{"url_path":"/sec/poww/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-22","source_url":"https://www.sec.gov/Archives/edgar/data/1015383/0001193125-26-276653-index.html","accession_number":"0001193125-26-276653","cik":"0001015383","ticker":"POWW","issuer_name":"Outdoor Holding Co","edgar_url":"https://www.sec.gov/Archives/edgar/data/1015383/0001193125-26-276653-index.html","primary_entity_key":"0001015383","primary_entity_name":"Outdoor Holding Co"},"word_count":2538,"has_tables":true,"body_markdown":"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\n\nPolicies and Procedures for Review and Approval of Related Party Transactions\n\nWe have adopted a formal written policy for the review, approval and ratification of transactions with related parties. Our Related Party Transactions Policy, which was adopted on June 6, 2024, provides guidance for addressing actual or potential conflicts of interest, including those that may arise from transactions and relationships between us and our executive officers or directors. The policy covers transactions between the Company and our executive officers, directors, director nominees, 5% stockholders and any person who is an immediate family member of any of the foregoing persons. The policy generally applies to any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (i) the Company was or is to be a participant, (ii) the amount of which exceeds the lesser of (x) $120,000 in the aggregate or (y) one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years and (iii) the related party had, or will have, a direct or indirect material interest.\n\nThe Audit Committee, as matter of appropriate corporate governance, reviews and approves all such transactions, to the extent required by applicable rules and regulations. Generally, management presents to the Board of Directors for approval at the next regularly scheduled Board meeting any related party transactions proposed to be entered into by us. The Audit Committee may approve the transaction if it is deemed to be in the best interests of the Company. In determining whether to approve or ratify a transaction, the Audit Committee takes into account, among\n\n \n\n56\n\n \n\nother factors it deems appropriate, (i) the relevant facts and circumstances of the transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, (ii) the extent of the related party’s interest in the transaction, (iii) whether the transaction contravenes the Company’s Code of Business Ethics and Conduct Policy or other policies, (iv) whether the relationship underlying the transaction is believed to be in the best interests of the Company and its stockholders and (v) if such related party is a director or his or her immediate family member, the effect that the transaction may have on the director’s status as an independent member of the Board of Directors and eligibility to serve on committees of the Board of Directors pursuant to SEC rules and applicable stock exchange listing standards.\n\nTransactions with Related Parties\n\nThe following is a description of each transaction since April 1, 2024 and each currently proposed transaction in which:\n\n•\nwe have been or are to be a participant;\n\n•\nthe amount involved exceeds the lesser of (x) $120,000 in the aggregate or (y) one percent of the average of the Company's total assets at year-end for the last two completed fiscal years; and\n\n•\nany related person had or will have a direct or indirect material interest.\n\nTransactions Involving Steve Urvan\n\nSteve Urvan, our Chief Executive Officer and Chairman of the Board, owns or controls approximately 19.8% of our common stock as of the date of this Form 10-K.\n\nGemini Accounts Receivable\n\nThrough our acquisition of Gemini Direct Investments, LLC (\"Gemini\") in 2021, a related party relationship was created through Mr. Urvan, then a director and now our Chairman of the Board and Chief Executive Officer, by virtue of his ownership of entities that provided services to Gemini. There was $201,646 included in our accounts receivable at September 30, 2025 from entities owned by Mr. Urvan. During the three months ended December 31, 2025, the Company determined that these amounts were uncollectible after evaluating the age of the receivables, historical collection experience, incomplete billing records, and the financial condition and operating history of the related entities. As a result, the $201,646 included in our accounts receivable was written off against the Company's reserve for credit losses. The determination of uncollectibility and the related write-off were reviewed and approved by the Company's Audit Committee, and Mr. Urvan did not participate in the review or approval of such determination and the related write-off.\n\nThe 2025 Urvan Settlement Agreement\n\nOn May 21, 2025, we entered into the 2025 Settlement Agreement. The 2025 Settlement Agreement became effective as of the Settlement Effective Date. As a result and pursuant to the 2025 Settlement Agreement, effective as of the Settlement Effective Date, (i) Jared Smith resigned as a member of the Board of Directors and from his position as the Chief Executive Officer of the Company and as an officer or member of each of the Company’s direct and indirect subsidiaries and (ii) Mr. Urvan was appointed as the Chief Executive Officer of the Company and as the Chairman of the Board of Directors. In addition, in accordance with the 2025 Settlement Agreement, on June 3, 2025, the Company, Speedlight, Mr. Urvan and the Legacy Directors filed a Stipulation of Voluntary Dismissal With Prejudice dismissing, with prejudice, all claims asserted in the Delaware Litigation.