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Segments
 6 Months Ended
Jun. 30, 2024
Segments [Abstract]  
Segments

Note 15 - Segments

 

The Company routinely evaluates whether its operating and reportable segments continue to reflect the way the CODM evaluates the business. The determination is based on: (1) how the Company’s CODM evaluates the performance of the business, including resource allocation decisions, and (2) whether discrete financial information for each operating segment is available. The Company considers the Chief Executive Officer to be its CODM.

 

As of June 30, 2024, 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 and e-commerce transaction revenues.

 

●Brands: Our wholly owned brands include:

 

●EveryLife, Inc., which generates revenue from online and wholesale sales of diapers and wipes.

 

  ● PSQLink, LLC, which generates revenues through B2B sales, by providing its customers with a digital marketing and CRM platform.

 

●Financial Technology: Our wholly owned Financial Technology subsidiaries include:

 

●Credova Holdings, Inc., which generates revenue primarily through four activities: revenue from sale of loan and lease contracts, revenue from interest earned on loans, revenue from retailer discounts and origination fees paid by lending institutions (direct revenue) earned in connection with providing financing on consumer goods.

 

●PSQPayments LLC (also referred to as “PublicSquare Payments”), is a wholly owned subsidiary of PSQH which will generate revenue from launching a merchant servicer platform to provide its customers with a payments stack which will comprise of a framework of technological components and services that the Company’s customers can utilize to manage their payment processes.

 

The CODM measures and evaluates the Company’s performance based on segment gross revenue, segment gross profit margin and segment operating income, before interest, taxes, depreciation, and amortization (“EBITDA”). 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 direct contribution for the three and six months ended June 30, 2024 and 2023:

 

   For the three months ended
June 30,		   For the six months ended
June 30,		 
   2024   2023   2024   2023 
Revenues, net:                
Marketplace                
Advertising and e-commerce sales  $726,638   $529,707   $1,672,109   $907,741 
Brands                    
Product sales   2,478,455    
-
    4,828,965    
-
 
Other sales   18,738    
-
    18,738    
-
 
Returns and discounts   (206,619)   
-
    (413,720)   
-
 
Total Brand revenues, net   2,290,574    
-
    4,433,983    
-
 
Financial Technology                    
Direct revenue   967,260    
-
    1,121,867    
-
 
Interest income on loans   961,518    
-
    1,100,916    
-
 
Loan and lease contracts sold, net   1,039,238    
-
    1,122,242    
-
 
Total Financial Technology revenues, net   2,968,016    
-
    3,345,025    
-
 
Total revenues, net  $5,985,228   $529,707   $9,451,117   $907,741 

 

   For the three months ended June 30, 2024 
   Marketplace   Brands   Financial
Technology		   Total 
                 
Revenues, net  $726,638   $2,290,574   $2,968,016   $5,985,228 
Segment cost of revenues   (517,304)   
-
    (13,794)   (531,098)
Segment cost of goods sold   
-
    (1,438,843)   
-
    (1,438,843)
Segment gross profit   209,334    851,731    2,954,222    4,015,287 
Segment operating costs   (7,274,357)   (1,507,427)   (3,160,466)   (11,942,250)
Adjusted EBITDA   (7,065,023)   (655,696)   (206,244)   (7,926,963)
Transaction costs incurred in connection with acquisitions                  (1,908)
Share-based compensation (exclusive of what is included in transaction costs above)                  (5,171,760)
Depreciation and amortization                  (930,874)
Other income, net                  52,599 
Change in fair value of convertible notes                  
-
 
Change in fair value of earnout liabilities                  220,000 
Change in fair value of warrant liabilities                  3,091,000 
Interest expense, net                  (553,303)
Income tax expense                  (14,037)
Net loss                 $(11,235,246)

 

   For the three months ended June 30, 2023 
   Marketplace   Brands   Financial
Technology		   Total 
                 
Revenues, net  $529,707   $
          -
   $
           -
   $529,707 
Segment cost of revenues   (432,934)   
-
    
-
    (432,934)
Segment cost of goods sold   
-
    
-
    
-
    
-
 
Segment gross profit   96,773    
-
    
-
    96,773 
Segment operating costs   (6,586,734)   
-
    
-
    (6,586,734)
Adjusted EBITDA   (6,489,961)   
-
    
-
    (6,489,961)
Transaction costs incurred in connection with acquisitions                  
-
 
Share-based compensation (exclusive of what is included in transaction costs above)                  
-
 
Depreciation and amortization        
 
    
 
    (699,237)
Other income, net                  48,549 
Change in fair value of convertible notes                  (13,423,204)
Change in fair value of earnout liabilities                  
-
 
Change in fair value of warrant liabilities                  
-
 
Interest expense, net                  (155,854)
Income tax expense                  (1,600)
Net loss                 $(20,721,307)

 

   For the six months ended June 30, 2024 
   Marketplace   Brands   Financial
Technology		   Total 
                 
Revenues, net  $1,672,109   $4,433,983   $3,345,025   $9,451,117 
Segment cost of revenues   (1,052,623)   
-
    (76,836)   (1,129,459)
Segment cost of goods sold   -    (2,830,251)   -    (2,830,251)
Segment gross profit   619,486    1,603,732    3,268,189    5,491,407 
Segment operating costs   (14,539,615)   (2,622,041)   (3,575,460)   (20,737,116)
Adjusted EBITDA   (13,920,129)   (1,018,309)   (307,271)   (15,245,709)
Transaction costs incurred in connection with acquisitions                  (2,295,502)
Share-based compensation (exclusive of what is included in transaction costs above)                  (10,170,774)
Depreciation and amortization                  (1,227,471)
Other income, net                  155,978 
Change in fair value of convertible notes                  
-
 
Change in fair value of earnout liabilities                  340,000 
Change in fair value of warrant liabilities                  5,322,500 
Interest expense, net                  (677,481)
Income tax expense                  (13,618)
Net loss                 $(23,812,077)

  

   For the six months ended June 30, 2023 
   Marketplace   Brands   Financial
Technology		   Total 
                 
Revenues, net  $907,741   $
           -
   $
           -
   $907,741 
Segment cost of revenues   (795,907)   
-
    
-
    (795,907)
Segment cost of goods sold   
-
    
-
    
-
    
-
 
Segment gross profit   111,834    
-
    
-
    111,834 
Segment operating costs   (11,593,141)   
-
    
-
    (11,593,141)
Adjusted EBITDA   (11,481,307)   
-
    
-
    (11,481,307)
Transaction costs incurred in connection with acquisitions                  
-
 
Share-based compensation (exclusive of what is included in transaction costs above)                  
-
 
Depreciation and amortization        
 
    
 
    (1,244,574)
Other income, net                  53,687 
Change in fair value of convertible notes                  (14,571,109)
Change in fair value of earnout liabilities                  
-
 
Change in fair value of warrant liabilities                  
-
 
Interest expense, net                  (163,855)
Income tax expense                  (1,789)
Net loss                 $(27,408,947)

 

No asset information has been disclosed as the CODM does not regularly review asset information by reportable segment.