Thank you for standing by. My name is Eric and I will be a conference operator today. At this time, I would like to welcome everyone to the Public Square second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Will Kent, Senior Vice President of Corporate Affairs. Please go ahead.

Good afternoon, everyone, and welcome to Public Square's second quarter 2025 earnings conference call. Joining me today are Michael Seifert, Chairman and Chief Executive Officer, James Wren, Chief Financial Officer, and Dusty Wunderlich, Chief Strategy Officer. Before we get started, we want to emphasize that information discussed on this call, including our outlook, is based on information as of today and contains forward-looking statements that involves risks, uncertainties, and assumptions. We undertake no duty or obligation to update such statements as a result of new information or future events. Please refer to today's earnings press release and our SEC filings, including our 2024-10K, for factors that may cause actual results to differ materially from our forward-looking statements. We'd also like to point out that we present non-GAAP measures in addition to and not as a substitute for financial measures calculated in accordance with GAAP. I'll now hand the call over to Michael. Michael, please go ahead.

Thank you, Will, and welcome, everyone, to our second quarter 2025 earnings call. We appreciate you all joining us today, and to get us started, I would like our CFO, James Wren, to provide a financial overview on our performance in the second quarter. So, James, take us away.

Thank you, Michael, and good afternoon, everyone. I'm honored to address you for the first time as CFO of Public Square. While new to this role at Public Square, I've had the privilege of supporting the company from the board level for the past two years, and I'm excited to now lead our finance organization and partner with our executive team during the next chapter of growth and operational execution. Let's walk through the key financial highlights from the second quarter and for the first half of 2025. In regards to revenue growth and segment performance, We reported net revenue of $7.1 million for the quarter-ended June 30, 2025. That's 18% year-over-year increase compared to $6 million for Q2 of 2024. The breakdown by business segment in Q2 illustrates the strength of our current segments. Financial technology, which includes PSQ payments in Cordova, earned $3.4 million in revenue and a 15.6% increase from the prior year period. Revenue would have been $3.8 million and a 28% increase year-over-year if we had not incurred a one-time vendor true-up of $0.4 million during the second quarter of 2025. Our recently launched PSQ payments revenue for the quarter into June 30th was $1 million, which is an increase of over 80% from Q1 2025. As expected, our credit business revenue declined year-over-year. However, the company has strengthened its credit portfolio performance through greater use of AI-driven underwriting and machine learning, which resulted in decreased first payment default rates over the last nine months by 74.8% on a vintage monthly basis, outperforming peers in a challenging environment. Brands, driven primarily by EveryLife, earned $3.3 million in revenue, which equates to a 45.5% increase compared to the prior period. Marketplace earned $0.3 million during the quarter, which was soft, as expected, due to the halting of our marketing spend as we were in the lead-up to the Made in America Marketplace launch that took place in July of 2025. Transitioning to operating expense control, we made substantial progress in expense optimization and improvements in how we allocate capital. First half financial results included total cost and operating expenses declining by 13% or $4.8 million year-over-year, while revenues increased 46% or $4.4 million year-over-year. The net loss for the first half of 2025 improved by 46 percent, or $11 million, decreasing from $23.8 million to $12.8 million. General and administrative expenses decreased by 22 percent for the first half of 2025 compared to the prior year. Sales and marketing expenses declined by 46 percent during the first six months of the year compared to the prior year. R&D expenses increased by $0.6 million, and investment in internally developed software was $1.6 million for the first half of the year, reflecting our continued investment and enhancements in our fintech platform. Moving to margin and profitability, our growth margin in Q2 was 53% compared to 67% in Q2 of last year. The decline was primarily related to revenue mix changes. additionally fintech revenues were more heavily weighted from credit and towards our psq payments in q2 our gap operating loss for the quarter was 8.1 million dollars a significant improvement from the 14 million dollars in the same quarter of 2024. that loss for the quarter was 8.4 million dollars or a loss of $0.18 per share, a 50% per share improvement compared to a loss of $0.36 per share reported in Q2 of 2024. Moving on to cash flow and liquidity, as of June 30, 2025, we held $20.6 million in cash and cash equivalents with an additional $0.3 million in restricted cash. Net cash from operating activities decreased by $5.7 million during the first half of 2025 as compared to the same period of the prior year. We had $4 million outstanding on our $10 million revolving line of credit that we utilized to finance our Cordova credit products. We also made a strategic decision to retain certain consumer finance receivables on our balance sheet representing about a million dollars in cash usage for the quarter this ultimately allows us to increase our long-term return we also invested 455 000 toward money transmitter license applications for the fintech segment during the quarter on may 23rd 2025 public square filed an at-the-market offering or ATM during Q2. During Q2, we sold 164,971 shares via the ATM. These proceeds covered our costs to establish the ATM. We believe it is good corporate practice for a company of our size to have this ATM in place, and we may use it from time to time for the reasons noted in the prospectus and to help offset the cost of being a public company in terms of share count as of june 30th 2025 we had 42 million 676 029 class a common shares outstanding and 3 million 213 678 class c common shares outstanding in late 2024 the company enacted a strategic reorganization to improve efficiency and reduce cost. This reorganization of the business was expected to save approximately $11 million on an annualized basis and was also expected to lower the company's cash needs meaningfully. We are happy to report that the company has experienced better-than-expected operating expense reduction results from its reorganization efforts announced in the fourth quarter of 2024, realizing approximately $9 million of its expected $11 million in annualized savings in the first half of 2025 alone. So, to summarize, we are growing revenue at a strong pace, maintaining healthy margins, and significantly narrowing our operating losses, in part due to reducing operating costs year over year we believe we are well positioned to deliver long-term shareholder value as we execute on our strategic repositioning and continue our progress toward profitability of scale now let me hand it back to michael for more about the exciting path forward for public square awesome thank you james before we go any further i want to pause and underscore the significance of what james just shared.

