The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), expressed in U.S. dollars. The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, as well as elimination of intercompany accounts, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with U.S. GAAP. References to U.S. GAAP issued by the Financial Accounting Standards Board’s (“FASB”) in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”).

During the third quarter of 2025, management committed to a plan to divest the Company’s Brands and Marketplace segments following a strategic review process intended to refocus the Company on its core FinTech operations. As of September 30, 2025, the criteria for classification as held for sale under ASC 360-10 and discontinued operations under ASC 205-20-45 were met for both segments.

After September 30, 2025, management reassessed its plan to sell the Marketplace segment based on market conditions and expected transaction economics. As of December 31, 2025, the Company determined that the Marketplace disposal group no longer met the criteria for classification as held for sale. Accordingly, the Marketplace assets were reclassified as held for use in accordance with ASC 360-10 and evaluated for recoverability. Based on this assessment, management concluded that the carrying value of the Marketplace capitalized software assets was not recoverable and recorded an impairment loss of the remaining carrying value of $3.6 million during the fourth quarter of 2025. As a result, the Marketplace assets are no longer presented as held for sale in the Consolidated Balance Sheets as of December 31, 2025.

Further, as of December 31, 2025, the Brands segment continues to meet the held-for-sale criteria under ASC 360-10 and the discontinued operations criteria under ASC 205-20-45. Accordingly, the assets and liabilities of the Brands segment are presented as held for sale in the Consolidated Balance Sheets, and the results of operations of the Brands segment are presented as discontinued operations in the Consolidated Statements of Operations.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Such estimates include, but are not limited to, lease merchandise and related depreciation method, impairments, loans held for sale and related credit losses, fair values of net assets acquired, fair values of net assets held for sale, revenue recognition, loss on loan purchase commitment, discount on self-originated loans, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets, and other long-lived assets, estimates related to useful lives of capitalization software, estimation of contingencies, recoverability of deferred tax assets, the incremental borrowing rate applied to lease accounting, valuation of earn out liabilities and warrant liabilities, and estimation of income taxes. These estimates, judgments, and assumptions are reviewed periodically and the impact of any revisions are reflected in the consolidated financial statements in the period in which such revisions are made. Actual results could differ materially from those estimates, judgments, or assumptions, and such differences could be material to the Company’s consolidated financial position and results of operations.

The Company computes basic loss per share (“EPS”) by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the reporting period. All securities that meet the definition of a participating security, irrespective of whether the securities are convertible, nonconvertible, or potential common stock securities, shall be included in the computation of basic EPS using the two-class method. However, when the different classes of units have identical rights and privileges except voting rights, whereby they share equally in dividends and residual net assets on a per unit basis, the classes can be combined and presented as one class for EPS purposes. As such, the Company has combined the Class A Common Stock and Class C Common Stock for purposes of the EPS calculation.

Diluted loss per share is calculated by dividing net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when they are anti-dilutive, common stock equivalents, if any, are not considered in the computation. As of December 31, 2025 and 2024, the Company’s restricted stock units (“RSUs”) and Warrants were not considered in the computation as they are anti-dilutive. Therefore, basic and diluted loss per share was the same for the periods presented due to the Company’s net loss position. Basic weighted average shares outstanding for the years ended December 31, 2025 and 2024 include 5,018,184 and zero, respectively, shares underlying pre-funded warrants ("Pre-Funded Warrants") to purchase shares of Class A Common Stock. As the shares underlying these Pre-Funded Warrants can be issued for little consideration (an exercise price per share equal to $0.0001 per share), these shares are deemed to be issued for purposes of basic loss per share. As of December 31, 2025 and 2024, there were no anti-dilutive shares or common stock equivalents outstanding.

The Company sells certain loans that it originates or purchases from its originating bank partners directly to third-party investors. The Company recognizes a gain or loss on sale of loans sold to third parties at a point in time when the Company satisfies a performance obligation by transferring control of the loans and leases to a third party. The Company recognizes a gain or loss on sale of loans or leases sold to third parties by calculating the difference between the proceeds received and the carrying value of the loan. This amount is adjusted for the initial recognition of any assets or liabilities incurred upon sale. These generally include a net servicing asset or liability in connection with our ongoing obligation to continue to service the loans and a liability in connection with our loan repurchase obligation for loans that do not meet certain contractual requirements where such information about the loan was unknown at the time of sale.

