Part I [Business](index=4&type=section&id=ITEM%201.%20BUSINESS.) Outdoor Holding Company now exclusively operates GunBroker.com, an online marketplace for firearms and accessories, facing competition and extensive regulation after its ammunition segment sale - On January 20, 2025, the company agreed to sell its Ammunition Manufacturing Business for a gross price of **$75.0 million**, closing on April 18, 2025, with net proceeds of approximately **$42.9 million**, followed by a name change to Outdoor Holding Company[20](index=20&type=chunk) - The GunBroker.com marketplace is the company's sole continuing operation, with approximately **8.4 million** registered users and an average of **3.67 million** daily listings as of March 31, 2025[22](index=22&type=chunk) - The company implemented several platform enhancements in fiscal year 2025, including an enhanced shopping cart, improved auction checkout, and a redesigned homepage[23](index=23&type=chunk)[27](index=27&type=chunk) - The business operates in a highly regulated industry, requiring compliance with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the National Firearms Act (NFA), and the Gun Control Act (GCA), among other federal, state, and local laws[37](index=37&type=chunk) - As of June 10, 2025, the company had **81** employees, with none represented by a union[32](index=32&type=chunk) [Risk Factors](index=9&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company identifies numerous business, legal, regulatory, and financial risks, including dependence on user retention, intense competition, cybersecurity threats, and material weaknesses in internal controls - Business performance is highly dependent on the ability to attract and retain an active community of buyers and sellers on the GunBroker platform[46](index=46&type=chunk) - The company faces substantial competition from peer-to-peer marketplaces, e-commerce dealers, direct-to-consumer manufacturers, and traditional auction houses with online platforms[51](index=51&type=chunk)[53](index=53&type=chunk) - The restatement of financial statements has led to significant costs, management diversion, and a pending SEC investigation into areas including share-based compensation accounting and executive compensation disclosure[93](index=93&type=chunk) - Management has concluded that there are material weaknesses in internal control over financial reporting related to the control environment, complex accounting, related-party transactions, and segregation of duties, increasing the risk of financial misstatement[104](index=104&type=chunk)[106](index=106&type=chunk) - The business is exposed to significant regulatory risk from federal, state, and local laws governing firearms and ammunition, which could change and adversely impact demand for products sold on the platform[110](index=110&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The Series A Preferred Stock ranks junior to all company indebtedness and other liabilities, and its trading market may lack adequate liquidity[127](index=127&type=chunk)[129](index=129&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports that it has no unresolved comments from the SEC staff - None[140](index=140&type=chunk) [Cybersecurity](index=24&type=section&id=ITEM%201C.%20CYBERSECURITY) The company's cybersecurity risk management is integrated into its overall risk framework and overseen by the Board of Directors, with an Information Security Program in place to protect data - The Board of Directors provides oversight for cybersecurity risk management, receiving reports from management and senior IT leadership[146](index=146&type=chunk)[148](index=148&type=chunk) - The company's Information Security Program is designed to protect personal and proprietary information and is periodically assessed against the NIST Cybersecurity Framework and PCI DSS[143](index=143&type=chunk)[145](index=145&type=chunk) - The company acknowledges experiencing cybersecurity incidents in the ordinary course of business but states they have not had a material adverse effect on the company to date[151](index=151&type=chunk) [Properties](index=25&type=section&id=ITEM%202.