In November of last year, we implemented these meaningful operational changes with a clear objective to maximize the efficiency of our company and streamline our operations so that every dollar we spend delivers measurable impact. 2024 was a year for investment, and as we entered 2025, we knew it was time to monetize those investments by driving revenue while tightening OPEX. In November, we communicated to our shareholders, all of you, that these changes alone were projected to save the company a net of 11 million dollars annually so today to reiterate james comments we are proud and grateful to report that in just the first half of this year alone we've already realized 9 million of the 11 million in expected net savings well ahead of the expected schedule and we achieved this while growing revenue year over year and scaling the business in meaningful ways expenses have decreased while revenue has increased and both our company and our mission are stronger because of it. James covered our Q2 performance, and while we are certainly pleased with the growth we continue to see at the business, the quarter was also defined by something even more significant, the strategic choices we made to sharpen our focus and align the business for maximum impact over the near, mid, and long term. From day one, we're going back a bit. From day one, Public Square has been guided by a mission that is simple in words but profound in purpose. We are here to build commerce for a better America. That means using the power of technology to serve a community of patriotic Americans with financial products that protect life, family, and economic liberty. We've never deviated from that mission, and our conviction in it grows stronger day by day. And because our mission drives every decision we make, we regularly evaluate whether our structure and strategy are positioned to achieve it in the most effective way possible recently those evaluations made clear that we could take bold steps in this season to increase our effectiveness and focus until now our approach from a strategic standpoint was to build this financial ecosystem through three divisions marketplace fintech and brands working in synchrony to deliver value for customers and merchants alike and frankly that model served us well. But as we've scaled, it has also become clear that while this structure could make us a good company, achieving true greatness, becoming a truly great company, meaning we become an indispensable leader for our audience, requires a tighter, more concentrated focus. So we're announcing here today that we are monetizing EveryLife and the marketplace via the sale of EveryLife and the sale or strategic repurposing of the marketplace, while the go-forward public company, PublicSquare, will focus entirely on growing as a financial technology company. While I am bullish and optimistic about the future of both EveryLife and our marketplace, we believe that both of these entities belong in and deserve environments where they can fully thrive, while PublicSquare dedicates all of our efforts, time, attention, and resources to growing our fintech stack to meet the demand we've received the heartbeat of this economic ecosystem we've created is the transaction experience this is the place where a customer or a merchant's economic liberties are most vulnerable this is where we've witnessed egregious debanking and cancel culture from some of the largest financial institutions in america in recent years and this is where we see the greatest potential for the accomplishment of our mission as we move forward We are passionate about financial technology and its power to provide freedom and trust-based transactions to our customers. And we have all the right ingredients for success. We have the right team, the right technology, the right brand, and the unwavering commitment to the industries we serve to thrive as a true leader at the dawn of a new era of financial technology, one that will be marked by innovation, security, and an advancement of financial freedom. As CEO and Chairman, alongside our board and management team, I could not be more confident in the strategic repositioning of our business. We believe it will unlock extraordinary growth potential, sharpen our operational focus, and ultimately deliver transformative value for you, our shareholders. While this has obviously been a heavy decision, I believe that in five years' time, we will look back on this decision as a truly pivotal moment