PublicSquare Reports Third Quarter 2023 Financial Results

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PSQ Holdings, Inc. (NYSE: PSQH) (“PublicSquare,” “the Company”), a leading marketplace of patriotic businesses and consumers, today announced financial results for the third quarter of 2023.

Michael Seifert, Chairman and Chief Executive Officer of PublicSquare, commented, “This was another transformational period for PublicSquare – having launched the business just over one year ago, listing on the NYSE, and building a commerce ecosystem for a network of Americans that are looking to spend their hard-earned money with values-aligned brands. Excluding discounts, we saw revenue increase sequentially by over 300% compared to the second quarter of this year, and we continued to witness a rapid increase of new business vendors and consumers joining our platform. We are in the early innings of establishing a high-quality revenue model, with strong consolidated margins, driven by eCommerce, advertising, and wholly-owned brands like EveryLife and PSQ Link. Looking closer at our financials, excluding transaction costs, our third-quarter performance illustrates that our business can generate strong margins and recurring cash flow at scale. PublicSquare is building the parallel economy that will transform the way millions of Americans conduct commerce and we’re grateful for the early milestones we’ve achieved.”

3Q 2023 HIGHLIGHTS

Increased net revenue by 283% and 1,529% to $2.0 million compared to second quarter of 2023 and third quarter of 2022, respectively (inclusive of discounts & returns)
Increased PublicSquare marketplace revenue by 65% and 602% to $0.9 million compared to second quarter of 2023 and third quarter of 2022, respectively
Launched EveryLife, a wholly-owned baby-care brand, in July of 2023, contributing over $1.0 million in new revenue in the quarter, of which 71% was subscription-based
Increased consumer members by 646% to 1.6 million compared to third quarter of 2022
Increased businesses on the platform by 224% to 71,000 compared to third quarter of 2022
Incurred $3.3 million in one-time transaction costs related to the business combination in third quarter of 2023
Ended the quarter with $25.3 million in cash and cash equivalents

YTD 2023 HIGHLIGHTS

Increased net revenue by 1,387% compared to YTD 2022
Increased PublicSquare marketplace revenue by 803% compared to YTD 2022

SUBSEQUENT EVENTS

On October 13, 2023, the Company launched PSQ Link, a subscription-based SaaS business CRM and management tool, for PublicSquare merchants
On October 24, 2023, the Company announced a partnership with Tucker Carlson’s digital media company, Last Country, Inc., to create content across Tucker’s X profile and emerging subscription platform, which will highlight the PublicSquare mission. This high-profile collaboration is slated to kick off during the fourth quarter of 2023
On November 1, 2023, the Company rebranded under PublicSquare which included the purchase of the domain name PublicSquare.com
On November 1, 2023, the Company launched its multi-vendor, single-cart shopping feature on desktop, mobile, and in-app experiences. The eCommerce marketplace highlights over 400,000 products and is a key component driving platform monetization

FORWARD-LOOKING CONSIDERATIONS

We expect elevated eCommerce research and development expenses to continue through the fourth quarter of 2023 and then step down and stabilize at a lower rate going forward in 2024
We expect general and administrative expenses to decrease going forward based on the completion of the business combination
We reiterate our expectation of achieving our first profitable quarter in 2024 and we do not anticipate any forthcoming capital raises to support the existing business

Third Quarter 2023 Prepared Remarks & Discussion

Management will host prepared remarks today at 4:30 pm ET. The live webcast and replay can be accessed at https://investors.publicsq.com/overview/default.aspx. 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. To comply with U.S. securities laws and on the advice of counsel, the Company will not comment on other topics.

About PublicSquare

PublicSquare is an app and website that connects patriotic Americans to high-quality businesses that share their values, both online and in their local communities. The primary mission of the platform is to help consumers “shop their values” and put purpose behind their purchases. In just over one year since its nationwide launch, PublicSquare has seen tremendous growth and proven to the nation that the parallel, “patriotic” economy can be a major force in commerce. The platform has approximately 71,000 businesses from a variety of different industries and approximately 1.6 million consumer members. Additionally, PublicSquare leverages data and insights from the platform to assess its members’ needs and provide quality wholly-owned products, such as EveryLife diapers and wipes, to fill those needs. PublicSquare is free to join for both consumers and business owners alike, and to learn more, download the app on the App Store or Google Play, or visit PublicSquare.com.

About EveryLife Inc.

EveryLife Inc. began with a simple mission: to provide premium products for every baby, because every baby is a miracle from God who deserves to be loved, protected, and supported. At EveryLife, we believe in providing for — and protecting — the next generation. EveryLife Inc. was acquired by PublicSquare in February 2023 and launched on July 13, 2023 as a wholly-owned baby-care brand selling diapers and wipes. To learn more, please visit everylife.com.

