[10-Q] Outdoor Holding Company 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock Quarterly Earnings Report
Outdoor Holding Company completed the sale of its Ammunition Manufacturing Business to Olin Winchester for a gross purchase price of $75.0 million, with net proceeds of approximately $42.9 million received on closing April 18, 2025. The ammunition business is presented as discontinued operations and the company now operates the GunBroker online Marketplace.
For the three months ended June 30, 2025, consolidated net revenues were $11,857,376 versus $12,281,991 a year earlier, producing gross profit of $10,334,978. Operating loss from continuing operations was $6,010,675. Net loss attributable to common shareholders was $7,232,459, or a basic loss per share of $0.06, improved from $0.13 a year ago. Cash and cash equivalents increased to $63,363,812 from $30,227,796, driven largely by the sale proceeds. The company recorded a full valuation allowance on deferred tax assets, holds goodwill of $90,870,094 and net intangible assets of $95,861,409. The Delaware litigation was settled and dismissed with prejudice, and as settlement consideration the company issued a 7.0 million share warrant valued at $7,094,926 and related-party promissory notes aggregating $51,000,000. The report discloses an ongoing SEC investigation for which a loss cannot yet be estimated.
Outdoor Holding Company ha completato la vendita della sua attività di produzione di munizioni a Olin Winchester per un prezzo d'acquisto lordo di $75.0 milioni, incassando proventi netti di circa $42.9 milioni alla chiusura avvenuta il 18 aprile 2025. L'attività munizioni è presentata come attività cessate e la società opera ora il marketplace online GunBroker.
Per i tre mesi terminati il 30 giugno 2025, i ricavi netti consolidati sono stati $11,857,376 rispetto a $12,281,991 dell'anno precedente, con un utile lordo di $10,334,978. La perdita operativa dalle attività in corso è stata di $6,010,675. La perdita netta attribuibile agli azionisti ordinari è stata $7,232,459, pari a una perdita base per azione di $0.06, migliorata rispetto a $0.13 dell'anno precedente. La liquidità e gli equivalenti di cassa sono aumentati a $63,363,812 da $30,227,796, trainati in gran parte dai proventi della vendita. La società ha registrato una svalutazione integrale sulle attività per imposte differite, detiene avviamento per $90,870,094 e attività immateriali nette per $95,861,409. La controversia in Delaware è stata risolta e archiviata con pregiudizio; a fronte dell'accordo la società ha emesso un warrant su 7,0 milioni di azioni del valore di $7,094,926 e cambiali a parti correlate per un totale di $51,000,000. Il rapporto segnala inoltre un'indagine in corso della SEC per la quale non è ancora possibile stimare una perdita.
Outdoor Holding Company completó la venta de su negocio de fabricación de municiones a Olin Winchester por un precio de compra bruto de $75.0 millones, recibiendo ingresos netos de aproximadamente $42.9 millones al cierre el 18 de abril de 2025. El negocio de municiones se presenta como operaciones discontinuadas y la compañía ahora gestiona el mercado en línea GunBroker.
Para los tres meses terminados el 30 de junio de 2025, los ingresos netos consolidados fueron $11,857,376 frente a $12,281,991 del año anterior, generando una utilidad bruta de $10,334,978. La pérdida operativa de las operaciones continuas fue de $6,010,675. La pérdida neta atribuible a los accionistas comunes fue de $7,232,459, o una pérdida básica por acción de $0.06, mejorando desde $0.13 hace un año. El efectivo y equivalentes de efectivo aumentaron a $63,363,812 desde $30,227,796, impulsados en gran parte por los ingresos de la venta. La compañía registró una provisión completa sobre los activos por impuestos diferidos, posee un goodwill de $90,870,094 y activos intangibles netos de $95,861,409. El litigio en Delaware se resolvió y fue desestimado con prejuicio; como parte del acuerdo la compañía emitió un warrant sobre 7.0 millones de acciones valorado en $7,094,926 y pagarés con partes relacionadas por un total de $51,000,000. El informe también revela una investigación en curso de la SEC para la cual aún no puede estimarse una pérdida.
Outdoor Holding Company는 탄약 제조 사업을 Olin Winchester에 총 매매대금 $75.0백만 달러에 매각을 완료했으며, 2025년 4월 18일 종결 시점에 약 $42.9백만 달러의 순수익금을 수령했습니다. 해당 탄약 사업은 중단영업으로 분류되었고, 회사는 현재 GunBroker 온라인 마켓플레이스를 운영하고 있습니다.
2025년 6월 30일로 끝나는 3개월 동안 연결 순매출액은 $11,857,376로 전년의 $12,281,991에 비해 감소했으며, 매출총이익은 $10,334,978을 기록했습니다. 계속 영업에서의 영업손실은 $6,010,675였습니다. 보통주주 귀속 순손실은 $7,232,459이며 기본 주당손실은 $0.06로 전년의 $0.13에서 개선되었습니다. 현금 및 현금성자산은 매각대금의 영향으로 $30,227,796에서 $63,363,812로 증가했습니다. 회사는 이연법인세자산에 대해 전액 평가충당금을 설정했으며, 영업권(굿윌) $90,870,094 및 순무형자산 $95,861,409을 보유하고 있습니다. 델라웨어 소송은 합의로 종결되어 기각되었고, 합의 대가로 회사는 가치 $7,094,926의 700만 주 워런트 및 총액 $51,000,000의 특수관계자 약속어음을 발행했습니다. 보고서에는 현재 진행 중인 미 증권거래위원회(SEC) 조사가 공개되어 있으며 이로 인한 손실은 아직 추정할 수 없습니다.
Outdoor Holding Company a finalisé la cession de son activité de fabrication de munitions à Olin Winchester pour un prix d'achat brut de 75,0 millions de dollars, recevant des produits nets d'environ 42,9 millions de dollars à la clôture le 18 avril 2025. l'activité munitions est présentée comme une activité abandonnée et la société exploite désormais la place de marché en ligne GunBroker.
Pour les trois mois clos le 30 juin 2025, le chiffre d'affaires net consolidé s'est élevé à $11,857,376 contre $12,281,991 un an plus tôt, générant une marge brute de $10,334,978. La perte d'exploitation des activités poursuivies s'est élevée à $6,010,675. La perte nette imputable aux actionnaires ordinaires a été de $7,232,459, soit une perte de base par action de $0.06, en amélioration par rapport à $0.13 l'an dernier. La trésorerie et équivalents de trésorerie ont augmenté à $63,363,812 contre $30,227,796, principalement grâce aux produits de la vente. La société a constitué une provision totale pour dépréciation des actifs d'impôts différés, détient un écart d'acquisition (goodwill) de $90,870,094 et des actifs incorporels nets de $95,861,409. Le litige dans le Delaware a été réglé et l'affaire rejetée avec préjudice ; en contrepartie du règlement, la société a émis un warrant sur 7,0 millions d'actions évalué à $7,094,926 et des billets à ordre à des parties liées totalisant $51,000,000. Le rapport mentionne également une enquête en cours de la SEC pour laquelle il est encore impossible d'estimer une perte.
Outdoor Holding Company hat den Verkauf seines Munitionsfertigungsgeschäfts an Olin Winchester zum Bruttokaufpreis von $75,0 Millionen abgeschlossen und bei Abschluss am 18. April 2025 Nettoerlöse von etwa $42,9 Millionen erhalten. Das Munitionsgeschäft wird als aufgegebener Geschäftsbereich ausgewiesen, und das Unternehmen betreibt nun den Online-Marktplatz GunBroker.
Für die drei Monate zum 30. Juni 2025 beliefen sich die konsolidierten Nettoerlöse auf $11,857,376 gegenüber $12,281,991 im Vorjahr, wobei ein Bruttogewinn von $10,334,978 erzielt wurde. Der Betriebsverlust aus fortgeführten Tätigkeiten betrug $6,010,675. Der den Stammaktionären zurechenbare Nettoverlust belief sich auf $7,232,459, entsprechend einem einfachen Verlust je Aktie von $0.06, verbessert gegenüber $0.13 im Vorjahr. Zahlungsmittel und Zahlungsmitteläquivalente stiegen auf $63,363,812 gegenüber $30,227,796, hauptsächlich aufgrund der Verkaufserlöse. Das Unternehmen bildete eine vollständige Bewertungsrückstellung für latente Steueransprüche, hält einen Firmenwert (Goodwill) von $90,870,094 und immaterielle Nettovermögenswerte von $95,861,409. Die Delaware-Streitigkeit wurde verglichen und mit Präjudiz abgewiesen; als Gegenleistung für den Vergleich gab das Unternehmen einen Warrant auf 7,0 Millionen Aktien im Wert von $7,094,926 sowie an verbundene Parteien ausgestellte Schuldscheine mit einem Gesamtbetrag von $51,000,000 aus. Der Bericht weist zudem auf eine laufende Untersuchung durch die US-Börsenaufsicht (SEC) hin, deren möglichen Verlust man noch nicht schätzen kann.
- Sale of Ammunition Manufacturing Business closed for $75.0 million gross, generating approximately $42.9 million net proceeds
- Cash balance increased to $63,363,812 at June 30, 2025 from $30,227,796 at March 31, 2025
- Adjusted EBITDA reported positive at $3,138,115 for the three months ended June 30, 2025
- Delaware Litigation dismissed with prejudice, resolving that material lawsuit
- GAAP net loss attributable to common shareholders was $7,232,459 for the quarter ended June 30, 2025
- Accumulated deficit$211,094,494
- Issued related-party settlement consideration totaling $51,000,000 of promissory notes and a 7.0 million share warrant, materially altering capital structure
- Ongoing SEC investigation into accounting and disclosure matters for which potential loss is not yet estimable
Insights
TL;DR: Sale improved liquidity materially; operating losses persist but Adjusted EBITDA is positive, creating a mixed near-term financial picture.
The April 18, 2025 sale of the Ammunition Manufacturing Business generated net proceeds of approximately $42.9 million, lifting cash to $63.36 million at June 30, 2025. Continuing operations produced net revenues of $11.86 million and a gross profit of $10.33 million for the quarter. While GAAP operating loss from continuing operations was $6.01 million and net loss attributable to common shareholders was $7.23 million, management reports Adjusted EBITDA of $3.14 million, indicating underlying cash-operating strength in the Marketplace segment after excluding nonrecurring items. The company recorded a full valuation allowance against deferred tax assets and carries an accumulated deficit of $211.09 million. Material financing tied to the Delaware settlement (warrant valued at $7.09 million and $51.0 million of related-party notes) substantially changed the capital structure and will affect future interest and dilution dynamics. Overall, liquidity improved but profitability and contingent risks remain key near-term considerations.
TL;DR: Delaware Litigation resolved, but settlement created significant related-party indebtedness and governance changes that are material to shareholders.