%20PROPERTIES) The company leases two primary facilities: its executive offices in Scottsdale, Arizona, and the GunBroker operations office in Atlanta, Georgia Leased Properties | Location | Size (sq ft) | Monthly Rent | Purpose | | :--- | :--- | :--- | :--- | | Scottsdale, AZ | ~21,000 | ~$25,000 | Principal executive, administration, marketing | | Atlanta, GA | 10,000 | ~$20,000 | GunBroker offices and operations | [Legal Proceedings](index=25&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company reports on several significant legal matters, including the settlement and dismissal of the Delaware Litigation and an ongoing breach of contract lawsuit seeking $100 million in damages - The Delaware Litigation, involving lawsuits between the company and Steve Urvan, was fully settled and dismissed with prejudice in June 2025[154](index=154&type=chunk) - The MN Action involves a breach of contract claim by Innovative Computer Professionals, Inc (DCP) against GunBroker.com, alleging **$100 million** in damages, with a trial expected in January 2026[157](index=157&type=chunk) [Mine Safety Disclosure](index=26&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURE) This item is not applicable to the company's operations - Not applicable[158](index=158&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=ITEM%205%3A%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on the Nasdaq under "POWW", with no common stock dividends ever paid, while a **$30.0 million** share repurchase program expired in February 2025 with **$8.6 million** utilized - The company's Common Stock is traded on the Nasdaq Capital Market under the symbol "POWW"[160](index=160&type=chunk) - No dividends have ever been declared or paid on Common Stock, but the company paid preferred dividends on its Series A Preferred Stock amounting to **$3.0 million** in each of the fiscal years 2025, 2024, and 2023[162](index=162&type=chunk) - A share repurchase program for up to **$30.0 million** of common stock expired on February 6, 2025, with **$8.6 million** used to repurchase approximately **4.8 million** shares, leaving **$21.4 million** unused at expiration[165](index=165&type=chunk)[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=ITEM%207%3A%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) The MD&A details the company's financial performance, focusing on continuing operations after the Ammunition segment divestiture, reporting a significant net loss and decreased liquidity due to litigation and increased legal fees - The company sold its Ammunition segment, which closed on April 18, 2025, for net proceeds of approximately **$42.9 million**, with the segment now reported as discontinued operations[175](index=175&type=chunk) - A major litigation with Steve Urvan was settled in May 2025, including issuing a warrant for **7.0 million** shares, a **$12.0 million** promissory note, and a **$39.0 million** promissory note, with Mr Urvan appointed CEO and Chairman[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) Key Financial Metrics (Continuing Operations, in millions) | Financial Metric (Continuing Operations) | FY 2025 | FY 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenues | $49.4 | $53.9 | (8.4%) | | Gross Profit | $42.9 | $46.3 | (7.3%) | | Loss from Operations | $(59.7) | $(6.4) | (827%) | | Net Loss from Continuing Operations | $(65.2) | $(5.4) | (1108%) | | Adjusted EBITDA | $15.3 | $24.0 | (36.3%) | - The significant increase in operating expenses in FY2025 was primarily due to a **$29.1 million** contingency for the Delaware Litigation and a **$14.1 million** increase in legal and professional fees related to the restatement, investigations, and litigation[197](index=197&type=chunk) - Cash and cash equivalents decreased by **$25.4 million**, from **$55.6 million** at the end of FY2024 to **$30.2 million** at the end of FY2025[210](index=210&type=chunk) - A critical accounting estimate involved classifying the Ammunition segment as held for sale, which resulted in an estimated loss on classification of approximately **$45.8 million**[236](index=236&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks, including fluctuations in interest rates and commodity prices, in the ordinary course of its business activities, but has not used market risk sensitive instruments for trading purposes - The company is exposed to market risks from fluctuations in interest rates and commodity prices, which can affect its operating, investing, and financing activities[244](index=244&type=chunk) [Controls and Procedures](index=40&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses identified during a Special Committee Investigation, leading to a financial restatement and an adverse auditor opinion - A Special Committee Investigation uncovered accounting errors that required the restatement of financial statements for fiscal years 2022, 2023, and 2024[246](index=246&type=chunk)[247](index=247&type=chunk) - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses[249](index=249&type=chunk) - Material weaknesses were identified in several areas: Control Environment, Information and Communication, Monitoring Activities, and Control Activities (including Complex Technical Accounting, Related Party Transactions, Financial Reporting, and Segregation of Duties)[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - Management has initiated a remediation plan that includes hiring a new CFO and VP of Accounting, reinforcing compliance communications, implementing