Safety Shot(SHOT) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2025, and December 31, 2024 Forward Looking Statements (General) This section provides a general disclaimer regarding forward-looking statements within the report, emphasizing that they reflect management's current views and are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements are based on current views and assumptions, but actual results may differ materially due to inherent risks and uncertainties[14][15] - The company does not undertake any obligation to revise or update forward-looking statements after the report date[16] Item 1. Financial Statements This section presents the company's unaudited consolidated financial statements, including balance sheets, statements of operations, statements of shareholders' equity (deficit), and statements of cash flows for the periods ended June 30, 2025, and December 31, 2024, along with comprehensive notes detailing significant accounting policies, acquisitions, capital structure, and commitments Consolidated Balance Sheets This section provides a summary of the company's consolidated balance sheets, highlighting key asset and liability changes between December 31, 2024, and June 30, 2025 - Total assets significantly increased from $7.34 million at December 31, 2024, to $42.07 million at June 30, 2025, primarily driven by new investments and goodwill from the Yerbaé acquisition[21] Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash | $466,791 | $348,816 | | Inventory | $840,863 | $233,510 | | Prepaid expenses and deposits | $2,181,757 | $920,189 | | Investment in SRM | $18,190,351 | - | | Goodwill | $12,594,180 | - | | Total current assets | $21,942,705 | $2,580,353 | | Total non-current assets | $20,124,517 | $4,758,050 | | TOTAL ASSETS | $42,067,222 | $7,338,403 | | Total current liabilities | $18,926,700 | $9,397,307 | | Total liabilities | $18,978,853 | $9,511,455 | | Total shareholders' equity (deficit) | $23,088,369 | $(2,173,052) | Consolidated Statements of Operations This section details the company's consolidated statements of operations, presenting revenue, expenses, and net income or loss for the three and six months ended June 30, 2025 and 2024 - For the six months ended June 30, 2025, the company reported a net income of $8.05 million, a significant improvement from a net loss of $23.95 million in the prior year period, primarily due to an $18.19 million unrealized gain on equity investment[23] Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales | $44,948 | $710,240 | $87,049 | $880,972 | | Cost of sales | $21,070 | $504,528 | $42,182 | $2,887,813 | | Gross profit (loss) | $23,878 | $205,712 | $44,867 | $(2,006,841) | | Total operating costs and expenses | $4,363,514 | $8,618,618 | $9,774,838 | $21,575,170 | | Unrealized gain (loss) on equity investment | $18,190,351 | - | $18,190,351 | $(599,155) | | Net income (loss) | $13,374,947 | $(8,274,094) | $8,048,014 | $(23,948,765) | | Basic EPS | $0.16 | $(0.16) | $0.11 | $(0.48) | | Diluted EPS | $0.09 | $(0.16) | $0.06 | $(0.48) | Consolidated Statements of Shareholders' Equity (Deficit) This section outlines changes in shareholders' equity, including net income, stock issuances, and other comprehensive income, for the periods presented - Shareholders' equity transitioned from a deficit of $2.17 million at December 31, 2024, to a positive $23.09 million by June 30, 2025, driven by net income and significant common stock issuances[26] Shareholders' Equity Changes (H1 2025) | Item | Amount (USD) | | :------------------------------------------ | :------------- | | Balance, December 31, 2024 | $(2,173,052) | | Net loss (Q1 2025) | $(5,326,933) | | Net income (Q2 2025) | $13,374,947 | | Common stock issued for Yerbaé acquisition | $5,768,396 | | Common stock issued for private placement | $4,971,971 | | Common stock issued for settlement of payables | $1,461,800 | | Balance, June 30, 2025 | $23,088,369 | Consolidated Statements of Cash Flows This section presents the company's consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities - Net cash used in operating activities decreased to $6.28 million for the six months ended June 30, 2025, from $12.10 million in the prior year, while investing activities shifted to a net outflow due to acquisitions[30] Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :------------------------------------------ | :----------- | :------------ | | Net income (loss) | $8,048,014 | $(23,948,765) | | Net Cash (Used in) Operating Activities | $(6,282,025) | $(12,100,942) | | Net Cash Provided by (Used in) Investing Activities | $(242,770) | $880,195 | | Net Cash Provided by Financing Activities | $6,642,770 | $10,611,181 | | CHANGE IN CASH | $117,975 | $(609,566) | | CASH AT END OF PERIOD | $466,791 | $3,223,783 | - Investing activities included cash outflows of $109,710 for the acquisition of Yerbaé and $133,060 for intangible assets in H1 2025[30] Notes to the Consolidated Financial Statements This section provides detailed explanations of the company's significant accounting policies, financial statement line items, and other relevant disclosures - The company operates as a single reportable segment, with the CEO making resource allocation decisions on a consolidated basis[39] - As an 'emerging growth company,' Safety Shot has elected the extended transition period for complying with new or revised financial accounting standards, which may affect comparability[45] - Revenue is recognized when control of goods is transferred to the customer (FOB shipping point), with payments typically in advance or net 30 days[55] Note 1 - Organization and Business Operations This note describes the company's corporate structure, business activities, recent acquisitions, and going