PSQ Holdings Inc.
05/07/2026 | Press release | Distributed by Public on 05/07/2026 05:38
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including, without limitation, statements under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, the future financial performance of the company, our growth plans and opportunities, our financial performance, our ability to raise additional funds, and any other statements that are not statements of current or historical facts.
The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated by reference herein, and in this Quarterly Report on Form 10-Q. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. These risks and others described under "Risk Factors" may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.
Unless the context otherwise requires, references, in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "PSQ Holdings, Inc.," "we," "us," "our," and the "Company" refer to PSQ Holdings, Inc. and its consolidated subsidiaries.
Overview
PSQ Holdings, Inc. is a payments and financial infrastructure company. The Company builds and operates infrastructure in highly regulated environments for industries underserved by traditional financial institutions, including businesses, campaigns, and nonprofits that depend on reliable, compliant payment solutions. PSQ Holdings, Inc. historically operated under three segments: Financial Technology, Marketplace, and Brands ("Financial Technology", "Marketplace", and "Brands"), however, in August 2025, the Company announced a strategic repositioning to focus its resources and capital on accelerating the growth of its Financial Technology segment. As part of this repositioning, the Company initiated a plan to monetize the Brands segment through the sale of EveryLife and to pursue a sale or strategic partnership of the Marketplace segment, including evaluating opportunities to repurpose certain intellectual property to complement its Financial Technology offerings.
Following further evaluation of market conditions and transaction alternatives, the Company determined during the fourth quarter of 2025 that pursuing a sale or partnership of the Marketplace segment would not be the most efficient use of resources. Accordingly, the Company wound down the Marketplace business as of December 31, 2025, and will not continue development of the Marketplace technology platform as part of its long-term strategy. The Company may evaluate opportunities to leverage certain customer relationships in support of its Financial Technology initiatives.
As of March 31, 2026, the Company continues to actively pursue the monetization of the Brands segment, and the sale process remains ongoing. Management expects to enter into a definitive agreement during the first half of 2026 and continues to engage with interested parties.
Effective December 31, 2025, PSQ Holdings, Inc. operates under one reportable segment: Financial Technology ("Financial Technology" or "FinTech"). The Financial Technology reportable segment is comprised of three operating segments, Credova, a "Buy Now, Pay Later" company focused on the outdoors & shooting sports industry; PSQ Payments, a "cancel-proof" payments processing company; and PSQ Impact, a payments and fundraising platform serving nonprofit organizations and political campaigns.
Payment processing is the lifeblood of the American economy. Owning the payments stack puts PSQ Holdings, Inc. at the center of its merchants' transactions with solutions that are simple to integrate and resilient by design. We pair advanced technology with a deep understanding of merchant and consumer needs to facilitate next generation commerce. By bundling multiple payment types, the Company expects to create higher conversion and more stickiness with consumers. Multiple systems redundancies and sponsor banks mean peace of mind and better economics for our merchants, regardless of business industry.
Recent Developments
Board of Director and Executive Leadership Updates
On January 7, 2026, the Company announced updates to its Board and executive leadership structure intended to delineate board oversight, enhance operational focus, and position the Company for its next phase of growth as a scaled public FinTech platform. The leadership updates include:
•Michael Seifert stepped down as Chairman of the Board.
•Dusty Wunderlich was named Chairman of the Board and has stepped down as Chief Strategy Officer of the Company.
•Blake Masters was appointed Lead Independent Board Director and will provide independent oversight and serve as liaison between the Board and management.
•Michael Perkins was appointed Chief Operating Officer.
•Mike Hebert stepped down as Chief Operating Officer and was named Senior Vice President of People to oversee the organizational development, talent and culture of the Company.
On January 27, 2026, Michael Seifert stepped down as Chief Executive Officer and resigned from the Company's Board of Directors, and Dusty Wunderlich was appointed as Chief Executive Officer.