new policies for related parties and perquisites, and establishing a formal disclosure committee[258](index=258&type=chunk) - The independent registered public accounting firm issued an adverse opinion, stating the Company has not maintained effective internal control over financial reporting as of March 31, 2025[264](index=264&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=47&type=section&id=ITEM%2010%3A%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information for this item, including details on directors, executive officers, and corporate governance, is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's 2025 definitive proxy statement[278](index=278&type=chunk) [Executive Compensation](index=47&type=section&id=ITEM%2011%3A%20EXECUTIVE%20COMPENSATION) Details regarding executive compensation are incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's 2025 definitive proxy statement[279](index=279&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=ITEM%2012%3A%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information concerning the security ownership of certain beneficial owners and management is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's 2025 definitive proxy statement[280](index=280&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=47&type=section&id=ITEM%2013%3A%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding related party transactions and director independence is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's 2025 definitive proxy statement[281](index=281&type=chunk) [Principal Accounting Fees and Services](index=47&type=section&id=ITEM%2014%3A%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Details about the fees paid to the principal accountant and the services provided are incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's 2025 definitive proxy statement[282](index=282&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=48&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all exhibits filed as part of the Annual Report on Form 10-K, including governance documents, material contracts, and certifications, and indicates that financial statements and schedules are included under Item 8 - This section provides a comprehensive list of all exhibits filed with the Form 10-K, such as the Asset Purchase Agreement for the ammunition business sale, the Settlement Agreement with Steve Urvan, and various executive employment and separation agreements[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) Financial Statements and Notes [Report of Independent Registered Public Accounting Firm](index=53&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an unqualified opinion on the consolidated financial statements but an adverse opinion on internal control over financial reporting due to material weaknesses, identifying "Settlement Valuation" as a critical audit matter - The auditor issued an unqualified opinion on the financial statements, finding them to be fairly presented in conformity with U.S GAAP[300](index=300&type=chunk) - An adverse opinion was issued on the company's internal control over financial reporting due to material weaknesses[301](index=301&type=chunk) - The valuation of the **$29.1 million** litigation settlement contingency was identified as a Critical Audit Matter due to the significant management judgment and subjectivity involved[305](index=305&type=chunk) [Consolidated Financial Statements](index=55&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, results of operations, and cash flows, reflecting a significant decrease in total assets, an increase in total liabilities, and a substantial net loss driven by continuing and discontinued operations Consolidated Balance Sheet (in millions) | Consolidated Balance Sheet (in millions) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $72.1 | $131.5 | | Total Assets | $297.3 | $403.0 | | Total Current Liabilities | $62.1 | $31.0 | | Total Liabilities | $75.3 | $45.0 | | Total Shareholders' Equity | $222.0 | $358.0 | Consolidated Statement of Operations (in millions) | Consolidated Statement of Operations (in millions) | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Net Revenues (Continuing) | $49.4 | $53.9 | $63.1 | | Net Loss from Continuing Operations | $(65.2) | $(5.4) | $3.6 (Income) | | Loss from Discontinued Operations | $(65.6) | $(11.2) | $(12.4) | | Net Loss Attributable to Common Shareholders | $(133.9) | $(19.7) | $(11.9) | Consolidated Statement of Cash Flow (in millions) | Consolidated Statement of Cash Flow (in millions) | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net Cash from Continuing Operations | $(5.1) | $17.5 | | Net Cash from Discontinued Operations | $(7.4) | $9.3 | | Net Decrease in Cash | $(25.4) | $16.0 (Increase) | [Notes to Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and