\n\nAs partial consideration for the settlement, on the Settlement Effective Date, the Company issued to an affiliated designee of Mr. Urvan, GDI Air, LLC, the Warrant to purchase 7.0 million shares of common stock. GDI Air is a single-member limited liability company whose sole member is UFO, LLC (\"UFO\"). UFO is a single-member limited liability company whose sole member is the 50 X 50 Trust, a Nevada irrevocable domestic asset protection trust of which Mr. Urvan is the grantor, investment trust adviser, and a discretionary beneficiary. Mr. Urvan serves as a manager of UFO and, in such capacity, has sole voting and dispositive power over the shares owned or controlled by UFO. The Warrant has a five-year term and an exercise price of $1.81 per share. Pursuant to the terms of the Warrant, the Warrant is exercisable at the holder’s discretion, in whole or in part, on or after the six-month anniversary of the Settlement Effective Date, subject to certain accelerated vesting in certain circumstances.\n\nIn addition to the Warrant, we issued to an affiliated designee of Mr. Urvan, (i) Note 1, an unsecured promissory note in a principal amount of $12.0 million and (ii) Note 2, an unsecured promissory note in a principal\n\n \n\n57\n\n \n\namount of $39.0 million. Note 1 bears interest at 6.50% per annum (subject to a 2.00% increase during an event of default), which interest is payable to the holder annually on the anniversary of the Settlement Effective Date, beginning on the first anniversary of the Settlement Effective Date (each interest payment due date, an “Interest Payment Date”). Note 2 bore interest at a rate per annum equal to the applicable federal rate for long-term loans in effect on the Settlement Effective Date (subject to a 2.00% increase during an event of default), which was payable to the holder annually on the Interest Payment Date.\n\nThe unpaid principal balance of Note 1 and all accrued and unpaid interest thereon is due on the 12th anniversary of the Settlement Effective Date. Pursuant to the terms of Note 1, the Company is required to make annual prepayments of $1.0 million (inclusive of accrued and unpaid interest then due and payable) to the holder on each Interest Payment Date. The Company has the right to prepay all or any part of the principal or interest of the Note without penalty.\n\nWith respect to Note 2, the Company also had the option, at any time prior to the first anniversary of the Settlement Effective Date, to prepay all, but not less than all, of the then-outstanding principal amount of Note 2 and accrued and unpaid interest thereon in exchange for the issuance of the Additional Warrant to purchase 13.0 million shares of common stock. On September 17, 2025, the independent and disinterested members of the Board of Directors approved the exercise of the Prepayment Option, and the Company issued the Additional Warrant to Mr. Urvan’s affiliated designee. Upon issuance of the Additional Warrant, all remaining obligations under Note 2 were deemed satisfied with the same force and effect as a prepayment of all principal and accrued and unpaid interest under Note 2. The Additional Warrant has a five-year term and an exercise price of $1.00 per share. Pursuant to the terms of the Additional Warrant, the Additional Warrant is exercisable at the holder’s discretion, in whole or in part, on or after September 17, 2026, subject to accelerated vesting in certain circumstances. Except with respect to the exercise price and the vesting date, the terms of the Additional Warrant and the Warrant are substantially similar.\n\nLetter of Credit\n\nOn July 26, 2023, we obtained a $1.6 million letter of credit with The Northern Trust Company (“Northern Trust”) for collateral for a bond related to a judgment assessed to GunBroker. Effective July 12, 2024, our $1.6 million letter of credit with Northern Trust was extended until July 26, 2025. Effective July 7, 2025 the letter of credit was moved to Sunflower Bank with an expiration date of July 7, 2026. The term of the letter of credit is twelve months and includes interest of approximately 4%. Per the terms of the merger agreement with Gemini, Mr. Urvan was required to indemnify the Company with respect to any losses related to the underlying judgment against GunBroker if the appeal was unsuccessful. Pursuant to the terms of the 2025 Settlement Agreement, the losses related to the judgment are no longer indemnified by Mr. Urvan.\n\nTriton Settlement Agreement Payment\n\nOn June 24, 2024, we entered into a Confidential Settlement Agreement and Mutual General Release (the “Triton Settlement Agreement”) with Triton Value Partners, LLC, Donald Gasgarth, Paul Freischlag, Jr., Jeff Zwitter (the “Plaintiffs”), and Steven Urvan and TVP Investments LLC (the “Urvan Defendants”) and GunBroker.com, LLC, IA TECH, LLC, and GB Investments, Inc. (the “GunBroker Defendants,” and collectively with the Urvan Defendants, the “Defendants”) to fully resolve and settle all disputes and claims related to the litigation between the Defendants and Plaintiffs captioned Triton Value Partners, LLC et al. v. TVP Investments, LLC et al., Cobb County Superior Court, CAFN 18104869 (the “Triton Action”). Pursuant to the Triton Settlement Agreement, the GunBroker Defendants agreed to pay the Plaintiffs $8,000,000 (the “Settlement Amount”) in a single lump sum payment. The Company agreed to tender the Settlement Amount to an escrow agent on behalf of the GunBroker Defendants within 45 days of the Triton Settlement Agreement’s execution.