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)

Group 1 - Outdoor Holding Company announced a cash dividend of $0.546875 per share for its 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, payable on June 16, 2025, to holders of record as of June 1, 2025 [1] - The company is the owner of GunBroker.com, the largest online marketplace for firearms and shooting sports, and is a leading producer of high-performance ammunition and components [1][2] - GunBroker.com operates as a platform for third-party sellers to list firearms and related products, adhering to federal and state laws regarding the sale of such items [2] Group 2 - Outdoor Holding Company is headquartered in Scottsdale, Arizona, and serves outdoor enthusiasts through its subsidiaries [2] - GunBroker.com promotes responsible ownership of firearms and provides a secure way to buy and sell various outdoor and shooting-related products [2]

Group 1: Market Overview - As of April 23, 2025, two stocks in the consumer discretionary sector are signaling potential warnings for momentum-focused investors [1] - The Relative Strength Index (RSI) is highlighted as a key momentum indicator, with values above 70 indicating overbought conditions [2] Group 2: Company Analysis - ThredUp Inc (TDUP) - ThredUp is set to release its Q1 financial results on May 5, with the stock having increased approximately 37% over the past month and reaching a 52-week high of $3.89 [6] - The current RSI value for ThredUp is 83.2, indicating overbought conditions, and the stock closed at $3.85 after a 15.3% gain [6] - ThredUp has a momentum score of 99.37 and a value score of 52.30 according to Edge Stock Ratings [6] Group 3: Company Analysis - Ammo Inc (POWW) - Ammo Inc completed the sale of ammunition manufacturing assets to Olin Winchester on April 18, which is seen as a pivotal moment for the company [6] - This strategic move is expected to unlock significant value and facilitate growth as a pure-play e-commerce platform [6] - Ammo's stock rose around 35% over the past five days, reaching a 52-week high of $2.86, with an RSI value of 81.4 [6] - The stock closed at $1.80 after a 15.4% increase [6]

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].

Core Viewpoint - Rosen Law Firm is reminding investors who purchased AMMO, Inc. securities between August 19, 2020, and September 24, 2024, about 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 eligible for 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 file with the Court by November 29, 2024 [2]. - The Rosen Law Firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions [3]. Group 2: Allegations Against AMMO, Inc. - The lawsuit alleges that AMMO made false and misleading statements and failed to disclose critical information, including inadequate internal controls over financial reporting [4]. - Specific allegations include the failure to accurately disclose executive officers and related party transactions, mischaracterization of fees related to investor relations, and improper valuation of stock awards [4]. - As a result of these alleged misrepresentations, the lawsuit claims that investors suffered damages when the true details became public [4].