Increased Second Quarter 2024 Net Revenue by
over 11x YoY
Second Quarter 2024 Net Revenue Exceeds Full
Year 2023 Net Revenue
Company Presents Forward Vision for New
Payments Business
Signed Agreement for $10 million Convertible
Note to Fund Payments Business
PSQ Holdings, Inc. (NYSE: PSQH) (“PublicSquare,” or the
“Company”), America's leading commerce and payments ecosystem
valuing life, family, and liberty, today announced financial
results for the second quarter 2024.
Michael Seifert, Chairman and Chief Executive Officer of
PublicSquare, commented, “Our second-quarter results show we are on
a solid path towards profitability with revenue growth far
outpacing the growth of expenses, but the greatest success of the
last quarter is the strong foundation we have set for the future of
our Marketplace and Payments ecosystem. Three years ago, our
business consisted of an idea, a few lines of code, and seven
employees in a one-room office. We had a roadmap filled with
promise, but we knew our vision could only be accomplished through
determined and deft execution. We put our heads down, got to work,
and the growth we’ve experienced has exceeded our expectations. We
generated $7,000 in revenue in 2021, $475,000 in 2022, $5.7 million
in 2023, and in the last quarter alone, generated $6.0 million.
We’ve executed, and yet we as a team hold the firm belief that we
have barely scratched the surface of our business potential. This
year, we’ve focused on developing our payments business in order to
serve our tens of thousands of merchants with best-in-class
technology, competitive rates, and a cancel-proof promise. We
believe, with the launch of our payment stack this month, with over
$200M in annualized GMV (“Gross Merchandise Value”) in payments
processing volume already under contract and integrating, and with
a line of sight to $1.0 billion of annualized GMV by the beginning
of the 2024 Christmas shopping season, our vision for the
Marketplace and Payments ecosystem is materializing and is ready
for scale. The $10 million convertible note investment will
supercharge this initiative and allow us to capitalize on the
strong demand we’ve received from our merchants.”
SECOND HALF 2024 OUTLOOK
Looking ahead into the remainder of 2024, the Company expects to
hit several significant milestones and make certain strategic
changes throughout its business. Most significantly, the Company
will formally launch its payments platform, for which it already
has over $200 million of annualized GMV under contract, with a line
of sight to $1.0 billion of annualized GMV by the beginning of the
2024 Christmas shopping season.
In light of the enhanced focus on its financial technology stack
and the synergies that are materializing between the Marketplace
and Financial Technology, the Company intends to sunset the brand
name “Credova” and consolidate the branding, marketing, and product
features under the name “PublicSquare”. The PublicSquare
Marketplace will continue to focus its offerings on a
family-values-oriented audience, targeting its core consumers with
a better shopping experience while expanding its
Business-to-Business (“B2B”) and Business-to-Consumer (“B2C”)
software as a service (“SaaS”) offerings to merchants through
payments, credit, and advertising services. This change, along with
reallocating and consolidating people and resources, are expected
to result in cost savings for the overall business.
The Company’s Brands segment will launch EveryLife soaps &
lotions in the third quarter of 2024, expanding its product
offerings into a vertical the Company’s consumers have been
demanding, followed in the fourth quarter by the addition of a
training pants line and the international expansion of the
EveryLife brand to South Korea. The Company now expects its Eden
feminine care brand to launch in the first quarter of 2025,
aligning with the renewed focus of the overall business. The
Company's brands remain a successful part of its portfolio, and the
company will continue to make appropriate investments in this
segment; however, the company expects that in the medium to long
term, as its SaaS offerings grow, brands will occupy a smaller
percentage of its revenue base in the future.
LOCK-UP AGREEMENT EXTENSION
Chairman and CEO Michael Seifert, Chief Financial Officer Brad
Searle, and Investor and Advisor Donald Trump Jr. extended their
lock-up agreements for an additional 12 months in the third quarter
of 2024 to indicate their strong belief in and commitment to the
business's promising future.
SECOND QUARTER 2024 HIGHLIGHTS
- Net revenue increased 1,030%, and cash flow operating expenses
only rose 49% compared to the second quarter 2023
- Increased net revenue (net of returns & discounts) by 73%
quarter over quarter to $6.0 million compared to $3.5 million in
the first quarter 2024
- Gross Margin increased to 67% in the second quarter of 2024
compared to 43% in the first quarter 2024
- Dusty Wunderlich was promoted to Chief Strategy Officer of
PublicSquare; prior to this role, Dusty was the President of
Credova
- Mike Hebert was promoted to Chief Operating Officer of
PublicSquare; prior to this role, Mike was Chief People Officer of
PublicSquare
SUBSEQUENT EVENTS
- On August 13, 2024, Randy Carlson was promoted to Chief
Technology Officer of PublicSquare; prior to this role, Randy was
Senior Vice President of Engineering
Second Quarter 2024 Prepared Remarks & Discussion
Management will host prepared remarks today at 9:00 am ET. The
live webcast and replay can be accessed at https://investors.publicsquare.com. PublicSquare
has utilized the Say Technologies platform to allow shareholders to
submit questions to management in advance of the webcast.
