{"url_path":"/sec/aout/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 Form 10-K Summary","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-25","source_url":"https://www.sec.gov/Archives/edgar/data/1808997/0001808997-26-000031-index.html","accession_number":"0001808997-26-000031","cik":"0001808997","ticker":"AOUT","issuer_name":"American Outdoor Brands, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1808997/0001808997-26-000031-index.html","primary_entity_key":"0001808997","primary_entity_name":"American Outdoor Brands, Inc."},"word_count":14796,"has_tables":true,"body_markdown":"Item 16. Form 10-K Summary\n\nNone.\n\n61\n\nSIGNATURES\n\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\n\nAMERICAN OUTDOOR BRANDS, INC.\n\n/s/ Brian D. Murphy\n\nBrian D. Murphy\n\nPresident and Chief Executive Officer\n\nDate: June 25, 2026\n\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.\n\nSignatureCapacityDate\n\n/s/ Brian D. MurphyPresident, Chief Executive Officer (Principal Executive Officer) and DirectorJune 25, 2026\n\nBrian D. Murphy\n\n/s/ H. Andrew FulmerExecutive Vice President, Chief Financial\nOfficer, Treasurer, and Secretary (Principal Financial Officer)June 25, 2026\n\nH. Andrew Fulmer\n\n/s/ Barry M. MonheitChairman of the BoardJune 25, 2026\n\nBarry M. Monheit\n\n/s/ Bradley T. FavreauDirectorJune 25, 2026\n\nBradley T. Favreau\n\n/s/ Mary E. GallagherDirectorJune 25, 2026\n\nMary E. Gallagher\n\n/s/ Gregory J. Gluchowski, Jr.DirectorJune 25, 2026\n\nGregory J. Gluchowski, Jr.\n\n/s/ Luis G. MarconiDirectorJune 25, 2026\n\nLuis G. Marconi\n\n62\n\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nPage\n\n[Report](#ieb264ac0dbdb4e6a9c07b6f964896196_127)[s](#ieb264ac0dbdb4e6a9c07b6f964896196_127)[of Independent Registered Public Accounting Firm (PCAOB ID Number](#ieb264ac0dbdb4e6a9c07b6f964896196_127)248[)](#ieb264ac0dbdb4e6a9c07b6f964896196_127)\n\nF-[2](#ieb264ac0dbdb4e6a9c07b6f964896196_127)\n\n[Consolidated Balance Sheets as of April 30, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_130)[6](#ieb264ac0dbdb4e6a9c07b6f964896196_130)[and 20](#ieb264ac0dbdb4e6a9c07b6f964896196_130)[25](#ieb264ac0dbdb4e6a9c07b6f964896196_130)\n\nF-[4](#ieb264ac0dbdb4e6a9c07b6f964896196_130)\n\n[Consolidated Statements of Operations for the years ended April 30, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_133)[6](#ieb264ac0dbdb4e6a9c07b6f964896196_133)[, 2024, and 20](#ieb264ac0dbdb4e6a9c07b6f964896196_133)[24](#ieb264ac0dbdb4e6a9c07b6f964896196_133)\n\nF-[5](#ieb264ac0dbdb4e6a9c07b6f964896196_133)\n\n[Consolidated Statements of Equity for the years ended April 30, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_136)[6](#ieb264ac0dbdb4e6a9c07b6f964896196_136)[, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_136)[5](#ieb264ac0dbdb4e6a9c07b6f964896196_136)[, and 20](#ieb264ac0dbdb4e6a9c07b6f964896196_136)[24](#ieb264ac0dbdb4e6a9c07b6f964896196_136)\n\nF-[6](#ieb264ac0dbdb4e6a9c07b6f964896196_136)\n\n[Consolidated Statements of Cash Flows for the years ended April 30, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_139)[6](#ieb264ac0dbdb4e6a9c07b6f964896196_139)[, 202](#ieb264ac0dbdb4e6a9c07b6f964896196_139)[5](#ieb264ac0dbdb4e6a9c07b6f964896196_139)[, and 20](#ieb264ac0dbdb4e6a9c07b6f964896196_139)[24](#ieb264ac0dbdb4e6a9c07b6f964896196_139)\n\nF-[7](#ieb264ac0dbdb4e6a9c07b6f964896196_139)\n\n[Notes to Consolidated Financial Statements](#ieb264ac0dbdb4e6a9c07b6f964896196_142)\n\nF-[9](#ieb264ac0dbdb4e6a9c07b6f964896196_142)\n\nF-1\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nBoard of Directors and Shareholders\n\nAmerican Outdoor Brands, Inc.\n\nOpinion on internal control over financial reporting\n\nWe have audited the internal control over financial reporting of American Outdoor Brands, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of April 30, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended April 30, 2026, and our report dated June 25, 2026 expressed an unqualified opinion on those financial statements.\n\nBasis for opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report On Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and limitations of internal control over financial reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ GRANT THORNTON LLP\n\nBoston, Massachusetts\n\nJune 25, 2026\n\nF-2\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nBoard of Directors and Shareholders\n\nAmerican Outdoor Brands Inc.\n\nOpinion on the financial statements\n\nWe have audited the accompanying consolidated balance sheets of American Outdoor Brands Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of April 30, 2026 and 2025, the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended April 30, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended April 30, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of April 30, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated June 25, 2026 expressed an unqualified opinion.\n\nBasis for opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical audit matters\n\nCritical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.\n\n/s/ GRANT THORNTON LLP\n\nWe have served as the Company’s auditor since 2020.\n\nBoston, Massachusetts\n\nJune 25, 2026\n\nF-3\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\nAs of:\n\nApril 30, 2026April 30, 2025\n\n(In thousands, except par value and share data)\n\nASSETS\n\nCurrent assets:\n\nCash and cash equivalents$21,436 $23,423 \n\nAccounts receivable, net of allowance for credit losses of $419 on April 30, 2026\n\nand $159 on April 30, 2025\n29,233 39,337 \n\nInventories91,889 104,717 \n\nAssets held for sale734 — \n\nPrepaid expenses2,268 2,435 \n\nOther current assets16,978 1,535 \n\nIncome tax receivable156 143 \n\nTotal current assets162,694 171,590 \n\nProperty, plant, and equipment, net9,327 11,231 \n\nIntangible assets, net23,527 31,411 \n\nRight-of-use assets30,710 31,896 \n\nOther assets362 227 \n\nTotal assets$226,620 $246,355 \n\nLIABILITIES AND EQUITY\n\nCurrent liabilities:\n\nAccounts payable$13,432 $15,717 \n\nAccrued expenses13,212 13,872 \n\nAccrued payroll and incentives1,700 5,871 \n\nLease liabilities, current1,569 1,336 \n\nTotal current liabilities29,913 36,796 \n\nLease liabilities, net of current portion30,814 31,949 \n\nTotal liabilities60,727 68,745 \n\nCommitments and contingencies (Note 16)\n\nEquity:\n\nPreferred stock, $0.001 par value, 20,000,000 shares authorized, no shares\n\nissued or outstanding on April 30, 2026 and 2025\n— — \n\nCommon stock, $0.001 par value, 100,000,000 shares authorized, 15,288,148 shares\n\nissued and 12,459,004 shares outstanding on April 30, 2026 and 14,974,217\n\nshares issued and 12,696,356 shares outstanding on April 30, 2025\n15 15 \n\nAdditional paid in capital283,327 280,711 \n\nRetained deficit(83,908)(74,700)\n\nTreasury stock, at cost (2,829,144 shares on April 30, 2026 and\n\n2,277,861 shares on April 30, 2025)\n(33,541)(28,416)\n\nTotal equity165,893 177,610 \n\nTotal liabilities and equity$226,620 $246,355 \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-4\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\nFor the Years ended April 30,\n\n202620252024\n\n(In thousands, except per share data)\n\nNet sales$190,536 $222,322 $201,099 \n\nCost of sales105,342 123,058 112,673 \n\nGross profit85,194 99,264 88,426 \n\nOperating expenses:\n\nResearch and development6,087 7,710 6,851 \n\nSelling, marketing, and distribution51,748 55,563 55,050 \n\nGeneral and administrative32,926 36,145 39,022 \n\nImpairment of assets held for sale3,433 — — \n\nTotal operating expenses94,194 99,418 100,923 \n\nOperating loss(9,000)(154)(12,497)\n\nOther income/(expense), net:\n\nOther income, net113 140 140 \n\nInterest (expense)/income, net(276)60 39 \n\nTotal other (expense)/income, net(163)200 179 \n\n(Loss)/income from operations before income taxes(9,163)46 (12,318)\n\nIncome tax expense/(benefit)45 123 (70)\n\nNet loss$(9,208)$(77)$(12,248)\n\nNet loss per share:\n\nBasic and diluted$(0.73)$(0.01)$(0.94)\n\nWeighted average number of common shares\n\noutstanding:\n\nBasic and diluted12,587 12,806 12,967 \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-5\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF EQUITY\n\nCommon StockAdditional\nPaid-In\nCapitalTreasury Stock\n\nSharesAmountRetained\n(Deficit)/EarningsSharesAmountTotal\nEquity\n\nBalance at April 30, 202314,447$14 $272,784 $(62,375)1,214$(18,559)$191,864 \n\nNet loss—— — (12,248)—— (12,248)\n\nStock-based compensation—— 4,075 — —— 4,075 \n\nShares issued under employee stock purchase plan92— 671 — —— 671 \n\nIssuance of common stock under restricted stock unit awards, net of tax1621 (423)— —— (422)\n\nRepurchase of treasury stock—— — — 689(6,015)(6,015)\n\nBalance at April 30, 202414,701$15 $277,107 $(74,623)1,903$(24,574)$177,925 \n\nNet loss—— — (77)—— (77)\n\nStock-based compensation—— 3,500 —— 3,500 \n\nShares issued under employee stock purchase plan86— 628 — —— 628 \n\nIssuance of common stock under restricted stock unit awards, net of tax187— (524)— —— (524)\n\nRepurchase of treasury stock—— — — 375(3,842)(3,842)\n\nBalance at April 30, 202514,974$15 $280,711 $(74,700)2,278$(28,416)$177,610 \n\nNet loss—— — (9,208)—— (9,208)\n\nStock-based compensation—— 3,071 — —— 3,071 \n\nShares issued under employee stock purchase plan85— 620 — —— 620 \n\nIssuance of common stock under restricted stock unit awards, net of tax229— (1,075)— —— (1,075)\n\nRepurchase of treasury stock—— — — 551(5,125)(5,125)\n\nBalance at April 30, 202615,288$15 $283,327 $(83,908)2,829$(33,541)$165,893 \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-6\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nFor the Years Ended April 30,\n\n202620252024\n\n(In thousands)\n\nCash flows from operating activities:\n\nNet loss$(9,208)$(77)$(12,248)\n\nAdjustments to reconcile net loss to net cash provided by\n\noperating activities:\n\nDepreciation and amortization12,438 13,275 16,101 \n\nLoss on sale/disposition of assets— 15 7 \n\nProvision for credit losses on accounts receivable(363)26 8 \n\nImpairment of assets held for sale3,433 — — \n\nStock-based compensation expense3,071 3,500 4,075 \n\nChanges in operating assets and liabilities:\n\nAccounts receivable10,467 (13,635)1,110 \n\nInventories9,430 (11,402)6,419 \n\nPrepaid expenses(28)(450)622 \n\nOther current assets(15,248)2,890 807 \n\nIncome tax receivable(13)80 1,028 \n\nAccounts payable(1,617)834 2,873 \n\nAccrued payroll and incentives(4,171)1,704 2,354 \n\nRight of use assets1,554 1,668 1,335 \n\nAccrued expenses(2,168)4,185 946 \n\nOther assets8 81 137 \n\nLease liabilities(1,270)(1,335)(1,049)\n\nOther non-current liabilities— — (34)\n\nNet cash provided by operating activities6,315 1,359 24,491 \n\nCash flows from investing activities:\n\nPayments to acquire patents and software(418)(743)(1,340)\n\nProceeds from sale of property and equipment— — 131 \n\nPayments to acquire property and equipment(2,046)(3,153)(4,767)\n\nNet cash used in investing activities(2,464)(3,896)(5,976)\n\nCash flows from financing activities:\n\nProceeds from loans and notes payable9,120 7,000 — \n\nPayments on notes and loans payable(9,120)(7,000)(5,000)\n\nPayments to acquire treasury stock(5,125)(3,842)(6,015)\n\nCash paid for debt issuance costs(258)— — \n\nProceeds from exercise of options to acquire common stock,\n\nincluding employee stock purchase plan\n620 628 671 \n\nPayment of employee withholding tax related to restricted\n\nstock units\n(1,075)(524)(423)\n\nNet cash used in financing activities(5,838)(3,738)(10,767)\n\nNet (decrease)/increase in cash and cash equivalents(1,987)(6,275)7,748 \n\nCash and cash equivalents, beginning of period23,423 29,698 21,950 \n\nCash and cash equivalents, end of period$21,436 $23,423 $29,698 \n\nSupplemental disclosure of cash flow information\n\nCash paid for:\n\nInterest$354 $291 $307 \n\nIncome taxes (net of refunds)$108 $100 $(978)\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-7\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)\n\nSupplemental Disclosure of Non-cash Investing and Financing Activities:\n\nFor the Years Ended April 30,\n\n202620252024\n\n(In thousands)\n\nPurchases of property and equipment and intangibles included in accounts payable$1,548 $685 $192 \n\nChanges in right of use assets for operating lease obligations368 — 10,701 \n\nChanges in lease liabilities for operating lease obligations368 — 10,701 \n\nCharges of debt issuance costs included in accrued expenses— — — \n\nRecord assets held for sale4,167 — — \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-8\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n1. Organization\n\nAmerican Outdoor Brands, Inc. and its wholly owned Subsidiaries (our \"company,\" \"we,\" \"us,\" or \"our\") is a leading provider of outdoor lifestyle products and shooting sports accessories encompassing hunting, fishing, meat processing, outdoor cooking, shooting, and personal security and defense products for rugged outdoor enthusiasts.