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:+1 651 240 6001

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, 2024, was $243,028,721 based on the closing price of $88.22 per share of Common Stock as reported on The Nasdaq Stock Market LLC.

The total number of shares of common stock, par value $0.00001 per share, outstanding at February 25, 2025 was 5,642,281.

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 2025 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, 2024.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-K and the documents incorporated by reference herein (“Form 10-K”) includes “forward-looking statements” under Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (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 and in other filings we make with the Securities and Exchange Commission. 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 and consumer credit;

•our ability to maintain our relationship with our existing merchant base, increase our merchant network and Gross Merchandise Volume (“GMV”);

•our ability to retain and increase our consumer base and GMV;

•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;

•the loans facilitated through the Sezzle Platform involve a high degree of financial risk;

•our reliance on our originating bank partner to originate a substantial majority of the loans facilitated by the Sezzle Platform;

•our reliance on third-party data to assess creditworthiness of consumers;

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

•our ability to comply with the applicable requirements of Visa and other payment processors;

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

•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;

•our ability to comply with applicable state lending licenses and other state lending laws and regulations;

•the impact of litigation, regulatory investigations and actions, and compliance issues on our business; 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 intention or obligation to update any forward-looking statements, to reflect events or circumstances occurring 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

•Our 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 and consumer credit.

•We, and our industry, has been and may continue to be subject to negative publicity.

Risks Related to Our Strategy and Growth

•We have a limited operating history, and until recently, a history of operating losses.

•Our business depends on our ability to maintain and increase our merchant network and GMV.

•Our business depends on our ability to retain and increase our consumer base and GMV.

•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 require additional capital.

Risks Related to Our Financing Program

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

•Our agreement with our originating bank partner is non-exclusive and subject to termination by our originating partner upon the occurrence of certain events.

•We rely on third-party data to assess the creditworthiness of consumers and such data may be inaccurate.

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

•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.

Risks Related to Our Technology and the Sezzle Platform

•Our results depend on 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

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

•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.

•Changes to our key operating metrics and real or perceived inaccuracies.

•Conditions in the capital and credit markets, including higher 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.

•We are subject to the regulatory, supervisory and enforcement authority of the CFPB.

•We rely on our originating bank partner model to originate a substantial majority of the loans facilitated on the Sezzle Platform.

•Failure to identify, obtain and operate the licenses necessary to operate our business.

•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 have not paid dividends on our common stock and any future payment of dividends will be at the discretion of our board directors and depend on certain factors.

•Our stock repurchase(s) could affect the price of our stock and increase volatility in the market.

•Our Chief Executive Officer and Chairman of the board owns a large percentage of our stock and can exert significant influence over us.

•A large percentage of our stock are pledged securities subject to foreclosure or disposal upon the occurrence of certain events.

•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 inability 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.