concern considerations - Safety Shot Inc. (formerly Jupiter Wellness Inc.) acquired GBB Drink Lab Inc.'s Sure Shot Dietary Supplement assets in August 2023 and launched the product in December 2023[33] - On June 27, 2025, the company acquired Yerbaé Brands Corp., a premium energy beverage company, to expand its functional beverage market presence[34] - The company faces going concern considerations due to negative working capital of $3,016,005 at June 30, 2025[37] Note 2 - Significant Accounting Policies This note details the critical accounting principles and methods used in preparing the consolidated financial statements Basis of Presentation This section outlines the basis for preparing the consolidated financial statements in accordance with GAAP and SEC rules - Consolidated financial statements are prepared in conformity with GAAP and SEC rules, including accounts of Safety Shot, Inc. and its wholly-owned subsidiaries[38] Segment Reporting This section describes the company's operating segments and how financial performance is reviewed by management - The company operates as a single reportable segment, with the CEO reviewing financial performance on a consolidated basis[39] - Revenues are derived from e-commerce, distributors, and direct to retail consumers, solely within the United States[39] Business Combinations This section explains the accounting treatment for business combinations, including purchase price allocation and goodwill recognition - Business combinations are accounted for under ASC 805, allocating the purchase price to acquired assets and assumed liabilities based on estimated fair values, with any excess recorded as goodwill[40] Fair Value Measurements This section describes the company's methodology for fair value measurements, categorizing assets and liabilities into a three-tier hierarchy - The company classifies assets and liabilities measured at fair value into a three-tier hierarchy (Level 1, 2, 3) based on the observability of inputs used in valuation[41][46] Debt Extinguishment and Modification This section outlines the accounting treatment for material changes to debt instruments, including extinguishments and modifications - Material changes to debt instruments are accounted for as extinguishments, derecognizing the original debt and recognizing a new one, with any fair value difference recognized as a gain or loss[42] Equity Method for Investments This section explains the application of the equity method for investments in unconsolidated affiliates where significant influence is exerted - Investments in unconsolidated affiliates where the company exerts significant influence are accounted for using the equity method, initially recorded at cost[43] Emerging Growth Company Status This section clarifies the company's status as an 'emerging growth company' and its election regarding new accounting standards - The company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new accounting standards, which may impact financial statement comparability[44][45] Use of Estimates This section highlights the role of management estimates and assumptions in financial statement preparation and their potential impact on actual results - Financial statement preparation requires management to make estimates and assumptions that affect reported amounts, and actual results may differ[47] Cash and Cash Equivalents This section defines cash and cash equivalents and reports their balances as of the financial statement dates - All short-term investments with a maturity of three months or less when purchased are considered cash and equivalents; there were no cash equivalents as of June 30, 2025, or December 31, 2024[48] Inventory This section details the valuation method for inventories and significant adjustments, such as write-downs - Inventories are stated at the lower of cost or market, using the average cost method. A $1,649,473 write-down occurred in H1 2024 due to rebranding issues[49] Sale of SRM Entertainment, Inc. This section describes the company's investment in SRM Entertainment, Inc. and related lock-up agreements - As of June 30, 2025, the company held 2,347,142 shares of SRM's common stock, with a fair value of $18.2 million, subject to a lock-up agreement until January 2026[50] Trading Securities This section explains the accounting treatment for securities classified as trading securities, including fair value measurement and gain/loss recognition - Securities intended for sale are classified as trading securities and carried at fair value, with gains and losses recognized in current period earnings[51] Net Income (Loss) per Common Share This section outlines the calculation of basic and diluted net income (loss) per common share - Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding; diluted EPS considers potential common shares unless they reduce a loss or increase EPS[52] Revenue Recognition This section describes the company's policy for recognizing revenue from product sales and related fees - Revenue is recognized in accordance with ASC 606 when control of promised goods or services is transferred to a customer, typically upon shipment (FOB shipping point)[54][55] - Slotting fees paid to customers are recognized as a reduction to the transaction price and amortized over the estimated life of the contract[57] Accounts Receivable and Credit Risk This section details the accounting for accounts receivable and the assessment of credit risk, including allowance for doubtful collections - Accounts receivable are generated from product sales, with an allowance for doubtful collections based on outstanding receivables and historical data; no allowance was recorded as of June 30, 2025, or December 31, 2024[58] Impairment of Long-Lived Assets This section explains