Cover
Cover - shares | 3 Months Ended | |
Jun. 30, 2022 | Aug. 12, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q1 | |
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 | 116,961,005 | |
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, $0.001 par value | |
Trading Symbol | POWWP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | |
Current Assets: | |||
Cash and cash equivalents | $ 20,901,109 | $ 23,281,475 | |
Accounts receivable, net | 38,997,537 | 43,955,084 | |
Due from related parties | 1,559,000 | 15,000 | |
Inventories | 64,588,248 | 59,016,152 | |
Prepaid expenses | 4,576,824 | 3,423,925 | |
Current portion of restricted cash | 500,000 | ||
Total Current Assets | 131,122,718 | 129,691,636 | |
Equipment, net | 46,669,664 | 37,637,806 | |
Other Assets: | |||
Deposits | 11,829,304 | 11,360,322 | |
Restricted cash, net of current portion | 500,000 | ||
Patents, net | 5,402,852 | 5,526,218 | |
Other intangible assets, net | 133,156,993 | 136,300,387 | |
Goodwill | 90,870,094 | [1] | 90,870,094 |
Right of use assets – operating leases | 2,583,344 | 2,791,850 | |
TOTAL ASSETS | 422,134,969 | 414,178,313 | |
Current Liabilities: | |||
Accounts payable | 23,807,732 | 26,817,083 | |
Factoring liability | 228,026 | 485,671 | |
Accrued liabilities | 7,012,674 | 6,178,814 | |
Inventory credit facility | 92,332 | 825,675 | |
Current portion of operating lease liability | 811,139 | 831,429 | |
Current portion of note payable related party | 700,507 | 684,639 | |
Current portion of construction note | 200,133 | ||
Insurance premium note payable | 1,501,846 | ||
Total Current Liabilities | 34,354,389 | 35,823,311 | |
Long-term Liabilities: | |||
Contingent consideration payable | 202,840 | 204,142 | |
Notes payable related party, net of current portion | 181,132 | ||
Construction note payable, net of unamortized issuance costs | 5,634,368 | 38,330 | |
Operating lease liability, net of current portion | 1,900,559 | 2,091,351 | |
Deferred income tax liability | 2,037,445 | 1,536,481 | |
Total Liabilities | 44,129,601 | 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 June 30, 2022 and March 31, 2022, respectively | 1,400 | 1,400 | |
Common stock, $0.001 par value, 200,000,000 shares authorized 116,923,884 and 116,485,747 shares issued and outstanding at June 30, 2022 and March 31, 2022, respectively | 116,924 | 116,487 | |
Additional paid-in capital | 386,648,901 | 385,426,431 | |
Accumulated deficit | (8,761,857) | (11,240,752) | |
Total Shareholders’ Equity | 378,005,368 | 374,303,566 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 422,134,969 | $ 414,178,313 | |
[1]Other intangible assets consist of Tradenames, Customer Relationships, Intellectual Property, and other tangible assets related to the acquired business. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 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 | 116,923,884 | 116,485,747 |
Common stock, shares outstanding | 116,923,884 | 116,485,747 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Net Revenues | ||
Total Revenues | $ 60,756,026 | $ 44,476,332 |
Cost of Revenues | 42,620,364 | 25,505,438 |
Gross Profit | 18,135,662 | 18,970,894 |
Operating Expenses | ||
Selling and marketing | 1,908,170 | 1,165,849 |
Corporate general and administrative | 5,029,297 | 3,156,597 |
Employee salaries and related expenses | 2,785,098 | 2,356,873 |
Depreciation and amortization expense | 3,350,356 | 2,611,061 |
Total operating expenses | 13,072,921 | 9,290,380 |
Income from Operations | 5,062,741 | 9,680,514 |
Other Expenses | ||
Other income | 193,498 | 21,425 |
Interest expense | (120,487) | (165,279) |
Total other income/(expense) | 73,011 | (143,854) |
Income before Income Taxes | 5,135,752 | 9,536,660 |
Provision for Income Taxes | 1,882,725 | |
Net Income | 3,253,027 | 9,536,660 |
Preferred Stock Dividend | (774,132) | (337,745) |
Net Income Attributable to Common Stock Shareholders | $ 2,478,895 | $ 9,198,915 |
Net Income per share | ||
Basic | $ 0.02 | $ 0.09 |
Diluted | $ 0.02 | $ 0.08 |
Weighted average number of shares outstanding | ||
Basic | 116,560,372 | 105,876,867 |
Diluted | 117,879,639 | 109,051,682 |
Ammunition Sales [Member] | ||
Net Revenues | ||
Total Revenues | $ 40,969,883 | $ 28,351,780 |
Marketplace Revenue [Member] | ||
Net Revenues | ||
Total Revenues | 16,504,946 | 12,272,066 |
Casing Sales [Member] | ||
Net Revenues | ||
Total Revenues | $ 3,281,197 | $ 3,852,486 |
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] | Total |
Balance at Mar. 31, 2021 | $ 93,100 | $ 202,073,968 | $ (41,819,539) | $ 160,347,529 | |
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 | 9,536,660 | 9,536,660 | |||
Acquisition stock issuances | $ 18,500 | 131,947,282 | 131,965,782 | ||
Acquisition stock issuances, shares | 18,500,000 | ||||
Common stock issued for exercised warrants | $ 219 | 477,592 | 477,811 | ||
Common stock issued for exercised warrants, shares | 219,144 | ||||
Common stock issued for services | $ 750 | 1,499,250 | $ 1,500,000 | ||
Common stock issued for services, shares | 750,000 | 202,500 | |||
Issuance of Series A Preferred Stock, net of issuance costs | $ 1,400 | 31,007,396 | $ 31,008,796 | ||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 1,400,000 | ||||
Balance at Jun. 30, 2021 | $ 1,400 | $ 113,047 | 367,771,424 | (32,620,624) | 335,265,247 |
Balance, shares at Jun. 30, 2021 | 1,400,000 | 113,046,766 | |||
Balance at Mar. 31, 2022 | $ 1,400 | $ 116,487 | 385,426,431 | (11,240,752) | 374,303,566 |
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 | 3,253,027 | $ 3,253,027 | |||
Common stock issued for services, shares | 338,375 | ||||
Balance at Jun. 30, 2022 | $ 1,400 | $ 116,924 | $ 386,648,901 | $ (8,761,857) | $ 378,005,368 |
Balance, shares at Jun. 30, 2022 | 1,400,000 | 116,923,884 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net Income | $ 3,253,027 | $ 9,536,660 |