The Company and related parties executed a settlement that resulted in voluntary dismissal with prejudice of the Delaware Litigation and, effective May 30, 2025, governance changes including the resignation of the prior CEO and appointment of Mr. Urvan as Chairman and CEO. As partial settlement consideration, the Company issued a warrant for 7.0 million shares (Black-Scholes value $7,094,926) and two unsecured promissory notes aggregating $51.0 million, recorded with substantial debt discounts. These are related-party instruments issued to an affiliate of Mr. Urvan and include transfer restrictions and vesting/transfer mechanics. The settlement resolves a multi-party dispute but introduced sizable related-party obligations and equity-linked instruments; combined with the disclosed ongoing SEC investigation, these developments raise material governance and disclosure considerations for investors.
Outdoor Holding Company ha completato la vendita della sua attività di produzione di munizioni a Olin Winchester per un prezzo d'acquisto lordo di $75.0 milioni, incassando proventi netti di circa $42.9 milioni alla chiusura avvenuta il 18 aprile 2025. L'attività munizioni è presentata come attività cessate e la società opera ora il marketplace online GunBroker.
Per i tre mesi terminati il 30 giugno 2025, i ricavi netti consolidati sono stati $11,857,376 rispetto a $12,281,991 dell'anno precedente, con un utile lordo di $10,334,978. La perdita operativa dalle attività in corso è stata di $6,010,675. La perdita netta attribuibile agli azionisti ordinari è stata $7,232,459, pari a una perdita base per azione di $0.06, migliorata rispetto a $0.13 dell'anno precedente. La liquidità e gli equivalenti di cassa sono aumentati a $63,363,812 da $30,227,796, trainati in gran parte dai proventi della vendita. La società ha registrato una svalutazione integrale sulle attività per imposte differite, detiene avviamento per $90,870,094 e attività immateriali nette per $95,861,409. La controversia in Delaware è stata risolta e archiviata con pregiudizio; a fronte dell'accordo la società ha emesso un warrant su 7,0 milioni di azioni del valore di $7,094,926 e cambiali a parti correlate per un totale di $51,000,000. Il rapporto segnala inoltre un'indagine in corso della SEC per la quale non è ancora possibile stimare una perdita.
Outdoor Holding Company completó la venta de su negocio de fabricación de municiones a Olin Winchester por un precio de compra bruto de $75.0 millones, recibiendo ingresos netos de aproximadamente $42.9 millones al cierre el 18 de abril de 2025. El negocio de municiones se presenta como operaciones discontinuadas y la compañía ahora gestiona el mercado en línea GunBroker.
Para los tres meses terminados el 30 de junio de 2025, los ingresos netos consolidados fueron $11,857,376 frente a $12,281,991 del año anterior, generando una utilidad bruta de $10,334,978. La pérdida operativa de las operaciones continuas fue de $6,010,675. La pérdida neta atribuible a los accionistas comunes fue de $7,232,459, o una pérdida básica por acción de $0.06, mejorando desde $0.13 hace un año. El efectivo y equivalentes de efectivo aumentaron a $63,363,812 desde $30,227,796, impulsados en gran parte por los ingresos de la venta. La compañía registró una provisión completa sobre los activos por impuestos diferidos, posee un goodwill de $90,870,094 y activos intangibles netos de $95,861,409. El litigio en Delaware se resolvió y fue desestimado con prejuicio; como parte del acuerdo la compañía emitió un warrant sobre 7.0 millones de acciones valorado en $7,094,926 y pagarés con partes relacionadas por un total de $51,000,000. El informe también revela una investigación en curso de la SEC para la cual aún no puede estimarse una pérdida.
Outdoor Holding Company는 탄약 제조 사업을 Olin Winchester에 총 매매대금 $75.0백만 달러에 매각을 완료했으며, 2025년 4월 18일 종결 시점에 약 $42.9백만 달러의 순수익금을 수령했습니다. 해당 탄약 사업은 중단영업으로 분류되었고, 회사는 현재 GunBroker 온라인 마켓플레이스를 운영하고 있습니다.
2025년 6월 30일로 끝나는 3개월 동안 연결 순매출액은 $11,857,376로 전년의 $12,281,991에 비해 감소했으며, 매출총이익은 $10,334,978을 기록했습니다. 계속 영업에서의 영업손실은 $6,010,675였습니다. 보통주주 귀속 순손실은 $7,232,459이며 기본 주당손실은 $0.06로 전년의 $0.13에서 개선되었습니다. 현금 및 현금성자산은 매각대금의 영향으로 $30,227,796에서 $63,363,812로 증가했습니다. 회사는 이연법인세자산에 대해 전액 평가충당금을 설정했으며, 영업권(굿윌) $90,870,094 및 순무형자산 $95,861,409을 보유하고 있습니다. 델라웨어 소송은 합의로 종결되어 기각되었고, 합의 대가로 회사는 가치 $7,094,926의 700만 주 워런트 및 총액 $51,000,000의 특수관계자 약속어음을 발행했습니다. 보고서에는 현재 진행 중인 미 증권거래위원회(SEC) 조사가 공개되어 있으며 이로 인한 손실은 아직 추정할 수 없습니다.
Outdoor Holding Company a finalisé la cession de son activité de fabrication de munitions à Olin Winchester pour un prix d'achat brut de 75,0 millions de dollars, recevant des produits nets d'environ 42,9 millions de dollars à la clôture le 18 avril 2025. l'activité munitions est présentée comme une activité abandonnée et la société exploite désormais la place de marché en ligne GunBroker.
Pour les trois mois clos le 30 juin 2025, le chiffre d'affaires net consolidé s'est élevé à $11,857,376 contre $12,281,991 un an plus tôt, générant une marge brute de $10,334,978. La perte d'exploitation des activités poursuivies s'est élevée à $6,010,675. La perte nette imputable aux actionnaires ordinaires a été de $7,232,459, soit une perte de base par action de $0.06, en amélioration par rapport à $0.13 l'an dernier. La trésorerie et équivalents de trésorerie ont augmenté à $63,363,812 contre $30,227,796, principalement grâce aux produits de la vente. La société a constitué une provision totale pour dépréciation des actifs d'impôts différés, détient un écart d'acquisition (goodwill) de $90,870,094 et des actifs incorporels nets de $95,861,409. Le litige dans le Delaware a été réglé et l'affaire rejetée avec préjudice ; en contrepartie du règlement, la société a émis un warrant sur 7,0 millions d'actions évalué à $7,094,926 et des billets à ordre à des parties liées totalisant $51,000,000. Le rapport mentionne également une enquête en cours de la SEC pour laquelle il est encore impossible d'estimer une perte.
Outdoor Holding Company hat den Verkauf seines Munitionsfertigungsgeschäfts an Olin Winchester zum Bruttokaufpreis von $75,0 Millionen abgeschlossen und bei Abschluss am 18. April 2025 Nettoerlöse von etwa $42,9 Millionen erhalten. Das Munitionsgeschäft wird als aufgegebener Geschäftsbereich ausgewiesen, und das Unternehmen betreibt nun den Online-Marktplatz GunBroker.
Für die drei Monate zum 30. Juni 2025 beliefen sich die konsolidierten Nettoerlöse auf $11,857,376 gegenüber $12,281,991 im Vorjahr, wobei ein Bruttogewinn von $10,334,978 erzielt wurde. Der Betriebsverlust aus fortgeführten Tätigkeiten betrug $6,010,675. Der den Stammaktionären zurechenbare Nettoverlust belief sich auf $7,232,459, entsprechend einem einfachen Verlust je Aktie von $0.06, verbessert gegenüber $0.13 im Vorjahr. Zahlungsmittel und Zahlungsmitteläquivalente stiegen auf $63,363,812 gegenüber $30,227,796, hauptsächlich aufgrund der Verkaufserlöse. Das Unternehmen bildete eine vollständige Bewertungsrückstellung für latente Steueransprüche, hält einen Firmenwert (Goodwill) von $90,870,094 und immaterielle Nettovermögenswerte von $95,861,409. Die Delaware-Streitigkeit wurde verglichen und mit Präjudiz abgewiesen; als Gegenleistung für den Vergleich gab das Unternehmen einen Warrant auf 7,0 Millionen Aktien im Wert von $7,094,926 sowie an verbundene Parteien ausgestellte Schuldscheine mit einem Gesamtbetrag von $51,000,000 aus. Der Bericht weist zudem auf eine laufende Untersuchung durch die US-Börsenaufsicht (SEC) hin, deren möglichen Verlust man noch nicht schätzen kann.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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TABLE OF CONTENTS
PART I |
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ITEM 1: |
FINANCIAL STATEMENTS |
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Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and March 31, 2025 |
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Condensed Consolidated Statements of Operations (Unaudited) for the three months ended June 30, 2025 and 2024 |
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Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended June 30, 2025 and 2024 |
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Condensed Consolidated Statements of Cash Flow (Unaudited) for the three months ended June 30, 2025 and 2024 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
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QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
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CONTROLS AND PROCEDURES |
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PART II |
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ITEM 1: |
LEGAL PROCEEDINGS |
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RISK FACTORS |
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ITEM 2: |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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ITEM 3: |
DEFAULTS UPON SENIOR SECURITIES |
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MINE SAFETY DISCLOSURE |
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OTHER INFORMATION |
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EXHIBITS |
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SIGNATURES |
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2
PART I
ITEM 1. FINANCIAL STATEMENTS
OUTDOOR HOLDING COMPANY
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|
|
|
|
||
Other intangible assets, net |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Right of use assets - operating leases |
|
|
|
|
|
|
||
Noncurrent assets - discontinued operations |
|
|
- |
|
|
|
|
|
TOTAL ASSETS |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|||||||
Current Liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued liabilities |
|
|
|
|
|
|
||
Current portion of operating lease liability |
|
|
|
|
|
|
||
Notes payable - related parties, current portion |
|
|
|
|
|
- |
|
|
Current liabilities - discontinued operations |
|
|
- |
|
|
|
|
|
Total Current Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Long-term Liabilities: |
|
|
|
|
|
|
||
Notes payable - related parties, net of $ |
|
|
|
|
|
- |
|
|
Income tax payable |
|
|
|
|
|
|
||
Operating lease liability, net of current portion |
|
|
|
|
|
|
||
Noncurrent liabilities - discontinued operations |
|
|
- |
|
|
|
|
|
Total Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Contingencies (Note 14) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Shareholders' Equity: |
|
|
|
|
|
|
||
Series A cumulative perpetual preferred stock |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Treasury stock, at cost |
|
|
( |
) |
|
|
( |
) |
Total Shareholders' Equity |
|
|
|
|
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
OUTDOOR HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
For the Three Months Ended June 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
Net revenues |
|
|
|
|
|
|
|
||
Cost of revenues |
|
|
|
|
|
|
|
||
Gross Profit |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Operating Expenses |
|
|
|
|
|
|
|
||
Selling and marketing |
|
|
|
|
|
|
|
||
Corporate general and administrative |
|
|
|
|
|
|
|
||
Employee salaries and related expenses |
|
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
|
||
Loss from Operations |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Other Income (Expense) |
|
|
|
|
|
|
|
||
Other income |
|
|
|
|
|
|
|
||
Interest expense |
|
|
|
( |
) |
|
|
( |
) |
Total other income |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Loss before income taxes from continuing operations |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Provision for income taxes |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net loss from continuing operations |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Preferred stock dividend |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Net loss before discontinued operations |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Loss from discontinued operations, net of tax |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Net loss attributable to common stock shareholders |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
||
Basic loss per share of common stock: |
|
|
|
|
|
|
|
||
Continuing operations |
|
|
$ |
( |
) |
|
$ |
( |
) |
Discontinued operations |
|
|
|
(0.00 |
) |
|
|
( |
) |
Total basic loss per share of common stock |
|
|
$ |
( |
) |
|
$ |
( |
) |
Diluted loss per share of common stock: |
|
|
|
|
|
|
|
||
Continuing operations |
|
|
$ |
( |
) |
|
$ |
( |
) |
Discontinued operations |
|
|
|
(0.00 |
) |
|
|
( |
) |
Total diluted loss per share of common stock |
|
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
||
Basic |
|
|
|
|
|
|
|
||
Diluted |
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
OUTDOOR HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
|
|
Preferred Stock |
|
|
Common Shares |
|
|
Additional |
|
|
Accumulated |
|
|
Treasury |
|
|
|
|
||||||||||||||
|
|
Number |
|
|
Par Value |
|
|
Number |
|
|
Par Value |
|
|
Capital |
|
|
(Deficit) |
|
|
Stock |
|
|
Total |
|
||||||||
