PSQ Holdings, Inc.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

On August 12, 2025, the Company announced a strategic repositioning of its business to accelerate the growth of its FinTech segment. As part of this repositioning, the Company plans to monetize its Brands segment and pursue a sale or strategic partnership of its Marketplace segment. The Company also made the decision to reverse the Brands expansion into South Korea as part of the repositioning.

Previous wording

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

Current wording

During the three months ended September 30, 2025 and 2024, our net loss was $12.0 million and $13.1 million, respectively. During the three months ended September 30, 2025, our net loss decreased $1.1 million as compared to the three months ended September 30, 2024, due to a $1.2 million increase in revenues, and a $2.6 million decrease in loss from discontinued operations. This was partially offset by a $0.6 million increase in expenses, a quarter over quarter loss of $1.8 million relating to the change in fair value of the warrant liabilities, a quarter over quarter loss of $0.1 million relating to the change in fair value of the earnout liabilities. For the nine months ended September 30, 2025 and 2024, our net loss was $24.8 million and $36.9 million, respectively. During the nine months ended September 30, 2025, our net loss decreased $12.1 million as compared to the nine months ended September 30, 2024, due to $4.3 million increase in revenues, a $3.8 million decrease in expenses, a $4.2 million decrease in loss from discontinued operations, a $0.7 million increase in interest income earned and a $0.3 million gain in the change in fair value of the warrant liabilities offset by a $1.2 million increase in interest expense

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Research and development expenses consist primarily of salaries, employee benefits and consultant fees related to our development activities to originate, develop, and build the PSQ Payments' and PSQ Impact ecosystems. 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.

Previous wording

Depreciation and amortization expense consists of amortization of capitalized software development costs and depreciation of leased assets.

Current wording

Depreciation and amortization expense consists of amortization of capitalized software development costs, depreciation of leased assets, office fixtures, and furniture.

Previous wording

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

Current wording

Other income, net relates to interest income earned on the money market accounts and a gain resulting from the sale of leased assets for the three months ended September 30, 2025. For the nine months ended September 30, 2025, other income also includes a gain resulting from the settlement of an outstanding payable.

Previous wording

For the three and six months ended June 30, 2025, GMV was $10.7 million and $22.1 million, respectively, which represented an approximate change of (19)% and (27)%, respectively, as compared to the same period in 2024.

Current wording

For the three and nine months ended September 30, 2025, GMV was $11.0 million and $33.2 million, respectively, which represented an approximate change of (29)% and (27)%, respectively, as compared to the same period in 2024.

Previous wording

For the six months ended June 30, 2025, our top five merchants and platform partners represented approximately 58% of total GMV - Credit, as compared to 41% for the six months ended June 30, 2024. GMV - Credit attributable to our largest merchant during the three months ended June 30, 2025 represented 24% of total GMV - Credit, compared to 16% for the same period in 2024. The shift in volume from our top five merchants is primarily due to the overall reductions in sales across the industry.

Current wording

For the nine months ended September 30, 2025, our top five merchants and platform partners represented approximately 58% of total GMV - Credit, as compared to 42% for the nine months ended September 30, 2024. GMV - Credit attributable to our largest merchant during the three months ended September 30, 2025 represented 23% of total GMV - Credit, compared to 16% for the same period in 2024. The shift in volume from our top five merchants is primarily due to the overall reductions in sales across the industry.

Previous wording

GMV - Credit declined year-over-year, driven by a broader slowdown in the firearm retail industry and our continued focus on disciplined underwriting practices. Industry-wide softness impacted many of our merchant partners, with some reporting sales down more than 20% year-over-year, consistent with national trends. According to the National Shooting Sports Foundation (“NSSF”), U.S. firearm sales fell for the fourth consecutive year in 2024, totaling approximately 15.2 million adjusted background checks—a 3.5% decline from 2023. This downward trend persisted into 2025, with Q2 adjusted checks decreasing approximately 3.4% compared to the prior year, and February 2025 marking one of the weakest months in over a decade with a 9% year-over-year decline. The decline in overall firearm demand has been influenced by reduced consumer urgency under a pro-Second Amendment federal administration, as well as macroeconomic factors such as inflationary pressures and constrained discretionary spending, which have affected purchasing behavior across the retail sector. Despite these headwinds, the industry continues to demonstrate resilience, with each month in 2025 exceeding one million NSSF-adjusted background checks—a threshold that has been maintained for more than five years—underscoring a historically strong baseline level of demand. In addition to market pressures, our recent credit policy enhancements—including the broader implementation of machine learning—tightened approval rates as part of a long-term strategy to improve portfolio performance. These factors, along with changes to our origination channels and a shift in sales focus, contributed to the overall reduction in GMV - Credit during the period.

