Cover
Cover - shares | 9 Months Ended | |
Dec. 31, 2022 | Feb. 10, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --03-31 | |
Entity File Number | 001-13101 | |
Entity Registrant Name | AMMO, Inc. | |
Entity Central Index Key | 0001015383 | |
Entity Tax Identification Number | 83-1950534 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 7681 E Gray Road | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85260 | |
City Area Code | (480) | |
Local Phone Number | 947-0001 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 117,844,417 | |
Common Stock, $0.001 par value | ||
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | POWW | |
Security Exchange Name | NASDAQ | |
8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value | ||
Title of 12(b) Security | 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value | |
Trading Symbol | POWWP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 27,093,614 | $ 23,281,475 |
Accounts receivable, net | 30,419,611 | 43,955,084 |
Due from related parties | 15,000 | |
Inventories | 67,145,401 | 59,016,152 |
Prepaid expenses | 3,838,968 | 3,423,925 |
Current portion of restricted cash | 500,000 | |
Total Current Assets | 128,997,594 | 129,691,636 |
Property and Equipment, net | 55,290,328 | 37,637,806 |
Other Assets: | ||
Deposits | 9,656,907 | 11,360,322 |
Patents, net | 5,156,120 | 5,526,218 |
Other intangible assets, net | 126,870,205 | 136,300,387 |
Goodwill | 90,870,094 | 90,870,094 |
Right of use assets - operating leases | 1,378,711 | 2,791,850 |
TOTAL ASSETS | 418,219,959 | 414,178,313 |
Current Liabilities: | ||
Accounts payable | 20,964,686 | 26,817,083 |
Factoring liability | 1,678,450 | 485,671 |
Accrued liabilities | 4,298,739 | 6,178,814 |
Inventory credit facility | 825,675 | |
Current portion of operating lease liability | 518,778 | 831,429 |
Current portion of note payable related party | 358,263 | 684,639 |
Current portion of construction note payable | 258,430 | |
Insurance premium note payable | 119,449 | |
Total Current Liabilities | 28,196,795 | 35,823,311 |
Long-term Liabilities: | ||
Contingent consideration payable | 158,570 | 204,142 |
Notes payable related party, net of current portion | 181,132 | |
Construction note payable, net of unamortized issuance costs | 10,967,947 | 38,330 |
Operating lease liability, net of current portion | 980,009 | 2,091,351 |
Deferred income tax liability | 2,819,962 | 1,536,481 |
Total Liabilities | 43,123,283 | 39,874,747 |
Shareholders’ Equity: | ||
Series A cumulative perpetual preferred Stock 8.75%, ($25.00 per share, $0.001 par value) 1,400,000 shares issued and outstanding as of December 31, 2022 and March 31, 2022, respectively | 1,400 | 1,400 |
Common stock, $0.001 par value, 200,000,000 shares authorized 118,044,417 and 116,485,747 shares issued and 117,894,417 and 116,485,747 outstanding at December 31, 2022 and March 31, 2022, respectively | 117,894 | 116,487 |
Additional paid-in capital | 390,501,876 | 385,426,431 |
Accumulated deficit | (15,233,633) | (11,240,752) |
Treasury Stock | (290,861) | |
Total Shareholders’ Equity | 375,096,676 | 374,303,566 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 418,219,959 | $ 414,178,313 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Mar. 31, 2022 | |
Statement of Financial Position [Abstract] | ||
Preferred stock, dividend rate, percentage | 8.75% | 8.75% |
Preferred stock, stated value per share | $ 25 | $ 25 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 1,400,000 | 1,400,000 |
Preferred stock, shares outstanding | 1,400,000 | 1,400,000 |
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 118,044,417 | 116,485,747 |
Common stock, shares outstanding | 117,894,417 | 116,485,747 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Revenues | ||||
Total Revenues | $ 38,711,494 | $ 64,689,186 | $ 147,756,079 | $ 170,167,603 |
Cost of Revenues | 26,184,315 | 42,166,320 | 104,257,529 | 102,457,775 |
Gross Profit | 12,527,179 | 22,522,866 | 43,498,550 | 67,709,828 |
Operating Expenses | ||||
Selling and marketing | 1,010,543 | 1,510,574 | 3,987,214 | 4,226,817 |
Corporate general and administrative | 7,835,201 | 3,737,455 | 17,920,197 | 10,976,288 |
Employee salaries and related expenses | 4,705,636 | 2,939,095 | 11,414,434 | 7,943,076 |
Depreciation and amortization expense | 3,309,074 | 3,725,921 | 9,950,752 | 10,044,994 |
Total operating expenses | 16,860,454 | 11,913,045 | 43,272,597 | 33,191,175 |
Income/(Loss) from Operations | (4,333,275) | 10,609,821 | 225,953 | 34,518,653 |
Other Expenses | ||||
Other income/(expense) | (170,403) | 363 | 28,193 | 21,788 |
Interest expense | (320,439) | (190,319) | (538,191) | (468,404) |
Total other expense | (490,842) | (189,956) | (509,998) | (446,616) |
Income/(Loss) before Income Taxes | (4,824,117) | 10,419,865 | (284,045) | 34,072,037 |
Provision for Income Taxes | (721,125) | 1,351,998 | 1,369,427 | 1,351,998 |
Net Income/(Loss) | (4,102,992) | 9,067,867 | (1,653,472) | 32,720,039 |
Preferred Stock Dividend | (782,639) | (782,582) | (2,339,409) | (1,902,966) |
Net Income/(Loss) Attributable to Common Stock Shareholders | $ (4,885,631) | $ 8,285,285 | $ (3,992,881) | $ 30,817,073 |
Net Income/(Loss) per share | ||||
Basic | $ (0.04) | $ 0.07 | $ (0.03) | $ 0.28 |
Diluted | $ (0.04) | $ 0.07 | $ (0.03) | $ 0.27 |
Weighted average number of shares outstanding | ||||
Basic | 117,348,511 | 114,757,014 | 116,950,013 | 111,289,024 |
Diluted | 117,348,511 | 116,717,500 | 116,950,013 | 113,350,998 |
Ammunition Sales [Member] | ||||
Net Revenues | ||||
Total Revenues | $ 20,250,965 | $ 44,069,473 | $ 90,607,817 | $ 112,629,655 |
Marketplace Revenue [Member] | ||||
Net Revenues | ||||
Total Revenues | 15,419,202 | 17,596,769 | 46,486,842 | 46,646,051 |
Casing Sales [Member] | ||||
Net Revenues | ||||
Total Revenues | $ 3,041,327 | $ 3,022,944 | $ 10,661,420 | $ 10,891,897 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance at Mar. 31, 2021 | $ 93,100 | $ 202,073,968 | $ (41,819,539) | $ 160,347,529 | ||
Beginning balance, shares at Mar. 31, 2021 | 93,099,967 | |||||
Common stock issued for cashless warrant exercise | $ 275 | (275) | ||||
Common stock issued for cashless warrant exercise, shares | 275,155 | |||||
Employee stock awards | $ 203 | 699,297 | 699,500 | |||
Employee stock awards, shares | 202,500 | |||||
Stock grants | 66,914 | 66,914 | ||||
Dividends accumulated on preferred stock | (337,745) | (337,745) | ||||
Net income (loss) | 9,536,660 | 9,536,660 | ||||
Common stock issued for exercised warrants | $ 219 | 477,592 | 477,811 | |||
Common stock issued for exercised warrants, shares | 219,144 | |||||
Acquisition stock issuances | $ 18,500 | 132,626,500 | 132,645,000 | |||
Acquisition stock issuances, shares | 18,500,000 | |||||
Common stock issued for services | $ 750 | 1,499,250 | 1,500,000 | |||
Common stock issued for services, shares | 750,000 | |||||
Issuance costs | (4,670,422) | (4,670,422) | ||||
Issuance of Series A Preferred Stock, net of issuance costs | $ 1,400 | 34,998,600 | 35,000,000 | |||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 1,400,000 | |||||
Ending balance at Jun. 30, 2021 | $ 1,400 | $ 113,047 | 367,771,424 | (32,620,624) | 335,265,247 | |
Ending balance, shares at Jun. 30, 2021 | 1,400,000 | 113,046,766 | ||||
Beginning balance at Mar. 31, 2021 | $ 93,100 | 202,073,968 | (41,819,539) | 160,347,529 | ||
Beginning balance, shares at Mar. 31, 2021 | 93,099,967 | |||||
Net income (loss) | 32,720,039 | |||||
Ending balance at Dec. 31, 2021 | $ 1,400 | $ 115,437 | 382,015,310 | (11,002,466) | 371,129,681 | |
Ending balance, shares at Dec. 31, 2021 | 1,400,000 | 115,436,404 | ||||
Beginning balance at Jun. 30, 2021 | $ 1,400 | $ 113,047 | 367,771,424 | (32,620,624) | 335,265,247 | |
Beginning balance, shares at Jun. 30, 2021 | 1,400,000 | 113,046,766 | ||||
Common stock issued for cashless warrant exercise | $ 2 | (2) | ||||
Common stock issued for cashless warrant exercise, shares | 1,752 | |||||
Employee stock awards | $ 352 | 1,153,273 | 1,153,625 | |||
Employee stock awards, shares | 352,250 | |||||
Stock grants | 65,098 | 65,098 | ||||
Dividends accumulated on preferred stock | (782,639) | (782,639) | ||||
Net income (loss) | 14,115,512 | 14,115,512 | ||||
Common stock issued for exercised warrants | $ 161 | 343,684 | 343,845 | |||
Common stock issued for exercised warrants, shares | 160,998 | |||||
Acquisition stock issuances | (29,500) | (29,500) | ||||
Common stock issued for services and equipment | $ 21 | 127,479 | 127,500 | |||
Common stock issued for services and equipment, shares | 21,250 | |||||
Ending balance at Sep. 30, 2021 | $ 1,400 | $ 113,583 | 369,431,456 | (19,287,751) | 350,258,688 | |
Ending balance, shares at Sep. 30, 2021 | 1,400,000 | 113,583,016 | ||||
Employee stock awards | $ 301 | 1,044,824 | 1,045,125 | |||
Employee stock awards, shares | 301,250 | |||||
Stock grants | 65,098 | 65,098 | ||||
Preferred stock dividends declared | (638,021) | (638,021) | ||||
Dividends accumulated on preferred stock | (144,561) | (144,561) | ||||
Net income (loss) | 9,067,867 | 9,067,867 | ||||
Common stock issued for exercised warrants | $ 51 | 122,200 | 122,251 | |||
Common stock issued for exercised warrants, shares | 50,938 | |||||
Acquisition stock issuances, shares | 1,500,000 | |||||
Acquisition stock issuances | $ 1,500 | 10,753,500 | 10,755,000 | |||
Common stock issued for services and equipment | $ 2 | 4,198 | 4,200 | |||
Common stock issued for services and equipment, shares | 1,200 | |||||
Common stock warrant issuance | 594,034 | 594,034 | ||||
Ending balance at Dec. 31, 2021 | $ 1,400 | $ 115,437 | 382,015,310 | (11,002,466) | 371,129,681 | |
Ending balance, shares at Dec. 31, 2021 | 1,400,000 | 115,436,404 | ||||
Beginning balance at Mar. 31, 2022 | $ 1,400 | $ 116,487 | 385,426,431 | (11,240,752) | 374,303,566 | |
Beginning balance, shares at Mar. 31, 2022 | 1,400,000 | 116,485,747 | ||||
Common stock issued for cashless warrant exercise | $ 99 | (99) | ||||
Common stock issued for cashless warrant exercise, shares | 99,762 | |||||
Employee stock awards | $ 338 | 1,174,725 | 1,175,063 | |||
Employee stock awards, shares | 338,375 | |||||
Stock grants | 47,844 | 47,844 | ||||
Preferred stock dividends declared | (638,071) | (638,071) | ||||
Dividends accumulated on preferred stock | (136,061) | (136,061) | ||||
Net income (loss) | 3,253,027 | 3,253,027 | ||||
Ending balance at Jun. 30, 2022 | $ 1,400 | $ 116,924 | 386,648,901 | (8,761,857) | 378,005,368 | |
Ending balance, shares at Jun. 30, 2022 | 1,400,000 | 116,923,884 | ||||
Beginning balance at Mar. 31, 2022 | $ 1,400 | $ 116,487 | 385,426,431 | (11,240,752) | 374,303,566 | |
Beginning balance, shares at Mar. 31, 2022 | 1,400,000 | 116,485,747 | ||||
Net income (loss) | (1,653,472) | |||||
Ending balance at Dec. 31, 2022 | $ 1,400 | $ 117,894 | 390,501,876 | (15,233,633) | (290,861) | 375,096,676 |
Ending balance, shares at Dec. 31, 2022 | 1,400,000 | 117,894,417 | ||||
Beginning balance at Jun. 30, 2022 | $ 1,400 | $ 116,924 | 386,648,901 | (8,761,857) | 378,005,368 | |
Beginning balance, shares at Jun. 30, 2022 | 1,400,000 | 116,923,884 | ||||
Employee stock awards | $ 339 | 1,176,036 | 1,176,375 | |||
Employee stock awards, shares | 338,750 | |||||
Stock grants | 43,750 | 43,750 | ||||
Preferred stock dividends declared | (646,595) | (646,595) | ||||
Dividends accumulated on preferred stock | (136,044) | (136,044) | ||||
Net income (loss) | (803,507) | (803,507) | ||||
Common stock issued for exercised warrants | $ 12 | 24,230 | 24,242 | |||
Common stock issued for exercised warrants, shares | 12,121 | |||||
Ending balance at Sep. 30, 2022 | $ 1,400 | $ 117,275 | 387,892,917 | (10,348,003) | 377,663,589 | |
Ending balance, shares at Sep. 30, 2022 | 1,400,000 | 117,274,755 | ||||
Employee stock awards | $ 604 | 2,105,931 | 2,106,535 | |||
Employee stock awards, shares | 604,510 | |||||
Stock grants | 43,750 | 43,750 | ||||
Preferred stock dividends declared | (638,304) | (638,304) | ||||
Dividends accumulated on preferred stock | (144,334) | (144,334) | ||||
Net income (loss) | (4,102,992) | (4,102,992) | ||||
Common stock issued for exercised warrants | $ 165 | 31,639 | 31,804 | |||
Common stock issued for exercised warrants, shares | 165,152 | |||||
Warrants issued for services | 427,639 | 427,639 | ||||
Treasury shares purchased | (150) | (290,861) | (291,011) | |||
Common stock issued for services | 427,639 | |||||
Ending balance at Dec. 31, 2022 | $ 1,400 | $ 117,894 | $ 390,501,876 | $ (15,233,633) | $ (290,861) | $ 375,096,676 |
Ending balance, shares at Dec. 31, 2022 | 1,400,000 | 117,894,417 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net Income | $ (1,653,472) | $ 32,720,039 |
Adjustments to reconcile Net Income/(Loss) to Net Cash provided by (used in) operations: | ||
Depreciation and amortization | 12,950,972 | 12,778,103 |
Debt discount amortization | 62,440 | 18,905 |
Employee stock awards | 4,457,973 | 2,898,250 |
Stock grants | 135,344 | 197,110 |
Stock for services | 4,200 | |
Warrants issued for services | 106,909 | 148,508 |
Contingent consideration payable fair value | (45,572) | (362,753) |
Allowance for doubtful accounts | 1,327,419 | 1,097,985 |
(Gain) on disposal of assets | (12,044) | |
Reduction in right of use asset | 512,063 | 496,469 |
Deferred income taxes | 1,283,481 | 958,019 |
Changes in Current Assets and Liabilities | ||
Accounts receivable | 12,208,054 | (20,755,245) |
Due to (from) related parties | 15,000 | |
Inventories | (8,129,249) | (30,599,676) |
Prepaid expenses | 1,941,206 | 1,569,928 |
Deposits | 1,678,415 | (13,051,850) |
Accounts payable | (5,852,397) | 7,538,451 |
Accrued liabilities | (2,044,248) | 1,310,641 |
Operating lease liability | (522,917) | (514,872) |
Net cash provided by (used in) operating activities | 18,431,421 | (3,559,832) |
Cash flows from investing activities: | ||
Purchase of equipment | (10,566,182) | (50,517,840) |
Gemini acquisition | (12,868,156) | |
Proceeds from disposal of assets | 59,800 | |
Net cash used in investing activities | (10,566,182) | (63,326,196) |
Cash flow from financing activities: | ||
Payments on inventory facility, net | (825,675) | (896,287) |
Proceeds from factoring liability | 57,300,000 | 86,465,962 |
Payments on factoring liability | (56,107,221) | (84,210,284) |
Payments on note payable - related party | (507,508) | (463,192) |
Payments on insurance premium note payment | (1,916,070) | (1,922,651) |
Proceeds from construction note payable | 1,000,000 | |
