Outdoor Holding Co
For the period ended Dec 31, 2025. Filed Feb 9, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 9, 2026
POWW$2.30-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001193125-25-273158
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-09.
0001193125-26-041880
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 88 current paragraphs.
50 unchanged; 28 reworded; 10 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Settlement of SEC Investigation
Current report
As previously disclosed, the Company was subject to an investigation by the U.S. Securities and Exchange Commission (the “SEC”) relating to certain accounting, disclosure, and internal control issues primarily arising during periods prior to the tenure of the Company’s current management team. The Company made an Offer of Settlement to the SEC, and on December 15, 2025, the SEC instituted settled cease-and-desist proceedings that fully resolved the investigation. The Company consented to the entry of the cease-and-desist order (the “SEC Order”) without admitting or denying the SEC’s findings, except as to jurisdiction.
Current report
Under the terms of the settlement, the SEC did not impose any civil penalty or monetary sanction. The Company agreed to cease and desist from committing or causing any future violations of certain provisions of the federal securities laws and related rules. The SEC’s findings relate primarily to historical disclosure failures, accounting misstatements, non-GAAP financial metric disclosures, and deficiencies in internal accounting controls during the period from August 2020 through July 2023. As part of the SEC settlement, the Company agreed to undertakings requiring it to engage a third-party compliance consultant to review and make recommendations concerning the remediation of material weaknesses in internal control over financial reporting. The Company is required to cooperate fully with the consultant, adopt and implement the consultant’s recommendations within two years of the SEC Order, and provide written certifications of compliance to the SEC staff.
Current report
The Company began significant remediation efforts prior to the settlement and has continued those efforts following the resolution of the SEC matter. These actions have included, among other measures, conducting an independent internal investigation, restating affected historical financial statements, replacing prior senior leadership, expanding and enhancing the accounting and external reporting function, retaining external accounting and internal control advisors, strengthening policies and procedures related to expense classification, capitalization, and stock-based compensation, enhancing period-end close and reconciliation controls, establishing a formal disclosure committee, and implementing a more robust process for identifying and disclosing related-party transactions.
Current report
The settlement with the SEC did not result in any civil penalty or disgorgement and, accordingly, did not have any direct adverse impact on the Company’s liquidity or capital resources. However, the Company has incurred, and expects to continue to incur, costs related to compliance with the settlement undertakings and indemnification of three former directors and officers. These costs include fees and expenses associated with the compliance consultant and ongoing internal control remediation activities, along with advancement of legal expenses to former directors and officers against whom the SEC has instituted a separate enforcement action. These costs may be material in individual reporting periods but are not expected to impair the Company’s ability to meet its obligations or execute its business strategy.
Current report
Management believes that the resolution of the SEC investigation eliminates a significant source of uncertainty and allows the Company to focus on operating its business, enhancing its control environment, and pursuing its strategic objectives. While management cannot provide assurance regarding the timing or ultimate effectiveness of all remediation efforts, the Company believes it has made, and will continue to make, appropriate progress in remediating the identified internal accounting control deficiencies and strengthening its governance, disclosure and financial reporting processes.
Current report
Net revenues for the three months ended December 31, 2025 increased $0.9 million, or 7.0%, from the three months ended December 31, 2024 due to increased GMV from our Marketplace driven by increases in firearms sales.
Current report
Cost of revenues increased $0.1 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The increase is associated with higher transaction volume and investments in the platform.
Current report
Share Repurchase Program
Current report
On January 4, 2026, the Board authorized a discretionary share repurchase program pursuant to which we may repurchase up to $15.0 million of our outstanding common stock over a period of twelve months. Repurchases under the program may be made from time to time, in management’s discretion, through open market purchases, privately negotiated transactions, and other means in accordance with federal securities laws, including pursuant to one or more Rule 10b5-1 trading plans. The timing, volume, and value of any repurchases will be determined by management based on factors including market conditions, our liquidity and capital needs, and other factors deemed relevant. The share repurchase program does not obligate us to repurchase any specific number of shares and may be modified, suspended, or terminated at any time at the discretion of the Board of Directors or management. Any repurchases under the program will be funded from our existing cash balances, future operating cash flows, or other legally available funds.
Removed paragraphs (2)
Previous report
Net revenues for the three months ended September 30, 2025 were consistent with the prior period. There was a minor reduction in volume through our Marketplace, offset by a minor increase in advertising revenue.
Previous report
Cost of revenues for the three months ended September 30, 2025 were consistent with the three months ended September 30, 2024.
Reworded paragraphs (28)
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 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.
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 nine months ended December 31, 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 8.6 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.