As part of Mr. Seifert's separation from the Company, Mr. Seifert forfeited 1,000,000 shares of Class C Common Stock. As of February 27, 2026, all of Mr. Seifert's Class C Common Stock converted on a one-for-one basis into shares of Class A Common Stock. As a result, Mr. Seifert no longer possesses a majority of the voting power of the Company's common stock and the Company is no longer a "controlled company" under NYSE rules. We are now required to comply with certain NYSE rules that govern corporate governance standards from which we were previously exempt, subject to certain phase-in periods. These include the requirement to have (i) a majority of independent directors, (ii) a nominating/corporate governance committee composed entirely of independent directors, and (iii) a compensation committee composed entirely of independent directors. NYSE rules mandate that the Company must satisfy the majority independent board requirement within one year of the date its status changed and have at least one independent member on its nominating committee and at least one independent member on its compensation committee by the date its status changes, at least a majority of independent members on each committee within 90 days of the date its status changes and fully independent committees within one year of the date its status changes. There can be no assurance that the Company will be able to satisfy such requirements. Failure to meet such requirements could subject the Company to delisting from the NYSE.
On April 1, 2026, James Rinn provided notice to the Company of his resignation from the position of Chief Financial Officer, effective April 30, 2026. Mr. Rinn's resignation was not the result of a disagreement between Mr. Rinn and the Company or any matter relating to the Company's operations, policies, or practices.
On April 6, 2026, the Board appointed Michael Pena to the role of Chief Financial Officer, Treasurer and Krista Wenzel to the role of Chief Accounting Officer, both effective May 1, 2026.
NYSE Notice of Non-Compliance
On February 10, 2026, the Company received written notice from the New York Stock Exchange (the "NYSE") that the Company is not in compliance with the NYSE Listed Company Manual (i) Rule 802.01B, relating to the Company's required minimum total market capitalization over a consecutive 30 trading-day period and minimum stockholders equity, and (ii) Rule 802.01C, relating to the minimum average closing price of the Company's Class A Common Stock, required over a consecutive 30 trading-day period. This notice does not result in the immediate delisting of the Company's Class A common stock. The Company responded to the NYSE within 10 business days of its intent to submit a business plan to regain compliance with Rule 802.01B and to cure its non-compliance with Rule 802.01C, and submitted a business plan to the NYSE within 45 days demonstrating compliance with Rule 802.01B within 18 months of receipt of the notice. If the NYSE accepts the business plan, the Company will be subject to quarterly monitoring; if the NYSE does not accept the plan or the Company fails to comply with the plan, the NYSE may commence suspension and delisting procedures. [FD1] The Company can gain compliance with Rule 802.01C at any time within the six-month cure period if, on the last trading day of any calendar month during the cure period, the Class A common stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on that date. On February 17, 2026, the Company issued a press release regarding the NYSE notice.
Second Amended and Restated Loan and Security Agreement
On March 12, 2026, the Company entered into the Second Amended and Restated Loan and Security Agreement which extends the funding termination date through July 31, 2027. No other material changes were made to the terms of the Company's Amended and Restated Loan and Security Agreement as a result of this agreement.
Components of Results of Operations
During the three months ended March 31, 2026 and 2025, our net loss was $6.5 million and $4.4 million, respectively. During the three months ended March 31, 2026, our net loss increased $2.0 million as compared to the three months ended March 31, 2025, primarily due to an increase in total costs and expenses of $1.9 million, decrease in the change in fair value of the warrant liabilities of $6.7 million, decrease in the change in fair value of the earnout liabilities of $0.4 million and increase in interest and other expenses of $0.5 million. This was partially offset by an increase in revenues of $5.1 million and decrease in loss from discontinued operations of $2.4 million.
Revenues, net
We generate revenues from our one segment: Financial Technology, as summarized below.
Financial Technology
Credova principally generates "Buy Now, Pay Later" revenue from five activities: revenue from sale of loan and lease contracts, revenue from interest earned on loans, revenue from rent payments on leased merchandise, revenue from retailer discounts, and origination fees paid by third parties earned in connection with providing financing on consumer goods. Revenue from the Company's sales of loans and leases is recognized at a point in time when the Company satisfies a performance obligation by transferring control of the loans and leases to a third party. Interest on loans is calculated by the simple-interest method on daily balances of the principal amount outstanding. Revenue from leases is recognized over time when the Company satisfies a performance obligation based on the agreed upon financing terms. Revenue from retailer discounts is recognized at a point in time when the Company satisfies performance obligations by purchasing the contract from the merchant in connection with a merchant-originated consumer financing product. Origination fees from lenders are recognized at time of loan origination.
PSQ Payments generates revenue via its merchant servicer platform to provide its customers with a payments stack to efficiently manage their payment processes. The merchant servicer platform combines the payment processing and gateway into a single, integrated service encompassing all debit and credit card processing and ACH in and out payment processing. The Company recognizes card processing and transaction revenues in connection with customer use of the platform.