Payments on construction note payable | (66,586) | |
Preferred stock dividends paid | (2,195,075) | (1,758,405) |
Common stock repurchase plan | (291,011) | |
Common stock issued for exercised warrants | 56,046 | 943,907 |
Payments on assumed debt from Gemini | (50,000,000) | |
Payments on note payable | (4,000,000) | |
Sale of preferred stock | 35,000,000 | |
Common stock issuance costs | (3,199,922) | |
Net cash used in financing activities | (3,553,100) | (24,040,872) |
Net increase/(decrease) in cash | 4,312,139 | (90,926,900) |
Cash, beginning of period | 23,281,475 | 118,341,471 |
Cash and restricted cash, end of period | 27,593,614 | 27,414,571 |
Cash paid during the period for: | ||
Interest | 433,761 | 474,454 |
Income taxes | 1,302,811 | |
Non-cash investing and financing activities: | ||
Construction note payable | 10,237,032 | |
Insurance premium note payment | 2,035,519 | 2,166,852 |
Dividends accumulated on preferred stock | 144,334 | 144,561 |
Operating lease liability | 901,076 | 501,125 |
Warrants issued for services | 427,639 | 387,968 |
Acquisition stock issuances | 143,400,000 | |
Warrants issued for services | $ 594,034 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITY | 9 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITY | NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY We were formed under the name Retrospettiva, Inc. in November 1990 to manufacture and import textile products, including both finished garments and fabrics. We were inactive until the following series of events in December 2016 and March 2017. On December 15, 2016, the Company’s majority shareholders sold their common stock to Mr. Fred W. Wagenhals (“Mr. Wagenhals”) resulting in a change in control of the Company. Mr. Wagenhals was appointed as sole officer and the sole member of the Company’s Board of Directors. The Company also approved (i) doing business in the name AMMO, Inc., (ii) a change to the Company’s OTC trading symbol to POWW, (iii) an agreement and plan of merger to re-domicile and change the Company’s state of incorporation from California to Delaware, and (iv) a 1-for-25 On March 17, 2017, the Company entered into a definitive agreement with AMMO, Inc. a Delaware Corporation (PRIVCO) under which the Company acquired all of the outstanding shares of common stock of (PRIVCO). (PRIVCO) subsequently changes its name to AMMO Munitions, Inc. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Basis The accompanying unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. Additionally, these condensed consolidated financial statements and related disclosures are presented pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures contained in the Company’s Annual Report filed with the SEC on Form 10-K for the year ended March 31, 2022. The results for the three and nine month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine month periods ended December 31, 2022 and 2021, (b) the financial position at December 31, 2022, and (c) cash flows for the nine month periods ended December 31, 2022 and 2021. We use the accrual basis of accounting and U.S. GAAP and all amounts are expressed in U.S. dollars. The Company has a fiscal year-end of March 31 st Unless the context otherwise requires, all references to “Ammo”, “we”, “us”, “our,” or the “Company” are to AMMO, Inc., a Delaware corporation, and its consolidated subsidiaries. Principles of Consolidation The condensed consolidated financial statements include the accounts of AMMO, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the condensed consolidated financial statements include the valuation of allowances for doubtful accounts, valuation of deferred tax assets, inventories, useful lives of assets, goodwill, intangible assets, stock-based compensation and warrant-based compensation. Goodwill We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. In testing for goodwill impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. Due to the declines in the value of our stock price and market capitalization, we assessed qualitative factors to determine if it is more likely than not that the fair value of the Marketplace segment is less than its carrying amount. Through our analysis we determined our stock price and market capitalization decline it is not indicative of a decrease in the the fair value of our Marketplace segment and a fair value calculation using the discounted cash flows was more appropriate due to the operational performance of the reporting segment. Accordingly, the impairment of Goodwill was not warranted for the three and nine months ended December 31, 2022. As of December 31, 2022, the Company has a goodwill carrying value of $ 90,870,094 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable represents amounts due from customers for products sold and include an allowance for uncollectible accounts which is estimated based on the aging of the accounts receivable and specific identification of uncollectible accounts. At December 31, 2022 and March 31, 2022, we reserved $ 4,382,671 3,055,252 Restricted Cash We consider cash to be restricted when withdrawal or general use is legally restricted. Our restricted cash balance is comprised of cash on deposit with banks to secure the Construction Note Payable as discussed in Note 10. We report restricted cash in the Consolidated Balance Sheets as current or non-current classification based on the expected duration of the restriction. License Agreements We are a party to a license agreement with Jesse James, a well-known motorcycle designer, and Jesse James Firearms, LLC, a Texas limited liability company. The license agreement grants us the exclusive worldwide rights through April 12, 2026 to Mr. James’ image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of Jesse James Branded Products. We agreed to pay Mr. James royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. Patents On September 28, 2017, AMMO Technologies Inc. (“ATI”), an Arizona corporation, which is 100% owned by us, merged with Hallam, Inc, a Texas corporation, with ATI being the survivor. The primary asset of Hallam, Inc. was an exclusive license to produce projectiles and ammunition using the Hybrid Luminescence Ammunition Technology under patent U.S. 8,402,896 B1 with a publication date of March 26, 2013 owned by the University of Louisiana at Lafayette. The license was formally amended and assigned to AMMO Technologies Inc. pursuant to an Assignment and First Amendment to Exclusive License Agreement. Assumption Agreement dated to be effective as of August 22, 2017, the Merger closing date. This asset will be amortized from September 2017, the first full month of the acquired rights, through October 29, 2028. Under the terms of the Exclusive License Agreement, the Company is obligated to pay a quarterly royalty to the patent holder, based on a $ 0.01 89,340 18,558 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On October 5, 2018, we completed the acquisition of SW Kenetics Inc. ATI succeeded all of the assets of SW Kenetics, Inc. and assumed all of the liabilities. The primary asset of SW Kenetics Inc. was a pending patent for modular projectiles. All rights to patent pending application were assigned and transferred to AMMO Technologies, Inc. pursuant to Intellectual Property Rights Agreement on September 27, 2018. We intend to continue building our patent portfolio to protect our proprietary technologies and processes, and will file new applications where appropriate to preserve our rights to manufacture and sell our branded lines of ammunition. Other Intangible Assets On March 15, 2019, Enlight Group II, LLC d/b/a Jagemann Munition Components, a wholly owned subsidiary of AMMO, Inc., completed its acquisition of assets of Jagemann Stamping Company’s ammunition casing manufacturing and sales operations pursuant to the terms of the Amended and Restated Asset Purchase Agreement. The intangible assets acquired include a tradename, customer relationships, and intellectual property. On April 30, 2021, we entered into an agreement and plan of merger (the “Merger Agreement”), by and among the Company, SpeedLight Group I, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company and Gemini Direct Investments, LLC, a Nevada limited liability company. Whereby SpeedLight Group I, LLC merged with and into Gemini Direct Investments, LLC, with SpeedLight Group I, LLC surviving the merger as a wholly owned subsidiary of the Company. At the time of the Merger, Gemini Direct Investments, LLC had nine (9) subsidiaries, all of which are related to Gemini’s ownership of Gunbroker.com, an online auction marketplace dedicated to firearms, hunting, shooting, and related products. The intangible assets acquired include a tradename, customer relationships, intellectual property, software and domain names. Impairment of Long-Lived Assets We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. No Revenue Recognition We generate revenue from the production and sale of ammunition, ammunition casings, and marketplace fee revenue, which includes auction revenue, payment processing revenue, and shipping income. We recognize revenue according to Accounting Standard Codification – Revenue from Contract with Customers (“ASC 606”). When the customer obtains control over the promised goods or services, we record revenue in the amount of consideration that we can expect to receive in exchange for those goods and services. We apply the following five-step model to determine revenue recognition: ● Identification of a contract with a customer ● Identification of the performance obligations in the contact ● Determination of the transaction price ● Allocation of the transaction price to the separate performance allocation ● Recognition of revenue when performance obligations are satisfied AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS We only apply the five-step model when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. For Ammunition Sales and Casing Sales, our contracts contain a single performance obligation and the entire transaction price is allocated to the single performance obligation. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Accordingly, we recognize revenues (net) when the customer obtains control of our product, which typically occurs upon shipment of the product or the performance of the service. In the year ended March 31, 2021, we began accepting contract liabilities or deferred revenue. We included Deferred Revenue in our Accrued Liabilities. We will recognize revenue when the performance obligation is met. For Marketplace revenue, the performance obligation is satisfied, and revenue is recognized as follows: Auction revenue consists of optional listing fees with variable pricing components based on customer options selected from the GunBroker website and final value fees based on a percentage of the final selling price of the listed item. The performance obligation is to process the transactions as initiated by the customer. Revenue is recognized at a point in time when the transaction is processed. Payment processing revenue consists of fees charged to customers on a transactional basis. The performance obligation is to process the transactions as initiated by the customer. The price is set by the GunBroker user agreement on the website based on stand-alone selling prices. Revenue is recognized at a point in time when the transaction is processed. Shipping income consists of fees charged to customers for shipping of sold items listed on the GunBroker website. The performance obligation is to ship the item sold as initiated by the customer. The price is set based on the third-party service provider selected to be used by the customer as well as the speed and location of shipment. Revenue is recognized at a point in time when the shipping label is printed. Banner Advertising Campaign Revenue consists of fees charged to customers for advertisement placement and impressions generated through the GunBroker website. The performance obligation is to generate the number of impressions specified by the customer on banner advertisements on the GunBroker website using the placement selected by the customer. The price is set by the GunBroker user agreement on the website based on standalone selling prices, or by advertising insertion order as negotiated by media broker. If the number of impressions promised is not generated, the customer receives a refund and the refund is applied to the transaction price. Banner advertising campaigns generally run for one month, and revenue is recognized at a point in time at the end of the selected month. Product Sales consists of fees charged for the liquidation of excess inventory for partner distributors. The performance obligation is to sell and ship the inventory item as initiated by the customer. The price depends on whether the inventory is a fixed price item or an auction item. For a fixed price item, the Company performs research to determine the current market rate for such an item, and the item is listed at that price. For an auction item, the price is set by what the buyer is willing to pay. The Company acts as a principal in these transactions due to the extent of control they have over the product prior to the sale. Due to the principal determination, gross revenue is recognized at a point in time when the item has been shipped. Identity Verification consists of fees charged to customers for identity verification in order to gain access to the GunBroker website. The performance obligation is to process the identity verification as initiated by the customer. The price is set by the GunBroker user agreement on the website based on a stand-alone selling price. Revenue is recognized at a point in time when the identity verification is completed. For the three and nine months ended December 31, 2022, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: SCHEDULE OF CONCENTRATION OF RISKS Revenues at Accounts Receivable PERCENTAGES Three Months Nine Months Ended December 31, March 31, Customers: A 12.5 % - 18.4 % 11.8 % 12.5 % - 18.4 % 11.8 % Disaggregated Revenue Information The following table represent a disaggregation of revenue from customers by category. We attribute net sales to categories by product or services types; ammunition, ammunition casings, and marketplace fees. We note that revenue recognition processes are consistent between product and service type, however, the amount, timing and uncertainty of revenue and cash flows may vary by each product type due to the customers of each product and service type. SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT For the Three Months Ended For the Nine Months Ended December 31, December 31, 2021 December 31, 2022 December 31, 2021 Ammunition Sales $ 20,250,965 $ 44,069,473 $ 90,607,817 $ 112,629,655 Marketplace fee revenue 15,419,202 17,596,769 46,486,842 46,646,051 Ammunition Casings Sales 3,041,327 3,022,944 10,661,420 10,891,897 Total Sales $ 38,711,494 $ 64,689,186 $ 147,756,079 $ 170,167,603 Ammunition products are sold through “Big Box” retailers, manufacturers, local ammunition stores, and shooting range operators. We also sell directly to customers online. In contrast, our ammunition casings products are sold to manufacturers. Marketplace fees are generated through our GunBroker.com online auction marketplace. Advertising Costs We expense advertising costs as they are incurred in selling and marketing expenses of operating expenses. Marketplace advertising costs are expenses as they are incurred in cost of revenues. We incurred advertising expenses of $ 912,959 448,367 243,246 193,752 Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash, accounts receivable, accounts payable, amounts due to related parties, factoring liability, and the construction note payable. Fair values were assumed to approximate carrying values because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Inventories We state inventories at the lower of cost or net realizable value. We determine cost using the average cost method. Our inventory consists of raw materials, work in progress, and finished goods. Cost of inventory includes cost of parts, labor, quality control, and all other costs incurred to bring our inventories to condition ready to be sold. We periodically evaluate and adjust inventories for obsolescence. