EveryLife diapers are carefully made to limit and eliminate harsh ingredients to help protect a baby’s developing brain and body. EveryLife’s diapers are made without fragrances, dyes, lotions, latex, parabens, phthalates, or elemental chlorine . • Wipes: EveryLife’s baby wipes are made with 99% purified water and with only five clean ingredients.
Item 1. Business Unless the context otherwise requires, throughout this Annual Report on Form 10-K, the words “PSQ,” “PSQH,” “we,” “us,” “PublicSquare” the “registrant” or the “Company” refer to PSQ Holdings, Inc. and its subsidiaries (as applicable). On February 23, 2023, PSQ completed a stock-for-stock transaction to purchase 100% of the outstanding shares of EveryLife, Inc.
Item 1. Business Unless the context otherwise requires, throughout this Annual Report on Form 10-K, the words “PSQ,” “PSQH,” “PublicSquare,” “we,” “us,” the “registrant” or the “Company” refer to PSQ Holdings, Inc. and its subsidiaries (as applicable). On February 23, 2023, PublicSquare completed a stock-for-stock transaction to purchase 100% of the outstanding shares of EveryLife, Inc.
See “Risk Factors — Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business .” In the ordinary course of our business, we may process a significant volume of personal information and other regulated information from our users, employees and other third parties.
See “Risk Factors — Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business .” 12 Table of Contents In the ordinary course of our business, we may process a significant volume of personal information and other regulated information from our users, employees and other third parties.
The Platform facilitates online payments, including subscription fees, and therefore we will be subject to a variety of laws governing online transactions, payment card transactions and the automatic renewal of online agreements. In the U.S., these matters are regulated by, among other things, the federal Restore Online Shoppers Confidence Act (“ ROSCA ”) and various state laws. 12
The Platform facilitates online payments, including subscription fees, and therefore we will be subject to a variety of laws governing online transactions, payment card transactions and the automatic renewal of online agreements. In the U.S., these matters are regulated by, among other things, the federal Restore Online Shoppers Confidence Act (“ROSCA”) and various state laws.
This commitment has quickly set EveryLife apart, elevating both its brand and products. Since its launch in July 2023, EveryLife has been delivering high-performing and price-accessible products that align with the values of our consumers. Our Products and Services ● Diapers: EveryLife’s diapers use high-performance flow channel technology for faster absorption and 12-hour leak protection.
This commitment has quickly set EveryLife apart, elevating both its brand and products. Since its launch in July 2023, EveryLife has been delivering premium, high-performing, price-accessible products that align with the pro-life and pro-family values of its consumers. Products and Services • Diapers: EveryLife’s diapers use high-performance flow channel technology for faster absorption and 12-hour leak protection.
We are uniquely situated to provide this connection and bond that can help support small and medium sized American business members sharing traditional values. ● Mutually Reinforcing Business Model: ● The Platform serves as an ecosystem designed to connect patriotic consumer members with values-aligned business members to create trust-driven transactions between consumer members and business members.
We are uniquely situated to provide this connection and bond that can help support small- and medium-sized American businesses sharing traditional values. • Mutually Reinforcing Business Model: ◦ The Platform serves as an ecosystem designed to connect patriotic consumers with values-aligned business owners to create trust-driven transactions between consumers and businesses.
Structure of the Transaction Pursuant to the Credova Merger Agreement, on March 13, 2024, the transactions which are the subject of the Credova Merger Agreement were consummated (the “Closing”) and Merger Sub merged with and into Credova (the “Merger”), with Credova surviving as a wholly-owned subsidiary of PSQ.
Pursuant to the Credova Merger Agreement, on March 13, 2024, the transactions which are the subject of the Credova Merger Agreement were consummated (the “Credova Closing”) and Credova Merger Sub merged with and into Credova (the “Merger”), with Credova surviving as a wholly-owned subsidiary of PublicSquare.
The PSQ platform (the “Platform”) can be accessed through two primary means: ● Mobile application — Our mobile app is available for both iOS and Android-based devices. ● Web — Users can access the Platform at PublicSquare.com. 1 Business owners from a wide array of industries, offering a myriad of products and services, can host their business listing on the Platform directory at no cost.
The PSQ platform can be accessed through two primary means: • Mobile application — Available for both iOS and Android-based devices. • Web — Via web browser at PublicSquare.com. Business owners from a wide variety of industries, offering a myriad of products and services, can host their business listing on the Platform directory at no cost.
We have observed that many consumers are increasingly disenchanted with large corporations that have embraced non-traditional, progressive ideas and policies and would prefer to re-allocate more of their dollars to business members who do not stand in opposition to their views and values.
We have observed that many consumers are increasingly disenchanted with large corporations that have embraced non-traditional, progressive ideas and policies and would prefer to re-allocate more of their dollars to businesses that do not stand in opposition to their views and values. This is the solution that the PSQ Platform and EveryLife provide.
We, in turn, utilize data from the Platform to identify the needs of our users and businesses which we can fill through launching or acquiring wholly owned subsidiaries that provide solutions.
We, in turn, utilize data from the Platform to identify the needs of our users and businesses which we can fill through launching or acquiring wholly owned subsidiaries that provide solutions. Additionally, we can serve these business owners with financing and payment solutions under the FinTech segment.
We believe these brands will enable us to fill gaps within consumer spending through our established primary customer acquisition channel. ● Increase Monetization on the Platform — We are still in the early stages of monetization on the Platform and believe there are many avenues for sustained revenue growth that may be available to us in the future through the Platform and the network of connections that it allows us to establish and grow.
We believe additional product lines under the EveryLife Brand, as well as launching and acquiring new brands will enable us to fill gaps within consumer spending through our established primary customer acquisition channel. 10 Table of Contents • Increase Monetization on the Platform — We believe there are many avenues for sustained revenue growth that may be available to us in the future through the Platform and the network of connections that it allows us to establish and grow.
Each business profile provides information about the business, such as its location, a description of services and/or products provided by such business, and, in many cases, contact information and a PSQ-specific discount code, if applicable. Users are able to purchase products, bookmark favorite businesses, and share business profiles.
Each business listing provides information about the business, such as its location, a description of services and/or products provided, and, in many cases, contact information and an exclusive promo code, if applicable. Shoppers are able to purchase products, bookmark favorite businesses, and share business listings.
We are focused on developing and implementing efficiencies to decrease the acquisition cost of consumer members and business members. Additionally, we expect that, as we scale operations, our staff will become more efficient in various aspects of operations and maintenance such that we can reduce operating costs.
We continue to focus on developing and implementing efficiencies to decrease the acquisition cost of consumers and merchants across our segments. Additionally, we expect that, as we scale operations, our staff will become more efficient in various aspects of operations and maintenance such that we can keep operating costs low.
A number of Consideration Shares equal to ten percent (10%) of the Consideration Shares (the “Escrow Shares”) was placed in an escrow account for indemnity claims made under the Credova Merger Agreement.
As consideration for the Merger, Credova stockholders received 2,920,993 newly-issued shares of Class A Common Stock (the “Consideration Shares”). A number of Consideration Shares equal to ten percent (10%) of the Consideration Shares (the “Escrow Shares”) was placed in an escrow account for indemnity claims made under the Credova Merger Agreement.
In connection with the Merger, each share of Credova was converted into the right to receive newly-issued shares of our Class A common stock (“Class A Common Stock”), delivered to the Credova stockholders at the Closing (“Credova Stockholders”). Merger Consideration As consideration for the Merger, Credova stockholders received 2,920,993 newly-issued shares of Class A Common Stock (the “Consideration Shares”).
In connection with the Merger, each share of Credova was converted into the right to receive newly-issued shares of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), delivered to the Credova stockholders at the Credova Closing (“Credova Stockholders”).
In order for a new business to join the Platform, a representative of that business must agree that the business will respect the following five core values (the “ five core values ”) that we strive to uphold and promote within our community: ● We are united in our commitment to freedom and truth — that’s what makes us Americans. ● We will always protect the family unit and celebrate the sanctity of every life. ● We believe small business members and the communities who support them are the backbone of our economy. ● We believe in the greatness of this Nation and will always fight to defend it. ● Our constitution is non-negotiable — government isn’t the source of our rights, so it can’t take them away.
These five values are: • We are united in our commitment to freedom and truth — that’s what makes us Americans. • We will always protect the family unit and celebrate the sanctity of every life. • We believe small businesses and the communities who support them are the backbone of our economy. 1 Table of Contents • We believe in the greatness of this Nation and will always fight to defend it. • Our Constitution is non-negotiable — government isn’t the source of our rights, so it can’t take them away.
We are currently focused on near-term goals in two main areas — scaling our digital advertising business and developing new revenue streams, such as our e-commerce integration and the development and launch of B2B products and the expansion of our D2C product offerings. ● Pursue Value-Enhancing Acquisitions — In order to fully capitalize on opportunities within our addressable market, as well as to further expand the Platform and offerings, we intend, over time, to pursue value-enhancing acquisitions as they become available in the future.
We are currently focused on near-term goals in two main areas — scaling our digital advertising business and developing new revenue streams, such as a monthly subscription for e-commerce businesses as well as an affiliate offering for businesses who are not able to integrate into our commerce offering (service businesses, brick and mortar retail, etc.). • Pursue Value-Enhancing Acquisitions — In order to fully capitalize on opportunities within our addressable market, as well as to further expand the Platform and offerings, we intend, over time, to pursue value-enhancing acquisitions as they become available in the future.
Our Technology Our investments in technology are currently focused on the following areas: business solutions, cloud infrastructure and development principles. ● Business Solutions — Our proprietary Content Management System (“ CMS ”) is the core our business toolset, powering our advertising products, content technology stack and reporting capabilities.
Our Technology Our investments in technology focus on four key areas: business solutions, cloud infrastructure, development principles, and FinTech platforms. • Business Solutions — Our Content Management System ("CMS") is the foundation of our business toolset, powering our advertising products, content technology stack, and reporting capabilities.
Acquisition of Credova Credova Merger Agreement On March 13, 2024, we entered into an agreement and plan of merger (the “Credova Merger Agreement”) with Cello Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub” and, together with PSQ, the “Buyer Parties”), Credova Holdings, Inc., a Delaware corporation (“Credova”), and Samuel L.
At the closing of the Business Combination (the “Closing”), Colombier changed its name to “PSQ Holdings, Inc.” On March 13, 2024, we entered into an agreement and plan of merger (the “Credova Merger Agreement”) with Cello Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Credova Merger Sub”), Credova Holdings, Inc., a Delaware corporation (“Credova”), and Samuel L.
Credova has developed and maintains an internet-based proprietary retail finance platform and related application programming interfaces (“APIs”) through which Credova, certain FDIC and NCUA insured financial institutions, and other financial institutions authorized by Credova (each a “Financing Partner”), and merchants can dynamically offer certain financing products (collectively, the “Services”).
Credova has developed and maintains an internet-based proprietary retail finance platform (the "Credova Platform") and related application programming interfaces ("APIs") through which Credova, certain Federal Deposit Insurance Corporation (“FDIC”) and National Credit Union Administration (“NCUA”) insured financial institutions, other insured financial institutions authorized by Credova (each a "Financing Partner"), and merchants can dynamically offer certain financing products.
Accordingly, we are, or may become, subject to numerous privacy and data protection obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to privacy and data protection.
Accordingly, we are, or may become, subject to numerous privacy and data protection obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to privacy and data protection. Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (“CCPA”), and the California Privacy Rights Act (“CPRA”).
We expect that our ongoing product investments will allow us to enable and capture potential new revenue in small business and e-commerce offering for goods and services. ● Other growth strategies: ● Increase our marketing, sales, and business development initiatives to attract new customers and create financial partnerships. ● Continue to hire highly competent, hardworking, ethical executives and personnel based on merit. ● Exploit our proprietary data and utilize to provide high-quality services to our consumer base. ● Lower operating costs.
We expect that our ongoing product investments will allow us to enable and capture potential new revenue from our goods and services provided. • Other growth strategies: ◦ Increase our marketing, sales, and business development initiatives to attract new customers and merchants to our three segments. ◦ Continue to hire highly competent, hardworking, ethical executives and personnel based on merit, with a focus on the FinTech segment. ◦ Utilize our proprietary data to provide high-quality products and services to our community of consumers and business owners. ◦ Maintain low operating costs.
In so doing, we intend to focus on like-minded business members that respect our five core values, complement our values-aligned platform, and fulfill demand from our consumer members and business partners. 7 We also expect to further scale the scope and form of our advertising and marketing efforts, as briefly described below.
In so doing, we intend to focus on like-minded business owners that respect our five core values, complement our values-aligned platform, and fulfill demand from our consumers and business partners.
Built with flexibility in mind, our CMS consists of content targeting and delivery engines. These capabilities serve all of our paying business members. ● Cloud Infrastructure — We continually invest in the underlying technology platform that powers all of the Platform and services.
Designed for flexibility, our CMS includes advanced content targeting and delivery engines, ensuring a seamless experience for all our paying businesses. • Cloud Infrastructure — We continually invest in the underlying technology that powers our platform and services.
We believe we are the only patriotic marketplace that is operating at scale and launching wholly owned subsidiaries that fill the gaps for our users and business members. ● First Mover Advantage: ● We view PSQ as the first business, at scale, to address the concerns and needs of our target consumer and business members through an online platform oriented towards patriotic Americans inspired to build a parallel economy.
We believe we are the only patriotic marketplace that is operating at scale and launching wholly owned subsidiaries that fill the gaps for our consumers and business owners. • First Mover Advantage: ◦ We view PublicSquare as the first business, at scale, to address the concerns and needs of our target consumers and business owners through a suite of products and services focused on serving patriotic Americans who have been ignored and unaddressed for far too long.
D2C Brand Overview EveryLife is a direct-to-consumer baby care company founded in 2023 with a mission to provide premium products to every miraculous life. Every baby is considered a gift from God and deserves love, protection, and celebration. EveryLife is committed to its core values, ensuring product quality, and demonstrating generosity by donating diapers and wipes to moms in need.
EveryLife believes that every baby is a gift from God and deserves love, protection, and celebration. EveryLife is committed to its core values, ensuring excellence in product quality, and demonstrating generosity by donating diapers and wipes to moms in need (via its unique "Buy For a Cause" program).
The creditworthiness of consumers is largely determined based on credit scores provided by national credit reporting agencies and other proprietary underwriting criteria. Marketing Credova operates Credova.com, which provides information to potential retailer partners about the benefits of partnering with Credova. In addition, Credova looks for retail partners by utilizing an in-house sales team, referrals, and online marketing.
Credova operates Credova.com, which provides information to potential retailer partners about the benefits of partnering with Credova. In addition, Credova looks for retail partners by utilizing an in-house sales team, referrals, and online marketing. Credova provides merchants with compliant advertising and other marketing content that will advertise the retailer’s products and the financing solutions facilitated by Credova.
In addition, the Platform is powered by proprietary technology and certain open-source software.
Intellectual Property Our intellectual property includes trademarks, copyrights and trade secrets. In addition, the PSQ Platform and Credova Platform are powered by proprietary technology and certain open-source software.
Users using the Platform can then identify and patronize these business members. Users are able to review our five core values on the Platform. By accepting the terms and conditions of our application, business members confirm that they have reviewed our five core values and affirm that they will respect these values.