Management will respond to previously submitted top questions that
pertain to PublicSquare’s strategic priorities, business
operations, financial position, and efforts to continue enhancing
the business.
About PublicSquare
PublicSquare is America's leading commerce and payments
ecosystem, valuing life, family, and liberty. PublicSquare operates
under three segments: Marketplace, Financial Technology, and
Brands. The primary mission of the Marketplace segment is to help
consumers “shop their values” and put purpose behind their
purchases. PublicSquare leverages data and insights from the
Marketplace to assess its customers’ needs and provide wholly-owned
quality financial products and brands. PublicSquare’s Financial
Technology segment comprises Credova, a consumer finance company,
and PublicSquare Payments, a payments processing company.
PublicSquare’s Brands segment comprises EveryLife, a premium D2C
life-affirming baby products company, and PSQLink, a digital
marketing and customer relationship management (“CRM”) platform.
The PublicSquare Marketplace is free to join for both consumers and
business owners. Download the app on the App Store or Google Play,
or visit PublicSquare.com to learn more.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, as amended, and for purposes
of the “safe harbor” provisions under the United States Private
Securities Litigation Reform Act of 1995. Any statements other than
statements of historical fact contained herein are forward-looking
statements. Such forward-looking statements include, but are not
limited to, expectations, hopes, beliefs, intentions, plans,
prospects, financial results or strategies regarding PublicSquare,
anticipated product launches, our products and markets, future
financial condition, expected future performance and market
opportunities of PublicSquare. Forward-looking statements generally
are identified by the words “anticipate,” “believe,” “could,”
“expect,” “estimate,” “future,” “intend,” “may,” “might,”
“strategy,” “opportunity,” “plan,” “project,” “possible,”
“potential,” “project,” “predict,” “scales,” “representative of,”
“valuation,” “should,” “will,” “would,” “will be,” “will continue,”
“will likely result,” and similar expressions, and in this press
release, include statements about our anticipated launch of our
payments platform and its anticipated GMV, the expansion of our
EveryLife product line, including our expansion to South Korea, the
anticipated launch of our Eden care brand and our outlook; however,
the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements are predictions,
projections and other statements about future events that are based
on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Many factors could cause actual
future events to differ materially from the forward-looking
statements in this communication, including, without limitation:
(i) unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies for the management, expansion and growth of
our operations, including the possibility that any of the
anticipated benefits of the Credova transaction will not be
realized or will not be realized within the expected time period,
(ii) the ability of PublicSquare and Credova to integrate the
business successfully and to achieve anticipated synergies and
value creation, (iii) changes in the competitive industries and
markets in which PublicSquare operates, variations in performance
across competitors, changes in laws and regulations affecting
PublicSquare’s business and changes in the combined capital
structure, (iv) the ability to implement business plans, growth,
marketplace and other expectations, and identify and realize
additional opportunities, (v) risks related to PublicSquare’s
limited operating history, the rollout and/or expansion of its
business and the timing of expected business milestones, (vi) risks
related to PublicSquare’s potential inability to achieve or
maintain profitability and generate significant revenue, (vii) the
ability to raise capital on reasonable terms as necessary to
develop its products in the timeframe contemplated by
PublicSquare’s business plan, (viii) the ability to execute
PublicSquare’s anticipated business plans and strategy, (ix) the
ability of PublicSquare to enforce its current or future
intellectual property, including patents and trademarks, along with
potential claims of infringement by PublicSquare of the
intellectual property rights of others, (x) actual or potential
loss of key influencers, media outlets and promoters of
PublicSquare’s business or a loss of reputation of PublicSquare or
reduced interest in the mission and values of PublicSquare and the
segment of the consumer marketplace it intends to serve, and (xi)
the risk of economic downturn, increased competition, a changing
regulatory landscape and related impacts that could occur in the
highly competitive consumer marketplace, both online and through
“bricks and mortar” operations. The foregoing list of factors is
not exhaustive. Recipients should carefully consider such factors
and the other risks and uncertainties described and to be described
in PublicSquare’s public filings with the Securities and Exchange
Commission. These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Recipients are cautioned not to put undue reliance
on forward-looking statements, and PublicSquare does not assume any
obligation to, nor does it intend to, update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by law.
PublicSquare gives no assurance that PublicSquare will achieve its
expectations.