PSQ Impact generates revenues via its fundraising platform by providing a secure payments and reporting technology to support 501c(3) and 501c(4) nonprofits in the conservative movement.
For a description of our revenue recognition policies, see Note 3, Summary of Significant Accounting Policies, in our unaudited condensed consolidated financial statements.
Cost of Revenue (exclusive of depreciation and amortization)
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.
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.
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. 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 and the reclassification of certain costs, we expect general and administrative expenses will decrease in absolute dollars in future periods and decline as a percentage of total revenue over time.
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 our platforms/solutions. As a result of reclassification of costs, we expect sales and marketing expenses will increase in absolute dollars and decline as a percentage of total revenue over time as we scale back paid marketing efforts and focus on monetizing our current customer base. Our inability to scale our expenses could negatively impact profitability.
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 build our platforms. As a result of cost-cutting efforts, the Company expects research and development expenses will decrease in absolute dollars in future periods and 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, intangible assets, depreciation of leased assets, office fixtures, and furniture.
Non-Operating Income and Other Items
Other (Expense) Income, net
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 March 31, 2026.
Changes in Fair Value of Earn-out Liabilities
Changes in fair value of earn-out liabilities are recorded in the Condensed 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. We record the earn-out liabilities at their fair values at each reporting period.
Changes in Fair Value of Warrant Liabilities
Changes in fair value of warrant liabilities are recorded in the Condensed Consolidated Statement of Operations as the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. We record the warrant liabilities at their fair values at each reporting period.
Interest Expense, net
Interest expense incurred consists of interest due on the Company's revolving line of credit and convertible promissory notes issued.
Income Tax Benefit (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. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. 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 the following key metrics and non-GAAP measures to evaluate our performance, identify trends affecting our business, and make strategic decisions:
•Segment Revenue (see Note 15 to the Condensed Consolidated Financial Statements for more details);
•Segment non-GAAP operating loss (see discussion below in "Non-GAAP Financial Measures");
•Segment non-GAAP gross profit (see discussion below in "Non-GAAP Financial Measures"); and
•Gross Merchandise Volume ("GMV") of Financial Technology Segment.
•Revenue per headcount
For GMV, these metrics are based on internal company data, assumptions, and estimates and are used in managing our business. We believe that these figures are reasonable estimates, and we actively take measures to improve their accuracy, such as eliminating known fictitious or duplicate accounts. There are, however, inherent challenges in gathering accurate data across large online and mobile populations.
GMV of Financial Technology Segment
In addition to revenue, net loss, and other results under U.S. generally accepted accounting principles ("U.S. GAAP"), the following table sets forth key operating metrics we use to evaluate our Financial Technology segment.
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| GMV - Credit | $ | 15,072,530 | $ | 11,398,052 | 32 | % | |||||||||||
| GMV - PSQ Payments | $ | 186,221,940 | $ | 36,032,985 | 417 | % | |||||||||||
We measure GMV to assess the volume of transactions that take place on our platform. We define GMV as the total dollar amount of all transactions generated from the Financial Technology segment during the applicable period, net of refunds. GMV does not represent revenue earned by us; however, it is an indicator of the success of our merchants and the strength of our platform.
For the three months ended March 31, 2026 and 2025, GMV - Credit was $15.1 million and $11.4 million, respectively, which represented an approximate change of 32% as compared to the same period in 2025.
For the three months ended March 31, 2026, our top five merchants and platform partners represented approximately 56% of total GMV - Credit, as compared to 58% for the three months ended March 31, 2025. GMV - Credit attributable to our largest merchant during each of the three months ended March 31, 2026 and 2025 represented 23% of total GMV - Credit. The slight decrease in concentration among our top five merchants reflect the impact of onboarding new merchants, which has diversified the overall merchant mix.
GMV - Credit increased year-over-year, driven by higher consumer conversion and approval rates, a less pronounced seasonal decline following the holiday period compared to the prior year period, and the impact of customer re-engagement initiatives.