Shoppers using the Platform can then find and patronize these small businesses. Shoppers are able to review our mission and values on the Platform. By accepting our terms and conditions, businesses confirm that they have reviewed our core values and that they will respect them in their operations. Requiring confirmation helps ensure mutual trust and shopper satisfaction.
As of December 31, 2023, we had 82 full-time employees (including employees of wholly-owned subsidiaries), all of whom are based in the United States. We believe we have good relationships with our employees. Our human capital resources objectives include identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees.
Employees As a mission-driven technology company, we believe our employees are our most valuable resource. As of December 31, 2024, we had 85 full-time employees (including employees of wholly-owned subsidiaries), all of whom are based in the United States. We believe we have good relationships with our employees.
These five core values are the foundation of our Company’s vision, which connects the consumer members and business members who use the Platform to promote their voice through their purchasing power, or ‘vote with their wallet’.
These five core values are the foundation of our Company’s vision, which connects the consumers and merchants who use our services to promote their voice through their purchasing power, or "vote with their wallets." 2 Table of Contents Our Business Model The Company's operations comprise three operating segments: Marketplace, Brands, and Financial Technology, summaries of which are below.
We actively seek to continue growing this program. ● Expand Our Branded D2C Product Offerings — We introduced our first branded D2C products, disposable diapers and wipes offered under our pro-family “EveryLife TM ” brand in July 2023 and expect to expand and diversify our branded D2C offerings in areas where we believe there is significant existing market need or opportunity going forward.
Our strategic focus on balance sheet growth through high-quality consumer assets aligns with our long-term objective of sustainable and scalable financial success for the company and its shareholders. • Expand Our Branded D2C Product Offerings — We introduced our first branded D2C products offered under our pro-family “EveryLife TM ” brand in 2023 and expect to expand and diversify our branded D2C offerings in areas where we believe there is significant existing market need or opportunity going forward.
These moms are fervent about supporting companies that mirror their values, placing a strong emphasis on family priorities. In response to a growing discontent with baby brands supporting abortion and progressive causes, EveryLife emerges as a solution, filling a significant market gap.
These moms are passionate about supporting brands that align with their family values. With growing discontent over baby brands backing abortion and progressive causes, EveryLife emerges as a solution, filling a significant market gap. More than just baby care, EveryLife offers high-performing products for moms seeking premium brands that reflect their values.
Product Development Since our inception, we have focused on continuous improvement of the Platform and user experience, with our product and engineering teams working in an environment focused on efficiency and speed combined with end-user value.
Product & Service Development Since our inception, we have focused on continuous improvement of the Platform and user experience, with our product and engineering teams focused on efficiency and speed of service for both shopper and business owner. Using proprietary technology, we surface relevant businesses and their products, driving discovery for our shopper base.
EveryLife partners with manufacturing partners who are committed to quality, Current Good Manufacturing Practices (“cGMPs”), sustainability, and innovation. EveryLife conducts quality audits of third-party manufacturing partners and requires that they follow EveryLife’s quality standards of controlled documentation, cleaning and safety protocols, and laboratory controls.
EveryLife partners with manufacturers who share its commitment to quality, sustainability, and innovation, adhering to Current Good Manufacturing Practices (cGMPs). To ensure excellence, EveryLife conducts rigorous quality audits, requiring its partners to uphold strict standards in controlled documentation, safety protocols, and laboratory controls.
They can also sync their products in order for users to purchase their product on the app. For users, our user-friendly app provides different tabs where they can find both local and online business members. The Platform categorizes products and services into industries including but not limited to: coffee & tea, clothing, outdoor recreation, shooting, and vitamins and supplements.
For shoppers, our user-friendly app provides different tabs where they can find both local and online businesses. The Platform groups products and services into categories including but not limited to: personal care, food, baby & kids, apparel, and sports.
EveryLife’s third-party manufacturing and fulfillment partners are located in various locations including the United States and Mexico. EveryLife’s Operations team manages these third-party relationships and processes. EveryLife’s distribution network includes multiple warehouses in the United States with direct-to-consumer (“D2C”) fulfillment capabilities and value-added services. The fulfillment centers are operated by third party logistics (“3PL”) service providers.
With manufacturing partners strategically located across North America, EveryLife’s operations team carefully oversees these relationships and processes to maintain seamless production and delivery. EveryLife’s distribution network includes multiple warehouses across the United States, all equipped with D2C fulfillment capabilities and value-added services.
From its inception, our infrastructure was built to be cloud-native, applying well-tested design patterns with distributed systems that are linearly scalable and highly flexible. We currently utilize a large third-party cloud service provider to support the Platform needs. 10 ● Development Principles — Execution, quality, velocity and autonomy are core pillars of our engineering culture.
We currently utilize a leading third-party cloud service provider to meet the evolving demands of our Platform and ensure seamless performance for our users. • Development Principles — Execution, quality, velocity and autonomy are core pillars of our engineering culture.
Marketing and Advertising To date, a majority of our marketing and advertising activity has been conducted by our management team and employees, through our Outreach Program, earned media exposure, social media exposure, word of mouth growth, and guerrilla marketing (creating viral videos to capitalize on current events, engaging with content creators through superchats, press campaigns to support local business members, and culturally relevant merch drops).
Competition We compete with, among other businesses, traditional multi-vendor marketplaces like Amazon or Etsy, business directories like Yelp, and online household essentials sites like Melaleuca or Thrive Market, as well as a few smaller competitors who also position themselves as values-based platforms. 3 Table of Contents Marketing Strategy To date, a majority of our Platform marketing and advertising activity has focused on our Ambassador Program, earned media exposure, social media exposure, organic growth, and guerrilla marketing (creating viral videos to capitalize on current events, engaging with content creators through superchats, press campaigns to support local businesses, and culturally relevant product drops).
The Platform We are free-to-use for users, who can use the Platform to search for and shop from values-aligned business members both locally and nationally. The types of business members found on the Platform currently include, among others, retailers and other merchants, restaurants, banks and other service providers.
Marketplace The PSQ Marketplace (the "Platform") is our primary customer and merchant acquisition tool. The Platform is free to use for shoppers, who can utilize the Platform to search and shop from quality American small businesses, both locally and across the country. These values-aligned businesses include e-commerce merchants, restaurants, banks, and other service providers.
We “sing a different tune” than many other major e-commerce platforms and businesses in the United States and we believe this differentiation will work to our advantage. ● Value Proposition for Users: ● We provide users using the Platform the ability to search for and shop with business members that share their traditional American values.
We “sing a different tune” than many other major marketplace and payments companies in the United States and we believe this differentiation will work to our advantage. • Differentiated Financial Technology Offerings: ◦ Our Financial Technology offerings, financing and payments, equip merchants with a comprehensive, secure, and values-aligned checkout solution.
Market Credova’s Services allow merchants to offer point of sale financing options for the purchase of consumer goods online and in store. The intended market includes consumers making purchases from retailers with a focus on those in the outdoor recreation industry and others.
The intended market includes consumers making purchases from retailers with a focus on those in the outdoor recreation industry and others. The creditworthiness of consumers is largely determined based on credit scores provided by national credit reporting agencies and other proprietary underwriting criteria.
Credova’s offerings fall into four main categories: (i) Merchant-originated products; (ii) Bank Partner-originated closed-end installment loans; (iii) Credova-originated loan products; (iv) Zero-interest installment product (“Pay-in-4”). The Services and products offered by Credova promote convenience in the borrowing community by providing interest bearing and non-interest bearing financial products that cover the majority of the credit spectrum.
This gateway is used to onboard and support merchant onboarding for payment processing as well as to support the merchant experience. The services and products offered by Credova promote convenience in the borrowing community by providing interest bearing and non-interest bearing financial products that cover the majority of the credit spectrum.
E-Commerce Transactional Revenue — We launched e-commerce capabilities on the Platform in November 2023, which provide in-app shopping capabilities with discounts for the PSQ community. The Platform allows consumer members to purchase products and services provided by business members directly on our app and further facilitate and ease their experience, from which we realize transaction-based revenue fees.
Revenues E-Commerce Commissions — E-commerce capabilities launched on the Platform in November 2023, providing multi-merchant cart and checkout capabilities to the PSQ Platform community. The Platform allows shoppers to purchase products provided by commerce-integrated businesses directly on the Platform, from which we collect transaction fees, ranging on average from 8% - 15% of the sale price, depending on the industry.
The principal purposes of our equity incentive plans are to attract, retain, and motivate key employees and directors through the granting of share-based compensation awards. 11 Competition We compete with, among other business members, traditional e-commerce platforms, business directories and online retailers, as well as some smaller competitors who also position themselves as values-aligned platforms.
Our human capital resources objectives include identifying, recruiting, retaining, incentivizing, and integrating our existing and future employees. The principal purposes of our equity incentive plans are to attract, retain, and motivate key employees and directors through the granting of share-based compensation awards.
Unlike many competitors, EveryLife is singularly dedicated to leading with these values, making it a distinctive choice for consumers who prioritize such principles in their purchasing decisions. 4 While competitors often extend their offerings beyond diapers and wipes, EveryLife recognizes the importance of catering to a broader spectrum of baby essentials.
While these brands vie for the top spot in quality among American parents, EveryLife stands apart with its unwavering commitment to pro-life values and the tangible ways it upholds them. Unlike many competitors, EveryLife leads with these values, making it a distinctive choice for consumers who prioritize them in their purchasing decisions.
The more we are able to provide high quality products to our users and business members, the more the reach of the Platform can grow. 6 Our Growth Strategy We are currently focusing on the following areas to drive our growth: ● Continue to Innovate and Improve the Platform Offering — We are continuously looking to improve the Platform functionality and user experience, and to add new features and technologies to improve the Platform and value proposition.
The more we are able to provide high quality products and services to our users and business owners, the more the reach of the entire PublicSquare ecosystem can grow.
The grassroots Ambassador Program has successfully enlisted nearly 700 moms across the United States who are dedicated to spreading EveryLife’s mission in their communities, local churches, and pregnancy centers. Manufacturers/Supply Chain & Operations/Third Party Logistics EveryLife manages a North American-based supply chain of highly qualified, third-party manufacturing and logistics partners to produce and distribute EveryLife products.
As of February 28, 2025, EveryLife has successfully enlisted over 1,300 moms across the United States who are dedicated to spreading the brand's mission within their communities, local churches, and pregnancy resource centers. EveryLife ambassadors receive a commission when someone purchases EveryLife products using their unique referral code.
A link to each business’ website, when available, is also provided to facilitate ease of shopping by interested consumer members if the business is not set up for e-commerce capabilities. 2 Our Business Model Digital Advertising — We currently generate revenue from digital advertising fees from both local and national advertisers.
A link to each business’ website, when available, is also provided if the business is not integrated with e-commerce.
EveryLife manages inventory by forecasting demand, analyzing product sell-through, and analyzing supply chain with manufacturers to ensure sufficient capacity to support demand. Product Development EveryLife is embarking on an exciting expansion beyond diapers and wipes to broaden its product offerings.
These fulfillment centers, operated by third-party logistics ("3PL") providers, allow EveryLife to efficiently manage inventory by forecasting demand, analyzing product sell-through, and collaborating with manufacturers to ensure sufficient supply for both current and future needs. Product & Service Development EveryLife is expanding beyond diapers and wipes, thoughtfully broadening its product line to meet the evolving needs of families.
At the same time, businesses that also share these traditional American values are seeking to attract new customers; our values-aligned platform allows these business members to get exposure to our consumer member base. We are unique in that it is a leading mission-driven platform focused on connecting patriotic Americans with like-minded business members.
At the same time, businesses that also share these traditional American values are seeking to attract new customers through channels other than Amazon, while operating with financial technology that is "cancel-proof".
Removed
At the closing of the Business Combination (the “Closing”), Colombier changed its name to “PSQ Holdings, Inc.”. Our Business We are a values-aligned platform where users with traditional American values can connect with and patronize business members whose values aligned with their own. Users are able to search for and shop businesses offering products and services both locally and online.
Added
Assuming they are not subject to indemnity claims, the Escrow Shares remaining in escrow upon the 12-month anniversary of the Credova Closing will be released and distributed pro rata to the former stockholders of Credova. Our Business PublicSquare is a technology-enabled Marketplace & Payments ecosystem that serves an audience of consumers and merchants who value life, family, and liberty.
Removed
The PSQ platform is accessible through the web and mobile devices. Since our nationwide launch in July 2022, we have become the largest values-aligned platform of pro-America businesses and consumers. Our Values We are passionate about our mission and that passion guides everything we do.
Added
PublicSquare operates under three segments: Marketplace, Brands, and Financial Technology. 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 products and services and traditional American values.
Removed
We believe that the Platform is the leading widely accessible repository dedicated to empowering like-minded, patriotic Americans to discover and support companies that share their values. As a company, we strive to connect consumer members with a wide selection of values-aligned and patriotic business members from a wide variety of industries.
Added
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 wholly-owned direct-to-consumer ("D2C") products. The Brands segment includes EveryLife, a premium D2C life-affirming baby products company.
Removed
We believe that having our business members confirm that they respect our five core values, helps ensure platform mutual trust in order to drive consumer and business satisfaction and retention.
Added
The Financial Technology ("FinTech") segment comprises Credova, a "Buy Now Pay Later" company focused on the outdoors & shooting sports industry, and PSQ Payments, a "cancel-proof" payments processing company. Our Values We are passionate about our mission and that passion guides everything we do. We are driven to transform the United States, for the better, through the power of commerce.
Removed
We ensure that our business members respect our five core values by having our team routinely review business member profiles and other advertising materials and content on the Platform to ensure that they do not upload any content that we believe does not respect our five core values.
Added
We as a company embrace and promote five core values that differentiate us greatly from our competitors.
Removed
Users are encouraged to send reviews and report to our support team if they come across businesses who should be considered noncompliant in relation to our values.
Added
The Merchants on our platform can list their businesses at no cost, are charged transaction fees when shoppers purchase their products through our Marketplace, and can choose to conduct paid advertising on the platform to increase their exposure to our customers.
Removed
When we find noncompliant business members who do not support our five core values, we confirm the validity of the feedback and determine the best course of action with the business member, which may include contacting the business member directly, or removing the business member from the Platform.
Added
Our Platform has a number of material differentiators that customers are drawn to, including but not limited to: our focus on providing shoppers options to purchase locally-sourced foods, Made in the USA goods, quality products from small businesses you won't find on Amazon or any other major retailer, and health-conscious, non-toxic products.
Removed
When joining the Platform, business members upload their respective profiles to be included in the Platform directory at no cost. In addition, they can advertise their services on the application platform, which increases their exposure to the consumer members in our network, for a monthly fee.
Added
Advertising Revenue — We migrated our existing advertising products onto a newly launched Cost per Mille ("CPM") advertising product on the Platform in July 2024.
Removed
Business members advertising on the Platform pay monthly or purchase certain items a la carte to advertise, with a tiered pricing system. By advertising their services on PSQ, business members can increase their exposure to users on the Platform.
Added
This new Product allows our business owners to deliver more effective ads to consumers within a budget of their choosing, provides greater retention of advertisers, and has allowed us to expand the amount of businesses we work with per category through the fine-tuned expansion of inventory.
Removed
All advertisers we conduct business with are listed on the Platform and are required to affirm that they respect our five core values.