in realizing the future we've always envisioned for PublicSquare. So I'd like to dive a bit deeper into the practical moves we are making here. This business evolution centers around three core initiatives. Number one, we are doubling down on fintech. Overwhelming demand over the last year from values-aligned merchants and consumers has validated our fintech model. The speed at which we've been able to accumulate and process substantial GMV, especially from enterprise merchants on a rapidly expedited timeline compared to our competitors, by the way, communicates a clear trust in our payment stack. And the desire for our key differentiators, most notably our build checkout product offering of payments and credit services, paired with our intentional commitment to serve industries previously ignored by mainstream financial institutions, has proven tremendously accretive to both our top and bottom line. When we combine our debit and credit card processing capabilities, consumer financing activities and ACH processing, we have the opportunity to facilitate the movement of all money in and out for our merchants. And this positioning has allowed us to ensure that in every step of the transaction, we are securing economic liberty for the community we're grateful to serve. In the near future, you'll see us add additional features to our payment stack, including crypto payments, donations technology, private label credit card programs, tools to drive increased loyalty for our merchants, and more. Number two, we are monetizing non-core segments. So as I mentioned, we are monetizing our EveryLife brand via a strategic sale and exploring a sale or strategic repurposing for the marketplace. Both have built substantial brand equity with their respective consumers, and we have received positive early indicators regarding the demand for both of these entities. The divestiture of these entities should provide non-dilutive and tax-efficient capital to the go-forward company, while also providing an environment for every life and marketplace where they can both thrive with the whole focus of their new ownership dedicated to their long-term success. We expect to complete these efforts by the end of the fourth quarter of 2025. And while this is certainly a bittersweet move for us as a company we believe this repositioning will unlock tremendous value for both every life and marketplace as well as the go forward public square fintech entity number three as we mentioned in our press release from late may a significant aspect of our go forward vision includes building and deploying cryptocurrency solutions that empower consumers and merchants while opening up new high margin revenue streams for our company we have also explored and are in the process of deploying a diversified digital assets treasury strategy to complement our effort as we productize our payment stack in favor of alternative financial systems that mark a departure from the traditional payment rails. We recently welcomed Caitlin Long, a renowned cryptocurrency and finance expert, to our board of directors to help guide and spearhead this effort. With the recent regulatory and legislative wins regarding cryptocurrency, the merchant demand we've witnessed for diversified payment methods and our passion for digital assets because of their positive impact on the economic liberty movement we are excited to press forward in this space with intentionality in the weeks months and years ahead finally to dive far deeper into the strategy of our go forward fintech company we'll be hosting an analyst and investor meeting in september we will share details regarding the date the time and participation opportunities of this event in the coming weeks we're at an exciting inflection point as a company but we're also at an inflection point as a nation the economy and the world writ large are transforming quickly due to the technological revolution happening before our eyes with the rise of AI alternative financial systems and we the people's pursuit of financial freedom more than ever before with the bold moves we are making as a company here today we believe we're positioned to lead with excellence and principle in this new era of technology we believe our performance over the coming months quarters and years will bear testament to that reality and we are immeasurably grateful that you're on the journey with us we are just getting started so now let's head to q a at this time i would like to remind everyone