Balance as of March 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock based compensation |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Warrants issued for legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Repurchase of common shares (1) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Preferred stock dividends |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Dividends accumulated on preferred stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
Preferred Stock |
|
|
Common Shares |
|
|
Additional |
|
|
Accumulated |
|
|
Treasury |
|
|
|
|
||||||||||||||
|
|
Number |
|
|
Par Value |
|
|
Number |
|
|
Par Value |
|
|
Capital |
|
|
(Deficit) |
|
|
Stock |
|
|
Total |
|
||||||||
Balance as of March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock based compensation |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Repurchase of common shares (1) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Preferred stock dividends |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Dividends accumulated on preferred stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Treasury shares purchased |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
OUTDOOR HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
|
|
For the Three Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Cash flow from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Loss from discontinued operations, net of tax |
|
|
( |
) |
|
|
( |
) |
Net loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by/(used in) operations: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Debt discount amortization |
|
|
|
|
|
- |
|
|
Stock based compensation |
|
|
|
|
|
|
||
Loss on disposal of assets |
|
|
|
|
|
- |
|
|
Allowance for credit losses |
|
|
|
|
|
|
||
Reduction in right of use asset |
|
|
|
|
|
|
||
Valuation allowance |
|
|
- |
|
|
|
|
|
Deferred income taxes |
|
|
- |
|
|
|
( |
) |
Changes in current assets and liabilities |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
|
||
Due from related parties |
|
|
- |
|
|
|
( |
) |
Prepaid expenses |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
( |
) |
|
|
( |
) |
Accrued liabilities |
|
|
( |
) |
|
|
|
|
Operating lease liability |
|
|
( |
) |
|
|
( |
) |
Net cash provided by/(used in) operating activities |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||
Cash flow from investing activities: |
|
|
|
|
|
|
||
Sale of ammunition business assets |
|
|
|
|
|
- |
|
|
Purchase of equipment |
|
|
( |
) |
|
|
( |
) |
Net cash provided by/(used in) investing activities |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Cash flow from financing activities: |
|
|
|
|
|
|
||
Payments on insurance premium note |
|
|
- |
|
|
|
( |
) |
Preferred stock dividends paid |
|
|
( |
) |
|
|
( |
) |
Repurchase of common shares |
|
|
( |
) |
|
|
( |
) |
Common stock repurchase plan |
|
|
- |
|
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Cash flow from discontinued operations |
|
|
|
|
|
|
||
Net cash used in operating activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net cash provided by/(used in) investing activities of discontinued operations |
|
|
|
|
|
( |
) |
|
Net cash used in financing activities of discontinued operations |
|
|
|
|
|
( |
) |
|
Net cash used in discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net increase/(decrease) in cash |
|
|
|
|
|
( |
) |
|
Cash, beginning of period |
|
|
|
|
|
|
||
Cash, end of period |
|
$ |
|
|
$ |
|
||
(Continued)
6
OUTDOOR HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
|
|
For the Three Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Supplemental cash flow disclosures: |
|
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
Income taxes |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Insurance premium note payment |
|
$ |
- |
|
|
$ |
|
|
Issuance of notes payable - related party in DE Litigation settlement |
|
$ |
|
|
$ |
- |
|
|
Discount on notes payable - related party in DE Litigation settlement |
|
$ |
( |
) |
|
$ |
- |
|
Warrant issued for legal settlement - related party in DE Litigation settlement |
|
$ |
|
|
$ |
- |
|
|
Dividends accumulated on preferred stock |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(Unaudited)
NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY
Outdoor Holding Company ("Outdoor Holding," "we," "us," "our" or the "Company") began its operations in 2017 as a producer of high-performance ammunition and premium components. Following the acquisition of the GunBroker business ("GunBroker") in 2021, we conducted operations through
Prior to the sale of the ammunition manufacturing business in April, 2025 (see “Discontinued Operations and Assets Held for Sale” under Note 4), our Ammunition segment manufactured small arms ammunition and their components for the commercial, military, and law enforcement communities. Our manufacturing operations were based out of Manitowoc, Wisconsin ("WI"). We emphasized an American heritage by using predominantly American-made components and raw materials in our products that were produced, inspected, and packaged at our facility in Manitowoc, WI. Following the sale of the ammunition manufacturing business, the Company continues to operate its online Marketplace business.
The Company changed its name from AMMO, Inc. to Outdoor Holding Company on April 21, 2025.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Outdoor Holding Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.
Accounting Basis
The accompanying unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for the periods presented in this report. Additionally, these condensed consolidated financial statements and related disclosures are presented pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025. The results for the three months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial information contains all normal and recurring adjustments necessary to fairly present the condensed consolidated balance sheets and statements of operations, cash flow and changes in stockholders’ equity of the Company for the interim periods presented.
We use the accrual basis of accounting and U.S. GAAP, and all amounts are expressed in U.S. dollars. The Company has a fiscal year-end of March 31st.
Discontinued Operations
In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-20 “Discontinued Operations,” a business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn. A business classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less costs to sell, a loss is recognized and updated each reporting period as appropriate. Assets held for sale are not depreciated or amortized.
The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of
8
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
operations are reported in a single line, net of tax, in the consolidated statement of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.
During the year ended March 31, 2025, the Board of Directors initiated a formal review of strategic alternatives for the Company. This review of strategic alternatives resulted in the decision to sell the assets of the Company's Ammunition segment. The Company concluded the assets of the Ammunition segment met the criteria for classification as held for sale during the three months ended March 31, 2025. Additionally, the Company determined the ultimate disposal would represent a strategic shift that would have a major effect on the Company's operations and financial results. As such, the results of the Ammunition segment are presented as discontinued operations in the accompanying condensed consolidated statements of operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. The assets and liabilities of the Ammunition segment have been reflected as assets and liabilities of discontinued operations in the accompanying condensed consolidated balance sheets for the year ended March 31, 2025. The Company ceased depreciating and amortizing its long-lived assets for the Ammunition segment which primarily include right-of-use assets, intangible assets and property and equipment in the year ended March 31, 2025. On
Unless otherwise noted, all amounts and disclosures included in these notes to the condensed consolidated financial statements reflect only the Company's continuing operations. Refer to Note 4, Discontinued Operations and Assets Held for Sale, for additional details on discontinued operations.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the condensed consolidated financial statements include the valuation of allowances for credit losses, valuation of deferred tax assets, useful lives of assets, goodwill, intangible assets, stock-based compensation, and warrants.
Goodwill
We evaluate goodwill for impairment annually or more frequently when an event occurs, or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. In testing for goodwill impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flow. Forecasts of future cash flow are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. As of June 30, 2025 and March 31, 2025, the Company had a goodwill carrying value of $
Accounts Receivable and Allowance for Credit Losses
Our accounts receivable represents amounts due from customers for fees and include an allowance for estimated credit losses which is estimated based on the collectability and age of the accounts receivable balances and categorization of customers with similar financial condition. At June 30, 2025 and March 31, 2025, we had a reserve of $
Cash and Cash Equivalents
For purposes of the condensed consolidated statements of cash flow, we consider highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
9
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Impairment of Long-Lived Assets
We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Revenue Recognition
We generate revenue from marketplace fees, which includes marketplace revenue, compliance fee revenue, payment processing revenue, advertising revenue and shipping revenue. We recognize revenue according to ASC 606 – Revenue from Contracts with Customers (“ASC 606”). When the customer obtains control over the promised goods or services, we record revenue in the amount of consideration that we can expect to receive in exchange for those goods and services. We apply the following five-step model to determine revenue recognition:
We only apply the five-step model when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract obligation, determine those that are performance obligations, and assess whether each promised good or service is distinct.
Marketplace fees are generated through our GunBroker online marketplace. Performance obligations are satisfied, and revenue is recognized, as follows:
Marketplace revenue consists of optional listing fees with variable pricing components based on customer options selected from the GunBroker website and final value fees based on a percentage of the final selling price of the listed item. The performance obligation is to process the transactions as initiated by the customer. Revenue is recognized at a point in time when the transaction is processed.
Compliance fee revenue consists of fees charged to customers based on a percentage of the final price of an item at the time of purchase. The performance obligation is to process the transactions as initiated by the customer. Revenue is recognized at a point in time when the transaction is processed.
Shipping revenue consists of fees charged to customers for shipping of sold items listed on the GunBroker website. The performance obligation is to ship the item sold as initiated by the customer. The price is set based on the third-party service provider selected to be used by the customer as well as the speed and location of shipment. Revenue is recognized at a point in time when the shipping label is printed.
Advertising revenue consists of fees charged to customers for advertisement placement and impressions generated through the GunBroker website. The performance obligation is to generate the number of impressions specified by the customer on banner advertisements on the GunBroker website using the placement selected by the customer. The price is set by the GunBroker user agreement on the website based on standalone selling prices, or by advertising insertion order as negotiated by a media broker. If the number of impressions promised is not generated, the customer receives a refund and the refund is applied to the transaction price. Revenue is recognized at a point in time at the end of the selected month.
For the three months ended June 30, 2025 and 2024,
Advertising Costs
Marketplace advertising costs are expensed as they are incurred and recorded in cost of revenues. We incurred advertising expenses of $
10
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Leases
We determine if an arrangement is a lease at inception of the contract. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; instead, we recognize lease expense for these leases on a straight-line basis over the lease term. We do not account for lease components (e.g., fixed payments to use the underlying lease asset) separately from the non-lease components (e.g., fixed payments for common-area maintenance costs and other items that transfer a good or service). Some of our leases include variable lease payments, which primarily result from changes in consumer price and other market-based indices, which are generally updated annually, and maintenance and usage charges. These variable payments are excluded from the calculation of our lease assets and lease liabilities.