financial results, including the accounting for discontinued operations, a **$29.1 million** litigation settlement contingency, debt instruments, related-party transactions, and subsequent events like the ammunition business sale and litigation settlement terms [Note 4: Discontinued Operations and Assets Held for Sale](index=75&type=section&id=NOTE%204-%20DISCONTINUED%20OPERATIONS%20AND%20ASSETS%20HELD%20FOR%20SALE) This note details the financial impact of classifying the Ammunition segment as held for sale and reporting it as a discontinued operation, including a **$45.8 million** impairment charge in FY2025 - The Ammunition segment was classified as held for sale, and its results are presented as discontinued operations for all periods shown[386](index=386&type=chunk) - An impairment charge of **$45.8 million** was recorded in FY2025 to write down the carrying value of the Ammunition segment's assets to fair value less costs to sell, including a **$16.9 million** write-down of inventory[390](index=390&type=chunk)[392](index=392&type=chunk)[394](index=394&type=chunk) Discontinued Operations (Ammunition Segment) | Discontinued Operations (Ammunition Segment) | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net Revenues | $74.9M | $91.1M | | Loss from Discontinued Operations (pre-tax) | $(67.2)M | $(14.1)M | | *Includes $45.8M impairment in FY2025* | | | [Note 9: Related Party Transactions](index=82&type=section&id=NOTE%209%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses several transactions with related parties, including final payments on a note to Jagemann Stamping Company, the **$8.0 million** Triton Settlement, and undisclosed payments received by a former executive from a company vendor - The company paid the remaining balance on a promissory note to former related party Jagemann Stamping Company during FY2024[410](index=410&type=chunk) - In connection with the Triton Settlement, the company paid **$8.0 million**, with a portion effectively covered by the cancellation of **2,857,143** shares held by Steve Urvan[374](index=374&type=chunk)[375](index=375&type=chunk) - The company was made aware that a former executive, Chris Larson, received undisclosed payments totaling **$814,863** from a third-party service provider to the company between January 2022 and March 2024[415](index=415&type=chunk)[417](index=417&type=chunk) [Note 13: Income Taxes](index=89&type=section&id=NOTE%2013%20%E2%80%93%20INCOME%20TAXES) The company's effective tax rate was **15.2%** for FY2025, with a significant **$36.0 million** valuation allowance recorded against net deferred tax assets due to uncertainty regarding their future realization, resulting in a **$6.3 million** tax provision despite a pre-tax loss - For FY2025, the company recorded a tax provision of **$6.3 million** on a pre-tax loss from continuing operations of **$58.9 million**[446](index=446&type=chunk) - A valuation allowance of **$36.0 million** was recorded against deferred tax assets in FY2025 due to uncertainty about their future realization[446](index=446&type=chunk)[449](index=449&type=chunk) - The company has a liability for uncertain tax positions of **$1.6 million** as of March 31, 2025, which includes accrued penalties and interest[450](index=450&type=chunk) [Note 16: Subsequent Events](index=94&type=section&id=NOTE%2016%3A%20SUBSEQUENT%20EVENTS) This note details significant events after the fiscal year-end, including the sale of the Ammunition business, separation agreements with former executives, and the settlement of the Delaware Litigation with Steve Urvan, involving the issuance of warrants and promissory notes - The sale of the Ammunition Manufacturing Business was completed on April 18, 2025, resulting in a recognized gain on sale of **$1.3 million**[462](index=462&type=chunk) - On May 30, 2025, the company settled litigation with Steve Urvan, issuing a warrant to purchase **7.0 million** shares at **$1.81/share** as part of the settlement[470](index=470&type=chunk)[471](index=471&type=chunk) - The settlement also required the issuance of two unsecured promissory notes to Mr Urvan's designee: one for **$12.0 million** and another for **$39.0 million**[473](index=473&type=chunk)[475](index=475&type=chunk)