in order to ask a question please press star followed by the number one on your telephone linky pad. Your first question comes from the line of Darren Aftahi with Roth. Please go ahead.

Hey, guys. Thanks for my question. A couple if I may. First, in the last quarter, you talked about onboarding a bunch of payment customers, and then there'd be a sort of significant ramp up in the second half of the year. Just wondering if that kind of thesis is still holding true.

Absolutely. Yeah, thank you, Darren. Great to hear from you. So the thesis is certainly still holding true. I would say that onboarding has taken a bit longer than we had anticipated, but actually for kind of an exciting reason. Many of our merchants are finding the desire for our bundled checkout offering, meaning combining our credit services as well as our payments, more than we had even anticipated. So because of that, many of these merchants are actually wanting to migrate their entire checkout stack, not just payments at the same time, which is obviously just a slightly larger technical lift. But we certainly reiterate the thesis that the second half of this year is when we should begin to see very material revenue, even over and above the 80% increase we saw from Q1 to Q2.

Great. Then two more, if I may. Just on the EveryLife potential sale. Just kind of curious when that official process sort of started and what kind of inbound interest you've kind of seen thus far.

Yeah, great question. So this process started very recently. This is really the week where we're officially starting the process, beginning ultimately with this announcement here to our shareholders. As we've had preliminary conversations to gauge interest, we've been very positively received. And ultimately, we believe that the fundamentals of every life stand incredibly strong. It is a business that I love dearly and believe in passionately. It has a very strong economic outlook based upon not only its track record from the last two years, but also the increased demand we've even witnessed over the past few months for greater bulk order partners and opportunities with nonprofits at scale and being able to unlock future distribution models. So I'd say that value, both the track record and its go forward forecast has been very positively received. And we believe that we as a company are going to receive a very accretive deal for the sale of this brand. And ultimately, we're very excited about it landing in the hands of an ownership, either as a single individual or a firm or a network of investors that share two things. Number one, a positive outlook on the financial opportunity of EveryLife as a brand, as well as the values that have guided EveryLife from the beginning. We've always said at EveryLife that customers will come to EveryLife for the values and they will stay for the quality of the products. These are clean, premium, quality products that serve the life, health, and well-being of the most precious people we have in our home which is the next generation and ultimately that value has been uh very very positively received by potential investors or suitors that really believe that they can transform this brand into a a positive force as it continues to move and scale forward so as i said in the statement we anticipate wrapping up this uh process by the end of Q4 of this year, which really sets us up for a clean 2026 as a go-forward fintech company.

Your next question comes from the line of Francesco Marmo with Maxon Group. Please go ahead.

Hi, hello everybody. Thank you for taking my questions and congrats on the quarter. Just a quick one. I was wondering whether you guys could expand on your AI-driven initiatives in credit, and now that the company is going to pivot even further into its fintech businesses, how do you think AI will impact your operation and cost structure going forward? Thank you.

Thank you, Francesco. Great to hear from you. I'll start with one point, but then I'd actually love for Dusty Wunderlich, our chief strategy officer, to extrapolate, especially related to AI's utilization within our credit stack. At the whole business in the go-forward fintech environment, AI has played an instrumental role in really helping make us as a team operate with greater efficiency, efficacy, and speed. You know, we've really leveraged AI to help us in all aspects of the business, especially engineering and product, aside from the financial operations of the business that Dusty will touch on. So we're excited to continue implementing these toolings that are very innovative in nature and really allow for us as a small company to produce outsized output. And we've had very positive benefits thus far, and we would assume that those will only continue as we move forward. Dusty, do you want to address Francesco's question related to credit in our AI underwriting?