\n\nWe conceive, design, produce or source, and sell our outdoor lifestyle products, including:\n\n•premium sportsman knives and tools for fishing and hunting;\n\n•land management tools for hunting preparedness and for use in the backyard;\n\n•products used while hunting;\n\n•meat processing equipment; and\n\n•outdoor cooking products.\n\nWe conceive, design, produce or source, and sell our shooting sports accessories, including:\n\n•rests, vaults, and other related accessories;\n\n•electro-optical devices, including hunting optics, firearm aiming devices, flashlights, and laser grips;\n\n•and reloading, gunsmithing, and firearm cleaning supplies.\n\nWe develop and market all our products as well as manufacture some of our electro-optics products at our facility in Columbia, Missouri. We also contract for the manufacture and assembly of most of our products with third parties located in Asia.\n\nWe focus on our brands and the establishment of product categories in which we believe our brands will resonate strongly with the activities and passions of consumers and enable us to capture an increasing share of our overall addressable markets. Our owned brands include BOG, BUBBA, Caldwell, Crimson Trace, Frankford Arsenal, Grilla Grills, or Grilla, Hooyman, Imperial, LaserLyte, Lockdown, MEAT! Your Maker, Old Timer, Schrade, Tipton, Uncle Henry, and Wheeler, and we license additional brands for use in association with certain products we sell, including M&P, Smith & Wesson, and Performance Center by Smith & Wesson. In focusing on the growth of our brands, we organize our product development, customer service, and marketing teams into four brand lanes, each of which focuses on one of four distinct consumer verticals – Adventurer, Harvester, Marksman, and Defender – with each of our brands included in one of the brand lanes.\n\n2. Summary of Significant Accounting Policies\n\nPrinciples of Consolidation\n\nThe accompanying consolidated financial statements include the accounts of our company and our wholly owned subsidiaries, including AOB Products Company, or AOBPC, BTI Tools LLC, Crimson Trace Corporation, Ultimate Survival Technologies, LLC, or ust, and AOB Consulting (Shenzhen), Co., LTD. All intercompany accounts and transactions have been eliminated in consolidation.\n\nReclassifications\n\nCertain prior-year amounts have been reclassified to conform to the current-year presentation. In connection with the separate presentation of other current assets on the consolidated balance sheets, amounts previously reported as prepaid expenses and other current assets have been reclassified to separate captions for prepaid expenses and other current assets. Corresponding reclassifications were also made within operating activities on the consolidated statements of cash flows.\n\nF-9\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThese reclassifications had no effect on previously reported total current assets, total assets, net income, stockholders' equity, net cash provided by operating activities, or net increase (decrease) in cash and cash equivalents.\n\nUse of Estimates\n\nIn preparing our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, we make estimates and assumptions that affect amounts reported in our consolidated financial statements and accompanying notes. Our significant estimates include various sales adjustments for discounts, returns, allowances, and other customer incentives; provisions for excess and obsolete inventory; accruals for freight, duty, and tariff costs on international inventory purchases and related inventory valuation adjustments; estimates related to the recognition and measurement of tariff refund recoveries and related receivables; valuation of long-lived intangible assets; valuation of stock-based compensation awards; and realization of deferred tax assets. Actual results may differ from those estimates.\n\nFair Value of Financial Instruments\n\nThe carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued expenses and other short-term financial instruments approximate fair value due to their short term nature. The carrying amount of debt, if any, approximates fair value because the variable or fixed interest rates approximate market rates.\n\nU.S. Tariff Developments\n\nIn 2025, the U.S. Administration imposed a series of tariffs on nearly all U.S. trading partners pursuant to the International Emergency Economic Powers Act of 1977 (“IEEPA”). On February 20, 2026, the United States Supreme Court issued a ruling striking down tariffs previously imposed under IEEPA. Immediately following the Supreme Court ruling, the U.S. government initiated new tariffs under Section 122 of the Trade Act (\"Section 122 tariffs\") which have been in effect since February 24, 2026. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.\n\nIn March 2026, the U.S. Court of International Trade (\"CIT\") issued an order directing U.S. Customs and Border Protection (\"CBP\") to process refunds of certain IEEPA tariffs. In April 2026, the CBP released a new system to process IEEPA tariff refunds, allowing importers to submit refund claims. We are seeking refunds of tariffs previously paid under IEEPA and we account for such claims under the loss recovery framework by analogy to ASC 410-30 - Environmental Obligations. A receivable is recognized when recovery is considered probable and reasonably estimable. Recoveries are recognized in the same financial statement line item as the underlying tariff costs or as an adjustment to inventory when the related inventory remains on hand. We believe it is probable that we will recover the IEEPA tariffs previously paid and have recognized an IEEPA tariff refund receivable under the loss recovery accounting model.\n\nThe ultimate timing and amount of recoveries remain subject to review and processing by governmental authorities and could be affected by future legal, regulatory, or administrative developments. In addition, there continues to be uncertainty regarding existing and proposed tariff regimes, including the potential imposition, modification, suspension, or invalidation of tariffs under various statutory authorities. The Company continues to monitor tariff-related developments and assess their potential impact on its business, financial condition, and results of operations.\n\nCash and Cash Equivalents\n\nWe consider all highly liquid investments purchased with original maturities of three months or less at the date of acquisition to be cash equivalents. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. As of April 30, 2026, all of our accounts exceeded federally insured limits.\n\nAccounts Receivable and Allowance for Estimated Credit Losses\n\nWe record trade accounts receivable at net realizable value that include estimated allowances for trade terms, sales incentive programs, discounts, markdowns, chargebacks, and returns as discussed under Revenue Recognition below. We extend credit to our domestic customers and some foreign distributors based on their creditworthiness. We sometimes offer\n\nF-10\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\ndiscounts for early payment on invoices. When we believe the extension of credit is not advisable, we rely on either a prepayment or a letter of credit. We write off balances deemed uncollectible by us against our allowance for credit loss accounts.\n\nWe maintain an allowance for credit losses related to trade accounts receivable for future expected credit losses resulting from the inability or unwillingness of our customers to make required payments. We estimate our allowance for credit losses based on relevant information such as historical experience, current conditions, and future expectation and in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics and similar financial assets. We adjust the allowance as appropriate to reflect differences in current conditions as well as changes in forecasted macroeconomic conditions. We write off trade accounts receivable when they are determined to be uncollectible after considering the facts and circumstances specific to the customer and after all collection efforts have been exhausted. Recoveries of amounts previously written off are recorded when received.\n\nIn November 2020, we entered into a factoring arrangement with a financial institution specifically designed to factor trade receivables with a certain customer that has extended payment terms, which are traditional to the customer’s industry. Under this factoring arrangement, from time to time, we sell this customer’s trade receivables at a discount on a non-recourse basis. We account for these transactions as sales and cash proceeds are included in cash provided by operating activities in the statement of cash flows. During the fiscal year ended April 30, 2026, 2025, and 2024, we recorded an immaterial amount of factoring fees related to factoring transactions, which are included in other (expense)/income, net on our consolidated statements of operations.\n\nInventories\n\nWe state inventories at the lower of cost or net realizable value. We determine cost on the first-in, first-out method and net of discounts or rebates received from vendors. Provisions for potential nonsalable inventory due to excess stock or obsolescence are based upon a detailed review of inventory, past history, and expected future usage. We evaluate quantities that make up our current inventory against past and future demand and market conditions to determine excess or slow-moving inventory that may be sold below cost. For each product category, we estimate the market value of the inventory comprising that category based on current and projected selling prices. If the projected market value is less than cost, we will record a provision adjustment to reflect the lower value of the inventory. This methodology recognizes projected inventory losses at the time such losses are evident rather than at the time goods are actually sold. The projected market value of the inventory may decrease because of consumer preferences or loss of key contracts, among other events.