Leadership Transition - Steve Urvan has been appointed as the Chief Executive Officer and Chairman of the Board of Outdoor Holding Company, effective May 30, 2025, pending Nasdaq's approval of a settlement transaction [1][2] - Urvan is the founder of GunBroker.com and the largest shareholder of the Company, bringing 22 years of experience in technology and e-commerce [2][3] Strategic Focus - The Company aims to accelerate its strategic focus on growing its profitable e-commerce segment, particularly through GunBroker.com, which is the largest online marketplace for firearms and related products [3][9] - Urvan expressed a commitment to building a winning culture and establishing clear operating principles to guide the Company towards success [2] Litigation Settlement - The Company has settled ongoing litigation with Urvan, which will allow it to focus on enhancing profitability and shareholder value [4] - As part of the settlement, outgoing CEO Jared Smith will resign from the Board, leaving a total of six members, including Urvan [4] Financial Remuneration - Urvan will receive a salary of $1 in his first year as CEO, with bonuses or equity grants to be determined by the Compensation Committee [6] - The settlement also includes financial remuneration for Urvan, details of which are available in the Company's Current Report filed with the SEC [5] Compliance with Nasdaq - The Company has regained compliance with Nasdaq's listing rule regarding timely periodic reporting, having filed Forms 10-Q for the periods ended September 30 and December 31, 2024 [7] - The Company plans to file its annual report on Form 10-K for fiscal year 2025 in a timely manner [7]

PART I [Financial Statements](index=3&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) Presents Outdoor Holding Company's unaudited condensed consolidated financial statements for Q3 2024, detailing financial position, operations, and cash flows with explanatory notes [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The company reported increased net losses for Q3 and H1 2024, with assets declining and operating cash flow turning negative Condensed Consolidated Statements of Operations (Unaudited) | Indicator | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $31.4 million | $34.4 million | $62.4 million | $68.6 million | | **Gross Profit** | $7.2 million | $8.3 million | $17.0 million | $22.3 million | | **Loss from Operations** | ($12.5 million) | ($9.0 million) | ($22.9 million) | ($11.0 million) | | **Net Loss** | ($12.4 million) | ($7.7 million) | ($27.2 million) | ($9.0 million) | | **Net Loss per Share (Basic & Diluted)** | ($0.11) | ($0.07) | ($0.24) | ($0.09) | Condensed Consolidated Balance Sheet Highlights (Unaudited) | Asset/Liability | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $33.5 million | $55.6 million | | Inventories | $51.8 million | $45.6 million | | Total Assets | $368.9 million | $403.0 million | | Total Liabilities | $43.4 million | $45.0 million | | Total Shareholders' Equity | $325.6 million | $358.0 million | Condensed Consolidated Statements of Cash Flow (Unaudited, Six Months Ended) | Cash Flow Activity | September 30, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($9.9 million) | $18.2 million | | Net cash used in investing activities | ($2.8 million) | ($2.6 million) | | Net cash used in financing activities | ($9.3 million) | ($5.6 million) | | **Net (decrease) increase in cash** | **($22.1 million)** | **$9.9 million** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section provides detailed notes on the company's segment operations, accounting policies, significant legal contingencies, and crucial subsequent events - The company operates through two segments: **Ammunition manufacturing** and the **GunBroker e-commerce Marketplace**. On April 21, 2025, the company changed its name from AMMO, Inc. to **Outdoor Holding Company**[24](index=24&type=chunk)[25](index=25&type=chunk)[135](index=135&type=chunk) - Goodwill of **$90.9 million** is entirely allocated to the Marketplace segment, with potential for a **material non-cash impairment charge** for the fiscal year ending March 31, 2025, due to declines in stock price and market capitalization[33](index=33&type=chunk) - The company is involved in significant litigation, including a lawsuit filed by director Steve Urvan seeking rescission of the GunBroker Merger and damages of at least **$140 million**, to which the company has filed a countersuit[79](index=79&type=chunk) - Subsequent to the quarter end, on January 20, 2025, the company entered into an agreement to sell its Ammunition Manufacturing Business to Olin Winchester, LLC for a gross price of **$75.0 million**, with the transaction completed on April 18, 2025[144](index=144&type=chunk)[149](index=149&type=chunk) Asset Impairment from Ammunition Business Sale | Asset Category | Impairment Amount | | :--- | :--- | | Inventory | $17.1 million | | Property, plant and equipment | $25.4 million | | Other assets | $0.5 million | | Intangible assets | $2.8 million | | **Total Impairment** | **$45.8 million** | - The company is facing a **pending investigation by the SEC Division of Enforcement** concerning its valuation and accounting for share-based compensation, capitalization of share issuance costs, and disclosure of perquisites and related party transactions, with no estimable potential loss