PART I - FINANCIAL INFORMATION Financial Statements For the quarter ended March 31, 2024, Safety Shot, Inc. reported a significant increase in net loss to $15.7 million, compared to a $1.3 million loss in the prior-year period. This was driven by high operating expenses, including a substantial inventory write-off and stock-based compensation, despite a rise in revenue to $170,732 following the launch of its new product. The balance sheet reflects a decrease in cash and total assets, and the company's auditors have raised substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flow from operations Condensed Consolidated Balance Sheets As of March 31, 2024, the company's total assets decreased to $9.2 million from $12.7 million at year-end 2023. The decline was primarily due to a reduction in cash and marketable securities. Total liabilities remained relatively stable at $3.6 million, while total shareholders' equity fell from $8.8 million to $5.6 million, largely due to the net loss incurred during the quarter Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $2,046,355 | $3,833,349 | | Total current assets | $4,344,429 | $7,690,824 | | Total assets | $9,214,880 | $12,709,180 | | Liabilities & Equity | | | | Total current Liabilities | $3,396,925 | $3,587,137 | | Total liabilities | $3,644,366 | $3,892,044 | | Total Shareholders' Equity | $5,570,514 | $8,817,136 | Condensed Consolidated Statement of Operations For the three months ended March 31, 2024, the company's revenue increased to $170,732 from $34,788 in the same period of 2023. However, a significant increase in cost of sales to $2.4 million resulted in a gross loss of $2.2 million. Operating expenses surged to $12.96 million, leading to a net loss of $15.7 million, or ($0.33) per share, a substantial increase from the $1.3 million net loss, or ($0.05) per share, in Q1 2023 Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Sales | $170,732 | $34,788 | | Cost of Sales | $2,383,285 | $23,965 | | Gross profit (loss) | ($2,212,553) | $10,823 | | Total operating expenses | $12,956,552 | $1,244,953 | | Net loss | ($15,674,671) | ($1,308,174) | | Net loss per share (Basic) | ($0.33) | ($0.05) | Condensed Consolidated Statement of Cash Flows For the first quarter of 2024, net cash used in operating activities was $6.4 million, a significant increase from $1.2 million in the prior-year period. Net cash provided by investing activities was $0.8 million from the sale of marketable securities. Financing activities provided $3.8 million, primarily from warrant conversions. Overall, cash and cash equivalents decreased by $1.8 million, ending the period at $2.0 million Cash Flow Summary (Unaudited) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash (used in) operating activities | ($6,387,929) | ($1,169,019) | | Net cash provided by investing activities | $808,720 | $0 | | Net cash provided by financing activities | $3,792,215 | $3,150,675 | | Net (decrease) in cash | ($1,786,994) | $1,999,876 | | Cash at end of period | $2,046,355 | $3,477,428 | Notes to the Consolidated Financial Statements The notes detail the company's transformation into Safety Shot, Inc. after acquiring the Safety Shot product in August 2023, highlighting a 'Going Concern' consideration due to significant deficits and cash burn - The company was formerly known as Jupiter Wellness Inc. and changed its name to Safety Shot, Inc. in August 2023 after acquiring the Safety Shot product, which it launched in December 202327 - Auditors have raised substantial doubt about the Company's ability to continue as a going concern due to accumulated deficits of $81.4 million and cash used in operations of $6.4 million for the quarter30 - The company took a $1,744,714 inventory write-down for certain raw materials and finished goods during Q1 2024 due to rebranding issues41 - Subsequent to the quarter end, the company raised $5,000,000 through a private placement of 2,369,668 shares of its common stock125 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic shift to focus on the commercialization of the Safety Shot dietary supplement following its acquisition in August 2023, leading to a substantial net loss of $15.7 million for Q1 2024 despite revenue growth - The company's primary focus is the commercialization of its Safety Shot Dietary Supplement, launched in December 2023. It is also developing a powdered stick pack version and pursuing placement in Big Box stores132135136 - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards163164 Results of Operations Comparing the three months ended March 31, 2024, to the same period in 2023, revenues increased due to the Safety Shot beverage launch, but a significant increase in cost of goods sold and operating expenses led to a widened net loss Comparison of Operations for Three Months Ended March 31 | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Sales | $170,732 | $34,788 | | Gross Profit (Loss) | ($2,212,553) | $10,823 | | Total operating expenses | ($12,956,552) | ($1,244,953) | | Net loss | ($15,674,671) | ($1,308,174) | - The increase in cost of sales was attributed to startup costs for the Safety Shot Beverage and a one-time inventory write-off of $1,744,714 for rebranding192 - Key operating expenses for Q1 2024 included $1,450,773 for marketing, $2,382,950 for legal and professional fees, and $8,090,534 for stock-based compensation194195 Quantitative and Qualitative Disclosures About Market Risk The company is not required to provide information for this item as it qualifies as a 'smaller reporting company' - As a 'smaller reporting company', the registrant is exempt from this disclosure requirement199 Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective as of the end of the reporting period due to a small team and lack of a fulsome internal control framework, with remediation efforts underway - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were ineffective201 - Reasons for ineffectiveness include an insufficient degree of segregation of duties and the lack of formalized policy documentation. The company plans to expand its management team to remediate these issues201202 PART II - OTHER INFORMATION Legal Proceedings The company is involved in several legal proceedings, defending against multiple lawsuits primarily alleging breach of contract related to stock warrants, while also having won a default judgment in its own lawsuit against Capybara Research and settled a trademark infringement case with Coachella Music Festival - The company is defending against multiple lawsuits from entities including Intracoastal Capital, Sabby Volatility Warrant Master Fund, 3i LP, Bigger Capital, and Alta Partners, primarily concerning stock warrants208211213 - The company was awarded a Default Judgment in its lawsuit against Capybara Research and Igor Appelboom for securities fraud and tortious interference regarding a defamatory article210 - A lawsuit with Coachella Music Festival, LLC regarding trademark infringement was settled, with the company agreeing to cease related activities and make a monetary payment that is not expected to be material215 Risk Factors As a 'smaller reporting company', Safety Shot, Inc. is not required to provide the information for this item - The company is not required to provide risk factor disclosures as it qualifies as a 'smaller reporting company'219 Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2024, the company issued a total of 812,000 unregistered shares of common stock for services and to settle pre-existing obligations - Issued 450,000 shares of common stock for services, valued at $614,500220 - Issued 362,000 shares of common stock to settle obligations from 2023, including 100,000 shares for consulting agreements and 262,000 shares related to a promissory debt modification220221 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None222 Mine Safety Disclosures This item is not applicable to the company - Not applicable223 Other Information The company reported no other information for this item - None226 Exhibits This section lists the exhibits filed with the Form 10-Q, which include the CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and the Interactive Data Files (XBRL) - The exhibits filed include Section 302 and 906 certifications by the Principal Executive Officer and Principal Financial Officer, as well as XBRL Interactive Data Files225
Safety Shot(SHOT) - 2024 Q1 - Quarterly Report