{"url_path":"/sec/poww/10-k/2026/item-9a","section_key":"item-9a","section_title":"Item 9A CONTROLS AND PROCEDURES","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":1865,"has_tables":true,"body_markdown":"ITEM 9A. CONTROLS AND PROCEDURES\n\nEvaluation of Disclosure Controls and Procedures\n\nOur management, with participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31, 2026. Our disclosure controls and procedures are designed to provide reasonable assurance that information disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including our CEO and CFO, to allow timely decisions regarding required disclosures. Based upon that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2026.\n\nManagement’s Report on Internal Control Over Financial Reporting\n\nOur management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our ICFR is a process designed by, or under the supervision of, our CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and of the preparation of financial statements for external reporting purposes, in accordance with GAAP and includes those policies and procedures that (i) maintain records in reasonable detail that accurately and fairly reflect transactions and dispositions of assets (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized use, acquisition, or disposition of assets that could have a material effect on the financial statements.\n\nBecause of inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls\n\n \n\n39\n\n \n\nmay become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nUnder the supervision and with participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) . Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2026.\n\nThis Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because, as a smaller reporting company, we are not required to provide such an attestation pursuant to Section 404(b) of the Sarbanes Oxley Act. Our independent registered public accounting firm has not audited and does not express an opinion on the effectiveness of our internal control over financial reporting.\n\nManagement’s Remediation of Previously Identified Material Weaknesses\n\nWe are committed to maintaining a strong internal control environment. In connection with our annual report Form 10-K for the year ended March 31, 2025, we identified material weaknesses in the design and operation of our ICFR in the Control Environment, Control Activities, Information & Communication, and Monitoring components of the COSO framework related to the following areas:\n\nControl Environment, Information and Communication, and Monitoring Activities - Under the COSO framework, the Board of Directors and senior management establish the tone at the top regarding the importance of internal controls and management reinforces expectations at the various levels of the company.\n\n•\nWe did not execute appropriately designed entity-level controls governing the control environment and effective monitoring controls to prevent or detect material misstatements to the consolidated financial statements. These deficiencies were attributed to (i) a lack of a sufficient complement of qualified personnel within the accounting and financial reporting function, including reliance on unqualified personnel, with an appropriate level of technical expertise to provide for sufficient oversight, accountability and monitoring over the performance of control activities, (ii) insufficient governance to monitor compliance with the Company's Code of Conduct to identify, evaluate, and report potential fraud as well as related director and management behavior, such as, among other things, director independence, and (iii) improper review and approval of disclosure regarding related party transactions and executive compensation.\n\nControl Activities– These material weaknesses in the control environment resulted in certain instances of inappropriate accounting decisions and inappropriate changes in accounting methodology and contributed to the following additional material weaknesses whereby we did not design, implement and maintain effective controls within certain business processes.\n\n•\nComplex Technical Accounting: Stock Compensation / Warrants / Convertible Notes – We did not design and maintain controls over the effective review of the models, assumptions and data used in developing estimates or changes made to models, assumptions and data to ensure the appropriate application of GAAP. It was further determined that the existence of complementary or compensating controls could not be relied upon to mitigate the identified deficiencies given failures were detected in all critical procedures from initiation to disclosure of the related transactions, including: timely and accurate accounting assessments performed over newly executed contracts to ensure appropriate application of GAAP; the review and approval of the issuance of stock awards to employees and third-party service providers including determining specific grant dates and key terms; determination of an appropriate fair value measurement for financial instruments; review of the classification and recording of equity compensation expenses; timely and accurate application of GAAP related to equity issuance costs; and recognition and disclosure of compensation expense for all share-based payment awards to employees, directors and third parties.\n\n•\nRelated Party Transactions and Executive Compensation – We did not properly maintain controls over the identification and disclosure of related party transactions and executive compensation.\n\n \n\n40\n\n \n\nThere were insufficient management review procedures to validate the completeness and accuracy of related party and executive compensation disclosures and to clearly define and evidence the process used and criteria and judgment applied to identify and disclose related party transactions and executive compensation.