GrabAGun Digital Holdings Inc.

Previous wording

GrabAGun is a digitally native and multi-brand eCommerce retailer of firearms, ammunition and related accessories. Since we began doing business as GrabAGun.com in 2010, GrabAGun has developed and grown its online gun platform, leveraging technology to provide a tech-first eCommerce experience, specially catering to the next generation of firearms enthusiasts, sportsmen and defenders. Our broad selection of product offerings ranges from carry handguns and sporting long guns to an assortment of firearm ammunition, magazines and optics. We source these products from more than 2,000 leading brands such as Smith & Wesson Brands, Sturm, Ruger & Co., Sig Sauer and Glock, for whom we serve as a non-exclusive online sales partner, as well as emerging brands and manufacturers. Our firearms products are purchased by customers online through our eCommerce site and delivered to the customers’ choice of federal firearm licensed dealers within our network or, with respect to most accessories and other eligible products, delivered directly to customers. Our collaborative business relationships and multi-brand vendor strategy enable us to offer about 73,000 products, which we believe to be one of the most expansive product assortments currently offered among firearms and ammunition industry retailers. For the three months ended March 31, 2026 and 2025, we generated $25.9 million and $23.3 million in net revenues, respectively. We had a net loss of $1.8 million for the three months ended March 31, 2026 and had net income of $0.1 million for the three months ended March 31, 2025.

Current wording

GrabAGun is a digitally native and multi-brand eCommerce retailer of firearms, ammunition and related accessories. Since we began doing business as GrabAGun.com in 2010, GrabAGun has developed and grown its online gun platform, leveraging technology to provide a tech-first eCommerce experience, specially catering to the next generation of firearms enthusiasts, sportsmen and defenders. Our broad selection of product offerings ranges from carry handguns and sporting long guns to an assortment of firearm ammunition, magazines and optics. We source these products from more than 2,000 leading brands such as Smith & Wesson Brands, Sturm, Ruger & Co., Sig Sauer and Glock, for whom we serve as a non-exclusive online sales partner, as well as emerging brands and manufacturers. Our firearms products are purchased by customers online through our eCommerce site and delivered to the customers’ choice of federal firearm licensed dealers within our network or, with respect to most accessories and other eligible products, delivered directly to customers. Our collaborative business relationships and multi-brand vendor strategy enable us to offer about 73,000 products, which we believe to be one of the most expansive product assortments currently offered among firearms and ammunition industry retailers. For the three months ended June 30, 2026 and 2025, we generated $23.2 million and $21.2 million in net revenues, respectively. For the six months ended June 30, 2026 and 2025, we generated $49.1 million and $44.6 million in net revenues, respectively. We had a net loss for the three and six months ended June 30, 2026 of $1.8 million and $3.6 million, respectively, and net income for the three and six months ended June 30, 2025 of $0.8 million and $0.9 million, respectively.

Previous wording

See Note 1 of our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning the closing of the Business Combination.

Current wording

See Note 1 of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning the closing of the Business Combination.

Previous wording

See Note 3 of our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning our revenue recognition policies.

Current wording

See Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning our revenue recognition policies.

Previous wording

The results of operations presented below should be reviewed in conjunction with our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, included elsewhere in this Quarterly Report.

Current wording

The results of operations presented below should be reviewed in conjunction with our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025, included elsewhere in this Quarterly Report.

Previous wording

Comparison of the three months ended March 31, 2026 and 2025

Current wording

Comparison of the three and six months ended June 30, 2026 and 2025

Previous wording

Net revenues increased by $2.6 million, or 11.1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by fluctuations within the firearm and non-firearm product categories, as well as the initiation of service revenues as outlined below:

Current wording

Net revenues increased by $2.0 million, or 9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by fluctuations within the firearm and non-firearm product categories, as well as the initiation of service revenues as outlined below:

Previous wording

Firearm sales increased by $2.1 million, or 10% , for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to an 8% increase in average sales price and a 2% increase in sales volumes of firearm products.

Current wording

Firearm sales increased $1.5 million, or 8%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This increase was primarily due to a 12% increase in average sales price, partially offset by a 4% decrease in sales volumes of firearm products.

Previous wording

Service sales totaled $0.1 million, for the three months ended March 31, 2026 as PEW Logistics started generating revenue during the current quarter.

Current wording

Service sales totaled $0.2 million for the three months ended June 30, 2026. There were no service sales in the comparable 2025 period, as PEW Logistics began generating revenue in the first quarter of 2026.