Industry conditions remained below prior-year levels. According to the National Shooting Sports Foundation ("NSSF"), U.S. firearm sales as measured by NSSF-adjusted National Instant Criminal Background Check System ("NICS") checks declined in 2025 compared to 2024, and early 2026 trends indicate continued year-over-year softness. These trends reflect a combination of reduced consumer purchasing urgency and macroeconomic factors, including inflationary pressures and constrained discretionary spending. Despite these dynamics, the industry continues to demonstrate a consistent baseline level of demand, with monthly adjusted background checks exceeding one million.
The Company continues to implement initiatives designed to support growth and diversification, including expansion into new and tangential retail verticals, increased customer re-engagement, development of new financial products, and enhancements to underwriting processes through data-driven tools.
For the three months ended March 31, 2026 and 2025, GMV - PSQ Payments was $186.2 million and $36.0 million, respectively, which represented an approximate change of 417%, as compared to the same period in 2025.
GMV - PSQ Payments increased year-over-year, driven primarily by an increased number of merchants actively processing through our solution.
For the three months ended March 31, 2026, our top three merchants accounted for approximately 73% of total GMV - PSQ Payments, with our largest merchant representing 37% of total GMV - PSQ Payments. As PSQ Payments was a nascent business during this same period in 2025 and only a few merchants were actively processing through our solution, management believes first quarter 2025 GMV Payments breakdown by merchant is not beneficial to provide.
Revenue per Headcount
Beginning in the first quarter 2026, the Company started tracking revenue per headcount as a key operating metric to evaluate our efficiency and productivity relative to peers.
We define revenue per headcount as total revenue for the period divided by the number of full-time equivalent employees ("FTEs") as of the last day of the period. FTEs include full-time employees.
The following table summarizes our revenue per headcount:
|
For the three months ended March 31, |
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| 2026 | 2025 | ||||||||||
| Revenue per headcount: | $ | 173,583 | $ | 44,864 | |||||||
For the three months ended March 31, 2026, total FTEs were 47 compared to 68 for the three months ended March 31, 2025. The year-over-year increase is driven by a 167% increase in revenue growth coupled with a 31% decrease in headcount.
Management uses this metric to: i) assess operational efficiency and scalability of the business; ii) benchmark performance against industry peers; and iii) inform decisions regarding hiring, resource allocation, and cost structure. Because this metric uses a point-in-time headcount measure, it may be influenced by the timing of hiring or workforce reductions during the period and may not fully reflect average staffing levels.
Results of Operations
The results of operations presented below should be reviewed in conjunction with the unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2026 and 2025 found elsewhere in this document.
The following table sets forth our Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025, and the dollar and percentage change between the two periods:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 |
Variance ($) |
Variance (%) |
||||||||||||||||||||
| Revenues, net | $ | 8,158,417 | $ | 3,050,785 | $ | 5,107,632 | 167 | % | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | 3,599,955 | 630,009 | 2,969,946 | 471 | % | ||||||||||||||||||
| General and administrative | 6,615,164 | 8,260,744 | (1,645,580) | (20) | % | ||||||||||||||||||
| Sales and marketing | 1,604,807 | 1,538,462 | 66,345 | 4 | % | ||||||||||||||||||
| Research and development | 624,095 | 1,030,222 | (406,127) | (39) | % | ||||||||||||||||||
| Depreciation and amortization | 1,848,044 | 906,824 | 941,220 | 104 | % | ||||||||||||||||||
| Total costs and expenses | 14,292,065 | 12,366,261 | 1,925,804 | 16 | % | ||||||||||||||||||
| Operating loss | (6,133,648) | (9,315,476) | 3,181,828 | (34) | % | ||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Other (expense) income, net | (97,280) | 309,819 | (407,099) | (131) | % | ||||||||||||||||||
| Changes in fair value of earn-out liabilities | 38,500 | 450,000 | (411,500) | (91) | % | ||||||||||||||||||
| Changes in fair value of warrant liabilities | 658,250 | 7,381,500 | (6,723,250) | (91) | % | ||||||||||||||||||
| Interest expense, net | (947,469) | (868,457) | (79,012) | 9 | % | ||||||||||||||||||
| Loss before income taxes from continuing operations | (6,481,647) | (2,042,614) | (4,439,033) | 217 | % | ||||||||||||||||||
| Income tax expense | - | (8,240) | 8,240 | (100) | % | ||||||||||||||||||
| Loss from continuing operations | $ | (6,481,647) | $ | (2,050,854) | $ | (4,430,793) | 216 | % | |||||||||||||||
| Income / (loss) from discontinued operations, net of tax | 26,710 | (2,396,491) | 2,423,201 | (101) | % | ||||||||||||||||||
| Net loss | $ | (6,454,937) | $ | (4,447,345) | $ | (2,007,592) | 45 | % | |||||||||||||||
Revenues, net
|
For the three months ended March 31, |
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| 2026 | 2025 | ||||||||||
| Revenues, net: | |||||||||||
| Financial Technology | |||||||||||
| Direct revenue | $ | 680,046 | $ | 715,767 | |||||||
| Interest income on loans | 818,978 | 588,496 | |||||||||
| Loan and lease contracts sold, net | 2,093,706 | 1,062,374 | |||||||||
| Lease merchandise, net | 904,073 | 112,804 | |||||||||
|
Payment processing revenues (1)
|
3,661,614 | 571,344 | |||||||||
| Total revenues, net | $ | 8,158,417 | $ | 3,050,785 | |||||||
(1)Includes both PSQ Payments and PSQ Impact revenues.