Added
We also sell advertising placements within our shopper-focused emails to our business owner base at various price points, depending on the merchant's desired exposure.
Removed
Business to Business (“B2B”) Revenue — Through a B2B initiative that we are in the process of further developing, we currently collaborate with multiple business members on the Platform that primarily serve other business members through revenue sharing arrangements pursuant to which we receive referral fees in the form of commissions based on the dollar amounts of transactions between the business members we connect through our B2B referral initiative.
Added
We also are beginning to leverage Artificial Intelligence in the search and discovery process, which will enhance personalization and efficacy in the merchandising search results.
Removed
The business members with which we have such relationships currently include, but are not limited to telecommunications, recruiting services, and business and marketing services. We vet these members for quality and values-alignment by researching the business members through publicly available data to assess their public reputation.
Added
Team The team is composed of experts with decades of experience at companies like Target, Amazon, Best Buy, and Yelp, building out the Platform and supporting services to support the needs of our shoppers and small businesses. Brands EveryLife is a direct-to-consumer baby care company founded in 2023 with a mission to provide premium products for every miraculous life.
Removed
We then refer them to our business network and either receive fees representing a percentage of the revenue earned by our business members through the relationships that we facilitate or place their advertising in an email distributed to PSQ business members.
Added
EveryLife baby wipes are made without alcohol, fragrance, phthalates, parabens, dyes, lotions, or PEG ingredients. • Training Pants: EveryLife's high-performing training pants are made from clean, premium materials — without fragrances, dyes, lotions, parabens, or phthalates.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our Class A Common Stock or Warrants and result in a loss of all or a portion of your investment: ● We may not continue to grow or maintain our base of consumer and business members or advertisers and may not be able to achieve or maintain profitability. ● Our recent and rapid growth in platform participants may not be sustainable or indicative of future performance. ● The market for the Platform and services may not be as large as we believe it to be, presently or in the future. ● We have limited experience with respect to determining optimal prices and pricing structure for our products and services, which may impact our financial results. ● Our business faces significant competition, and if we are unable to compete effectively, our business and operating results could be materially and adversely affected. ● The anticipated expansion of our operations, including in areas not part of our current operations, subjects us to additional risks that can adversely affect our operating results. ● Our business depends on hiring, developing and retaining highly skilled and dedicated employees, and any failure to do so, could have a material adverse effect on our business. ● Consumer tastes and preferences change over time and from time to time, as may public perception of us, which could be adversely affected by any negative publicity or reputational effects attributable to us or any of our affiliates or Outreach Program participants, which may impact our consumer and business members’ desire to utilize the Platform and materially affect our business and operating results. ● If we cannot maintain our company culture as we grow, our success, business and competitive position may be harmed. ● Our success depends on establishing and maintaining a strong brand and active engagement by business and consumer members and advertisers on the Platform, and any failure to establish and maintain a strong brand and member base, or adverse change in advertisers’ willingness to pay for advertising on the Platform, would adversely affect our future growth prospects. ● Our five core values may not always align with the interests of our business or our stockholders. ● Any failure by us to attract advertisers or any change in or loss of relationships with our existing advertisers or the amounts advertisers are able or willing to spend to advertise on the Platform could adversely affect our business and results of operations. 13 ● If member engagement by business or consumer members on the Platform fails to increase or declines, we may not be able to maintain or expand our advertising revenue and our business and operating results will be harmed. ● Changes to our existing platform and services could fail to attract engagement by consumer and business members with, or advertising spending on, the Platform, which could materially affect our ability to generate revenues. ● We may not be able to able to expand into or to compete successfully in one or more of the highly competitive business areas in which we anticipate expanding, including e-commerce and the B2B market, or recently expanded into, including the D2C market that we recently entered into with our launch of EveryLife in July 2023. ● We are subject to payments-related risks. ● Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition. ● We may in the future make acquisitions, and such acquisitions could disrupt our operations, and may have an adverse effect on our operating results. ● We are or may be subject to numerous risks relating to the need to comply with data and information privacy laws. ● We are subject to cybersecurity risks and interruptions or failures in our information technology systems and as we grow, we will need to expend additional resources to enhance our protection from such risks. ● Management identified a material weakness in our internal control over financial reporting as of December 31, 2023.
Biggest changeIn particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our Class A Common Stock or public warrants and result in a loss of all or a portion of your investment: • We may not continue to grow or maintain our base of consumers and business owners or advertisers and may not be able to achieve or maintain profitability. • Our recent and rapid growth in platform participants may not be sustainable or indicative of future performance. • The market for the Platform and services may not be as large as we believe it to be, presently or in the future. • We have limited experience with respect to determining optimal prices and pricing structure for our products and services, which may impact our financial results. • Our business faces significant competition, and if we are unable to compete effectively, our business and operating results could be materially and adversely affected. • The anticipated expansion of our operations, including in areas not part of our current operations, subjects us to additional risks that can adversely affect our operating results. • Our business depends on hiring, developing and retaining highly skilled and dedicated employees, and any failure to do so, could have a material adverse effect on our business. 15 Table of Contents • Consumer tastes and preferences change over time and from time to time, as may public perception of us, which could be adversely affected by any negative publicity or reputational effects attributable to us or any of our affiliates, which may impact our consumers' and business owners’ desire to utilize the Platform and materially affect our business and operating results. • If we cannot maintain our company culture as we grow, our success, business and competitive position may be harmed. • Our success depends on establishing and maintaining a strong brand and active engagement by businesses, consumers, and advertisers on the Platform, and any failure to establish and maintain a strong brand and consumer base, or adverse change in advertisers’ willingness to pay for advertising on the Platform, would adversely affect our future growth prospects. • Our five core values may not always align with the interests of our business or our stockholders. • Any failure by us to attract and onboard new merchants in the Financial Technology segment or any change in or loss of relationships with our existing partners could adversely affect our business and results of operations. • If engagement by business owners or consumers on the Platform fails to increase or declines, we may not be able to maintain or expand our advertising revenue and our business and operating results will be harmed. • Changes to our existing platform and services could fail to attract engagement with the Platform or fail to generate revenue. • We may not be able to able to expand into or to compete successfully in one or more of the highly competitive business areas in which we anticipate expanding, including e-commerce and the Business-to-Business ("B2B") market, or recently expanded into, including the D2C market that we recently entered into with our launch of EveryLife in July 2023. • We are subject to payments-related risks. • Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition. • We may in the future make acquisitions, and such acquisitions could disrupt our operations, and may have an adverse effect on our operating results. • We are or may be subject to numerous risks relating to the need to comply with data and information privacy laws. • We are subject to cybersecurity risks and interruptions or failures in our information technology systems and as we grow, we will need to expend additional resources to enhance our protection from such risks. • Management identified a material weakness in our internal control over financial reporting as of December 31, 2023 and as of December 31, 2024, this material weakness still exists.
Our success will depend on the willingness of people to widely adopt the PSQ experience, values and the products and services that we offer through the Platform.
Our success will depend on the willingness of people to widely adopt the PSQ Platform experience, values and the products and services that we offer through the Platform.
If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things: ● develop or enhance our products; ● to expand our sales and marketing and research and development organizations; ● acquire complementary technologies, products or businesses; ● expand operations in the United States or internationally; 16 ● hire, train, and retain employees; or ● respond to competitive pressures or unanticipated working capital requirements.
If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things: • develop or enhance our products; • to expand our sales and marketing and research and development organizations; • acquire complementary technologies, products or businesses; • expand operations in the United States or internationally; • hire, train, and retain employees; or • respond to competitive pressures or unanticipated working capital requirements.
Moreover, our privacy risks are likely to increase as we continue to expand, grow our consumer and business member base, and process, store, and transmit increasingly large amounts of personal or sensitive data. Issues in the use of artificial intelligence, including machine learning and computer vision (together, “AI”), in our analytics platforms may result in reputational harm or liability.
Moreover, our privacy risks are likely to increase as we continue to expand, grow our consumer and business base, and process, store, and transmit increasingly large amounts of personal or sensitive data. Issues in the use of artificial intelligence, including machine learning and computer vision (together, “AI”), in our analytics platforms may result in reputational harm or liability.
New laws in other jurisdictions may also require us to change our content moderation practices, or privacy policies and practices in ways that harm our business or create the risk of fines or other penalties for non-compliance. 47 If we infringe on the intellectual property (“IP”) of others, we could be exposed to substantial losses and face restrictions on our operations.
New laws in other jurisdictions may also require us to change our content moderation practices, or privacy policies and practices in ways that harm our business or create the risk of fines or other penalties for non-compliance. If we infringe on the intellectual property (“IP”) of others, we could be exposed to substantial losses and face restrictions on our operations.
Any failure to develop, implement, or maintain effective internal controls related to our revenue and other accounting, auditing or tax systems and associated reporting could materially adversely affect our business, results of operations, and financial condition or cause us to fail to meet our reporting obligations. 53 We have encountered difficulties with growth and change.
Any failure to develop, implement, or maintain effective internal controls related to our revenue and other accounting, auditing or tax systems and associated reporting could materially adversely affect our business, results of operations, and financial condition or cause us to fail to meet our reporting obligations. We have encountered difficulties with growth and change.
Additionally, if we are unable to properly protect the privacy and security of personal information, including sensitive personal information (e.g., financial information), we could be found to have breached our contracts with certain third parties. 44 There are numerous U.S. and Canadian federal, state, and provincial laws and regulations related to the privacy and security of personal information.
Additionally, if we are unable to properly protect the privacy and security of personal information, including sensitive personal information (e.g., financial information), we could be found to have breached our contracts with certain third parties. There are numerous U.S. and Canadian federal, state, and provincial laws and regulations related to the privacy and security of personal information.
All shares currently held by Public Stockholders and all of the shares issued in the Business Combination to former Private PSQ stockholders are freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates” (as defined under Rule 144 under the Securities Act, (“ Rule 144 ”)), including our directors, executive officers and other affiliates.
All shares currently held by Public Stockholders and all of the shares issued in the Business Combination to former Private PSQ stockholders are freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates” (as defined under Rule 144 under the Securities Act, (“Rule 144 ” )), including our directors, executive officers and other affiliates.
Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or achieve profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures and consumer member demand.
Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or achieve profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures and consumer demand.
We consider our five core values as a guide to the decisions we make, which we believe are essential to our success in increasing our business and consumer member and advertiser growth rate and engagement and in serving the best, long-term interests of both us and our stockholders.
We consider our five core values as a guide to the decisions we make, which we believe are essential to our success in increasing our business, consumer, and advertiser growth rate and engagement and in serving the best, long-term interests of both us and our stockholders.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer member confidence and spending to decrease, which could adversely impact our operations.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer confidence and spending to decrease, which could adversely impact our operations.
Seifert has agreed not to sell any of his Class C Common Stock during the period (the “ Lock-Up Period ”) commencing from the Closing and ending on the earlier of (A) the one (1) year anniversary of the date of the Closing, (B) the first date subsequent to the Closing with respect to which the closing price of our Class A Common Stock has equaled or exceeded $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any 30-trading day period commencing at least 150 days after the Closing or (C) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property.
Seifert has agreed not to sell any of his Class C Common Stock during the period commencing from the Closing and ending on the earlier of (A) the one (1) year anniversary of the date of the Closing, (B) the first date subsequent to the Closing with respect to which the closing price of our Class A Common Stock has equaled or exceeded $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any 30-trading day period commencing at least 150 days after the Closing or (C) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property.
Risks Related to Our Operations as a New Public Company The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent board members.
Risks Related to Our Operations as a Public Company The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent Board members.
In the event that it is more difficult to access our content or use our apps and services, particularly on mobile devices, or if our members choose not to access our content or use our apps on their mobile devices or choose to use mobile products that do not offer access to our content or our apps, or if the preferences of our traffic require us to increase the number of platforms on which our product is made available to our traffic, our traffic growth, engagement, advertising targeting and monetization could be harmed and our business and operating results could be adversely affected.
In the event that it is more difficult to access our content or use our apps and services, particularly on mobile devices, or if our consumers choose not to access our content or use our apps on their mobile devices or choose to use mobile products that do not offer access to our content or our apps, or if the preferences of our traffic require us to increase the number of platforms on which our product is made available to our traffic, our traffic growth, engagement, advertising targeting and monetization could be harmed and our business and operating results could be adversely affected.
Negative publicity or other changes in public perceptions about our company, including our technology, values and ideologies, sales practices, personnel or customer service, or regarding any of our ambassadors and influencers in our Outreach Program or others who publicly support our business, could adversely affect the growth of our business, our reputation or demand for the Platform, and diminish confidence in and the use of products and services sold through the Platform.
Negative publicity or other changes in public perceptions about our company, including our technology, values and ideologies, sales practices, personnel or customer service, or regarding any of our ambassadors and influencers or others who publicly support our business, could adversely affect the growth of our business, our reputation or demand for the Platform, and diminish confidence in and the use of products and services sold through the Platform.
We will also face increased compliance costs associated with growth, the expansion of our business and consumer member base, and being a public company.
We will also face increased compliance costs associated with growth, the expansion of our business and consumer base, and being a public company.
Federal Reserve as well as counterparts in other countries have made a series of aggressive interest rate hikes commencing in 2022 and extending into early 2023 in an attempt to cool global economies. Inflation did not have a significant impact on our results of operations for the years ended December 31, 2023 and 2022.
Federal Reserve as well as counterparts in other countries have made a series of aggressive interest rate hikes commencing in 2022 and extending into 2023 in an attempt to cool global economies. Inflation did not have a significant impact on our results of operations for the years ended December 31, 2024 and 2023.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve the availability of the Platform, especially during peak usage times and as our solutions become more complex and our member traffic increases.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve the availability of the Platform, especially during peak usage times and as our solutions become more complex and our consumer traffic increases.
Internationally, government regulation concerning the internet, and in particular, network neutrality, may be developing or may not exist at all. Within such an environment, without network neutrality regulations, we could experience discriminatory or anti-competitive practices that could impede both our and our business members domestic and international growth, increase our costs or adversely affect our business.
Internationally, government regulation concerning the internet, and in particular, network neutrality, may be developing or may not exist at all. Within such an environment, without network neutrality regulations, we could experience discriminatory or anti-competitive practices that could impede both our and our business owners' domestic and international growth, increase our costs or adversely affect our business.
Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business. New laws and regulations could restrict our ability to conduct marketing by, for example, restricting the emailing or targeting of members or use of certain technologies like AI.
Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business. New laws and regulations could restrict our ability to conduct marketing by, for example, restricting the emailing or targeting of consumers or use of certain technologies like AI.
Subject to the terms and conditions set forth in the Merger Agreement, holders of Private PSQ’s common stock prior to the Closing Date and certain executive officers, employees and service providers (collectively, the “Participating Equityholders”) are entitled to receive their pro rata portion of up to 3,000,000 “Earnout Shares” (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing Date, including to account for any equity securities into which such shares are exchanged or converted) as additional consideration based on the performance of the Class A Common Stock during the five (5) year period after the Closing Date (the “Earnout Period”), as set forth below upon satisfaction of any of the following conditions: ● in the event that, and upon the date during the Earnout Period on which, the volume-weighted average trading price of the Class A Common Stock quoted on the NYSE (or such other exchange on which our Class A Common Stock is then listed) for any twenty (20) trading days within any thirty (30) consecutive trading day period (the “Earnout Trading Price”) is greater than or equal to $12.50 (“Triggering Event I”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 Earnout Shares; ● in the event that, and upon the date during the Earnout Period on which, the Earnout Trading Price is greater than or equal to $15.00 (“Triggering Event II”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 additional Earnout Shares; and ● in the event that, and upon the date during the Earnout Period on which, the Earnout Trading Price is greater than or equal to $17.50 (“Triggering Event III” and, together with Triggering Event I and Triggering Event II, the “Triggering Events”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 additional Earnout Shares.