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 8.7 million users to follow ownership policies and regulations through our network of approximately 31,000 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, marketplace service fee revenue (previously referred to as compliance fee revenue), advertising campaign revenue and shipping revenue. Our key strategic initiatives for the remainder of fiscal year 2026 and first two quarters of fiscal year 2027 include: launching universal payment processing to drive electronic transactions, decrease transaction friction, increase gross merchandise value ("GMV"), and accelerate user adoption; deploy capital opportunistically by repurchasing shares; 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.As part of our key strategic initiatives, the Company invested in a platform integration with Master FFL beginning in November 2025. Master FFL integration allows us to provide platform users access to a larger network of Federal Firearms License ("FFL") dealers, centralizing FFL dealer verification and compliance, and allowing streamlined firearm transfers through automatic verification of federally-licensed firearm dealers. While integration is in progress and may temporarily affect gross margins, the initiative supports long-term marketplace scalability, enhances federal compliance, and improves operational efficiency across our Marketplace.
Previous 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:
Current wording
The following table presents summarized financial information taken from our unaudited condensed consolidated statements of operations for the three and nine months ended December 31, 2025, compared with the three and nine months ended December 31, 2024:
Previous 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.
Current wording
For the nine months ended December 31, 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 nine months ended December 31, 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 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.
Current wording
To more clearly present Adjusted EBITDA, we have updated the table to begin with our net income (loss) before discontinued operations and now include the preferred stock dividend as an adjustment. This update has no impact on the Adjusted EBITDA amount, rather, it improves the alignment of the presentation with our consolidated statement of operations. Adjusted EBITDA is a non-GAAP financial measure that displays our net income (loss) before discontinued operations, adjusted to eliminate the effect of certain items as described below. We define Adjusted EBITDA as net income (loss) before discontinued operations excluding (i) provision or benefit for income taxes, (ii) preferred stock dividend (iii) depreciation and amortization, (iv) interest expense, net, (v) stock-based compensation expenses relating to stock awards and common stock purchase options, (vi) other income (expense), net, (vii) expenses related to acquisition and divestitures, (viii) gain on extinguishment of debt, (xi) 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 (x) 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
employee stock awards, and common stock purchase options expense has been, and will continue to be for the foreseeable future, a significant recurring expense for the Company and an important part of our compensation strategy;
Current wording
stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense for the Company and an important part of our compensation strategy;
Previous wording
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.
Current wording
Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including our net income (loss) and our other financial results presented in accordance with GAAP.
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. 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.
Current wording
We generate revenue from marketplace fees, which includes marketplace revenue, marketplace service 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. Marketplace service fee revenue consists of fees charged to customers based on the final price of an item at the time of purchase. Effective as of the current reporting period, the fee previously referred to as the compliance fee is now called the marketplace service fee. This fee is assessed by GunBroker and added to the price of the item at the time of purchase for all buyers, based on the final price of an item at the time of purchase. The change in terminology reflects the nature of the fee as a service-related charge rather than a regulatory compliance charge. The marketplace service fee helps offset increased costs associated with compliance with new state laws related to taxation, privacy, and firearms, which have significantly increased GunBroker’s operational compliance expenses. 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 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.
Current wording
Net revenues for the nine months ended December 31, 2025 increased by $0.4 million, or 1.2%, from the prior period due to an increase in GMV generated from our Marketplace in addition to an increase in advertising revenue.
Previous 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.
Current wording
Cost of revenues for the nine months ended December 31, 2025 decreased $0.1 million compared to the nine months ended December 31, 2024. This decrease was primarily the result of a decrease in credit card processing fees.
Previous 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.
Current wording
Our gross margin, which measures our gross profit as a percentage of sales, decreased slightly to 87.1% for the three months ended December 31, 2025 compared to 87.4% for the three months ended December 31, 2024. This decrease in gross margin was primarily the result of the efforts around the implementation of the Master FFL platform. For the nine months ended December 31, 2025, our gross margin increased to 87.1% from 86.6% for the nine months ended December 31, 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.
Previous 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.
Current wording
Operating expenses decreased by $21.8 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease in operating expenses was the result of a reduction of $11.0 million in settlement contingencies that were recorded in the three months ended December 31, 2024 without a corresponding expense in the three months ended December 31, 2025, a decrease of $9.3 million in legal and professional fees primarily related to the completion of the Delaware Litigation, the Special Committee Investigation and restatement and the SEC Investigation, a reduction of stock-based compensation expense of $0.5 million due to a reduction in stock award grants, a $0.5 million reduction in salaries and related expenses also due to reduced headcount, a $0.2 million reduction in corporate insurance expense due to the sale of the Ammunition Manufacturing Business, and a $0.5 million reduction in bad debt expense as a result of increased collection efforts. These decreases were partially offset by a $0.2 million increase in depreciation and amortization expense due to increased capitalized software development costs.
Previous wording
Operating expenses decreased by approximately $6.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in operating expenses was the result of a decrease of $4.6 million in legal fees related to the completion of the Delaware Litigation and developments in the SEC Investigation, a $2.0 million reduction in legal fees associated with recording a receivable from our directors and officers insurance, a reduction of stock-based compensation expense of $1.2 million due to a reduction in stock award grants, a $0.3 million reduction in salaries and related expenses due to reduced headcount and a $0.4 million reduction due to a reduction in bad debt expense as a result of increased collection efforts. These decreases were partially offset by a $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.