yet[157](index=157&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=ITEM%202%3A%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) Management discusses decreased revenues, increased operating expenses from legal fees, and reduced liquidity, with a strategic shift after the ammunition business sale Revenue by Category (Three Months Ended) | Category | September 30, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Proprietary Ammunition | $2.7 million | $1.2 million | | Standard Ammunition | $13.2 million | $14.3 million | | Ammunition Casings | $3.5 million | $6.4 million | | Marketplace Revenue | $12.0 million | $12.5 million | | **Total Revenues** | **$31.4 million** | **$34.4 million** | - Net revenues decreased by **8.6%** for the three months and **9.1%** for the six months ended September 30, 2024, attributed to changes in market demand, pricing, sales mix in the ammunition division, and lower volume in the Marketplace segment[180](index=180&type=chunk) - Gross margin percentage decreased from **24.1% to 23.0%** for the three-month period year-over-year, due to increased costs in the Ammunition segment, partially offset by improved margins from the GunBroker.com marketplace[187](index=187&type=chunk) - Operating expenses increased by **$2.4 million** for the quarter, primarily due to a **$3.7 million** increase in legal fees related to the Delaware litigation and professional fees for manufacturing efficiency investments[189](index=189&type=chunk)[190](index=190&type=chunk) Adjusted EBITDA Reconciliation (Non-GAAP) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss | ($12.4 million) | ($7.7 million) | ($27.2 million) | ($9.0 million) | | **Adjusted EBITDA** | **$0.6 million** | **$1.9 million** | **$3.0 million** | **$7.9 million** | - Cash and cash equivalents decreased by **$22.1 million** from March 31, 2024, to **$33.5 million** at September 30, 2024, driven by an **$8.0 million** legal settlement payment, **$5.6 million** in legal fees, and **$5.9 million** in stock repurchases[195](index=195&type=chunk)[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203%3A%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) No material changes to market risks were reported from the prior Annual Report on Form 10-K - There have been no material changes to the market risks disclosed in the company's most recent Form 10-K[219](index=219&type=chunk) [Controls and Procedures](index=41&type=section&id=ITEM%204%3A%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of September 30, 2024, due to material weaknesses, and is implementing a remediation plan - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of September 30, 2024, due to existing **material weaknesses**[223](index=223&type=chunk) - A Special Committee investigation uncovered **material misstatements** in prior financial periods related to share-based compensation, capitalization of costs, and accounting for convertible notes and warrants[220](index=220&type=chunk)[221](index=221&type=chunk) - Identified **material weaknesses** include issues with the control environment, complex technical accounting, related party transaction disclosure, financial reporting processes, and segregation of duties[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - Management's **remediation plan** includes hiring a new CFO and VP of Accounting, reinforcing compliance, updating policies for significant transactions and related parties, and establishing a formal disclosure committee[227](index=227&type=chunk)[231](index=231&type=chunk) PART II [Legal Proceedings](index=44&type=section&id=ITEM%201%3A%20LEGAL%20PROCEEDINGS) The company faces significant legal disputes, including a $140 million lawsuit from director Steve Urvan and a $100 million breach of contract claim from DCP - Director and stockholder Steve Urvan filed a suit seeking partial rescission of the GunBroker.com acquisition and damages of not less than **$140 million**, with the company filing a countersuit and a trial scheduled for April 2026[235](index=235&type=chunk) - Innovative Computer Professionals, Inc. (DCP) filed a civil action against GunBroker.com for breach of contract, alleging **$100 million** in damages, with the matter tentatively scheduled for trial in November 2025[236](index=236&type=chunk) [Risk Factors](index=45&type=section&id=ITEM%201A%3A%20RISK%20FACTORS) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K/A were reported - No material changes to the "Risk Factors" disclosed in the Form 10-K/A were reported[238](index=238&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=ITEM%202%3A%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company has an active share repurchase program of up to $30.0 million, with 2.9 million shares repurchased in Q3 2024, leaving $21.4 million available - The Board of Directors