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Property and Equipment We state property and equipment at cost, less accumulated depreciation. We capitalize major renewals and improvements, while we charge minor replacements, maintenance, and repairs to current operations. We compute depreciation by applying the straight-line method over estimated useful lives, which are generally five to ten years. Compensated Absences We accrue a liability for compensated absences in accordance with Accounting Standards Codification 710 – Compensation – General (“ASC 710”) . Research and Development To date, we have expensed all costs associated with developing our product specifications, manufacturing procedures, and products through our cost of products sold, as this work was done by the same employees who produced the finished product. We anticipate that it may become necessary to reclassify research and development costs into our operating expenditures for reporting purposes as we begin to develop new technologies and lines of ammunition. Stock-Based Compensation We account for stock-based compensation at fair value in accordance with Accounting Standards Codification 718 – Compensation – Stock Compensation (“ASC 718”). Which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors. Stock-based compensation is recognized on a straight line basis over the vesting periods and forfeitures are recognized in the periods they occur. There were 604,510 1,281,635 Concentrations of Credit Risk Accounts at banks are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 Income Taxes We file federal and state income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with Accounting Standards Codification 740 – Income Taxes (“ASC 740”). The provision for income taxes includes federal, state, and local income taxes currently payable, and deferred taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable amounts in years in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In accordance with ASC 740, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained. We measure recognized income tax positions at the largest amount that is greater than 50% likely of being realized Excise Tax As a result of regulations imposed by the Federal Government for sales of ammunition to non-government U.S. entities, we charge and collect an 11 7.8 10.3 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Contingencies Certain conditions may exist as of the date the condensed consolidated financial statements are issued that may result in a loss to us but will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims and the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is reasonably estimated, the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of range of possible loss if determinable and material, would be disclosed. On September 24, 2019, the Company received notice that a former employee that had voluntarily terminated filed a complaint against the Company, and certain individuals, with the U.S. Department of Labor (“DOL”). The Complaint in alleges that the individual reported potential violations of SEC rules and regulations by management and that as a result of such disclosures, the individual experienced a hostile work environment; that the Company lacks sufficient internal controls, and that the individual was the victim of retaliation and constructive discharge after being removed as a director by majority vote of the shareholders. The claims were investigated by a newly appointed Special Investigative Committee made up of independent directors represented by special independent legal counsel. The Special Investigative Committee and legal counsel found the material claims were unsubstantiated, including those concerning alleged SEC violations, and recommended enhancements to certain corporate governance charter documents and processes which the Company promptly implemented. The Parties participated in a successful mediation at the end of June 2022 and all matters relating to this former employee/claimant were confidentially resolved with the lawsuit dismissed with prejudice (Order pending). The settlement was covered by our Employment Practices Liability Policy and did not amount to a material amount. On February 10, 2022, AMMO filed a Texas state court complaint against Expansion Industries pursing eight (8) claims in pursuit of recovery of AMMO’s in primer acquisition deposit monies (i.e., Breach of Contract, Common Law Fraud, Violations of Texas Theft Liability Act, Conversion, Negligent Misrepresentation, Unjust Enrichment, Money Had and Received and Constructive Trust). AMMO has since moved aggressively to further the process, including successfully garnishing a portion of the deposit monies in Expansion bank accounts, filing a Motion for Summary Judgement, continuing to pursue written discovery, and amending the Complaint to add Expansion principal as an individual party. The putative primer manufacturer settled the two related lawsuits in September 2022 by repaying all deposit monies due AMMO, in addition to payment of principally all fees and costs incurred by the Company in pursuit of the resolution. The principal lawsuit and AMMO’s garnishment action adverse the defendant were dismissed with prejudice. Along with countless other suppliers of Remington Outdoors, AMMO was served with an avoidance claim lawsuit by the bankruptcy trustee. AMMO presented substantial “ordinary course” defense evidence to the Trustee and the case was settled for a nominal sum in September 2022, with the lawsuit dismissed with prejudice. AMMO is defending two contract arbitration cases involving adverse former employees that are presently in discovery, one involving an employee terminated for cause and the second action involving a termination without cause wherein the former employee is seeking contract wages, commissions and allegedly earned common stock. The Company also received notice in October that an OSHA whistleblower complaint had been filed with the US Department of Labor by an employee that had been terminated for cause. The regulatory filing was received after AMMO refused to capitulate to the former employee’s demands. AMMO has produced documents and submitted its position statement to OSHA and the matter is currently pending at the agency level. There were no other known contingencies at December 31, 2022. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 9 Months Ended |
Dec. 31, 2022 | |
Net Income/(Loss) per share | |
INCOME PER COMMON SHARE | NOTE 3 – INCOME PER COMMON SHARE We calculate basic income per share using the weighted-average number of shares of common stock outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities, such as outstanding options and warrants. We use the treasury stock method, in the determination of dilutive shares outstanding during each reporting period. We have issued warrants to purchase 2,781,482 389,544 1,070,694 536,311 150,000 5,281 19,095 SCHEDULE OF INCOME (LOSS) PER COMMON SHARE 2022 2021 2022 2021 For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 Numerator: Net income/(loss) $ (4,102,992 ) $ 9,067,867 $ (1,653,472 ) $ 32,720,039 Less: Preferred stock dividends (782,639 ) (782,582 ) (2,339,409 ) (1,902,966 ) Net income/(loss) attributable to common stockholders $ (4,885,631 ) $ 8,285,285 $ (3,992,881 ) $ 30,817,073 Denominator: Weighted average shares of common stock – Basic 117,348,511 114,757,014 116,950,013 111,289,024 Effect of dilutive common stock purchase warrants - 1,835,395 - 1,934,172 Effect of dilutive equity incentive awards - 125,091 - 127,802 Weighted average shares of common stock - Diluted 117,348,511 116,717,500 116,950,013 113,350,998 Basic earnings per share: Income/(loss) per share attributable to common stockholders – basic $ (0.04 ) $ 0.07 $ (0.03 ) $ 0.28 Diluted earnings per share: Income/(loss) per share attributable to common stockholders – diluted $ (0.04 ) $ 0.07 $ (0.03 ) $ 0.27 (1) Weighted average of contingently issuable shares measured from the effective date of merger, April 30, 2021 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES At December 31, 2022 and March 31, 2022, the inventory balances are composed of: SCHEDULE OF INVENTORIES December 31, 2022 March 31, 2022 Finished product $ 20,760,747 $ 6,167,318 Raw materials 31,387,096 33,924,813 Work in process 14,997,558 18,924,021 Inventory net $ 67,145,401 $ 59,016,152 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT We state equipment at historical cost less accumulated depreciation. We compute depreciation using the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which are generally five ten years We capitalize additions and expenditures for improving or rebuilding existing assets that extend the useful life. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Property and Equipment consisted of the following at December 31, 2022 and March 31, 2022: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2022 March 31, 2022 Building $ 28,113,684 $ - Construction in progress 1,834,688 14,335,371 Leasehold Improvements 257,009 257,009 Furniture and Fixtures 368,359 343,014 Vehicles 153,254 153,254 Equipment 37,689,716 32,524,850 Tooling 143,710 143,710 Total property and equipment $ 68,560,420 $ 47,757,208 Less accumulated depreciation (13,270,092 ) (10,119,402 ) Net property and equipment $ 55,290,328 $ 37,637,806 Depreciation Expense for the three and nine months ended December 31, 2022 totaled $ 1,089,243 3,150,691 1,087,550 3,184,976 |
FACTORING LIABILITY
FACTORING LIABILITY | 9 Months Ended |
Dec. 31, 2022 | |
Factoring Liability | |
FACTORING LIABILITY | NOTE 6 – FACTORING LIABILITY On July 1, 2019, we entered into a Factoring and Security Agreement with Factors Southwest, LLC (“FSW”). FSW may purchase from time to time the Company’s Accounts Receivables with recourse on an account by account basis. The twenty-four month agreement contains a maximum advance amount of $ 5,000,000 85% 4.5% 3% 150,000 1,678,450 42,286 111,220 37,500 103,876 216,242 37,500 On June 17, 2021, this agreement was amended which extended the maturity date to June 17, 2023 |
INVENTORY CREDIT FACILITY
INVENTORY CREDIT FACILITY | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Credit Facility | |
INVENTORY CREDIT FACILITY | NOTE 7 – INVENTORY CREDIT FACILITY On June 17, 2020, we entered into a Revolving Inventory Loan and Security Agreement with FSW. FSW will establish a revolving credit line, and make loans from time to time to the Company for the purpose of providing capital. The twenty-four month agreement secured by our inventory, among other assets, contains a maximum loan amount of $ 1,750,000 an annualized interest rate of the greater of the three-month LIBOR rate plus 3.09% or 8% 2% 35,000 2,250,000 6,580 24,256 8,561 |
LEASES
LEASES | 9 Months Ended |
Dec. 31, 2022 | |
Leases | |
LEASES | NOTE 8 – LEASES We lease office, manufacturing, and warehouse space in Scottsdale, AZ, Atlanta and Marietta, GA, and Manitowoc, WI under contracts we classify as operating leases. None of our leases are financing leases. The Scottsdale lease does not include a renewal option. In August of 2021 we extended the lease of our Atlanta offices through May of 2027, accordingly we increased our Right of Use Assets and Operating Lease Liabilities by $ 501,125 308,326 901,076 As of December 31, 2022 and March 31, 2022, total Right of Use Assets were $ 1,378,711 2,791,850 1,498,787 2,922,780 518,778 831,429 980,009 1,498,787 2,091,351 2,922,780 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The weighted average remaining lease term and weighted average discount rate for operating leases were 3.4 10.0% Future minimum lease payments under non-cancellable leases as of December 31, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES Years Ended March 31, 2023 (1) $ 160,757 2024 583,768 2025 387,214 2026 351,962 2027 257,508 Thereafter 43,516 Total Lease Payments 1,784,725 Less: Amount Representing Interest (285,938 ) Present value of lease liabilities $ 1,498,787 (1) This amount represents future lease payments for the remaining three months of fiscal year 2023. It does not include any lease payments for the nine months ended December 31, 2022. |
NOTES PAYABLE _ RELATED PARTY
NOTES PAYABLE – RELATED PARTY | 9 Months Ended |
Dec. 31, 2022 | |
Notes Payable Related Party | |
NOTES PAYABLE – RELATED PARTY | NOTE 9 – NOTES PAYABLE – RELATED PARTY For the three and nine months ended December 31, 2022, the Company made $ 173,134 507,507 12,753 41,450 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
CONSTRUCTION NOTE PAYABLE
CONSTRUCTION NOTE PAYABLE | 9 Months Ended |