Adjustments to reconcile Net Income to Net Cash provided by operations: | ||
Depreciation and amortization | 4,300,123 | 3,516,851 |
Debt discount amortization | 20,813 | |
Employee stock awards | 1,175,063 | 699,500 |
Stock grants | 47,844 | 66,914 |
Contingent consideration payable fair value | (1,302) | (56,638) |
Allowance for doubtful accounts | 711,372 | 71,157 |
Gain on disposal of assets | (12,044) | |
Reduction in right of use asset | 208,506 | 27,087 |
Deferred income taxes | 500,964 | |
Changes in Current Assets and Liabilities | ||
Accounts receivable | 4,246,175 | 2,124,556 |
Due from related parties | (1,544,000) | |
Inventories | (5,572,096) | (12,072,607) |
Prepaid expenses | 882,620 | 1,114,473 |
Deposits | (493,982) | (3,119,492) |
Accounts payable | (3,009,351) | 7,021,584 |
Accrued liabilities | 697,799 | (208,131) |
Operating lease liability | (211,082) | (39,203) |
Net cash provided by operating activities | 5,212,493 | 8,670,667 |
Cash flows from investing activities: | ||
Purchase of equipment | (5,264,863) | (1,611,316) |
Gemini acquisition | (50,651,444) | |
Proceeds from disposal of assets | 59,800 | |
Net cash used in investing activities | (5,264,863) | (52,202,960) |
Cash flow from financing activities: | ||
Payments on inventory facility, net | (733,343) | (832,143) |
Proceeds from factoring liability | 24,700,000 | 23,651,000 |
Payments on factoring liability | (24,957,645) | (24,397,199) |
Payments on note payable – related party | (165,264) | (150,775) |
Payments on insurance premium note payment | (533,673) | (415,003) |
Proceeds from construction note payable | 1,000,000 | |
Preferred stock dividends paid | (638,071) | |
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 issued for exercised warrants | 477,811 | |
Common stock issuance costs | (3,170,422) | |
Net cash used in financing activities | (1,327,996) | (23,836,731) |
Net decrease in cash | (1,380,366) | (67,369,024) |
Cash, beginning of period | 23,281,475 | 118,341,471 |
Cash and restricted cash, end of period | 21,901,109 | 50,972,447 |
Cash paid during the period for: | ||
Interest | 100,876 | 189,116 |
Income taxes | ||
Non-cash investing and financing activities: | ||
Construction note payable | 4,800,358 | |
Insurance premium note payment | 2,035,519 | 1,693,764 |
Dividends accumulated on preferred stock | 136,061 | 337,745 |
Acquisition stock issuances | $ 132,645,000 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITY | 3 Months Ended |
Jun. 30, 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 | 3 Months Ended |
Jun. 30, 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 month period ended June 30, 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 month periods ended June 30, 2022 and 2021, (b) the financial position at June 30, 2022, and (c) cash flows for the three month periods ended June 30, 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. 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 June 30, 2022 and March 31, 2022, we reserved $ 3,766,624 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 11. 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 44,044 3,404 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 impairment expense was recognized for the three and nine months ended June 30, 2022 and 2021. Revenue Recognition We generate revenue from the production and sale of ammunition, 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. 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 the three months ended June 30, 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 June 30, 2022 Accounts Receivable PERCENTAGES Three Months Ended June 30, March 31, Customers: A 10.6 % - 11.8 % B - 14.5 % - 10.6 % 14.5 % 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 March 31, 2022 March 31, 2021 For the Three Months Ended June 30, 2022 June 30, 2021 Ammunition sales $ 40,969,883 $ 28,351,780 Marketplace fee revenue 16,504,946 12,272,066 Ammunition casings sales 3,281,197 3,852,486 Total Revenues $ 60,756,026 $ 44,476,332 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 $ 550,447 116,433 182,104 19,000 Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of June 30, 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, and amounts due to related parties. 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 Codifications 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 338,375 202,500 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 3.7 2.4 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 didn’t 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. Discovery continues at this date while the Company awaits the ruling on its Motion for Summary Judgment. AMMO will continue to move forward aggressively with the claims to recover the deposit monies. There were no other known contingencies at June 30, 2022. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 3 Months Ended |
Jun. 30, 2022 | |
Net Income 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 2,833,755 150,000 SCHEDULE OF INCOME/(LOSS) PER COMMON SHARE 2022 2021 For the Three Months Ended 2022 2021 Numerator: Net income $ 3,253,027 $ 9,536,660 Less: Preferred stock dividends (774,132 ) (337,745 ) Net income attributable to common stockholders $ 2,478,895 $ 9,198,915 Denominator: Weighted average shares of common stock - basic 116,560,372 105,876,867 Effect of dilutive common stock purchase warrants 1,287,280 2,024,037 Effect of dilutive equity incentive awards 31,987 139,909 Effect of dilutive contingently issuable common stock - 1,010,869 Weighted average shares of common stock - Diluted 117,879,639 109,051,682 Basic earnings per share: Income/(loss) per share attributable to common stockholders - basic $ 0.02 $ 0.09 Diluted earnings per share: Income/(loss) per share attributable to common stockholders - diluted $ 0.02 $ 0.08 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES At June 30, 2022 and March 31, 2022, the inventory balances are composed of: SCHEDULE OF INVENTORIES June 30, 2022 March 31, 2022 Finished product $ 11,906,050 $ 6,167,318 Raw materials 32,918,290 33,924,813 Work in process 19,763,908 18,924,021 Inventory net $ 64,588,248 $ 59,016,152 |