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 our expectation of our first profitable quarter in 2024 and the number of products expected to be on our app; 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) the outcome of any legal proceedings that may be instituted against PublicSquare. related to the business combination with Colombier, (ii) 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, (iii) the ability to implement business plans, growth, marketplace and other expectations, and identify and realize additional opportunities, (iv) risks related to PublicSquare’s limited operating history, the rollout and/or expansion of its business and the timing of expected business milestones, including Every Life, PSQ Link, E-commerce, and the Tucker Carlson partnership, (v) risks related to PublicSquare’s potential inability to achieve or maintain profitability and generate significant revenue, (vi) the ability to raise capital on reasonable terms as necessary to develop its products in the timeframe contemplated by PublicSquare’s business plan, (vii) the ability to execute PublicSquare’s anticipated business plans and strategy, (viii) 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, (ix) 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 (x) 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 intends 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 PublicSq.)
Condensed Consolidated Balance Sheets

	September 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	25,255,909		$	2,330,405
Inventory		1,476,085			–
Prepaid expenses and other current assets		3,541,769			289,379
Accounts receivable		67,604			–
Total current assets		30,341,367			2,619,784
Intangible assets, net		2,532,063			1,267,673
Operating lease right-of-use asset		164,304			293,520
Property and equipment, net		132,246			26,723
Deposits		78,165			7,963
Total assets	$	33,248,145		$	4,215,663

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	1,714,385		$	424,065
Accrued expenses		1,061,606			41,494
Deferred revenue		248,958			49,654
Current portion of operating lease liabilities		168,608			169,275
Total current liabilities		3,193,557			684,488
Earn-out liabilities		1,950,000			–
Warrant liabilities		16,599,500			–
Operating lease liabilities, non-current		–			129,762
Total liabilities		21,743,057			814,250
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock, $0.0001 par value; 50,000,000 authorized shares; no shares issued and outstanding as of September 30, 2023 and December 31, 2022		–			–
Class A Common stock, $0.0001 par value; 500,000,000 authorized shares; 24,340,075 shares and 11,806,007 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		2,434			1,181
Class C Common stock, $0.0001 par value; 40,000,000 authorized shares; 3,213,678 shares issued and outstanding as of September 30, 2023 and December 31, 2022		321			321
Additional paid in capital		68,033,896			12,383,475
Subscription receivable		–			(99,612	)
Accumulated deficit		(56,531,563	)		(8,883,952	)
Total stockholders’ equity		11,505,088			3,401,413
Total liabilities and stockholders’ equity	$	33,248,145		$	4,215,663


PSQ HOLDINGS, INC. (dba PublicSq.)
Condensed Consolidated Statements of Operations (Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022
Revenues, net of returns and discounts of $232,597 and $0 for the three months ended September 30, 2023 and 2022, and $232,597 and $0 for the nine months ended September 30, 2023 and 2022, respectively	$	2,030,900		$	124,634		$	2,938,641		$	197,575
Costs and expenses:
Cost of sales – services (exclusive of depreciation and amortization shown separately below)		569,502			210,363			1,189,440			483,756
Cost of goods sold (exclusive of depreciation and amortization shown separately below)		903,672			–			903,672			–
Transaction costs incurred in connection with the Business Combination		3,309,597			–			7,048,177			–
General and administrative		4,311,199			993,488			7,448,015			2,175,612
Sales and marketing		3,670,309			429,455			6,739,149			954,501
Research and development		1,486,069			413,675			3,310,943			874,026
Depreciation and amortization		759,745			203,489			2,004,319			477,405
Total costs and expenses		15,010,093			2,250,470			28,643,715			4,965,300
Operating loss		(12,979,193	)		(2,125,836	)		(25,705,074	)		(4,767,725	)
Other income (expense):
Other income, net		119,957			328			173,644			8,174
Change in fair value of convertible notes		–			–			(14,571,109	)		–
Change in fair value of earn-out liabilities		450,000			–			450,000			–
Change in fair value of warrant liabilities		(7,783,000	)		–			(7,783,000	)		–
Interest expense, net		(46,690	)		–			(210,545	)		–
Loss before income tax expense		(20,238,926	)		(2,125,508	)		(47,646,084	)		(4,759,551	)
Income tax benefit (expense)		262			4,208			(1,527	)		3,495
Net loss	$	(20,238,664	)	$	(2,121,300	)	$	(47,647,611	)	$	(4,756,056	)

Net loss per common share, basic and diluted	$	(0.77	)	$	(0.18	)	$	(2.38	)	$	(0.44	)
Weighted-average shares outstanding, basic and diluted		26,265,627			11,982,103			20,058,726			10,705,779