Current wording
Operating expenses decreased by $28.9 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. The decrease in operating expenses was primarily the result of a reduction of $12.3 million in settlement contingencies, as well as a decrease in stock-based compensation expense of $2.4 million due to a reduction in stock award grants, a decrease of $4.0 million due to the completion of the Special Committee Investigation and restatement, a decrease of $10.6 million in legal fees related to the completion of the Delaware Litigation and the SEC Investigation, including 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 $0.6 million in depreciation and amortization resulting from increased capitalized software development costs.
Previous 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.
Current wording
Total other income, net for the three months ended December 31, 2025 increased by $0.1 million compared to the three months ended December 31, 2024. This increase was the result of an increase in interest income of $0.3 million generated from holding a higher cash balance, partially offset by the increase in interest expense of $0.2 million related to the interest obligation from Notes issued in the Delaware Litigation settlement.
Previous wording
Total other income, net for the six months ended September 30, 2025 increased by $0.5 million compared to the six months ended September 30, 2024. This increase was primarily the result of recognizing an $0.8 million gain on the extinguishment of the $39.0 million note payable due to the conversion to a 13.0 million warrant in addition to an increase in interest income of $0.5 million due to a higher cash balance and an increase of $0.4 million associated with the sale of equity securities, partially offset by an increase in interest expense of $1.2 million related to the Notes issued in the Delaware Litigation settlement.
Current wording
Total other income, net for the nine months ended December 31, 2025 increased by $0.6 million compared to the nine months ended December 31, 2024. This increase was primarily the result of recognizing an $0.8 million gain on the extinguishment of Note 2 due to the conversion to the Additional Warrant in addition to an increase in other income of $1.2 million, $0.8 million of which was interest earned due to a higher cash balance and $0.4 million of which was associated with the sale of equity securities. These increases were partially offset by an increase in interest expense of $1.4 million related to the Notes issued in the Delaware Litigation settlement.
Previous 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.
Current wording
For the three and nine months ended December 31, 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 nine months ended December 31, 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 nine months ended December 31, 2024 was the 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 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.
Current wording
As of December 31, 2025, we had $69.9 million of cash and cash equivalents, an increase of $39.6 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 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.
Current wording
For the nine months ended December 31, 2025, net cash provided by operations was primarily the result of the benefit of non-cash expenses for depreciation and amortization, stock based compensation and a reduction in the allowance for doubtful accounts, partially offset by 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.
Previous 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.
Current wording
For the nine months ended December 31, 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. 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 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.
Current wording
For the nine months ended December 31, 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 $2.2 million in capitalized development costs related to our Marketplace.
Previous 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.
Current wording
For the nine months ended December 31, 2024, net cash used in investing activities consisted of $3.0 million related to capitalized development costs for our Marketplace.
Previous 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.
Current wording
For the nine months ended December 31, 2025, net cash used in financing activities consisted of $2.2 million in payments of preferred stock dividends and $0.3 million used in the repurchase of common stock to cover taxes on shares issued to employees.
Previous 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.
Current wording
For the nine months ended December 31, 2024, net cash used in financing activities consisted of $2.2 million of insurance premium note payments, $2.2 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 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.
Current wording
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 our share repurchase program, capital expenditures, debt repayments and any potential acquisitions.
Previous 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.
Current wording
We currently lease three locations, two of which are office space and one that is a 2,660 square-foot mixed-use warehouse space in Marietta, GA. The lease for the mixed-use warehouse space commenced on October 1, 2025 and expires in October 2028. On October 1, 2025, we moved our corporate headquarters to our leased facility in Atlanta, Georgia. We have vacated the premises of our Scottsdale, Arizona leased office property and intend to sublease it. As of December 31, 2025, we had $1.4 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.
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 was $51.0 million, and we were required to make aggregate annual prepayments of $2.95 million beginning on May 30, 2026.
Current wording
As described in the "Recent Developments"section above, 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 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.
Current wording
For the three months ended December 31, 2025, we recorded interest expense of $245,865 on Note 1 and no interest expense on Note 2. For the nine months ended December 31, 2025, we recorded interest expense of $573,685 and $950,070 on Note 1 and Note 2, respectively.
Previous wording
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 in satisfaction of Note 2. The prepayment of Note 2 was accounted for as an extinguishment of debt and a gain of $801,894 was recognized on the condensed consolidated income statement. After the prepayment of Note 2, the remaining principal balance on Note 1 is 12.0 million and we are required to make an annual prepayment of $1.0 million on Note 1 beginning on May 30, 2026.
Current wording
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 in satisfaction of Note 2. The prepayment of Note 2 was accounted for as an extinguishment of debt and a gain of $801,894 was recognized on the condensed consolidated statement of operations. The remaining principal balance on Note 1 is $12.0 million and we are required to make an annual prepayment of $1.0 million on Note 1 beginning on May 30, 2026.