PublicSquare Reports Second Quarter 2024 Financial Results

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.

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:

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