\n\nProperty, Plant, and Equipment\n\nWe record property, plant, and equipment, consisting of leasehold improvements, machinery, equipment, hardware, furniture, and fixtures at cost and depreciate them using the straight-line method over their estimated useful lives. We recognize depreciation expense for leasehold improvements over the shorter of their estimated useful lives or the lease terms, and include them in depreciation and amortization expense. We charge expenditures for maintenance and repairs to earnings as incurred, and we capitalize additions, renewals, and betterments. Upon the retirement, or other disposition of property and equipment, we remove the related cost and accumulated depreciation from the respective accounts and include any gain or loss in operations. A summary of the estimated useful lives is as follows:\n\nDescriptionUseful Life\n\nMachinery and equipment\n2 to 10 years\n\nComputer and other equipment\n2 to 7 years\n\nLeasehold improvements\n10 to 20 years\n\nWe include tooling, dies, furniture, and fixtures as part of machinery and equipment and depreciate them over a period generally not exceeding 10 years.\n\nIntangible Assets\n\nWe record intangible assets at cost or based on the fair value of the assets acquired. Intangible assets consist of developed software and technology, customer relationships, trademarks, trade names, and patents. We amortize intangible\n\nF-11\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nassets over their estimated useful lives or in proportion to expected yearly revenue generated from the intangibles that were acquired.\n\nValuation of Long-lived Assets\n\nWe have significant long-lived assets, which are susceptible to valuation adjustments as a result of changes in various factors or conditions. The most significant long-lived assets are property, plant, and equipment; right-of-use assets; developed technology; customer relationships; patents; trademarks; and trade names, which is our long lived asset group. Our long-lived assets are primarily located in the United States with some tooling and equipment located in Asia. We amortize all finite-lived assets either on a straight-line basis or based upon patterns in which we expect to utilize the economic benefits of such assets. We initially determine the values of assets by a risk-adjusted, discounted cash flow approach.\n\nWe evaluate the recoverability of long-lived assets on an annual basis or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment. When such evaluations indicate that the related future undiscounted cash flows are not sufficient to recover the carrying values of the asset group, such carrying values are reduced to fair value and this adjusted carrying value becomes the asset’s new cost basis. We determine the initial fair value of our long-lived assets, primarily using future anticipated cash flows that are directly associated with and are expected to arise as a direct result of the use and eventual disposition of the asset, or asset group, discounted using an interest rate commensurate with the risk involved. Based on the results of this evaluation, on an undiscounted cash flow basis, there were no indications of impairment of our long-lived asset group in fiscal 2026, 2025, or 2024.\n\nFuture adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified.\n\nRevenue Recognition\n\nWe recognize revenue for the sale of our products at the point in time when the control of ownership has transferred to the customer and our primary performance obligation is the sale of finished goods to wholesale, retail, and direct-to-consumer customers. The transfer of control typically occurs at a point in time based on consideration of when the customer has (i) a payment obligation, (ii) physical possession of goods has been received, (iii) legal title to goods has passed, (iv) risks and rewards of ownership of goods has passed to the customer, and (v) the customer has the ability to direct the use of and obtain substantially all of the benefits from the product. The timing of revenue recognition occurs either on shipment or delivery of goods based on contractual terms with the customer, as this is when transfer of control occurs and the customer has the ability to direct the use of and obtain substantially all of the benefits from the product, has title and significant risks and rewards of ownership of the product, and physical possession of the product has been transferred. Revenue recorded excludes sales tax charged to retail customers as we are considered a pass-through conduit for collecting and remitting sales taxes.\n\nThe duration of contractual arrangements with customers in our wholesale and retail channels is typically less than one year. Payment terms with customers are typically between 20 and 90 days, with a discount available in certain cases for early payment. For contracts with discounted terms, we determine the transaction price upon establishment of the contract that contains the final terms of the sale, including the description, quantity, and price of each product purchased. We estimate variable consideration relative to the amount of cash discounts to which customers are likely to be entitled. In some instances, we provide longer payment terms, particularly as it relates to extended seasonal payment terms for certain hunting-related products, which represent payment terms due in the fall for certain orders of hunting products received in the spring and summer. We do not consider these extended terms to be a significant financing component of the contract because the payment terms are less than one year.\n\nWe have elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as distribution expenses at the time we recognize the related revenue. Shipping and handling costs billed to customers are included in net sales.\n\nF-12\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nWe sponsor direct to consumer customer loyalty programs in which customers earn rewards from qualifying purchases or activities. We defer revenue for a portion of the transaction price from product sales to customers that earn loyalty points.\n\nThe amount of revenue we recognize reflects the expected consideration to be received for providing the goods or services to customers, which includes estimates for variable consideration. Variable consideration includes allowances for trade term discounts, volume incentives, chargebacks, and product returns. Estimates of variable consideration are determined at contract inception and are constrained to the extent that the inclusion of such variable consideration could result in a significant reversal of cumulative revenue in future periods. We apply the portfolio approach as a practical expedient and utilize the expected value method in determining estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends, and current economic conditions. We have co-op advertising program expense, which we record within advertising expense, in recognition of a distinct service that we receive from our customers at the retail level which estimates fair value of the service.\n\nIn some instances, sales include multiple performance obligations. The most common of these instances relates to sales promotion programs under which customers are entitled to receive a free good or subscription service based upon their purchase of our products, which we have identified as a material right. The fulfillment of these free goods is our responsibility. In such instances, we allocate the revenue of the promotional sales based on the estimated level of participation in the sales promotional program and the timing of the shipment of all of the products included in the promotional program, including the free goods. We recognize subscription revenue ratably over the term of the contract, as the customer simultaneously receives and consumes the benefits of the service throughout the period. The net change in contract liabilities for a given period is reported as increase or decrease in accrued expenses on the balance sheet and an increase or decrease to sales on the statement of operations. During the year ended April 30, 2026, 2025, and 2024, we recorded an immaterial amount of service revenue and deferred revenue to satisfy certain performance obligations.\n\nDisaggregation of Revenue\n\nThe following table sets forth certain information regarding trade channel net sales for the fiscal years ended April 30, 2026, 2025, and 2024 (dollars in thousands):\n\n20262025$ Change% Change2024\n\ne-commerce channels$71,216 $84,391 $(13,175)(15.6)%$84,313 \n\nTraditional channels119,320 137,931 (18,612)(13.5)%116,786 \n\nTotal net sales$190,536 $222,322 $(31,786)(14.3)%$201,099 \n\nOur e-commerce channels include net sales from customers that do not traditionally operate a physical brick-and-mortar store, but generate the majority of their revenue from consumer purchases at their retail websites. Our e-commerce channels also include our direct-to-consumer sales. Our traditional channels include customers that operate primarily out of physical brick and mortar stores and generate the large majority of their revenue from consumer purchases at their brick-and-mortar locations.\n\nWe sell our products worldwide. The following table sets forth certain information regarding geographic makeup of net sales included in the above table for the fiscal years ended April 30, 2026, 2025, and 2024 (dollars in thousands):\n\n20262025$ Change% Change2024\n\nDomestic$179,911 $207,834 $(27,923)(13.4)%$189,027 \n\nInternational 10,625 14,488 (3,863)(26.7)%12,072 \n\nTotal net sales$190,536 $222,322 $(31,786)(14.3)%$201,099 \n\nF-13\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThe following table sets forth the breakdown of international net sales included in the above table by region. Our international sales accounted for approximately 6%, 7%, and 6% of total net sales for the fiscal years ended April 30, 2026, 2025, and 2024, respectively (dollars in thousands):\n\n20262025$ Change% Change2024\n\nCanada$5,538 $6,282 $(744)(11.8)%$5,111 \n\nEurope3,261 5,394 (2,133)(39.5)%4,337 \n\nAll others international1,825 2,812 (987)(35.1)%2,624 \n\nTotal international net sales$10,625 $14,488 $(3,863)(26.7)%$12,072 \n\nThe following table sets forth certain information regarding net sales in our shooting sports and outdoor lifestyle categories for the fiscal years ended April 30, 2026, 2025, and 2024 (dollars in thousands):\n\n20262025$ Change% Change2024\n\nShooting sports$80,054 $95,200 $(15,146)(15.9)%$91,716 \n\nOutdoor lifestyle110,482 127,122 (16,640)(13.1)%109,383 \n\nTotal net sales$190,536 $222,322 $(31,786)(14.3)%$201,099 \n\nOur shooting sports category includes net sales of shooting accessories and our products used for personal protection. Our outdoor lifestyle category includes net sales of our products used in hunting, fishing, meat processing, rugged outdoor activities, and outdoor cooking.\n\nCost of Goods Sold\n\nCost of goods sold for our purchased finished goods includes the purchase costs and related overhead. We source most of our purchased finished goods from manufacturers in Asia. Cost of goods sold for our manufactured goods includes all materials, labor, and overhead costs incurred in the production process. Overhead includes all costs related to manufacturing or purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, freight, tariff and duties, royalties, and shrinkage.