has authorized a share repurchase program for up to **$30.0 million** of common stock, extended until February 2025[239](index=239&type=chunk) Share Repurchases (Three Months Ended September 30, 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that may yet be Purchased | | :--- | :--- | :--- | :--- | | **Total** | **2.9 million** | **$1.68** | **$21.4 million** | [Defaults Upon Senior Securities](index=45&type=section&id=ITEM%203%3A%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - None[243](index=243&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=ITEM%204%3A%20MINE%20SAFETY%20DISCLOSURE) Mine safety disclosures are not applicable to the company's operations - Not applicable[244](index=244&type=chunk) [Other Information](index=45&type=section&id=ITEM%205%3A%20OTHER%20INFORMATION) No other material information was reported in this section - None[245](index=245&type=chunk) [Exhibits](index=46&type=section&id=ITEM%206%3A%20EXHIBITS) This section lists exhibits filed with the quarterly report, including the ammunition business sale agreement and CEO/CFO certifications - Key exhibits filed include the **Asset Purchase Agreement** with Olin Winchester, LLC, and **certifications from the CEO and CFO** pursuant to the Sarbanes-Oxley Act[246](index=246&type=chunk)

SCOTTSDALE, Ariz., May 09, 2025 (GLOBE NEWSWIRE) -- Outdoor Holding Company (Nasdaq: POWW, POWWP) (“Outdoor Holding Company,” “OHC,” or the “Company”) the owner of GunBroker.com, the largest online marketplace serving the firearms and shooting sports industries, and a leading vertically integrated producer of high-performance ammunition and components, today announced that the holders of record of the Company’s 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) a ...

Core Insights - AMMO, Inc. has completed the sale of its ammunition manufacturing assets to Olin Winchester, marking a significant shift towards becoming a tech-enabled e-commerce company focused on GunBroker.com [1][2][3] - The transaction is expected to unlock substantial value and accelerate growth as AMMO transitions to a pure-play e-commerce platform [3][4] - GunBroker.com will serve as the core business and growth engine, with recent enhancements leading to improved customer engagement and conversion rates [4][7] Transaction Details - Olin Winchester acquired AMMO's 185,000-square-foot manufacturing and ballistic testing facility located in Manitowoc, Wisconsin [5] - The sale was unanimously approved by AMMO's Board and M&A Committee after a comprehensive strategic review process that began in February 2024 [6][8] - The transaction involved a competitive sale process with 15 potential buyers and included a fairness opinion from Lake Street Capital Markets [6][8] Future Focus - The company aims to prioritize the profitable, high-margin GunBroker.com marketplace and capitalize on e-commerce growth opportunities in the firearms and shooting sports industries [7][8] - Proceeds from the transaction will be used for general corporate purposes, with potential evaluations for other uses in the future [8] - AMMO is initiating a rebranding process, including a name change to Outdoor Holding Company, to better align with its e-commerce identity [9] Compliance and Updates - AMMO has submitted an updated compliance plan to Nasdaq to address a deficiency notification regarding its listing requirements [10]

Core Viewpoint - AMMO, Inc. is under investigation for potential breaches of fiduciary duties by its board of directors following a class action complaint related to financial reporting issues and internal controls [1][3]. Group 1: Company Developments - On September 24, 2024, AMMO announced the resignation of its Chief Financial Officer at the request of the Board and disclosed an independent investigation into its internal control over financial reporting for fiscal years 2020 through 2023 [2]. - The investigation will assess whether the company accurately disclosed executive officers, management members, and related party transactions, as well as the proper characterization of fees and valuation of stock awards during fiscal years 2020 to 2023 [2][3]. - Following the announcement, AMMO's share price fell by $0.08, or 5.26%, closing at $1.44 per share on September 25, 2024, with unusually high trading volume [2]. Group 2: Class Action Complaint Details - The class action complaint alleges that AMMO made materially false and misleading statements and failed to disclose adverse facts about its business and operations during the class period from August 19, 2020, to September 24, 2024 [3]. - Specific allegations include inadequate internal controls over financial reporting, failure to accurately disclose management and related party transactions, improper characterization of fees, and inappropriate valuation of stock awards [3].

