Business Context and Reporting Period
Company: Outdoor Holding Company (formerly AMMO, Inc.)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and nine months ended December 31, 2025
Business Overview: The Company operates the GunBroker e-commerce marketplace for firearms and outdoor gear. In April 2025, the Company completed the sale of its Ammunition Manufacturing Business, which is now reported as discontinued operations. The Company changed its name from AMMO, Inc. to Outdoor Holding Company on April 21, 2025.
Key Financial Metrics
| Metric | Three Months Ended Dec 31, 2025 | Nine Months Ended Dec 31, 2025 |
|---|---|---|
| Net Revenues | $13.39 million | $37.24 million |
| Gross Profit | $11.66 million | $32.44 million |
| Gross Margin | 87.1% | 87.1% |
| Operating Income (Loss) | $1.97 million | ($3.34 million) |
| Net Income (Loss) from Continuing Ops | $2.23 million | ($2.23 million) |
| Net Income (Loss) Attributable to Common | $1.46 million | ($5.11 million) |
| Cash and Cash Equivalents | $69.86 million | $69.86 million (Ending Balance) |
| Working Capital | $61.87 million | $61.87 million (Ending Balance) |
| Adjusted EBITDA | $6.55 million | $14.60 million |
Material Changes vs. Prior Period
- Revenue Growth: Net revenues increased 7.0% ($0.9M) for the three months and 1.2% ($0.4M) for the nine months ended December 31, 2025, compared to the prior year periods, driven by increased Gross Merchandise Value (GMV) and advertising revenue.
- Operating Expenses: Operating expenses decreased significantly by $21.8 million (three months) and $28.9 million (nine months) year-over-year. This reduction is primarily due to the absence of $11.0 million in settlement contingencies recorded in the prior year, a $10.6 million decrease in legal fees related to the resolution of the Delaware Litigation and SEC Investigation, and reduced stock-based compensation.
- Profitability: The Company returned to profitability for the three months ended December 31, 2025, reporting operating income of $1.97 million compared to a loss of $20.51 million in the same period last year. The nine-month period remained loss-making due to prior-year litigation costs and restructuring.
- Discontinued Operations: The Ammunition segment was sold in April 2025. There were no discontinued operations results for the three months ended December 31, 2025. The nine-month period includes a loss of $0.60 million from discontinued operations.
Guidance, Outlook, and Risks
Management Commentary & Outlook:
- Strategic Initiatives: Focus on launching universal payment processing, deploying capital via share repurchases, and advancing restructuring to reduce operational costs.
- Platform Integration: Integration with Master FFL began in November 2025 to expand the network of Federal Firearms License dealers. Management notes this may temporarily affect gross margins but supports long-term scalability.
- Liquidity: Management expects existing working capital and operating cash flows to be adequate for the next 12 months.
Risks and Contingencies:
- Legal Proceedings:
- Delaware Litigation: Settled in May 2025. Consideration included $51.0 million in promissory notes (Note 1 and Note 2) and warrants. Note 2 ($39M) was extinguished in September 2025 via the issuance of a warrant, resulting in an $0.8 million gain. Note 1 ($12M) remains outstanding with annual prepayments starting May 2026.
- DCP Matter (MN Action): A breach of contract lawsuit alleging $100 million in damages. Trial is expected in 2026; loss is currently not estimable.
- Vista Settlement: Settled for $2.75 million payable in quarterly installments. $2.5 million liability recorded as of December 31, 2025.
- SEC Investigation: Fully resolved on December 15, 2025, via a cease-and-desist order with no civil penalty. The Company must engage a third-party compliance consultant to remediate internal control weaknesses.
- Internal Controls: Material weaknesses in internal control over financial reporting continue to exist as of December 31, 2025, specifically regarding complex technical accounting, related party transactions, and financial reporting processes.
Investor Verification Checklist
- Cash Position: Verify the $69.9 million cash balance and the impact of the $42.9 million net proceeds from the ammunition business sale on liquidity.
- Debt Obligations: Confirm the terms of the remaining $12.0 million Note 1 from the Delaware Litigation settlement and the $2.75 million Vista settlement liability.
- Share Repurchase Program: Review the January 4, 2026 authorization to repurchase up to $15.0 million of common stock and its potential impact on capital allocation.
- Internal Control Remediation: Monitor progress on remediation of material weaknesses identified in the SEC settlement and the effectiveness of new disclosure controls.
- Warrant Dilution: Assess the potential dilution from 20.8 million outstanding warrants, including the 7.0 million and 13.0 million warrants issued as part of the Delaware Litigation settlement.