\n\nResearch and Development\n\nWe engage in both internal and external research and development, or R&D, in order to remain competitive and to exploit potential untapped market opportunities. We approve prospective R&D projects after analysis of the costs and benefits associated with the potential product. Costs in R&D expense include salaries, materials, utilities, and administrative costs.\n\nAdvertising\n\nWe expense advertising costs, primarily consisting of digital, printed, or television advertisements, either as incurred or upon the first occurrence of the advertising. Advertising expense, included in selling, marketing, and distribution expenses, totaled $9.6 million, $10.9 million, and $11.1 million in fiscal 2026, 2025, and 2024, respectively. We have co-op advertising program expense, which we record within advertising expense, in recognition of a distinct service that we receive from our customers at the retail level.\n\nWarranty\n\nWe generally provide either a limited lifetime, four-year, three-year, two-year, or one-year warranty program to the original purchaser of most of our products. We will also repair or replace certain products or parts found to be defective under normal use and service with an item of equivalent value, at our option, without charge during the warranty period. We provide for estimated warranty obligations in the period in which we recognize the related revenue. We quantify and record an estimate for warranty-related costs based on our actual historical claims experience and current repair costs. We make adjustments to accruals as warranty claims data and historical experience warrant.\n\nF-14\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThe following table sets forth the change in accrued warranties, a portion of which is recorded as a non-current liability, in the fiscal years ended April 30, 2026, 2025, and 2024 (in thousands):\n\nApril 30, 2026April 30, 2025April 30, 2024\n\n Beginning balance$1,392 1,243 966 \n\nWarranties issued and adjustments to provisions1,207 1,853 1,569 \n\nWarranty claims(1,262)(1,704)(1,292)\n\n Ending balance$1,337 1,392 1,243 \n\nLeases\n\nWe occasionally enter into non-cancelable operating leases for office space, distribution facilities, and equipment. Our leases for real estate have initial terms ranging from one to 18 years, generally with renewal options. Leases for equipment typically have initial terms ranging from one to 10 years. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes and occupancy-related costs. See Note 5 – Leases for more information.\n\nSelf-Insurance\n\nWe record our liability for estimated incurred losses, related to our self-insured group health insurance program, based on historical claim data in the accompanying consolidated financial statements on an undiscounted basis. While we believe these reserves to be adequate, it is possible that the ultimate liabilities will exceed such estimates. See Note 12 - Self-Insurance Reserves for more information.\n\nEarnings/(Loss) Per Share\n\nWe calculate basic and diluted earnings/(loss) per share in accordance with the provisions of ASC 260-10, Earnings Per Share. Basic earnings per common share equals earnings/(loss) divided by the weighted average number of common shares outstanding during the periods presented. Diluted earnings per common share equals earnings/(loss) divided by the weighted average number of common shares outstanding during the periods presented, giving effect to all potentially dilutive stock awards that are outstanding, if their effect is dilutive.\n\nDue to the loss from operations for the fiscal years ended April 30, 2026, 2025, and 2024, there are no common shares added to calculate dilutive EPS because the effect would be anti-dilutive. Had there been income from operations for the fiscal years ended April 30, 2026, 2025, and 2024, all of our performance-based restricted stock units, or PSUs, and restricted stock units, or RSUs, further described in Note 13 - Equity, would have been included in the computation of diluted earnings per share and could potentially dilute earnings per share in the future.\n\nStock-Based Compensation\n\nOur stock-based compensation awards consist of stock options, PSUs, and RSUs, all of which are based on our common shares. Compensation costs for all awards expected to vest are recognized over the vesting period using the simplified method in accordance with ASC 718 as we believe the simplified method is the best method to calculate our stock compensation expense. In addition, we estimate an expected forfeiture rate and only recognize expense for those shares expected to vest. The awards granted generally vest annually in three or four-year tranches for our executive officers and employees and vest in monthly tranches for our directors, and are included in costs of goods sold; research and development; selling, marketing, and distribution; and general and administrative expenses in the consolidated statements of operations. See Note 13 – Equity for additional information.\n\nIncome Taxes\n\nWe account for income taxes in accordance with ASC 740, Income Taxes (ASC 740). The provision for income taxes is based upon income reported in the accompanying consolidated financial statements as required by ASC 740-10. We determine deferred tax assets and liabilities based on temporary differences between financial reporting and tax bases in assets and liabilities and measure them by applying enacted rates and laws expected to be in place when the deferred items become subject to income tax or deductible for income tax purposes. We recognize the effect on deferred taxes and\n\nF-15\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nliabilities of a change in tax rates in the period that includes the enactment date. In assessing the realization of our deferred income tax assets, we consider whether it is more likely than not that the deferred income tax assets will be realized. The ultimate realization of our deferred income tax assets depends upon generating future taxable income during the periods in which our temporary differences become deductible and before our net operating loss carryforwards expire. We periodically evaluate the recoverability of our deferred income tax assets by assessing the need for a valuation allowance. If we determine that it is more likely than not that our deferred income tax assets will not be recovered, we establish a valuation allowance against some or all of our deferred income tax assets. We determine unrecognized income tax benefits in accordance with ASC 740 on the basis of a two-step process in which first we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and second for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Accrued income taxes in the consolidated balance sheet includes unrecognized income tax benefits along with related interest and penalties, appropriately classified as current or noncurrent. We recognize interest and penalties related to unrecognized tax benefits as interest income/(expense) and other income/(expense), respectively, in the accompanying consolidated statement of operations. All deferred tax assets and liabilities are classified as noncurrent in the consolidated balance sheet.\n\nWe periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets. The ultimate realization of net deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. We establish valuation allowances if it is more likely than not that we will be unable to realize our deferred income tax assets.\n\nIn making this determination, we consider available positive and negative evidence and make certain assumptions. We consider, among other things, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, our historical financial results, and tax planning strategies. Significant judgment is required in this analysis.\n\nWe determined in a prior period that it was not more likely than not that our net deferred tax assets would be realized and accordingly we recorded a full valuation allowance. This assessment of the realizability of our net deferred tax assets remains unchanged for the current fiscal year. Our assessment involved estimates and assumptions about matters that are inherently uncertain, and unanticipated events or circumstances could cause actual results to differ from these estimates.\n\nEstimates may change as new events occur, estimates of future taxable income may increase during the expected reversal period of our deferred tax assets, or additional information becomes available. Should we change our estimate of the amount of deferred tax assets that we would be able to realize, a full or partial reversal of the valuation allowance could occur resulting in a decrease to the provision for income taxes in the period such a change in estimate is made.\n\nConcentration of Credit Risk\n\nFinancial instruments that potentially subject us to concentration of credit risk consist primarily of cash, cash equivalents, and trade receivables. We place our cash and cash equivalents in overnight U.S. government securities. Concentrations of credit risk with respect to trade receivables are limited by the large number of customers comprising our customer base and their geographic and business dispersion. We perform ongoing credit evaluations of our customers’ financial condition and generally do not require collateral.\n\nFor the fiscal year ended April 30, 2026, 2025, and 2024, respectively, one of our customers accounted for more than 10% of our net sales, accounting for $34.8 million, or 18.3%, $45.0 million, or 20.3%, and $44.3 million, or 22.1%, of our fiscal 2026, 2025, and 2024 net sales, respectively.\n\nAs of April 30, 2026, we had two customers that exceeded 10% or more of our accounts receivable, accounting for $6.1 million, or 20.8%; $3.8 million, or 12.9%, of our fiscal 2026 accounts receivable. As of April 30, 2025, we had three customers exceed 10% or more of our accounts receivable, accounting for $5.8 million, or 14.6%; $5.2 million, or 13.1%; $4.4 million, or 11.1%, of our fiscal 2025 accounts receivable. We are not aware of any issues with respect to relationships with any of our top customers.\n\nWe source a majority of our purchased finished goods from Asia. As of April 30, 2026, we had two inventory suppliers that exceeded 10% or more of our total inventory purchases. As of April 30, 2025, we had three inventory\n\nF-16\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nsuppliers that exceeded 10% or more of our total inventory purchases. We have alternative options at our discretion that would mitigate a concentration risk in the future related to our inventory suppliers.\n\nShipping and Handling\n\nIn the accompanying consolidated financial statements, we included amounts billed to customers for shipping and handling in net sales. We include costs relating to shipping and handling charges, including inbound freight charges and internal transfer costs, in cost of goods sold; however, costs incurred to distribute products to customers is included in distribution expenses.\n\nLegal\n\nFrom time to time, we are involved in lawsuits, claims, investigations, and proceedings, including those relating to product liability, intellectual property, commercial relationships, employment issues, and governmental matters, which arise in the ordinary course of business.