Revenues, net increased by $5.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase is primarily related to the launch of PSQ Payments, the increase in loan and lease contracts sold and the addition of lease merchandise revenue.
Cost of Revenue (exclusive of depreciation and amortization)
Cost of revenue (exclusive of depreciation and amortization) increased by $3.0 million, or 471%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This is primarily attributed to an increase in transaction fees as a result of the launch of PSQ Payments.
General and Administrative Expenses
General and administrative expenses decreased by $1.6 million, or 20%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily due to the reduction in share-based compensation expense of $1.7 million, partially offset by $0.1 million of other general and administrative expenses.
Sales and Marketing Expenses
Sales and marketing expenses increased $0.1 million, or 4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase is primarily due to a $0.4 million increase in employee compensation, partially offset by a decrease of share-based compensation of $0.1 million and other sales and marketing costs of $0.2 million.
Research and Development Expenses
Research and development expenses decreased by $0.4 million, or 39%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily due to a $0.4 million decrease in share-based compensation expense.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by $0.9 million, or 104%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was related to the depreciation of leased assets of $0.3 million and the amortization of capitalized software development costs of $0.6 million.
Other (Expense) Income, net
Other income, net decreased by $0.4 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily due to a $0.2 million loss on sale of leased assets along with $0.3 million less interest income earned on the money market accounts.
Changes in Fair Value of Earn-out Liabilities
Changes in fair value of earn-out liabilities decreased by $0.4 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The change was due to the fluctuation in the fair value of the earn-out liabilities at the end of the reporting period.
Changes in Fair Value of Warrant Liabilities
Changes in fair value of warrant liabilities decreased by $6.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The change was due to the fluctuation in the fair value of the warrant liabilities at the end of the reporting period.
Interest Expense, net
Interest expense, net increased by $0.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due to the interest paid on the revolving line of credit.
Income Tax Benefit (Expense)
Income tax benefit (expense) decreased by an insignificant amount for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily related to state income tax.
Liquidity and Capital Resources
Historically, our primary sources of liquidity have been funds from financing activities. We have reported net losses of $6.5 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively, and had negative cash flows from operations of $4.1 million and $6.4 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, the Company had aggregate unrestricted cash and cash equivalents of $10.1 million and $14.6 million and net working capital of $11.2 million and $16.1 million, respectively.
The Company believes its existing cash and cash equivalents, together with anticipated cash proceeds from the planned sale of the Brands segment, will be sufficient to fund its operating and capital needs for at least the next twelve months from the date of the Condensed Consolidated Financial Statements were available to be issued. In addition, the Company has access to an at-the-market equity offering program pursuant to which it may offer and sell shares of its Class A Common Stock from time to time, with $48.8 million in shares remaining available for issuance and sale under the program as of March 31, 2026.
Management continues to implement initiatives intended to reduce cash usage and improve operating efficiency. Through the strategic shift to focus exclusively on FinTech operations, the Company is improving its cash position and initiating a variety of cash management initiatives, including stronger revenues and margin run rates derived from the investments made in 2025, discontinuation of its Brands and Marketplace segments, reducing corporate operating expenses, and a staff reduction of 41% which occurred from September 2025 through March 2026. In addition, the Company is working to terminate and or reduce contractor and consulting agreements. These executed and planned reductions that started in the fourth quarter of 2025 are expected to result in annualized cash savings of approximately $8.0 million. Additionally, management is considering further options such as completing a sale of EveryLife, amending the terms of the existing credit facility to access additional financing, and evaluating other areas to reduce compensation and costs if necessary.