EQUIPMENT
EQUIPMENT | 3 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | NOTE 5 – 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 to ten years. Upon retirement or sale of property and equipment, we remove the cost of the disposed assets and related accumulated depreciation from the accounts and any resulting gain or loss is credited or charged to other income. We charge expenditures for normal repairs and maintenance to expense as incurred. 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 Equipment consisted of the following at June 30, 2022 and March 31, 2022: SCHEDULE OF EQUIPMENT June 30, 2022 March 31, 2022 Construction in progress $ 22,564,493 $ 14,335,371 Leasehold Improvements 257,009 257,009 Furniture and Fixtures 343,014 343,014 Vehicles 153,254 153,254 Equipment 34,360,949 32,524,850 Tooling 143,710 143,710 Total property and equipment $ 57,822,429 $ 47,757,208 Less accumulated depreciation (11,152,765 ) (10,119,402 ) Net equipment $ 46,669,664 $ 37,637,806 Depreciation Expense for the three months ended June 30, 2022 and 2021 totaled $ 1,033,363 995,334 826,401 769,956 206,962 225,378 |
DUE FROM RELATED PARTIES
DUE FROM RELATED PARTIES | 3 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
DUE FROM RELATED PARTIES | NOTE 6 – DUE FROM RELATED PARTIES On June 30, 2022, we posted a bond of approximately $ 1.6 |
FACTORING LIABILITY
FACTORING LIABILITY | 3 Months Ended |
Jun. 30, 2022 | |
Factoring Liability | |
FACTORING LIABILITY | NOTE 7 – 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 3 150,000 228,026 59,816 37,500 41,579 On June 17, 2021, this agreement was amended which extended the maturity date to June 17, 2023 |
INVENTORY CREDIT FACILITY
INVENTORY CREDIT FACILITY | 3 Months Ended |
Jun. 30, 2022 | |
Inventory Credit Facility | |
INVENTORY CREDIT FACILITY | NOTE 8 – 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 92,332 5,142 17,659 8,561 |
LEASES
LEASES | 3 Months Ended |
Jun. 30, 2022 | |
Leases | |
LEASES | NOTE 9 – LEASES We lease office, manufacturing, and warehouse space in Scottsdale, AZ, Atlanta and Marietta, GA, and Manitowoc and Two Rivers, 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 As of June 30, 2022 and March 31, 2022, total Right of Use Assets were $ 2,583,344 2,791,850 2,711,698 2,922,780 811,139 831,429 1,900,559 2,711,698 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 June 30, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES Years Ended March 31, 2022 (1) $ 782,069 2023 992,620 2024 796,066 2025 351,962 2026 257,508 Thereafter 43,660 Total Lease Payments 3,223,885 Less: Amount Representing Interest (512,187 ) Present Value Of Lease Liabilities $ 2,711,698 (1) This amount represents future lease payments for the remaining nine months of fiscal year 2023. It does not include any lease payments for the three months ended June 30, 2022. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
NOTES PAYABLE _ RELATED PARTY
NOTES PAYABLE – RELATED PARTY | 3 Months Ended |
Jun. 30, 2022 | |
Notes Payable Related Party | |
NOTES PAYABLE – RELATED PARTY | NOTE 10 – NOTES PAYABLE – RELATED PARTY For the three months ended June 30, 2022 and 2021, the Company made $ 165,264 150,755 June 26, 2023 18,652 33,141 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
CONSTRUCTION NOTE PAYABLE
CONSTRUCTION NOTE PAYABLE | 3 Months Ended |
Jun. 30, 2022 | |
Construction Note Payable | |
CONSTRUCTION NOTE PAYABLE | NOTE 11 – 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 three months ended June 30, 2022, approximately $ 5.8 1.0 |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
CAPITAL STOCK | NOTE 12 – CAPITAL STOCK Our authorized capital consists of 200,000,000 0.001 During the three month period ended June 30, 2022, we issued 438,137 ● 99,762 100,000 ● 338,375 1,175,063 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At June 30, 2022, outstanding and exercisable stock purchase warrants consisted of the following: SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS Number of Shares Weighted Weighted Average Life Remaining Outstanding at March 31, 2022 2,933,755 $ 2.32 2.29 Granted - - - Exercised (100,000 ) 0.01 4.44 Forfeited or cancelled - - - Outstanding at June 30, 2022 2,833,755 $ 2.40 2.01 Exercisable at June 30, 2022 2,833,755 $ 2.40 2.01 As of June 30, 2022, we had 2,833,755 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 1,821,567 2.00 474,966 2.40 386,311 2.63 150,000 6.72 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
PREFERRED STOCK
PREFERRED STOCK | 3 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
PREFERRED STOCK | NOTE 13 – 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 Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”), as to dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up, ranks: (1) senior to all classes or series of Common Stock and to all other capital stock issued by the Company expressly designated as ranking junior to the Series A Preferred Stock; (2) on parity with any future class or series of the Company’s capital stock expressly designated as ranking on parity with the Series A Preferred Stock; (3) junior to any future class or series of the Company’s capital stock expressly designated as ranking senior to the Series A Preferred Stock; and (4) junior to all the Company’s existing and future indebtedness. The Series A Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. In the event of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of shares for the Series A Preferred Stock are entitled to be paid out of the Company’s assets legally available for distribution