\n\nWe periodically assess liabilities and contingencies in connection with legal proceedings and other claims that may arise from time to time. When we believe it is probable that a loss has been or will be incurred, we record an estimate of the loss in the consolidated financial statements. We adjust estimates of losses when additional information becomes available or circumstances change. We disclose a contingent liability when we believe there is at least a reasonable possibility that a material loss may have been incurred. We record legal fees as incurred.\n\nFor the fiscal years ended April 30, 2026, 2025, and 2024, we did not incur any material expenses in defense and administrative costs relative to product liability litigation. In addition, we did not incur any settlement fees related to product liability cases in those fiscal years.\n\nRecently Adopted Accounting Standards\n\nIn December 2023, the Financial Accounting Standards Board (\"FASB\") issued Accounting Standards Update (\"ASU\") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (\"ASU 2023-09\"), which improves the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. We adopted ASU 2023-09 effective as of the beginning of the fiscal year ended April 30, 2026 on a prospective basis. The adoption did not have a material impact on the Company's consolidated financial statements and disclosures.\n\nRecently Issued Accounting Standards\n\nIn November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (\"ASU 2024-03), which requires disaggregation disclosures on an annual or interim basis, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the statement of operations. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027 and should be applied prospectively, with the option to apply the standard retrospectively. We are currently evaluating the impact of adopting this ASU 2024-03 on our consolidated financial statements and disclosures.\n\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which improves transparency to provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The new guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. This ASU 2025-05 is not expected to have a significant impact to the Company’s consolidated financial statements when adopted.\n\nF-17\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n3. Assets Held for Sale\n\nOn December 12, 2025, our Board of Directors approved a plan to divest our ust branded product line (the “Disposal Group”). The Disposal Group consists primarily of inventory and long-lived intangible assets associated with the brand. We expect to complete the divestiture within twelve months.\n\nThe Disposal Group does not represent a strategic shift that will have a major effect on our operations or financial results. We concluded that the Disposal Group met the criteria for classification as held for sale under ASC 360-10 – Property, Plant, and Equipment during fiscal 2026 and does not qualify as discontinued operations under ASC 205-20 – Presentation of Financial Statements. The results of the Disposal Group will continue to be reported within continuing operations.\n\nUpon classification as held for sale, we measured the Disposal Group at the lower of its carrying amount or fair value less costs to sell. Based on our estimate of fair value using the income approach, we determined that the carrying value exceeded the fair value less costs to sell and recorded a non-cash impairment charge of $3.4 million during fiscal 2026 included within operating income in the Condensed Consolidated Statements of Operations.\n\nThe carrying amounts of the major classes of assets included in the Disposal Group were as follows (in thousands):\n\nApril 30, 2026\n\nInventory$3,395 \n\nLong-lived intangible asset788\n\nOther(16)\n\nImpairment charge(3,433)\n\nCarrying value$734 \n\nThe impairment was allocated to the assets within the Disposal Group in accordance with ASC 360.\n\nThe fair value of the Disposal Group was determined using Level 3 inputs under the fair value hierarchy in ASC 820 – Fair Value Measurement. Fair values were estimated using discounted cash flow analysis using significant assumptions including projected cash flows of the brand, terminal growth rates, discount rates, and market-based revenue multiples observed in comparable transactions. Costs to sell were estimated based on expected transaction-related fees and other incremental costs.\n\nWe will reassess the fair value of the Disposal Group at each reporting date until the transaction is completed. Any subsequent adjustments to fair value less costs to sell will be recognized in earnings in the period in which they are identified.\n\n4. Other Current Assets\n\nDuring the year ended April 30, 2026, we submitted claims seeking refunds of certain IEEPA tariffs previously paid. Based on our assessment of the Supreme Court ruling, subsequent legal and administrative developments, and the status of our claim, we concluded that recovery of a portion of such tariffs was probable and reasonably estimable. Accordingly, we recorded a receivable of $15.2 million as of April 30, 2026. The ultimate amount and timing of any recoveries remain subject to governmental review, administrative processing, and potential future legal and regulatory developments. Actual recoveries may differ from the amounts currently recorded. Other current assets also includes inventory deposits and other receivable balances as of April 30, 2026 and 2025, respectively.\n\nF-18\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n5. Leases\n\nWe lease real estate, as well as other equipment, under non-cancelable operating lease agreements. We recognize expenses under our operating lease assets and liabilities at the commencement date based on the present value of lease payments over the lease terms. Our leases do not provide an implicit interest rate. We use our incremental borrowing rate consistent with our revolving line of credit and based on the information available at the lease commencement date in determining the discount rate for the present value of lease payments. Our lease agreements do not require material variable lease payments, residual value guarantees, or restrictive covenants. For operating leases, we recognize expense on a straight-line basis over the lease term. We record tenant improvement allowances as an offsetting adjustment included in our calculation of the respective right-of-use asset. The vast majority of our leases are for property located in the United States.\n\nMany of our leases include renewal options that can extend the lease term. These renewal options are at our sole discretion and are reflected in the lease term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.\n\nThe amounts of assets and liabilities related to our operating leases as of April 30, 2026 and 2025 are as follows (in thousands):\n\nApril 30, 2026April 30, 2025\n\nOperating Leases\n\nRight-of-use assets$37,516 $37,474 \n\nAccumulated amortization(6,806)(5,578)\n\nRight-of-use assets, net$30,710 $31,896 \n\nLease liabilities, current portion$1,569 $1,336 \n\nLease liabilities, net of current portion30,814 31,949 \n\nTotal operating lease liabilities$32,383 $33,284 \n\nDuring the fiscal year ended April 30, 2026, we recorded $4.2 million of operating lease costs, of which $295,000 related to short-term leases. During the fiscal year ended April 30, 2025, we recorded $4.1 million of operating lease costs, of which $386,000 related to short-term leases. During the fiscal year ended April 30, 2024, we recorded $4.0 million of operating lease costs, of which $132,000 related to short-term leases. As of April 30, 2026, our weighted average lease term and weighted average discount rate for our operating leases was 12.5 years and 6.0%, respectively. As of April 30, 2025, our weighted average lease term and weighted average discount rate for our operating leases was 13.5 years and 5.4%, respectively. The operating lease costs, weighted average lease term, and weighted average discount rate are primarily driven by the lease of our corporate office and warehouse facility in Columbia, Missouri through fiscal 2039.\n\nDuring the fiscal year ended April 30, 2024, we entered an Assignment Agreement to assign us the rights to the entire building and surrounding property at our corporate office and warehouse facility in Columbia, Missouri. The assignment was effective on January 1, 2024. The operating lease covers approximately 632,000 square feet, where we formerly subleased approximately 361,000 square feet. The lease provides us with an option to expand the building by up to 491,000 additional square feet. The terms of the lease are consistent with the terms of our former sublease agreement prior to the Assignment Agreement. The lease term ends on November 26, 2038 and, pursuant to the Assignment Agreement, does not provide for an extension of the term of the lease. We will receive tax and other incentives from federal, state, and local governmental authorities. The former sublessor will guarantee the lease through the end of the term. During fiscal year ended April 30, 2024, we recorded a right-of-use asset and lease liability of $10.6 million for the additional space provided under the Assignment Agreement.\n\nF-19\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nFuture lease payments for all our operating leases as of April 30, 2026, and for succeeding fiscal years, are as follows (in thousands):\n\nOperating\n\n2027$3,461 \n\n20283,510 \n\n20293,534 \n\n20303,572 \n\n20313,534 \n\nThereafter28,927 \n\nTotal future lease payments46,538 \n\nLess amounts representing interest(14,155)\n\nPresent value of lease payments32,383 \n\nLess current maturities of lease liabilities(1,569)\n\nLong-term maturities of lease liabilities$30,814 \n\nDuring the fiscal year ended April 30, 2026, the cash paid for amounts included in the measurement of the liabilities was $1.3 million and included in our operating cash flows. During the fiscal year ended April 30, 2025, the cash paid for amounts included in the measurement of the liabilities was $1.3 million and included in our operating cash flows. During the fiscal year ended April 30, 2024, the cash paid for amounts included in the measurement of the liabilities was $1.0 million and included in our operating cash flows.\n\n6. Inventory\n\nThe following table sets forth a summary of inventories stated at lower of cost or net realizable value, as of April 30, 2026 and 2025 (in thousands):\n\nApril 30, 2026April 30, 2025\n\nFinished goods$85,223 $96,105 \n\nFinished parts1,624 2,680 \n\nWork in process107 306 \n\nRaw material4,935 5,626 \n\nTotal inventories$91,889 $104,717 \n\n7. Property, Plant, and Equipment\n\nThe following table summarizes property, plant, and equipment as of April 30, 2026 and 2025 (in thousands):\n\nApril 30, 2026April 30, 2025\n\nMachinery and equipment$24,201 $24,087 \n\nComputer and other equipment2,489 2,228 \n\nLeasehold improvements1,850 1,753 \n\n28,540 28,068 \n\nLess: Accumulated depreciation and amortization(19,285)(16,962)\n\n9,256 11,106 \n\nConstruction in progress71 125 \n\nTotal property, plant, and equipment, net$9,327 $11,231 \n\nF-20\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nDepreciation expense for the fiscal years ended April 30, 2026, 2025, and 2024 was $3.9 million, $3.5 million, and $3.0 million, respectively. As of April 30, 2026 and 2025, $5.5 million and $6.4 million, respectively, of our net property, plant, and equipment was located in the United States and $3.8 million and $4.8 million, respectively, was located in Asia.