Core Insights - AMMO, Inc. (NASDAQ: POWW) is facing a lawsuit filed by investors over alleged securities law violations related to inadequate internal controls and misleading statements about the company's financial reporting [2] Group 1: Company Developments - On September 24, 2024, AMMO, Inc. announced the resignation of its Chief Financial Officer at the request of the Board [2] - The company is conducting an independent investigation into its internal control over financial reporting for the fiscal years 2020 through 2023 [2] Group 2: Legal Issues - A lawsuit was filed on September 30, 2024, alleging that AMMO, Inc. failed to disclose significant issues regarding its internal controls and financial reporting [2] - The plaintiff claims that the company did not accurately disclose executive officers, management members, and related party transactions for fiscal years 2020 through 2023 [2] - Allegations also include improper characterization of fees related to investor relations and legal services, as well as failure to appropriately value stock awards during fiscal years 2020 through 2022 [2]

Core Viewpoint - Rosen Law Firm is reminding investors who purchased AMMO, Inc. securities between August 19, 2020, and September 24, 2024, of the upcoming lead plaintiff deadline on November 29, 2024, for a class action lawsuit [1]. Group 1: Class Action Details - Investors who bought AMMO securities during the specified Class Period may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [1]. - A class action lawsuit has already been filed, and those wishing to serve as lead plaintiff must act by November 29, 2024 [2]. - The lawsuit alleges that AMMO made false or misleading statements and failed to disclose critical information regarding its financial reporting and management practices [4]. Group 2: Rosen Law Firm's Credentials - Rosen Law Firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions [3]. - The firm has achieved significant settlements, including the largest securities class action settlement against a Chinese company at the time, and has recovered hundreds of millions of dollars for investors [3]. - In 2019, the firm secured over $438 million for investors, showcasing its effectiveness in representing clients [3].

Core Viewpoint - A class action lawsuit has been filed against AMMO, Inc. for alleged violations of securities laws, specifically related to misleading financial statements and inadequate controls over financial reporting [1][5]. Group 1: Lawsuit Details - The lawsuit pertains to investors who purchased AMMO's securities between August 19, 2020, and September 24, 2024 [2]. - The Schall Law Firm is representing the investors and encourages those who suffered losses to contact them before November 29, 2024 [2][3]. - The class has not yet been certified, meaning potential class members are not currently represented by an attorney [4]. Group 2: Allegations Against AMMO, Inc. - The complaint alleges that AMMO made false and misleading statements regarding its financial reporting and failed to maintain appropriate controls [5]. - Specific issues include misstated related party transactions from 2020 to 2023 and improper valuation of unrestricted stock awards to executives and employees from 2020 to 2022 [5]. - As a result of these failures, the company's public statements were deemed materially misleading, leading to investor damages when the truth was revealed [5].

Core Viewpoint - AMMO, Inc. has received a deficiency notification from Nasdaq due to the late filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which is linked to an ongoing independent investigation [1][2]. Compliance and Filing Status - The company has until January 21, 2025, to submit a plan to regain compliance with Nasdaq Listing Rule 5250(c)(1) [3]. - If Nasdaq accepts the plan, the company may receive an extension of up to 180 days to regain compliance, potentially until May 19, 2025 [3]. - The company is actively working to complete and file the Form 10-Q as soon as possible to meet compliance requirements [3]. Impact of Notification - The notification does not have an immediate effect on the listing of the company's common or preferred stock on Nasdaq [5]. - There is no assurance that the company will regain compliance or maintain other listing requirements, which could lead to potential delisting if compliance is not achieved within the specified period [4]. Company Overview - AMMO, Inc. is a vertically integrated producer of high-performance ammunition and components, and it owns GunBroker.com, the largest online marketplace for firearms and related products [1][6]. - The company was founded in 2016 and aims to innovate within the munitions industry, offering products such as STREAK™ Visual Ammunition and armor-piercing rounds [6]. GunBroker.com Overview - GunBroker.com serves as a platform for third-party sellers to list firearms and related items, adhering to federal and state laws regarding the sale of such products [7]. - The platform promotes responsible gun ownership and provides a secure way to buy and sell firearms and accessories online [7].