to its stockholders ( i.e. 25.00 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. On May 19, 2021, we entered into an underwriting agreement (the “Underwriting Agreement”) with Alexander Capital, L.P., as representative of several underwriters (collectively, the “Underwriters”), relating to a firm commitment public offering of 1,097,200 8.75 25.00 164,580 1,097,200 27,430,000 On May 25, 2021, we entered into an additional underwriting agreement with Alexander Capital, L.P. relating to a firm commitment public offering of 138,220 25.00 138,220 3,455,500 164,580 4,114,500 We accumulated $ 136,061 337,745 On May 12, 2022, the Board of Directors of the Company declared a dividend on the Company’s Series A Preferred Stock for the period beginning March 15, 2022 through and including June 14, 2022 payable on June 15, 2022 to holders of record of Series A Preferred Stock on May 31, 2022 equal to $ 0.559027777777778 782,639 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
ACQUISITION
ACQUISITION | 3 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 14 - 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 Patent $ 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 Three Months Ended June 30, 2021 Net revenues $ 52,521,753 Net income $ 14,083,148 AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS We recorded approximately $ 1.3 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 15 – 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 months ended June 30, 2022 and 2021 were $ 3,266,760 2,521,517 SCHEDULE OF INTANGIBLE ASSETS June 30, 2022 Life Licenses Patent Other Intangible Assets 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 - (1,671,153 ) - Accumulated amortization – Intangible Assets - - (18,606,624 ) $ - $ 5,402,852 $ 133,156,993 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) $ 9,828,455 2024 13,074,489 2025 12,664,775 2026 12,664,775 2027 12,553,355 Thereafter 77,773,996 Annual amortization of intangible assets $ 138,559,845 (1) This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the three months ended June 30, 2022. AMMO, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
SEGMENTS
SEGMENTS | 3 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 16 – 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 June 30, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 44,251,080 $ 16,504,946 $ - $ 60,756,026 Cost of Revenues 40,337,015 2,283,349 - 42,620,364 General and administrative expense 3,673,112 2,433,729 3,615,724 9,722,565 Depreciation and amortization 146,412 3,203,944 - 3,350,356 Income from Operations $ 94,541 $ 8,583,924 $ (3,615,724 ) $ 5,062,741 Ammunition Marketplace Corporate Total For the Three Months Ended June 30, 2021 Ammunition Marketplace Corporate Total Net Revenues $ 32,204,266 $ 12,272,066 $ - $ 44,476,332 Cost of Revenues 23,848,248 1,657,190 - 25,505,438 General and administrative expense 2,877,354 1,002,564 2,799,401 6,679,319 Depreciation and amortization 420,242 2,190,819 - 2,611,061 Income from Operations $ 5,058,422 $ 7,421,493 $ (2,799,401 ) $ 9,680,514 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17 – INCOME TAXES The income tax provision effective tax rates were 37.0% 0.0% 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Manufacturing Business Spin-Off On August 15, 2022, we announced that our Board of Directors have unanimously approved the spin-off of our manufacturing business into a separate publicly traded company. We expect that this the transaction will be in the form of a distribution to our shareholders of 100% of the stock of the new independent publicly traded company. The distribution is intended to be tax-free to both companies and their shareholders for U.S. federal income tax purposes The marketplace business will remain a part of the Company, operating under a new name and ticker symbol. As of this date, we reasonably anticipate the transaction will be completed in the 2023 calendar year, subject to final approval by our Board of Directors, a Form 10 registration statement being declared effective by the U.S. Securities and Exchange Commission, regulatory approvals and satisfaction of other standard and necessary terms and conditions. There can be no assurance the transaction will be consummated or as concerns the ultimate timing of the proposed transaction. Common Stock Issuances Subsequent to the June 30, 2022, the Company issued 25,000 87,500 3.50 12,121 24,242 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 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 month period ended June 30, 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 month periods ended June 30, 2022 and 2021, (b) the financial position at June 30, 2022, and (c) cash flows for the three month periods ended June 30, 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. 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 June 30, 2022 and March 31, 2022, we reserved $ 3,766,624 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 11. 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 44,044 3,404 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 impairment expense was recognized for the three and nine months ended June 30, 2022 and 2021. |
Revenue Recognition | Revenue Recognition We generate revenue from the production and sale of ammunition, 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. 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 the three months ended June 30, 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 June 30, 2022 Accounts Receivable PERCENTAGES Three Months Ended June 30, March 31, Customers: A 10.6 % - 11.8 % B - 14.5 % - 10.6 % 14.5 % 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 March 31, 2022 March 31, 2021 For the Three Months Ended June 30, 2022 June 30, 2021 Ammunition sales $ 40,969,883 $ 28,351,780 Marketplace fee revenue 16,504,946 12,272,066 Ammunition casings sales 3,281,197 3,852,486 Total Revenues $ 60,756,026 $ 44,476,332 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 $ 550,447 116,433 182,104 19,000 |