Subject to the terms and conditions set forth in the Merger Agreement, holders of Private PSQ’s common stock prior to the Closing Date and certain executive officers, employees and service providers (collectively, the “Participating Equityholders”) are entitled to receive their pro rata portion of up to 3,000,000 shares of Class A Common Stock that may be issued by the Company to Participating Equityholders upon achievement of certain trading price-based targets for the Class A Common Stock following Closing (the “Earnout Shares”) (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing Date, including to account for any equity securities into which such shares are exchanged or converted) as additional consideration based on the performance of the Class A Common Stock during the five (5) year period after the Closing Date (the “Earnout Period”), as set forth below upon satisfaction of any of the following conditions: • in the event that, and upon the date during the Earnout Period on which, the volume-weighted average trading price of the Class A Common Stock quoted on the NYSE (or such other exchange on which our Class A Common Stock is then listed) for any twenty (20) trading days within any thirty (30) consecutive trading day period (the “Earnout Trading Price”) is greater than or equal to $12.50 (“Triggering Event I”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 Earnout Shares; • in the event that, and upon the date during the Earnout Period on which, the Earnout Trading Price is greater than or equal to $15.00 (“Triggering Event II”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 additional Earnout Shares; and • in the event that, and upon the date during the Earnout Period on which, the Earnout Trading Price is greater than or equal to $17.50 (“Triggering Event III” and, together with Triggering Event I and Triggering Event II, the “Triggering Events”), the Participating Equityholders will be entitled to receive an aggregate of 1,000,000 additional Earnout Shares.
Since our inception, we have financed our operations and capital expenditures primarily through equity investments. In the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business.
Since our inception, we have financed our operations and capital expenditures primarily through equity investments and convertible notes. In the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business.
Our applications, systems, networks, software, and physical facilities could have material vulnerabilities, be breached, or personal or confidential information could be otherwise compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our personnel or our business members to disclose information or usernames and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities.
Our applications, systems, networks, software, and physical facilities could have material vulnerabilities, be breached, or personal or confidential information could be otherwise compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our personnel or our business owners to disclose information or usernames and/or passwords, or otherwise compromise the security of our networks, systems and/or physical facilities.
For example, Google has indicated that it will ultimately phase out the use of cookies to track members of its search services in future versions of its Chrome web browser, and Apple has updated its iOS mobile operating system to require app developers to obtain opt-in consent before tracking members of its various services.
For example, Google has indicated that it will ultimately phase out the use of cookies to track consumers of its search services in future versions of its Chrome web browser, and Apple has updated its iOS mobile operating system to require app developers to obtain opt-in consent before tracking consumers of its various services.
Although we enter into non-disclosure and invention assignment agreements with our employees, enter into non-disclosure agreements with our business members, consultants and other parties with whom we have strategic relationships and business alliances and enter into IP assignment agreements with our consultants and vendors, no assurance can be given that these agreements will be effective in controlling access to and distribution of our technology and proprietary information.
Although we enter into non-disclosure and invention assignment agreements with our employees, enter into non-disclosure agreements with our business owners, consultants and other parties with whom we have strategic relationships and business alliances and enter into IP assignment agreements with our consultants and vendors, no assurance can be given that these agreements will be effective in controlling access to and distribution of our technology and proprietary information.
If any vendor fails to provide the services Credova requires, fails to meet contractual requirements (including compliance with applicable laws and regulations), fails to maintain adequate data privacy controls and electronic security systems, or suffers a cyber-attack or other security breach, Credova could be subject to CFPB, the Federal Trade Commission (“ FTC ”) and other regulatory enforcement actions, claims from third parties, including Credova’s consumers, and suffer economic and reputational harm that could have an adverse effect on Credova’s business.
If any vendor fails to provide the services Credova requires, fails to meet contractual requirements (including compliance with applicable laws and regulations), fails to maintain adequate data privacy controls and electronic security systems, or suffers a cyber-attack or other security breach, Credova could be subject to CFPB, the Federal Trade Commission (“FTC”) and other regulatory enforcement actions, claims from third parties, including Credova’s consumers, and suffer economic and reputational harm that could have an adverse effect on Credova’s business.
We have not yet tested the procedure in full, and the transition procedure may take several days or more to complete. During this time, the Platform may be unavailable in whole or in part to our members. We currently rely upon third-party providers of cloud-based infrastructure to host our products.
We have not yet tested the procedure in full, and the transition procedure may take several days or more to complete. During this time, the Platform may be unavailable in whole or in part to our consumers. We currently rely upon third-party providers of cloud-based infrastructure to host our products.
We have previously experienced, and may experience in the future, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to the number of members accessing the Platform simultaneously, and denial of service or fraud or security attacks.
We have previously experienced, and may experience in the future, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to the number of consumers accessing the Platform simultaneously, and denial of service or fraud or security attacks.
If our member traffic declines, our advertisers may also stop or reduce the amount of advertising on the Platform and our business could be further harmed. We are subject to payments-related risks. We accept payments using a variety of methods, including credit and debit cards.
If our consumer traffic declines, our advertisers may also stop or reduce the amount of advertising on the Platform and our business could be further harmed. We are subject to payments-related risks. We accept payments using a variety of methods, including credit and debit cards.
For certain payment methods, including credit and debit cards, we may incur interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We would need to rely on third parties to provide certain PSQ-branded payment methods and payment processing services, including the processing of credit cards and debit cards.
For certain payment methods, including credit and debit cards, we may incur interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We would need to rely on third parties to provide certain PublicSquare-branded payment methods and payment processing services, including the processing of credit cards and debit cards.
If some investors find those securities less attractive as a result of its reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile. 60 Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
If some investors find those securities less attractive as a result of its reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile. 63 Table of Contents Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
We rely on various information technology systems, including our licensed Sage-Intacct enterprise resource planning (“ ERP ”) system to manage our operations, which subjects us to inherent costs and risks associated with maintaining, upgrading, replacing and changing systems, including impairment of our information technology, potential disruption of our internal control systems, substantial capital expenditures, demands on management time, adequate training and other risks of delays or difficulties in upgrading, transitioning to new systems or of integrating adjoining systems to our current systems.
We rely on various information technology systems, including our licensed Sage-Intacct enterprise resource planning (“ERP”) system to manage our operations, which subjects us to inherent costs and risks associated with maintaining, upgrading, replacing and changing systems, including impairment of our information technology, potential disruption of our internal control systems, substantial capital expenditures, demands on management time, adequate training and other risks of delays or difficulties in upgrading, transitioning to new systems or of integrating adjoining systems to our current systems.
This would negatively impact our ability to attract members and advertisers and increase the frequency with which they use our website and mobile app. We expect to continue to make significant investments to maintain and improve the availability of the Platform and to enable rapid releases of new features and products.
This would negatively impact our ability to attract consumers and advertisers and increase the frequency with which they use our website and mobile app. We expect to continue to make significant investments to maintain and improve the availability of the Platform and to enable rapid releases of new features and products.
In that event, the trading price of our common stock could decline, and you may lose all or part of your investment. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
In that event, the trading price of our Class A Common Stock could decline, and you may lose all or part of your investment. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
These risks have caused us, and may in the future cause us, to lose our ability to accept and account for online payments or other payment transactions, which could disrupt our business for an extended period of time, make the Platform less convenient and attractive to members, expose business members information to unauthorized disclosures and abuse, and adversely affect our ability to attract and retain business members, or materially adversely affect our business, financial condition, ability to forecast accurately, and results of operations.
These risks have caused us, and may in the future cause us, to lose our ability to accept and account for online payments or other payment transactions, which could disrupt our business for an extended period of time, make the Platform less convenient and attractive to consumers, expose business information to unauthorized disclosures and abuse, and adversely affect our ability to attract and retain business owners, or materially adversely affect our business, financial condition, ability to forecast accurately, and results of operations.
Risk Related to Credova’s Industry The consumer finance and buy-now-pay-later (“BNPL”) industry has become subject to increased regulatory scrutiny, and Credova’s failure to manage its business to comply with new regulations would materially and adversely affect Credova’s business, results of operations and financial condition.
Risks Related to Credova’s Industry The consumer finance and buy now pay later (“BNPL”) industry has become subject to increased regulatory scrutiny, and Credova’s failure to manage its business to comply with new regulations would materially and adversely affect Credova’s business, results of operations and financial condition.
If the Platform is unavailable when members attempt to access it or it does not load as quickly as they expect, members may seek other services to obtain the information for which they are looking and may not return to the Platform as often in the future, or at all.
If the Platform is unavailable when consumers attempt to access it or it does not load as quickly as they expect, consumers may seek other services to obtain the information for which they are looking and may not return to the Platform as often in the future, or at all.
We have offered and intend to continue to offer incentives, including economic incentives, to influencers and ambassadors in our Outreach Program to join and promote the Platform, and these arrangements have involved and are expected to continue to involve fixed payment obligations or the issuances of equity that are not contingent on actual revenue or performance metrics generated by the applicable influencer, which may adversely impact our financial performance, results of operations and liquidity.
We have offered and intend to continue to offer incentives, including economic incentives, to influencers and ambassadors to join and promote the Platform, and these arrangements have involved and are expected to continue to involve fixed payment obligations or the issuances of equity that are not contingent on actual revenue or performance metrics generated by the applicable influencer, which may adversely impact our financial performance, results of operations and liquidity.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our control, including: ● the size and composition of our consumer member base; ● the number of products that we offer and feature across the Platform; ● consumer member demand for products sold by values-aligned business members; ● our information technology infrastructure; ● the quality and responsiveness of our customer service; ● our selling and marketing efforts; ● the quality and price of the products that we offer; ● the convenience of the shopping experience that we provide on our app; ● our ability to identify and partner with key suppliers and manufacturers; ● our ability to distribute our products and manage our operations; and ● our reputation and brand strength.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our control, including: • the size and composition of our consumer base; • the number of products that we offer and feature across the Platform; • consumer demand for products sold by values-aligned businesses; • our information technology infrastructure; • the quality and responsiveness of our customer service; • our selling and marketing efforts; • the quality and price of the products that we offer; • the convenience of the shopping experience that we provide on our app; • our ability to identify and partner with key suppliers and manufacturers; • our ability to distribute our products and manage our operations; and • our reputation and brand strength.
If we are unable to increase the base of consumers and businesses actively using the Platform, or if our members and advertisers do not believe the Platform provides them with sufficient value and utility, our business would be materially and adversely affected.
If we are unable to increase the base of consumers and businesses actively using the Platform, or if our business owners and advertisers do not believe the Platform provides them with sufficient value and utility, our business would be materially and adversely affected.
These competitors may engage in more extensive research and development efforts, enter or expand their presence in any or all of the ecommerce or retail channels where we compete, undertake more far-reaching marketing campaigns, and adopt more aggressive pricing policies, which may allow them to build larger consumer bases or generate revenue from their existing consumer bases more effectively than we do.
These competitors may engage in more extensive research and development efforts, enter or expand their presence in any or all of the e-commerce or retail channels where we compete, undertake more far-reaching marketing campaigns, and adopt more aggressive pricing policies, which may allow them to build larger consumer bases or generate revenue from their existing consumer bases more effectively than we do.
Any acquisitions that we may undertake in the future involve numerous risks, including, but not limited to, the following: ● difficulties in integrating and managing the operations, personnel, systems, technologies, and products of the companies we acquire; ● diversion of our management’s attention from normal daily operations of our business; 35 ● our inability to maintain the key business relationships and the reputations of the businesses we acquire; ● uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; ● our inability to increase revenue from an acquisition; ● increased costs related to acquired operations and continuing support and development of acquired products; ● our responsibility for the liabilities of the businesses we acquire; ● potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses; ● adverse tax consequences associated with acquisitions; ● changes in how we are required to account for our acquisitions under U.S. generally accepted accounting principles (“ GAAP ”), including arrangements that we assume from an acquisition; ● potential negative perceptions of our acquisitions by consumer and business members, financial markets or investors; ● failure to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if at all, which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition; ● our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; ● potential loss of key employees of the companies we acquire; ● potential security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings; ● difficulties in increasing or maintaining security standards for acquired technology consistent with our other services, and related costs; ● ineffective or inadequate controls, procedures and policies at the acquired company; ● inadequate protection of acquired IP rights; and ● potential failure to achieve the expected benefits on a timely basis or at all.
Any acquisitions that we may undertake in the future involve numerous risks, including, but not limited to, the following: • difficulties in integrating and managing the operations, personnel, systems, technologies, and products of the companies we acquire; • diversion of our management’s attention from normal daily operations of our business; • our inability to maintain the key business relationships and the reputations of the businesses we acquire; • uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; 37 Table of Contents • our inability to increase revenue from an acquisition; • increased costs related to acquired operations and continuing support and development of acquired products; • our responsibility for the liabilities of the businesses we acquire; • potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses; • adverse tax consequences associated with acquisitions; • changes in how we are required to account for our acquisitions under U.S. generally accepted accounting principles (“GAAP”), including arrangements that we assume from an acquisition; • potential negative perceptions of our acquisitions by consumers and businesses, financial markets or investors; • failure to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if at all, which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition; • our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; • potential loss of key employees of the companies we acquire; • potential security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings; • difficulties in increasing or maintaining security standards for acquired technology consistent with our other services, and related costs; • ineffective or inadequate controls, procedures and policies at the acquired company; • inadequate protection of acquired IP rights; and • potential failure to achieve the expected benefits on a timely basis or at all.
If one of these third parties terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we could incur substantial delays and expense in finding and integrating an alternative payment service provider to process payments from business members, and the quality and reliability of any such alternative payment service provider may not be comparable.
If one of these third parties terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we could incur substantial delays and expense in finding and integrating an alternative payment service provider to process payments from businesses, and the quality and reliability of any such alternative payment service provider may not be comparable.
Acquisitions involve many complexities, including, but not limited to, risks associated with the acquired business’ past activities, difficulties in integrating personnel and human resource programs, integrating technology systems and other infrastructures under our control, unanticipated expenses and liabilities, and the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”).
Acquisitions involve many complexities, including, but not limited to, risks associated with the acquired business’ past activities, difficulties in integrating personnel and human resource programs, integrating technology systems and other infrastructures under our control, unanticipated expenses and liabilities, and the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. Our disaster recovery program contemplates transitioning the Platform and data to a backup center in the event of a catastrophe.
To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. 28 Table of Contents Our disaster recovery program contemplates transitioning the Platform and data to a backup center in the event of a catastrophe.