Dec. 31, 2022 | |
Construction Note Payable | |
CONSTRUCTION NOTE PAYABLE | NOTE 10 – CONSTRUCTION NOTE PAYABLE On October 14, 2021, we entered into a Construction Loan Agreement (the “Loan Agreement”) with Hiawatha National Bank (“Hiawatha”). The Loan Agreement specifies that Hiawatha may lend up to $ 11,625,000 160,000 329,843 Additionally, on October 14, 2021, we issued a Promissory Note in favor of Hiawatha (the “Note”) in the amount of up to $ 11,625,000 4.5% October 14, 2026 We can prepay the Note in whole or in part starting in July 2022 with a prepayment premium of one percent ( 1% The Loan Agreement contains customary events of default including, but not limited to, a failure to make any payments pursuant to the Loan Agreement or Note, a failure to complete construction of the project, a lien of $100,000 or more against the property, or a transfer of the property without Hiawatha’s consent. Upon the occurrence of an event of default, among other remedies, the amounts due pursuant to the Loan can be accelerated, Hiawatha can foreclose on the property pursuant to the mortgage, and a late charge of five percent (5%) of the amount due will be owed with all amounts then owed pursuant to the Note bearing interest at an increased rate For the nine months ended December 31, 2022, approximately $ 11.2 1.0 66,585 500,000 |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
CAPITAL STOCK | NOTE 11 – CAPITAL STOCK Our authorized capital consists of 200,000,000 0.001 During the nine month period ended December 31, 2022, we issued 1,558,670 ● 99,762 100,000 ● 177,273 56,046 ● 1,281,635 4,457,973 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2022, outstanding and exercisable stock purchase warrants consisted of the following: SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS Number of Weighted Weighted Average Life Remaining Outstanding at March 31, 2022 2,933,755 $ 2.32 2.29 Granted 150,000 0.01 - Exercised (277,273 ) 0.21 - Forfeited or cancelled (25,000 ) 2.00 - Outstanding at December 31, 2022 2,781,482 $ 2.41 1.60 Exercisable at December 31, 2022 2,781,482 $ 2.41 1.60 As of December 31, 2022, we had 2,781,482 Each warrant provides the holder the right to purchase up to one share of our Common Stock at a predetermined exercise price. The outstanding warrants consist of (1) warrants to purchase 911 1.65 1,769,294 2.00 474,966 2.40 386,311 2.63 150,000 6.72 During the three months ended December 31, 2022, the Company issued 150,000 150,000 0.01 150,000 427,639 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
PREFERRED STOCK
PREFERRED STOCK | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
PREFERRED STOCK | NOTE 12 – PREFERRED STOCK On May 18, 2021, the Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware to establish the preferences, voting powers, limitations as to dividends or other distributions, qualifications, terms and conditions of redemption and other terms and conditions of the Series A Preferred Stock. The Company will pay cumulative cash dividends on the Series A Preferred Stock when, as and if declared by its board of directors (or a duly authorized committee of its board of directors), only out of funds legally available for payment of dividends. Dividends on the Series A Preferred Stock will accrue on the stated amount of $ 25.00 8.75% 2.1875 payable quarterly in arrears on March 15, June 15, September 15 and December 15 Generally, the Series A Preferred Stock is not redeemable by the Company prior to May 18, 2026. However, upon a change of control or delisting event (each as defined in the Certificate of Designations), the Company will have a special option to redeem the Series A Preferred Stock for a limited period of time. Preferred dividends accumulated as of December 31, 2022 were $ 144,334 0.5529514 774,132 0.55902778 782,639 0.559027777777778 782,639 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
ACQUISITION
ACQUISITION | 9 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 13 – ACQUISITION Gemini Direct Investments, LLC On April 30, 2021 (the “Effective Date”) we entered into an agreement and plan of merger (the “Merger Agreement”), by and among the Company, SpeedLight Group I, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Sub”), Gemini Direct Investments, LLC, a Nevada limited liability company (“Gemini”), and Steven F. Urvan, an individual (the “Seller”), whereby Sub merged with and into Gemini, with Sub surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). At the time of the Merger, Gemini had nine (9) subsidiaries, all of which are related to Gemini’s ownership of the GunBroker.com business. GunBroker.com is an on-line auction marketplace dedicated to firearms, hunting, shooting, and related products. The Merger was completed on the Effective Date. In consideration of the Merger, on the terms and subject to the conditions set forth in the Merger Agreement, on the Effective Date, (i) the Company assumed and repaid an aggregate amount of indebtedness of Gemini and its subsidiaries equal to $ 50,000,000 50,000,000 20,000,000 0.001 In connection with the Merger Agreement, the Company and the Seller agreed that the Stock Consideration consisted of: (a) 14,500,000 4,000,000 1,500,000 The total estimated consideration consisted of cash payment of $ 50,000,000 1,350,046 2,000,000 50,000,000 10,755,000 1,500,000 18,500,000 7.17 Pursuant to the Merger Agreement, the Company completed a Post-Closing Adjustment following the close of the Merger equal to the Closing Working Capital minus the Estimated Working Capital at closing of the Merger. Accordingly, the Company received a cash payment of $ 129,114 2,000,000 1,870,886 In accordance with the acquisition method of accounting for business combinations, the assets acquired, and the liabilities assumed have been recorded at their respective fair values. The consideration in excess of the fair values of assets acquired, and liabilities assumed are recorded as goodwill. The fair value of the consideration transferred was valued as of the date of the acquisition as follows: SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED Cash $ 48,649,954 Working capital adjustment 1,870,886 Contingent consideration 10,755,000 Common stock 132,645,000 Assumed debt 50,000,000 Fair value of consideration transferred $ 243,920,840 The allocation for the consideration recorded for the acquisition is as follows: SCHEDULE OF ALLOCATION FOR CONSIDERATION Accounts receivable, net $ 17,002,362 Prepaid expenses 478,963 Equipment 1,051,980 Deposits 703,389 Other Intangible assets (1) 146,617,380 Goodwill (1) 90,870,094 Right of use assets – operating leases 612,727 Accounts payable (12,514,919 ) Accrued expenses (196,780 ) Operating lease liability (704,356 ) Total Consideration $ 243,920,840 (1) Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. Unaudited Pro Forma Results of Operations This pro forma results of operations gives effect to the acquisition as if it had occurred April 1, 2021. Material pro forma adjustments include the removal of approximately $ 1.8 0.9 SCHEDULE OF UNAUDITED PRO FORMA RESULTS OF OPERATIONS INCOME STATEMENT DATA For the Nine Months Net revenues $ 178,213,024 Net income $ 37,266,527 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 14 – GOODWILL AND INTANGIBLE ASSETS During our fiscal year ended March 31, 2022, we recorded $ 90,870,094 Amortization expenses related to our intangible assets for the three and nine months ended December 31, 2022 were $ 3,266,761 9,800,281 3,535,805 9,593,127 SCHEDULE OF INTANGIBLE ASSETS December 31, 2022 Life Licenses Patent Other Licensing Agreement – Jesse James 5 $ 125,000 $ - $ - Licensing Agreement – Jeff Rann 5 125,000 - - Streak Visual Ammunition patent 11.2 - 950,000 - SWK patent acquisition 15 - 6,124,005 - Jagemann Munition Components: Customer Relationships 3 - - 1,450,613 Intellectual Property 3 - - 1,543,548 Tradename 5 - - 2,152,076 GDI Acquisition: Tradename 15 - - 76,532,389 Customer List 10 - - 65,252,802 Intellectual Property 10 - - 4,224,442 Other Intangible Assets 5 - - 607,747 250,000 7,074,005 151,763,617 Accumulated amortization – Licensing Agreements (250,000 ) - - Accumulated amortization – Patents - (1,917,885 ) - Accumulated amortization – Intangible Assets - - (24,893,412 ) $ - $ 5,156,120 $ 126,870,205 Annual amortization of intangible assets for the next five fiscal years are as follows: SCHEDULE OF ANNUAL AMORTIZATION OF INTANGIBLE ASSET Years Ended March 31, Estimates for 2023 (1) $ 3,294,934 2024 13,074,489 2025 12,664,775 2026 12,664,775 2027 12,553,355 Thereafter 77,773,997 Annual amortization of intangible assets $ 132,026,325 (1) This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the nine months ended December 31, 2022. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
SEGMENTS
SEGMENTS | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 15 – SEGMENTS On April 30, 2021, we entered into an agreement and plan of merger with Gemini, which, along with its subsidiaries, engages primarily in the operation of an online marketplace dedicated to firearms, hunting, shooting and related products, which created a second reportable segment. Our Chief Executive Officer reviews financial performance based on our two operating segments as follows: ● Ammunition – which consists of our manufacturing business. The Ammunition segment engages in the design, production and marketing of ammunition and ammunition component products. ● Marketplace – which consists of the GunBroker.com marketplace. In its role as an auction site, GunBroker.com supports the lawful sale of firearms, ammunition and hunting/shooting accessories. In the current period, we began the reporting of the separate allocation of certain corporate general and administrative expenses including non-cash stock compensation expense, as such we have updated the prior period disclosure herein. The following tables set forth certain financial information utilized by management to evaluate our operating segments for the interim period presented: SCHEDULE OF OPERATING SEGMENTS Ammunition Marketplace Corporate Total For the Three Months Ended December 31, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 23,292,292 $ 15,419,202 $ - $ 38,711,494 Cost of Revenues 23,865,275 2,319,040 - 26,184,315 General and administrative expense 4,838,081 1,719,707 6,993,592 13,551,380 Depreciation and amortization 143,378 3,165,696 - 3,309,074 Income/(Loss) from Operations $ (5,554,442 ) $ 8,214,759 $ (6,993,592 ) $ (4,333,275 ) Ammunition Marketplace Corporate Total For the Nine Months Ended December 31, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 101,269,237 $ 46,486,842 $ - $ 147,756,079 Cost of Revenues 97,555,732 6,701,797 - 104,257,529 General and administrative expense 12,117,828 6,713,561 14,490,456 33,321,845 Depreciation and amortization 437,694 9,513,058 - 9,950,752 Income/(Loss) from Operations $ (8,842,017 ) $ 23,558,426 $ (14,490,456 ) $ 225,953 Ammunition Marketplace Corporate and other expenses Total For the Three Months Ended December 31, 2021 Ammunition Marketplace Corporate and other expenses Total Net Revenues $ 47,092,417 $ 17,596,769 $ - $ 64,689,186 Cost of Revenues 39,904,811 2,261,509 - 42,166,320 General and administrative expense 3,941,639 2,251,146 1,994,339 8,187,124 Depreciation and amortization 420,077 3,305,844 - 3,725,921 Income/(loss) from Operations $ 2,825,890 $ 9,778,270 $ (1,994,339 ) $ 10,609,821 Ammunition Marketplace Corporate and other expenses Total For the Nine Months Ended December 31, 2021 Ammunition Marketplace Corporate and other expenses Total Net Revenues $ 123,521,552 $ 46,646,051 $ - $ 170,167,603 Cost of Revenues 96,203,542 6,254,233 - 102,457,775 General and administrative expense 10,068,430 5,400,925 7,676,826 23,146,181 Depreciation and amortization 1,260,064 8,784,930 - 10,044,994 Income/(Loss) from Operations $ 15,989,516 $ 26,205,963 $ (7,676,826 ) $ 34,518,653 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 – INCOME TAXES The income tax provision effective tax rates were 14.9% 482.1% 13.0% 4.0% The Company has never had an Internal Revenue Service audit; therefore, the tax periods ended December 31, 2016, December 31, 2017, and March 31, 2018, 2019, 2020, 2021, and 2022 are subject to audit. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 – RELATED PARTY TRANSACTIONS Through our acquisition of Gemini, a related party relationship was created through one of our Members of the Board of Directors by ownership of entities that transacts with Gemini. Our Accounts Receivable consisted of $ 182,344 222,300 30,000 105,000 During the nine months ended December 31, 2022, we paid $ 211,712 45,000 129,705 Settlement Agreement On November 3, 2022, AMMO, Inc. (the “Company”) entered into a Settlement Agreement (the “Settlement Agreement”) with Steven F. Urvan and Susan T. Lokey (collectively with each of their respective affiliates and associates, the “Urvan Group”). Pursuant to the Settlement Agreement, the Urvan Group has agreed to withdraw its notice of stockholder nomination of its seven director candidates (the “Urvan Candidates”) and its demand to inspect books and records, pursuant to Section 220 of the General Corporation Law of the State of Delaware, and the Company agreed to immediately increase the size of the Board from seven to nine directors and appoint Christos Tsentas and Wayne Walker (each, a “New Director” and the New Directors together with Mr. Urvan, the “Urvan Group Directors”) to the Board to serve as directors with terms expiring at the 2022 annual meeting of stockholders (the “2022 Annual Meeting”). The Company will include the Urvan Group Directors in its director candidates slate for the 2022 Annual Meeting and any subsequent annual meeting of stockholders of the Company occurring prior to the Termination Date (as defined below). The Company has agreed to not increase the size of the Board above nine directors prior to the Termination Date unless the increase is approved by at least seven directors. Mr. Wagenhals will continue to serve as a director and Chairman of the Board. Unless otherwise mutually agreed to in writing by each party, the Settlement Agreement will remain in effect until the date that is the earlier of (i) 30 days prior to the earlier of (A) the deadline set forth in the notice requirements of Federal “Universal Proxy Rules” promulgated under Rule 14a-19(a) and Rule 14a-19(b) under the Securities Exchange Act of 1934, as amended (the “UPR Deadline”) relating to the Company’s 2023 annual meeting of stockholders (the “2023 Annual Meeting”) and (B) any deadline that may be set forth in the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate”) or Bylaws (the “Bylaws”) following the execution of the Settlement Agreement relating to the nomination of director candidates for election to the Board at the 2023 Annual Meeting, and (ii) 90 days prior to the first anniversary of the 2022 Annual Meeting (such date, the “Termination Date”). However, if the Company notifies Mr. Urvan in writing at least 15 days prior to such Termination Date that the Board irrevocably offers to re-nominate the Urvan Group Directors for election at the 2023 Annual Meeting and Mr. Urvan accepts such offer within 15 days of receipt of such notice, the Termination Date will be automatically extended until the earlier of (i) 30 days prior to the earlier of (A) the UPR Deadline relating to the Company’s 2024 annual meeting of stockholders (the “2024 Annual Meeting”) and (B) any deadline that may be set forth in the Certificate or the Bylaws following execution of the Settlement Agreement relating to the nomination of director candidates for election to the Board at the 2024 Annual Meeting, and (ii) 90 days prior to the first anniversary of the 2023 Annual Meeting. Notwithstanding the foregoing, the “Termination Date” shall not occur prior to 20 days after Mr. Urvan’s departure from the Board. Pursuant to the Settlement Agreement, the Company will suspend the previously announced separation of Company into Action Outdoor Sports, Inc. and Outdoor Online, Inc., pending the further evaluation of strategic options by the Board. The Company paid approximately $ 500,000 125,000 437,500 110,000 385,000 The foregoing summary of the Settlement Agreement does not purport to be complete and is subject to, and qualified in its entirety, by reference to the full text of the Settlement Agreement, a copy of which was previously filed as Exhibit 10.1 in the Form 8-K filed with the SEC on November 7, 2022, and incorporated herein by reference. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Common Stock Issuances Subsequent to the December 31, 2022, the Company issued 22,730 45,460 25,000 87,500 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounting Basis | Accounting Basis The accompanying unaudited condensed consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. Additionally, these condensed consolidated financial statements and related disclosures are presented pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures contained in the Company’s Annual Report filed with the SEC on Form 10-K for the year ended March 31, 2022. The results for the three and nine month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine month periods ended December 31, 2022 and 2021, (b) the financial position at December 31, 2022, and (c) cash flows for the nine month periods ended December 31, 2022 and 2021. We use the accrual basis of accounting and U.S. GAAP and all amounts are expressed in U.S. dollars. The Company has a fiscal year-end of March 31 st Unless the context otherwise requires, all references to “Ammo”, “we”, “us”, “our,” or the “Company” are to AMMO, Inc., a Delaware corporation, and its consolidated subsidiaries. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of AMMO, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the condensed consolidated financial statements include the valuation of allowances for doubtful accounts, valuation of deferred tax assets, inventories, useful lives of assets, goodwill, intangible assets, stock-based compensation and warrant-based compensation. |
Goodwill | Goodwill We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. In testing for goodwill impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. Due to the declines in the value of our stock price and market capitalization, we assessed qualitative factors to determine if it is more likely than not that the fair value of the Marketplace segment is less than its carrying amount. Through our analysis we determined our stock price and market capitalization decline it is not indicative of a decrease in the the fair value of our Marketplace segment and a fair value calculation using the discounted cash flows was more appropriate due to the operational performance of the reporting segment. Accordingly, the impairment of Goodwill was not warranted for the three and nine months ended December 31, 2022. As of December 31, 2022, the Company has a goodwill carrying value of $ 90,870,094 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable represents amounts due from customers for products sold and include an allowance for uncollectible accounts which is estimated based on the aging of the accounts receivable and specific identification of uncollectible accounts. At December 31, 2022 and March 31, 2022, we reserved $ 4,382,671 3,055,252 |
Restricted Cash | Restricted Cash We consider cash to be restricted when withdrawal or general use is legally restricted. Our restricted cash balance is comprised of cash on deposit with banks to secure the Construction Note Payable as discussed in Note 10. We report restricted cash in the Consolidated Balance Sheets as current or non-current classification based on the expected duration of the restriction. |
License Agreements | License Agreements We are a party to a license agreement with Jesse James, a well-known motorcycle designer, and Jesse James Firearms, LLC, a Texas limited liability company. The license agreement grants us the exclusive worldwide rights through April 12, 2026 to Mr. James’ image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of Jesse James Branded Products. We agreed to pay Mr. James royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. |
Patents | Patents On September 28, 2017, AMMO Technologies Inc. (“ATI”), an Arizona corporation, which is 100% owned by us, merged with Hallam, Inc, a Texas corporation, with ATI being the survivor. The primary asset of Hallam, Inc. was an exclusive license to produce projectiles and ammunition using the Hybrid Luminescence Ammunition Technology under patent U.S. 8,402,896 B1 with a publication date of March 26, 2013 owned by the University of Louisiana at Lafayette. The license was formally amended and assigned to AMMO Technologies Inc. pursuant to an Assignment and First Amendment to Exclusive License Agreement. Assumption Agreement dated to be effective as of August 22, 2017, the Merger closing date. This asset will be amortized from September 2017, the first full month of the acquired rights, through October 29, 2028. Under the terms of the Exclusive License Agreement, the Company is obligated to pay a quarterly royalty to the patent holder, based on a $ 0.01 89,340 18,558 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On October 5, 2018, we completed the acquisition of SW Kenetics Inc. ATI succeeded all of the assets of SW Kenetics, Inc. and assumed all of the liabilities. The primary asset of SW Kenetics Inc. was a pending patent for modular projectiles. All rights to patent pending application were assigned and transferred to AMMO Technologies, Inc. pursuant to Intellectual Property Rights Agreement on September 27, 2018. We intend to continue building our patent portfolio to protect our proprietary technologies and processes, and will file new applications where appropriate to preserve our rights to manufacture and sell our branded lines of ammunition. |
Other Intangible Assets | Other Intangible Assets On March 15, 2019, Enlight Group II, LLC d/b/a Jagemann Munition Components, a wholly owned subsidiary of AMMO, Inc., completed its acquisition of assets of Jagemann Stamping Company’s ammunition casing manufacturing and sales operations pursuant to the terms of the Amended and Restated Asset Purchase Agreement. The intangible assets acquired include a tradename, customer relationships, and intellectual property. On April 30, 2021, we entered into an agreement and plan of merger (the “Merger Agreement”), by and among the Company, SpeedLight Group I, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company and Gemini Direct Investments, LLC, a Nevada limited liability company. Whereby SpeedLight Group I, LLC merged with and into Gemini Direct Investments, LLC, with SpeedLight Group I, LLC surviving the merger as a wholly owned subsidiary of the Company. At the time of the Merger, Gemini Direct Investments, LLC had nine (9) subsidiaries, all of which are related to Gemini’s ownership of Gunbroker.com, an online auction marketplace dedicated to firearms, hunting, shooting, and related products. The intangible assets acquired include a tradename, customer relationships, intellectual property, software and domain names. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. No |
Revenue Recognition | Revenue Recognition We generate revenue from the production and sale of ammunition, ammunition casings, and marketplace fee revenue, which includes auction revenue, payment processing revenue, and shipping income. We recognize revenue according to Accounting Standard Codification – Revenue from Contract with Customers (“ASC 606”). When the customer obtains control over the promised goods or services, we record revenue in the amount of consideration that we can expect to receive in exchange for those goods and services. We apply the following five-step model to determine revenue recognition: ● Identification of a contract with a customer ● Identification of the performance obligations in the contact ● Determination of the transaction price ● Allocation of the transaction price to the separate performance allocation ● Recognition of revenue when performance obligations are satisfied AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS We only apply the five-step model when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. For Ammunition Sales and Casing Sales, our contracts contain a single performance obligation and the entire transaction price is allocated to the single performance obligation. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Accordingly, we recognize revenues (net) when the customer obtains control of our product, which typically occurs upon shipment of the product or the performance of the service. In the year ended March 31, 2021, we began accepting contract liabilities or deferred revenue. We included Deferred Revenue in our Accrued Liabilities. We will recognize revenue when the performance obligation is met. For Marketplace revenue, the performance obligation is satisfied, and revenue is recognized as follows: Auction revenue consists of optional listing fees with variable pricing components based on customer options selected from the GunBroker website and final value fees based on a percentage of the final selling price of the listed item. The performance obligation is to process the transactions as initiated by the customer. Revenue is recognized at a point in time when the transaction is processed. Payment processing revenue consists of fees charged to customers on a transactional basis. The performance obligation is to process the transactions as initiated by the customer. The price is set by the GunBroker user agreement on the website based on stand-alone selling prices. Revenue is recognized at a point in time when the transaction is processed. Shipping income consists of fees charged to customers for shipping of sold items listed on the GunBroker website. The performance obligation is to ship the item sold as initiated by the customer. The price is set based on the third-party service provider selected to be used by the customer as well as the speed and location of shipment. Revenue is recognized at a point in time when the shipping label is printed. Banner Advertising Campaign Revenue consists of fees charged to customers for advertisement placement and impressions generated through the GunBroker website. The performance obligation is to generate the number of impressions specified by the customer on banner advertisements on the GunBroker website using the placement selected by the customer. The price is set by the GunBroker user agreement on the website based on standalone selling prices, or by advertising insertion order as negotiated by media broker. If the number of impressions promised is not generated, the customer receives a refund and the refund is applied to the transaction price. Banner advertising campaigns generally run for one month, and revenue is recognized at a point in time at the end of the selected month. Product Sales consists of fees charged for the liquidation of excess inventory for partner distributors. The performance obligation is to sell and ship the inventory item as initiated by the customer. The price depends on whether the inventory is a fixed price item or an auction item. For a fixed price item, the Company performs research to determine the current market rate for such an item, and the item is listed at that price. For an auction item, the price is set by what the buyer is willing to pay. The Company acts as a principal in these transactions due to the extent of control they have over the product prior to the sale. Due to the principal determination, gross revenue is recognized at a point in time when the item has been shipped. Identity Verification consists of fees charged to customers for identity verification in order to gain access to the GunBroker website. The performance obligation is to process the identity verification as initiated by the customer. The price is set by the GunBroker user agreement on the website based on a stand-alone selling price. Revenue is recognized at a point in time when the identity verification is completed. For the three and nine months ended December 31, 2022, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: SCHEDULE OF CONCENTRATION OF RISKS Revenues at Accounts Receivable PERCENTAGES Three Months Nine Months Ended December 31, March 31, Customers: A 12.5 % - 18.4 % 11.8 % 12.5 % - 18.4 % 11.8 % Disaggregated Revenue Information The following table represent a disaggregation of revenue from customers by category. We attribute net sales to categories by product or services types; ammunition, ammunition casings, and marketplace fees. We note that revenue recognition processes are consistent between product and service type, however, the amount, timing and uncertainty of revenue and cash flows may vary by each product type due to the customers of each product and service type. SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT For the Three Months Ended For the Nine Months Ended December 31, December 31, 2021 December 31, 2022 December 31, 2021 Ammunition Sales $ 20,250,965 $ 44,069,473 $ 90,607,817 $ 112,629,655 Marketplace fee revenue 15,419,202 17,596,769 46,486,842 46,646,051 Ammunition Casings Sales 3,041,327 3,022,944 10,661,420 10,891,897 Total Sales $ 38,711,494 $ 64,689,186 $ 147,756,079 $ 170,167,603 Ammunition products are sold through “Big Box” retailers, manufacturers, local ammunition stores, and shooting range operators. We also sell directly to customers online. In contrast, our ammunition casings products are sold to manufacturers. Marketplace fees are generated through our GunBroker.com online auction marketplace. |