The Company accrues interest income using the simple-interest method, which includes the amortization of any discounts or premiums on loan receivables created upon the purchase of a loan from our originating bank partners or upon the origination of a loan. Interest income on a loan is accrued daily, based on the finance charge disclosed to the consumer, over the term of the loan based upon the principal outstanding.

The Company leases goods, consisting primarily of sporting goods, to its customers under certain terms agreed to by the customer, and recognizes revenue straight-line over the lease term in accordance with ASC 842, Leases ("ASC 842"). Generally, the customer has the right to acquire title either through a 30-day promotional pricing option, an early lease-purchase option (buyout), or by completing all lease payments. Lease terms typically range between 12 and 24 months. On any current lease, customers have the option to terminate the agreement at any time without significant penalty, in accordance with the lease terms. All the Company's customer agreements are considered operating leases.

Payments processing revenue primarily consists of processing and transaction revenues in connection with customer use of the PSQ Payments platform. Merchant partners (or integrated merchants) are generally charged a fee based on gross merchandise volume (“GMV”) processed through the PSQ Payments platform. The fees vary depending on the individual arrangement between the Company and each merchant and on the terms of the product offering. The fee is recognized at the point in time the merchant successfully confirms the transaction, which is when the terms of the executed merchant agreement are fulfilled.

The Company's contracts with merchants are defined at the transaction level and do not extend beyond the service already provided (i.e., each transaction represents a separate contract). The fees collected from merchants for each transaction are determined as a percentage of the value of the goods purchased by the consumer from merchants and consider a number of factors including the end consumer’s credit risk and financing term. The Company does not have any capitalized contract costs, and does not carry any material contract balances.

The Company's service comprises a single performance obligation to merchants to facilitate transactions with consumers. The Company has concluded that it acts as the principal in these arrangements because it controls the payment processing service before it is transferred to the merchant. Although third-party payment processors perform certain processing activities, those services represent inputs to an integrated payment solution controlled and provided by the Company. The Company is primarily responsible for fulfilling the promise to the merchant, including onboarding, platform access, transaction routing, and customer support, and it has discretion in establishing pricing with merchants. Accordingly, revenue is presented on a gross basis in the amount of consideration to which the Company expects to be entitled from merchants.

Payments processing revenue also includes revenue generated from PSQ Impact, which 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. The Company recognizes processing and transaction revenues in connection with donations completed on the platform. The fee is recognized at the point in time the transaction is successfully completed.

The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. The carrying values of cash and cash equivalents approximate their fair values due to the short-term nature of these instruments. The Company maintains cash accounts with financial institutions. At times, balances in these accounts may exceed federally insured limits. No losses have been incurred to date on any deposits.

The Company has two Deposit Account Control Agreements (“DACA”) with lenders. With these agreements, the Company assigned the rights to a collateral account to the lenders. The DACA accounts are utilized to collect the consumer payments on loans and leases. Funds are then distributed in accordance with the loan security agreement. Funds cover payments for servicing, interest on revolving loans, and paying down revolving loans.

Loans are unsecured and are stated at the amount of unpaid principal. Interest on loans is calculated by the simple-interest method on daily balances of the principal amount outstanding. Accrued interest on loans is discontinued when management believes that, after considering collection efforts and economic and business conditions, the collection of interest is doubtful. The Company’s policy is to stop accruing interest when the loan becomes 120 days delinquent.

All interest accrued but not collected for loans that are placed on non-accrual status or subsequently charged-off is reversed against interest income which is included in revenues, net on the Consolidated Statements of Operations. Income is subsequently recognized on the cash basis until, in management’s judgment, the borrower’s ability to make periodic and future principal and interest payments is reasonably assured, in which case the loan is returned to accrual status. The Company classifies its loans as either current or past due. Amounts are considered past due if a scheduled payment is not paid on its due date. The Company does not modify the terms of its existing loans with customers.

The Company estimates expected credit losses over the contractual term of loans, incorporating adjustments for anticipated prepayments and defaults when applicable. The contractual term excludes expected extensions, renewals, and modifications unless one of the following conditions is met: (i) management has a more likely than not expectation at the reporting date that an extension or renewal option is included in the original or modified contract, and (ii) such options are not unconditionally cancellable by the Company.

The foundation for the discount rate used in our credit loss estimation is the Secured Overnight Financing Rate ("SOFR"), a widely accepted benchmark for the cost of overnight borrowing collateralized by United States Treasury securities. SOFR is commonly used by traditional credit and warehouse facilities to account for interest rate variability. In addition to SOFR, our discount rate incorporates an interest rate floor, which reflects the minimum rate a market investor would require for a pool of unsecured consumer receivables. This rate is further adjusted based on prevailing market and macroeconomic conditions. The combination of SOFR and the interest rate floor determines the overall discount rate applied to calculate the net present value of expected credit losses. Management reviews the discount rate at each reporting period and updates when applicable.