Current wording

GMV – Credit declined year-over-year, driven by a broader slowdown in the firearm retail industry and our continued focus on disciplined underwriting practices. Industry-wide softness impacted many of our merchant partners, with some reporting sales down more than 20% year-over-year, consistent with national trends. According to the National Shooting Sports Foundation (“NSSF”), U.S. firearm sales fell for the fourth consecutive year in 2024, totaling approximately 15.2 million adjusted background checks—a 3.5% decline from 2023. This downward trend carried into 2025, with Q3 2025 adjusted checks at approximately 3.2 million, reflecting a 5.7% decline compared to Q3 2024 (3.4 million). The decline in overall firearm demand has been influenced by reduced consumer urgency under a pro-Second Amendment federal administration, as well as macroeconomic factors such as inflationary pressures and constrained discretionary spending, which have affected purchasing behavior across the retail sector. Despite these headwinds, the industry continues to demonstrate a strong baseline, with August 2025 alone posting over 1.1 million NSSF-adjusted background checks, though these metrics are still down ~9.9% year-over-year compared to the previous year. In addition to market pressures, our recent credit policy enhancements—including the broader implementation of machine-learning models—tightened approval rates as part of a long-term strategy to improve portfolio performance. These factors, along with changes to our origination channels and a shift in sales focus, contributed to the overall reduction in GMV – Credit during the period.

Previous wording

For the three months ended June 30, 2025 and 2024, GMV - PSQ Payments was $68.2 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. For the six months ended June 30, 2025 and 2024, GMV - PSQ Payments was $104.2 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. PSQ Payments was launched in October 2024.

Current wording

For the three months ended September 30, 2025 and 2024, GMV - PSQ Payments was $89.2 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. For the nine months ended September 30, 2025 and 2024, GMV - PSQ Payments was $193.4 million and zero, respectively, which represented an approximate change of 100%, as compared to the same period in 2024. PSQ Payments was launched in October 2024.

Previous wording

The results of operations presented below should be reviewed in conjunction with the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024. See "Part I - Financial Information - Item 1. Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited)," and "- Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2025 and 2024 (Unaudited)."

Current wording

The results of operations presented below should be reviewed in conjunction with the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024. See Part I - Financial Information - Item 1. Condensed Consolidated Financial Statements - Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (Unaudited), and Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 (Unaudited).

Previous wording

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

Current wording

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

Previous wording

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

Current wording

General and administrative expenses decreased by $10.1 million, or 33%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was due to the reduction in share-based compensation expense of $5.4 million, a decrease in transaction costs of $2.3 million, a decrease in professional services of $1.1 million, a decrease of employee and contractor compensation and benefits of $1.1 million, and a decrease of other administrative expenses of $0.2 million. The share-based compensation expense reduction is primarily due to a Type III modification realized last quarter caused by a change in role and responsibilities of the former Chief Financial Officer.

Previous wording

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

Current wording

Research and development expenses increased by $0.8 million, or 204%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to a $0.2 million increase in share-based compensation expense, an increase of $0.6 million in employee and contractor compensation and benefits.

Previous wording

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

Current wording

Research and development expense increased by $2.0 million, or 159%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was due to employee and contractor compensation and benefits expenses of $1.6 million and an increase of $0.4 million in share-based compensation expense.

Previous wording

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

Current wording

Depreciation and amortization expense increased by $1.0 million, or 133%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was related to the depreciation of leased assets of $0.5 million and the amortization of capitalized software development costs of $0.5 million.

Previous wording

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

Current wording

Depreciation and amortization expense increased by $2.4 million, or 151%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was related to the amortization of capitalized software development costs of $1.3 million and the depreciation of leased assets of $1.1 million.

Previous wording

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

Current wording

Other income, net increased by $0.1 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was due to interest income of $0.1 million earned on the money market accounts.