Advertising Costs | Advertising Costs We expense advertising costs as they are incurred in selling and marketing expenses of operating expenses. Marketplace advertising costs are expenses as they are incurred in cost of revenues. We incurred advertising expenses of $ 912,959 448,367 243,246 193,752 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash, accounts receivable, accounts payable, amounts due to related parties, factoring liability, and the construction note payable. Fair values were assumed to approximate carrying values because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. |
Inventories | Inventories We state inventories at the lower of cost or net realizable value. We determine cost using the average cost method. Our inventory consists of raw materials, work in progress, and finished goods. Cost of inventory includes cost of parts, labor, quality control, and all other costs incurred to bring our inventories to condition ready to be sold. We periodically evaluate and adjust inventories for obsolescence. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Property and Equipment | Property and Equipment We state property and equipment at cost, less accumulated depreciation. We capitalize major renewals and improvements, while we charge minor replacements, maintenance, and repairs to current operations. We compute depreciation by applying the straight-line method over estimated useful lives, which are generally five to ten years. |
Compensated Absences | Compensated Absences We accrue a liability for compensated absences in accordance with Accounting Standards Codification 710 – Compensation – General (“ASC 710”) . |
Research and Development | Research and Development To date, we have expensed all costs associated with developing our product specifications, manufacturing procedures, and products through our cost of products sold, as this work was done by the same employees who produced the finished product. We anticipate that it may become necessary to reclassify research and development costs into our operating expenditures for reporting purposes as we begin to develop new technologies and lines of ammunition. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation at fair value in accordance with Accounting Standards Codification 718 – Compensation – Stock Compensation (“ASC 718”). Which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors. Stock-based compensation is recognized on a straight line basis over the vesting periods and forfeitures are recognized in the periods they occur. There were 604,510 1,281,635 |
Concentrations of Credit Risk | Concentrations of Credit Risk Accounts at banks are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 |
Income Taxes | Income Taxes We file federal and state income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with Accounting Standards Codification 740 – Income Taxes (“ASC 740”). The provision for income taxes includes federal, state, and local income taxes currently payable, and deferred taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable amounts in years in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In accordance with ASC 740, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained. We measure recognized income tax positions at the largest amount that is greater than 50% likely of being realized |
Excise Tax | Excise Tax As a result of regulations imposed by the Federal Government for sales of ammunition to non-government U.S. entities, we charge and collect an 11 7.8 10.3 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Contingencies | Contingencies Certain conditions may exist as of the date the condensed consolidated financial statements are issued that may result in a loss to us but will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims and the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is reasonably estimated, the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of range of possible loss if determinable and material, would be disclosed. On September 24, 2019, the Company received notice that a former employee that had voluntarily terminated filed a complaint against the Company, and certain individuals, with the U.S. Department of Labor (“DOL”). The Complaint in alleges that the individual reported potential violations of SEC rules and regulations by management and that as a result of such disclosures, the individual experienced a hostile work environment; that the Company lacks sufficient internal controls, and that the individual was the victim of retaliation and constructive discharge after being removed as a director by majority vote of the shareholders. The claims were investigated by a newly appointed Special Investigative Committee made up of independent directors represented by special independent legal counsel. The Special Investigative Committee and legal counsel found the material claims were unsubstantiated, including those concerning alleged SEC violations, and recommended enhancements to certain corporate governance charter documents and processes which the Company promptly implemented. The Parties participated in a successful mediation at the end of June 2022 and all matters relating to this former employee/claimant were confidentially resolved with the lawsuit dismissed with prejudice (Order pending). The settlement was covered by our Employment Practices Liability Policy and did not amount to a material amount. On February 10, 2022, AMMO filed a Texas state court complaint against Expansion Industries pursing eight (8) claims in pursuit of recovery of AMMO’s in primer acquisition deposit monies (i.e., Breach of Contract, Common Law Fraud, Violations of Texas Theft Liability Act, Conversion, Negligent Misrepresentation, Unjust Enrichment, Money Had and Received and Constructive Trust). AMMO has since moved aggressively to further the process, including successfully garnishing a portion of the deposit monies in Expansion bank accounts, filing a Motion for Summary Judgement, continuing to pursue written discovery, and amending the Complaint to add Expansion principal as an individual party. The putative primer manufacturer settled the two related lawsuits in September 2022 by repaying all deposit monies due AMMO, in addition to payment of principally all fees and costs incurred by the Company in pursuit of the resolution. The principal lawsuit and AMMO’s garnishment action adverse the defendant were dismissed with prejudice. Along with countless other suppliers of Remington Outdoors, AMMO was served with an avoidance claim lawsuit by the bankruptcy trustee. AMMO presented substantial “ordinary course” defense evidence to the Trustee and the case was settled for a nominal sum in September 2022, with the lawsuit dismissed with prejudice. AMMO is defending two contract arbitration cases involving adverse former employees that are presently in discovery, one involving an employee terminated for cause and the second action involving a termination without cause wherein the former employee is seeking contract wages, commissions and allegedly earned common stock. The Company also received notice in October that an OSHA whistleblower complaint had been filed with the US Department of Labor by an employee that had been terminated for cause. The regulatory filing was received after AMMO refused to capitulate to the former employee’s demands. AMMO has produced documents and submitted its position statement to OSHA and the matter is currently pending at the agency level. There were no other known contingencies at December 31, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CONCENTRATION OF RISKS | For the three and nine months ended December 31, 2022, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: SCHEDULE OF CONCENTRATION OF RISKS Revenues at Accounts Receivable PERCENTAGES Three Months Nine Months Ended December 31, March 31, Customers: A 12.5 % - 18.4 % 11.8 % 12.5 % - 18.4 % 11.8 % |
SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT | SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT For the Three Months Ended For the Nine Months Ended December 31, December 31, 2021 December 31, 2022 December 31, 2021 Ammunition Sales $ 20,250,965 $ 44,069,473 $ 90,607,817 $ 112,629,655 Marketplace fee revenue 15,419,202 17,596,769 46,486,842 46,646,051 Ammunition Casings Sales 3,041,327 3,022,944 10,661,420 10,891,897 Total Sales $ 38,711,494 $ 64,689,186 $ 147,756,079 $ 170,167,603 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Net Income/(Loss) per share | |
SCHEDULE OF INCOME (LOSS) PER COMMON SHARE | SCHEDULE OF INCOME (LOSS) PER COMMON SHARE 2022 2021 2022 2021 For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 Numerator: Net income/(loss) $ (4,102,992 ) $ 9,067,867 $ (1,653,472 ) $ 32,720,039 Less: Preferred stock dividends (782,639 ) (782,582 ) (2,339,409 ) (1,902,966 ) Net income/(loss) attributable to common stockholders $ (4,885,631 ) $ 8,285,285 $ (3,992,881 ) $ 30,817,073 Denominator: Weighted average shares of common stock – Basic 117,348,511 114,757,014 116,950,013 111,289,024 Effect of dilutive common stock purchase warrants - 1,835,395 - 1,934,172 Effect of dilutive equity incentive awards - 125,091 - 127,802 Weighted average shares of common stock - Diluted 117,348,511 116,717,500 116,950,013 113,350,998 Basic earnings per share: Income/(loss) per share attributable to common stockholders – basic $ (0.04 ) $ 0.07 $ (0.03 ) $ 0.28 Diluted earnings per share: Income/(loss) per share attributable to common stockholders – diluted $ (0.04 ) $ 0.07 $ (0.03 ) $ 0.27 (1) Weighted average of contingently issuable shares measured from the effective date of merger, April 30, 2021 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | At December 31, 2022 and March 31, 2022, the inventory balances are composed of: SCHEDULE OF INVENTORIES December 31, 2022 March 31, 2022 Finished product $ 20,760,747 $ 6,167,318 Raw materials 31,387,096 33,924,813 Work in process 14,997,558 18,924,021 Inventory net $ 67,145,401 $ 59,016,152 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and Equipment consisted of the following at December 31, 2022 and March 31, 2022: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2022 March 31, 2022 Building $ 28,113,684 $ - Construction in progress 1,834,688 14,335,371 Leasehold Improvements 257,009 257,009 Furniture and Fixtures 368,359 343,014 Vehicles 153,254 153,254 Equipment 37,689,716 32,524,850 Tooling 143,710 143,710 Total property and equipment $ 68,560,420 $ 47,757,208 Less accumulated depreciation (13,270,092 ) (10,119,402 ) Net property and equipment $ 55,290,328 $ 37,637,806 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Leases | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES | Future minimum lease payments under non-cancellable leases as of December 31, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES Years Ended March 31, 2023 (1) $ 160,757 2024 583,768 2025 387,214 2026 351,962 2027 257,508 Thereafter 43,516 Total Lease Payments 1,784,725 Less: Amount Representing Interest (285,938 ) Present value of lease liabilities $ 1,498,787 (1) This amount represents future lease payments for the remaining three months of fiscal year 2023. It does not include any lease payments for the nine months ended December 31, 2022. |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS | At December 31, 2022, outstanding and exercisable stock purchase warrants consisted of the following: SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS Number of Weighted Weighted Average Life Remaining Outstanding at March 31, 2022 2,933,755 $ 2.32 2.29 Granted 150,000 0.01 - Exercised (277,273 ) 0.21 - Forfeited or cancelled (25,000 ) 2.00 - Outstanding at December 31, 2022 2,781,482 $ 2.41 1.60 Exercisable at December 31, 2022 2,781,482 $ 2.41 1.60 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED | The fair value of the consideration transferred was valued as of the date of the acquisition as follows: SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED Cash $ 48,649,954 Working capital adjustment 1,870,886 Contingent consideration 10,755,000 Common stock 132,645,000 Assumed debt 50,000,000 Fair value of consideration transferred $ 243,920,840 |
SCHEDULE OF ALLOCATION FOR CONSIDERATION | The allocation for the consideration recorded for the acquisition is as follows: SCHEDULE OF ALLOCATION FOR CONSIDERATION Accounts receivable, net $ 17,002,362 Prepaid expenses 478,963 Equipment 1,051,980 Deposits 703,389 Other Intangible assets (1) 146,617,380 Goodwill (1) 90,870,094 Right of use assets – operating leases 612,727 Accounts payable (12,514,919 ) Accrued expenses (196,780 ) Operating lease liability (704,356 ) Total Consideration $ 243,920,840 (1) Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. |
SCHEDULE OF UNAUDITED PRO FORMA RESULTS OF OPERATIONS | SCHEDULE OF UNAUDITED PRO FORMA RESULTS OF OPERATIONS INCOME STATEMENT DATA For the Nine Months Net revenues $ 178,213,024 Net income $ 37,266,527 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | SCHEDULE OF INTANGIBLE ASSETS December 31, 2022 Life Licenses Patent Other Licensing Agreement – Jesse James 5 $ 125,000 $ - $ - Licensing Agreement – Jeff Rann 5 125,000 - - Streak Visual Ammunition patent 11.2 - 950,000 - SWK patent acquisition 15 - 6,124,005 - Jagemann Munition Components: Customer Relationships 3 - - 1,450,613 Intellectual Property 3 - - 1,543,548 Tradename 5 - - 2,152,076 GDI Acquisition: Tradename 15 - - 76,532,389 Customer List 10 - - 65,252,802 Intellectual Property 10 - - 4,224,442 Other Intangible Assets 5 - - 607,747 250,000 7,074,005 151,763,617 Accumulated amortization – Licensing Agreements (250,000 ) - - Accumulated amortization – Patents - (1,917,885 ) - Accumulated amortization – Intangible Assets - - (24,893,412 ) $ - $ 5,156,120 $ 126,870,205 |