PSQ HOLDINGS, INC. (dba PublicSq.)
Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the nine months ended September 30,
	2023			2022
Cash Flows from Operating Activities
Net loss	$	(47,647,611	)	$	(4,756,056	)
Adjustment to reconcile net loss to cash used in operating activities
Amortization and depreciation		2,004,319			477,405
Share based compensation		2,095,889			–
Realized gain on short term investment		(173,644	)		–
Change in fair value of convertible notes		14,571,109			–
Change in fair value of warrant liabilities		7,783,000			–
Change in fair value of earn-out liabilities		(450,000	)		–
Noncash lease expense		129,216			13,042
Interest expense		58,455			–
Changes in operating assets and liabilities:
Accounts receivable		(67,604	)		–
Prepaid expenses and other assets		(2,017,390	)		(124,066	)
Deposits		(70,202	)		(5,463	)
Accounts payable		8,648,290			90,788
Inventory		(1,476,085	)		–
Accrued expenses		4,268,432			73,898
Deferred revenue		199,304			22,196
Operating lease payments		(130,429	)		(8,822	)
Net cash used in operating activities		(12,274,951	)		(4,217,078	)

Cash flows from Investing Activities
Software development costs		(1,840,066	)		(1,058,672	)
Purchases of short-term investments		(10,049,870	)		–
Proceeds from the sale of short-term investments		10,223,514			–
Purchases of intangible assets		(86,600	)		–
Purchases of property and equipment		(113,065	)		(21,465	)
Net cash used in investing activities		(1,866,087	)		(1,080,137	)

Cash flows from Financing Activities
Proceeds from the issuance of Convertible Notes Payable		22,500,000			–
Proceeds from reverse recapitalization		18,104,194			–
Transaction costs incurred in connection with Business Combination		(6,137,377	)		–
Repayment of subscription payable		(400	)		–
Proceeds from the issuance of common stock		2,600,125			5,433,365
Net cash provided by financing activities		37,066,542			5,433,365
Net increase in cash and cash equivalents		22,925,504			136,150
Cash and cash equivalents, beginning of period		2,330,405			399,403
Cash and cash equivalents, end of the period	$	25,255,909		$	535,553

Supplemental Cash Flow Information
Promissory notes converted to equity	$	37,294,023		$	–
Initial recognition of Earn-out liability	$	2,400,000		$	–
Acquisition of warrant liability	$	8,816,500		$	–
Recording of D&O tail insurance acquired by Colombier	$	1,235,000		$	–
Acquisition of tax liability	$	957,982		$	–
Stock for stock transfer	$	1,334,500		$	–
Cash paid for interest	$	–		$	–

Segments

As of September 30, 2023, the Company’s operating and reportable segments include:

Marketplace: PSQ has created a marketplace platform to access consumers that are drawn to patriotic values. The Company generates revenue from advertising revenues.
Brands: The first wholly-owned brand is EveryLife, Inc., which generates revenue from online sales of diapers and wipes.

Adjusted EBITDA is defined as earnings (loss) from operations less depreciation and amortization, share based compensation and transaction costs. Earnings (loss) from operations excludes interest, interest expense, (gain) loss on sale of equipment, change in fair value of financial instruments and other expenses. The Company believes that Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

Segment performance, as defined by the Company, is not necessarily comparable to other similarly titled captions of other companies.

The following tables set forth the Company’s revenues, net and adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:

	For the three months ended September 30,					For the nine months ended September 30,
	2023			2022		2023			2022
Revenues, net:
Marketplace
Advertising sales	$	875,546		$	124,634	$	1,783,287		$	197,575
Brands
Product sales		1,387,951			–		1,387,951			–
Returns and discounts		(232,597	)		–		(232,597	)		–
Total Brand revenues, net		1,155,354			–		1,155,354			–
Total revenues, net	$	2,030,900		$	124,634	$	2,938,641		$	197,575

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022
*Adjusted EBITDA:*
Marketplace EBITDA	$	(6,339,765	)	$	(1,922,347	)	$	(14,082,492	)	$	(4,290,320	)
Brands EBITDA		(1,384,997	)		–			(1,384,997	)		–
Total adjusted EBITDA		(7,724,762	)		(1,922,347	)		(15,467,489	)		(4,290,320	)
Transaction costs incurred in connection with the Business Combination		(3,309,597	)		–			(7,048,177	)		–
Share-based compensation (exclusive of what is included in transaction costs above)		(1,185,089	)		–			(1,185,089	)		–
Depreciation and amortization		(759,745	)		(203,489	)		(2,004,319	)		(477,405	)
Other income, net		119,957			328			173,644			8,174
Change in fair value of warrant liabilities		(7,783,000	)		–			(7,783,000	)		–
Change in fair value of earn-out liabilities		450,000			–			450,000			–
Change in fair value of convertible notes		–			–			(14,571,109	)		–
Income tax benefit (expense)		262			4,208			(1,527	)		3,495
Interest expense, net		(46,690	)		–			(210,545	)		–
Net loss	$	(20,238,664	)	$	(2,121,300	)	$	(47,647,611	)	$	(4,756,056	)

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