Failure to comply with these rules or requirements, as well as any breach, compromise, or failure to otherwise detect or prevent fraudulent activity involving our data security systems, could result in our being liable for card issuing banks’ costs, subject to fines and higher transaction fees, and loss of our ability to accept credit and debit card payments from our business and consumer members, process electronic funds transfers, or facilitate other types of online payments, and our business and operating results could be adversely affected.
Failure to comply with these rules or requirements, as well as any breach, compromise, or failure to otherwise detect or prevent fraudulent activity involving our data security systems, could result in our being liable for card issuing banks’ costs, subject to fines and higher transaction fees, and loss of our ability to accept credit and debit card payments from our businesses and consumers, process electronic funds transfers, or facilitate other types of online payments, and our business and operating results could be adversely affected.
In some instances, we may not be able to identify the cause or causes of these problems or risks within an acceptable period of time. The loss of Michael Seifert, Our Founder, Chief Executive Officer and Chairman of the Board, or other key personnel, or failure to attract and retain other highly qualified personnel, could harm our business.
In some instances, we may not be able to identify the cause or causes of these problems or risks within an acceptable period of time. 30 Table of Contents The loss of Michael Seifert, Our Founder, Chief Executive Officer and Chairman of the Board, or other key personnel, or failure to attract and retain other highly qualified personnel, could harm our business.
If we are found to be in violation of such applicable laws or regulations, we could be subject to civil and criminal penalties or forced to cease our payments processing services or otherwise make changes to our business practices. Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition.
If we are found to be in violation of such applicable laws or regulations, we could be subject to civil and criminal penalties or forced to cease our payments processing services or otherwise make changes to our business practices. 27 Table of Contents Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition.
If we use AI as part of the Platform in a manner that is controversial because of the purported or real impact on our business members or vendors, this may lead to adverse results for our financial condition and operations or the financial condition and operations of our business members, which may further lead to us experiencing competitive harm, legal liability and brand or reputational harm.
If we use AI as part of the Platform in a manner that is controversial because of the purported or real impact on our businesses or vendors, this may lead to adverse results for our financial condition and operations or the financial condition and operations of our businesses, which may further lead to us experiencing competitive harm, legal liability and brand or reputational harm.
There are many other factors that could negatively affect member and advertiser growth, retention and engagement, including if: ● new competitors enter the market with business models similar to ours; ● competitors mimic our products or product features or create more engaging platforms or products, causing members to utilize their products instead of, or more frequently than, our products; ● we do not provide a compelling member experience because of the decisions we make regarding our products or the type and frequency of products, services and advertisements that we display on the Platform; ● the content (including products, services and advertisements of our business members) is not relevant to consumer members’ tastes or interests; ● search queries by consumer members do not yield relevant results; 18 ● third parties do not permit or continue to permit their content to be displayed on the Platform; ● consumer and business members have difficulty or are blocked from installing, updating or otherwise accessing the Platform on mobile devices or web browsers; ● our adherence to our five core values results in business decisions that are not in our best financial interests; ● there are changes in the amount of time consumer members spend across apps and platforms, including ours; ● consumer and business members use or spend more time on other platforms that they feel are more relevant or engaging; ● we are unable to provide engaging and relevant content on the Platform; ● technical or other problems frustrate the consumer and business member experience, particularly if those problems prevent us from delivering our services in a fast and reliable manner; ● we are unable to successfully educate consumer members on how to utilize new products and product features that we introduce, such as e-commerce shopping features; ● unscrupulous manufacturers and suppliers attempt to counterfeit, pirate, sell, and gray market our authentic D2C product offerings, which would cause us to incur expenses to combat these attacks and could materially and adversely impact our business and harm our reputation; ● consumer spending levels decrease due to increased inflationary pressures; ● platform participants behave in ways that negatively affect public perception of the Platform; ● changes in laws and regulations adversely affect our business; ● we are unable to address member and advertiser concerns regarding the content, privacy and security of the Platform; ● we are unable to combat spam, hostile, inappropriate, misleading, abusive or offensive content or usage of our products or services; ● consumer members adopt new technologies that block our products or services or where our products or services may be displaced in favor of other products or services, or may not be featured or otherwise available; ● our reputation, or public perception of us or persons associated with us; ● third-party initiatives that may enable greater use of the Platform, including consumer discounts or rewards, are discontinued; ● merchants exist on the Platform that do not provide consumer members with positive shopping experiences, for example, if products are not of the quality depicted on the platform or not readily available for purchase, are not priced competitively or for other reasons do are not in line with changing consumer preferences; ● there are macro level conditions that are beyond our control, such as national or regional economic or political conditions within the United States that affect our member base and that cause consumer members to spend less time on the Platform; or ● Any failure to increase or any decrease in member growth, retention or engagement would render the Platform less attractive to consumer and business members or advertisers, and would materially harm our business, revenue and financial results. 19 The market for the Platform and services may not be as large as we believe it to be.
There are many other factors that could negatively affect business owner and advertiser growth, retention and engagement, including if: • new competitors enter the market with business models similar to ours; • competitors mimic our products or product features or create more engaging platforms or products, causing business owners to utilize their products instead of, or more frequently than, our products; • we do not provide a compelling consumer experience because of the decisions we make regarding our products or the type and frequency of products, services and advertisements that we display on the Platform; • the content (including products, services and advertisements of our businesses) is not relevant to consumers’ tastes or interests; • search queries by consumers do not yield relevant results; • third parties do not permit or continue to permit their content to be displayed on the Platform; • consumers and business owners have difficulty or are blocked from installing, updating or otherwise accessing the Platform on mobile devices or web browsers; • our adherence to our five core values results in business decisions that are not in our best financial interests; • there are changes in the amount of time consumers spend across apps and platforms, including ours; • consumers and business owners use or spend more time on other platforms that they feel are more relevant or engaging; • we are unable to provide engaging and relevant content on the Platform; • technical or other problems frustrate the consumer and business experience, particularly if those problems prevent us from delivering our services in a fast and reliable manner; • we are unable to successfully educate consumers on how to utilize new products and product features that we introduce, such as e-commerce shopping features; • unscrupulous manufacturers and suppliers attempt to counterfeit, pirate, sell, and gray market our authentic D2C product offerings, which would cause us to incur expenses to combat these attacks and could materially and adversely impact our business and harm our reputation; • consumer spending levels decrease due to increased inflationary pressures; • platform participants behave in ways that negatively affect public perception of the Platform; • changes in laws and regulations adversely affect our business; • we are unable to address consumer, business owner, and advertiser concerns regarding the content, privacy and security of the Platform; 21 Table of Contents • we are unable to combat spam, hostile, inappropriate, misleading, abusive or offensive content or usage of our products or services; • consumers adopt new technologies that block our products or services or where our products or services may be displaced in favor of other products or services, or may not be featured or otherwise available; • our reputation, or public perception of us or persons associated with us; • third-party initiatives that may enable greater use of the Platform, including consumer discounts or rewards, are discontinued; • merchants exist on the Platform that do not provide consumers with positive shopping experiences, for example, if products are not of the quality depicted on the platform or not readily available for purchase, are not priced competitively or for other reasons do are not in line with changing consumer preferences; • there are macro level conditions that are beyond our control, such as national or regional economic or political conditions within the United States that affect our consumer base and that cause consumers to spend less time on the Platform; or • Any failure to increase or any decrease in consumer growth, retention or engagement would render the Platform less attractive to consumer and business owners or advertisers, and would materially harm our business, revenue and financial results.
Decisions that we make based on our five core values that do not align with our business objectives or contribute to the economic value of shares of our capital stock to our stockholders may not result in the benefits that we expect, in which case our member engagement, business, operating results, and financial condition could be harmed.
Decisions that we make based on our five core values that do not align with our business objectives or contribute to the economic value of shares of our capital stock to our stockholders may not result in the benefits that we expect, in which case our consumer and business owner engagement, business, operating results, and financial condition could be harmed.
The sale of our D2C branded products, including our recently launched disposable diaper and wipe products under our pro-family “EveryLife TM ” brand, may expose us to significant inventory risks that may adversely affect our operating results, as a result of seasonality, new product launches, rapid changes in product cycles and pricing, defective merchandise, warranty claims, recalls, changes in consumer and business member demand and spending patterns, changes in consumer member tastes with respect to our products, and other factors.
The sale of our D2C branded products, including our recently launched products under our pro-family “EveryLife TM ” brand, may expose us to significant inventory risks that may adversely affect our operating results, as a result of seasonality, new product launches, rapid changes in product cycles and pricing, defective merchandise, warranty claims, recalls, changes in consumer and business demand and spending patterns, changes in consumer tastes with respect to our products, and other factors.
A key element of our strategy is focusing on mobile applications (“ apps ”), and we expect to continue to devote significant resources to the creation and support of developing new and innovative mobile products, services and apps.
A key element of our strategy is focusing on mobile applications (“apps”), and we expect to continue to devote significant resources to the creation and support of developing new and innovative mobile products, services and apps.
If we fail to successfully capitalize on our new e-commerce functionality or new D2C product offerings, introduce new platform innovations or expand effectively into new markets, our revenue and our business may be harmed. A key element of our growth strategy depends on our ability to develop and market new products that appeal to our consumer members.
If we fail to successfully capitalize on our new e-commerce functionality or new D2C product offerings, introduce new platform innovations or expand effectively into new markets, our revenue and our business may be harmed. A key element of our growth strategy depends on our ability to develop and market new products that appeal to our consumers.
Furthermore, having a diversified mix of merchant partners is important to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of merchant or industry. Many of Credova’s agreements with Credova’s merchant partners are non-exclusive and lack any transaction volume commitments.
Furthermore, having a diversified mix of merchant partners is important to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of merchant or industry. 40 Table of Contents Many of Credova’s agreements with Credova’s merchant partners are non-exclusive and lack any transaction volume commitments.
Any of the foregoing factors could have negative consequences on our financial condition and results of operations. Limited insurance coverage and availability may prevent us from obtaining insurance to cover all risks of loss. We have insured certain products and launches to the extent that insurance was available at acceptable premiums.
Any of the foregoing factors could have negative consequences on our financial condition and results of operations. 58 Table of Contents Limited insurance coverage and availability may prevent us from obtaining insurance to cover all risks of loss. We have insured certain products and launches to the extent that insurance was available at acceptable premiums.
We believe that having our business members confirm that they respect our five core values helps ensure platform mutual trust in order to protect our brand and drive consumer and business satisfaction and retention.
We believe that having our business owners confirm that they respect our five core values helps ensure platform mutual trust in order to protect our brand and drive consumer and business satisfaction and retention.
Moreover, if the financial condition of a merchant deteriorates significantly or a merchant becomes subject to a bankruptcy proceeding, Credova may not be able to recover amounts due to it from the merchant. Negative publicity about Credova or its industry could adversely affect Credova’s business, results of operations, financial condition, and prospects.
Moreover, if the financial condition of a merchant deteriorates significantly or a merchant becomes subject to a bankruptcy proceeding, Credova may not be able to recover amounts due to it from the merchant. 41 Table of Contents Negative publicity about Credova or its industry could adversely affect Credova’s business, results of operations, financial condition, and prospects.
We are an Emerging Growth Company (“ EGC ”) as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “ JOBS Act ”), and we have taken and expect to continue to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports, registrations statements and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an Emerging Growth Company (“EGC”) as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we have taken and expect to continue to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports, registrations statements and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Risks Related to Our Business Strategy and Industry Our business faces significant competition, and if we are unable to compete effectively, our business and operating results would be adversely affected. Competition among digital advertising platforms for engagement with our directory information, products and services by business and consumer members, consumers and advertisers is intense.
Risks Related to Our Business Strategy and Industry Our business faces significant competition, and if we are unable to compete effectively, our business and operating results would be adversely affected. Competition among digital advertising platforms for engagement with our directory information, products and services by businesses and consumers, consumers and advertisers is intense.
We believe that our ability to compete effectively for platform engagement will depend upon many factors both within and beyond our control, including: ● the willingness of business and consumer members to adopt our values-aligned platform and support our mission; ● the popularity, usefulness and reliability of the Platform information, and of the products and services sold through the Platform, as compared to that of our competitors; ● the timing of introduction and market acceptance of the products and services offered through the Platform; ● the continued expansion and adoption of products and services sold through the Platform; ● our ability, and the ability of our competitors, to develop new products and enhancements to existing services; ● our ability, and the ability of our competitors, to attract, develop and retain influencers and ambassadors for our Outreach Program; ● our ability to generate revenues from our current and anticipated platform offerings; ● our ability to attract business members to advertise on the Platform; ● the frequency, relative prominence and appeal of the business members and advertising displayed by us or our competitors; ● public perceptions about the predominance of certain political viewpoints on the Platform, regardless of whether those perceptions are accurate; 31 ● changes mandated by, or that we elect to make to address, legislation, regulatory constraints or litigation; ● our ability to attract, retain and motivate talented employees; ● the costs of developing and procuring new services and products, relative to those of our competitors; ● acquisitions or consolidation within our industry, which may result in more formidable competitors; and ● our reputation and brand strength relative to our competitors.
We believe that our ability to compete effectively for platform engagement will depend upon many factors both within and beyond our control, including: • the willingness of business owners and consumers to adopt our values-aligned platform and support our mission; • the popularity, usefulness and reliability of the Platform information, and of the products and services sold through the Platform, as compared to that of our competitors; • the timing of introduction and market acceptance of the products and services offered through the Platform; • the continued expansion and adoption of products and services sold through the Platform; 32 Table of Contents • our ability, and the ability of our competitors, to develop new products and enhancements to existing services; • our ability, and the ability of our competitors, to attract, develop and retain influencers and ambassadors for outreach; • our ability to generate revenues from our current and anticipated platform offerings; • our ability to attract business owners to advertise on the Platform; • the frequency, relative prominence and appeal of the business owners and advertising displayed by us or our competitors; • public perceptions about the predominance of certain political viewpoints on the Platform, regardless of whether those perceptions are accurate; • changes mandated by, or that we elect to make to address, legislation, regulatory constraints or litigation; • our ability to attract, retain and motivate talented employees; • the costs of developing and procuring new services and products, relative to those of our competitors; • acquisitions or consolidation within our industry, which may result in more formidable competitors; and • our reputation and brand strength relative to our competitors.
The Sarbanes-Oxley Act, including the requirements of Section 404 of that Act, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Act and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“ PCAOB ”), the SEC and the NYSE, impose additional reporting and other obligations on public companies.
The Sarbanes-Oxley Act, including the requirements of Section 404 of that Act, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Act and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”), the SEC and the NYSE, impose additional reporting and other obligations on public companies.
If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. ● If we fail to adequately protect our proprietary intellectual property (“ IP ”) rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights. ● Our business depends on continued and unimpeded access to our directory information and services on the internet, which in turn relies on third-party telecommunications and internet service providers. ● We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers and other key management and technical personnel. ● The consumer finance and buy-now-pay-later (“BNPL”) industry has become subject to increased regulatory scrutiny, and Credova’s failure to manage Credova’s business to comply with new regulations would materially and adversely affect Credova’s business, results of operations and financial condition. ● Credova’s results depend on prominent presentation, integration, and support of its platform by its merchants. ● Current and future government regulations may negatively impact the demand for Credova’s merchants’ products and Credova’s operations and financial results. ● We may be exposed to risk if we cannot enhance, maintain, and adhere to our internal controls and procedures. ● Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business. ● The consumer finance and BNPL industry is subject to various state and federal laws in the United States and federal law concerning consumer finance, and the costs to maintain compliance with such laws and regulations may be significant. ● Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business. ● We are a “controlled company” within the meaning of NYSE listing standards and comply with reduced corporate governance standards as a result. ● Natural disasters, including and not limited to unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt our business schedule. ● We may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all. 14 Risks Related to Our Financial Performance and Operation Risks Related to Our Business We have a very limited operating history, which makes it difficult to evaluate our business and prospects.