SCHEDULE OF ANNUAL AMORTIZATION OF INTANGIBLE ASSET | Annual amortization of intangible assets for the next five fiscal years are as follows: SCHEDULE OF ANNUAL AMORTIZATION OF INTANGIBLE ASSET Years Ended March 31, Estimates for 2023 (1) $ 3,294,934 2024 13,074,489 2025 12,664,775 2026 12,664,775 2027 12,553,355 Thereafter 77,773,997 Annual amortization of intangible assets $ 132,026,325 (1) This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the nine months ended December 31, 2022. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF OPERATING SEGMENTS | SCHEDULE OF OPERATING SEGMENTS Ammunition Marketplace Corporate Total For the Three Months Ended December 31, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 23,292,292 $ 15,419,202 $ - $ 38,711,494 Cost of Revenues 23,865,275 2,319,040 - 26,184,315 General and administrative expense 4,838,081 1,719,707 6,993,592 13,551,380 Depreciation and amortization 143,378 3,165,696 - 3,309,074 Income/(Loss) from Operations $ (5,554,442 ) $ 8,214,759 $ (6,993,592 ) $ (4,333,275 ) Ammunition Marketplace Corporate Total For the Nine Months Ended December 31, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 101,269,237 $ 46,486,842 $ - $ 147,756,079 Cost of Revenues 97,555,732 6,701,797 - 104,257,529 General and administrative expense 12,117,828 6,713,561 14,490,456 33,321,845 Depreciation and amortization 437,694 9,513,058 - 9,950,752 Income/(Loss) from Operations $ (8,842,017 ) $ 23,558,426 $ (14,490,456 ) $ 225,953 Ammunition Marketplace Corporate and other expenses Total For the Three Months Ended December 31, 2021 Ammunition Marketplace Corporate and other expenses Total Net Revenues $ 47,092,417 $ 17,596,769 $ - $ 64,689,186 Cost of Revenues 39,904,811 2,261,509 - 42,166,320 General and administrative expense 3,941,639 2,251,146 1,994,339 8,187,124 Depreciation and amortization 420,077 3,305,844 - 3,725,921 Income/(loss) from Operations $ 2,825,890 $ 9,778,270 $ (1,994,339 ) $ 10,609,821 Ammunition Marketplace Corporate and other expenses Total For the Nine Months Ended December 31, 2021 Ammunition Marketplace Corporate and other expenses Total Net Revenues $ 123,521,552 $ 46,646,051 $ - $ 170,167,603 Cost of Revenues 96,203,542 6,254,233 - 102,457,775 General and administrative expense 10,068,430 5,400,925 7,676,826 23,146,181 Depreciation and amortization 1,260,064 8,784,930 - 10,044,994 Income/(Loss) from Operations $ 15,989,516 $ 26,205,963 $ (7,676,826 ) $ 34,518,653 |
ORGANIZATION AND BUSINESS ACT_2
ORGANIZATION AND BUSINESS ACTIVITY (Details Narrative) | Dec. 15, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reverse stock split | 1-for-25 |
SCHEDULE OF CONCENTRATION OF RI
SCHEDULE OF CONCENTRATION OF RISKS (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 12.50% | |
Revenue Benchmark [Member] | Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 12.50% | |
Accounts Receivable [Member] | Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 18.40% | 11.80% |
Accounts Receivable [Member] | Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 18.40% | 11.80% |
SCHEDULE OF DISAGGREGATED REVEN
SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||
Total Sales | $ 38,711,494 | $ 64,689,186 | $ 147,756,079 | $ 170,167,603 |
Ammunition Sales [Member] | ||||
Product Information [Line Items] | ||||
Total Sales | 20,250,965 | 44,069,473 | 90,607,817 | 112,629,655 |
Marketplace Fee Revenue [Member] | ||||
Product Information [Line Items] | ||||
Total Sales | 15,419,202 | 17,596,769 | 46,486,842 | 46,646,051 |
Ammunition Casings Sales [Member] | ||||
Product Information [Line Items] | ||||
Total Sales | $ 3,041,327 | $ 3,022,944 | $ 10,661,420 | $ 10,891,897 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Apr. 30, 2021 | [1] | |
Property, Plant and Equipment [Line Items] | |||||||
Goodwill | $ 90,870,094 | $ 90,870,094 | $ 90,870,094 | $ 90,870,094 | |||
Allowance for doubtful accounts | 4,382,671 | $ 4,382,671 | $ 3,055,252 | ||||
Impairment expense | $ 0 | $ 0 | $ 0 | ||||
Income tax examination, description | We measure recognized income tax positions at the largest amount that is greater than 50% likely of being realized | ||||||
Excise tax percentage | 11% | 11% | |||||
Excise tax amount | $ 7,800,000 | 10,300,000 | |||||
Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Cash FDIC insured amount | $ 250,000 | $ 250,000 | |||||
Employees Board of Directors and Advisory Committee Members [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Number of stock, shares issued | 604,510 | 1,281,635 | |||||
Selling and Marketing Expense [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Advertising expenses | $ 912,959 | 448,367 | |||||
Cost of Sales [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Advertising expenses | $ 243,246 | 193,752 | |||||
Patents [Member] | Exclusive License Agreement [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Share price | $ 0.01 | $ 0.01 | |||||
Royalty expenses | $ 89,340 | $ 18,558 | |||||
[1]Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. |
SCHEDULE OF INCOME (LOSS) PER C
SCHEDULE OF INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Income/(Loss) per share | ||||||||
Net income/(loss) | $ (4,102,992) | $ (803,507) | $ 3,253,027 | $ 9,067,867 | $ 14,115,512 | $ 9,536,660 | $ (1,653,472) | $ 32,720,039 |
Less: Preferred stock dividends | (782,639) | (782,582) | (2,339,409) | (1,902,966) | ||||
Net Income/(Loss) Attributable to Common Stock Shareholders | $ (4,885,631) | $ 8,285,285 | $ (3,992,881) | $ 30,817,073 | ||||
Weighted average shares of common stock – Basic | 117,348,511 | 114,757,014 | 116,950,013 | 111,289,024 | ||||
Effect of dilutive common stock purchase warrants | 1,835,395 | 1,934,172 | ||||||
Effect of dilutive equity incentive awards | 125,091 | 127,802 | ||||||
Weighted average shares of common stock - Diluted | 117,348,511 | 116,717,500 | 116,950,013 | 113,350,998 | ||||
Income/(loss) per share attributable to common stockholders – basic | $ (0.04) | $ 0.07 | $ (0.03) | $ 0.28 | ||||
Income/(loss) per share attributable to common stockholders – diluted | $ (0.04) | $ 0.07 | $ (0.03) | $ 0.27 |
INCOME PER COMMON SHARE (Detail
INCOME PER COMMON SHARE (Details Narrative) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 shares | Dec. 31, 2022 shares | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrants to purchase shares | 2,781,482 | 2,781,482 |
Common Stock Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock purchase warrants | 389,544 | 1,070,694 |
Treasury Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock purchase warrants | 536,311 | 150,000 |
Equity Incentive Award [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock purchase warrants | 5,281 | 19,095 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished product | $ 20,760,747 | $ 6,167,318 |
Raw materials | 31,387,096 | 33,924,813 |
Work in process | 14,997,558 | 18,924,021 |
Inventory net | $ 67,145,401 | $ 59,016,152 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 68,560,420 | $ 47,757,208 |
Less accumulated depreciation | (13,270,092) | (10,119,402) |
Net property and equipment | 55,290,328 | 37,637,806 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 28,113,684 | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,834,688 | 14,335,371 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 257,009 | 257,009 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 368,359 | 343,014 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 153,254 | 153,254 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 37,689,716 | 32,524,850 |
Tools, Dies and Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 143,710 | $ 143,710 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 1,089,243 | $ 1,087,550 | $ 3,150,691 | $ 3,184,976 |
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, estimated useful lives | 5 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, estimated useful lives | 10 years |
FACTORING LIABILITY (Details Na
FACTORING LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 17, 2021 | Jul. 01, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Factoring liability | $ 1,678,450 | |||||
Interest expenses on factoring liability | $ 42,286 | $ 103,876 | 111,220 | $ 216,242 | ||
Amortization of commitment fee | $ 37,500 | $ 37,500 | $ 37,500 | $ 37,500 | ||
Maturity date | Jun. 17, 2023 | |||||
Factoring and Security Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 5,000,000 | |||||
Line of credit facility interest rate during period | 85% | |||||
Line of credit facility commitment fee percentage | 3% | |||||
Line of credit facility commitment fee amount | $ 150,000 | |||||
Factoring and Security Agreement [Member] | Prime Rate [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Line of credit facility interest rate during period | 4.50% |
INVENTORY CREDIT FACILITY (Deta
INVENTORY CREDIT FACILITY (Details Narrative) - USD ($) | 9 Months Ended | |||
Jun. 17, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Interest expense on inventory credit facility | $ 6,580 | $ 24,256 | ||
Amortization of annual fee | $ 8,561 | |||
Revolving Inventory Loan and Security Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit maximum borrowing amount | $ 35,000 | $ 2,250,000 | ||
Line of credit facility, interest rate description | an annualized interest rate of the greater of the three-month LIBOR rate plus 3.09% or 8% | |||
Line of credit facility commitment fee percentage | 2% | |||
Revolving Inventory Loan and Security Agreement [Member] | Eligible Inventory [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit maximum borrowing amount | $ 1,750,000 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES (Details) - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 | |
Leases | |||
2023 | [1] | $ 160,757 | |
2024 | 583,768 | ||
2025 | 387,214 | ||
2026 | 351,962 | ||
2027 | 257,508 | ||
Thereafter | 43,516 | ||
Total Lease Payments | 1,784,725 | ||
Less: Amount Representing Interest | (285,938) | ||
Present value of lease liabilities | $ 1,498,787 | $ 2,922,780 | |
[1]This amount represents future lease payments for the remaining three months of fiscal year 2023. It does not include any lease payments for the nine months ended December 31, 2022. |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Jan. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Changes in operating lease liabilities | $ 308,326 | $ 501,125 | $ (522,917) | $ (514,872) | |
Right use of asset | 1,378,711 | $ 2,791,850 | |||
Operating lease, liability | 1,498,787 | 2,922,780 | |||
Operating lease liability, current | 518,778 | 831,429 | |||
Operating lease liability non-current | $ 980,009 | $ 2,091,351 | |||
Weighted average remaining lease term | 3 years 4 months 24 days | ||||
Weighted average discount rate for operating leases | 10% | ||||
Lease Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Changes in operating lease liabilities | $ 901,076 |
NOTES PAYABLE _ RELATED PARTY (
NOTES PAYABLE – RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Principal payments | $ 66,585 | $ 66,585 |
Interest expense related party | 12,753 | 41,450 |
Jagemann Stamping Company [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Principal payments | $ 173,134 | $ 507,507 |
CONSTRUCTION NOTE PAYABLE (Deta
CONSTRUCTION NOTE PAYABLE (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||
Oct. 14, 2021 USD ($) ft² | Jun. 17, 2021 | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2022 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Proceeds from notes payable | $ 1,000,000 | |||||
Debt maturity date | Jun. 17, 2023 | |||||
Debt instrument principal payment | $ 66,585 | 66,585 | ||||
Restricted cash | 500,000 | 500,000 | ||||
Hiawatha National Bank [Member] | Promissory Note [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Debt interest rate | 4.50% | |||||
Debt maturity date | Oct. 14, 2026 | |||||
Hiawatha National Bank [Member] | Maximum [Member] | Promissory Note [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Debt face amount | $ 11,625,000 | |||||
Construction Loan Agreement [Member] | Hiawatha National Bank [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Area of land | ft² | 160,000 | |||||
Proceeds from notes payable | 11,200,000 | |||||
Prepayment premium of note amount, percentage | 1% | |||||
Debt default, description | The Loan Agreement contains customary events of default including, but not limited to, a failure to make any payments pursuant to the Loan Agreement or Note, a failure to complete construction of the project, a lien of $100,000 or more against the property, or a transfer of the property without Hiawatha’s consent. Upon the occurrence of an event of default, among other remedies, the amounts due pursuant to the Loan can be accelerated, Hiawatha can foreclose on the property pursuant to the mortgage, and a late charge of five percent (5%) of the amount due will be owed with all amounts then owed pursuant to the Note bearing interest at an increased rate | |||||
Cash collateral or restricted cash | $ 1,000,000 | $ 1,000,000 | ||||
Construction Loan Agreement [Member] | Hiawatha National Bank [Member] | First Advance [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Proceeds from notes payable | $ 329,843 | |||||
Construction Loan Agreement [Member] | Hiawatha National Bank [Member] | Maximum [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Debt face amount | $ 11,625,000 |
SCHEDULE OF OUTSTANDING AND EXE
SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS (Details) - Warrant [Member] | 9 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of shares, outstanding beginning | shares | 2,933,755 |
Weighted average exercise price, outstanding beginning | $ / shares | $ 2.32 |
Weighted average life remaining years, outstanding beginning | 2 years 3 months 14 days |
Number of shares, granted | shares | 150,000 |
Weighted average exercise price, granted | $ / shares | $ 0.01 |
Number of shares, exercised | shares | (277,273) |
Weighted average exercise price, exercised | $ / shares | $ 0.21 |
Number of shares, forfeited or cancelled | shares | (25,000) |
Weighted average exercise price, forfeited or cancelled | $ / shares | $ 2 |
Number of shares, outstanding ending | shares | 2,781,482 |
Weighted average exercise price, outstanding ending | $ / shares | $ 2.41 |
Weighted average life remaining years, outstanding ending | 1 year 7 months 6 days |