the company's policy for evaluating and recognizing impairment of long-lived assets - Long-lived assets are evaluated for impairment when circumstances indicate the carrying amount may not be recoverable, with an asset considered impaired if its carrying amount exceeds undiscounted future net cash flow[59] Intangible Assets This section describes the company's intangible assets, their amortization, and impairment assessment - Intangible assets, including patents, trademarks, and customer relationships, are amortized over estimated useful lives (1-20 years) using the straight-line method; no impairment charges were recorded in H1 2025 or H1 2024[60][61] Research and Development (Accounting Policy) This section outlines the accounting policy for research and development costs and their expensing - Research and development costs are expensed as incurred, totaling $15,522 for the six months ended June 30, 2025, and $261,404 for the same period in 2024[62] Stock Based Compensation This section details the accounting for share-based compensation arrangements in accordance with ASC 718 - Compensation costs for share-based arrangements are measured at grant-date fair value and recognized over the employee service period, in accordance with ASC 718[63] Income Taxes This section describes the company's accounting for income taxes, including deferred tax assets and liabilities and uncertain tax positions - The company accounts for income taxes under ASC 740, recognizing deferred tax assets and liabilities and establishing a valuation allowance when realization is unlikely[64] - No significant uncertain tax positions were identified, and the company believes its income tax positions would be sustained on audit[65] Related parties This section outlines the company's policy for identifying and disclosing material related party transactions - The company follows ASC 850-10 for identifying related parties and disclosing material related party transactions, excluding ordinary course compensation[66][68] Recent Accounting Pronouncements This section discusses the adoption and impact of recent accounting standards updates on the company's financial statements - The company adopted ASU 2023-07, enhancing segment reporting requirements, for the year ended December 31, 2024, with no material impact on its financial statements[69] - Key provisions of ASU 2023-07 include enhanced expense disclosures, disclosure of 'other segment items,' interim reporting requirements, and disclosure of CODM information[73] Note 3 - Prepaid Expenses and Deposits This note provides a breakdown of prepaid expenses and deposits, highlighting significant changes between periods - Prepaid expenses and deposits increased significantly to $2.18 million at June 30, 2025, from $0.92 million at December 31, 2024, primarily due to a substantial increase in prepaid IR Campaign and other dues/subscriptions[70] Prepaid Expenses and Deposits Breakdown | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total Prepaid Expenses and Deposits | $2,181,757 | $920,189 | | Prepaid IR Campaign and other dues/subscriptions | $1,196,277 | N/A (part of other prepaids) | | Prepaid insurance | $329,413 | $260,943 | | Other prepaids, deposits, and capitalized slotting fees | $656,067 | $411,056 | | Raw materials (prepaid) | N/A | $193,074 | Note 4 - Inventory This note details the composition and changes in the company's inventory, including raw materials and finished goods - Inventory increased to $840,863 at June 30, 2025, from $233,510 at December 31, 2024, with both raw materials and finished goods seeing substantial increases[71] Inventory Breakdown | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Total Inventory | $840,863 | $233,510 | | Raw materials | $404,524 | $132,785 | | Finished goods | $439,582 | $100,725 | | Inventory reserve | $3,243 | - | Note 5 - Investments This note describes the company's marketable securities, specifically its investment in SRM Entertainment, Inc. common stock - As of June 30, 2025, the company held 2,347,142 shares of SRM Entertainment, Inc. common stock, valued at $18.2 million, classified as marketable securities[72] - These SRM shares are subject to a lock-up agreement, preventing their sale until January 2026[72] Note 6 – Acquisitions This note provides details on recent business combinations, including the acquisition of Yerbaé Brands Corp. and GBB Drink Lab Inc. - The company completed the acquisition of Yerbaé Brands Corp. on June 27, 2025, for approximately $6.0 million in common stock, recognizing $12.59 million in goodwill[74][75] - The GBB acquisition in July 2023 for the Sure Shot Dietary Supplement patents involved a purchase price of $4.93 million and an additional earn-out payment of $2.0 million in December 2023, with $175,000 still due[80] Acquisition of Yerbaé This section details the acquisition of Yerbaé Brands Corp., including the purchase price, consideration, and goodwill recognized - Acquisition of Yerbaé Brands Corp. was completed on June 27, 2025, for approximately $6.0 million, paid through the issuance of 19,881,948 common shares[74] - The acquisition resulted in the recognition of $12,594,180 in goodwill, primarily representing expected synergies and brand recognition[75] - Transaction-related costs of approximately $500,000 were expensed as incurred[75] Summary Pro Forma Financial Information (Unaudited) This section presents unaudited pro forma financial information, illustrating the combined impact of the Yerbaé acquisition on sales and net income - Pro forma combined sales for the three months ended June 30, 2025, were $880,008, and for the six months ended June 30, 2025, were $2,135,992, assuming the Yerbaé acquisition occurred on January 1, 2024[76][79] Pro Forma Combined Financials (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Pro Forma Combined Sales | $880,008 | $2,272,484 | $2,135,992 | $3,878,187 | | Pro Forma Combined Net Income (Loss) | $11,317,680 | $(11,134,232) | $2,617,450 | $(29,703,402) | GBB Acquisition This section describes the acquisition of GBB Drink Lab, Inc. assets, including the purchase price allocation and earn-out provisions - On July 10, 2023, the company acquired certain assets of GBB Drink Lab, Inc., including patents for the Sure Shot Dietary Supplement, for $4,929,164 (stock and cash)[80] - An additional $2,000,000 was paid in December 2023 under earn-out provisions, and as of June 30, 2025, GBB is entitled to an additional $175,000 payment[80] GBB Acquisition Purchase Price Allocation | Item | Amount | | :-------------------- | :----------- | | Cash | $2,593,725 | | Fair value of stock issued | $2,468,500 | | Total Purchase Price | $5,062,225 | | Patents | $5,062,225 | | Amortization | $(768,543) | | Balance (Patents) | $4,293,682 | Note 7 – Accrued Expenses This note provides a breakdown of accrued expenses, including interest, credit card payables, advances, and payroll accruals - Accrued expenses increased to $2,317,161 at June 30, 2025, from $1,667,605 at December 31, 2024, consisting of accrued interest, credit card payables, advances, and payroll accruals[83] Note 8 - Convertible Notes Payable This note details the company's convertible note agreements, including principal amounts, interest rates, and maturity dates - On January 20, 2025, the company entered into two convertible note agreements with Bigger Capital LLP totaling $5.25 million in principal, as part of a legal settlement[84] - These notes include a $1.75 million secured convertible note maturing December 31, 2026, and a $3.5 million convertible note maturing June 30, 2025, both accruing interest at 9% per annum[84] - Interest expense related to these notes was $115,350 for the three months and $207,225 for the six months ended June 30, 2025[85] Note 9 – Covid-19 SBA Loans This note describes the company's outstanding Economic Injury Disaster Loan (EIDL) from the Small Business Administration - The company has an outstanding Economic Injury Disaster Loan (EIDL) from the SBA with a balance of $48,330 at June 30, 2025, at a 3.75% interest rate over a 30-year term[86] Note 10 - Capital Structure This note outlines the company's authorized and outstanding preferred and common stock, including recent issuances and conversions - Common stock outstanding increased from 62.64 million shares at December 31, 2024, to 101.73 million shares at June 30, 2025, driven by various issuances[89] - The company issued 40,000 shares of Series A Preferred Stock on May 2, 2025, through the conversion of 6,575,025 common shares[88] Preferred Stock This section details the characteristics of the company's preferred stock, including dividend, voting, and liquidation rights - The company is authorized to issue 100,000 shares of preferred stock; 40,000 shares of Series A Preferred Stock were outstanding as of June 30, 2025[87][88] - Series A Preferred Stock holders have dividend rights on an as-converted basis, voting rights with common stockholders, and pro rata distribution rights upon liquidation[87] Common Stock This section provides information on the company's common stock, including changes in outstanding shares due to various issuances - Common stock outstanding increased from 62,640,314 shares at December 31, 2024, to 101,725,935 shares at June 30, 2025[89] Common Stock Issuances (H1 2025) | Issuance Type | Shares Issued | | :------------------------------------------ | :------------ | | Common stock issued for services | 3,425,244 | | Common stock issued for cash | 3,093,817 | | Common stock issued for litigation settlement | 3,070,987 | | Common stock issued for settlement of payables | 6,900,000 | | Common stock issued for private placement | 9,038,650 | | Common stock issued for employee bonus | 250,000 | | Common stock issued in connection with Yerbaé acquisition | 19,881,948 | | Conversion of common stock to preferred stock | (6,575,025) | Common Stock Payable This section reports the balance of common stock payable as of the financial statement dates - The balance of common stock payable increased to $2,117,259 at June 30, 2025, from $1,997,936 at December 31, 2024[97] Note 11 - Warrants and Options This note provides details on the company's outstanding warrants and stock options, including activity and valuation methods - Total outstanding warrants increased to 27.68 million at June 30, 2025, from 21.56 million at December 31, 2024, primarily due to new issuances from the Bigger Settlement and Yerbaé acquisition[102] - Stock options outstanding increased to 20.85 million at June 30, 2025, from 18.52 million at December 31, 2024, mainly due to Yerbaé replacement options[104] Warrants This section details the activity and terms of the company's outstanding warrants, including issuances, cancellations, and conversions - The company settled with Bigger Capital, canceling 1,656,050 original warrants and issuing 5,332,889 'exchange' warrants with an exercise price of $0.4348[98] Warrants Activity | Item | Number of Warrants | Wtd. Average Exercise Price | | :------------------------------------------ | :----------------- | :-------------------------- | | Balance at December 31, 2023 | 14,751,835 | $2.00 | | Warrants cancelled in the Bigger Settlement | (1,656,050) | ($1.40) | | Warrants issued in the Bigger Settlement | 5,332,889 | $0.43 | | Warrants issued in a private placement | 3,370,787 | $0.89 | | Warrants converted into common stock | (2,996,127) | ($1.32) | | Warrants issued in a private placement | 2,753,304 | $0.45 | | Balance at December 31, 2024 and March 31, 2025 | 21,556,638 | $1.80 | | Yerbaé replacement warrants | 2,120,622 | $1.41 | | Warrant purchase agreement with Core4 | 4,000,000 | $0.41 | | Balance at June 30, 2025 | 27,677,260 | $1.57 | Stock Options This section provides information on the company's stock options, including changes in outstanding options and their valuation - Total stock options outstanding increased from 18,521,166 at December 31, 2024, to 20,853,271 at June 30, 2025[104] Stock Options Activity | Item | Number of Stock Options | Wtd. Average Exercise Price | | :------------------------------------------ | :---------------------- | :-------------------------- | | Balance at December 31, 2024 | 18,521,166 | $1.65 | | Options issued during Q1 2025 | 500,000 | $0.45 | | Balance at March 31, 2025 | 19,021,166 | $1.62 | | Yerbaé replacement options | 1,832,105 | $3.07 | | Balance at June 30, 2025 | 20,853,271 | $1.75 | - The fair value of warrants and options is measured using the Black-Scholes valuation model[105][106] Note 12 - Commitments and Contingencies This note discloses the company's contractual commitments, such as office leases, and ongoing legal proceedings - The company has an office lease commitment with a Right of Use (ROU) asset of $276,442 and a current lease liability of $262,549 as of June 30, 2025[107] - The company is involved in several legal proceedings, including ongoing disputes with Sabby Volatility Warrant Master Fund Ltd. and a settled case with 3i LP, but management does not expect a material adverse effect on its financial position[109][110][111][112][117] - A dispute with Iroquois Master Fund, Ltd. was settled on July 29, 2025, with a $2.5 million payment for a full release of claims[116] Office Lease This section details the company's office lease agreement, including Right of Use assets and lease liabilities - The company has a five-year office lease (effective July 1, 2021) with one three-year renewal option[107] Office Lease Balances | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | ROU asset | $276,442 | $299,722 | | Current portion of lease liability | $262,549 | $212,964 | | Non-current portion of lease liability | $52,153 | $114,148 | - Rent expense for the lease was $45,201 for the three months and $111,438 for the six months ended June 30, 2025[108] Legal Proceedings (Notes) This section provides an overview of the company's legal disputes and their potential financial implications - Sabby Volatility Warrant Master Fund Ltd. successfully appealed a dismissal regarding a breach of contract claim related to a delayed SRM spin-off; the company intends to vigorously defend itself[110] - The company offered $1.5 million to settle a lawsuit with Sabby Volatility Warrant Master Fund Ltd. concerning the alleged improper refusal to honor a warrant exercise[111] - A lawsuit with 3i LP regarding warrant exercise was settled in April 2025 by providing $400,000 worth of unregistered common stock[112] - The Bigger Capital fund, L.P. lawsuit was settled on January 20, 2025, involving a $375,000 cash payment, $5.25 million in convertible notes, and 5,332,889 common stock warrants[114] - A dispute with Iroquois Master Fund, Ltd. was settled on July 29, 2025, with a $2.5 million payment for a full release of claims related to stock warrants[116] Note 13 - Subsequent Events This note describes significant events that occurred after the balance sheet date but before the financial statements were issued - On July 2, 2025, the company amended a Securities Purchase Agreement, reducing the warrant exercise price from $0.4348 to $0.33 per share[120] - On July 24, 2025, a registered direct offering and concurrent private placement raised approximately $16.3 million gross proceeds through the issuance of common stock and warrants[132][134][136] - On August 8, 2025, the company entered into an August Purchase Agreement for a PIPE offering of Series C Convertible Preferred Stock for $25 million, paid in BONK tokens, and a Revenue Sharing Agreement for additional Series C Preferred Stock in exchange for 10% of LetsBonk.fun gross revenue[140][141][142] Amendment to Securities Purchase Agreement This section details an amendment to a Securities Purchase Agreement, specifically regarding a change in warrant exercise price - On July 2, 2025, the company amended a Securities Purchase Agreement to change the warrant exercise price from $0.4348 to $0.33 per share[120] Exchange Agreement This section describes an Exchange Agreement to convert convertible notes into Series B Preferred Stock - On July 2, 2025, the company entered an Exchange Agreement to convert a $1.75 million Secured Convertible Note and a $3.5 million Convertible Note into 7,212 shares of Series B Preferred Stock[121] Series B Preferred Stock This section outlines the designation and characteristics of the company's Series B Convertible Preferred Stock - On July 2, 2025, the company designated 10,000 shares as Series B Convertible Preferred Stock, each with a stated value of $750 per share[122] - Series B Preferred Stock is convertible into common stock at a conversion price of $0.34 per share, subject to adjustment[126] - Holders of Series B Preferred Stock are entitled to dividends on an as-if-converted basis and voting rights together with common stock[123][124] Securities Purchase Agreement (July 3, 2025) This section details a securities purchase agreement for common shares, including gross proceeds and per-share price - On July 3, 2025, the company sold 844,594 shares for gross proceeds of $250,000 at a negotiated price of $0.296 per share[127] Stock Purchase Agreement (July 11, 2025) This section describes the sale of SRM Entertainment, Inc. common stock and the aggregate amount received - On July 11, 2025, the company sold 500,000 shares of