Previous wording

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

Current wording

Other income, net increased by $0.7 million for the nine months ended September 30, 2025, respectively, compared to the nine months ended September 30, 2024. The increase was due to a $0.2 million gain resulting from a settlement on an outstanding payable and interest income of $0.5 million earned on the money market accounts.

Previous wording

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

Current wording

Changes in fair value of earn-out liabilities decreased by $0.1 million and decreased by $25,000 for the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The change was due to the fluctuation in the fair value of the earn-out liabilities at the end of the reporting period.

Previous wording

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

Current wording

Changes in fair value of warrant liabilities decreased by $1.8 million and increased by $0.3 million for the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The change was due to the fluctuation in the fair value of the warrant liabilities at the end of the reporting period.

Previous wording

Interest expense, net increased by $0.3 million and $1.1 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024. The increase was due to the interest payable in relation to the convertible promissory notes recorded as of the reporting date, along with interest paid on the revolving line of credit.

Current wording

Interest expense, net increased by $0.1 million and $1.2 million for the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The increase was due to the interest payable in relation to the convertible promissory notes recorded as of the reporting date, along with interest paid on the revolving line of credit.

Previous wording

Income tax benefit (expense) increased by an insignificant amount for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. The increase was primarily due to state income tax.

Current wording

Income tax benefit (expense) increased by an insignificant amount for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024. The increase was primarily due to state income tax.

Previous wording

Historically, our primary sources of liquidity have been funds from financing activities. We have reported net losses of $12.8 million and $23.8 million for the six months ended June 30, 2025 and 2024, respectively, and had negative cash flows from operations of $11.3 million and $16.9 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Historically, our primary sources of liquidity have been funds from financing activities. We have reported net losses of $24.8 million and $36.9 million for the nine months ended September 30, 2025 and 2024, respectively, and had negative cash flows from operations of $17.4 million and $27.1 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025 and December 31, 2024, the Company had aggregate unrestricted cash and cash equivalents of $10.6 million and $33.6 million and net working capital of $18.5 million and $38.2 million, respectively.

Previous wording

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

Current wording

We believe that through our existing cash and cash equivalents along with anticipated cash received from the sale of the Marketplace and Brands segments, the Company will be able to fund operations and capital needs for the next year from the date these condensed consolidated financial statements were available to be issued. The Company also has access to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its Class A common stock, up to an aggregate offering price of $50.0 million

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $17.4 million compared to $27.1 million used in operating activities for the nine months ended September 30, 2024. The decrease in cash used in operating activities was due primarily to a decrease of $12.2 million in net loss, offset by a decrease in fair value of warrant liabilities of $0.3 million, an increase in the net cash used by operating assets and liabilities of $4.5 million and a decrease of $6.6 million in non-cash related expenses.

Previous wording

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

Current wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $7.7 million compared to $0.9 million net cash used in investing activities for the nine months ended September 30, 2024. Net cash used in investing activities for the nine months ended September 30, 2025 primarily related to $3.4 million of additions to lease merchandise, $2.3 million of software development costs, $0.5 million of licensing purchases and $1.5 million of net decrease in loans held for investment. Net cash used in investing activities for the nine months ended September 30, 2024 primarily related to $2.8 million of software development costs partially offset by an increase of $1.7 million of net loans held for investment.

Previous wording

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

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $0.8 million compared to $17.3 million provided by financing activities for the nine months ended September 30, 2024. The decrease was due to a decrease in raised capital of $20.0 million partially offset by an increase of $3.0 million in the revolving line of credit balance and an increase of $0.5 million related to taxes paid on vesting of employee RSUs.

Previous wording

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Our significant accounting policies are described in Note 3 to our Unaudited Condensed Consolidated Financial Statements for the six-month period ended June 30, 2025 included elsewhere in this report. There were no material changes in the Company's critical accounting policies and estimates during the six months ended June 30, 2025. For a description of the Company's critical accounting policies, estimates and assumptions used in preparation of the Company's financial statements included in Part II. Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Our significant accounting policies are described in Note 3 to our Unaudited Condensed Consolidated Financial Statements for the nine-month period ended September 30, 2025 included elsewhere in this report. There were no material changes in the Company's critical accounting policies and estimates during the nine months ended September 30, 2025. For a description of the Company's critical accounting policies, estimates and assumptions used in preparation of the Company's financial statements included in Part II. Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.