\n\n8. Intangible Assets\n\nThe following table summarizes intangible assets as of April 30, 2026 and 2025 (in thousands):\n\nApril 30, 2026April 30, 2025\n\nGross\nCarrying\nAmountAccumulated\nAmortizationNet Carrying\nAmountGross\nCarrying\nAmountAccumulated\nAmortizationNet Carrying\nAmount\n\nCustomer relationships$77,380 $(73,516)$3,864 $89,980 $(82,623)$7,357 \n\nDeveloped software and technology28,354 (24,076)4,278 28,155 (22,238)5,917 \n\nPatents, trademarks, and trade names70,504 (57,775)12,730 70,060 (53,966)16,094 \n\n176,239 (155,367)20,872 188,195 (158,827)29,368 \n\nPatents and software in development2,225 — 2,225 1,612 — 1,612 \n\nTotal definite-lived intangible assets178,463 (155,367)23,097 189,807 (158,827)30,981 \n\nIndefinite-lived intangible assets430 — 430 430 — 430 \n\nTotal intangible assets$178,894 $(155,367)$23,527 $190,237 $(158,827)$31,411 \n\nWe amortize definite-lived intangible assets with determinable lives over a weighted-average period of approximately five years. The weighted-average periods of amortization by intangible asset class is approximately five years for customer relationships, six years for developed software and technology, and six years for patents, trademarks, and trade names. Amortization expense amounted to $8.4 million, $9.8 million, and $13.1 million for the fiscal years ended April 30, 2026, 2025, and 2024, respectively.\n\nThe following table represents future expected amortization expense as of April 30, 2026 (in thousands):\n\nFiscalAmount\n\n2027$5,859 \n\n20284,482 \n\n20293,048 \n\n20302,307 \n\n20311,449 \n\nThereafter3,727 \n\nTotal$20,872 \n\nWe did not record any impairment charges for long-lived intangible assets in the fiscal years ended April 30, 2026, 2025, and 2024, respectively.\n\nF-21\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n9. Accrued Expenses\n\nThe following table sets forth other accrued expenses as of April 30, 2026 and 2025 (in thousands):\n\nApril 30, 2026April 30, 2025\n\nAccrued freight, tariff, and duty$5,114 $6,379 \n\nAccrued professional fees1,899 1,065 \n\nAccrued commissions1,628 1,694 \n\nAccrued sales allowances1,504 1,865 \n\nAccrued warranty1,337 1,392 \n\nAccrued other748 553 \n\nAccrued taxes other than income503 563 \n\nAccrued employee benefits480 362 \n\nTotal accrued expenses$13,212 $13,872 \n\n10. Debt\n\nOn August 24, 2020, we entered into a financing arrangement consisting of a $50.0 million revolving line of credit secured by substantially all our assets, maturing five years from the closing date, with available borrowings determined by a borrowing base calculation. The revolving line included an option to increase the credit commitment by an additional $15 million.\n\nOn March 25, 2022, we amended our secured loan and security agreement, or the First Amended Loan and Security Agreement, increasing the revolving line of credit to $75 million, secured by substantially all our assets, maturing in March 2027, with available borrowings determined by a borrowing base calculation. The amendment also includes an option to increase the credit commitment by an additional $15 million. The amended revolving line bears interest at a fluctuating rate equal to the Base Rate or Secured Overnight Financing Rate, or SOFR, as applicable, plus the applicable margin. The applicable margin can range from a minimum of 0.25% to a maximum of 1.75% based on certain conditions as defined in the Amended Loan and Security Agreement. The financing arrangement contains covenants relating to minimum debt service coverage.\n\nOn March 10, 2026, we amended our secured loan and security agreement, or the Third Amended Loan and Security Agreement, secured by substantially all our assets. The Third Amended Loan Agreement extended of the maturity date to March 2031, increases to the limits on permitted acquisitions, and a reduction of the covenant trigger threshold. Borrowing availability under the facility is subject to a borrowing base calculation. The financing arrangement also contains financial covenants, including a minimum debt service coverage ratio. We were in compliance with all financial covenants as of April 30, 2026. We recorded $258,000 of deferred financing costs, included in other assets on the consolidated balance sheet related to this amendment and are amortized over the term of the credit facility.\n\nAs of April 30, 2026, we had no borrowings outstanding on the revolving line of credit. Had there been borrowings outstanding under the revolving credit facility as of April 30, 2026, the applicable interest rate would have been 5.16%, equal to SOFR plus the applicable margin. As of April 30, 2025, we had no borrowings outstanding on the revolving line of credit. During the year ended April 30, 2026, we borrowed $9.1 million on our revolving line of credit for general business purposes. Also, during the year ended April 30, 2026, we paid, in full, the $9.1 million of borrowings utilizing cash on hand.\n\nAs of April 30, 2026 and 2025, we had executed irrevocable standby letters of credit totaling $7.8 and $1.7 million, respectively, to collateralize duty drawback and customs bonds. During the fiscal years ended April 30, 2026 and 2025, no amounts have been drawn on the letter of credit.\n\nF-22\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n11. Fair Value Measurement\n\nWe follow the provisions of ASC 820-10, Fair Value Measurements and Disclosures Topic, or ASC 820-10, for our financial assets and liabilities. Certain nonfinancial assets, including assets held for sale, are measured at fair value on a nonrecurring basis when events or changes in circumstances indicate that the carrying value may not be recoverable or when classification as held for sale is appropriate. ASC 820-10 provides a framework for measuring fair value under GAAP and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.\n\nFinancial assets and liabilities recorded on the accompanying consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:\n\nLevel 1 — Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access at the measurement date (examples include active exchange-traded equity securities, listed derivatives, and most U.S. Government and agency securities).\n\nCash and cash equivalents are reported at fair value based on market prices for identical assets in active markets, and therefore classified as Level 1 of the value hierarchy. Our cash and cash equivalents, which are measured at fair value on a recurring basis, as of April 30, 2026 and 2025, which would be the maximum amount of loss subject to credit risk.\n\nLevel 2 — Financial assets and liabilities whose values are based on quoted prices in markets in which trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following:\n\n•quoted prices for identical or similar assets or liabilities in non-active markets (such as corporate and municipal bonds which trade infrequently);\n\n•inputs other than quoted prices that are observable for substantially the full term of the asset or liability (such as interest rate and currency swaps); and\n\n•inputs that are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability (such as certain securities and derivatives).\n\nLevel 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our assumptions about the assumptions a market participant would use in pricing the asset or liability. The fair value of the Disposal Group as disclosed in Note 16 - Assets Held for Sale and the table below (in thousands), was determined using Level 3 inputs under the fair value hierarchy. Fair values were estimated using discounted cash flow analysis using significant assumptions including projected cash flows of the brand, terminal growth rates, discount rates, and market-based revenue multiples observed in comparable transactions.\n\nApril 30, 2026April 30, 2025\n\nCash and cash equivalents (Level 1)$21,436 $23,423 \n\nAssets held for sale (Level 3)734— \n\n12. Self-Insurance Reserves\n\nWe are essentially self-insured through retentions or deductibles with stop-loss insurance for medical claims that reach a certain limit per claim. We record our liability for estimated incurred losses based on historical claim data in the accompanying consolidated financial statements on an undiscounted basis. While we believe these reserves to be adequate, it is possible that the ultimate liabilities will exceed such estimates.\n\nF-23\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nThe following table summarizes the activity related to self-insurance reserves in the fiscal years ended April 30, 2026 and 2025 (in thousands):\n\nFor the years ended April 30,\n\n20262025\n\nBeginning balance$321 $359 \n\nAdditional provisions charged to expense2,594 2,365 \n\nPayments(2,618)(2,403)\n\nEnding balance$298 $321 \n\n13. Equity\n\nTreasury Stock\n\nOn October 2, 2023, our Board of Directors authorized the repurchase of up to $10.0 million of our common stock, subject to certain conditions, in the open market, in block purchases, or in privately negotiated transactions. This authorization expired on September 30, 2024. On September 25, 2024, our Board of Directors approved a program to purchase of up to $10.0 million of our common stock, subject to certain conditions, in the open market, in block purchases, or in privately negotiated transactions. This authorization expired on September 30, 2025. On September 30, 2025, our Board of Directors approved a program to purchase up to $10.0 million of our common stock, subject to certain conditions, in the open market, in block purchases, or in privately negotiated transactions, commencing on October 1, 2025 and executable through September 30, 2026. During the years ended April 30, 2026 and 2025, under these authorizations, we repurchased a total of 551,283 and 374,446 shares, respectively, of our common stock for $5.1 million and $3.8 million, respectively, utilizing cash on hand. As of April 30, 2026, we have $8.1 million of available funds to repurchase our common stock under the current authorization.\n\nIncentive Stock and Employee Stock Purchase Plans\n\nWe have a stock incentive plan, or 2020 Incentive Compensation Plan, under which we can grant new awards to our employees and directors. Our 2020 Incentive Compensation Plan authorizes the issuance of awards covering up to 1,397,510 shares of newly issued common stock, plus the lesser of (i) 2% of the number of shares outstanding as of the end of each of our fiscal years or (ii) such lesser number of shares as the Compensation Committee may determine. The plan permits the grant of options to acquire common stock, restricted stock awards, restricted stock units, or RSUs, stock appreciation rights, bonus stock and awards in lieu of obligations, performance awards, and dividend equivalents. Our Board of Directors, or a committee established by our Board of Directors, administers the plan, selects recipients to whom awards are granted, and determines the grants to be awarded. Stock options granted under the plan are exercisable at a price determined by our Board of Directors or a committee thereof at the time of grant, but in no event, less than fair market value of our common stock on the date granted. Grants of options may be made to employees and directors without regard to any performance measures. All options issued pursuant to the plan are generally nontransferable and subject to forfeiture.