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 June 30, 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, and amounts due to related parties. 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 Codifications 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 338,375 202,500 |
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 3.7 2.4 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 didn’t 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. Discovery continues at this date while the Company awaits the ruling on its Motion for Summary Judgment. AMMO will continue to move forward aggressively with the claims to recover the deposit monies. There were no other known contingencies at June 30, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CONCENTRATION OF RISKS | For the three months ended June 30, 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 June 30, 2022 Accounts Receivable PERCENTAGES Three Months Ended June 30, March 31, Customers: A 10.6 % - 11.8 % B - 14.5 % - 10.6 % 14.5 % 11.8 % |
SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT | SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT March 31, 2022 March 31, 2021 For the Three Months Ended June 30, 2022 June 30, 2021 Ammunition sales $ 40,969,883 $ 28,351,780 Marketplace fee revenue 16,504,946 12,272,066 Ammunition casings sales 3,281,197 3,852,486 Total Revenues $ 60,756,026 $ 44,476,332 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Net Income per share | |
SCHEDULE OF INCOME/(LOSS) PER COMMON SHARE | SCHEDULE OF INCOME/(LOSS) PER COMMON SHARE 2022 2021 For the Three Months Ended 2022 2021 Numerator: Net income $ 3,253,027 $ 9,536,660 Less: Preferred stock dividends (774,132 ) (337,745 ) Net income attributable to common stockholders $ 2,478,895 $ 9,198,915 Denominator: Weighted average shares of common stock - basic 116,560,372 105,876,867 Effect of dilutive common stock purchase warrants 1,287,280 2,024,037 Effect of dilutive equity incentive awards 31,987 139,909 Effect of dilutive contingently issuable common stock - 1,010,869 Weighted average shares of common stock - Diluted 117,879,639 109,051,682 Basic earnings per share: Income/(loss) per share attributable to common stockholders - basic $ 0.02 $ 0.09 Diluted earnings per share: Income/(loss) per share attributable to common stockholders - diluted $ 0.02 $ 0.08 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | At June 30, 2022 and March 31, 2022, the inventory balances are composed of: SCHEDULE OF INVENTORIES June 30, 2022 March 31, 2022 Finished product $ 11,906,050 $ 6,167,318 Raw materials 32,918,290 33,924,813 Work in process 19,763,908 18,924,021 Inventory net $ 64,588,248 $ 59,016,152 |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF EQUIPMENT | Equipment consisted of the following at June 30, 2022 and March 31, 2022: SCHEDULE OF EQUIPMENT June 30, 2022 March 31, 2022 Construction in progress $ 22,564,493 $ 14,335,371 Leasehold Improvements 257,009 257,009 Furniture and Fixtures 343,014 343,014 Vehicles 153,254 153,254 Equipment 34,360,949 32,524,850 Tooling 143,710 143,710 Total property and equipment $ 57,822,429 $ 47,757,208 Less accumulated depreciation (11,152,765 ) (10,119,402 ) Net equipment $ 46,669,664 $ 37,637,806 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Leases | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES | Future minimum lease payments under non-cancellable leases as of June 30, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES Years Ended March 31, 2022 (1) $ 782,069 2023 992,620 2024 796,066 2025 351,962 2026 257,508 Thereafter 43,660 Total Lease Payments 3,223,885 Less: Amount Representing Interest (512,187 ) Present Value Of Lease Liabilities $ 2,711,698 (1) This amount represents future lease payments for the remaining nine months of fiscal year 2023. It does not include any lease payments for the three months ended June 30, 2022. |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS | At June 30, 2022, outstanding and exercisable stock purchase warrants consisted of the following: SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK PURCHASE WARRANTS Number of Shares Weighted Weighted Average Life Remaining Outstanding at March 31, 2022 2,933,755 $ 2.32 2.29 Granted - - - Exercised (100,000 ) 0.01 4.44 Forfeited or cancelled - - - Outstanding at June 30, 2022 2,833,755 $ 2.40 2.01 Exercisable at June 30, 2022 2,833,755 $ 2.40 2.01 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Jun. 30, 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 Patent $ 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 Three Months Ended June 30, 2021 Net revenues $ 52,521,753 Net income $ 14,083,148 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | SCHEDULE OF INTANGIBLE ASSETS June 30, 2022 Life Licenses Patent Other Intangible Assets 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 - (1,671,153 ) - Accumulated amortization – Intangible Assets - - (18,606,624 ) $ - $ 5,402,852 $ 133,156,993 |
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) $ 9,828,455 2024 13,074,489 2025 12,664,775 2026 12,664,775 2027 12,553,355 Thereafter 77,773,996 Annual amortization of intangible assets $ 138,559,845 (1) This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the three months ended June 30, 2022. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF OPERATING SEGMENTS | SCHEDULE OF OPERATING SEGMENTS Ammunition Marketplace Corporate Total For the Three Months Ended June 30, 2022 Ammunition Marketplace Corporate Total Net Revenues $ 44,251,080 $ 16,504,946 $ - $ 60,756,026 Cost of Revenues 40,337,015 2,283,349 - 42,620,364 General and administrative expense 3,673,112 2,433,729 3,615,724 9,722,565 Depreciation and amortization 146,412 3,203,944 - 3,350,356 Income from Operations $ 94,541 $ 8,583,924 $ (3,615,724 ) $ 5,062,741 Ammunition Marketplace Corporate Total For the Three Months Ended June 30, 2021 Ammunition Marketplace Corporate Total Net Revenues $ 32,204,266 $ 12,272,066 $ - $ 44,476,332 Cost of Revenues 23,848,248 1,657,190 - 25,505,438 General and administrative expense 2,877,354 1,002,564 2,799,401 6,679,319 Depreciation and amortization 420,242 2,190,819 - 2,611,061 Income from Operations $ 5,058,422 $ 7,421,493 $ (2,799,401 ) $ 9,680,514 |