PSQ HOLDINGS, INC. (dba
PublicSquare)
Condensed Consolidated Balance
Sheets
June 30,
December 31,
2024
2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
7,613,430
$
16,446,030
Restricted cash
136,488
-
Accounts receivable, net
340,594
204,879
Loans held for investment, net of
allowance for credit losses of $616,812 as of June 30, 2024
4,342,928
-
Interest Receivable
358,270
-
Inventory
1,277,709
1,439,182
Prepaid expenses and other current
assets
2,783,388
3,084,576
Total current assets
16,852,807
21,174,667
Loans held for investment, net of
allowance for credit losses of $81,265 as of June 30, 2024,
non-current
572,182
-
Property and equipment, net
339,113
127,139
Intangible assets, net
15,858,943
3,557,029
Goodwill
10,930,978
-
Operating lease, right-of-use assets
456,795
324,238
Deposits
49,617
63,546
Total assets
$
45,060,435
$
25,246,619
Liabilities and stockholders’
equity
Current liabilities
Revolving line of credit
$
3,507,574
$
-
Accounts payable
3,923,344
1,828,508
Accrued expenses
1,118,867
1,641,553
Deferred revenue
241,784
225,148
Operating lease liabilities, current
portion
243,609
310,911
Total current liabilities
9,035,178
4,006,120
Convertible promissory notes, related
party (Note 12)
10,000,000
-
Convertible promissory notes
8,449,500
-
Warrant liabilities
4,807,500
10,130,000
Earn-out liabilities
320,000
660,000
Operating lease liabilities
218,622
16,457
Total liabilities
32,830,800
14,812,577
Commitments and contingencies (Note
16)
Stockholders’ equity
Preferred stock, $0.0001 par value;
50,000,000 authorized shares; no shares issued and outstanding as
of June 30, 2024 and December 31, 2023
-
-
Class A Common stock, $0.0001 par value;
500,000,000 authorized shares; 28,177,917 shares and 24,410,075
shares issued and outstanding as of June 30, 2024 and December 31,
2023, respectively
2,817
2,441
Class C Common stock, $0.0001 par value;
40,000,000 authorized shares; 3,213,678 shares issued and
outstanding as of June 30, 2024, and December 31, 2023
321
321
Additional paid in capital
98,251,713
72,644,419
Accumulated deficit
(86,025,216
)
(62,213,139
)
Total stockholders’ equity
12,229,635
10,434,042
Total liabilities and stockholders’
equity
$
45,060,435
$
25,246,619
PSQ HOLDINGS, INC. (dba
PublicSquare)
Condensed Consolidated Statements of
Operations (Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Revenues, net
$
5,985,228
$
529,707
$
9,451,117
$
907,741
Costs and expenses:
Cost of revenue (exclusive of depreciation
and amortization expense shown below)
531,098
432,934
1,129,459
795,907
Cost of goods sold (exclusive of
depreciation and amortization expense shown below)
1,438,843
-
2,830,251
-
General and administrative
10,993,793
3,895,467
21,256,671
7,987,317
Sales and marketing
5,090,331
2,402,783
9,772,969
3,068,840
Research and development
1,031,794
288,484
2,173,752
536,984
Depreciation and amortization
930,874
699,237
1,227,471
1,244,574
Total costs and expenses
20,016,733
7,718,905
38,390,573
13,633,622
Operating loss
(14,031,505
)
(7,189,198
)
(28,939,456
)
(12,725,881
)
Other income (expense):
Other income, net
52,599
48,549
155,978
53,687
Change in fair value of convertible
promissory notes
-
(13,423,204
)
-
(14,571,109
)
Change in fair value of earn-out
liabilities
220,000
-
340,000
-
Change in fair value of warrant
liabilities
3,091,000
-
5,322,500
-
Interest expense, net
(553,303
)
(155,854
)
(677,481
)
(163,855
)
Loss before income taxes
(11,221,209
)
(20,719,707
)
(23,798,459
)
(27,407,158
)
Income tax expense
(14,037
)
(1,600
)
(13,618
)
(1,789
)
Net loss
$
(11,235,246
)
$
(20,721,307
)
$
(23,812,077
)
$
(27,408,947
)
Net loss per common share, basic and
diluted
$
(0.36
)
$
(1.18
)
$
(0.80
)
$
(1.62
)
Weighted average shares outstanding, basic
and diluted
31,391,595
17,538,437
29,901,952
16,934,803
PSQ HOLDINGS, INC. (dba
PublicSquare)
Condensed Consolidated Statements of
Cash Flows (Unaudited)
For the six months ended June
30,
2024
2023
Cash Flows from Operating
Activities
Net loss
$
(23,812,077
)
$
(27,408,947
)
Adjustment to reconcile net loss to cash
used in operating activities:
Change in fair value of convertible
promissory notes
-
14,571,109
Change in fair value of warrant
liabilities
(5,322,500
)
-
Change in fair value of earn-out
liabilities
(340,000
)
-
Share-based compensation
11,058,185
-
Amortization of step-up in loans held for
investment
269,829
-
