Outdoor Holding Co

Previous wording

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.

Current wording

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 and six months ended September 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.

Previous wording

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.

Current wording

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 8.6 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 the remainder of fiscal year 2026 include: launching universal payment processing to drive electronic transactions, decrease transaction friction, increase gross merchandise value ("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.

Previous wording

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.

Current wording

We began our operations in 2017 as a producer of high-performance ammunition and premium components. Following the acquisition of the GunBroker.com business in 2021, we 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.

Previous wording

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 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".

Current wording

In fiscal year 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, we changed our name from “AMMO, Inc.” to “Outdoor Holding Company”. As of January 20, 2025, the Ammunition 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".

Previous wording

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.

Current wording

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 bore 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 was payable to the holder annually on the Interest Payment Date.

Previous wording

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.

Current wording

The unpaid principal balance of Note 1 and all accrued and unpaid interest thereon is due on the 12th anniversary of the Settlement Effective Date. Pursuant to the terms of Note 1, the Company is required to make annual prepayments of $1.0 million (inclusive of accrued and unpaid interest then due and payable) 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 Note 1 without penalty.

Previous wording

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.

Current wording

With respect to Note 2, the Company also had 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 “Prepayment Option”). On September 17, 2025, the independent and disinterested members of the Board of Directors approved the exercise of the Prepayment Option, and we issued the Additional Warrant to Mr. Urvan’s affiliated designee. Upon issuance of the Additional Warrant, all remaining obligations under Note 2 were deemed satisfied with the same force and effect as a prepayment of all principal and accrued and unpaid interest under Note 2. The Additional Warrant has a five-year term and an exercise price of $1.00 per share. Pursuant to the terms of the Additional Warrant, the Additional Warrant is exercisable at the holder’s discretion, in whole or in part, on or after September 17, 2026, subject to accelerated vesting in certain circumstances. Except with respect to the exercise price and the vesting date, the terms of the Additional Warrant and the Warrant are substantially similar.

Previous wording

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:

Current wording

The following table presents summarized financial information taken from our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2025, compared with the three and six months ended September 30, 2024:

Previous wording

For the three months ended June 30, 2024, other nonrecurring expenses consisted of a contingency related to the previously disclosed settlement with Triton Value Partners, LLC.

Current wording

For the three and six months ended September 30, 2025, other nonrecurring expenses consisted of a contingency for a settlement with a vendor as part of our sale of the Ammunition Manufacturing Business. For the six months ended September 30, 2024, other nonrecurring expenses consisted of a contingency related to the previously disclosed settlement with Triton Value Partners, LLC.

Previous wording

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.

Current wording

Adjusted EBITDA is a non-GAAP financial measure that displays our net income (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) gain on extinguishment of debt, (viii) professional service and legal fees related to an investigation conducted by a special committee of the Board of Directors (the “Special Committee Investigation”), a pending investigation of the Staff of the SEC Division of Enforcement and the Delaware Litigation and (ix) other nonrecurring expenses, such as contingencies associated with litigation or settlements and corporate restructuring costs related to headcount reductions, severance, and expense consolidation.

Previous wording

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.

Current wording

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. In the next reporting quarter, the Compliance Fee will be called the Marketplace Service Fee, which will still be 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.

Previous wording

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.

Current wording

Net revenues for the six months ended September 30, 2025 decreased by $0.4 million, or 1.7%, from the prior period due to a decrease in GMV generated from our Marketplace due to market conditions partially offset by a minor increase in our take rate and a minor increase in advertising revenue.

Previous wording

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.

Current wording

Cost of revenues for the six months ended September 30, 2025 decreased $0.2 million compared to the six months ended September 30, 2024. This decrease was the result of a decrease in credit card processing fees and a minor decrease in advertising expenses, as well as expenses to host our GunBroker.com website.

Previous wording

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.

Current wording

Our gross margin, which measures our gross profit as a percentage of sales increased to 87.1% for both the three and six months ended September 30, 2025 from 86.9% and 86.3% for the three and six months ended September 30, 2024, respectively. 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.

Previous wording

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.

Current wording

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, insurance and rent; employee salaries and related expenses, which include salaries, benefits and stock-based compensation and depreciation and amortization expenses.

Previous wording

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.