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 | 12 Months Ended |
Jun. 30, 2022 | Mar. 31, 2022 | |
Revenue Benchmark [Member] | Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 10.60% | |
Revenue Benchmark [Member] | Customer B [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | ||
Revenue Benchmark [Member] | Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 10.60% | |
Accounts Receivable [Member] | Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 11.80% | |
Accounts Receivable [Member] | Customer B [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 14.50% | |
Accounts Receivable [Member] | Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 14.50% | 11.80% |
SCHEDULE OF DISAGGREGATED REVEN
SCHEDULE OF DISAGGREGATED REVENUE FROM CUSTOMERS BY SEGMENT (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Product Information [Line Items] | ||
Total Revenues | $ 60,756,026 | $ 44,476,332 |
Ammunition Sales [Member] | ||
Product Information [Line Items] | ||
Total Revenues | 40,969,883 | 28,351,780 |
Marketplace Fee Revenue [Member] | ||
Product Information [Line Items] | ||
Total Revenues | 16,504,946 | 12,272,066 |
Ammunition Casings Sales [Member] | ||
Product Information [Line Items] | ||
Total Revenues | $ 3,281,197 | $ 3,852,486 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Allowance for doubtful accounts | $ 3,766,624 | $ 3,055,252 | |
Advertising expenses | 550,447 | $ 116,433 | |
Selling and marketing expenses | $ 182,104 | $ 19,000 | |
Number of stock, shares issued | 338,375 | 202,500 | |
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% | ||
Excise tax amount | $ 3,700,000 | $ 2,400,000 | |
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cash FDIC insured amount | $ 250,000 | ||
Patents [Member] | Exclusive License Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Share price | $ 0.01 | ||
Royalty expenses | $ 44,044 | $ 3,404 |
SCHEDULE OF INCOME_(LOSS) PER C
SCHEDULE OF INCOME/(LOSS) PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Net Income per share | ||
Net income | $ 3,253,027 | $ 9,536,660 |
Less: Preferred stock dividends | (774,132) | (337,745) |
Net Income Attributable to Common Stock Shareholders | $ 2,478,895 | $ 9,198,915 |
Weighted average shares of common stock - basic | 116,560,372 | 105,876,867 |
Effect of dilutive common stock purchase warrants | 1,287,280 | 2,024,037 |
Effect of dilutive equity incentive awards | 31,987 | 139,909 |
Effect of dilutive contingently issuable common stock | 1,010,869 | |
Weighted average shares of common stock - Diluted | 117,879,639 | 109,051,682 |
Income/(loss) per share attributable to common stockholders - basic | $ 0.02 | $ 0.09 |
Income/(loss) per share attributable to common stockholders - diluted | $ 0.02 | $ 0.08 |
INCOME PER COMMON SHARE (Detail
INCOME PER COMMON SHARE (Details Narrative) - shares | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrant, shares | 117,879,639 | 109,051,682 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrants outstanding | 2,833,755 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrant, shares | 150,000 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished product | $ 11,906,050 | $ 6,167,318 |
Raw materials | 32,918,290 | 33,924,813 |
Work in process | 19,763,908 | 18,924,021 |
Inventory net | $ 64,588,248 | $ 59,016,152 |
SCHEDULE OF EQUIPMENT (Details)
SCHEDULE OF EQUIPMENT (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 57,822,429 | $ 47,757,208 |
Less accumulated depreciation | (11,152,765) | (10,119,402) |
Net equipment | 46,669,664 | 37,637,806 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 22,564,493 | 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 | 343,014 | 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 | 34,360,949 | 32,524,850 |
Tools, Dies and Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 143,710 | $ 143,710 |
EQUIPMENT (Details Narrative)
EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Depreciation expense | $ 1,033,363 | $ 995,334 |
Cost of Sales [Member] | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Depreciation expense | 826,401 | 769,956 |
Operating Expense [Member] | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Depreciation expense | $ 206,962 | $ 225,378 |
DUE FROM RELATED PARTIES (Detai
DUE FROM RELATED PARTIES (Details Narrative) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 |
Related Party Transactions [Abstract] | ||
Due from related parties | $ 1,559,000 | $ 15,000 |
FACTORING LIABILITY (Details Na
FACTORING LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | ||||
Jun. 17, 2021 | Jul. 01, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 17, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of credit facility maximum borrowing capacity | $ 35,000 | ||||
Factoring liability | $ 228,026 | ||||
Interest expenses on factoring liability | 59,816 | ||||
Amortization of commitment fee | $ 37,500 | $ 41,579 | |||
Maturity date | Jun. 17, 2023 | Jun. 26, 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 ($) | 3 Months Ended | |||
Jun. 17, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jul. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit maximum borrowing amount | $ 35,000 | |||
Interest expense on inventory credit facility | $ 5,142 | $ 17,659 | ||
Amortization of annual fee | $ 8,561 | |||