Previous wording

Non-firearm sales increased by $0.4 million, or 10%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily driven by a 23% increase in average sales price, partially offset by a 10% decrease in sales volumes of non-firearm products.

Current wording

Non-firearm sales increased $0.6 million, or 9% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was primarily due to a 25% increase in average sales price, partially offset by a 13% decrease in sales volumes of non-firearm products.

Previous wording

Cost of goods sold increased by $2.1 million, or 10%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by an increase in net revenues during the three months ended March 31, 2026.

Current wording

Cost of goods sold increased by $1.1 million, or 6%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a 10% increase in average firearm product cost, partially offset by lower sales volumes across firearm and non-firearm products.

Previous wording

Gross profit increased by $0.5 million, or 23%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by an increase in firearm sales.

Current wording

Gross profit increased by $0.9 million, or 39%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by higher average sales prices across firearm and non-firearm products, as well as the contribution from service revenue generated by PEW Logistics.

Previous wording

Sales and marketing expense increased by $41 thousand or 17% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by increased spending on the Company’s marketing activities.

Current wording

Sales and marketing expense increased by $41 thousand or 18% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase reflects continued investment in marketing initiatives designed to drive customer growth and support long-term revenue. Spending was primarily focused on customer acquisition, brand awareness, and digital marketing programs.

Previous wording

Interest income, net increased by $0.7 million, or 1,413%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, which was due to an increase in the daily cash sweep balances held in the current period.

Current wording

Interest income, net increased by $0.7 million, or 1754%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, which was due to an increase in the daily cash sweep balances held in the current period.

Previous wording

Other income (expense) increased by $4 thousand, or 100%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, attributable to miscellaneous income and expense items recognized during the period.

Current wording

Other income, net increased by $6 thousand, or 100%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, attributable to miscellaneous income and expense items recognized during the period.

Previous wording

The following table reconciles our GAAP and non-GAAP financial measures for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Current wording

The following table reconciles our GAAP and non-GAAP financial measures for the three and six months ended June 30, 2026 and 2025 (in thousands, except percentages):

Previous wording

(1) Non-recurring costs consist of third-party accounting and consulting fees incurred in connection with the Business Combination.

Current wording

(1) Non-recurring costs consisting of third-party accounting and consulting fees incurred in connection with the Business Combination.

Previous wording

Historically, we have financed operations primarily through cash generated from operating activities. Based on our current operating plans, we believe that the net proceeds realized from the Business Combination, along with our previously existing cash and cash equivalent balance, will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least 12 months following the date the unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report are available to be issued. This estimate is based on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than anticipated.

Current wording

Historically, we have financed operations primarily through cash generated from operating activities. Based on our current operating plans, we believe that the net proceeds realized from the Business Combination, along with our previously existing cash and cash equivalent balance, will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least 12 months following the date the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025 included elsewhere in this Quarterly Report are available to be issued. This estimate is based on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than anticipated.

Previous wording

As of March 31, 2026 and December 31, 2025, the Company had a cash and cash equivalent balance of $106.4 million and $110.4 million, respectively. Excess cash is primarily invested in overnight cash sweeps, which offer high liquidity and strong credit ratings. Following the consummation of the Business Combination, we do not currently anticipate needing to raise additional capital in the near term and based on our current expectations with respect to cash to be generated from our operations. However, our liquidity needs will be dependent on the performance of our business. See “Risk Factors — GrabAGun may require additional funding to finance its operations, but adequate additional financing may not be available when it needs it, on acceptable terms or, at all” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further discussion. By focusing on competitive pricing and operational efficiency, we seek to maximize customer satisfaction and lifetime value while maintaining strong profit margins. The digital-first approach also allows our company to scale efficiently and serve a nationwide customer base with ease.

Current wording

As of June 30, 2026 and December 31, 2025, the Company had a cash and cash equivalent balance of $97.5 million and $110.4 million, respectively. Excess cash is primarily invested in overnight cash sweeps, which offer high liquidity and strong credit ratings. Following the consummation of the Business Combination, we do not currently anticipate needing to raise additional capital in the near term and based on our current expectations with respect to cash to be generated from our operations. However, our liquidity needs will be dependent on the performance of our business. See “Risk Factors — GrabAGun may require additional funding to finance its operations, but adequate additional financing may not be available when it needs it, on acceptable terms or, at all” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further discussion. By focusing on competitive pricing and operational efficiency, we seek to maximize customer satisfaction and lifetime value while maintaining strong profit margins. The digital-first approach also allows our company to scale efficiently and serve a nationwide customer base with ease.

