AMMO, Inc. (Nasdaq: POWW, POWWP) (“AMMO” or the “Company”), the
owner of GunBroker.com, the largest online marketplace serving the
firearms and shooting sports industries, and a leading vertically
integrated producer of high-performance ammunition and components,
issued the following Letter to Shareholders from CEO Jared Smith.
Dear Fellow Shareholders,
I am pleased to communicate directly with you as
AMMO, Inc.’s new Chief Executive Officer and want to take this
opportunity to share the many developments that have occurred over
the past six months and the future we envision for AMMO and
GunBroker.com.
I would like to begin by acknowledging AMMO
Inc.’s Executive Chairman Fred Wagenhals and thank him on behalf of
our leadership team and Board members for his innumerable and
invaluable contributions over the past seven years. I look forward
to learning from his impeccable entrepreneurial instincts and
drive.
I would also like to acknowledge all of our
employees for their hard work and our investors for their continued
patience. To our employees: this change has not been easy and
current market conditions have made this transition even tougher.
We have a very bright future, and I believe our team is now aligned
to execute on a set of principles and goals that will drive long
term shareholder value. To our investors: I ask that you maintain
your faith in AMMO’s vision. We are now starting to execute on that
vision while quickly making the changes necessary to win and
maintain your confidence.
We anticipate considerable progress in the
quarters ahead through careful execution under three major
categories: alignment and commitment from management; expansion of
the reach and positioning of GunBroker.com; and enhancing our
margins, operational prowess, and brand strength for our AMMO
division.
Management Alignment and Commitment
Principally, our success begins with a new
commitment from our executive management team to communicate more
effectively and provide a greater degree of transparency to our
shareholders. We have worked tirelessly to create alignment of
management compensation with bottom line profitability and
measurable creation of shareholder value, which includes bonus
structures aligned with profitable EBITDA goals and project
milestones, future compensation of stock options rather than stock
grants, and maintaining a mindset that our shareholders must win
first. We are committed to creating greater transparency of
managerial decisions, insights into current market conditions, and
greater financial accountability and engagement with our
shareholders, all of which will be illustrated by proper
governance, compliance, and controls to manage the ever-changing
responsibilities of managing and investing shareholder funds. This
will be illustrated by increased communication of details about our
operating models and profitability of each individual business unit
in a far more transparent way so our investors can decide when to
invest based on actionable information.
We have also committed to strengthening our
balance sheet and cash position through divestitures, strategic
acquisitions, and buyback of our stock. For example, our buyback
program will continue to create value for our long-term shareholder
value in this current period. We will also continue to seek
strategic and reasonable opportunities for acquisition using the
criteria of being accretive in two years. This is actionable and of
a size that does not stress our balance sheet while creating
milestones and earn outs for the new management teams. Lastly, we
will bring on new talent who will sharpen our execution and
timeline for delivering the following business initiatives.
Expanding
GunBroker.com’s
Platform and Reach
GunBroker.com continues to be an extremely
strong business segment for AMMO and will continue to deliver the
most effective and compliant solution for buying and selling new
and used firearms. Forging ahead, we will continue to streamline
the checkout process through a centralized payment system,
implementing a multi-item cart, and enabling financing for the
entire transaction.
While we build out the tools to aid in
streamlining our platform, we are growing our reach. Today, we are
primarily product focused, having ignored the other half of our
passion - the people and the places that enable us to get out
there. The outdoorsman and shooting enthusiast will finally have a
comprehensive site to find guide services, lodging, hunts,
preserves, gunsmithing, and other services this industry relies
upon to successfully enjoy the outdoors. We are curating the user
experience based on their unique passions and the products and
services necessary to be successful in the field. It is our goal
that GunBroker.com will become the EMarketplace, message board, and
aggregator of products and services for the outdoor community. In
the next year, we will bring product reviews and podcasts focused
on the historically relevant products and services available on the
platform. We are also developing and testing a new suite of AI
(Artificial Intelligence) tools to enhance the user experience. AI
applications include FAQs, real-time instructional/ factual outdoor
related inquiries, digital buyer assistance, reviews of inventoried
products, and internally by employees for ad hoc data requests to
help improve customer service. At the same time, we are cautious of
AI’s role and have firewalled user data, focusing AI’s role on
products and not the community to ensure personal information is
not shared or violated. We are doing this to give shareholders
better insight into our developments and to ensure GunBroker.com’s
dominance in this industry.