The Company's future capital requirements will depend on many factors including the Company's revenue growth rate, the timing and extent of spending to support further sales and marketing, and research and development efforts. In order to finance these opportunities, the Company may need to raise additional financing through public or private equity offerings, debt financings (including related-party financings), a credit facility or strategic collaborations. While there can be no assurances, the Company may need to pursue issuances of additional equity raises and debt rounds of financing. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to the Company or at all. If the Company is unable to raise additional capital when desired, the Company's business, results of operations and financial condition would be materially and adversely affected. The Company may not be able to complete the planned divestiture of EveryLife on the expected timeline, or at all, or the proceeds may be less than anticipated, which could adversely affect the Company's liquidity and capital resources.
Operationally, the Company continues to focus on improving cash generation through revenue growth within its Financial Technology segment. PSQ Payments has expanded its merchant onboarding and sales efforts and has entered into multiple large merchant agreements, with additional contracts in advanced stages of negotiations. PSQ Impact has continued to grow its customer base, including expansion into nonprofit organizations. These developments are expected to contribute to future revenue growth; however, the timing and magnitude of any related cash inflows may vary.
Comparison of the Three Months Ended March 31, 2026 and 2025
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:
|
For the three months ended March 31, |
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| 2026 | 2025 | $ Change | |||||||||||||||
| Net cash used in operating activities | $ | (4,128,167) | $ | (6,432,267) | $ | 2,304,100 | |||||||||||
| Net cash used in investing activities | $ | (1,360,795) | $ | (1,807,609) | $ | 446,814 | |||||||||||
| Net cash provided by/(used in) financing activities | $ | 1,207,613 | $ | (72,876) | $ | 1,280,489 | |||||||||||
Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 was $4.1 million compared to $6.4 million for the three months ended March 31, 2025. The decrease in cash used in operating activities was due primarily to an increase of $2.0 million in net loss, offset by a decrease in fair value of warrant liabilities of $6.7 million, a decrease in fair value of earn-out liabilities of $0.4 million, a decrease in the net cash used by operating assets and liabilities of $0.6 million and a decrease of $2.3 million in non-cash related expenses.
Net Cash Used in Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026 was $1.4 million compared to $1.8 million net cash used in investing activities for the three months ended March 31, 2025. Net cash used in investing activities for the three months ended March 31, 2026 primarily related to $0.2 million of reductions to lease merchandise offset by $0.7 million of software development costs and $0.9 million of net decrease in loans held for investment. Net cash used in investing activities for the three months ended March 31, 2025 primarily related to $0.7 million of software development costs and $1.1 million of additions to lease merchandise.
Net Cash Provided by (Used in) Financing Activities
Net cash provided by/(used in) financing activities for the three months ended March 31, 2026 was $1.2 million compared to $0.1 million used in financing activities for the three months ended March 31, 2025. The increase was primarily due to an increase of $1.3 million in the revolving line of credit balance.
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. 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.
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.
For the periods presented, we define non-GAAP operating loss as GAAP operating loss, adjusted to exclude, as applicable, certain expenses as presented in the table below:
| For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation: | |||||||||||
| GAAP operating loss | $ | (6,133,648) | $ | (9,315,476) | |||||||
| Non-GAAP adjustments: | |||||||||||
| Corporate costs not allocated to segments | (2,063,978) | (1,971,372) | |||||||||
| Share-based compensation expense | (1,365,556) | (3,622,845) | |||||||||
| Depreciation and amortization | (1,848,044) | (906,824) | |||||||||
| Non-GAAP operating loss | $ | (856,070) | $ | (2,814,435) | |||||||
Off-Balance Sheet Arrangements.
None.
Critical Accounting Policies and Estimates
We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. The preparation of condensed 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. 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. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our management's judgments and estimates. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our balance sheet and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those condensed 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 three-month period ended March 31, 2026 included elsewhere in this Quarterly Report on Form 10-Q. There were no material changes in the Company's critical accounting policies and estimates during the three months ended March 31, 2026. A description of the Company's critical accounting policies, estimates and assumptions used in the preparation of the Company's consolidated financial statements is included in Part II. Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
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