Inventory Credit Facility [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Inventory credit facility | $ 92,332 | |||
Revolving Inventory Loan and Security Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit maximum borrowing amount | $ 1,750,000 | $ 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% |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | |
Leases | |||
2022 | [1] | $ 782,069 | |
2023 | 992,620 | ||
2024 | 796,066 | ||
2025 | 351,962 | ||
2026 | 257,508 | ||
Thereafter | 43,660 | ||
Total Lease Payments | 3,223,885 | ||
Less: Amount Representing Interest | (512,187) | ||
Present Value Of Lease Liabilities | $ 2,711,698 | $ 2,922,780 | |
[1]This amount represents future lease payments for the remaining nine months of fiscal year 2023. It does not include any lease payments for the three months ended June 30, 2022. |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 1 Months Ended | |||
Jan. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | |
Leases | ||||
Changes in right of use assets | $ 308,326 | $ 501,125 | ||
Changes in operating lease liabilities | $ 308,326 | $ 501,125 | ||
Right use of asset | $ 2,583,344 | $ 2,791,850 | ||
Operating lease, liability | 2,711,698 | 2,922,780 | ||
Operating lease liability, current | 811,139 | 831,429 | ||
Operating lease liability non-current | $ 1,900,559 | $ 2,091,351 | ||
Weighted average remaining lease term | 3 years 4 months 24 days | |||
Weighted average discount rate for operating leases | 10% |
NOTES PAYABLE _ RELATED PARTY (
NOTES PAYABLE – RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 17, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Notes Payable Related Party | |||
Principal payments | $ 165,264 | $ 150,755 | |
Debt instrument maturity date | Jun. 17, 2023 | Jun. 26, 2023 | |
Interest expense related party | $ 18,652 | $ 33,141 |
CONSTRUCTION NOTE PAYABLE (Deta
CONSTRUCTION NOTE PAYABLE (Details Narrative) | 3 Months Ended | ||
Oct. 14, 2021 USD ($) ft² | Jun. 17, 2021 | Jun. 30, 2022 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Proceeds from notes payable | $ 1,000,000 | ||
Debt maturity date | Jun. 17, 2023 | Jun. 26, 2023 | |
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 | $ 5,800,000 | ||
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 | ||
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] | 3 Months Ended |
Jun. 30, 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 | |
Weighted average exercise price, granted | $ / shares | |
Number of shares, exercised | shares | (100,000) |
Weighted average exercise price, exercised | $ / shares | $ 0.01 |
Weighted average life remaining years, outstanding exercised | 4 years 5 months 8 days |
Number of shares, forfeited or cancelled | shares | |
Weighted average exercise price, forfeited or cancelled | $ / shares | |
Number of shares, outstanding ending | shares | 2,833,755 |
Weighted average exercise price, outstanding ending | $ / shares | $ 2.40 |
Weighted average life remaining years, outstanding ending | 2 years 3 days |
Number of shares, exercisable | shares | 2,833,755 |
Weighted average exercise price, exercisable | $ / shares | $ 2.40 |
Weighted average life remaining years, exercisable | 2 years 3 days |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Employees, Board of Directors, Advisory Committee [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Stock issued during period shares employee benefit plan | 338,375 | |
Stock issued during period value employee benefit plan | $ 1,175,063 | |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Shares issued cashless exercise of warrants | 99,762 | |
Cashless exercise of warrants | 100,000 | |
Warrants outstanding | 2,833,755 | |
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 1,821,567 shares of our Common Stock at an exercise price of $2.00 per share consisting of 32% of the warrants until August 2024, and 68% 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 | |
Warrant One [Member] | Until April 2025 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants issued to purchase common stock | 911 | |
Warrants exercise price | $ 1.65 | |
Warrant Two [Member] | Until August 2024 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants issued to purchase common stock | 1,821,567 | |
Warrants exercise price | $ 2 | |
Warrant Three [Member] | Until September 2024 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants issued to purchase common stock | 474,966 | |
Warrants exercise price | $ 2.40 | |
Warrant Four [Member] | Until November 2025 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants issued to purchase common stock | 386,311 | |
Warrants exercise price | $ 2.63 | |
Warrant Five [Member] | Until February 2024 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants issued to purchase common stock | 150,000 | |
Warrants exercise price | $ 6.72 | |
New Issuance of Shares [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued new shares, shares | 438,137 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Jun. 15, 2022 | May 31, 2022 | May 25, 2021 | May 19, 2021 | May 18, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | |
Class of Stock [Line Items] | ||||||||
Dividend rate | 8.75% | 8.75% | ||||||
Proceeds from offering | $ 31,008,796 | |||||||
Accumulated preferred dividends | $ 136,061 | $ 337,745 | ||||||
Series A Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Share price | $ 25 | |||||||
Dividend rate | 8.75% | |||||||
Preferred stock dividend rate per annum | $ 0.559027777777778 | $ 2.1875 | ||||||
Dividend payment terms | payable quarterly in arrears on March 15, June 15, September 15 and December 15 | |||||||
Accumulated preferred dividends | $ 782,639 | |||||||
Series A Preferred Stock [Member] | Underwriting Agreement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Share price | $ 25 | $ 25 | ||||||