If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. • If we fail to adequately protect our proprietary intellectual property (“IP”) rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights. • Our business depends on continued and unimpeded access to our directory information and services on the internet, which in turn relies on third-party telecommunications and internet service providers. • We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers and other key management and technical personnel. 16 Table of Contents • The consumer finance and buy now pay later (“BNPL”) industry has become subject to increased regulatory scrutiny, and Credova’s failure to manage Credova’s business to comply with new regulations would materially and adversely affect Credova’s business, results of operations and financial condition. • Credova’s results depend on prominent presentation, integration, and support of its platform by its merchants. • Current and future government regulations may negatively impact the demand for Credova’s merchants’ products and Credova’s operations and financial results. • We may be exposed to risk if we cannot enhance, maintain, and adhere to our internal controls and procedures. • Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business. • The consumer finance and BNPL industry is subject to various state and federal laws in the United States and federal law concerning consumer finance, and the costs to maintain compliance with such laws and regulations may be significant. • Compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in the U.S., or industry practices may adversely affect our business. • We are a “controlled company” within the meaning of NYSE listing standards and comply with reduced corporate governance standards as a result. • Natural disasters, including and not limited to unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt our business schedule. • We may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all.
Even if these investments do result in the growth of our business, if we do not effectively manage our growth, we may not be able to successfully execute on our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy the expectations of consumer or business members or maintain high-quality product offerings, any of which could adversely affect our business, financial condition, results of operations and prospects.
Even if these investments do result in the growth of our business, if we do not effectively manage our growth, we may not be able to successfully execute on our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy the expectations of consumers or business owners or maintain high-quality product offerings, any of which could adversely affect our business, financial condition, results of operations and prospects.
For example, in 2018, California enacted the California Consumer Privacy Act (“ CCPA ”), which, among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of information and may restrict the use of cookies and similar technologies for advertising purposes.
For example, in 2018, California enacted the California Consumer Privacy Act (“CCPA”), which, among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of information and may restrict the use of cookies and similar technologies for advertising purposes.
The CCPA, which became effective on January 1, 2020, was amended on multiple occasions and is the subject of regulations issued by the California Attorney General regarding certain aspects of the law and its application. Moreover, California voters approved the California Privacy Rights Act (the “ CPRA ”) in November 2020.
The CCPA, which became effective on January 1, 2020, was amended on multiple occasions and is the subject of regulations issued by the California Attorney General regarding certain aspects of the law and its application. Moreover, California voters approved the California Privacy Rights Act (the “CPRA”) in November 2020.
Any errors, bugs or vulnerabilities discovered in our software after it has been deployed, or never generally discovered, could result in interruptions in platform availability, product malfunctioning or data breaches, and thereby result in damage to our reputation, adverse effects upon members, loss of consumer and business members and relationships with third parties, including social media networks, loss of revenue or liability for damages.
Any errors, bugs or vulnerabilities discovered in our software after it has been deployed, or never generally discovered, could result in interruptions in platform availability, product malfunctioning or data breaches, and thereby result in damage to our reputation, adverse effects upon consumers, loss of consumers and business owners and relationships with third parties, including social media networks, loss of revenue or liability for damages.
In addition, as new and existing competitors introduce new products or services that compete with ours, or revise their pricing structures, we may be unable to attract new members and advertisers at the same price or based on the same pricing model as we have used historically.
In addition, as new and existing competitors introduce new products or services that compete with ours, or revise their pricing structures, we may be unable to attract new business owners and advertisers at the same price or based on the same pricing model as we have used historically.
In accordance with ASC 815, Derivatives and Hedging (“ ASC 815 ”), the Company’s warrants are classified as derivative liabilities and measured at fair value on its balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations.
In accordance with ASC 815, Derivatives and Hedging (“ASC 815”), the Company’s warrants are classified as derivative liabilities and measured at fair value on its balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations.
Credova’s technology platform faces competition from a variety of existing businesses and new market entrants, including competitors with BNPL products and those who enable transactions and commerce via digital payments. 37 Despite any competitive advantage Credova may have, there is always a risk of new entrants in the market, which may disrupt Credova’s business and decrease Credova’s market share.
Credova’s technology platform faces competition from a variety of existing businesses and new market entrants, including competitors with BNPL products and those who enable transactions and commerce via digital payments. 39 Table of Contents Despite any competitive advantage Credova may have, there is always a risk of new entrants in the market, which may disrupt Credova’s business and decrease Credova’s market share.
These licenses, if required, may not be available at all or have acceptable terms. As a result, IP claims against us could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows. Inadequate technical and legal IP protections could prevent us from defending or securing our proprietary technology and IP.
These licenses, if required, may not be available at all or have acceptable terms. As a result, IP claims against us could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows. 50 Table of Contents Inadequate technical and legal IP protections could prevent us from defending or securing our proprietary technology and IP.
If we are unable to provide consumer members with the information they seek, or if they can find equivalent or better content on other platforms, they may stop or reduce their use of the Platform, and traffic to our website and on our mobile app may decline.
If we are unable to provide consumers with the information they seek, or if they can find equivalent or better content on other platforms, they may stop or reduce their use of the Platform, and traffic to our website and on our mobile app may decline.
The Federal Trade Commission (“ FTC ”) expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of our business, and the cost of available tools to improve security and reduce vulnerabilities.
The Federal Trade Commission (“FTC”) expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of our business, and the cost of available tools to improve security and reduce vulnerabilities.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ● market adoption of the Platform; ● our ability to maintain and grow the Platform offerings, traffic, and engagement; ● our ability to attract and retain consumers and business members and advertisers; ● the success of our Outreach Program; ● the amount of advertising we can attract to the Platform and the pricing of our advertising products; ● the diversification and growth of our revenue sources beyond current sources, including our ability to successfully launch new products and realize revenues from increased e-commerce functionality on the Platform, including through consumer transactions executed in the Platform, and through the sale of our own D2C branded products; ● our ability to grow and generate revenue from our B2B offerings once launched; ● the development and introduction of new products, or services by us or our competitors; ● increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive, and increased expenses we have incurred and will continue to incur as a public company; ● legislation and regulation that forces us to change our content policies and practices (including those relating to our products, services and advertisements of our business members); ● our ability to maintain and increase operating margins; ● system failures or breaches of security or privacy; ● competition in the markets in which we operate, and our ability to successfully compete; and ● negative publicity we may encounter as we seek to grow our values-focused business.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • market adoption of our products and services; • our ability to maintain and grow the Platform offerings, traffic, and engagement; • our ability to attract and retain consumers, business owners, and advertisers; • the diversification and growth of our revenue sources beyond current sources, including our ability to successfully launch new products and realize revenues from increased e-commerce functionality on the Platform, including through consumer transactions executed in the Platform, and through the sale of our own D2C branded products; • our ability to grow and generate revenue from our B2B offerings once launched; • the development and introduction of new products, or services by us or our competitors; • increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive, and increased expenses we have incurred and will continue to incur as a public company; • legislation and regulation that forces us to change our content policies and practices (including those relating to our products, services and advertisements of our business owners); 17 Table of Contents • our ability to maintain and increase operating margins; • system failures or breaches of security or privacy; • competition in the markets in which we operate, and our ability to successfully compete; and • negative publicity we may encounter as we seek to grow our values-focused business.
Certain content or communications by consumer or business members participating on the Platform could deter current or potential consumer and business members from using the Platform and adversely affect relationships with our business partners, and we may face negative publicity, litigation or other legal actions or other potential harm or liability as a result of that content, regardless of whether such content violated any law.
Certain content or communications by consumers or business owners participating on the Platform could deter current or potential consumers and business owners from using the Platform and adversely affect relationships with our business partners, and we may face negative publicity, litigation or other legal actions or other potential harm or liability as a result of that content, regardless of whether such content violated any law.
To the extent our revenue and/or member growth assumptions associated with any influencer or ambassador do not meet our expectations or realize our expected return on investment, our financial performance, results of operations and liquidity may be negatively impacted.
To the extent our revenue and/or business and consumer growth assumptions associated with any influencer or ambassador do not meet our expectations or realize our expected return on investment, our financial performance, results of operations and liquidity may be negatively impacted.
This risk increases as the Platform continues to grow. In the event our members do not agree with our policies and procedures or their implementation, such members could decrease their usage of the Platform (or cease using us entirely), which could have a material adverse effect on our business or our results of operations for any period.
This risk increases as the Platform continues to grow. In the event our consumers or business owners do not agree with our policies and procedures or their implementation, such individuals could decrease their usage of the Platform (or cease using us entirely), which could have a material adverse effect on our business or our results of operations for any period.
If we are unable to retain our employees, or if we need to increase our compensation expenses to retain our employees, our business, operating results, and financial condition could be adversely affected. Members of our management team have no prior experience managing a public company.
If we are unable to retain our employees, or if we need to increase our compensation expenses to retain our employees, our business, operating results, and financial condition could be adversely affected. Members of our management team have limited experience managing a public company.
Although we have already hired additional personnel to help comply with these requirements, we may need to further expand our legal and finance departments in the future, which will increase our costs and expenses. 51 In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
Although we have already hired additional personnel to help comply with these requirements, we may need to further expand our legal and finance departments in the future, which will increase our costs and expenses. 54 Table of Contents In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
Additionally, there is a risk that members will make communications that may be viewed as representing certain political viewpoints, leading to public perceptions that we endorse those viewpoints, regardless of whether or not such perceptions are accurate.
Additionally, there is a risk that business owners will make communications that may be viewed as representing certain political viewpoints, leading to public perceptions that we endorse those viewpoints, regardless of whether or not such perceptions are accurate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo date, we have not experienced any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Biggest changeTo date, we have not experienced any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, financial condition, or results of operations.
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Item 1C. Cybersecurity We recognize the critical importance of developing, implementing and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. Within our risk management framework, we engage in application security assessments, vulnerability management, penetration testing, security audits, and continuous risk assessments.
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Item 1C. Cybersecurity Cybersecurity is a critical component of our risk management strategy and corporate governance. We have implemented a comprehensive cybersecurity program designed to identify, assess, and mitigate risks that could materially impact our operations, financial condition, or reputation.
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Additionally, we uphold a range of incident response plans that come into play upon incident detection. We mandate that all employees, including corporate personnel with access to information systems, undergo annual data protection and cybersecurity training as well as compliance programs. Senior leadership, as part of our enterprise risk assessments, thoroughly evaluates our cybersecurity risks and corresponding mitigations.
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Our approach begins with regular security risk assessments, where we analyze potential threats, evaluate their severity, and develop prioritized mitigation strategies. Responsibility for addressing these risks is assigned to appropriate teams, ensuring accountability and effective remediation. To enhance our security posture, we employ autonomous monitoring tools that continuously detect vulnerabilities and track anomalous activity across our infrastructure and applications.
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Our Principal Security Engineer has over twenty years of experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs, and secure architecture and design, as well as several relevant certifications, including a Bachelor of Science in Computer Science and security related certifications which includes ISC2 Certified Information Systems Security Professional (CISSP), AWS Security Specialty and Google Cloud Professional Cloud Security Engineer.
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Alerts from these systems are escalated for triage by our Information Security team, allowing us to proactively address potential threats. Employee education is also a key element of our cybersecurity strategy. We provide ongoing training on data security best practices, phishing awareness, and social engineering defenses to ensure that our workforce remains vigilant against evolving threats.
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The Information Security team furnishes routine reports to senior management and pertinent stakeholders, detailing a spectrum of cybersecurity threats, assessments, and discoveries. 61 Our information security team remains abreast of the latest cybersecurity advancements, staying informed about potential threats and emerging risk management strategies. This continuous learning is vital for proactively preventing, detecting, mitigating, and remediating cybersecurity incidents.
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We maintain a structured incident management program that is formally tested through tabletop exercises at least once a year. Additionally, our business continuity and disaster recovery program is regularly evaluated to ensure resilience against disruptions.
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Our information security team is responsible for implementing and supervising processes for ongoing monitoring of our information systems, incorporating advanced security measures and regular system audits to pinpoint vulnerabilities.
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Recognizing the risks associated with third-party service providers, we have a robust vendor risk management program in place to assess and mitigate cybersecurity risks within our supply chain, particularly for vendors that handle customer and employee data.
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In the event of a cybersecurity incident, our information security team employs a well-defined incident response plan, comprising immediate actions to minimize impact and long-term strategies for remediation and prevention of future incidents.
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Our key infrastructure and applications undergo external penetration testing at least annually, and we conduct enterprise-wide risk assessments, inclusive of cybersecurity risks, on an annual basis. Governance of cybersecurity risks is integrated into our overall corporate oversight framework. Our Board of Directors considers cybersecurity a fundamental risk area and has delegated responsibility for oversight to the Audit Committee.
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Our information security team consistently updates the CFO and CEO on all cybersecurity risks and incidents to ensure top management stays informed about our cybersecurity posture and potential risks. Additionally, significant cybersecurity matters and strategic risk management decisions are escalated to the Board of Directors, granting them comprehensive oversight and the ability to provide guidance on critical cybersecurity issues.
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The day-to-day management of cybersecurity risks is led by our Chief Information Security Officer (CISO), who is responsible for identifying, assessing, and mitigating security threats. As part of our broader enterprise risk assessment process, our CISO, Chief Technology Officer (CTO), Legal team, and Senior Engineering leadership conduct thorough evaluations of our cybersecurity program, risks, and corresponding mitigations.
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These assessments are reviewed with the Audit Committee at least annually. Our CISO brings extensive experience in security governance, risk, and compliance, with over 13 years of leadership in both public and private enterprises, including startups. Holding a degree in Accounting and Management Information Systems, our CISO provides deep expertise in aligning security initiatives with business objectives and regulatory requirements.
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However, we remain vigilant in our efforts to mitigate cybersecurity risks and respond swiftly to potential threats. 64 Table of Contents Our cybersecurity risk management framework is guided by industry-leading standards, including the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) and ISO 27001.
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Additionally, our FinTech business maintains Payment Card Industry Data Security Standard (PCI DSS) Level 1 compliance, undergoing annual external audits to ensure continued adherence. To further strengthen our security practices, management is actively evaluating additional certifications that align with our commitment to maintaining a resilient cybersecurity program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe continue to maintain approximately 6,881 square feet of office space in California. A number of our employees work remotely across the United States. Our facilities, which are leased, are adequate to meet our current needs though we intend to procure additional space in the future, if and as necessary, as we continue to add employees and expand our business.
Biggest changeOur facilities, which are leased, are adequate to meet our current needs though we intend to procure additional space in the near future, if and as necessary, as we continue to add employees and expand our business.
For D2C products we have introduced and may introduce in the future, we rely and continue to expect to rely on third party contract manufacturers and not be required to acquire or lease our own manufacturing or other facilities.