SRM Entertainment, Inc. common stock for an aggregate amount of $3,125,000[128] Nasdaq Compliance This section addresses the company's Nasdaq listing compliance status, including non-compliance notices and extension grants - On January 2, 2025, the company received a Nasdaq notice for non-compliance with the $1.00 minimum bid price rule[129] - On July 9, 2025, Nasdaq granted an additional 180 calendar days (until December 29, 2025) to regain compliance, with a reverse stock split being a potential option[130][131] Registered Direct Offering and Concurrent Private Placement This section details a registered direct offering and concurrent private placement, including shares issued, warrants, and gross proceeds - On July 24, 2025, the company issued 22,993,492 common shares at $0.461 per share in a registered direct offering[132] - Concurrently, a private placement issued unregistered warrants to purchase 45,986,984 common shares at an exercise price of $0.461 per share[134] - The combined offerings generated approximately $16.3 million in gross proceeds, intended for working capital and general corporate purposes[136] August Purchase Agreement (Series C Preferred Stock) This section describes a PIPE offering and revenue sharing agreement involving Series C Convertible Preferred Stock and BONK tokens - On August 8, 2025, the company entered a PIPE offering for 35,000 shares of Series C Convertible Preferred Stock (convertible into 62,701,541 common shares at $0.5582/share) for $25 million, payable in BONK tokens[140][141] - A Revenue Sharing Agreement issued 100,000 shares of Series C Preferred Stock (convertible into 179,147,260 common shares) in exchange for 10% of LetsBonk.fun gross revenue in perpetuity[142] - Series C Preferred Stock holders are entitled to elect 50% of the company's directors and have voting rights on an as-converted basis, subject to a 19.99% limitation without shareholder approval[148][152] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, product development, sales strategies, recent acquisitions, intellectual property, regulatory environment, and a detailed analysis of financial performance for the three and six months ended June 30, 2025 and 2024 Forward Looking Statements (MD&A) This section provides a disclaimer regarding forward-looking statements within the MD&A, emphasizing inherent risks and uncertainties - This section contains forward-looking statements about future events and financial performance, identifiable by terms like 'may,' 'should,' 'expects,' and 'plans'[155] - These statements are predictions involving known and unknown risks and uncertainties, and actual results may differ materially[155] General Overview This section provides a general overview of the company's business, product launches, and strategic acquisitions in the functional beverage market - Safety Shot Inc. (formerly Jupiter Wellness Inc.) acquired the Sure Shot Dietary Supplement in August 2023 and launched its e-commerce sales in December 2023[158] - On June 27, 2025, the company acquired Yerbaé, a premium energy beverage company, to strategically grow in the functional beverage market[158] - The Sure Shot Dietary Supplement is formulated with 28 Generally Regarded As Safe (GRAS) active ingredients to reduce blood alcohol content[159] Products Roadmap This section outlines the launch and future development plans for the Sure Shot Dietary Supplement, including new formats and formulations - The Sure Shot Dietary Supplement was launched on the company's website, Amazon, and in several Big Box stores in December 2023[162] - The company is developing additional product formats and formulations to cater to diverse consumer shopping habits[162] Research and Development This section details the clinical trial results for the Sure Shot Dietary Supplement and the company's R&D expenses - Clinical trials for the Sure Shot Dietary Supplement (Jan-Jun 2024) showed a statistically significant reduction (p=.002) in Blood Alcohol Content (BAC) within 30 minutes of consumption[165][166] - The trials also documented observable enhancements in cognitive abilities and physical function among participants[165][166] - Research and development expenses were $15,522 for the six months ended June 30, 2025, compared to $261,404 for the same period in 2024[62] Sales and Marketing This section describes the company's sales channels and marketing strategies focused on customer experience and loyalty - The company primarily sells its products through e-commerce websites, including Amazon[168] - Investments are made in customer experience and relationship management to drive loyalty, word-of-mouth marketing, and sustainable growth[168] Manufacturing, Logistics and Fulfillment This section explains the company's outsourced manufacturing, distribution, and logistics strategies - Manufacturing is outsourced to contract manufacturers in India and the US, adhering to the company's formulation specifications[169] - Products are shipped to third-party warehouses and corporate offices in the US for distribution to distributors, retailers, or direct to customers[169] - A limited number of logistics providers are used to reduce order fulfillment time, cut shipping costs, and improve inventory flexibility[169] Our Competitive Strengths This section highlights the company's competitive advantages, including innovation, R&D investments, and unique product positioning - The company emphasizes continuous improvement through innovation, with significant investments in R&D and a growing intellectual property portfolio[170] - The Safety Shot Dietary Supplement is positioned as a unique product in the liquid dietary supplement market, backed by rigorous clinical research[170] Recent Developments This section provides updates