We utilize the interest rate implicit in the lease to determine the lease liability when the interest rate can be determined. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.
Property and Equipment
We state property and equipment at cost, less accumulated depreciation. We compute depreciation using the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which are generally three to
We capitalize additions and expenditures for improving or rebuilding existing assets that extend the useful life. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured.
Fair Value of Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of June 30, 2025. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash, accounts receivable, accounts payable and notes due to related parties. Fair values were assumed to approximate carrying values because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Stock-Based Compensation
We account for stock-based compensation at fair value in accordance with ASC 718 – Compensation – Stock Compensation, which requires the recognition of the cost of employee, director and non-employee services received in exchange for an award of equity over the period the employee, director or non-employee is required to perform the services in exchange for the award. Stock-based compensation is measured based on the grant-date fair value of the award. Stock-based compensation is recognized on a straight-line basis over the vesting periods and forfeitures are recognized in the periods they occur.
Concentrations of Credit Risk
Accounts at banks are insured by the Federal Deposit Insurance Corporation up to $
Income Taxes
We file federal and state income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with ASC 740 - Income Taxes (“ASC 740”). The provision for income taxes includes federal, state, and local income taxes currently payable, and deferred taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable amounts in years in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In accordance with ASC 740, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained.
11
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The ASU requires that public business entities on an annual basis (1) disclose specific categories in the effective tax rate reconciliation and (2) provide additional information for reconciling items that meet or exceed a quantitative threshold. Additionally, it requires all entities disclose the following information about income taxes paid on an annual basis: (1) the year-to-date amounts of income taxes paid disaggregated by federal (national), state, and foreign taxes and (2) the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid. The amendments are effective for annual periods beginning after December 15, 2024. The amendments in this proposed ASU should be applied on a prospective basis, although retrospective application to all periods presented is permitted. Early adoption is permitted. We are currently evaluating the potential impact of these changes.
Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year's presentation. These reclassifications have no effect on the results of operations, stockholders' equity, and cash flow as previously reported.
NOTE 3 – INCOME (LOSS) PER COMMON SHARE
We calculate basic income/(loss) per share using the weighted average number of common shares outstanding during each period. Diluted earnings per share assumes the conversion, exercise or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options (using the treasury stock method), the exercise of warrants (using the if-converted method), and the vesting of restricted stock unit awards.
|
|
For the Three Months Ended June 30, |
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|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Unaudited) |
|
|||||
Numerator: |
|
|
|
|
|
|
||
Net loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Less: Preferred stock dividends |
|
|
( |
) |
|
|
( |
) |
Net loss before discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net loss from discontinued operations, net of tax |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Denominator: |
|
|
|
|
|
|
||
Weighted average shares of common stock - basic |
|
|
|
|
|
|
||
Effect of dilutive common stock purchase warrants |
|
|
- |
|
|
|
- |
|
Effect of dilutive equity incentive awards |
|
|
- |
|
|
|
- |
|
Weighted average shares of common stock - diluted |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic loss per share attributable to common stockholders: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Discontinued operations |
|
$ |
(0.00 |
) |
|
$ |
( |
) |
Total basic loss per share attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Diluted loss per share attributable to common stockholders: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Discontinued operations |
|
$ |
(0.00 |
) |
|
$ |
( |
) |
Total diluted loss per share attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
12
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the number of shares excluded from the calculation of diluted net loss per share attributable to common stockholders:
|
|
For the Three Months Ended, |
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|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Common stock options |
|
|
|
|
|
|
||
Non-vested stock awards |
|
|
- |
|
|
|
|
|
Warrants |
|
|
|
|
|
|
||
Total shares excluded from net loss per share attributable to common stockholders |
|
|
|
|
|
|
||
NOTE 4- DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
As previously reported, the Board of Directors initiated a formal review of strategic alternatives for the Ammunition segment during the year ended March 31, 2025. On
Financial Information of Discontinued Operations
The following table summarizes the results of operations of the Ammunition segment that are being reported as discontinued operations:
|
|
|
For the Three Months Ended June 30, |
|||||||
|
|
|
2025(1) |
|
|
2024 |
|
|
||
|
|
|
|
|
|
|
|
|
||
Net revenues(2) |
|
|
$ |
|
|
$ |
|
|
||
Cost of revenues |
|
|
|
|
|
|
|
|
||
Gross profit |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
||
Operating expenses |
|
|
|
|
|
|
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|
||
Selling and marketing |
|
|
|
|
|
|
|
|
||
Corporate general and administrative |
|
|
|
|
|
|
|
|
||
Employee salaries and related expenses |
|
|
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
- |
|
|
|
|
|
|
Total operating expenses |
|
|
|
|
|
|
|
|
||
Loss from operations |
|
|
|
( |
) |
|
|
( |
) |
|
Total other income/(expense) |
|
|
|
|
|
|
( |
) |
|
|
Loss from discontinued operations before income taxes |
|
|
|
( |
) |
|
|
( |
) |
|
Benefit for income taxes |
|
|
|
- |
|
|
|
( |
) |
|
Loss from discontinued operations, net of tax |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
13
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
There were
|
|
March 31, 2025 |
|
|
ASSETS |
|
|
|
|
Accounts receivable, net |
|
$ |
|
|
Inventories |
|
|
|
|
Prepaid expenses |
|
|
|
|
Equipment, net |
|
|
|
|
Patents, net |
|
|
|
|
Total assets of discontinued operations |
|
$ |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
|
|
Accrued liabilities |
|
|
|
|
Current portion of construction note payable |
|
|
|
|
Construction note payable, net of unamortized issuance costs |
|
|
|
|
Total liabilities of discontinued operations |
|
$ |
|
|
Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell.
Capital expenditures related to discontinued operations were $
NOTE 5 – SUPPLEMENTAL BALANCE SHEET INFORMATION
Accounts Receivable
Our net accounts receivable are summarized as follows:
|
|
June 30, |
|
|
March 31, |
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Less: allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
The following presents a reconciliation of our allowance for credit losses for the periods presented:
April 1, 2025 |
|
|
|
|
Increase in allowance |
|
|
|
|
Write-off of uncollectible amounts |
|
|
( |
) |
June 30, 2025 |
|
$ |
|
Property and Equipment
Property and equipment consisted of the following at June 30, 2025 and March 31, 2025:
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
||
Leasehold improvements |
|
$ |
|
|
$ |
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Software and equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Total property and equipment |
|
$ |
|
|
$ |
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Net property and equipment |
|
$ |
|
|
$ |
|
||
Depreciation expense for the three months ended June 30, 2025 and 2024 totaled $
14
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Accrued Liabilities
At June 30, 2025 and March 31, 2025, accrued liabilities were as follows:
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
||||
Accrued bonus program |
|
$ |
|
|
|
$ |
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
|
|
|
||
Accrued payroll |
|
|
|
|
|
|
|
|
|
||
Other accruals |
|
|
|
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
|
|
|
||
Accrued contingency |
|
|
|
— |
|
|
|
|
|
|
|
Accrued liabilities |
|
$ |
|
|
|
$ |
|
|
|
||
NOTE 6 – LEASES
We lease office space in Scottsdale, AZ and Atlanta, GA under contracts we classify as operating leases. None of our leases are financing leases. The Scottsdale lease has been extended through 2029 and does not include a renewal option.
Consolidated lease expense for the three months ended June 30, 2025 was $
The weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, 2025 were
Future minimum lease payments under non-cancellable leases as of June 30, 2025, are as follows:
Years Ended March 31, |
|
|
|
|
2026(1) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Total Lease Payments |
|
|
|
|
Less: Amount Representing Interest |
|
|
( |
) |
Present Value of Lease Liabilities |
|
$ |
|
|
NOTE 7 – PREFERRED STOCK
On May 18, 2021, the Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware to establish the preferences, voting powers, limitations as to dividends or other distributions, qualifications, terms and conditions of redemption and other terms and conditions of the Series A Cumulative Redeemable Perpetual Preferred Stock ("Series A Preferred Stock").
The Company will pay cumulative cash dividends on the Series A Preferred Stock when, as and if declared by its Board of Directors (or a duly authorized committee of its Board of Directors), only out of funds legally available for payment of dividends. Dividends on the Series A Preferred Stock will accrue on the stated amount of $
Generally, the Series A Preferred Stock is not redeemable by the Company prior to May 18, 2026. However, upon a change of control or de-listing event (each as defined in the Certificate of Designations), the Company will have a special option to redeem the Series A Preferred Stock for a limited period of time.
15
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of the dividends paid on the Series A Preferred Stock in the three months ended June 30, 2025 and 2024:
Dividend |
|
Record |
|
Dividend |
|
Dividend |
|
Dividend |
|
|
Per Share |
|
||||
|
|
|
|
$ |
|
|
|
$ |
|
|
||||||
Preferred dividends accumulated as of June 30, 2025 were $
Dividend |
|
Record |
|
Dividend |
|
Dividend |
|
Dividend |
|
|
Per Share |
|
||||
|
|
|
|
$ |
|
|
|
$ |
|
|
||||||
Preferred dividends accumulated as of June 30, 2024 were $
NOTE 8 – CAPITAL STOCK
Our authorized capital consists of
2017 Equity Incentive Plan
In October 2017, our Board of Directors approved the 2017 Equity Incentive Plan ("2017 Plan"). Our 2017 Plan initially permitted the issuance of equity-based instruments covering up to a total of
Warrants
On May 30, 2025, we issued a warrant to purchase
At June 30, 2025, outstanding and exercisable stock purchase warrants consisted of the following:
|
|
Number of |
|
|
Weighted |
|
|
Weighted |
|
|||
Outstanding at April 1, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
|
|
|
|
|
|
|||
Exercised |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeited or cancelled |
|
|
( |
) |
|
|
|
|
|
— |
|
|
Outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
Exercisable at June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|||
As of June 30, 2025, we had
Options Granted
During the year ended March 31, 2024, we granted stock options (“Options”) to purchase
16
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our stock option activity during the three months ended June 30, 2025:
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Grant Date Fair Value |
|
|
Weighted Average Remaining Life in Years |
|
|||||||||
Outstanding, April 1, 2025 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
||||
Granted |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
Exercised |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
Canceled/Forfeited |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
Outstanding, June 30, 2025 |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|||||
As of June 30, 2025, there was
Stock Awards
A summary of stock award activity for the three months ended June 30, 2025 is as follows:
|
|
Number of Shares |
|
|
Weighted-Average Grant-Date Fair Value Per Share |
|
|||
Outstanding at April 1, 2025 |
|
|
|
|
$ |
|
|
||
Granted |
|
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
Outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
||
As of June 30, 2025, there was no unrecognized compensation expense and no unvested stock awards.