For D2C products, both current and future, we rely and continue to expect to rely on third party contract manufacturers and not be required to acquire or lease our own manufacturing or other facilities.
Item 2. Properties Our headquarters are currently located in West Palm Beach, Florida, consisting of approximately 7,053 square feet of office space, and our mailing address there is 250 S. Australian Avenue, Suite 1300, West Palm Beach, Florida 33401. We relocated our headquarters to Florida from California in April 2023. Our lease for this facility expires in January 2025.
Item 2. Properties Our headquarters are currently located in West Palm Beach, Florida, consisting of approximately 281 square feet of office space in a flexible workspace, and our mailing address there is 1501 Belvedere Rd, Suite 500, West Palm Beach, Florida 33406. We relocated our headquarters to Florida from California in April 2023.
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We also lease approximately 3,712 square feet of office space in Bozeman, Montana, related to Credova. Our lease for this facility expires in May 2027. We no longer have a physical presence in California. A number of our employees work remotely across the United States.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that are expected to have a material adverse impact on our financial position, results of operations or cash flows, nor have we been to date since inception.
Biggest changeFrom time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that are expected to have a material adverse impact on our financial position, results of operations or cash flows, nor have we been to date since inception. Item 4.
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Item 3. Legal Proceedings The Company’s subsidiary, Credova, which the Company acquired on March 13, 2024, is responding to inquiries from the Consumer Financial Protection Bureau ("CFPB") regarding Credova’s lease products. In connection with this, the CFPB informed Credova that it is authorized to pursue a resolution or file an enforcement action, and has suggested certain injunctive relief.
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No assurance can be given that a settlement will be reached or about the terms of any such settlement. At this time the Company is unable to state the exact nature of any relief that might be sought in any such action or resolution, including monetary relief or penalties, if any.
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Mine Safety Disclosures Not applicable. 65 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of March 12, 2024, there were 50 holders of record of our Class A Common Stock, one holder of record of our Class C Common Stock and six holders of record of our Public Warrants.
Biggest changeHolders As of March 11, 2025, there were 54 holders of record of our Class A Common Stock, one holder of record of our Class C Common Stock and six holders of record of our Public Warrants.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock and Public Warrants are currently listed on NYSE under the symbols “PSQH” and “PSQH.WS,” respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock and Public Warrants are currently listed on the NYSE under the symbols “PSQH” and “PSQH.WS,” respectively.
Unregistered Sales of Equity Securities In 2023, we did not sell any shares of stock that were not registered under the Securities Act of 1933, as amended, other than those sales previously reported in a Current Report on Form 8-K. 63 Item 6. [Reserved]
Unregistered Sales of Equity Securities In 2024, we did not sell any shares of stock that were not registered under the Securities Act of 1933, as amended, other than those sales previously reported in a Current Report on Form 8-K. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth our consolidated statement of operations for the years ended December 31, 2023 and 2022, and the dollar and percentage change between the two periods: For the years ended December 31, Variance Variance 2023 2022 ($) (%) Net services sales - Marketplace $ 2,987,406 $ 475,175 $ 2,512,231 529 % Net product sales - Brands 2,698,581 - 2,698,581 NM Total net revenues 5,685,987 475,175 $ 5,210,812 1097 % Costs and expenses: Cost of sales - services (exclusive of depreciation and amortization expense shown below) 1,829,066 716,102 1,112,964 155 % Cost of goods sold (exclusive of depreciation and amortization expense shown below) 1,969,147 - 1,969,147 NM General and administrative 15,222,451 2,016,638 13,205,813 655 % Sales and marketing 12,096,211 2,550,418 9,545,793 374 % Transaction costs incurred in connection with the Business Combination 6,845,777 - 6,845,777 NM Research and development 4,626,625 1,446,347 3,180,278 220 % Depreciation and amortization 2,442,706 842,195 1,600,511 190 % Total operating expenses 45,031,983 7,571,700 37,460,283 495 % Operating loss (39,345,996 ) (7,096,525 ) (32,249,471 ) 454 % Other income (expense): Other income, net 340,807 118,158 222,649 188 % Change in fair value of convertible promissory notes (14,571,109 ) - (14,571,109 ) NM Change in fair value of earn-out liabilities 1,740,000 - 1,740,000 NM Change in fair value of warrant liabilities (1,313,500 ) - (1,313,500 ) NM Interest (expense) income (177,444 ) 591 (178,035 ) -30124 % Loss before income taxes (53,327,242 ) (6,977,776 ) (46,349,466 ) 664 % Income tax expense 1,945 800 1,145 143 % Net loss $ (53,329,187 ) $ (6,978,576 ) $ (46,350,611 ) 664 % NM* — Percentage change not meaningful.
Biggest changeResults of Operations The results of operations presented below should be reviewed in conjunction with the audited consolidated financial statements for the years ended December 31, 2024 and 2023 found elsewhere in this document. 72 Table of Contents The following table sets forth our consolidated statement of operations for the years ended December 31, 2024 and 2023, and the dollar and percentage change between the two periods: For the years ended December 31, Variance Variance 2024 2023 $ % Revenues, net $ 23,199,434 $ 5,685,987 $ 17,513,447 308 % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization expense shown below) 2,419,239 1,829,066 590,173 32 % Cost of goods sold (exclusive of depreciation and amortization expense shown below) 6,705,961 1,969,147 4,736,814 241 % Transaction costs incurred in connection with the Business Combination — 6,845,777 (6,845,777) (100) % General and administrative 43,326,414 15,222,451 28,103,963 185 % Sales and marketing 18,765,805 12,096,211 6,669,594 55 % Research and development 4,434,363 4,626,625 (192,262) (4) % Depreciation and amortization 3,258,810 2,442,706 816,104 33 % Total costs and expenses 78,910,592 45,031,983 33,878,609 75 % Operating loss (55,711,158) (39,345,996) (16,365,162) 42 % Other income (expense): Other income, net 343,747 340,807 2,940 1 % Change in fair value of convertible promissory notes — (14,571,109) 14,571,109 100 % Change in fair value of earn-out liabilities 40,000 1,740,000 (1,700,000) (98) % Change in fair value of warrant liabilities (56,000) (1,313,500) 1,257,500 (96) % Interest expense, net (2,302,697) (177,444) (2,125,253) 1198 % Loss before income taxes (57,686,108) (53,327,242) (4,358,866) 8 % Income tax expense 1,181 1,945 (764) (39) % Net loss $ (57,687,289) $ (53,329,187) $ (4,358,102) 8 % 73 Table of Contents Revenues, net For the years ended December 31, 2024 2023 Marketplace Advertising and e-commerce sales $ 2,951,292 $ 2,987,406 Brands Product sales 10,979,823 3,185,931 Other sales 51,039 — Returns and discounts (843,765) (487,350) Total Brand revenues, net 10,187,097 2,698,581 Financial Technology Direct revenue 3,269,740 — Interest income on loans 2,569,061 — Loan and lease contracts sold, net 4,002,463 — Payments revenue 219,781 — Total Financial Technology revenues, net 10,061,045 — Total revenues, net $ 23,199,434 $ 5,685,987 Total revenues, net increased by $17.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
In connection with the Merger, each share of Credova was converted into the right to receive newly-issued shares of our Class A common stock (“Class A Common Stock”), delivered to the Credova stockholders at the Closing (“Credova Stockholders”). As consideration for the Merger, Credova stockholders received 2,920,993 newly-issued shares of Class A Common Stock (the “Consideration Shares”).
In connection with the Merger, each share of Credova was converted into the right to receive newly-issued shares of our Class A common stock (“Class A Common Stock”), delivered to the Credova stockholders at the Credova Closing (“Credova Stockholders”). As consideration for the Merger, Credova stockholders received 2,920,993 newly-issued shares of Class A Common Stock (the “Consideration Shares”).
Change in fair value of earnout liabilities Changes in the fair value of earnout liabilities are recorded in the 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.
Change in fair value of earn-out liabilities Changes in the fair value of earn-out liabilities are recorded in the 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.
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 consolidated financial statements for the years ended December 31, 2023 and 2022 included elsewhere in this report.
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 consolidated financial statements for the years ended December 31, 2024 and 2023 included elsewhere in this report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our consolidated financial statements as of and for the years ended December 31, 2023 and 2022, and other information included elsewhere in this report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our consolidated financial statements as of and for the years ended December 31, 2024 and 2023, and other information included elsewhere in this report.
The Company accounts for the Public Warrants (as defined in Note 11) and the Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
The Company accounts for the Public Warrants (as defined in Note 13) and the Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
Transaction costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. Any contingent consideration (“Earnout liabilities”) is measured at fair value at the acquisition date.
Transaction costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. Any contingent consideration (“Earn-out liabilities”) is measured at fair value at the acquisition date.
PSQ will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter (if PSQ’s annual revenues exceeded $100 million during such completed fiscal year), or (ii) The market value of common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter (if PSQ’s annual revenues did not exceed $100 million during such completed fiscal year).
PublicSquare will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter (if PublicSquare’s annual revenues exceeded $100 million during such completed fiscal year), or (ii) The market value of common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter (if PublicSquare’s annual revenues did not exceed $100 million during such completed fiscal year).
Our critical accounting policies are described below. 75 Revenue Recognition [1] Marketplace Revenues eCommerce 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.
Our critical accounting policies are described below. Revenue Recognition [1] 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.
We record the earnout 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 consolidated statement of operations.
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 consolidated statement of operations.
To the extent PSQ takes advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible. Recent Accounting Pronouncements See Note 3, Summary of Significant Accounting Policies, to our consolidated financial statements for the years ended December 31, 2023 and 2022. 78
To the extent PublicSquare takes advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible. Recent Accounting Pronouncements See Note 3, Summary of Significant Accounting Policies, to our consolidated financial statements for the years ended December 31, 2024 and 2023. Item 7A.
Pursuant to the Credova Merger Agreement, on March 13 2024, the transactions which are the subject of the Credova Merger Agreement were consummated (the “Closing”) and Merger Sub merged with and into Credova (the “Merger”), with Credova surviving as a wholly-owned subsidiary of PSQ.
Pursuant to the Credova Merger Agreement, on March 13, 2024, the transactions which are the subject of the Credova Merger Agreement were consummated (the “Credova Closing”) and Merger Sub merged with and into Credova (the “Merger”), with Credova surviving as a wholly-owned subsidiary of PublicSquare.
Amortization is computed on an individual product basis over the estimated economic life of the product using the straight-line method. Software development costs expensed and not capitalized, which are included in research and development expense in the accompanying consolidated statements of operations, were approximately $1,078,000 and $170,000 for years ended December 31, 2023, and 2022, respectively.
Amortization is computed on an individual product basis over the estimated economic life of the product using the straight-line method. Software development costs expensed and not capitalized, which are included in research and development expense in the accompanying consolidated statements of operations, were approximately $0.7 million and $1.1 million for years ended December 31, 2024 and 2023, respectively.
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.
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.
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. 74 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.
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.
If we are unable to raise additional capital on acceptable terms when needed, our business, results of operations and financial condition would be materially and adversely affected.
If we are unable to raise additional capital when desired, our business, results of operations and financial condition would be materially and adversely affected.
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.
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.
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. We expect our personnel-related costs as a percentage of total costs to decrease over time.
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.
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 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 Notes were converted to equity at the close of the Business Combination. Income Tax 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.
Income Tax 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.
Depreciation and amortization Depreciation and amortization expense increased $1.6 million, or 190% for year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily related to the amortization of capitalized software development costs.
Depreciation and amortization Depreciation and amortization expense increased $0.8 million, or 33% for year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily related to the amortization of capitalized software development costs.
Share-Based Compensation The Company recognizes an expense for share-based compensation awards based on the estimated fair value of the award on the date of grant. The Company accounts for share-based compensation under the provisions of ASC Topic 718.
Share-Based Compensation The Company recognizes an expense for share-based compensation awards based on the estimated fair value of the award on the date of grant.
The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes.
We utilize a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes.
The Company reviews its receivables quarterly and records a reserve, if necessary. 76 Capitalized Software The Company capitalizes costs related to the development of its internal accounting software and certain projects for internal use in accordance with ASC 350 - Intangibles – Goodwill and Other .
Capitalized Software The Company capitalizes costs related to the development of its internal accounting software and certain projects for internal use in accordance with ASC 350 - Intangibles – Goodwill and Other .
Our operating expenses will likely increase in the future as we develop and launch new offerings and platform features, expand in existing and new markets, increase our sales and marketing efforts and continue to invest in the Platform, as well as a result of becoming a public company.
Our operating expenses will likely increase in the future as we develop and launch new offerings and platform features, expand in existing and new markets, increase our sales and marketing efforts and continue to strategically invest in our three segments.
This was partially offset with a decrease in fair value of earn-out liabilities of $1.7 million, an increase in non-cash expenses of $1.6 million for depreciation and amortization and share-based compensation of $6.7 million. Also offsetting this was an increase in cash provided by operating assets and liabilities of $4.1 million.
This was partially offset with a decrease in fair value of earn-out liabilities of $1.7 million, an increase in non-cash expenses of $0.8 million for depreciation and amortization and share-based compensation of $14.0 million.
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.
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.
In July 2023, the Company launched the EveryLife business and began to generate revenue through the sale of diapers and wipes to consumers by way of the EveryLife’s website. In November 2023, EveryLife’s products became available for purchase on the Platform. The Company considers customer orders to be the contracts with the customer.
Brands Our brand revenues have been derived primarily from our sale of products. In July 2023, the Company launched the EveryLife business and began to generate revenue through the sale of diapers and wipes to consumers by way of the EveryLife’s website. In November 2023, EveryLife’s products became available for purchase on the Platform.
We have not been profitable since inception, and as of December 31, 2023 and December 31, 2022, our accumulated deficit was $62.2 million and $8.9 million, respectively.
We have not been profitable since inception, and as of December 31, 2024 and December 31, 2023, our accumulated deficit was $119.9 million and $62.2 million, respectively. Since inception, we have financed our operations primarily through equity and debt raises.
In general, we report advertising revenue on a gross basis, since we control 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 our customers. The Company recognizes revenue from push notifications and email blasts at a point in time when delivered.
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.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “PSQ,” “we,” “us,” “our,” and the “Company” are intended to refer to (i) following the Business Combination, the business and operations of PSQ Holdings, Inc. and its consolidated subsidiaries, and (ii) prior to the Business Combination, Private PSQ (the predecessor entity in existence prior to the consummation of the Business Combination) and its consolidated subsidiaries.
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” are intended to refer to (i) following the Business Combination, the business and operations of PSQ Holdings, Inc. and its consolidated subsidiaries, and (ii) prior to the Business Combination, Private PSQ (the predecessor entity in existence prior to the consummation of the Business Combination) and its consolidated subsidiaries. 66 Table of Contents Overview PublicSquare is a technology-enabled Marketplace & Payments ecosystem that serves an audience of consumers and merchants who value life, family, and liberty.
The increase was due to the growth and expansion of our operations as well as costs related to being a public company, specifically a $7.2 million increase in staffing-related costs, a $2 million increase in professional services, a $1 million increase in software costs, a $0.8 million increase in insurance costs, and $0.6 million increase in acquisition costs as well as a $1.6 million increase in other administrative expenses.
