Message From Chairman and CEO, Steve Urvan

August 8, 2025
Steve Urvan
Chairman and Chief Executive Officer
Outdoor Holding Company (Nasdaq: POWW and POWWP)

Dear Fellow Stockholders,

It is time to usher in a new era for Outdoor Holding Company (the "Company"). The first quarter of fiscal 2026 represents a turning point as we transition to a streamlined, focused e-commerce marketplace operator. With the successful closing of the sale of our ammunition division in April 2025 and the launch of our new corporate identity, we are moving forward with clarity, purpose, and momentum. I rejoined the executive management team as CEO and Chairman of the Board of Directors at the end of May. As the Founder of the GunBroker marketplace, I look forward to leveraging my decades of prior experience at the helm to hearken back to what has made the platform so successful historically, while helping the Company evolve into its next iteration.

Today, we are now singularly focused on GunBroker.com, the largest online marketplace for firearms, hunting, and outdoor products. The transformation has been calculated, strategic, and essential. We've closed a challenging chapter that included litigation, internal investigations, delayed financial filings, and regulatory reviews. These challenges have required a significant amount of our time and resources to properly address. While we still anticipate some legal and indemnification-related expenses over the next 12 to 18 months, we believe the heaviest burdens are behind us and our elevated legal and other professional services expenses should decline over the coming quarters.

We've taken deliberate and effective steps to restore compliance with Nasdaq listing standards. Our financial reporting is current, and upon holding our annual meeting on August 29th, the Company will be in full compliance with Nasdaq's continued listing rules. As legacy issues fade and performance improves, we expect the performance of our stock to reflect the Company's true potential. Our financial foundation is strengthening, our compliance posture has improved considerably, and the road ahead is far clearer.

We are simultaneously executing an ambitious restructuring initiative-consolidating redundant functions, eliminating excess overhead, and reducing our physical footprint. We fully expect these moves to drive meaningful reductions in SG&A and directly improve Adjusted EBITDA and cash flow, as we progress through the end of the fiscal year. Despite persistent macroeconomic headwinds, we reported stable net revenue of almost $12 million, with gross margin expanding to an impressive 87.2%. Our net loss for the first quarter of ($5.9) million was cut in half compared to the prior year period, and Adjusted EBITDA[1] of $3.1 million demonstrates the underlying strength of our asset-light model. While these are signs of moderate improvement, it's nowhere near where we expect it to be. We expect to see continued impact of these initiatives reflected in our financial results in future quarters.

When I compare the GunBroker platform at the time of the AMMO-GunBroker merger in 2021 to the GunBroker platform in 2025, I see a business that continues to be the dominant technology player in the firearms space. 2020 and 2021 saw an industry-wide surge in consumer demand that drove revenues to record heights - bringing more buyers online and increasing the breadth of our demographic base. Over the past 17 years, I have observed similar patterns of surging demand followed by periods of weaker demand - to the point that, in my experience, such a pattern has been normal for the industry since 2008. I want to reassure our stockholders that GunBroker gained a great many new customers through each of these surges, including the most recent surge in 2020-2021, and has not lost market share or its preeminent position in the industry. While revenue may be down industry-wide in any given year, GunBroker's share of the industry has remained stable.

Our challenge at the moment is not the performance of the GunBroker business, but rather our SG&A. During the first quarter of fiscal 2026, we experienced increased costs at the corporate level related to the winding down of the operations supporting the ammunition manufacturing business that were not included in the sale. These costs are decreasing monthly, and we expect to eliminate the vast majority of them by the end of Q3 2026.

We also have experienced significant and debilitating legal and compliance costs related to the Section 10A investigation, an investigation by the Securities and Exchange Commission, and related indemnification of former officers and directors. Additionally, we continue to incur extraordinary costs in the course of litigation, resolution of sales tax audits from years ago, disclosure and regulatory counsel advisors, and various accounting and internal controls consultants. These extraordinary costs are, and will continue to be, a drag on our corporate operating expenses - lowering our profitability metrics. The good news is that these costs are largely a short-term aberration, and we expect them to abate as legal issues are resolved, processes are improved, and material weaknesses are remediated. We are not in control of the timeline to discontinue or dramatically reduce these costs, but our best estimate at this time is that we will see significant reductions within the next 12-18 months.

I believe that Outdoor Holding Company will be on a run rate of $25M Adjusted EBITDA[2] within 18 months, even assuming relatively flat revenue. With some positive contribution from the new initiatives detailed below, that number could be higher. We also intend to maximize free cash flow. With a substantial Net Operating Loss (NOL), we do not expect to have an income tax liability for a few years.

GunBroker's operational performance remains strong despite industry headwinds. We continue to experience increases in listings and registered users, reflecting improved seller engagement and platform visibility. We expect that enhancements in buyer personalization, seller tools, and search functionality will result in stronger conversion rates, higher average order values, and improved customer satisfaction. We are building momentum where it matters most.

Our strategy is laser-focused on unlocking stockholder value and growing the GunBroker ecosystem by enhancing the user experience. Our key strategic initiatives for the remainder of fiscal 2026 include:

We've done a lot of the heavy lifting, but there is still work to be done. We are now positioned to emerge from recent storms and to focus on operations: scaling, innovating, and growing. I am energized by the opportunities ahead-and confident in our ability to build sustainable, long-term value for our shareholders.

Thank you for your continued support and trust.

Sincerely,

Steve Urvan
Chairman and Chief Executive Officer
Outdoor Holding Company

Cautionary Statement Concerning Forward-Looking Statements

Statements contained or incorporated by reference in this letter that are not historical are considered "forward-looking statements" within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "target," "believe," "expect," "will," "may," "anticipate," "estimate," "would," "positioned," "future," and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, among others, statements about the Company's ability to transition to a streamlined, focused e-commerce marketplace operator, the Company's expected indemnification, legal and other professional services expenses, the Company's ability to maintain compliance with the listing standards of Nasdaq, the Company's expected stock performance, the Company's ability to reduce selling, general and administrative expenses and improve Adjusted EBITDA and cash flow, the Company's anticipated run rate of Adjusted EBITDA over the next 18 months, the Company's ability to use enhancements in buyer personalization, seller tools, and search functionality to drive stronger conversion rates, higher average order values, and improved customer satisfaction, the Company's business strategy, plans, objectives, expectations and intentions, the Company's anticipated future operating results and operating expenses, cash flow, capital resources, dividends and liquidity, the Company's future expansion or growth plans and potential for future growth, including our plan to expand its e-commerce platform, the Company's ability to attract new customers and other statements that are not historical facts. Instead, they are based only on Company management's current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, the Company's ability to maintain and expand its e-commerce business, the Company's ability to introduce new features on its e-commerce platform that match consumer preferences, the Company's ability to retain and grow its customer base, the impact of lawsuits, including product liability claims, securities class action lawsuits, stockholder derivative suits and enforcement actions by regulatory authorities, the impact of adverse economic market conditions, including from social and political factors, and the occurrence of any other event, change or other circumstances that could give rise to impacts on operating results. Therefore, investors should not rely on any of these forward-looking statements and should review the risks and uncertainties described under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on June 17, 2025, and additional disclosures the Company makes in its other filings with the SEC, which are available on the SEC's website at www.sec.gov. Forward-looking statements are made as of the date of this letter, and except as provided by law, the Company expressly disclaims any obligation or undertaking to any updated forward-looking statements.