NOTE 9 – GOODWILL AND INTANGIBLE ASSETS
The balance of goodwill at June 30, 2025 and March 31, 2025 was $
Amortization expense related to our intangible assets for the three months ended June 30, 2025 and 2024 was $
Intangible assets consisted of the following:
|
|
|
|
As of |
|
|||||
|
|
Life |
|
June 30, 2025 |
|
|
March 31, 2025 |
|
||
Tradename |
|
|
$ |
|
|
$ |
|
|||
Customer List |
|
|
|
|
|
|
|
|||
Intellectual Property |
|
|
|
|
|
|
|
|||
Other Intangible Assets |
|
|
|
|
|
|
|
|||
Gross Intangibles Assets |
|
|
|
|
|
|
|
|
||
Accumulated Amortization – Intangible Assets |
|
|
|
|
( |
) |
|
|
( |
) |
Net Intangible Assets |
|
|
|
$ |
|
|
$ |
98,891,767 |
|
|
Annual amortization of intangible assets for the next five fiscal years are as follows:
Years Ended March 31, |
|
Estimates for |
|
|
2026 (1) |
|
$ |
|
|
2027 |
|
$ |
|
|
2028 |
|
$ |
|
|
2029 |
|
$ |
|
|
2030 |
|
$ |
|
|
Thereafter |
|
$ |
|
|
Annual amortization of intangible assets |
|
$ |
|
|
17
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – SEGMENTS
We define our segments as those operations whose results our chief operating decision maker ("CODM") reviews to analyze performance and allocate resources. Our CODM is our chief executive officer.
Our CODM does not use asset book values in assessing performance or allocating resources for our operating segments and therefore this information is not disclosed.
The following table presents consolidated EBITDA for our reportable segment:
|
|
For the three months ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Net revenues |
|
$ |
|
|
$ |
|
||
Cost of revenues |
|
|
|
|
|
|
||
Selling and marketing |
|
|
|
|
|
|
||
Corporate and administrative |
|
|
|
|
|
|
||
Employee salaries and related expenses |
|
|
|
|
|
|
||
Consolidated EBITDA |
|
|
( |
) |
|
|
( |
) |
Adjustments and reconciling items: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Other income |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
Provision for income taxes |
|
|
— |
|
|
|
( |
) |
Net loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
NOTE 11 – INCOME TAXES
The income tax provision effective tax rates were
The Company has never had an Internal Revenue Service audit; therefore, the tax periods ended March 31, 2021, 2022, 2023, 2024, and 2025 are subject to audit.
NOTE 12 – RELATED PARTY TRANSACTIONS
Gemini Accounts Receivable
Through our acquisition of Gemini Direct Investments, LLC ("Gemini") in 2021, a related party relationship was created through Mr. Urvan, then a director and now our Chairman of the Board and Chief Executive Officer, by virtue of his ownership of entities that provided services to Gemini. There was $
Warrant
As partial consideration for the settlement in the Delaware Litigation described in Note 14, Contingencies, the Company issued an affiliated designee of Mr. Urvan, a warrant (the “Warrant”) to purchase
18
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the terms of the Warrant, the Warrant shares may not, subject to certain exceptions, be sold, assigned, transferred or otherwise distributed without prior approval from a majority of the disinterested and independent members of the Board of Directors, provided that on each of the first three anniversaries of May 30, 2025, the holder may transfer
We evaluated the Warrant in accordance with ASC 815, Derivatives and Hedging ("ASC 815"). We determined that the Warrant meets the criteria for equity classification since the Warrant is indexed to the Company's equity and includes settlement in shares. The Warrant was valued using the Black-Scholes option pricing model using a
$12M Note Payable
As partial consideration for the settlement in the Delaware Litigation described in Note 14, Contingencies, on May 30, 2025, the Company also issued to Mr. Urvan's affiliated designee, an unsecured promissory note for a principal amount of $
Pursuant to the terms of Note 1, the Company is required to make annual prepayments such that $
We evaluated Note 1 in accordance with ASC 470, Debt ("ASC 470"). Note 1 was initially recorded at its calculated fair value of $
During the three months ended June 30, 2025, we recorded interest expense on Note 1 of $
$39M Note Payable
As partial consideration for the settlement in the Delaware Litigation described in Note 14, Contingencies,, on May 30, 2025, the Company also issued to Mr. Urvan's affiliated designee, an unsecured promissory note in a principal amount of $
Pursuant to the terms of Note 2, we are required to make annual prepayments of the outstanding principal amount on Note 2 equal to $
The Additional Warrant, if issued, would have a
We evaluated Note 2 in accordance with ASC 470. Note 2 was initially recorded at its calculated fair value of $
During the three months ended June 30, 2025, we recorded interest expense on Note 2 of $
19
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – REVOLVING LOAN
On December 29, 2023, we entered into a Loan and Security Agreement (the “Sunflower Agreement”) by and among the Company and the other borrowers party to the Sunflower Agreement, the lenders party thereto (collectively, the “Lenders”) and Sunflower Bank, N.A., as administrative agent and collateral agent (the “Agent”), pursuant to which the Lenders provided us a revolving loan ("Revolving Loan") in the principal amount of the lesser of (a) $
On April 18, 2025, we entered into a Consent and Second Amendment to the Sunflower Agreement (the "Second Sunflower Loan Amendment"). Pursuant to the Second Sunflower Loan Amendment, we and the Agent agreed to, among other things: (i) release the Agent’s security interest in all collateral securing our obligations under the Sunflower Agreement upon consummation of the sale of the Ammunition Manufacturing Business; (ii) reduce all amounts available under the Revolving Loan to zero dollars as of the effective date of the Second Sunflower Loan Amendment; (iii) enter into an Amended and Restated Revolving Line Promissory Note in the amount of $
Upon signing of the Second Sunflower Loan Amendment, the Revolving Line Availability was reduced to zero dollars and will remain at zero dollars unless we provide the Agent with a security interest in new collateral or otherwise further amend the Sunflower Agreement.
On May 13, 2025, the Company entered into a Third Amendment to the Sunflower Agreement (the “Third Sunflower Loan Amendment”. Pursuant to the Third Sunflower Loan Amendment, we and the Agent agreed to change the definitions in the Sunflower Agreement of: (i) “AMMO, Inc” to “Outdoor Holding Company,” (ii) “Ammo” to “OHC,” (iii) “AMMO TECHNOLOGIES, INC” to “OHC TECHNOLOGIES, INC,” and (iv) AMMO MUNITIONS, INC” to “OHC MUNITIONS, INC.”
As of June 30, 2025, we did
NOTE 14 – CONTINGENCIES
Certain conditions may exist as of the date the condensed consolidated financial statements are issued that may result in a loss to us but will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims and the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is reasonably estimated, the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of range of possible loss if determinable and material, would be disclosed.
Delaware Litigation
On April 30, 2023, Steve Urvan filed suit in the Delaware Court of Chancery (the "Delaware Court") against the Company, and certain Company directors, former directors, employees, former employees and consultants. At the time the lawsuit was filed, Mr. Urvan was a member of the Board of Directors and our largest stockholder. Mr. Urvan now serves as Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. Urvan’s claims included fraudulent inducement, unjust enrichment and violations of the Arizona Securities Act. The suit sought a court order for partial rescission of the Company’s acquisition of GunBroker.com and compensatory damages of not less than $
20
OUTDOOR HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
consolidated the Company’s lawsuit against Mr. Urvan with Mr. Urvan’s lawsuit against the Company and the individual defendants (the “Delaware Litigation”).
On December 20, 2024, the Board of Directors held a meeting, during which it voted to pursue a settlement and voted to approve terms outlined in a non-binding term sheet. On May 21, 2025, the Company entered into a settlement agreement with Mr. Urvan and certain other parties, which became effective on May 30, 2025, pursuant to which the parties to the settlement agreement filed a Stipulation of Voluntary Dismissal With Prejudice dismissing, with prejudice, all claims asserted in the Delaware Litigation. As partial consideration for the settlement, the Company issued a warrant and two unsecured promissory notes to an affiliate of Mr. Urvan. We recorded a settlement contingency of $
The MN Action
On January 18, 2024, Innovative Computer Professionals, Inc. d/b/a Digital Cash Processing (“DCP”) filed a civil action in Minnesota state court against Outdoors Online, LLC d/b/a GunBroker.com (“GunBroker.com”) for breach of contract (the “MN Action”). In the MN Action, DCP alleges that GunBroker.com breached a May 2021 contract, pursuant to which DCP was to provide specified digital payment processing services, and it alleges $
SEC Investigation
The Company faces an inestimable loss contingency stemming from a pending investigation of the Staff of the SEC Division of Enforcement (the "SEC Investigation"). The Company has produced documents responsive to document subpoenas and cooperated by, among other things, providing other information to the SEC Staff on a voluntary basis. The SEC Staff has significant discretion in conducting investigations, and therefore, the Company cannot predict the scope or outcome of the SEC Investigation. Based upon document subpoenas to the Company and other communications, it appears that the SEC Staff is investigating and will likely recommend that the SEC bring an enforcement action relating to the Company’s: (i) valuation of, and accounting for share-based compensation awards to employees, non-employee directors and other service providers, and issued in exchange for goods and services; (ii) capitalization of certain share issuance costs; (iii) disclosure of perquisites and the valuation of equity-based compensation paid to certain executives; (iv) disclosure of certain executive officers and related party transactions; and (v) disclosure concerning the calculation of Adjusted EBITDA. The SEC Staff have not issued a Wells Notice to the Company. If the SEC Staff issues a Wells Notice, the Company will have the opportunity to present factual evidence, legal arguments and mitigating circumstances to the SEC. If, notwithstanding the Company’s Wells submission, the SEC authorizes a civil enforcement action, the agency may seek injunctions, civil penalties or other relief, and the Company may incur additional legal and other professional fees in defending such action or negotiating a resolution. Given the ongoing nature and complexity of the SEC Investigation, we cannot yet reasonably estimate a loss or range of loss that may arise from its resolution. The Company will continue to evaluate the status of the SEC Investigation and any resolution negotiation to determine when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable.
There were
21
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are any statements that refer to our estimated or anticipated results, other non-historical facts or future events and include, but are not limited to, statements regarding our business strategy; anticipated future operating results and operating expenses, cash flow, capital resources, dividends and liquidity; competition; trends, opportunities and risks affecting our business, industry and financial results; future expansion or growth plans and potential for future growth, including our plan to expand our e-commerce platform; our ability to attract new customers and retain existing customers; our ability to accurately forecast future revenues and appropriately plan our expenses; our expectations regarding future revenues; our ability to attract and retain qualified employees and key personnel; future regulatory, judicial and legislative changes; and the sufficiency of our existing cash and cash equivalents to meet our working capital and capital expenditure needs over the next 12 months. In addition, forward-looking statements also consist of statements involving trend analyses and statements including such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “should,” “will,” “would,” "hope," and similar expressions or the negative of such terms or other comparable terminology.