Yeah. Yeah, happy to. Hey, Francesco. Thanks for the question. On the Cordova side, we were fairly early to start adopting artificial intelligence into our credit underwriting and working with third parties of really solving AI with credit underwriting. The big problem the industry has and a lot of technologists have with credit specifically is you can't use black block solutions. from a regulatory perspective, we have to be able to tell consumers why that we're either approving or denying them credit. So we were able very early on to get with and partner with groups that were solving this problem. And effectively, what it's done, and this was as early as 2021, that we started training models. So we started adopting this and really spent the first couple years is training models with the over 300 data points we were already getting from either public records or the credit bureaus. And so over that time, Francesco, we've been able to curate a very specific credit underwriting score that's specific to our consumer data set. And about last year, we really started to implement this across our entire portfolio and underwriting system. And And we've seen drastic changes in our quality of our delinquency and charge-offs in that portfolio. It's part of the reason we're now balance sheeting more of our papers that completely changed some of the unit economics. And we're very bullish on what we've seen with this and continuing to press forward with how we implement this, not only in credit, but throughout organization as we look to the future. But we've been very pleased with what we've seen there and very glad that we made an early investment and really took time and patience to train these models correctly before we implement it. And I think we're seeing the fruits of that labor now.

Thank you.

I would now like to turn the call back over to Will Kent to answer some more questions submitted ahead of time. Please go ahead.

Thank you, Eric. We'll now address some questions that we received from the SAIT Technologies Platform. before closing up the call. First question. In Q1, you stated that no capital raise was needed for one to two years, yet weeks later, you filed a $50 million ATM. Was it closed? Any funds raised used?

Thank you for the question. It's a great question. I'd like to start by making something even further clear regarding the purpose of the ATM and its filing for our company not needing to raise for us is different than ensuring we have the opportunity to do so cleanly and efficiently should an opportunity arise that would be ultimately accretive for the business and beneficial to our shareholders so absolutely we reiterate the fact that we did not need to file the atm but for us it was more a matter of good corporate housekeeping to ensure that as james mentioned earlier in his comments that a company of our size has optionality And ultimately, that's what we look to do to ensure that we are constantly thinking about best ways in which we can serve the go-forward vision of this company and ultimately its benefit that we want to produce for shareholders. So that's number one, and I really appreciate the question there. The second thing I'll highlight is that, as James mentioned, we sold 164,971 shares via the ATM in Q2, which was really used to cover the cost of establishing the ATM in the first place. And ultimately, we will continue to keep the street updated as any relevant next steps are taken via the ATM. But ultimately, at the end of the day, I want to reiterate that point that for us, ATM is a good example of corporate housekeeping that ensures we have optionality to best benefit our company go forward and the shareholders.

Next question. As a shareholder, I'm curious what the board has been doing to help move Public Square forward. An example over the past two quarters, how Michael, Blake, Nick, Don Jr., or Dusty, or others have helped with growth, strategy, or visibility?

Yeah, I love this question. We are very grateful as a management team to have a board of directors that is actively involved in the operations and the strategy and the marketing of this company. I love the names that you mentioned. Blake is obviously a tech whiz. He has a long career in the intersection of technology, politics, and economics. And his help from a strategic point of view in guiding this company before it has truly been invaluable, especially as, by the way, we are migrating toward more and more of this fintech focus. I look at a Nick, and I'm blessed by Nick's wisdom and strategic guidance related to the operations of the company, how to structure a company in a streamlined fashion for success, paired with the fact that Nick has a tremendous level of influence and value in the faith-based community which is obviously a community that we hold very dear and we're honored to serve i look at a don jr and i reflect on the marketing expertise that he carries uh the deal flow that he's initiated for this company the uh real marketing brilliance specifically for the gun industry as well you know a lot of people obviously know don jr as businessman or as uh really a force of nature in the next generation and their views on politics. We're grateful for all of that and more because we get to see Don's passion for the firearms industry and the outdoor space come to life and how we grow this business forward and protect economic liberty for these industries. We are dedicated towards serving. You just heard from Dusty on the call. Dusty serves as not only board member but chief strategy officer as well. He's also one of the best economists I've ever met in my entire life. If you ever want a deep dive on how to structure this company for economic success, given the macroeconomic environment we find ourselves in, Dusty is my first call. And so I'm just really grateful for the board members we just mentioned, as well as the rest of our board members as well, Willie and Davis and Caitlin Long, who just joined this past week, and James Wren, our CFO. We really have an incredible board. We feel like we're out kicking our coverage here, and we believe that they'll continue to be instrumental as we move forward.