Previous wording

On November 25, 2025, the Company, through its indirect wholly owned subsidiary, 4880 Alpha LLC, entered into a Business Loan Agreement with BOKF, NA dba Bank of Texas (the “Lender”), pursuant to which the Lender extended a delayed draw term loan to 4880 Alpha LLC up to a maximum principal amount which was originally set at $8.5 million (the “Loan”). Subsequent to March 31, 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that increased the maximum principal amount of the Loan to $9.3 million. The Loan matures on November 25, 2036, and bears interest at a variable rate during the initial 12-month period beginning from the loan date (the “Initial Period”) equal to 1.85% over the one-month term SOFR; from and after November 25, 2026 (the “Remaining Period”), the Loan will bear interest at a fixed rate determined by the Lender as 1.85% over the BOKF Tier 1 COF. During the Initial Period, interest is payable quarterly, with the first quarterly interest payment due on February 25, 2026. During the Remaining Period, interest and principal amortization payments are payable quarterly, with the first quarterly interest and principal amortization payment due on February 25, 2027. The Loan is secured by a Deed of Trust encumbering the real property located at 4880 Alpha Road, Farmers Branch, Texas, together with all improvements, fixtures, rents and related personal property, as well as an Assignment of Rents with respect to such property. The Loan is guaranteed by the Company in the full principal amount pursuant to a Commercial Guaranty, dated November 25, 2025. Subsequent to March 31, 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that revised the financial covenant requirements. Under the amended loan documents, the Company and its consolidated subsidiaries are required to maintain either (i) a fixed charge coverage ratio of not less than 1.25 to 1.00, measured quarterly on a trailing twelve-month basis, or (ii) minimum liquidity held with the Lender equal to at least two times the loan balances of 4880 Alpha LLC. Compliance with either covenant satisfies this requirement. The amendment applies from the date the original Business Loan Agreement was entered into, and the Company was in compliance with the liquidity covenant requirement as of March 31, 2026. As of March 31, 2026, the Company has drawn $7.9 million under the Loan.

Current wording

On November 25, 2025, the Company, through its indirect wholly owned subsidiary, 4880 Alpha LLC, entered into a Business Loan Agreement with BOKF, NA dba Bank of Texas (the “Lender”), pursuant to which the Lender extended a delayed draw term loan to 4880 Alpha LLC up to a maximum principal amount which was originally set at $8.5 million (the “Loan”). During the second quarter of 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that increased the maximum principal amount of the Loan to $9.3 million. The Loan matures on November 25, 2036, and bears interest at a variable rate during the initial 12-month period beginning from the loan date (the “Initial Period”) equal to 1.85% over the one-month term SOFR; from and after November 25, 2026 (the “Remaining Period”), the Loan will bear interest at a fixed rate determined by the Lender as 1.85% over the BOKF Tier 1 COF. During the Initial Period, interest is payable quarterly, with the first quarterly interest payment due on February 25, 2026. During the Remaining Period, interest and principal amortization payments are payable quarterly, with the first quarterly interest and principal amortization payment due on February 25, 2027. The Loan is secured by a Deed of Trust encumbering the real property located at 4880 Alpha Road, Farmers Branch, Texas, together with all improvements, fixtures, rents and related personal property, as well as an Assignment of Rents with respect to such property. The Loan is guaranteed by the Company in the full principal amount pursuant to a Commercial Guaranty, dated November 25, 2025. Under the amended loan documents, the Company and its consolidated subsidiaries are required to maintain either (i) a fixed charge coverage ratio of not less than 1.25 to 1.00, measured quarterly on a trailing twelve-month basis, or (ii) minimum liquidity held with the Lender equal to at least two times the loan balances of 4880 Alpha LLC. Compliance with either covenant satisfies this requirement. The amendment applies from the date the original Business Loan Agreement was entered into, and the Company was in compliance with the amended covenant requirement as of June 30, 2026. As of June 30, 2026, the Company has drawn $7.9 million under the Loan.

Previous wording

Net cash used in operating activities was $1.7 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $1.3 million for the three months ended March 31, 2025. The change reflects the Company’s net loss, which was adjusted for non-cash items such as stock-based compensation, alongside an increase in inventory and a decrease in unearned revenue. These impacts were partially offset by an increase in accounts payable and a decrease in prepaid expenses and other current assets.