Forward-looking statements are neither historical facts nor assurances of future performance, and are based only on management’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. 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 our control. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
Forward-looking statements speak only as of the date of this report. We do not undertake any obligation to update or revise the forward-looking statements to reflect events that occur or circumstances that exist after the date of this report, except to the extent required by law.
22
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with management’s perspective on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (i) the accompanying unaudited condensed consolidated financial statements and notes thereto for the three months ended June 30, 2025, (ii) the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on June 16, 2025 (the "Form 10-K") and (iii) the discussion under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K. Except for certain information as of March 31, 2025, all amounts herein are unaudited. The following discussion contains forward-looking statements that are subject to risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), particularly in the section entitled “Risk Factors.” Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our” and the “Company” refer to Outdoor Holding Company (formerly AMMO, Inc.) and its consolidated subsidiaries.
Overview
Outdoor Holding Company, is the owner of the GunBroker Marketplace ("GunBroker" or the "Marketplace"), a leading online marketplace serving the firearms and shooting sports industries. Through our Marketplace, we allow third party sellers to list items consisting of firearms, hunting gear, fishing equipment, outdoor gear, collectibles, and much more, while facilitating compliance with federal and state laws that govern the sale of firearms and other restricted items. This allows our base of over 8.5 million users to follow ownership policies and regulations through our network of approximately 32,000 federally licensed firearms dealers who serve as transfer agents. The nature and operation of the Marketplace as an online auction and sales platform also affords us a unique view into the total domestic market for the purpose of understanding sales trends at a granular level across all elements of the outdoor sports and shooting space. We generate revenue from marketplace fees, which include marketplace revenue, compliance fee revenue, advertising campaign revenue and shipping revenue. Our key strategic initiatives for fiscal year 2026 include: launching universal payment processing to drive electronic transactions, decrease transaction friction, increase GMV, and accelerate user adoption; repurchasing shares (subject to Board approval) to improve the Company’s capital structure; advancing our restructuring efforts to further streamline the business and reduce operational costs; and implementing further user enhancements to the platform with new tools, analytics, and personalization features to deliver best-in-class buyer and seller experiences.
Recent Developments
Discontinued Operations
Outdoor Holding Company began its operations in 2017 as a producer of high-performance ammunition and premium components. Following the acquisition of the GunBroker.com business in 2021, the Company conducted operations through two operating and reportable segments, Ammunition and Marketplace. The Ammunition segment engaged in the design, production and marketing of ammunition, ammunition component and related products. The Marketplace segment consists of the GunBroker e-commerce marketplace, which, in its role as an e-commerce marketplace site, supports the lawful sale of firearms, ammunition, and hunting/shooting accessories.
In fiscal 2025, we initiated a formal review of various strategic alternatives. This review resulted in the decision to sell the Ammunition segment. On January 20, 2025, we entered into an Asset Purchase Agreement, as amended (the “Asset Purchase Agreement”) with Olin Winchester, LLC (the “Buyer”), pursuant to which the Buyer agreed to (i) acquire all assets of our business of designing, manufacturing, marketing, distributing and selling ammunition and ammunition components (collectively, the “Ammunition Manufacturing Business”) along with certain assets related to the Ammunition Manufacturing Business, including the Ammunition Manufacturing Business’ dedicated manufacturing facility in Manitowoc, WI, and (ii) assume certain liabilities related to the Ammunition Manufacturing Business, for a gross purchase price of $75.0 million, subject to adjustments for estimated net working capital and real property costs and pro-rations (the “Transaction”). The Transaction closed on April 18, 2025. The net proceeds after all adjustments totaled approximately $42.9 million. On April 21, 2025, the Company changed its name from “AMMO, Inc.” to “Outdoor Holding Company”. As of January 20, 2025, the Ammunition
23
segment met the held for sale and discontinued operations accounting criteria. For information on discontinued operations, refer to Note 2 to our condensed consolidated financial statements under the caption “Discontinued Operations” and Note 4, "Discontinued Operations and Assets Held for Sale".
Settlement of Delaware Litigation
As described in Note 12, “Related Party Transactions” and Note 14, “Contingencies,” in April 2023, Steven F. Urvan filed a lawsuit against the Company and certain of its directors, former directors, employees, former employees, and consultants, related to the Company’s acquisition of GunBroker.com and certain affiliated companies. At the time the lawsuit was filed, Mr. Urvan was a member of the Board of Directors and our largest stockholder. Mr. Urvan now serves as Chairman of the Board of Directors and Chief Executive Officer of the Company. In May 2023, the Board of Directors established a special committee to address the litigation initiated by Mr. Urvan, as well as a separate lawsuit subsequently filed by the Company against Mr. Urvan (the lawsuit filed by Mr. Urvan together with the lawsuit filed by the Company, the “Delaware Litigation”).
On May 21, 2025, the Company entered into a Settlement Agreement (the “Settlement Agreement”), by and among the Company, Speedlight Group I, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Speedlight”), Mr. Urvan, and the following persons, each of whom serves or previously served on the Board of Directors: Richard R. Childress, Jared Smith, Fred W. Wagenhals and Russell Williams Wallace, Jr. (collectively, the “Legacy Directors”). The Settlement Agreement became effective as of 5:00 p.m. Eastern Time on May 30, 2025, pursuant to its terms (the “Settlement Effective Date”). As a result and pursuant to the Settlement Agreement, effective as of the Settlement Effective Date, (i) Jared Smith resigned as a member of the Board of Directors and from his position as the Chief Executive Officer of the Company and as an officer or member of each of the Company’s direct and indirect subsidiaries and (ii) Mr. Urvan was appointed as the Chief Executive Officer of the Company and as the Chairman of the Board of Directors. In addition, in accordance with the Settlement Agreement, on June 3, 2025, the Company, Speedlight, Mr. Urvan and the Legacy Directors filed a Stipulation of Voluntary Dismissal With Prejudice dismissing, with prejudice, all claims asserted in the Delaware Litigation.
As partial consideration for the settlement, on the Settlement Effective Date, the Company issued to an affiliated designee of Mr. Urvan, a warrant to purchase 7.0 million shares of Common Stock (the “Warrant”). The Warrant has a five-year term and an exercise price of $1.81 per share. Pursuant to the terms of the Warrant, the Warrant is exercisable at the holder’s discretion, in whole or in part, on or after the six-month anniversary of the Settlement Effective Date, subject to certain accelerated vesting in certain circumstances.
In addition to the Warrant, the Company issued to an affiliated designee of Mr. Urvan, (i) an unsecured promissory note in a principal amount of $12.0 million (“Note 1”) and (ii) an unsecured promissory note in a principal amount of $39.0 million (“Note 2” and together with Note 1, the “Notes”). Note 1 bears interest at 6.50% per annum (subject to a 2.00% increase during an event of default), which interest is payable to the holder annually on the anniversary of the Settlement Effective Date, beginning on the first anniversary of the Settlement Effective Date (each interest payment due date, an “Interest Payment Date”). Note 2 bears interest at a rate per annum equal to the applicable federal rate for long-term loans in effect on the Settlement Effective Date (subject to a 2.00% increase during an event of default), which is payable to the holder annually on the Interest Payment Date.
The unpaid principal balance of Note 1 and Note 2 and all accrued and unpaid interest thereon is due on the 12th and 10th anniversary, respectively, of the Settlement Effective Date. Pursuant to the terms of Note 1 and Note 2, the Company is required to make annual prepayments of $1.0 million (inclusive of accrued and unpaid interest then due and payable) and $1.95 million, respectively, to the holder on each Interest Payment Date. The Company has the right to prepay all or any part of the principal or interest of the Notes without penalty.
With respect to Note 2, the Company also has the option, at any time prior to the first anniversary of the Settlement Effective Date, to prepay all, but not less than all, of the then-outstanding principal amount of Note 2 and accrued and unpaid interest thereon in exchange for the issuance of a warrant (the “Additional Warrant”) to purchase 13.0 million shares of Common Stock (the “Additional Warrant Shares”), provided that the Company must first obtain stockholder approval of the issuance of the Additional Warrant and the Additional Warrant Shares pursuant to Nasdaq Listing Rule 5635. The Additional Warrant, if issued, would have a five-year term and an exercise price of $1.00 per share. Pursuant to the terms of the Additional Warrant, the Additional Warrant would be exercisable at the holder’s discretion, in whole or in part, on or after the first anniversary of the issuance date. Except with respect to the exercise price and the vesting date, the terms of the Additional Warrant and the Warrant are substantially similar.
24
Results of Operations
The following table presents summarized financial information taken from our unaudited condensed consolidated statements of operations for the three months ended June 30, 2025, compared with the three months ended June 30, 2024:
|
|
For the Three Months Ended June 30 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(unaudited) |
|
|||||
Net revenues |
|
$ |
11,857,376 |
|
|
$ |
12,281,991 |
|
Cost of revenues |
|
|
1,522,398 |
|
|
|
1,744,790 |
|
Gross profit |
|
|
10,334,978 |
|
|
|
10,537,201 |
|
Operating expenses |
|
|
16,345,653 |
|
|
|
16,772,566 |
|
Loss from operations |
|
|
(6,010,675 |
) |
|
|
(6,235,365 |
) |
Other income (expense) |
|
|
|
|
|
|
||
Other income (expense), net |
|
|
147,982 |
|
|
|
206,754 |
|
Loss before provision for income taxes from continuing operations |
|
|
(5,862,693 |
) |
|
|
(6,028,611 |
) |
Provision for income taxes |
|
|
— |
|
|
|
5,968,414 |
|
Net loss from continuing operations |
|
$ |
(5,862,693 |
) |
|
$ |
(11,997,025 |
) |
Non-GAAP Financial Measures
We analyze operational and financial data to evaluate our business, allocate our resources, and assess our performance. In addition to total net sales, net loss, and other results under accounting principles generally accepted in the United States (“GAAP”), the following information includes key operating metrics and non-GAAP financial measures that we use to evaluate our business. We believe that these measures are useful for period-to-period comparisons of the Company's performance. We have included these non-GAAP financial measures in this Form 10-Q because they are key measures management uses to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating to operating expenses and the allocation of our resources. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.