\n\nIn connection with the merger agreement with Gemini, on April 30, 2021, the Company and Mr. Urvan entered into a Pledge and Escrow Agreement (the “Pledge and Escrow Agreement”), pursuant to which Mr. Urvan pledged common stock in the amount of $2.8 million, a portion of which were sent to the Company’s transfer agent for cancellation on September 30, 2024. Pursuant to the Triton Settlement Agreement, each of the Plaintiffs and the Defendants provided mutual releases of all claims as of June 24, 2024, arising from any allegations set forth in the Triton Action. Upon the cancellation of the pledged securities on September 30, 2024, the parties’ payment obligations under the Triton Settlement Agreement were complete.\n\nAs a result of the contingency recognized for the Triton Settlement Agreement, we had recorded a receivable of $4,800,000. During the year ended March 31, 2025, we recognized the value of shares returned to the Company in\n\n \n\n58\n\n \n\nlieu of the settlement payment. As of March 31, 2025, Mr. Urvan transferred the shares to the Company and they have been reclassified to treasury stock.\n\nTenor Litigation\n\nPursuant to the merger agreement with Gemini, Mr. Urvan was granted sole and exclusive control over the prosecution, defense and settlement of certain designated litigation matters, including the litigation captioned GunBroker.com, LLC v. Tenor Capital Partners, No. 1:20-CV-00613 (N.D. GA.) (the \"Tenor Litigation\"), and the right to receive any amounts recovered by or awarded to the Company with respect to such matters. In addition, the merger agreement with Gemini required Mr. Urvan to indemnify, defend, hold harmless and reimburse the Company with respect to designated matters, including the Tenor Litigation. Subsequently, pursuant to the 2025 Settlement Agreement, the Company released Mr. Urvan from certain of these indemnification, defense and hold harmless obligations under the merger agreement. In April 2026, the United States Court of Appeals for the Eleventh Circuit reversed the district court's grant of summary judgment on a breach of fiduciary duty claim asserted by GunBroker in the Tenor Litigation and remanded that claim for further proceedings.\n\nIn June 2026, the Company and its subsidiary Speedlight Group I, LLC entered into a side letter agreement with Mr. Urvan confirming his right to control the prosecution, defense, and settlement of the Tenor Litigation was not extinguished by the 2025 Settlement Agreement and clarifying that, consistent with the intent of the merger agreement and the 2025 Settlement Agreement, (i) Mr. Urvan is solely responsible for all costs, fees and expenses incurred in connection with the prosecution, defense and settlement of the Tenor Litigation, (ii) the Company has no obligation to fund, advance, reimburse or indemnify any cost, expense or liability arising from or related to the Tenor Litigation, and (iii) Mr. Urvan may not settle the Tenor Litigation on terms that would result in any obligation or restriction binding upon the Company or its subsidiaries without the prior written consent of the independent and disinterested members of the Board of Directors. The side letter does not amend the merger agreement with Gemini or the 2025 Settlement Agreement and does not revive or reinstate any indemnification or similar obligations of Mr. Urvan that were released pursuant to the 2025 Settlement Agreement. If Mr. Urvan determines to pursue a damage claim for breach of fiduciary duty in the full amount permitted by applicable law, such amount is likely to exceed the $120,000 disclosure threshold of Item 404 of Regulation S-K. The side letter was reviewed and approved by the Company's Audit Committee.\n\nDirector Independence\n\nNasdaq rules require that a majority of the members of our Board of Directors be independent directors. The independence rules include a series of objective tests, including that the director is not employed by the Company and has not engaged in various types of business dealings with the Company. In addition, our Board of Directors is required to make a subjective determination as to each independent director that no relationships exist that, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Based upon these standards and the consideration of the information and the transactions and relationships discussed above, our Board of Directors determined that Houman Akhavan, David Douglas, Christos Tsentas and Wayne Walker are independent, and that Steve Urvan is not independent under such standards. In making such determinations, the Board of Directors considered transactions and relationships between each non-employee director and the Company, if any, that would require disclosure pursuant to Item 404 of Regulation S-K under the Securities Act.\n\nEach director who served on a committee during the fiscal year ended March 31, 2026 was independent under the Nasdaq independence standards for service on the applicable committee."}