Sezzle

2 serious warning signs in Sezzle’s filings.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 26 Feb 2026, plus the 10-Q filed 7 Aug 2026 and 12 later 8-Ks.

• Weak checks on its own accounts

  Serious

  The company said its checks on its own accounts did not work at the end of its latest quarter. Mistakes could slip into the numbers.

  “Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level, due to the material weakness described in Management’s Annual Report on Internal Control over Financial Reporting as disclosed in the Company’s 2025 Form 10-K.”

  Show the full paragraph

  Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level, due to the material weakness described in Management’s Annual Report on Internal Control over Financial Reporting as disclosed in the Company’s 2025 Form 10-K. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

  From the 10-Q filed 7 August 2026, Part I, Item 4. Controls and Procedures. Read it in the filing

• Its past accounts can't be relied on

  Serious

  It told the SEC its earlier accounts should no longer be relied on, usually because they contained errors.

  8-K Item 4.02 filed 25 Feb 2026: the company said its earlier financial statements should no longer be relied on.

  From an 8-K filed 25 February 2026: Previously issued accounts should no longer be relied on. Open the filing

• Changed auditor

  Worth knowing

  The company changed its auditor (the firm that checks its books) in the last two years.

  “On March 16, 2026, Sezzle Inc. (the “Company”) dismissed Baker Tilly US, LLP (“Baker Tilly”) as the Company’s independent registered public accounting firm.”

  From an 8-K filed 20 March 2026: Change of auditor. Read it in the filing

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• We discovered a material weakness in our internal control over financial reporting. If we fail to remedy the material weakness or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to report our financial results on a timely and accurate basis may be adversely affected.

  Could happen

  As described within our Management’s Report on Internal Control over Financial Reporting within this Annual Report on Form 10-K, management identified a material weakness in its internal control over financial reporting with respect to the design and effectiveness of controls to evaluate the appropriate classification of the cash flows related to our notes receivable. While we have designed a remediation plan, we will not be able to conclude whether the remediation of the material weakness was successful until sufficient time has passed to allow management to test the design and operational effectiveness of the enhanced controls. Not remediating the material weakness or not identifying additional control weaknesses could result in additional accounting errors or reporting delays that could negatively impact our reputation or stock price.

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• If we fail to retain existing consumers or acquire new consumers in a cost-effective manner, our business, financial condition, and results of operations could be adversely affected.

  Could happen

  We generate total revenue when consumers pay with Sezzle at checkout in e-commerce transactions. We believe that growth of our business is dependent on our ability to generate repeat usage and increased transaction volume from existing consumers and to attract new consumers to the Sezzle Platform. The revenue driven by consumer transaction activity includes fees related to processing orders and payments and interchange from our virtual card solution, both of which scale with overall gross merchandise volume (“GMV”). If we are unable to maintain or increase consume engagement, transaction frequency, or AOV, transaction volumes and GMV could decline, which would adversely affect our revenue and operating results.

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• Our ability to attract and retain consumers enrolled in our subscription products or maintain the competitiveness and value of our paid subscription products, our business, financial condition, and results of operations could be adversely affected.

  Could happen

  We have adjusted, and may continue to adjust, our subscription pricing from time to time. If subscribers do not view our pricing as providing sufficient value, they may choose not to enroll in or renew a subscription. Conversely, efforts to enhance or expand our subscription products may require additional investment, and we may not be able to offset such costs through pricing adjustments or subscriber growth.

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• We have generated significant net losses in the past. We may not achieve or be able to maintain historic levels of profitability in the future.

  Could happen

  We plan to continue investing in the growth of our business, including enhancing our technology infrastructure and platform capabilities, developing and launching new consumer products and services, expanding our merchant network, and increasing our sales and marketing efforts to acquire and retain both consumers and merchants, and pursuing initiatives designed to enhance our funding efficiency and financial services capabilities, which may include seeking additional licenses and/or a bank charter. These initiatives require significant ongoing investment and may increase our operating expenses and capital requirements in the near term.

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• If we fail to comply with the applicable requirements of Visa or other payment processors, those payment processors could seek to fine us, suspend us or terminate our registrations, which could limit our ability to process transactions or earn related revenue, and could have a material adverse effect on our business, results of operations, financial condition, and prospects.

  Could happen

  A portion of our revenue is derived from interchange fees associated with our virtual card transactions processed on payment networks, including Visa. The amount of interchange we earn depends on the network rules, card product classifications, transaction mix, and applicable interchange schedules. Payment networks may modify their interchange fee structures, eligibility criteria, or program requirements, including with respect to our virtual card program, which could reduce the interchange revenue we earn and adversely affect our transaction economics.

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