The discount rate fluctuates in response to macroeconomic market cycles, as determined by management’s assessment of future economic conditions. The macroeconomic cycle is influenced by changes in money supply growth and contraction, which are inversely correlated with the discount rate. This inverse relationship allows for an adjusted present value assessment that accounts for the broader economic environment. Our cash flow model represents historical financial performance, while the discounted cash flow methodology projects future credit losses by adjusting the present value of historical data.

When management determines that loans are uncollectible, identified amounts are charged against the allowance for credit losses. Loans are written off in accordance with our charge-off policy, which stipulates charge-offs at 120 days past due or when other specific criteria are met. Any subsequent recoveries of previously charged-off amounts are credited back to the allowance for credit losses.

Upon the sale of a loan to a third-party loan buyer or unconsolidated securitization trust in which the Company retains servicing rights, the Company may recognize a servicing asset or liability. A servicing asset or liability arises when the Company's contractual servicing fee with a counterparty differs from the adequate compensation rate that would be required by a third party to service the same portfolio of assets, as defined by ASC 860. Servicing assets and liabilities are measured and recorded at fair value and are presented as a component of prepaid expenses and other current assets or accrued expenses, respectively, on the accompanying Consolidated Balance Sheets. The recognition of a servicing asset results in a corresponding increase to gain on sales of loans. The recognition of a servicing liability results in a corresponding decrease to gain on sales of loans. The servicing rights are remeasured at fair value each period, with the subsequent adjustment recognized in servicing income.

The Company leases goods, consisting primarily of sporting goods, to its customers under certain terms agreed to by the customer. All the Company's customer agreements are considered operating leases in accordance with ASC 842. The consumer goods under operating leases are initially recorded at cost and depreciated on a straight-line basis over the term of the related leases to the consumer goods' estimated residual value. All lease assets are purchased concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Upon transfer of ownership of merchandise to customers, resulting from satisfaction of their lease obligations, the related cost and accumulated depreciation are eliminated from lease merchandise. Amounts shown in the Consolidated Balance Sheets are net of accumulated depreciation and impairment.

The Company applies depreciation to lease merchandise as follows: (i) straight-line over the life of the lease term; (ii) accelerated deprecation for impaired leases and (iii) accelerated depreciation for leases when an early purchase option (buyout) is exercised. Depreciation expense for the lease merchandise is included within depreciation and amortization in the Consolidated Statements of Operations.

The Company periodically evaluates lease merchandise for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. If the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the lease merchandise are less than its carrying amount, an impairment loss is recognized for the excess of the carrying value over its fair value. Impairment charges, if any, are recorded within general and administrative in the Consolidated Statements of Operations. Refer to Note 8 — Lease Merchandise, Net for further details.

Assets, or disposal groups, are classified as held for sale when management, having the appropriate authority, commits to a plan to sell the business or asset group, the assets are available for immediate sale in their present condition, an active program to locate a buyer and complete the plan has been initiated, the sale is probable and expected to be completed within one year, and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon classification as held for sale, the related assets and liabilities are measured at the lower of their carrying amount or fair value less costs to sell and are no longer depreciated or amortized.

Fair value is determined based on the total consideration expected to be received, which may include cash proceeds, contingent consideration, and other forms of payment, less estimated costs to sell. The Company reassesses the fair value of disposal groups at each reporting date and records any subsequent write-downs to reflect the lower of carrying value or fair value less costs to sell as an adjustment to the carrying value. If the fair value of the disposal group increases in subsequent periods, a gain is recognized, but not in excess of the cumulative loss previously recognized.

If a disposal group previously classified as held for sale no longer meets the criteria in ASC 360-10-45-9, the Company reclassifies the disposal group as held for use in accordance with ASC 360-10-35-44. Upon reclassification, the disposal group is measured at the lower of (i) its carrying amount before it was classified as held for sale, adjusted for depreciation or amortization that would have been recognized had it remained held for use, or (ii) its fair value at the date of the subsequent decision not to sell. Depreciation and amortization resume prospectively, and the asset group is evaluated for recoverability in accordance with ASC 360.

A disposal group that meets the criteria in ASC 205-20-45 for discontinued operations—specifically, if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results—is presented as discontinued operations. For such transactions, the operating results of the disposal group, including any gain or loss on sale, are presented as discontinued operations in the Consolidated Statements of Operations for all years presented.