Adjusted EBITDA
|
|
For the Three Months Ended June 30, |
|
||||||
|
|
2025 |
|
|
|
2024 |
|
||
|
|
(Unaudited) |
|
||||||
Reconciliation of GAAP net loss from continuing operations to Adjusted EBITDA |
|
|
|
|
|
|
|
||
Net loss from continuing operations |
|
$ |
(5,862,693 |
) |
|
|
$ |
(11,997,025 |
) |
Provision for income taxes |
|
|
— |
|
|
|
|
5,968,414 |
|
Depreciation and amortization |
|
|
3,510,021 |
|
|
|
|
3,345,804 |
|
Interest expense, net |
|
|
348,330 |
|
|
|
|
45,478 |
|
Stock based compensation |
|
|
787,826 |
|
|
|
|
1,436,038 |
|
Other income (expense), net |
|
|
(496,312 |
) |
|
|
|
(252,232 |
) |
Acquisitions and divestitures |
|
|
79,398 |
|
|
|
|
— |
|
Special Committee Investigation and restatement |
|
|
1,304,908 |
|
|
|
|
— |
|
SEC Investigation |
|
|
676,080 |
|
|
|
|
1,588,809 |
|
Delaware Litigation legal and professional fees |
|
|
1,354,864 |
|
|
|
|
679,119 |
|
Corporate restructuring costs |
|
|
1,435,693 |
|
|
|
|
— |
|
Other nonrecurring expenses(1) |
|
|
— |
|
|
|
|
3,299,933 |
|
Adjusted EBITDA |
|
$ |
3,138,115 |
|
|
|
$ |
4,114,338 |
|
25
Adjusted EBITDA is a non-GAAP financial measure that displays our net loss from continuing operations, adjusted to eliminate the effect of certain items as described below. We define Adjusted EBITDA as net income (loss) from continuing operations excluding (i) provision or benefit for income taxes, (ii) depreciation and amortization, (iii) interest expense, net, (iv) share-based compensation expenses relating to employee stock awards and common stock purchase options, (v) other income (expense), net, (vi) expenses related to acquisition and divestitures, (vii) professional service and legal fees related to an investigation conducted by a special committee of the Board of Directors (the “Special Committee Investigation”), the SEC Investigation and the Delaware Litigation and (vii) other nonrecurring expenses, such as contingencies associated with litigation or settlements and corporate restructuring costs related to headcount reductions, severance, and expense consolidation.
We believe that it is useful to exclude these expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.
Non-GAAP financial measures have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:
Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including our net loss and our other financial results presented in accordance with GAAP.
Net Revenues
We generate revenue from marketplace fees, which includes marketplace revenue, compliance fee revenue, advertising revenue and shipping revenue. Marketplace revenue consists of optional listing fees with variable pricing components based on customer options and final value fees based on a percentage of the final selling price of the listed item. Compliance fee revenue consists of fees charged to customers based on the final price of an item at the time of purchase. Advertising revenue consists of fees charged for advertisement placement and impressions generated through the GunBroker website. Shipping revenue consists of fees for shipping of items sold on the GunBroker website.
Net revenues for the three months ended June 30, 2025, decreased by $0.4 million, or 3.5%, from the prior period due to changes in market conditions. This decrease was due to a decrease in gross merchandise sales generated from our Marketplace partially offset by a minor increase in our take rate. We believe the reduction in gross merchandise sales was a result of an overall decrease in gun and related product sales across the industry.
Cost of Revenues
Cost of revenues consists of costs associated with facilitating transactions on the GunBroker platform as well as advertising costs.
Cost of revenues decreased from $1.7 million to $1.5 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This decrease was the result of a decrease in credit card processing fees and advertising expenses.
Gross Margin
Our gross margin, which measures our gross profit as a percentage of sales increased to 87.2% during the three months ended June 30, 2025 from 85.8% for the three months ended June 30, 2024. The increase in gross margin was a result of improved platform monetization and an increasing mix of high-margin seller services, such as advertising and listing enhancements.
26
Operating Expenses
Operating expenses consist of selling and marketing expenses, which include tradeshows and marketing expenses, corporate general and administrative expenses, which include legal and professional fees and as well as insurance and rent, employee salaries and related expenses, which include salaries, benefits and stock based compensation as well as depreciation and amortization expenses.
Operating expenses decreased by approximately $0.4 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease in operating expenses was the result a reduction of $3.2 million in settlement contingencies that were recorded in the three months ended June 30, 2024 without a corresponding expense in the three months ended June 30, 2025 as well as a decrease in stock based compensation expense of $0.7 million due to a reduction in stock award grants. These decreases were partially offset by an increase in employee salaries and related expenses as a result of $1.4 million in severance costs associated with corporate restructuring, an increase of $1.9 million in legal and professional fees related to the Special Committee Investigation, restatement and Delaware Litigation and an increase in depreciation and amortization resulting from increased capitalized software development costs. We experienced increased costs at the corporate level related to the winding down of the operations supporting the ammunition manufacturing business that were not included in the sale. We expect to gradually eliminate the vast majority of them by the end of Q3 2026.
Other Income and Expenses
Total other income, net for the three months ended June 30, 2025 decreased by $0.1 million compared to the three months ended June 30, 2024. This decrease was primarily the result of an increase in interest expense of $0.3 million related to the Notes issued in the Delaware Litigation settlement partially offset by an increase in interest income on cash held in our bank account of $0.2 million.
Income Taxes
For the three months ended June 30, 2025, we did not record a provision or benefit for federal and state income taxes due to recording a full valuation allowance against our net deferred tax assets. For the three months ended June 30, 2024, we recorded a provision for federal and state income taxes of approximately $6.0 million.
Liquidity and Capital Resources
As of June 30, 2025, we had $63.4 million of cash and cash equivalents, an increase of $33.1 million from March 31, 2025. The increase was primarily attributable to the net proceeds received from the sale of the Ammunition manufacturing business of $42.9 million.
Working Capital is summarized and compared as follows:
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
||
Current assets |
|
$ |
74,486,175 |
|
|
$ |
72,148,138 |
|
Current liabilities |
|
|
22,725,627 |
|
|
|
62,092,917 |
|
|
|
$ |
51,760,548 |
|
|
$ |
10,055,221 |
|
Changes in cash flow are summarized as follows:
Operating Activities
For the three months ended June 30, 2025, net cash used in operations was primarily the result of a reduction in accounts payable and accrued liabilities primarily associated with legal and professional fees as well as payments for insurance resulting in an increase in prepaid expenses.
For the three months ended June 30, 2024, net cash provided by operations was primarily the result of an increase in accrued liabilities related to accrued and unpaid legal and professional fees, an increase in due from related parties associated with our settlement with Triton Value Partners, LLC in June 2024 and an increase in deferred income taxes. The cash provided by operations also included the benefit of non-cash expenses for depreciation and amortization and employee stock compensation offset by the change in the valuation allowance placed on deferred income taxes.
27
Investing Activities
For the three months ended June 30, 2025, net cash provided by investing activities consisted primarily of proceeds of $42.9 million related to the sale of the Ammunition manufacturing business partially offset by $0.9 million in capitalized development costs related to our Marketplace.
For the three months ended June 30, 2024, net cash used in investing activities consisted of $0.8 million related capitalized development costs related to our Marketplace.
Financing Activities
For the three months ended June 30, 2025, net cash used in financing activities consisted of $0.6 million in payments of preferred stock dividends and $0.2 million used in the repurchase of common stock to cover taxes on shares issued to employees.
For the three months ended June 30, 2024, net cash used in financing activities consisted of $0.7 million of insurance premium note payments, $0.6 million in payments of preferred stock dividends, $1.1 million used to repurchase shares of common stock pursuant to our then-existing repurchase plan, and $0.4 million used in the repurchase of common shares to cover taxes on shares issued to employees.
Liquidity
We expect existing working capital and cash flows from operations to be adequate to fund our operations over the next 12 months. Generally, we have financed operations to date through the proceeds of stock sales, bank financings, sales of equity, the sale of our Ammunition manufacturing business and related-party notes. These sources have been adequate to fund our recurring cash expenditures including but not limited to our working capital requirements, capital expenditures to expand our operations, debt repayments, and acquisitions. In the longer-term, we intend to continue to use the aforementioned sources of funding for capital expenditures, debt repayments and any potential acquisitions.
Leases
We currently lease two locations that are used for our offices. As of June 30, 2025, we had $1.6 million of fixed lease payment obligations with $0.6 million payable within the next 12 months. Please refer to Note 6, "Leases" for additional information.
Promissory Notes Issued in Settlement of the Delaware Litigation
As described in the "Recent Developments" section, on May 30, 2025, we issued Note 1 and Note 2 pursuant to the Settlement Agreement. The aggregate principal amount of Note 1 and Note 2 is $51.0 million, and we are required to make aggregate annual prepayments of $2.95 million beginning on May 30, 2026.
For the three months ended June 30, 2025, we recorded interest expense of $81,955 and $266,375 on Notes 1 and 2, respectively.
Revolving Loan
On December 29, 2023, we entered into a Loan and Security Agreement (the “Sunflower Agreement”) by and among the Company and the other borrowers party to the Sunflower Agreement, the lenders party thereto (collectively, the “Lenders”) and Sunflower Bank, N.A., as administrative agent and collateral agent (the “Agent”), pursuant to which the Lenders provided us a revolving loan ("Revolving Loan") in the principal amount of the lesser of (a) $20.0 million (the “Total Commitment Amount”) and (b) the borrowing base (a formula based on certain amounts owed to borrower for goods sold or services provided and eligible inventory). The proceeds of loans under the Sunflower Agreement could be used for working capital, general corporate purposes, permitted acquisitions, to pay fees and expenses incurred in connection with the Revolving Loan, to facilitate our stock repurchase program and to fund our general business requirements.
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We could borrow, repay and re-borrow under the Revolving Loan until December 29, 2026, at which time the commitments would terminate and all outstanding loans, together with all accrued and unpaid interest, must be repaid. If the Revolving Loan is refinanced by another lender prior to December 29, 2026, there is an additional fee payable concurrently with such refinancing based on a percentage (ranging from 1.0% to 3.0%) of the Total Commitment Amount depending on the date of the refinancing. Upon an event of default under the Sunflower Agreement, all obligations under the Sunflower Agreement would bear interest at a rate equal to three (3.0) percentage points above the interest rate applicable immediately prior to the occurrence of the event of default.
On April 18, 2025, we entered into a Consent and Second Amendment to the Sunflower Agreement (the "Second Sunflower Loan Amendment"). Pursuant to the Second Sunflower Loan Amendment, we and the Agent agreed to, among other things: (i) release the Agent’s security interest in all collateral securing our obligations under the Sunflower Agreement upon consummation of the sale of the Ammunition Manufacturing Business; (ii) reduce all amounts available under the Revolving Loan to zero dollars as of the effective date of the Second Sunflower Loan Amendment; (iii) enter into an Amended and Restated Revolving Line Promissory Note in the amount of $5.0 million, representing 100% of the Revolving Line Commitment (as defined in the Sunflower Agreement) available under the Sunflower Agreement, executed by the Company in favor of Agent as of the effective date of the Second Sunflower Loan Amendment; and (iv) certain other amendments to the Company's customary covenants and obligations under the Sunflower Agreement that only take effect in the event the Revolving Line Availability (as defined in the Sunflower Agreement) is greater than zero dollars.
Upon signing of the Second Sunflower Loan Amendment, the Revolving Line Availability was reduced to zero dollars and will remain at zero dollars unless we provide the Agent with a security interest in new collateral or otherwise further amend the Sunflower Agreement.
On May 13, 2025, the Company entered into a Third Amendment to the Sunflower Agreement (the “Third Sunflower Loan Amendment”. Pursuant to the Third Sunflower Loan Amendment, we and the Agent agreed to change the definitions in the Sunflower Agreement of: (i) “AMMO, Inc” to “Outdoor Holding Company,” (ii) “Ammo” to “OHC,” (iii) “AMMO TECHNOLOGIES, INC” to “OHC TECHNOLOGIES, INC,” and (iv) AMMO MUNITIONS, INC” to “OHC MUNITIONS, INC.”