\n\n•\nFinancial Reporting – We did not properly maintain controls over period-end financial reporting, including tie-out and review of supporting documentation. There were insufficient management review procedures to validate the completeness and accuracy of complex technical accounting transactions and to clearly define and evidence the process used and criteria and judgment applied in the performance of critical business components.\n\n•\nSegregation of Duties – We failed to properly separate the execution of certain controls by designated senior management, which did not provide for proper segregation between preparer and reviewer for select transactions. We further failed to fully resolve identified segregation of duties conflicts with system access for designated business and IT users, thus related user access review and application change management procedures could not be relied upon for select Company systems.\n\nThroughout fiscal years 2025 and 2026, we completed the implementation and testing of the remediation measures designed to address these material weaknesses. These remediation actions taken to address the material weaknesses included the following:\n\nControl Environment, Information and Communication, and Monitoring Activities:\n\n•\nExecutive Communications to Reinforce Compliance – The Company’s CEO and other executives, at the direction of the Board of Directors, have reinforced the importance of adherence to the Company’s policies and procedures regarding ethics and compliance and the importance of identifying misconduct and raising and communicating concerns. This reinforcement has occurred through email communications, staff meetings, remarks given to senior management, as well as other employee forums, including mandatory ethics training.\n\n•\nOrganizational Enhancements – The Company has completed implementation of several organizational enhancements as follows: (i) the identification and successful hiring of a Vice President of Accounting and External Reporting, who has the responsibility and authority to ensure that GAAP and accounting for complex or non-routine transactions that require specialized accounting are appropriately applied corporate-wide, (ii) the enhancement of the Company’s organizational structure over all finance functions and an increase in the Company’s accounting personnel with the requisite knowledge, experience, and training in GAAP to ensure that a formalized process for determining, documenting, communicating, implementing and monitoring controls over the period-end financial close and reporting processes is maintained and proper segregation exists between the preparer and reviewer for select transactions, and (iii) enhancement of accounting policies and procedures related to journal entries, invoice approval, account reconciliations and variance thresholds.\n\n•\nRelated Party Transaction Policy – The Company utilized its new Related Party Transactions Policy to proactively identify transactions and improve disclosures. Guidance is provided by new corporate disclosure counsel with review/approval by the Audit Committee. The Related Party Transactions Policy was further reviewed and revised in fiscal year 2026.\n\n•\nPerquisites Policy – The Company utilized its Perquisites Policy to better define its perquisites disclosure requirements, perquisite identification, training, and employee compliance requirements.\n\nControl Activities:\n\n•\nSignificant and Unusual Transactions (Complex Technical Accounting) – The Company evaluated its practices related to significant non-recurring transactions and implemented improvements in those practices, including, (i) updating the process to address agreements with non-standard terms, including formalized review and approval, (ii) more formalized practices for assessing the need for utilization of a third-party expert for unusual or complex transactions, and (iii) the development of a more comprehensive review process and monitoring controls over significant transactions to ensure accurate accounting and the preparation of accounting memoranda.\n\n \n\n41\n\n \n\n•\nRelated Party Transaction Policy – In conjunction with the Related Party Transaction Policy the Company implemented formal documentation requirements to clearly evidence the process, criteria, and judgment applied in the identification of related parties, related party transactions and executive compensation, including support for management’s conclusion regarding disclosure requirements.\n\n•\nFinancial Reporting – The Company enhanced its management review procedures through additional training of accounting staff, improved evidence of review through tick marks and screenshots to validate the completeness and accuracy of transactions and to clearly define and evidence the process used and criteria and judgment applied in performance of critical business activities.\n\n•\nDisclosure Committee – The Company established a formal disclosure committee that includes key members of management that have responsibility for disclosure information necessary for periodic reports filed with the SEC. This committee has met, and will continue to meet, on an as-needed basis as well as prior to the Audit Committee meeting in which a Form 10-K, Form 10-Q or other relevant Exchange Act document will be approved and will conduct follow-up meetings as necessary. The meetings cover all significant events from the period being reported upon and supporting information. A charter was created governing the conduct of this committee, a formal agenda is distributed prior to each meeting, and minutes are maintained for each meeting.\n\n \n\nBased on the foregoing remediation measures and testing, management concluded that the previously identified material weaknesses have been remediated and that the Company’s internal control over financial reporting was effective as of March 31, 2026.\n\nChanges in Internal Control Over Financial Reporting\n\nThere were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting."}