Number of common stock shares issued | 138,220 | 1,097,200 | ||||||
Shares issued percent | 8.75% | |||||||
Proceeds from offering | $ 3,455,500 | $ 27,430,000 | ||||||
Series A Preferred Stock [Member] | Underwriting Agreement [Member] | Over-Allotment Option [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of common stock shares issued | 164,580 | |||||||
Proceeds from offering | $ 4,114,500 | |||||||
Series A Preferred Stock [Member] | Underwriting Agreement [Member] | Underwriters [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of common stock shares issued | 164,580 |
SCHEDULE OF FAIR VALUE OF CONSI
SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED (Details) - USD ($) | Jun. 30, 2022 | Apr. 30, 2021 |
Business Combination and Asset Acquisition [Abstract] | ||
Cash | $ 48,649,954 | |
Working capital adjustment | 1,870,886 | |
Contingent consideration | 10,755,000 | $ 10,755,000 |
Common stock | 132,645,000 | |
Assumed debt | 50,000,000 | |
Fair value of Patent | $ 243,920,840 |
SCHEDULE OF ALLOCATION FOR CONS
SCHEDULE OF ALLOCATION FOR CONSIDERATION (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | ||
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 | [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
SCHEDULE OF UNAUDITED PRO FORMA RESULTS OF OPERATIONS (Details) | 6 Months Ended |
Jun. 30, 2021 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Net revenues | $ 52,521,753 |
Net income | $ 14,083,148 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | 3 Months Ended | ||||
Apr. 30, 2021 | Apr. 02, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Business acquisition, amount | $ 1,350,046 | ||||
Business combination, cash payment | 50,000,000 | ||||
Estimated working capital adjustment | 2,000,000 | ||||
Contingent consideration payable, net of current portion | 50,000,000 | $ 202,840 | $ 204,142 | ||
Contingent consideration, amount | $ 10,755,000 | $ 10,755,000 | |||
Shares issued prior stockholder | 1,500,000 | ||||
Business combination additional securities of common stock | 18,500,000 | ||||
Company received a cash payment | $ 129,114 | ||||
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 | ||||
Asset acquisition, consideration transferred, transaction cost | $ 1,300,000 | ||||
Gemini Direct Investments LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, share price | $ 7.17 | ||||
Business Acquisition Meger Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value of the consideration transferred | $ 1,870,886 | ||||
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 | ||||
Without Being Held in Escrow or Requiring Prior Stockholder Approval [Member] | |||||
Business Acquisition [Line Items] | |||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 14,500,000 | ||||
Pledge and Escrow Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 4,000,000 | ||||
Will Not Be Issued Prior to The Stockholder Approval [Member] | |||||
Business Acquisition [Line Items] | |||||
Issuance of Series A Preferred Stock, net of issuance costs, shares | 1,500,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) | 3 Months Ended |
Jun. 30, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, net | $ 138,559,845 |
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 | (18,606,624) |
Intangible assets, net | $ 133,156,993 |
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 | (1,671,153) |
Intangible assets, net | $ 5,402,852 |
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) | Jun. 30, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (1) | $ 9,828,455 | [1] |
2024 | 13,074,489 | |
2025 | 12,664,775 | |
2026 | 12,664,775 | |
2027 | 12,553,355 | |
Thereafter | 77,773,996 | |
Annual amortization of intangible assets | $ 138,559,845 | |
[1]This amount represents future amortization for the remaining nine months of fiscal year 2023. It does not include any amortization for the three months ended June 30, 2022. |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 90,870,094 | [1] | $ 90,870,094 | |
Amortization of intangible assets | $ 3,266,760 | $ 2,521,517 | ||
[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 | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | ||
Net Revenues | $ 60,756,026 | $ 44,476,332 |
Cost of Revenues | 42,620,364 | 25,505,438 |
General and administrative expense | 9,722,565 | 6,679,319 |
Depreciation and amortization | 3,350,356 | 2,611,061 |
Income from Operations | 5,062,741 | 9,680,514 |
Ammunition [Member] | ||
Revenue from External Customer [Line Items] | ||
Net Revenues | 44,251,080 | 32,204,266 |
Cost of Revenues | 40,337,015 | 23,848,248 |
General and administrative expense | 3,673,112 | 2,877,354 |
Depreciation and amortization | 146,412 | 420,242 |
Income from Operations | 94,541 | 5,058,422 |
Marketplace [Member] | ||
Revenue from External Customer [Line Items] | ||
Net Revenues | 16,504,946 | 12,272,066 |
Cost of Revenues | 2,283,349 | 1,657,190 |
General and administrative expense | 2,433,729 | 1,002,564 |
Depreciation and amortization | 3,203,944 | 2,190,819 |
Income from Operations | 8,583,924 | 7,421,493 |
Corporate and Other Expenses [Member] | ||
Revenue from External Customer [Line Items] | ||
Net Revenues | ||
Cost of Revenues | ||
General and administrative expense | 3,615,724 | 2,799,401 |
Depreciation and amortization | ||
Income from Operations | $ (3,615,724) | $ (2,799,401) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 37% | 0% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Aug. 15, 2022 USD ($) $ / shares shares | |
Subsequent Event [Line Items] | |
Number of shares issued exercise of warrants, shares | shares | 12,121 |
Shares issued exercise of warrants value | $ | $ 24,242 |
Employees [Member] | |
Subsequent Event [Line Items] | |
Number of stock issued as compensation | shares | 25,000 |
Stock issued as compensation, value | $ | $ 87,500 |
Shares issued price per share | $ / shares | $ 3.50 |