\n\nUnless terminated earlier by our Board of Directors, our 2020 Incentive Compensation Plan will terminate at the earliest of (1) the tenth anniversary of the effective date of our 2020 Incentive Compensation Plan, or (2) such time as 0 shares of common stock remain available for issuance under the plan and we have no further rights or obligations with respect to outstanding awards under the plan. The date of grant of an award is deemed to be the date upon which our Board of Directors or a committee thereof authorizes the granting of such award.\n\nExcept in specific circumstances, grants generally vest over a period of three or four years for our executive officers and employees and vest monthly for our directors. We have not granted any stock options, however, grants of stock options are exercisable for a period of 10 years. Our 2020 Incentive Compensation Plan also permits the grant of awards to non-employees.\n\nWe recognized $3.1 million, $3.5 million, and $4.1 million, respectively, of stock-based compensation expense for the fiscal years ended April 30, 2026, 2025, and 2024.\n\nF-24\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nWe grant RSUs to employees and directors. The awards are made at no cost to the recipient. An RSU represents the right to receive one share of our common stock and does not carry voting or dividend rights. Except in specific circumstances, RSU grants to employees generally vest over a period of four years with one-fourth of the units vesting on each anniversary of the grant date. RSU grants to directors generally vest over a 12 month period with one-twelve of the units vesting on each monthly anniversary of the grant date. We amortize the aggregate fair value of our RSU grants to compensation expense over the vesting period. Awards that do not vest are forfeited.\n\nWe grant PSUs to our executive officers and certain other employees from time to time. We granted PSUs to our executive officers in fiscal 2026 that include internal performance metrics and removed the calculation of the relative performance of our common stock against the Russell 2000, or RUT over the approximately three-year period. These PSUs are earned and vest based on two internal performance metrics that include 1) a three-year average return on invested capital, or ROIC, and 2) a three-year cumulative Adjusted EBITDA. The grant date fair value of the fiscal 2026 awards was estimated using the closing share price of our common stock on the date of grant. The total quantity of PSUs eligible to vest under these awards range from zero to 200% of the target based on actual average ROIC and cumulative Adjusted EBITDA performance during the performance period. As such, the fiscal 2026 awards are subject to performance conditions and compensation cost is recognized over the service period based on the amount of awards that we believe is probable that will vest. To the extent we estimate changes, we will recognize a cumulative catch up in subsequent reporting periods. We assess the likelihood of achieving these performance conditions each quarter and adjust compensation expense accordingly.\n\nFor PSUs granted to our executive officers in the prior fiscal year, we calculated the fair value of our PSUs using the Monte-Carlo simulation. We incorporated the following variables into the valuation model for the periods ended April 30, 2025 and April 30, 2024 (awards in our prior fiscal years):\n\nFor the years ended April 30,\n\n20252024\n\nGrant date fair market value\n\nAmerican Outdoor Brands, Inc.$7.89 $8.79 \n\nRussell 2000 Index$1,980.23 $1,769.21 \n\nVolatility (a)\n\nAmerican Outdoor Brands, Inc.48.15 %45.53 %\n\nRussell 2000 Index22.98 %27.08 %\n\nCorrelation coefficient (b)0.36 0.48 \n\nRisk-free interest rate (c)4.73 %3.81 %\n\nDividend yield (d)0 %0 %\n\n_____________________________________________________________________\n\n(a)Expected volatility is calculated based on a peer group over the most recent period that represents the remaining term of the performance period as of the valuation date, or three years.\n\n(b)The correlation coefficient utilizes the same historical price data used to develop the volatility assumptions.\n\n(c)The risk-free interest rate is based on the yield of a zero-coupon U.S. Treasury bill, commensurate with the three-year performance period.\n\n(d)We do not expect to pay dividends in the foreseeable future.\n\nThe PSUs granted in the prior fiscal year vest, and the fair value of such PSUs will be recognized, over the corresponding three-year performance period. Our PSUs have a maximum aggregate award equal to 200% of the target unit amount granted. Generally, the number of PSUs that may be earned depends upon the total stockholder return, or TSR, of our common stock compared with the TSR of the Russell 2000 Index, or the RUT, over the three-year performance period. For PSUs, our stock must outperform the RUT by 5% in order for the target award to vest. In addition, there is a cap on the number of shares that can be earned under our PSUs, which is equal to six times the grant-date value of each award.\n\nDuring the fiscal year ended April 30, 2026, we granted an aggregate 227,413 service based RSUs, including 79,729 RSUs to executive officers and 147,648 to non-executive officer employees and directors under our 2020 Incentive Compensation Plan. We granted an aggregate of 79,729 PSUs to our executive officers during fiscal 2026, which have a\n\nF-25\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nmaximum aggregate award value of 159,458 shares. In addition, in connection with a 2022 grant, we vested 52,277 market-condition PSUs (i.e., the target amount granted), which achieved 200% of the maximum aggregate award possible, resulting in awards totaling 104,554 shared to certain of our executive officers during fiscal 2026. During the fiscal year ended April 30, 2026, 12,663 RSUs were cancelled as a result of the service condition not being met. In connection with the vesting of RSUs and PSUs, during the fiscal year ended April 30, 2026, we delivered common stock to our employees, including our executive officers and directors with a total market value of $3.5 million.\n\nDuring the fiscal year ended April 30, 2025, we granted an aggregate of 278,764 service based RSUs, including 98,412 RSUs to executive officers and 180,352 RSUs to non-executive officer employees and directors under our 2020 Incentive Compensation Plan. We granted an aggregate of 98,412 PSUs to our executive officers during fiscal 2025, which have a maximum aggregate award value of 152,502 shares. During the fiscal year ended April 30, 2025, 23,987 PSUs were cancelled, at target, as the result of the performance condition not being met, and 26,270 RSUs as a result of the service condition not being met. In connection with the vesting RSUs, during the fiscal year ended April 30, 2025, we delivered common stock to our employees, including executive officers and directors, with a total market value of $2.2 million.\n\nDuring the fiscal year ended April 30, 2024, we granted an aggregate of 319,847 service based RSUs, including 103,475 RSUs to executive officers and 216,372 RSUs to non-executive officer employees and directors under our 2020 Incentive Compensation Plan. We granted an aggregate of 76,251 PSUs to our executive officers during fiscal 2024, which have a maximum aggregate award value of 152,502 shares. In addition, in connection with a 2018 grant, we vested 94,354 PSUs (i.e., the target amount granted), which achieved 200% of the maximum aggregate award possible, resulting in awards totaling — shares to certain of our executive officers and other employees. During the fiscal year ended April 30, 2024, we cancelled 25,594 RSUs as a result of the service condition not being met. In connection with the vesting RSUs, during the fiscal year ended April 30, 2024, we delivered common stock to our employees, including executive officers and directors, with a total market value of $1.6 million.\n\nA summary of activity for unvested RSUs and PSUs under our 2020 Incentive Compensation Plan for the fiscal years ended April 30, 2026, 2025, and 2024 is as follows:\n\nFor the years ended April 30,\n\n202620252024\n\nTotal # of\nRestricted\nStock UnitsWeighted\nAverage\nGrant Date\nFair ValueTotal # of\nRestricted\nStock UnitsWeighted\nAverage\nGrant Date\nFair ValueTotal # of\nRestricted\nStock UnitsWeighted\nAverage\nGrant Date\nFair Value\n\nRSUs and PSUs outstanding, beginning of period700,953$9.48 624,093$11.27 560,579$13.36 \n\nAwarded359,41910.83 377,1768.40 396,0988.69 \n\nVested(332,455)11.04 (250,059)10.43 (212,636)11.31 \n\nForfeited(12,663)9.39 (50,257)19.19 (119,948)12.46 \n\nRSUs and PSUs outstanding, end of period715,254$9.44 700,953$9.48 624,093$11.27 \n\nAs of April 30, 2026, there was $1.4 million of unrecognized compensation expense related to unvested RSUs and PSUs. We expect to recognize this expense over a weighted average remaining contractual term of 1.0 years.\n\nWe have an employee stock purchase plan, or ESPP, which authorizes the sale of up to 419,253 shares of our common stock to employees, plus the lesser of (i) 1% of the number of shares of our common stock outstanding as of the end of each of our fiscal years or (ii) such number of shares as determined by our Board of Directors or a Board committee designated by our Board of Directors. All options and rights to participate in our ESPP are nontransferable and subject to forfeiture in accordance with our ESPP guidelines. Our current ESPP will be implemented in a series of successive offering periods, each with a maximum duration of 12 months. If the fair market value per share of our common stock on any purchase date is less than the fair market value per share on the start date of a 12-month offering period, then that offering period will automatically terminate, and a new 12-month offering period will begin on the next business day. Each offering period will begin on April 1 or October 1, as applicable, immediately following the end of the previous offering period. Payroll deductions will be on an after-tax basis, in an amount of not less than 1% and not more than 20% (or such greater percentage as the committee appointed to administer our ESPP may establish from time to time before the first day of an offering period) of a participant’s compensation on each payroll date. The option exercise price per share will equal 85% of the lower of the fair market value on the first day of the offering period or the fair market value on the exercise date. The\n\nF-26\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nmaximum number of shares that a participant may purchase during any purchase period is the greater of 2,500 shares, or a total of $25,000 in shares, based on the fair market value on the first day of the offering period. Our ESPP will remain in effect until the earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater than the number of reserved shares available for purchase under our ESPP, (b) such date as is determined by our Board of Directors in its discretion, or (c) the tenth anniversary of the effective date. In the event of certain corporate transactions, each option outstanding under our ESPP will be assumed or an equivalent option will be substituted by the successor corporation or a parent or subsidiary of such successor corporation. During fiscal years ended April 30, 2026 and 2025, 85,057 shares and 85,606 shares, respectively, were purchased by our employees under our ESPP.