{"url_path":"/sec/powwp/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 LEGAL PROCEEDINGS","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-02-09","source_url":"https://www.sec.gov/Archives/edgar/data/1015383/0001193125-26-041880-index.html","accession_number":"0001193125-26-041880","cik":"0001015383","ticker":"POWW","issuer_name":"Outdoor Holding Co","edgar_url":"https://www.sec.gov/Archives/edgar/data/1015383/0001193125-26-041880-index.html","primary_entity_key":"0001015383","primary_entity_name":"Outdoor Holding Co"},"word_count":629,"has_tables":true,"body_markdown":"ITEM 1. LEGAL PROCEEDINGS\n\nExcept as set forth below, there were no material developments to our legal proceedings disclosed in the Form 10-K. From time to time, we are involved in various disputes, claims, suits, investigations and legal proceedings arising in the ordinary course of business, including commercial, intellectual property, and employment-related matters, as well as stockholder derivative actions, class action lawsuits and other matters. The litigation matters described below involve issues or claims that may be of particular interest to our stockholders, regardless of whether any of these matters were material to our business or financial condition based upon the standard set forth in SEC rules. We believe we have substantial defenses in each unresolved matter, and we intend to vigorously defend against the claims brought by plaintiffs in the pending lawsuits.\n\nDCP Matter\n\nOn January 18, 2024, Innovative Computer Professionals, Inc. d/b/a Digital Cash Processing (“DCP”) filed a civil action in Minnesota state court against Outdoors Online, LLC d/b/a GunBroker.com (“GunBroker.com”) for breach of contract (the “MN Action”). In the MN Action, DCP alleged that GunBroker.com breached a May 2021 contract, pursuant to which DCP was to provide specified digital payment processing services, and it alleged $100 million in damages. On February 7, 2024, GunBroker.com removed the MN Action to the United States District Court for the District of Minnesota (Case No. 24-CV-00373-DWF-DTS). On February 14, 2024, GunBroker.com moved to dismiss the MN Action for lack of personal jurisdiction and for failure to adequately state a claim, or, in the alternative, to transfer the MN Action to the United States District Court for the District of Arizona (the “Motion”). The court denied the Motion and GunBroker.com filed its Answer and Counterclaims. GunBroker.com denies the allegations in the MN Action, and it plans to vigorously defend the claims asserted against it. The parties’ initial disclosure statements were exchanged in August, 2024. The Company has, and will continue to, participate in the discovery process. The parties have retained expert witnesses who will supply expert testimony and reports. The Company expects this matter will be scheduled for trial in 2026.\n\nVista Settlement\n\nOn July 28, 2025, Vista Outdoor Sales, LLC d/b/a The Kinetic Group Sales (\"Vista\") filed a civil action (\"Vista Action\") against the Company in the United States District Court for the District of Minnesota (Case No. 25-CV-03023-NEB-DTS) alleging a breach of contract from an OEM Supplier and Ammunition Purchase Option Agreement dated August 9, 2021. After the Company’s divestiture of the Ammunition Business, it could no longer purchase ammunition manufacturing components. On November 21, 2025, the Company entered into a Settlement Agreement and Mutual Release (the “Vista Settlement and Release”) with Vista that resolves all claims asserted in the action. Pursuant to the terms of the Vistas Settlement and Release, the Company agreed to pay Vista an aggregate of $2.75 million in 12 equal quarterly installments, beginning December 1, 2025 and continuing through July 7, 2028. The settlement required Vista to dismiss the action with prejudice following receipt of the first installment. As of the date of this filing, the Company is in compliance with the Vista Settlement and Release, the action was dismissed with prejudice, and no further litigation is pending.\n\nSettlement of SEC Investigation\n\nAs previously disclosed, the Company was subject to the SEC Investigation relating to certain accounting, disclosure, and internal control issues primarily arising during periods prior to the tenure of the Company’s current management team. The Company made an Offer of Settlement to the SEC, and on December 15, 2025, the SEC instituted settled cease-and-desist proceedings that fully resolved the investigation. For more information regarding the settlement of the SEC Investigation, please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Settlement of SEC Investigation” above.\n\n \n\n43"}