AMMO, Inc. Received Notification of Deficiency from Nasdaq Related to Delayed Filing of Quarterly Report on Form 10-Q

Rhea-AI Summary

AMMO Inc (Nasdaq: POWW) received a deficiency notification from Nasdaq on November 20, 2024, for failing to timely file its Q3 2024 Form 10-Q. The delay is due to an ongoing independent investigation by a law firm retained by a Special Committee of the Board. The company has until January 21, 2025, to submit a compliance plan to Nasdaq. If accepted, AMMO could receive up to 180 days (until May 19, 2025) to regain compliance. Failure to comply could result in delisting, though the notice currently has no immediate effect on AMMO's Nasdaq listing.

Positive

• None.

Negative

• Failure to file quarterly report (Form 10-Q) on time
• Non-compliance with Nasdaq listing requirements
• Ongoing independent investigation by Special Committee
• Risk of potential delisting from Nasdaq if compliance is not achieved

Insights

Legal & Compliance Expert

This NASDAQ compliance issue represents a significant red flag. The delayed 10-Q filing, coupled with an ongoing independent investigation by a Special Committee, suggests potential material concerns with financial reporting or internal controls. The January 21, 2025 deadline for submitting a compliance plan and the maximum extension until May 19, 2025 create substantial uncertainty.

Most concerning is the vague nature of the investigation and the company's inability to provide specific timing for the 10-Q filing. The risk of delisting is real if compliance isn't achieved within the extension period. Historical precedents show that companies in similar situations often face increased scrutiny from regulators and potential legal challenges from shareholders. The lack of transparency regarding the investigation's scope and nature amplifies market uncertainty.

Financial Analyst

The delayed quarterly filing creates significant financial visibility issues for investors. Without current financial statements, it's impossible to accurately assess AMMO's performance, cash position and overall financial health. The presence of an independent investigation raises concerns about potential financial irregularities or control deficiencies that could materially impact historical or future results.

With a relatively small market cap of $157.3 million, the company has financial flexibility to address any potential issues that may arise from the investigation. The uncertainty could impact relationships with creditors, suppliers and customers, potentially affecting operational performance. Investors should expect increased volatility and possible negative pressure on the stock price until resolution.

SCOTTSDALE, Ariz., Nov. 26, 2024 (GLOBE NEWSWIRE) -- AMMO, Inc. (Nasdaq: POWW, POWWP) (“AMMO,” “we,” “us,” “our” 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 it received an expected deficiency notification letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) on November 20, 2024 (the “Notice”). The Notice indicated that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”) as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the “Form 10-Q”), as described more fully in the Company’s Form 12b-25 Notification of Late Filing filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2024 (the “Form 12b-25”). The Listing Rule requires Nasdaq-listed companies to timely file all required periodic financial reports with the SEC.

As reported in the Form 12b-25, the Form 10-Q cannot be filed within the prescribed time period without unreasonable effort or expense as a result of the ongoing independent investigation (the “Investigation”) conducted by a law firm retained by a Special Committee of the Board of Directors of the Company.

The Company has until January 21, 2025, to submit a plan to regain compliance with the Listing Rule (the “Plan”). The Company intends to timely submit the Plan, if necessary. Pursuant to the Notice, if Nasdaq accepts the Plan, Nasdaq has the discretion to grant the Company an exception of up to 180 calendar days (the “Compliance Period”) from the due date of the Form 10-Q, or until May 19, 2025, to regain compliance with the Listing Rule. While the Company cannot provide specific timing regarding the filing of the Form 10-Q, the Company continues to work diligently to complete the Form 10-Q and intends to file the Form 10-Q as soon as practicable to regain compliance with the Listing Rule within the Compliance Period.

No assurance can be given that the Company will be able to regain compliance with the Listing Rule or maintain compliance with the other continued listing requirements set forth in the Nasdaq Listing Rules. If the Company does not regain compliance with the Listing Rule within the Compliance Period, Nasdaq could provide notice that the Company’s securities will become subject to delisting. If the Company receives notice that its securities are being delisted, Nasdaq rules permit the Company to appeal any delisting determination by Nasdaq staff to a hearings panel.

The Notice has no immediate effect on the listing of the Company’s common stock or preferred stock on Nasdaq. 

About AMMO, Inc.

With its corporate offices headquartered in Scottsdale, Arizona, AMMO designs and manufactures products for a variety of aptitudes, including law enforcement, military, sport shooting and self-defense. The Company was founded in 2016 with a vision to change, innovate and invigorate the complacent munitions industry. AMMO promotes its own branded munitions, including its patented STREAK^™ Visual Ammunition, /stelTH/^™ subsonic munitions, and armor piercing rounds for military use. For more information, please visit: www.ammo-inc.com.

About GunBroker.com

GunBroker.com is the largest online marketplace dedicated to firearms, hunting, shooting and related products. Aside from merchandise bearing its logo, GunBroker.com currently sells none of the items listed on its website. Third-party sellers list items on the site and Federal and state laws govern the sale of firearms and other restricted items. Ownership policies and regulations are followed using licensed firearms dealers as transfer agents. Launched in 1999, GunBroker.com is an informative, secure and safe way to buy and sell firearms, ammunition, air guns, archery equipment, knives and swords, firearms accessories and hunting/shooting gear online. GunBroker.com promotes responsible ownership of guns and firearms. For more information, please visit: www.gunbroker.com.

Cautionary Note Regarding Forward Looking Statements

This press release contains express or implied “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “target,” “believe,” “expect,” “will,” “may,” “anticipate,” “estimate,” “would,” “positioned,” “future,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, among others, statements regarding the Company’s intent to timely submit the Plan and the Company’s plans and expectations about the completion and filing of the Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Company management’s current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, the timing of completion of the Investigation; Nasdaq’s acceptance of the Plan, and the duration of any extension that may be granted by Nasdaq; the potential inability to meet Nasdaq’s continued listing requirements; uncertainties associated with the Company’s preparation of the Form 10-Q and the related financial statements, including the possibility that accounting errors or corrections will be identified; and the possibility of additional delays in the filing of the Form 10-Q and the Company’s other SEC filings. Therefore, investors should not rely on any of these forward-looking statements and should review the risks and uncertainties described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on June 13, 2024, and additional disclosures the Company makes in its other filings with the SEC, which are available on the SEC’s website at www.sec.gov. Forward-looking statements are made as of the date of this press release, and except as provided by law, the Company expressly disclaims any obligation or undertaking to any update forward-looking statements.

Investor Contact:

CoreIR
Phone: (212) 655-0924
IR@ammo-inc.com 

Source: AMMO, Inc.

FAQ

Why did AMMO Inc (POWW) receive a Nasdaq deficiency notice?

AMMO Inc received a Nasdaq deficiency notice on November 20, 2024, for failing to timely file its Q3 2024 Form 10-Q due to an ongoing independent investigation.

What is the deadline for AMMO Inc (POWW) to submit its compliance plan to Nasdaq?

AMMO Inc has until January 21, 2025, to submit a plan to regain compliance with Nasdaq's listing rules.

What happens if AMMO Inc (POWW) fails to regain compliance with Nasdaq?

If AMMO Inc fails to regain compliance within the given period (up to May 19, 2025), its securities could become subject to delisting from Nasdaq, though the company would have the right to appeal.