Current wording

Operating expenses decreased by approximately $7.1 million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease in operating expenses was the result of a reduction of $3.2 million in settlement contingencies that were recorded in the six months ended September 30, 2024 without a corresponding expense in the six months ended September 30, 2025 as well as a decrease in stock-based compensation expense of $1.8 million due to a reduction in stock award grants, a decrease of $4.3 million in legal fees related to the completion of the Delaware Litigation and developments in the SEC Investigation, and a $2.0 million reduction in legal fees associated with recording a receivable from our directors and officers insurance. These decreases were partially offset by an increase of $2.0 million in employee salaries and related expenses as a result of severance costs associated with corporate restructuring, an increase in depreciation and amortization resulting from increased capitalized software development costs, and $1.8 million increase associated with an increased contingency for a settlement with a vendor as part of our sale of the Ammunition Manufacturing Business.

Previous wording

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.

Current wording

Other income, net for the three months ended September 30, 2025 increased by $0.5 million compared to the three months ended September 30, 2024. This increase was primarily the result of recognizing a $0.8 million gain on the extinguishment of the $39.0 million note payable due to the conversion to the Additional Warrant, an increase of $0.4 million associated with the sale of equity securities, and an increase in interest income of $0.2 million due to a higher cash balance, partially offset by an increase in interest expense of $0.9 million related to the Notes issued in the Delaware Litigation settlement.

Previous wording

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.

Current wording

For the three and six months ended September 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 and six months ended September 30, 2024, we recorded a provision for federal and state income taxes of approximately zero and $6.0 million respectively. The change in tax benefit for the six months ended September 30, 2024 was a result of recording a full valuation allowance against our deferred tax assets as we concluded it is more likely than not that the net deferred tax assets will not be realized.

Previous wording

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.

Current wording

As of September 30, 2025, we had $65.7 million of cash and cash equivalents, an increase of $35.4 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 partially offset by cash used in operations.

Previous wording

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.

Current wording

For the six months ended September 30, 2025, net cash used in operations was primarily the result of our net loss, a reduction in accounts payable and accrued liabilities primarily associated with a decrease in legal and professional fees as well as an increase in prepaid expenses and other current assets associated with payments for annual insurance and a receivable due from claims under the directors and officers insurance policy. The cash used in operations was partially offset by the benefit of non-cash expenses for depreciation and amortization.

Previous wording

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.

Current wording

For the six months ended September 30, 2024, net cash provided by operations was primarily the result of an increase in accrued liabilities and accounts payable related to unpaid legal and professional fees and an increase in accounts receivable due the timing of collecting of revenues generated from the prior quarter. The cash provided by operations also included the benefit of non-cash expenses for depreciation and amortization, employee stock compensation, and the change in the valuation allowance placed on deferred income taxes.

Previous wording

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.

Current wording

For the six months ended September 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 and $0.5 million in proceeds from the sale of an equity investment partially offset by $1.6 million in capitalized development costs related to our Marketplace.

Previous wording

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.

Current wording

For the six months ended September 30, 2024, net cash used in investing activities consisted of $2.0 million related to capitalized development costs for our Marketplace.

Previous wording

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.

Current wording

For the six months ended September 30, 2025, net cash used in financing activities consisted of $1.4 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.

Previous wording

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.

Current wording

For the six months ended September 30, 2024, net cash used in financing activities consisted of $1.4 million of insurance premium note payments, $1.4 million in payments of preferred stock dividends, $5.9 million used to repurchase shares of common stock pursuant to our then-existing repurchase plan, and $0.5 million used in the repurchase of common shares to cover taxes on shares issued to employees.

Previous wording

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.

Current wording

We currently lease two locations that are used for our offices. On September 17, 2025, we signed a lease for 2,660 square feet of mixed-use warehouse space in Marietta, GA. The lease commenced on October 1, 2025 and expires in October 2028. As of September 30, 2025, we had $1.4 million of fixed lease payment obligations with $0.3 million payable within the next 12 months. Please refer to Note 6, "Leases" for additional information.

Previous wording

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.

Current wording

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 was $51.0 million, and we were required to make aggregate annual prepayments of $2.95 million beginning on May 30, 2026.

Previous wording

For the three months ended June 30, 2025, we recorded interest expense of $81,955 and $266,375 on Notes 1 and 2, respectively.

Current wording

For the three months ended September 30, 2025, we recorded interest expense of $245,865 and $683,695 on Notes 1 and 2, respectively. For the six months ended September 30, 2025, we recorded interest expense of $327,820 and $950,070 on Notes 1 and 2, respectively.