Sezzle Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:+1 651 504 5294

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2023, was $36,764,617 based on the closing price of A$21.57 per share of Common Stock as reported on the Australian Securities Exchange.

The total number of shares of common stock, par value $0.00001 per share, outstanding at February 23, 2024 was 5,633,172.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2023.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-K (“Form 10-K”) includes “forward-looking statements” under Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management included in this Form 10-K are forward-looking statements. When used in this Form 10-K, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in this Form 10-K. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. There is a risk that such predictions, estimates, projections, and other forward-looking statements will not be achieved. Nevertheless, and despite the fact that management’s expectations and estimates are based on assumptions management believes to be reasonable and data management believes to be reliable, our actual results, performance or achievements are subject to future risks and uncertainties, any of which could materially affect our actual performance. Risks and uncertainties that could affect such performance include, but are not limited to:

•impact of the “buy-now, pay-later” (“BNPL”) industry becoming subject to increased regulatory scrutiny;

•impact of operating in a highly competitive industry;

•impact of macro-economic conditions on consumer spending;

•our ability to increase our merchant network, our base of consumers and underlying merchant sales (“UMS”);

•our ability to effectively manage growth, sustain our growth rate and maintain our market share;

•our ability to maintain adequate access to capital in order to meet the capital requirements of our business;

•impact of exposure to consumer bad debts and insolvency of merchants;

•impact of the integration, support and prominent presentation of our platform by our merchants;

•impact of any data security breaches, cyberattacks, employee or other internal misconduct, malware, phishing or ransomware, physical security breaches, natural disasters, or similar disruptions;

•impact of key vendors or merchants failing to comply with legal or regulatory requirements or to provide various services that are important to our operations;

•impact of the loss of key partners and merchant relationships;

•impact of exchange rate fluctuations in the international markets in which we operate;

•impact of our delisting from the Australian Securities Exchange and trading on the Nasdaq Capital Market as our sole trading exchange;

•our ability to protect our intellectual property rights and third party allegations of the misappropriation of intellectual property rights;

•our ability to retain employees and recruit additional employees;

•impact of the costs of complying with various laws and regulations applicable to the BNPL industry in the United States and Canada; and

•our ability to achieve our public benefit purpose and maintain our B Corporation certification.

We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in this Form 10-K. Should one or more of the risks or uncertainties described in this Form 10-K occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

All forward-looking statements, expressed or implied, included in this Form 10-K are expressly qualified in their entirety by these cautionary statements. These cautionary statements should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the cautionary statements in this section, to reflect events or circumstances after the date of this Form 10-K.

SUMMARY OF RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those highlighted in Item 1A “Risk Factors,” of this Form 10-K. If any of these risks actually occur, our business, financial condition, or results of operations would likely be materially and adversely affected. In such case, the trading price of our shares of common stock would likely decline, and you may lose all or part of your investment. These risks include, but are not limited to, the following:

Risks Related to Our Industry

•The BNPL industry has become subject to increased regulatory scrutiny.

•We operate in a highly competitive industry.

•Our success is subject to macro-economic conditions that have an impact on consumer spending.

•Our industry may be subject to negative publicity.

Risks Related to Our Strategy and Growth

•We are an early-stage financial technology company with a limited operating history and a history of operating losses.

•Our business depends on our ability to maintain and increase our merchant network, our base of consumers and UMS.

•Our ability to effectively manage growth.

•We may not be able to sustain our growth rate.

•Our ability to promote and maintain our brand.

•We may be unable to profitably manage our ongoing international operations.

•We may require additional capital.

Risks Related to Our Financing Program

•Loans facilitated through our platform involve a high degree of financial risk.

•Merchants may fail to fulfill their obligations to consumers or comply with applicable law.

•Our internet-based loan origination processes may give rise to greater risks than paper-based processes.

•Consumer bad debts and insolvency of merchants may adversely impact our financial success.

•Our ability to comply with the applicable requirements of payment processors.

Risks Related to Our Technology and the Sezzle Platform

•The integration, support and prominent presentation of our platform by our merchants.

•Unanticipated surges or increases in transaction volumes.

•The occurrence of data security breaches, cyberattacks, employee or other internal misconduct, malware, phishing or ransomware, physical security breaches, natural disasters, or similar disruptions.

•Real or perceived software failures or outages.

•Disruption in service on our platform that prevents or delays us from processing transactions.

•Fraudulent activities occurring on our platform.

Other Risks Related to Our Business

•The failure of key vendors or merchants to comply with legal or regulatory requirements or to provide various services that are important to our operations.

•The loss of key partners and merchant relationships.

•Potential inaccuracies in third-party data we use.

•Changes in market interest rates.

•Exchange rate fluctuations between the United States and Canada.

•Our ability to use net operating losses.

•Our ability to protect our intellectual property rights.

•The loss of licenses or any quality issues with third-party technology that support our business operations or are integrated with our products or services.

•Our insurance may not apply or be sufficient.

•Our business is subject to damage or interruption from events beyond our control.

•Our inability to retain employees or recruit additional employees, and risks of employee misconduct.

Risks Related to Our Regulatory Environment

•The costs of complying with various laws and regulations applicable to the BNPL industry in the United States and Canada.

•We are subject to various laws in the United States and Canada concerning lending programs, consumer finance and consumer protection.

•Failure to operate without obtaining necessary licenses.

•Violating applicable federal, state and/or local lending or other laws.

•Litigation, regulatory actions, and compliance issues could subject us to increased costs.

•Privacy and data protection laws could result in claims or harm our business.

Risks Related to Our Corporate Structure

•We do not currently intend to pay dividends on our common stock.

•Our $5 million stock repurchase could affect the price of our stock and increase volatility in the market.

•Our major stockholders own a large percentage of our stock and can exert significant influence over us.

•We are an “emerging growth company,” and the reduced U.S. public company reporting requirements applicable to emerging growth companies may make our shares of common stock less attractive to investors.

•We have and will continue to incur significant costs and are subject to additional regulations and requirements as a public company in the United States traded on the Nasdaq Capital Market.

•Our ability to continue to meet Nasdaq’s continued listing requirements.

•Failure to maintain effective internal control over financial reporting or disclosure controls may adversely affect our ability to report our financial results in a timely and accurate basis.

•Some provisions of our charter documents may have anti-takeover effects, and the exclusive forum designation may limit stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Risks Related to Our Existence as a Public Benefit Corporation and a Certified B Corporation

•As a public benefit corporation, we cannot provide any assurance that we will achieve our public benefit purpose.

•As a public benefit corporation, our focus on providing a public benefit purpose may negatively impact our financial condition.

•Our directors have a fiduciary duty to consider not only our stockholders’ interests, but also our specific public purpose and the interests of other stakeholders affected by our actions.

•Increased derivative litigation concerning our duty to balance stockholder and public benefit interest.

•A loss of our certification as a B Corporation or a decline in our score.