As of June 30, 2025, we did not have an outstanding balance on the Revolving Loan.
Off-Balance Sheet Arrangements
As of June 30, 2025 and March 31, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, net sales, expenses, results of operations, liquidity capital expenditures, or capital resources.
Critical Accounting Estimates
Our condensed consolidated financial statements were prepared in accordance with GAAP. Critical accounting estimates are those that we believe are most important to the portrayal of our financial condition and results of operations. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Our estimates are evaluated on an ongoing basis and are drawn from historical operations, current trends, future business plans and other factors that management believes are relevant at the time our condensed consolidated financial statements are prepared. Actual results may differ from our estimates. Management believes that the accounting estimates reflect the more significant judgments and estimates we use in preparing our condensed consolidated financial statements.
Certain accounting policies that require significant management estimates, and are deemed critical to our results of operations or financial position, are discussed in the critical accounting policies and estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K. There have been no material changes to the critical accounting policies disclosed in the Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes from the market risks disclosed under the caption “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of the Form 10-K.
29
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) accurately recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) properly accumulated and communicated to our management, including our principal executive officer (“Chief Executive Officer” or “CEO”) and principal financial officer (“Chief Financial Officer” or “CFO”), to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based upon the evaluation, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were not effective at a reasonable assurance level, due to the material weaknesses previously identified and disclosed in our Annual Report on Form 10-K for the year ended March 31, 2025 and listed below. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Management determined that the previously disclosed material weaknesses in its internal control over financial reporting continue to exist as of June 30, 2025, specifically:
Control Environment, Information and Communication, and Monitoring Activities – Under the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework, the Board of Directors and senior management establish the tone at the top regarding the importance of internal controls and management reinforces expectations at the various levels of the company.
Control Activities – These material weaknesses in the control environment resulted in certain instances of inappropriate accounting decisions and inappropriate changes in accounting methodology and contributed to the following additional material weaknesses whereby we did not design, implement and maintain effective controls within certain business processes:
30
Management’s Remediation Initiatives for Existing Material Weaknesses
We have begun the process of, and we are focused on, designing and implementing effective measures to strengthen our internal controls over financial reporting and remediate the material weaknesses. The Company has initiated remediation activities and expects to complete testing of the design and operating effectiveness of new controls over at least two consecutive quarters of financial reporting, in accordance with COSO and PCAOB guidance. Our planned internal control remediation efforts include the following:
Control Environment, Information and Communication, and Monitoring Activities:
The Company continues to implement other organizational enhancements, as follows: (i) the enhancement of the Company’s organizational structure over all finance functions and an increase in the Company’s accounting personnel with the requisite knowledge, experience, and training in GAAP to ensure that a formalized process for determining, documenting, communicating, implementing and monitoring controls over the period-end financial close and reporting processes is maintained and proper segregation exists between the preparer and reviewer for select transactions, and (ii) enhancement of accounting policies and procedures related to journal entries, invoice approval, account reconciliations and variance thresholds.
31
Control Activities:
While these actions and planned actions will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal control over financial reporting. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address these control deficiencies or modify the remediation plan described above.
Changes in Internal Control Over Financial Reporting
Other than the changes described above, there have not been any changes in our internal control over financial reporting (as such term is defined in Exchange Act in Rule 13a-15(c) and 15d-15(e) under the Exchange Act) during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management continues to monitor the effectiveness of newly implemented controls and assess whether any additional changes are warranted.
32
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Except as set forth below, there were no material developments to our legal proceedings disclosed in the Form 10-K. From time to time, we are involved in various disputes, claims, suits, investigations and legal proceedings arising in the ordinary course of business, including commercial, intellectual property, and employment-related matters, as well as stockholder derivative actions, class action lawsuits and other matters. The litigation matters described below involve issues or claims that may be of particular interest to our stockholders, regardless of whether any of these matters were material to our business or financial condition based upon the standard set forth in the SEC’s rules. We believe we have substantial defenses in each unresolved matter, and we intend to vigorously defend against the claims brought by plaintiffs in the pending lawsuits.
As described in Note 12, “Related Party Transactions” and Note 14, “Contingencies”, in 2023 Mr. Urvan and the Company each filed lawsuits relating to the sale of GunBroker.com. On May 21, 2025, the Company entered into the Settlement Agreement with Mr. Urvan and certain other parties, which became effective on May 30, 2025, pursuant to which the parties to the Settlement Agreement filed a Stipulation of Voluntary Dismissal With Prejudice dismissing, with prejudice, all claims asserted in the Delaware Litigation. As partial consideration for the settlement, the Company issued a warrant and two unsecured promissory notes to an affiliate of Mr. Urvan. For a description of other terms of the Settlement Agreement, see “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Settlement of Delaware Litigation”.
On January 18, 2024, Innovative Computer Professionals, Inc. d/b/a Digital Cash Processing (“DCP”) filed a civil action in Minnesota state court against Outdoors Online, LLC d/b/a GunBroker.com (“GunBroker.com”) for breach of contract (the “MN Action”). In the MN Action, DCP alleged that GunBroker.com breached a May 2021 contract, pursuant to which DCP was to provide specified digital payment processing services, and it alleged $100 million in damages. On February 7, 2024, GunBroker.com removed the MN Action to the United States District Court for the District of Minnesota (Case No. 24-CV-00373-DWF-DTS). On February 14, 2024, GunBroker.com moved to dismiss the MN Action for lack of personal jurisdiction and for failure to adequately state a claim, or, in the alternative, to transfer the MN Action to the United States District Court for the District of Arizona (the “Motion”). The court denied the Motion and GunBroker.com filed its Answer and Counterclaims. GunBroker.com denies the allegations in the MN Action, and it plans to vigorously defend the claims asserted against it. The parties’ initial disclosure statements were exchanged in August, 2024. The Company has, and will continue to, participate in the discovery process. The parties have retained expert witnesses who will supply expert testimony and reports. The Company expects this matter will be scheduled for trial in 2026.
33
ITEM 1A. RISK FACTORS
There were no material changes to the risk factors disclosed in Part I, Item 1A "Risk Factors" of the Form 10-K for the year ended March 31, 2025, and filed with the SEC on June 16, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
34
ITEM 6. EXHIBITS
Exhibit No. |
|
Exhibit |
|
|
|
2.1# |
|
Agreement and Plan of Merger, dated April 30, 2021, by and among Ammo, Inc., SpeedLight Group I, LLC, Gemini Direct Investments, LLC and Steven F. Urvan (Incorporated by Reference to Exhibit 2.1 to the Current Report on Form 8-K filed on May 6, 2021. |
2.2.1#† |
|
Asset Purchase Agreement, dated January 20, 2025, by and among OHC Technologies, Inc., Enlight Group II, LLC, Firelight Group I, LLC, Outdoor Holding Company and Olin Winchester, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on April 18, 2025). |
2.2.2 |
|
First Amendment to the Asset Purchase Agreement, dated April 18, 2025, by and among OHC Technologies, Inc., Enlight Group II, LLC, Firelight Group I, LLC, Outdoor Holding Company and Olin Winchester, LLC (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed on April 18, 2025). |
3.1 |
|
Amended and Restated Certificate of Incorporation (as amended through April 21, 2025) (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed on June 16, 2025). |
3.2 |
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Bylaws (Incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed on February 9, 2017). |
3.3 |
|
Certificate of Designations with respect to the 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share, dated May 18, 2021 (Incorporated by Reference to Exhibit 3.1 to the Registration Statement on Form 8-A filed on May 21, 2021). |
4.2 |
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Form of Underwriters’ Warrant Agreement issued December 3, 2020 (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 4, 2020). |
4.3 |
|
Purchase Warrant Issued to Eugene Webb, issued on December 21, 2020 (Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form S-3 filed on August 20,2021). |
4.4 |
|
Purchase Warrant Issued to Eugene Webb, issued on February 17, 2021 (Incorporated by reference |
4.5 |
|
Form of Warrant in connection with the May 21, 2025 Settlement Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on May 28, 2025). |
4.6 |
|
Form of Additional Warrant in connection with the May 21, 2025 Settlement Agreement (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on May 28, 2025). |
10.1+ |
|
Executive Separation Agreement, dated April 8, 2025, by and between Outdoor Holding Company and Fred W. Wagenhals (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 8, 2025). |
10.2+ |
|
Executive Separation Agreement, dated May 21, 2025, by and between Outdoor Holding Company and Jared Smith (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed on May 28, 2025). |
10.3 |
|
Consent and Second Amendment to Loan and Security Agreement, dated April 18, 2025, by and among Outdoor Holding Company and Sunflower Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 18, 2025). |
10.4 |
|
Consent and Third Amendment to Loan and Security Agreement, dated May 13, 2025, by and among Outdoor Holding Company and Sunflower Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 19, 2025). |
10.5 |
|
Settlement Agreement, dated May 21, 2025, by and among Outdoor Holding Company, Speedlight Group I, LLC, Richard R. Childress, Jared Smith, Steven F. Urvan, Fred W. Wagenhals, Russell Williams Wallace, Jr. and the Board’s Delaware Litigation Settlement Committee (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 28, 2025). |
10.6 |
|
Form of Note 1 in connection with the Settlement Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on May 28, 2025). |
10.7 |
|
Form of Note 2 in connection with the Settlement Agreement (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on May 28, 2025). |
35
10.8 |
|
Amendment No. 2 to Settlement Agreement, dated May 21, 2025, by and between Outdoor Holding Company, Steven F. Urvan and Susan T. Lokey (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on May 28, 2025). |
31.1* |
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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2* |
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1** |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2** |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS* |
|
Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page formatted as Inline XBRL and contained in Exhibit 101 |
# Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or similar attachment will be furnished supplementally to the Securities and Exchange Commission upon request.
† Certain portions have been redacted in accordance with Item 601(b)(2)(ii) of Regulation S-K. The Company will furnish supplementally copies to the Securities and Exchange Commission or its staff upon request.
+ Management compensatory plan or contract.
* Filed Herewith.
** The certifications attached as Exhibit 32.1 and Exhibit 32.2 are not deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Outdoor Holding Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
36
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Outdoor Holding Company |
|
|
|
|
|
By: |
/s/ Steven F. Urvan |
Dated: August 8, 2025 |
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Steven F. Urvan, Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
By: |
/s/ Paul Kasowski |
Dated: August 8, 2025 |
|
Paul Kasowski, Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer) |
37
FAQ
What were Outdoor Holding's (POWW) net revenues for the quarter ended June 30, 2025?
How much cash did Outdoor Holding have after the ammunition business sale?
What was the net loss per share reported for the quarter (POWW)?
What settlement actions resolved the Delaware Litigation?
Is the ammunition business still part of Outdoor Holding's continuing operations?
Does the company face regulatory investigations?
