AMMO(POWW) - 2026 Q3 - Quarterly Report

Financial Performance - Total net revenues for the three months ended December 31, 2025, increased to $13.39 million, up from $12.52 million in the same period of 2024, representing a growth of 6.95%[12] - Gross profit for the nine months ended December 31, 2025, was $32.44 million, compared to $31.90 million for the same period in 2024, reflecting an increase of 1.69%[12] - The company reported a net income of $1.46 million for the three months ended December 31, 2025, compared to a net loss of $26.91 million in the same period of 2024[12] - Basic income per share for the three months ended December 31, 2025, was $0.01, compared to a loss of $0.23 per share in the same period of 2024[12] - The company reported other income of $510,332 for the three months ended December 31, 2025, compared to $161,705 in the same period of 2024, an increase of 215.51%[12] - For the nine months ended December 31, 2025, the net loss from continuing operations was $2,227,615, a significant improvement compared to a net loss of $38,259,945 for the same period in 2024[18] - The company reported a net income of $2.230 million for the quarter ending December 31, 2025, compared to a net income of $1.404 million for the quarter ending June 30, 2025[13] - Consolidated EBITDA for the three months ended December 31, 2025, was $5,599,505, compared to a loss of $(17,100,182) for the same period in 2024[110] Assets and Liabilities - Total current assets as of December 31, 2025, amounted to $82.52 million, an increase from $72.15 million as of March 31, 2025, indicating a growth of 14.66%[9] - Total liabilities decreased to $34.39 million as of December 31, 2025, down from $75.30 million as of March 31, 2025, a reduction of 54.30%[9] - The company’s total shareholders' equity increased to $237.27 million as of December 31, 2025, from $222.03 million as of March 31, 2025, an increase of 6.84%[9] - The accumulated deficit reached $210.438 million as of September 30, 2025, compared to $211.094 million as of June 30, 2025[13] - The company’s net accounts receivable as of December 31, 2025, was $9,169,620, after accounting for an allowance for credit losses of $2,803,832[79] Cash Flow and Investments - Cash flow from operating activities generated $2,228,215, contrasting with a cash outflow of $3,537,004 in the prior year[18] - The company reported a net cash increase of $39,629,934 for the period, compared to a decrease of $23,664,751 in the previous year[18] - The sale of ammunition business assets generated $42,946,905 in cash inflow, contributing to the positive cash flow from investing activities of $41,254,111[18] - The total cash at the end of the period increased to $69,857,730, up from $31,921,690 at the end of the previous year, marking a growth of approximately 118.5%[18] Shareholder Activities - The balance of common stock increased to 117,288,753 shares as of December 31, 2025, up from 117,110,827 shares as of June 30, 2025[13] - Preferred stock dividends accumulated amounted to $638,021 for the quarter ending December 31, 2025[13] - The company repurchased 45,824 shares of common stock during the quarter ending September 30, 2025, resulting in a total repurchase of 129,611 shares for the previous quarter[13] - The total paid-in capital increased to $454.688 million as of December 31, 2025, from $442.047 million as of June 30, 2025[13] Operational Changes and Strategy - The company has shifted its focus to its online Marketplace business following the divestiture of the Ammunition segment, which is expected to enhance operational efficiency[24] - The company completed the sale of its Ammunition Manufacturing Business for $75 million on April 18, 2025, marking a strategic shift in operations[34] - The company anticipates future growth through the expansion of its e-commerce platform and aims to attract new customers while retaining existing ones[154] Advertising and Revenue Recognition - For the three months ended December 31, 2025, advertising expenses were $134,714, compared to $90,648 for the same period in 2024, representing a 48.5% increase[49] - For the nine months ended December 31, 2025, advertising expenses totaled $304,919, compared to $293,335 for the same period in 2024, indicating a 4.5% increase[49] - Revenue from marketplace service fees is recognized at the point of transaction processing, based on a percentage of the final price of items sold[43] - Shipping revenue is recognized when the shipping label is printed, reflecting the performance obligation to ship items sold[44] - Advertising revenue is recognized at the end of the selected month, contingent on the number of impressions generated[45] Legal and Regulatory Matters - The Company is engaged in ongoing litigation related to a breach of contract claim, with potential damages claimed at $100 million[145] - The SEC Investigation concluded without a civil penalty, resolving issues related to share-based compensation and other disclosures[146] - A settlement with Vista Outdoor was agreed upon, requiring the Company to pay $2.75 million in cash in twelve quarterly installments[148] - As of December 31, 2025, the Company had a liability of $2.5 million related to the Vista settlement, with $0.9 million recorded in accounts payable[149]