During the third quarter of 2025, management committed to a plan to divest the Company’s Brands and Marketplace segments. The decision followed a strategic review process intended to refocus the Company on its core FinTech operations. As of September 30, 2025, the criteria for classification as held for sale under ASC 360-10 and discontinued operations under ASC 205-20-45 were met.

Subsequent to September 30, 2025, management reassessed its plan to sell the Marketplace segment based on market conditions and expected transaction economics. As of December 31, 2025, the Company determined that the Marketplace disposal group no longer met the criteria for classification as held for sale. Accordingly, the Marketplace assets were reclassified as held for use in accordance with ASC 360-10-35-44 and evaluated for recoverability. Based on this assessment, management concluded that the Marketplace capitalized software assets were not recoverable and recorded an impairment loss of the remaining carrying value of $3.6 million during the fourth quarter of 2025.

The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, the Company applies its judgment to determine whether the acquired net assets meet the definition of a business by considering if the set includes an acquired input, process, and the ability to create outputs.

The Company accounts for business combinations using the acquisition method when it has obtained control. The Company measures goodwill as the fair value of the consideration transferred including the fair value of any non-controlling interest recognized, less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at their fair value as of the acquisition date. Transaction costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred.

Any contingent consideration (“earn-out liabilities”) is measured at fair value at the acquisition date. For contingent consideration that does not meet all the criteria for equity classification, such contingent consideration is required to be recorded at its initial fair value at the acquisition date, and on each balance sheet date thereafter. Changes in the estimated fair value of liability-classified contingent consideration are recognized on the Consolidated Statements of Operations in the period of change.

When the initial accounting for a business combination has not been finalized by the end of the reporting period in which the transaction occurs, the Company reports provisional amounts. Provisional amounts are adjusted during the measurement period, which does not exceed one year from the acquisition date. These adjustments, or recognition of additional assets or liabilities, reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

Property and equipment is recorded at cost and depreciated using the straight-line basis over the estimated useful lives of the respective asset. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations. The Company’s property and equipment and related estimated useful lives consist of the following:

On March 13, 2024, the Company entered into an Agreement and Plan of Merger (the “Credova Merger Agreement”) with Cello Merger Sub, Inc., its wholly owned subsidiary (“Merger Sub”), Credova Holdings, Inc. (“Credova”), and Samuel L. Paul, as Seller Representative, pursuant to which Merger Sub merged with and into Credova (the “Credova Merger”). Goodwill in the Company’s consolidated financial statements resulted from the Credova Merger, while the acquired intangible assets recorded in the Company’s consolidated financial statements resulted from the Credova Merger.

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination and is not amortized. Goodwill is tested for impairment at least annually as of October 1, or more frequently if events or changes in circumstances indicate that the carrying amount of a reporting unit may not be recoverable, in accordance with ASC 350, Intangibles—Goodwill and Other.

The Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative assessment considers relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, changes in the composition or carrying amount of net assets, and sustained decreases in share price. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed.

As of October 1, 2025, goodwill of $10.9 million was attributable entirely to the Company’s Financial Technology reporting unit (Credova). During the first half of 2025, the Company operated across three reportable segments; however, during 2025 the Company initiated a strategic shift to focus resources and capital on its Financial Technology platform and monetize or repurpose its non-FinTech operations. As a result, a portion of the negative operating cash flows of approximately $19.9 million for the year-to-date period related to segments that were subsequently classified as discontinued operations or were being wound down, rather than to the Financial Technology reporting unit to which goodwill is assigned.

In performing the qualitative assessment, management evaluated the performance and outlook of the Financial Technology reporting unit independently from discontinued or non-core activities. The reporting unit generated year-over-year revenue growth and continued expansion of its merchant and lending partner relationships. The Company also considered the Company’s FinTech product roadmap, merchant onboarding pipeline, and internally prepared revenue forecasts, which supported expected revenue growth and improving operating leverage within the reporting unit. No significant adverse changes occurred in the reporting unit’s customer base, regulatory environment, competitive position, or expected future cash flows.

The Company also considered the decline in its stock price during 2025. As of the October 1, 2025 testing date, the Company’s market capitalization exceeded its consolidated net book value, including goodwill, indicating that the implied fair value of equity provided meaningful excess over carrying value. The Company concluded that the stock price decline primarily reflected broader market conditions and investor sentiment rather than reporting-unit-specific deterioration in the Financial Technology business.

Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the respective asset. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Acquired indefinite-lived intangible assets are not amortized but are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the intangible asset may be impaired.

The Company capitalizes costs related to the development of its internal software and certain projects for internal use in accordance with ASC 350-40, Internal-Use Software ("ASC 350-40"). The Company capitalizes costs to develop its mobile application and website when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage, including maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades on a per project basis. Amortization is computed on an individual product basis over the estimated economic life of the product using the straight-line method. Software development costs expensed and not capitalized, which are included in research and development expense in the accompanying Consolidated Statements of Operations, were approximately $1.7 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively.

The Company reviews long-lived assets, including definite-lived intangible assets, capitalized software, property and equipment, and right-of-use lease assets, for impairment in accordance with ASC 360 whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are grouped and evaluated at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

The Company’s impairment assessment is trigger-based. Indicators of impairment considered include, among other factors: significant adverse changes in the business climate, operating performance or projected cash flows; significant decreases in market demand for the Company’s products or services; a sustained decrease in the Company’s market capitalization relative to its net asset value; plans to dispose of or significantly change the use of an asset group; and other events that could indicate that the carrying amount of an asset group may not be recoverable.

If such indicators are present, recoverability is evaluated by comparing the carrying amount of the asset group to the undiscounted future net cash flows expected to be generated by the asset group. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized for the amount by which the carrying value exceeds fair value.

In performing its assessment, the Company considers both internal and external qualitative and quantitative factors. Although the Company has experienced operating losses and volatility in its stock price, the Company evaluates whether such factors are attributable to the performance of specific asset groups or reflect broader market conditions, capital market dynamics, or the Company’s stage of growth and strategic initiatives. Management concluded that, for asset groups classified as held and used, operating results and cash flow projections supported recoverability and did not indicate that the carrying amounts were not recoverable. Declines in the Company’s stock price were evaluated in the context of overall market conditions and did not, in isolation, represent a triggering event under ASC 360 for the Company’s long-lived asset groups.

During the fourth quarter of 2025, in connection with the Company’s strategic exit of the Marketplace segment, certain Marketplace capitalized software assets were evaluated for recoverability and determined to be not recoverable. As a result, the Company recorded an impairment loss of $3.6 million, representing the remaining carrying value of those assets. This impairment is presented within discontinued operations as the exit represents a strategic shift with a major effect on the Company’s operations and financial results.

In addition, the Company recognized an impairment loss of $0.5 million related to leased merchandise during the year ended December 31, 2025 which is included in general and administrative expenses in the Consolidated Statements of Operations, primarily as a result of writing off a related leas receivable as uncollectible and determining the Company was not able to recover the underlying leased asset.

The Company has issued convertible notes, which are convertible at the note holder's discretion, or, under certain circumstances, the Company’s discretion, into shares of Company Class A Common Stock. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the convertible notes date with a charge to expense in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480"), and records interest expense as incurred.

The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 815-40, Derivatives and Hedging (“ASC 815-40”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company accounts for the Public Warrants (as defined in Note 11) and the Private Placement Warrants (the "Private Warrants”) in accordance with the guidance contained in ASC 815-40 under which both the Public Warrants and Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies both the Public Warrants and Private Warrants as liabilities at their fair value and adjusts the Public Warrants and Private Warrants to fair value at each reporting period. This liability is subject to re-measurement at each reporting period until exercised, and any change in fair value is recognized in the Consolidated Statements of Operations. The Public Warrants and Private Warrants for periods where no observable traded price was available are valued using a Black-Scholes option pricing model. For the Public Warrants, quoted market price will be used as the fair value as of each relevant date.

The Company evaluated the Pre-Funded Warrants and common stock warrants (the "Common Warrants") under ASC 480 and ASC 815-40. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815-40, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. The Company concluded that the Pre-Funded Warrants are indexed to the Company’s own common stock and meet the criteria for equity classification because (i) the Pre-Funded Warrants require physical settlement in shares of common stock, (ii) they do not embody an obligation to repurchase shares or settle in cash, and (iii) they do not contain provisions that would require liability classification. Accordingly, the Pre-Funded Warrants are classified within stockholders’ equity at their allocated fair value upon issuance and are not subsequently remeasured. Further, the Company concluded that the Common Warrants are indexed to the Company’s own stock and meet the conditions for equity classification. Accordingly, the Common Warrants are recorded within stockholders’ equity at their allocated fair value upon issuance and are not subsequently remeasured.