Provision for credit losses on loans held
for investment
154,202
-
Origination of loans and leases for
resale
(10,124,894
)
-
Proceeds from sale of loans and leases for
resale
11,247,135
-
Gain on sale of loans and leases
(1,122,241
)
-
Depreciation and amortization
1,227,471
1,244,574
Non-cash operating lease expense
208,564
82,673
Changes in operating assets and
liabilities:
Accounts receivable
(493,985
)
-
Prepaid expenses and other current
assets
1,571,121
(745,075
)
Inventory
161,473
-
Deposits
13,929
(30,202
)
Accounts payable
(1,335,335
)
149,173
Accrued expenses
(110,806
)
2,135,248
Deferred revenue
16,636
63,867
Operating lease payments
(206,258
)
(80,071
)
Net cash used in operating
activities
(16,939,551
)
(10,017,651
)
Cash flows from Investing
Activities
Software development costs
(1,777,479
)
(992,467
)
Principal paydowns on loans held for
investment
5,265,396
-
Disbursements for loans held for
investment
(3,576,860
)
-
Acquisition of businesses, net of cash
acquired
141,215
-
Purchase of short-term investments
-
(10,049,870
)
Purchase of intangible assets and
trademarks
-
(86,601
)
Purchases of property and equipment
-
(113,064
)
Net cash provided by (used in)
investing activities
52,272
(11,242,002
)
Cash flows from Financing
Activities
Proceeds from convertible note payable,
related party (Note 12)
10,000,000
-
Proceeds from convertible note payable
-
22,500,000
Proceeds from the issuance of common
stock
-
2,600,125
Repayments on revolving line of credit
(1,808,833
)
-
Repayment of subscription payable
-
(400
)
Net cash provided by financing
activities
8,191,167
25,099,725
Net (decrease) increase in cash and cash
equivalents
(8,696,112
)
3,840,072
Cash, cash equivalents and restricted
cash beginning of period
16,446,030
2,330,405
Cash, cash equivalents and restricted
cash end of the period
$
7,749,918
$
6,170,477
Cash and cash equivalents
$
7,613,430
$
6,170,477
Restricted cash
136,488
-
Total cash, cash equivalents and
restricted cash, end of the period
$
7,749,918
$
6,170,477
Supplemental Non-Cash Investing and
Financing Activity
Accrued variable compensation settled with
RSU grants
$
411,880
$
-
Shares issued in connection with Credova
Merger
$
14,137,606
$
-
Note Exchange in connection with Credova
Merger
$
8,449,500
$
-
Brand intangible purchase for stock
$
-
$
1,334,850
Adjusted EBITDA
Adjusted EBITDA, a non-GAAP financial measure, as net earnings
(loss) before interest and other expenses, net, income tax expense,
depreciation and amortization, as adjusted to exclude change in
fair value of our financial instruments, other income (expense),
net, transaction expenses and share-based compensation expense. We
utilize adjusted EBITDA as an internal performance measure in the
management of our operations because we believe the exclusion of
these non-cash and non-recurring charges allow for a more relevant
comparison of our results of operations to other companies in our
industry. Adjusted EBITDA should not be viewed as a substitute for
net loss calculated in accordance with GAAP, and other companies
may define adjusted EBITDA differently.
The following table provides a reconciliation of net loss to
adjusted EBITDA to net loss for the periods presented:
For the three months
ended
For the six months
ended
June 30,
June 30,
2024
2023
2024
2023
Net loss
$
(11,235,246
)
$
(20,721,307
)
$
(23,812,077
)
$
(27,408,947
)
Excluding:
Interest expense, net
553,303
155,854
677,481
163,855
Income tax expense
14,037
1,600
13,618
1,789
Change in fair value of convertible
notes
-
13,423,204
-
14,571,109
Change in fair value of earnout
liabilities
(220,000
)
-
(340,000
)
-
Change in fair value of warrant
liabilities
(3,091,000
)
-
(5,322,500
)
-
Other income, net
(52,599
)
(48,549
)
(155,978
)
(53,687
)
Depreciation and amortization
930,874
699,237
1,227,471
1,244,574
Share-based compensation (exclusive of
what is shown above in transaction costs)
5,171,760
-
10,170,774
-
Transaction costs incurred in connection
with acquisitions
1,908
-
2,295,502
-
Adjusted EBITDA
$
(7,926,963
)
$
(6,489,961
)
$
(15,245,709
)
$
(11,481,307
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814298550/en/
Investors Contact: investment@publicsquare.com
Media Contact: pr@publicsquare.com
PSQ (NYSE:PSQH)
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PSQ (NYSE:PSQH)
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