The increase was due to the growth and expansion of our operations, specifically a $10.0 million increase due to the addition of the FinTech segment, $12.9 million increase in staffing-related costs of which $9.4 million was share-based compensation, a $2.7 million increase in professional services, a $0.9 million increase in insurance costs as well as a $1.6 million increase in other administrative expenses.
Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $3.3 million, an increase of $1.7 million from cash used in investing activities of $1.6 million for the year ended December 31, 2022.
Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $3.0 million, a decrease of $0.3 million from cash used in investing activities of $3.3 million for the year ended December 31, 2023.
Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized by applying the statutory tax rates in effect in the years in which the differences between the financial reporting and tax filing bases of existing assets and liabilities are expected to reverse.
Under this method, deferred tax assets and liabilities are recognized by applying the statutory tax rates in effect in the years in which the differences between the financial reporting and tax filing bases of existing assets and liabilities are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.
Assuming they are not subject to indemnity claims, the Escrow Shares remaining in escrow upon the 12-month anniversary of the Closing will be released and distributed pro rata to the former stockholders of Credova.
Assuming they are not subject to indemnity claims, the Escrow Shares remaining in escrow upon the 12-month anniversary of the Credova Closing will be released and distributed pro rata to the former stockholders of Credova. The mailing address of PublicSquare's principal executive office is 1501 Belvedere Rd, Suite 500, West Palm Beach, Florida 33406.
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 Notes issued.
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.
As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.
As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult. 82 Table of Contents Implications of being a Smaller Reporting Company Additionally, PublicSquare is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
Actual future operating results and the underlying amount and type of income could differ materially from our estimates, assumptions and judgments thereby impacting its financial position and results of operations. 77 Business Combinations The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
Business Combinations The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
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 certain key metrics and financial measures not prepared in accordance with GAAP to evaluate and manage our business.
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.
As a result, 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.
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.
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. [2] Brand Sales Product Sales The Company generates revenue through the sale of diapers and wipes to consumers by way of the Company’s website.
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.
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 PSQ’s platforms/solutions and certain costs related to the acquisition of both consumer and business members on the Platform.
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 PSQ’s platforms/solutions.
As noted above, ASC Topic 718 requires that share-based payment transactions with employees and non-employees, in certain cases, be recognized in the consolidated financial statements based on their fair value. As of December 31, 2023 there were 2,354,989 units outstanding. At December 31, 2022, there were no board approved grants of share-based compensation awards.
The Company accounts for share-based compensation under the provisions of ASC Topic 718. As noted above, ASC Topic 718 requires that share-based payment transactions with employees and non-employees, in certain cases, be recognized in the consolidated financial statements based on their fair value.
The convertible promissory notes were converted to equity at the close of the Business Combination. 72 Change in fair value of earnout liabilities Changes in the fair value of earnout liabilities of $1.7 million represents the decrease in fair value of the earn-out liabilities from the date of the Business Combination through December 31, 2023.
The convertible promissory notes were converted to equity at the close of the Business Combination and therefore no expense was recognized in 2024. Change in fair value of earn-out liabilities Changes in the fair value of earn-out liabilities decreased by $1.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Comparison of the Years Ended December 31, 2023 and 2022 The following table shows our cash flows provided by (used in) operating activities, investing activities and financing activities for the stated periods: For the years ended December 31, 2023 2022 Variance Net cash used in operating activities $ (25,764,078 ) $ (6,034,149 ) (19,729,929 ) Net cash used in investing activities (3,324,227 ) (1,554,334 ) (1,769,893 ) Net cash provided by financing activities 43,203,930 9,519,485 33,684,445 Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $25.8 million compared to $6.0 million used in operating activities during the year ended December 31, 2022.
Comparison of the Years Ended December 31, 2024 and 2023 The following table shows our cash flows provided by (used in) operating activities, investing activities and financing activities for the stated periods: For the years ended December 31, 2024 2023 Variance Net cash used in operating activities $ (34,128,721) $ (25,764,078) $ (8,364,643) Net cash used in investing activities $ (3,019,388) $ (3,324,227) $ 304,839 Net cash provided by financing activities $ 57,291,686 $ 43,203,930 $ 14,087,756 Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $34.1 million compared to $25.8 million used in operating activities during the year ended December 31, 2023.
Transaction costs incurred in connection with the Business Combination Transaction costs incurred in connection with the Business Combination primarily consists of professional fees, travel expenses and one-time share-based payments to non-employee advisors and influencers.
Transaction costs incurred in connection with the Business Combination Transaction costs incurred in connection with the Business Combination primarily consists of professional fees, travel expenses and one-time share-based payments to non-employee advisors and influencers. 69 Table of Contents 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.
The increase was mainly due to an increase in personnel expenses. Cost of goods sold (exclusive of depreciation and amortization) Cost of goods sold (exclusive of depreciation and amortization) increased by $2.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cost of goods sold (exclusive of depreciation and amortization) Cost of goods sold (exclusive of depreciation and amortization) increased by $4.7 million or 241% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Change in fair value of convertible promissory notes The change in fair value of convertible promissory notes represents the premium recorded on the convertible promissory note’s date with a charge to expense.
Other Income, net Other income, net changed by an insignificant amount for the year ended December 31, 2024 compared to the year ended December 31, 2023. Change in fair value of convertible promissory notes The change in fair value of convertible promissory notes represents the premium recorded on the convertible promissory note’s date with a charge to expense.
On February 23, 2023, PSQ completed a stock-for-stock transaction to purchase 100% of the outstanding shares of EveryLife, Inc. (“EveryLife”), a Delaware corporation, in exchange for 1,071,229 shares of common stock, par value $0.001 per share, of Private PSQ (“Private PSQ Common Stock”). The mailing address of PSQ’s principal executive office is 250 S.
After 10 months of testing in various markets and courting consumer feedback, we launched the Platform nationwide on July 4, 2022. On February 23, 2023, PublicSquare completed a stock-for-stock transaction to purchase 100% of the outstanding shares of EveryLife, Inc. (“EveryLife”), a Delaware corporation, in exchange for 1,071,229 shares of common stock, par value $0.001 per share, of Private PSQ.
Paul, in the capacity as the Seller Representative in accordance with the terms of the Credova Merger Agreement (“Credova Merger”). Credova assists consumers, lenders, and retailers in offering point-of-sale financing products.
Paul, in the capacity as the Seller Representative in accordance with the terms of the Credova Merger Agreement.
Implications of being a Smaller Reporting Company Additionally, PSQ is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
Non-Operating Income and Other Items Other Income, Net Other income, net primarily relates to realized and unrealized gains on our available for sale investments for the year ended December 31, 2023 and Employee Retention Tax Credit (“ERTC”) and the Research and Development Tax Credit (“R&D Tax Credit”) for the year ended December 31, 2022.
Non-Operating Income and Other Items Other Income, net Other income, net primarily relates to interest income on our money market accounts for the year ended December 31, 2024 and realized and unrealized gains on our short term investments and interest income on our money market accounts for the year ended December 31, 2023.
Also in March 2024, we completed an acquisition of Credova in exchange for the issuance of shares of our common stock. Additionally, Credova generates positive cash flow from operations.
Terms for the note were priced based on notes exchanged as part of the Credova transaction. 75 Table of Contents Also in March 2024, we completed an acquisition of Credova in exchange for the issuance of shares of our common stock. Additionally, Credova has historically generated positive cash flows from operations.
Critical Accounting Policies and Significant Management 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.
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.
For a description of our revenue recognition policies, see Note 3, Summary of Significant Accounting Policies, in our consolidated financial statements. 67 Cost of Sales - Services (exclusive of depreciation and amortization) Cost of sales- services (exclusive of depreciation and amortization) consists of the direct costs incurred in building and running the Platform.
For a description of our revenue recognition policies, see Note 3, Summary of Significant Accounting Policies, in our consolidated financial statements.
The increase in cash used in operating activities was due to an overall increase in operating expenses, resulting in an increased net loss of $53.3 million (which includes the increase in fair value of Notes of $14.6 million and change in fair value of the warrants of $1.3 million).
The increase in cash used in operating activities was due to an overall increase in operating expenses, resulting in an increased operating loss of $16.4 million. Also, there was an increase in net cash used by operating assets and liabilities of $6.8 million.
The increase was mainly due to the launch of product sales in July 2023. General and Administrative Expense General and administrative expense increased by $13.2 million, or 655%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The increase was due to the growth and expansion of the Brands operations and is directly tied to the increase in revenues year-over-year. General and Administrative Expense General and administrative expense increased by $28.1 million, or 185%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase was primarily due to $22.5 million of proceeds from the issuance of Notes, $18.1 million of proceeds from the reverse recapitalization and $2.6 million of proceeds from the issuance of Private PSQ Common Stock.
The increase was primarily due to $39.3 million of proceeds from the issuance of common stock, $20.0 million of proceeds from the issuance of convertible note payable, partially offset by repayments on the line of credit of $8.6 million in 2024, compared to $22.5 million of proceeds from the issuance of convertible note payable, $18.1 million of proceeds from the reverse recapitalization and $2.6 million of proceeds from the issuance of common stock in 2023.
The funds are currently held in escrow and the investment is subject to stockholder approval of the issuance of the underlying shares as part of the Company's annual shareholder meeting. 64 Credova Merger Agreement On March 13, 2024 , the Company entered into an agreement and plan of merger (the “Credova Merger Agreement”) with Cello Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub” and, together with PSQ, the “Buyer Parties”), Credova Holdings, Inc., a Delaware corporation (“Credova”), and Samuel L.
At the closing of the Business Combination (the “Closing”), Colombier changed its name to “PSQ Holdings, Inc.” On March 13, 2024, we entered into an agreement and plan of merger (the “Credova Merger Agreement”) with Cello Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”), Credova Holdings, Inc., a Delaware corporation (“Credova”), and Samuel L.
Net Cash Provided by Financing Activities Net cash provided by financing activities for year ended December 31, 2023 was $43.2 million compared to $9.5 million provided by financing activities for the year ended December 31, 2022.
Cash used by investing activities for the year ended December 31, 2024 primarily related to $3.7 million of software development costs partially offset by $0.5 million net loans held for investment. 76 Table of Contents Net Cash Provided by Financing Activities Net cash provided by financing activities for year ended December 31, 2024 was $57.3 million compared to $43.2 million provided by financing activities for the year ended December 31, 2023.
We expect to continue to invest substantial resources to support our growth. We anticipate that each of the following categories of operating expenses, other than transaction costs incurred in connection with the Business Combination, will increase in absolute dollar amounts and decrease as a percentage of revenue for the foreseeable future.
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.
Sales and Marketing Expense Sales and marketing expense increased by $9.5 million, or 374%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to an increase in expenses related to the Outreach Program, as well as brand awareness campaigns.
Sales and Marketing Expense Sales and marketing expense increased by $6.7 million, or 55%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal, audit, tax and accounting costs, investor relations costs, higher insurance premiums and compliance costs.
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.
Income Tax Expense Income tax expense increased by an insignificant amount for the year ended December 31, 2023 compared to the year ended December 31, 2022. Liquidity and Capital Resources Historically, we have financed operations primarily through cash generated from equity and debt raises.
Liquidity and Capital Resources Historically, we have financed operations primarily through cash generated from equity and debt raises. Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenditures.
Interest Expense, net Interest expense, net increased by $0.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to the interest expense on the convertible promissory notes that were subsequently converted in connection with the closing of the Business Combination.
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 $2.1 million, or 1198%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
While we believe that the proceeds realized by us through the Merger will be sufficient to meet our currently contemplated business needs, we cannot assure you that this will be the case. If additional financing is required by us from outside sources, we may not be able to raise it on terms acceptable to us or at all.
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.
As of December 31, 2023 and December 31, 2022, our cash and cash equivalents balance was $16.4 million, and $2.3 million, respectively. Cash and cash equivalents consist of interest-bearing deposit accounts managed by third-party financial institutions, and highly liquid investments with maturities of one year or less.
Cash and cash equivalents consist of interest-bearing deposit accounts managed by third-party financial institutions, and highly liquid investments with maturities of one year or less. On March 13, 2024, the Company entered into a note purchase agreement for a 9.75% private placement convertible note for $10.0 million invested by a Board member and his affiliates.
As a result, we expect that sales expenses will increase in absolute dollars in future periods as we increase marketing activities, grow our operations, and continue to build our brand awareness, but decline as a percentage of total revenue over time. Our inability to scale our expenses could negatively impact profitability.
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.
Change in fair value of warrant liabilities Changes in the fair value of warrant liabilities of $1.3 million represents the net increase in fair value of the warrant liabilities from the date of the Business Combination through December 31, 2023.
The decrease was due to an increase 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 $1.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
As of the date of this report, the CEO controls approximately 50.63% of our outstanding voting power due to his ownership of all of our outstanding shares of Class C Common Stock. Components of Results of Operations During the years ended December 31, 2023 and 2022, our net loss was $53.3 million and $7.0 million, respectively.
Components of Results of Operations During the years ended December 31, 2024 and 2023, our net loss was $57.7 million and $53.3 million, respectively. Our net loss increased in 2024 from 2023, largely due to the growth of the Company resulting in an operating loss of $55.7 million in 2024 compared to $39.3 million in 2023.
Other Income, net Other income, net increased by $0.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily related to the realized gain on short term investments.
Cost of revenue (exclusive of depreciation and amortization) Cost of revenue (exclusive of depreciation and amortization) increased by $0.6 million, or 32%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily related to the addition of the Financial Technology segment in 2024.
Advertising services Advertising revenue is generated by displaying ad products and services on the Company’s platform. Customers enter into advertising subscription arrangements. The Company recognizes revenues over-time as the ads are displayed over the subscription period so the Company is providing a service and the service is being consumed by the customer simultaneously over the period of service.
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.
Transaction costs incurred in connection with the Business Combination Transaction costs incurred in connection with the Business Combination for the year ended December 31, 2023 include legal fees of $5.0 million, accounting fees of $0.8 million, travel and other expenses of $0.3 million and a one-time share-based payment expense of $0.7 million for immediately-vested RSUs issued to non-employee influencers and advisors.
Transaction costs incurred in connection with the Business Combination Transaction costs incurred in connection with the Business Combination were $6.8 million for the year ended December 31, 2023.
Removed
Overview PSQ is a values-aligned platform where consumers with traditional American values can connect with and patronize business members whose values align with their own. PSQ is free-to-use for consumer members, who can use its platform to search for and shop from values-aligned business members both locally, online, and nationally.
Added
PublicSquare operates under three segments: Marketplace, Brands, and Financial Technology. 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.
Removed
Since our nationwide launch in July 2022, we have become the largest values-aligned platform of pro-America businesses and consumers.
Added
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 Brands segment includes EveryLife, a premium D2C life-affirming baby products company.
Removed
After 10 months of testing in various markets and courting member feedback, we launched the Platform nationwide on July 4, 2022.
Added
The Financial Technology segment comprises Credova, a "Buy Now Pay Later" company focused on the outdoors & shooting sports industry, and PSQ Payments, a "cancel-proof" payments processing company.
Removed
As of December 31, 2023, on the Platform we have more than 1.6 million active consumer members (defined as unique consumer membership accounts for which we have received all required contact information and which have not been deactivated or deleted since our reception) and more than 75,000 business members from a wide variety of industries.

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