Number of shares, exercisable | shares | 2,781,482 |
Weighted average exercise price, exercisable | $ / shares | $ 2.41 |
Weighted average life remaining years, exercisable | 1 year 7 months 6 days |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2021 | Dec. 31, 2022 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Shares issued exercise of warrants value | $ 56,046 | |||
Warrants exercise price | $ 0.01 | $ 0.01 | ||
Stock issued warrants for services value | $ 427,639 | $ 1,500,000 | ||
Employees, Board of Directors, Advisory Committee [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stock issued during period shares employee benefit plan | 1,281,635 | |||
Stock issued during period value employee benefit plan | $ 4,457,973 | |||
Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Shares issued cashless exercise of warrants | 99,762 | |||
Cashless exercise of warrants | 100,000 | |||
Number of shares issued exercise of warrants, shares | 177,273 | |||
Stock issued warrants for services | 750,000 | |||
Purchase of shares of common stock | 150,000 | |||
Stock issued warrants for services value | $ 750 | |||
Warrant [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants outstanding | 2,781,482 | 2,781,482 | ||
Issuance of warrants, description | Each warrant provides the holder the right to purchase up to one share of our Common Stock at a predetermined exercise price. The outstanding warrants consist of (1) warrants to purchase 911 shares of Common Stock at an exercise price of $1.65 per share until April 2025; (2) warrants to purchase 1,769,294 shares of our Common Stock at an exercise price of $2.00 per share consisting of 30% of the warrants until August 2024, and 70% until February 2026; (3) warrants to purchase 474,966 shares of Common Stock at an exercise price of $2.40 until September 2024; (4) warrants to purchase 386,311 shares of Common Stock at an exercise price of $2.63 until November 2025, and (5) warrants to purchase 150,000 shares of Common Stock at an exercise price of $6.72 until February 2024 | |||
Stock issued warrants for services | 150,000 | |||
Warrant One [Member] | Until April 2025 [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants issued to purchase common stock | 911 | 911 | ||
Warrants exercise price | $ 1.65 | $ 1.65 | ||
Warrant Two [Member] | Until August 2024 [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants issued to purchase common stock | 1,769,294 | 1,769,294 | ||
Warrants exercise price | $ 2 | $ 2 | ||
Warrant Three [Member] | Until September 2024 [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants issued to purchase common stock | 474,966 | 474,966 | ||
Warrants exercise price | $ 2.40 | $ 2.40 | ||
Warrant Four [Member] | Until November 2025 [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants issued to purchase common stock | 386,311 | 386,311 | ||
Warrants exercise price | $ 2.63 | $ 2.63 | ||
Warrant Five [Member] | Until February 2024 [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants issued to purchase common stock | 150,000 | 150,000 | ||
Warrants exercise price | $ 6.72 | $ 6.72 | ||
New Issuance of Shares [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common stock issued new shares, shares | 1,558,670 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Dec. 15, 2022 | Nov. 30, 2022 | Sep. 15, 2022 | Aug. 31, 2022 | Jun. 15, 2022 | May 31, 2022 | May 18, 2021 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Mar. 31, 2022 | |
Class of Stock [Line Items] | |||||||||||||||
Shares issued, price per share | $ 0.01 | $ 0.01 | |||||||||||||
Dividend rate | 8.75% | 8.75% | |||||||||||||
Preferred dividends | $ 144,334 | $ 136,044 | $ 136,061 | $ 144,561 | $ 782,639 | $ 337,745 | |||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares issued, price per share | $ 25 | ||||||||||||||
Dividend rate | 8.75% | ||||||||||||||
Preferred stock dividend rate per annum | $ 0.5529514 | $ 0.55902778 | $ 0.559027777777778 | $ 2.1875 | |||||||||||
Dividend payment terms | payable quarterly in arrears on March 15, June 15, September 15 and December 15 | ||||||||||||||
Accumulated preferred dividends | $ 144,334 | ||||||||||||||
Preferred dividends | $ 774,132 | $ 782,639 | $ 782,639 |
SCHEDULE OF FAIR VALUE OF CONSI
SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED (Details) | Apr. 30, 2021 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Cash | $ 48,649,954 |
Working capital adjustment | 1,870,886 |
Contingent consideration | 10,755,000 |
Common stock | 132,645,000 |
Assumed debt | 50,000,000 |
Fair value of consideration transferred | $ 243,920,840 |
SCHEDULE OF ALLOCATION FOR CONS
SCHEDULE OF ALLOCATION FOR CONSIDERATION (Details) - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 | Apr. 30, 2021 | ||
Business Combination and Asset Acquisition [Abstract] | |||||
Accounts receivable, net | $ 17,002,362 | ||||
Prepaid expenses | 478,963 | ||||
Equipment | 1,051,980 | ||||
Deposits | 703,389 | ||||
Other Intangible assets | [1] | 146,617,380 | |||
Goodwill | $ 90,870,094 | $ 90,870,094 | 90,870,094 | [1] | |
Right of use assets – operating leases | 612,727 | ||||
Accounts payable | (12,514,919) | ||||
Accrued expenses | (196,780) | ||||
Operating lease liability | (704,356) | ||||
Total Consideration | $ 243,920,840 | ||||
[1]Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. |
SCHEDULE OF UNAUDITED PRO FORMA
SCHEDULE OF UNAUDITED PRO FORMA RESULTS OF OPERATIONS (Details) | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Net revenues | $ 178,213,024 |
Net income | $ 37,266,527 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | Apr. 30, 2021 | Apr. 02, 2021 | Dec. 31, 2022 | Mar. 31, 2022 |
Business Acquisition [Line Items] | ||||
Contingent consideration payable, net of current portion | $ 158,570 | $ 204,142 | ||
Contingent consideration, amount | $ 10,755,000 | |||
Working capital adjustments | $ 2,000,000 | |||
Business acquisitions pro form a interest and debt expense | $ 1,800,000 | |||
Business acquisitions pro form a depreciation and amortization | $ 900,000 | |||
Gemini Direct Investments LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, share price | $ 7.17 | |||
Company received a cash payment | $ 50,000,000 | |||
Business acquisition, cash acquired | 1,350,046 | |||
Estimated working capital adjustment | 2,000,000 | |||
Contingent consideration payable, net of current portion | 50,000,000 | |||
Contingent consideration, amount | $ 10,755,000 | |||
Shares issued prior stockholder | 1,500,000 | |||
Business combination additional securities of common stock | 18,500,000 | |||
Merger Agreement [Member] | Gemini Direct Investments LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, amount | $ 50,000,000 | |||
Business acquisition, shares | 20,000,000 | |||
Business acquisition, share price | $ 0.001 | |||
Company received a cash payment | $ 129,114 | |||
Consideration transferred | $ 1,870,886 | |||
Without Being Held in Escrow or Requiring Prior Stockholder Approval [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock issued for cash, shares | 14,500,000 | |||
Pledge and Escrow Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock issued for cash, shares | 4,000,000 | |||
Will Not Be Issued Prior to The Stockholder Approval [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock issued for cash, shares | 1,500,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, net | $ 132,026,325 |
Licensing Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | 250,000 |
Accumulated amortization | (250,000) |
Intangible assets, net | |
Streak Visual Ammunition Patent [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 11 years 2 months 12 days |
Intangible assets, Gross | $ 950,000 |
SWK Patent Acquisition [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 15 years |
Intangible assets, Gross | $ 6,124,005 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 3 years |
Intangible assets, Gross | $ 1,450,613 |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 3 years |
Intangible assets, Gross | $ 1,543,548 |
Intellectual Property [Member] | GDI Acquisition [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 10 years |
Intangible assets, Gross | $ 4,224,442 |
Tradename [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 5 years |
Intangible assets, Gross | $ 2,152,076 |
Tradename [Member] | GDI Acquisition [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 15 years |
Intangible assets, Gross | $ 76,532,389 |
Customer Lists [Member] | GDI Acquisition [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 10 years |
Intangible assets, Gross | $ 65,252,802 |
Other Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | 151,763,617 |
Accumulated amortization | (24,893,412) |
Intangible assets, net | $ 126,870,205 |
Other Intangible Assets [Member] | GDI Acquisition [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 5 years |
Intangible assets, Gross | $ 607,747 |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | 7,074,005 |
Accumulated amortization | (1,917,885) |
Intangible assets, net | $ 5,156,120 |
Jesse James [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 5 years |
Jesse James [Member] | Licensing Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | $ 125,000 |
Jeff Rann [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Licensing agreement, life | 5 years |
Jeff Rann [Member] | Licensing Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | $ 125,000 |
SCHEDULE OF ANNUAL AMORTIZATION
SCHEDULE OF ANNUAL AMORTIZATION OF INTANGIBLE ASSET (Details) | Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (1) | $ 3,294,934 | [1] |
2024 | 13,074,489 | |
2025 | 12,664,775 | |
2026 | 12,664,775 | |
2027 | 12,553,355 | |
Thereafter | 77,773,997 | |
Annual amortization of intangible assets | $ 132,026,325 | |
[1]This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the nine months ended December 31, 2022. |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Apr. 30, 2021 | [1] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Goodwill | $ 90,870,094 | $ 90,870,094 | $ 90,870,094 | $ 90,870,094 | |||
Amortization of intangible assets | $ 3,266,761 | $ 3,535,805 | $ 9,800,281 | $ 9,593,127 | |||
Merger Agreement [Member] | Gemini Direct Investments LLC [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Goodwill | $ 90,870,094 | ||||||
[1]Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. |
SCHEDULE OF OPERATING SEGMENTS
SCHEDULE OF OPERATING SEGMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||||
Net Revenues | $ 38,711,494 | $ 64,689,186 | $ 147,756,079 | $ 170,167,603 |
Cost of Revenues | 26,184,315 | 42,166,320 | 104,257,529 | 102,457,775 |
General and administrative expense | 13,551,380 | 8,187,124 | 33,321,845 | 23,146,181 |
Depreciation and amortization | 3,309,074 | 3,725,921 | 9,950,752 | 10,044,994 |
Income/(Loss) from Operations | (4,333,275) | 10,609,821 | 225,953 | 34,518,653 |
Ammunition [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Revenues | 23,292,292 | 47,092,417 | 101,269,237 | 123,521,552 |
Cost of Revenues | 23,865,275 | 39,904,811 | 97,555,732 | 96,203,542 |
General and administrative expense | 4,838,081 | 3,941,639 | 12,117,828 | 10,068,430 |
Depreciation and amortization | 143,378 | 420,077 | 437,694 | 1,260,064 |
Income/(Loss) from Operations | (5,554,442) | 2,825,890 | (8,842,017) | 15,989,516 |
Marketplace [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Revenues | 15,419,202 | 17,596,769 | 46,486,842 | 46,646,051 |
Cost of Revenues | 2,319,040 | 2,261,509 | 6,701,797 | 6,254,233 |
General and administrative expense | 1,719,707 | 2,251,146 | 6,713,561 | 5,400,925 |
Depreciation and amortization | 3,165,696 | 3,305,844 | 9,513,058 | 8,784,930 |
Income/(Loss) from Operations | 8,214,759 | 9,778,270 | 23,558,426 | 26,205,963 |
Corporate and Other Expenses [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Revenues | ||||
Cost of Revenues | ||||
General and administrative expense | 6,993,592 | 1,994,339 | 14,490,456 | 7,676,826 |
Depreciation and amortization | ||||
Income/(Loss) from Operations | $ (6,993,592) | $ (1,994,339) | $ (14,490,456) | $ (7,676,826) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 14.90% | 13% | 482.10% | 4% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Nov. 03, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||
Total Revenues | $ 38,711,494 | $ 64,689,186 | $ 147,756,079 | $ 170,167,603 | ||
Stock Issued During Period, Value, Issued for Services | 427,639 | $ 1,500,000 | ||||
Common stock shares issued, value | $ 35,000,000 | |||||
Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock issued for services, shares | 750,000 | |||||
Stock Issued During Period, Value, Issued for Services | $ 750 | |||||
Common stock shares issued, value | ||||||
Settlement Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 110,000 | |||||
Costs, fees and expenses | $ 500,000 | |||||
Common stock shares issued, value | $ 385,000 | |||||
Settlement Agreement [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 125,000 | |||||
Common stock shares issued, value | $ 437,500 | |||||
Marketplace Revenue [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Total Revenues | 15,419,202 | $ 17,596,769 | 46,486,842 | $ 46,646,051 | ||
Board Of Directors [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable | $ 182,344 | $ 182,344 | ||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 30,000 | |||||
Shares issued, value | 105,000 | |||||
Board Of Directors [Member] | Marketplace Revenue [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Total Revenues | $ 222,300 | |||||
Two Independent Contractors [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Service fees | 211,712 | |||||
Stock Issued During Period, Value, Issued for Services | $ 129,705 | |||||
Two Independent Contractor [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock issued for services, shares | 45,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Feb. 04, 2023 | Jun. 30, 2021 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | |||
Shares issued pursuant exercise of warrants value | $ 35,000,000 | ||
Warrant [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares, cancelled | (25,000) | ||
Subsequent Event [Member] | Warrant [Member] | |||
Subsequent Event [Line Items] | |||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 22,730 | ||
Shares issued pursuant exercise of warrants value | $ 45,460 | ||
Number of shares, cancelled | 25,000 | ||
Shares issued employee stock | $ 87,500 |