on key corporate events, including acquisitions, legal settlements, and strategic agreements - The company completed the acquisition of Yerbaé Brands on June 27, 2025, to support strategic growth in the functional beverage market[171] - A settlement agreement with Bigger Capital on January 20, 2025, resolved a lawsuit through a cash payment, convertible notes, and common stock warrants[172] - On August 8, 2025, the company entered into an August Purchase Agreement for Series C Convertible Preferred Stock, involving a PIPE offering paid in BONK tokens and a revenue sharing agreement[182][183][184] Acquisition of Yerbaé Brands This section details the acquisition of Yerbaé Brands, emphasizing its strategic importance for growth in the functional beverage market - The acquisition of Yerbaé, a premium energy beverage company, was completed on June 27, 2025, to support Safety Shot's strategic growth in the functional beverage market[171] Settlement Agreement with Bigger Capital This section describes the settlement of a lawsuit with Bigger Capital, including the terms of payment and convertible notes - On January 20, 2025, the company settled a lawsuit with Bigger Capital, agreeing to pay $375,000, issue a $1.75 million secured convertible note, a $3.5 million convertible note, and 5,332,889 common stock warrants[172] - The Secured Convertible Bigger Note accrues interest at 9% per annum and is convertible into common stock at the lesser of $0.5435 per share or the closing price preceding stockholder approval[173][175] - The Convertible Bigger Note also accrues interest at 9% per annum and matures on June 30, 2025, with repayment options including cash, a SAFE Note, or a Replacement Bigger Note[177][178] August Purchase Agreement This section outlines the August Purchase Agreement, including a PIPE offering and revenue sharing agreement involving Series C Preferred Stock - On August 8, 2025, the company entered a PIPE offering for 35,000 shares of Series C Convertible Preferred Stock (convertible into 62,701,541 common shares at $0.5582/share) for $25 million, paid in BONK tokens[182][183] - A Revenue Sharing Agreement issued 100,000 shares of Series C Preferred Stock (convertible into 179,147,260 common shares) in exchange for 10% of LetsBonk.fun gross revenue in perpetuity[184] - Series C Preferred Stock holders can elect 50% of the company's directors and have voting rights on an as-converted basis, subject to a 19.99% limitation without shareholder approval[190][194] Registration Rights This section discusses the company's obligations to file and maintain a registration statement for shares issuable under convertible notes - Pursuant to the Bigger Settlement Agreement, the company must promptly file and maintain a registration statement for 150% of the shares issuable upon exercise of the Bigger Notes[196] Intellectual Property This section details the company's patent portfolio, including key patents for the Sure Shot Dietary Supplement - The company owns five patents, including US 10,028,991 B2 for the Sure Shot Dietary Supplement, which expires on November 5, 2035[197] - A new utility patent, US 12,156,878, related to the current version of the Sure Shot Dietary Supplement, was granted on December 3, 2024[197] Government Regulation This section addresses the regulatory environment for the Sure Shot Dietary Supplement, including FDA standards and classification - The Sure Shot Dietary Supplement's production, distribution, and sale are subject to various federal, state, and local regulations, including the FD&C Act and California Proposition 65[198] - All ingredients in the Sure Shot Dietary Supplement are deemed Generally Recognized as Safe (GRAS) and align with FDA standards[203] - The Sure Shot Dietary Supplement is classified as a dietary supplement, exempt from FDA approval or filing requirements mandated for pharmaceutical drugs[203] Results of Operations This section analyzes the company's financial performance, including sales, expenses, and net income or loss for the reported periods - For the three months ended June 30, 2025, the company reported a net income of $13.37 million, a significant improvement from a net loss of $8.27 million in the prior year, primarily due to an unrealized gain on equity investment[204][209] - For the six months ended June 30, 2025, net income was $8.05 million, compared to a net loss of $23.95 million in the prior year, also driven by the unrealized gain on equity investment[210][215] For the three months ended June 30, 2025 and 2024 This section provides a comparative analysis of financial performance for the three months ended June 30, 2025 and 2024 Financial Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Sales | $44,948 | $710,240 | -93.7% | | Cost of Sales | $21,070 | $504,528 | -95.8% | | Gross Profit | $23,878 | $205,712 | -88.4% | | Total Operating Expenses | $4,363,514 | $8,618,618 | -49.4% | | Other Income (Expense) | $17,714,583 | $138,812 | N/A | | Net Income (Loss) | $13,374,947 | $(8,274,094) | N/A | - Sales decreased significantly due to a redirection of focus on the Yerbaé acquisition and a new marketing strategy to be implemented in Q3 2025[205] - Other income for Q2 2025 included an $18,190,351 unrealized gain on equity investment, contributing to the net income[209] For the six months ended June 30, 2025 and 2024 This section provides a comparative analysis of financial performance for the six months ended June 30, 2025 and 2024 Financial Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Sales | $87,049 | $880,972 | -90.1% | | Cost of Sales | $42,182 | $2,887,813 | -98.5% | | Gross Profit (Loss) | $44,867 | $(2,006,841) | N/A | | Total Operating Expenses | $9,774,838 | $21,575,170 | -54.7% | | Other Income (Expense) | $17,777,985 | $(366,754) | N/A | | Net Income (Loss) | $8,048,014 | $(23,948,765) | N/A | - Cost of sales decreased significantly in H1 2025 due to decreased revenues and a one-time inventory write-off of $1,649,473 in H1 2024 related to product rebranding[211] - Other income for H1 2025 included an $18,190,351 unrealized gain on equity investment, contrasting with a net loss on equity investment in SRM Entertainment Inc. of $599,155 in H1 2024[215][216] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a 'smaller reporting company,' Safety Shot, Inc. is exempt from providing detailed quantitative and qualitative disclosures about market risk - The company is not required to provide market risk disclosures due to its status as a 'smaller reporting company'[217] Item 4. Controls and Procedures The company's disclosure controls and procedures were deemed ineffective as of June 30, 2025, primarily due to insufficient segregation of duties and lack of formalized documentation. Remediation efforts are underway, including hiring experienced personnel. The recently acquired Yerbaé Brands Corp. was excluded from the current assessment but will be integrated in future periods Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - The company's disclosure controls and procedures were concluded to be ineffective as of June 30, 2025, due to insufficient segregation of duties and lack of formalized policy and procedure documentation[218][219] - Management plans to expand its team and build a comprehensive internal control framework for a more complex entity[219] Changes in Internal Control Over Financial Reporting This section discusses remediation efforts for internal control weaknesses and the integration of acquired entities - Remediation measures for previously disclosed internal control ineffectiveness included hiring experienced individuals and modifying accounting processes[220] - Yerbaé Brands Corp. was excluded from the assessment of internal control effectiveness as of June 30, 2025, but will be integrated into the framework in future periods[221][222] Limitations on the Effectiveness of Controls This section acknowledges the inherent limitations of any control system in providing absolute assurance against misstatement or fraud - Management acknowledges that any control system provides only reasonable assurance and cannot guarantee that all objectives are met or all fraud is detected, due to inherent limitations and resource constraints[224] PART II - OTHER INFORMATION This section provides additional information not included in the financial statements, covering legal proceedings, risk factors, and other disclosures Item 1. Legal Proceedings The company is involved in several legal proceedings, including ongoing disputes with Sabby Volatility Warrant Master Fund Ltd. regarding a delayed spin-off and warrant exercise, and a settled case with 3i LP. Management believes the ultimate disposition of these litigations will not materially adversely affect the company's financial position, results of operations, or liquidity - Sabby Volatility Warrant Master Fund Ltd. successfully appealed a dismissal regarding a breach of contract claim related to a delayed SRM spin-off; the company intends to vigorously defend itself[227] - The company offered $1.5 million to settle a lawsuit with Sabby Volatility Warrant Master Fund Ltd. concerning the alleged improper refusal to honor a warrant exercise[228] - A lawsuit with 3i LP regarding warrant exercise was settled in April 2025 by providing $400,000 worth of unregistered common stock[229] - The Bigger Capital fund, L.P. lawsuit was settled on January 20, 2025, involving a $375,000 cash payment, $5.25 million in convertible notes, and 5,332,889 common stock warrants[231] - A dispute with Iroquois Master Fund, Ltd. was settled on July 29, 2025, with a $2.5 million payment for a full release of claims related to stock warrants[233] Item 1A. Risk Factors There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[235] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable to the company for the reporting period, indicating no unregistered sales of equity securities or use of proceeds to report - This item is not applicable[236] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[237] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period, as it does not engage in mining operations - This item is not applicable[238] Item 5. Other Information Todd Gibson, previously appointed to the Board of Directors, ultimately did not accept the appointment, and there is currently no arrangement for his service - Todd Gibson, previously appointed to the Board of Directors, did not accept the appointment, and there is no current arrangement for his service[239] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certificates of designation for Series C Preferred Stock, forms of common stock purchase warrants, placement agent warrants, securities purchase agreements, a revenue sharing agreement, and Section 302 and 906 certifications - Key exhibits include the Certificate of Designation of Series C Preferred Stock, forms of Common Stock Purchase Warrants and Placement Agent Warrants, Securities Purchase Agreements, and the Revenue Sharing Agreement[240] - The report also includes Section 302 and 906 Certifications by the Principal Executive Officer and Principal Financial Officer[240] SIGNATURES This section contains the required signatures for the report, confirming its submission by authorized personnel Signatures The report is duly signed on behalf of Safety Shot, Inc. by Jarrett Boon, Chief Executive Officer (Principal Executive Officer), on August 14, 2025 - The report was signed by Jarrett Boon, Chief Executive Officer (Principal Executive Officer), on August 14, 2025[244]