Our next question, what specific strategies is Public Square pursuing to sustainably increase profitability without compromising its core values?

I love this question, and I find it really fascinating because it's a good point to call out that in many cases, sometimes people feel like the pursuit of profitability is at odds with their mission or their core values. For us, we actually are very lucky and blessed that for our company, pursuing profitability means holding fast to our core values. We actually unlock greater profitable potential by holding fast to our core values. And I'll give you an example. One of the reasons we've been able to scale so fast in fintech, for example, is our commitment to our core value for economic liberty and protecting a cancel-proof transaction. That core promise that wakes us up every morning, excited to produce value in this business, is also the thing that leads to greater merchant onboarding. Our commitment to support families across this great country that have felt underserved by the existing financial institutional incumbents has been a major driver in onboarding and getting our message out in a grassroots effort to millions of customers and merchants that want to feel like there are financial services out there that are built for them. So to wrap that up, I would say across this entire business, a key strategy to driving sustainable increases of profitability is by holding fast to our core values, making sure that those values are messaged and marketed frequently, and that ultimately we're living them out, that we're holding fast to our convictions, upholding our promises to our merchants and our customers, and being a force for change through the power of this economic ecosystem we've created.

And our last question. Tablecoins, DeFi, and crypto were briefly discussed in the last call with what sounded like concrete plans to both adopt crypto as payments as well as buying Bitcoin to strengthen the balance sheet when the time is right. After some recent SEC clarity, where does Public Square stand on this as of today?

Well, I will tell you, I certainly love the recent SEC clarity as well as the legislative wins we've had recently with the Genius Act, for example. We love also the institutional interest like never before in the world of digital assets. And as a believer in this space for the last decade, as many of our management team and board of directors are as well, I can tell you that it feels pretty surreal to watch digital assets, cryptocurrency become a major part of the not only economic conversation, but also political conversation. We feel like as a business, we have an opportunity to really be a leader in this space by productizing much of the economic benefit that cryptocurrency brings to the table. And what I mean by that is that over the last 15 years, cryptocurrency has largely been an engineering-led effort. But over the course of the coming years, we predict that we will see cryptocurrency actually have a lot more to do with the actual products themselves and how we can utilize cryptocurrencies for a tangible benefit, both for our consumers and our merchants, seeing them as really a viable tool, not purely an asset. And so for us, we've put a lot of strategic time and effort into scoping what our future in this space looks like. What I can tell you is that we're excited to share more on our September Analyst and Investor Day about all the nuances and nitty gritty of our strategy here related to cryptocurrency moving forward. But finally, I'll say this. For us, it's been intentional. We have not wanted to just YOLO into Bitcoin because other companies are doing so. We actually believe that the best way to conduct a successful treasury strategy, for example, is by not only leveraging crypto for your treasury strategy, but also making sure that there is a productization of that crypto strategy reflected in our fintech stack. And so we want those two worlds to come together in a perfect marriage and ultimately that's what we are uh pressing forward on with our foot firmly pressed against the gas and we're excited to reveal more about what that looks like in the coming months i will add one more piece which is obviously for us leadership at the table is incredibly important that has a heavy level of both wisdom and influence in this space and obviously as i mentioned earlier in this call caitlin long joining our board there's no one better and so we feel like again we have the right team, the right talent, the right time, and we've put the right thought into this so that we feel we'll be able to execute here with a lot of efficacy and excellence here.

Well, I think that's it.

Really, really prefer or appreciate everybody's questions here today. Thank you all for joining us on this call. We are looking forward to communicating with you all in a soon forthcoming market communication regarding, again, the date, the time, and participation opportunities for our Investor and Analyst Day coming up in September. And we cannot thank you enough for being on this journey with us. So to all of you who joined us today and those who asked questions, we appreciate it and we hope you have a fantastic remainder of your evening.

Ladies and gentlemen, this concludes today's call. Thank you all for joining and you may now