Filing summary
Entity and period: The request identifies BONK, INC., but the supplied filing is Safety Shot, Inc.’s Form 10-K, filed April 1, 2024, for the fiscal year ended December 31, 2023. The filing reports full-year results; it does not provide clear standalone fourth-quarter financial results. The company traded as SHOT after changing its name from Jupiter Wellness, Inc. in August 2023.
Business context and reporting period
Safety Shot acquired assets for its functional beverage in August 2023 and began e-commerce sales in December. The beverage is marketed as a dietary supplement formulated to reduce blood alcohol accumulation; the company says its ingredients are GRAS and the product does not require FDA drug approval. The company’s main stated priority is commercializing this beverage, alongside legacy wellness products and development candidates. It had eight full-time employees at year-end and outsources manufacturing.
The August 2023 separation of SRM reduced the company’s ownership to a minority interest and ended consolidation of SRM’s operating results. The filing says approximately 98% of 2022 revenue came from the SRM business, making the prior-year comparison materially affected by the separation.
Financial results and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | $202,670 | $120,727 |
| Cost of sales | $277,127 | $325,169 |
| Gross profit (loss) | $(74,457) | $(204,542) |
| Total operating expenses | $12,524,869 | $14,078,784 |
| Net loss | $(15,083,041) | $(15,223,028) |
| Basic and diluted loss per share | $(0.49) | $(0.69) |
| Cash and cash equivalents at year-end | $3,833,349 | $1,477,552 |
| Net cash used in continuing operating activities | $10,715,314 | $6,448,078 |
Revenue increased, which the company attributes to the December 2023 beverage launch, but remained very small relative to expenses. Gross margin was negative in both years; a percentage margin is not meaningful when cost of sales exceeds revenue. Operating expenses included $4.86 million of legal and professional costs, $4.30 million of general and administrative costs, $2.08 million of stock-based compensation, and a $200,000 impairment of an advance to an affiliate. Other expenses included $1.51 million of unrealized losses on marketable securities and an $864,418 equity-investment loss.
At December 31, 2023, total current assets were $7.69 million and total current liabilities were $3.59 million; reported working capital was $4.30 million. Total liabilities were $3.89 million, including $1.50 million of convertible notes, $48,974 of SBA loan balance, and $519,659 of lease liabilities. Cash increased during the year, supported by $13.46 million of cash proceeds from share issuances and warrant exercises. The filing warns that further capital may be needed and that financing may not be available on acceptable terms. Auditors expressed substantial doubt about the company’s ability to continue as a going concern.
Material changes, outlook, risks and unusual items
- Strategic shift: The beverage asset purchase cost $200,000 cash and 5 million shares, initially valued at $2.47 million; subsequent earn-out payments brought the reported patent carrying amount to $4.56 million at year-end. The agreement allows up to $5.5 million of additional consideration tied to warrant-exercise milestones; the filing says $175,000 was due under one milestone as of March 30, 2024.
- Commercial plans: Management planned to pursue big-box retail distribution in early 2024, a U.S. Photocil relaunch in Q4 2024, a JW-700 U.S. launch in Q4 2024, and formulation and test launch of JW-500 in Q4 2024. These are plans, not financial guidance. No revenue or earnings guidance is provided. SS-100, a proposed drug for acute alcohol poisoning, would require FDA investigational and clinical-trial steps; the company has not established that it will receive orphan designation or approval.
- Financing and dilution: The company issued 23.30 million additional shares during 2023, ending the year with 45.63 million shares outstanding; 49.22 million were reported outstanding as of March 28, 2024. At year-end, the filing lists 14.75 million warrants outstanding, while another risk discussion cites 15.76 million—a discrepancy to verify. The company said warrant exercises might provide capital, but there is no assurance holders will exercise.
- Accounting and controls: Management concluded internal control over financial reporting was ineffective at year-end and disclosure controls were also described as ineffective in the assessment, despite contradictory boilerplate language elsewhere in the filing. The cash-flow discussion in the risk section gives operating cash use of $10.515 million, while the financial statements and notes report $10.715 million. The filing also contains inconsistent figures for certain 2022 expenses and revenue; consult the audited statements and notes for the controlling presentation.
- Litigation and contingencies: Several warrant-related lawsuits seek damages or share delivery, including claims with stated estimates of at least $2 million, $3 million plus estimated liquidated damages of $4 million, and at least $750,000 plus at least $600,000 in liquidated damages. The company disputes the claims and says it does not expect material adverse effects. A Coachella-related lawsuit was settled with a permanent injunction, cessation of festival activities, and a payment described as not material. The company also reported a March 2024 default judgment against Capybara Research and an agreement by Benzinga to retract the challenged article.
- Other risks: The company cites limited operating history, ongoing losses and cash burn, dependence on financing and key personnel, product safety and liability exposure, regulatory and labeling risk, third-party manufacturing and supply-chain dependence, competition, and uncertainty over the commercial acceptance of the beverage. It has stopped marketing CBD products and has no agreement to dispose of related assets.
Most important facts for investors to verify
- Confirm the filing belongs to the intended issuer: the supplied 10-K is for Safety Shot, Inc. (SHOT), not BONK, INC.
- Review the auditor’s going-concern warning, cash runway, actual subsequent financing, and the amount and timing of any expected warrant proceeds.
- Reconcile warrant counts, operating cash-flow figures, and other inconsistent amounts in the filing against the audited statements, notes, and later filings.
- Track beverage sales, gross margins, repeat purchasing, retail distribution, and whether management’s product-launch plans are achieved.
- Assess the status and potential exposure of warrant litigation and the terms, accounting, and remaining conditions of the beverage acquisition earn-outs.
- Evaluate dilution from warrants, options, equity plans, and shares issued after year-end, as well as progress in remediating ineffective financial-reporting controls.