Upon final buildout with this suite of tools
(auction, credit card processing, carting, financing, and the
compliant checkout of state and federally regulated goods) we will
look to new markets outside of the firearm industry.
AMMO Division:
Enhancing our Margins, Operational Prowess, and Brand
Strength
Our ammunition business will be laser-focused on
margin creation and premium positioning for the AMMO, Inc. brand.
We will accomplish this by continuing to grow sales of rifle and
pistol brass to domestic and international markets, while
continuing expansion in our rifle brass capacity, further
integrating our business with the strategic manufacturers in this
industrial space and continuing our vertical integration into
projectile production.
We are utilizing our new 185,000 square-foot
facility to produce those items that create real margin for the
company, and that match our engineering capabilities with the
products and services needed by the shooting, law enforcement, and
military communities. Additionally, we will continue to create
leaner and more efficient operations while creating cash from our
inventories.
In our most recent fiscal year, we generated
$35.6M in cash from our operations. We repositioned our operations
and we continue to meet this new market head on. We retooled our
factory and changed our go-to-market approach for both the
ammunition and GunBroker divisions.
We will continue at this pace of change through
the onboarding of top talent to facilitate new growth. We need more
driven engineers, up-all-night computer scientists/developers,
committed accountants, savvy analysts, and passionate sales
leaders. This is the key to our growth. The new talent must be able
to lead and empower the new organization we are building. Our
investment community must know we are building a company based
around proper governance, transparency, and best in class reporting
so that we can provide better metrics for our strategic growth. We
will not stand around waiting for the market to improve and we will
not rest until we have created the company your investment
deserves.
We are grateful for our shareholders’ interest
and support of AMMO and our singular goal remains that our
long-term and supportive shareholders realize the full potential of
these amazing businesses, which will be reflected in our future
financial performance and the share price.
I am honored to lead our winning team and
acknowledge my colleagues and Board Members for their many
contributions and shared achievements.
Sincerely,AMMO, Inc./GunBroker.com CEOJared
Smith
About AMMO, Inc.
With its corporate offices headquartered in
Scottsdale, Arizona, AMMO designs and manufactures products for a
variety of aptitudes, including law enforcement, military, sport
shooting and self-defense. The Company was founded in 2016 with a
vision to change, innovate and invigorate the complacent munitions
industry. AMMO promotes branded munitions as well as its patented
STREAK™ Visual Ammunition, /stelTH/™ subsonic munitions,
and specialty rounds for military use via government programs. For
more information, please visit: www.ammo-inc.com.
About
GunBroker.com
GunBroker.com is the largest online marketplace
dedicated to firearms, hunting, shooting and related products.
Aside from merchandise bearing its logo, GunBroker.com currently
sells none of the items listed on its website. Third-party sellers
list items on the site and Federal and state laws govern the sale
of firearms and other restricted items. Ownership policies and
regulations are followed using licensed firearms dealers as
transfer agents. Launched in 1999, GunBroker.com is an informative,
secure and safe way to buy and sell firearms, ammunition, air guns,
archery equipment, knives and swords, firearms accessories and
hunting/shooting gear online. GunBroker.com promotes responsible
ownership of guns and firearms. For more information, please
visit: www.GunBroker.com.
Forward Looking Statements
This document contains certain “forward-looking
statements”. All statements other than statements of historical
fact are “forward-looking statements” for purposes of federal and
state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any
statements of the plans, strategies, goals and objectives of
management for future operations; any statements concerning
proposed new products and services or developments thereof; any
statements regarding future economic conditions or performance; any
statements or belief; and any statements of assumptions underlying
any of the foregoing.
Forward looking statements may include the words
“may,” “could,” “estimate,” “intend,” “continue,” “believe,”
“expect” or “anticipate” or other similar words, or the negative
thereof. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the dates on
which they are made. We do not undertake to update forward-looking
statements to reflect the impact of circumstances or events that
arise after the dates they are made. You should, however, consult
further disclosures and risk factors we include in Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, and Reports filed on
Form 8-K.
Investor Contact:CoreIRPhone: (212)
655-0924
AMMO, Inc. Contact:Victoria
WelchPhone: (480) 947-0001
Source: AMMO, Inc.
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