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Convertible Promissory Notes

9 Months Ended

Sep. 30, 2023

Convertible Promissory Notes [Abstract]

Note 8 — Convertible Promissory Notes

During the nine months ended September 30, 2023, the Company issued convertible promissory notes (the “Notes”) in the total amount of $22,500,000 that accrue interest at the rate of 5% per annum until converted or paid in full upon maturity being December 31, 2024.

As described in Note 1, on July 19, 2023, the Company consummated the Business Combination and became a publicly-traded company at which time the balance under each Note converted automatically into shares of PSQ Common Stock at a conversion price per share based upon an implied $100 million fully diluted pre-money valuation, excluding the Notes.

The Notes are required to be recorded at their initial fair value on the date of issuance under ASC 480-10-25-14, and each balance sheet date thereafter. Changes in the estimated fair value of the Notes are recognized as non-cash gains or losses in the condensed consolidated statements of operations.

The change in the fair value of the Notes measured with Level 3 inputs for the three and nine months ended September 30, 2023 is summarized as follows:

	Convertible Notes
Fair value as of January 1, 2023	$	-
Principal balance of convertible notes issued		2,050,000
Change in valuation inputs or other assumptions		1,147,905
Fair value as of March 31, 2023		3,197,905
Principal balance of convertible notes issued		20,450,000
Change in valuation inputs or other assumptions		13,423,204
Fair value as of June 30, 2023		37,071,109
Conversion of convertible notes		(37,071,109	)
Fair value as of September 30, 2023	$	-