\n\nWe measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. We amortize the fair value of the award over the vesting period of the option. Under the ESPP, fair value is determined at the beginning of the purchase period and amortized over the term of each exercise period.\n\nThe following assumptions were used in valuing ESPP purchases under our ESPP during the years ended April 30, 2026, 2025, and 2024:\n\nFor the years ended April 30,\n\n202620252024\n\nRisk-free interest rate\n3.72% -3.80%\n4.23 %\n5.46% - 5.53%\n\nExpected term6 months6 months\n6 months - 12 months\n\nExpected volatility\n44.7% - 61.1%\n60.7 %\n43.2% - 48.9%\n\nDividend yield0 %0 %0 %\n\nThe fair value of each stock option or ESPP purchase was estimated on the date of the grant using the Black-Scholes option pricing model (using the risk-free interest rate, expected term, expected volatility, and dividend yield variables, as noted in the above table).\n\n14. Employer Sponsored Benefit Plans\n\nContributory Defined Investment Plan — Our employees participate in a contributory defined investment plan, subject to service requirements. Under the terms of the plan, employees may contribute from 1% to 30% of their annual pay and we generally make discretionary matching contributions of up to 50% of the first 6% of employee contributions to the plan. We contributed $540,000, $546,000, and $438,000 for the fiscal years ended April 30, 2026, 2025, and 2024, respectively.\n\nNon-Contributory Profit-Sharing Plan — Our employees participate in our non-contributory profit-sharing plan upon meeting certain eligibility requirements. Employees become eligible on May 1 following the completion of a full fiscal year of continuous service. Our contributions to the plan are discretionary. We did not contribute to the plan for the fiscal years 2026, 2025, or 2024. Contributions are funded after the fiscal year-end.\n\nF-27\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n15. Income Taxes\n\nIncome tax expense/(benefit) from operations consists of the following (in thousands):\n\nFor the Years Ended April 30,\n\n202620252024\n\nCurrent:\n\nFederal (a)$(8)$48 $5 \n\nState (b)48 64 (79)\n\nForeign5 11 4 \n\nTotal current45 123 (70)\n\nDeferred:\n\nDeferred federal— — — \n\nDeferred state— — — \n\nTotal deferred— — — \n\nTotal income tax expense/(benefit)$45 $123 $(70)\n\n_____________________________________________________________________\n\n(a)Fiscal Year 2025 federal current expense is net of $875,000 tax benefit of operating loss carryforwards.\n\n(b)Fiscal Year 2025 state current expense is net of $95,000 tax benefit of operating loss carryforwards.\n\nF-28\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nA reconciliation of the provision for income taxes at statutory rates to the provision reported in the consolidated financial statements for the period ended April 30, 2026, after the adoption of ASU 2023-09 is as follows (in thousands):\n\nApril 30, 2026\n\nAmountPercent\n\nU.S Federal Statutory Tax Rate$(1,924)21.0 %\n\nState and Local Income Taxes, Net of Federal Income Tax Effect (c)36(0.4)%\n\nForeign Tax Effects\n\n China\n\n  Statutory tax rate Difference between China and United States(24)0.3 %\n\nEffects of Cross-Border Tax Laws\n\n Global intangible low-tax income20(0.2)%\n\nTax Credits\n\n Research & Development Credits(151)1.6 %\n\nChanges in Valuation Allowances1,565(17.1)%\n\nNontaxable or Nondeductible Items\n\n Stock Compensation(104)1.1 %\n\n Executive compensation limitation 550(6.0)%\n\n Other77(0.8)%\n\nEffective Tax Rate45(0.5)%\n\nThe following table presents a reconciliation of the provision for income taxes from operations at statutory rates to the provision (benefit) in the consolidated financial statements as previously disclosed prior to the adoption of ASU 2023-09 (in thousands):\n\nFor the Years Ended April 30,\n\n20252024\n\nFederal income taxes expected at the statutory rate$10 $(2,587)\n\nState income taxes, less federal income tax benefit14 (132)\n\nStock compensation249 436 \n\nResearch and development tax credit(149)(203)\n\nChange in deferred tax valuation allowance(192)2,257 \n\nOther191 159 \n\nTotal income tax expense/(benefit)$123 $(70)\n\n_____________________________________________________________________\n\n(c) State income taxes for Texas composes the majority (greater than 50%) of state income tax expense, net of federal\n\nincome tax effect category.\n\nF-29\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nDeferred tax assets (liabilities) related to temporary differences are the following (in thousands):\n\nApril 30, 2026April 30, 2025\n\nNon-current tax assets (liabilities):\n\nInventories$1,380 $1,321 \n\nAccrued expenses, including compensation1,189 2,261 \n\nWorkers' compensation— 13 \n\nWarranty reserve309 322 \n\nStock-based compensation956 991 \n\nState bonus depreciation34 56 \n\nProperty, plant, and equipment(1,438)(1,974)\n\nIntangible assets10,056 11,059 \n\nRight-of Use assets(7,145)(7,401)\n\nRight-of Use lease liabilities7,536 7,724 \n\nCapitalized R&D1,875 2,649 \n\nAssets held for sale802 — \n\nOther(108)(182)\n\nLoss and credit carryforwards5,445 2,267 \n\nLess valuation allowance(20,891)(19,106)\n\nNet deferred tax asset/(liability) — total$— $— \n\nCash paid for income taxes (net of refunds) by jurisdiction for the year ended April 30, 2026 as reported in the consolidated financial statements, after the adoption of ASU 2023-09 is as follows:\n\nFor the Year Ended April 30,\n\n2026\n\nJurisdiction(In thousands)\n\n  Federal$— \n\nState103 \n\nForeign5 \n\nCash paid for income taxes (net of refunds) exceeded five percent of total taxes paid (net of refunds) in the following states:\n\nFor the Year Ended April 30,\n\n2026\n\nState(In thousands)\n\n California$(7)\n\n Kentucky5 \n\n North Carolina 10 \n\n New York11 \n\n Tennessee37 \n\n   Texas33 \n\nF-30\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\nCash paid for income taxes (net of refunds), prior to the adoption of ASU 2023-09, was $100,000 and $(978,000) for the years ended April 30, 2025 and 2024, respectively.\n\nAs of April 30, 2026, federal and state net operating loss, or NOL, carryforwards were $20.6 million and $12.2 million, respectively, and $533,000 of federal research & development tax credits. The tax-effected deferred tax assets recorded for federal and state NOL carryforwards were $4.3 million and $586,000, respectively. Under legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or Tax Act, federal NOLs incurred in taxable years ending after December 31, 2017, may be carried forward indefinitely. The federal research and development credits of $533,000, which, if unused, will expire between April 30, 2043 and 2045. State NOL carryforwards of $7.7 million, which, if unused, will expire in years April 30, 2033 through April 30, 2056. The remaining $4.5 million of the state NOL carryforwards may also be carried forward indefinitely.\n\nAs of April 30, 2026, we continued to maintain a full valuation allowance of $20.9 million against our net deferred income tax assets based on management's assessment that it was more likely than not that our deferred income tax assets will not be recovered. We will continue to evaluate the need for a valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances. As of April 30, 2025, we maintained a full valuation allowance of $19.1 million against our net deferred income tax assets based on management's assessment that it was more likely than not that our deferred income tax assets will not be recovered.\n\nThe income tax provisions (benefit) represent effective tax rates of (0.5)%, 267.4%, and 0.6% for the fiscal years ended April 30, 2026, 2025, and 2024, respectively.\n\nAs of April 30, 2026 and 2025, we did not have any gross tax-effected unrecognized tax benefits.\n\nWith limited exception, we are subject to U.S. federal, state, and local, or non-U.S. income tax audits by tax authorities for fiscal years subsequent to April 30, 2022.\n\n16. Commitments and Contingencies\n\nContracts\n\nEmployment Agreements — We have employment agreements with certain executive officers and managers that provide severance benefits upon qualifying terminations of employment, including termination without cause. These benefits generally include salary continuation and certain continued welfare benefits, and may also include accelerated vesting of specified equity awards. Certain agreements further provide enhanced benefits upon a qualifying termination following a change in control, including additional cash severance and accelerated vesting of outstanding equity awards.\n\nLeases\n\nThe following summarizes our operating leases for office and/or manufacturing space:\n\nLocation of LeaseExpiration Date\n\nYangjiang, ChinaJuly 15, 2026\n\nShenzhen, ChinaSeptember 30, 2028\n\nColumbia, MissouriNovember 26, 2038\n\nF-31\n\nAMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)\n\n17. Segment Reporting\n\nWe have evaluated our operations under ASC 280-10-50-1 – Segment Reporting and have concluded that we are operating as one segment based on several key factors, including the reporting and review process used by the chief operating decision maker, or CODM, who reviews only consolidated financial information and makes decisions to allocate resources based on those financial statements. Our CODM is our Chief Executive Officer.\n\nWe analyze revenue streams in various ways, including customer group, brands, product categories, and customer channels. See also Note 2 – Summary of Significant Accounting Policies for more information on how we disaggregate our net sales.\n\nThe CODM uses consolidated net income to set budgets, evaluate margins, review actual results and in deciding whether to reinvest profits and cash flows into our business, repurchase our stock, pursue acquisitions, or make any other capital management decisions. Consolidated net income is the measure of segment profit most consistent with U.S. GAAP that is regularly reviewed by the CODM to allocate resources and assess performance.\n\nSignificant segment level expense information provided to the CODM is consistent with our consolidated statements of operations, as presented on the accompanying consolidated statements of operations.\n\nThe measure of segment assets is reported on the accompanying consolidated balance sheet as total assets.\n\n18. Subsequent Events\n\nSubsequent to April 30, 2026, we received $2.9 million in cash related to its previously recorded IEEPA tariff refund receivable. The receipt represented a portion of our total refund claim and was recorded as a reduction of the related refund receivable. In addition, we also received an immaterial amount of interest associated with the refund payment. We accounted for the underlying tariff refund claim as a recovery of previously paid tariff amounts. However, any interest associated with the refund represents an amount in excess of previously remitted tariffs and therefore is not considered a recovery of previously incurred costs. Accordingly, we evaluate potential interest recoveries and record interest as a gain contingency in accordance with ASC 450-30, Contingencies—Gain Contingencies. We did not recognize any receivable related to potential interest as of April 30, 2026 because realization of such amounts had not occurred and the amount was not reasonably determinable. Interest income, if any, is recorded and recognized when realized or realizable.\n\nF-32"}