The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use (“ROU”) assets represent the Company’s right to use the underlying asset for the term of the lease and the lease liabilities represent an obligation to make lease payments arising from the lease. The Company’s lease agreement contains rent escalation provisions, which are considered in determining the ROU assets and lease liabilities. The Company begins recognizing rent expense when the lessor makes the underlying asset available for use by the Company. Lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. Lease renewal periods are considered on a lease-by-lease basis in determining the lease term. The interest rate the Company uses to determine the present value of future lease payments is the Company’s incremental borrowing rate because the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors. The ROU asset is determined based on the lease liability initially established and adjusted for any prepaid lease payments and any lease incentives received. The lease term to calculate the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Certain leases contain variable costs, such as common area maintenance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the Consolidated Statements of Operations.

Deferred tax assets are determined based on the difference between the financial statement basis and tax basis as well as net operating loss or other tax credit carryforwards, if any, and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. If the Company’s assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.

The Company follows ASC Topic 740-10-65-1 in accounting for uncertainty in income taxes by prescribing rules for recognition, measurement, and classification in the financial statements of tax positions taken or expected to be in a tax return. This prescribes a two-step process for the financial statement measurement and recognition of a tax position. The first step involves the determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the consolidated financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon ultimate settlement. This topic also provides guidance on the accounting for related interest and penalties, financial statement classification and disclosure. The Company’s policy is that any interest or penalties related to uncertain tax positions are recognized in income tax expense when incurred. The Company has no uncertain tax positions or related interest or penalties requiring accrual at December 31, 2025 and 2024.

The Company expenses research and development costs as incurred, except for certain internal-use software development costs, which may be capitalized as noted above. Research and development expenses consist primarily of software development costs, including employee compensation and external contractors, associated with the ongoing development of the Company’s technology.

Fair value is the price that would be received to sell an asset, or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a fair value hierarchy based on the inputs used to measure fair value. The recorded amounts of certain financial instruments, including money markets classified as cash equivalents, accounts receivable, accounts payable, accrued expenses, debt at fixed interest rates, and other liabilities approximate fair value due to their relatively short maturities.

The Company follows the guidance of ASC 280, Segment Reporting (“ASC 280”), which establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. Operating segments are defined under ASC 280 as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which discrete financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Aggregation of similar operating segments into a single reportable operating segment is permitted if the businesses have similar economic characteristics and meet established qualitative criteria. As of December 31, 2025, the Company determined that the Company has one reportable segment, Financial Technology.

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents, and accounts receivable. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor, per insured bank, per ownership category. The Company’s cash balances may exceed these FDIC insured limits from time to time. As of December 31, 2025, the Company had approximately $12.7 million of cash and cash equivalents in excess of FDIC insured limits. The Company has not experienced any losses in such accounts.

In March 2024, the FASB issued Accounting Standards Update ("ASU") No. 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which intends to improve clarity and comparability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with ASC 718, Compensation—Stock Compensation ("ASC 718"). Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company adopted ASU 2024-01 effective January 1, 2025, which did not have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. ASU 2023-09 will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-09 beginning January 1, 2025. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers ("ASC 606"). Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06") which amends the guidance in ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. The amendments in ASU 2025-06 are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in ASU 2025-06 permits entities to use either 1) a prospective transition approach, 2) a modified transition approach, or 3) a retrospective transition approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and disclosures.

In November 2025, the FASB issued ASU No. 2025-08, Financial instruments – Credit Losses (Topic 326): Purchased Loans ("ASU 2025-08"), which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under ASU 2025-08, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses (gross-up approach). Purchased seasoned loans are defined as either: (1) non-purchased credit deteriorated ("PCD") loans that are obtained in a business combination, or (2) non-PCD loans that (a) are obtained in an asset acquisition or upon consolidation of a variable interest entity that is not a business and (b) are acquired more than 90 days after their origination date by a transferee that was not involved in their origination. ASU 2025-08 also introduces an accounting policy election related to the subsequent measurement of expected credit losses for entities that use a method other than a discounted cash flow analysis to estimate credit losses on purchased seasoned loans. If this accounting policy is elected, entities can use the amortized cost basis of the asset to subsequently measure their credit loss allowance. ASU 2025-08 is effective for interim and annual reporting periods beginning after December 15, 2026. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is currently assessing the impact of ASU 2025-08 on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2025-11 on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements ("ASU 2025-12"). ASU 2025-12 adds clarification, corrects errors, or makes minor improvements. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period and adoption can be applied on prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-12 on its consolidated financial statements and disclosures.