Current wording

Net cash used in operating activities was $8.3 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $0.2 million for the six months ended June 30, 2025. The change reflects the Company’s net loss, which was adjusted for non-cash items such as stock-based compensation, alongside a decrease in accounts payable and unearned revenue.

Previous wording

Net cash used in investing activities was $1.3 million for the three months ended March 31, 2026, compared to $0.1 million for the three months ended March 31, 2025 and consisted primarily of the purchase of property and equipment related to building improvements, inclusive of capitalized interest, and additions to capitalized software.

Current wording

Net cash used in investing activities was $3.1 million for the six months ended June 30, 2026, compared to $0.1 million for the six months ended June 30, 2025. The change was driven by the purchase of property and equipment related to building improvements.

Previous wording

Net cash used in financing activities was $1.1 million for the three months ended March 31, 2026, compared to $1.7 million for the three months ended March 31, 2025. The change was primarily driven by stock repurchases, partially offset by proceeds from borrowings related to building improvements.

Current wording

Net cash used in financing activities was $1.4 million for the six months ended June 30, 2026, compared to $3.3 million for the six months ended June 30, 2025. The change was driven by stock repurchases, partially offset by proceeds from borrowings related to building improvements.

Previous wording

While our significant accounting policies are described in more detail in Note 3 of our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our balance sheet and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Current wording

While our significant accounting policies are described in more detail in Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025 included elsewhere in this Quarterly Report, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our balance sheet and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Previous wording

Generally, customers may return non-firearm products within 30 days of purchase. Revenue is recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns. Sales returns reserve totaled $0.4 million as of March 31, 2026 and $0.4 million as of December 31, 2025 and is included in accrued expenses and other current liabilities within the condensed consolidated balance sheets.

Current wording

Generally, customers may return non-firearm products within 30 days of purchase. Revenue is recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns. Sales returns reserve totaled $0.2 million as of June 30, 2026 and $0.4 million as of December 31, 2025 and is included in accrued expenses and other current liabilities within the condensed consolidated balance sheets.

Previous wording

PEW Logistics service revenue consists of order fulfillment services, e-commerce platform hosting services, and storage solutions. Revenue from order fulfillment services is recognized when control of the goods is transferred to the end customer, which occurs upon delivery. Revenue from e-commerce platform hosting services is recognized ratably over the contractual service period. Revenue from storage solutions is recognized each month based on the volume of goods stored and the period during which storage services are provided. The Company commenced revenue-generating activities for PEW Logistics during the three months ended March 31, 2026.

Current wording

PEW Logistics service revenue consists of order fulfillment services, e-commerce platform hosting services, and storage solutions. Revenue from order fulfillment services is recognized when control of the goods is transferred to the end customer, which occurs upon delivery. Revenue from e-commerce platform hosting services is recognized ratably over the contractual service period. Revenue from storage solutions is recognized each month based on the volume of goods stored and the period during which storage services are provided. The Company commenced revenue-generating activities for PEW Logistics during the three months ended March 31, 2026, and increased during the three months ended June 30, 2026.

Previous wording

We record adjustments to inventories, which are reflected in cost of goods sold, if the cost of specific inventory items on hand exceeds the amount that we expect to realize from the ultimate sale or disposal of the inventory. A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if necessary. No provision was recognized during the three months ended March 31, 2026 and 2025.

Current wording

We record adjustments to inventories, which are reflected in cost of goods sold, if the cost of specific inventory items on hand exceeds the amount that we expect to realize from the ultimate sale or disposal of the inventory. A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if necessary. No provision was recognized during the three and six months ended June 30, 2026 and 2025

Previous wording

In addition, we record an estimated reserve amount for the net realizable value of expected future inventory returns related to our sale returns reserve. The inventory returns reserve balance was $0.3 million as of March 31, 2026 and $0.3 million as of December 31, 2025, and is included in inventory, net within the condensed consolidated balance sheets.

Current wording

In addition, we record an estimated reserve amount for the net realizable value of expected future inventory returns related to our sale returns reserve. The inventory returns reserve balance was $0.2 million as of June 30, 2026 and $0.3 million as of December 31, 2025, and is included in inventory, net within the condensed consolidated balance sheets.

Previous wording

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, and cash flows is included in Note 3 of our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report.

Current wording

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, and cash flows is included in Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025 included elsewhere in this Quarterly Report.