PEW 10-K & 10-Q changes, risk factors and insider trading

GrabAGun is a digitally native and multi-brand eCommerce retailer of firearms, ammunition and related accessories. Since we began doing business as GrabAGun.com in 2010, GrabAGun has developed and grown its online gun platform, leveraging technology to provide a tech-first eCommerce experience, specially catering to the next generation of firearms enthusiasts, sportsmen and defenders. Our broad selection of product offerings ranges from carry handguns and sporting long guns to an assortment of firearm ammunition, magazines and optics. We source these products from more than 2,000 leading brands such as Smith & Wesson Brands, Sturm, Ruger & Co., Sig Sauer and Glock, for whom we serve as a non-exclusive online sales partner, as well as emerging brands and manufacturers. Our firearms products are purchased by customers online through our eCommerce site and delivered to the customers’ choice of federal firearm licensed dealers within our network or, with respect to most accessories and other eligible products, delivered directly to customers. Our collaborative business relationships and multi-brand vendor strategy enable us to offer about 73,000 products, which we believe to be one of the most expansive product assortments currently offered among firearms and ammunition industry retailers. For the three months ended MarchJune 31,30, 2026 and 2025, we generated $25.9$23.2 million and $23.3$21.2 million in net revenues, respectively. For the six months ended June 30, 2026 and 2025, we generated $49.1 million and $44.6 million in net revenues, respectively. We had a net loss for the three and six months ended June 30, 2026 of $1.8 million and $3.6 million, respectively, and net income for the three months ended March 31, 2026 and had net income of $0.1 million for the threesix months ended MarchJune 31,30, 2025.2025 of $0.8 million and $0.9 million, respectively.

See Note 1 of our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning the closing of the Business Combination.

See Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025, included elsewhere in this Quarterly Report, for more information concerning our revenue recognition policies.

The results of operations presented below should be reviewed in conjunction with our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025, included elsewhere in this Quarterly Report.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025

Net revenues increased by $2.6$2.0 million, or 11.1%,9%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by fluctuations within the firearm and non-firearm product categories, as well as the initiation of service revenues as outlined below:

Non-firearmFirearm sales increased by $0.4$1.5 million, or 10%,8%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. This increase was primarily drivendue byto a 23%12% increase in average sales price, partially offset by a 10%4% decrease in sales volumes of non-firearmfirearm products.

Service sales totaled $0.1$0.2 million,million for the three months ended MarchJune 31,30, 20262026. There were no service sales in the comparable 2025 period, as PEW Logistics startedbegan generating revenue duringin the currentfirst quarter.quarter of 2026.

GrossCost profitof goods sold increased by $0.5$1.1 million, or 23%,6%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by ana 10% increase in average firearm sales.product cost, partially offset by lower sales volumes across firearm and non-firearm products.

Sales and marketing expense increased by $41 thousand or 17%18% for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase reflects continued investment in marketing initiatives designed to drive customer growth and support long-term revenue. Spending was primarily driven by increased spendingfocused on thecustomer Company’sacquisition, brand awareness, and digital marketing activities.programs.

General and administrative expense increased by $3.2$4.2 million, or 162%,342%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. This increase was primarily driven by increased employeecosts to support the growth of the business and directoroperating relatedas expensesa public company, including ana $1.6 million increase of $1.5 million in payroll,employee compensation costs, a $0.5 million increase in stock-based compensation,compensation and $0.5 million in director-related expenses. Additionally, there wasexpense, a $0.4$0.9 million increase in professional services relatingcosts, toa public$0.5 companymillion costs.increase in director fees and expenses, and a $0.3 million increase in program and web development expenses.

Interest income, net increased by $0.7 million, or 1,413%,1754%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, which was due to an increase in the daily cash sweep balances held in the current period.

OtherInterest incomeincome, (expense)net increased by $4$1.5 thousand,million or 100%,1579%, for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025, attributablewhich was due to miscellaneousan incomeincrease and expense items recognized duringin the daily cash sweep balances held in the current period.

The following table reconciles our GAAP and non-GAAP financial measures for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands, except percentages):

(1) Non-recurring costs consistconsisting of third-party accounting and consulting fees incurred in connection with the Business Combination.

Historically, we have financed operations primarily through cash generated from operating activities. Based on our current operating plans, we believe that the net proceeds realized from the Business Combination, along with our previously existing cash and cash equivalent balance, will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least 12 months following the date the unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025 included elsewhere in this Quarterly Report are available to be issued. This estimate is based on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than anticipated.

As of MarchJune 31,30, 2026 and December 31, 2025, the Company had a cash and cash equivalent balance of $106.4$97.5 million and $110.4 million, respectively. Excess cash is primarily invested in overnight cash sweeps, which offer high liquidity and strong credit ratings. Following the consummation of the Business Combination, we do not currently anticipate needing to raise additional capital in the near term and based on our current expectations with respect to cash to be generated from our operations. However, our liquidity needs will be dependent on the performance of our business. See “Risk Factors — GrabAGun may require additional funding to finance its operations, but adequate additional financing may not be available when it needs it, on acceptable terms or, at all” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further discussion. By focusing on competitive pricing and operational efficiency, we seek to maximize customer satisfaction and lifetime value while maintaining strong profit margins. The digital-first approach also allows our company to scale efficiently and serve a nationwide customer base with ease.

On November 25, 2025, the Company, through its indirect wholly owned subsidiary, 4880 Alpha LLC, entered into a Business Loan Agreement with BOKF, NA dba Bank of Texas (the “Lender”), pursuant to which the Lender extended a delayed draw term loan to 4880 Alpha LLC up to a maximum principal amount which was originally set at $8.5 million (the “Loan”). SubsequentDuring tothe Marchsecond 31,quarter of 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that increased the maximum principal amount of the Loan to $9.3 million. The Loan matures on November 25, 2036, and bears interest at a variable rate during the initial 12-month period beginning from the loan date (the “Initial Period”) equal to 1.85% over the one-month term SOFR; from and after November 25, 2026 (the “Remaining Period”), the Loan will bear interest at a fixed rate determined by the Lender as 1.85% over the BOKF Tier 1 COF. During the Initial Period, interest is payable quarterly, with the first quarterly interest payment due on February 25, 2026. During the Remaining Period, interest and principal amortization payments are payable quarterly, with the first quarterly interest and principal amortization payment due on February 25, 2027. The Loan is secured by a Deed of Trust encumbering the real property located at 4880 Alpha Road, Farmers Branch, Texas, together with all improvements, fixtures, rents and related personal property, as well as an Assignment of Rents with respect to such property. The Loan is guaranteed by the Company in the full principal amount pursuant to a Commercial Guaranty, dated November 25, 2025. Subsequent to March 31, 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that revised the financial covenant requirements. Under the amended loan documents, the Company and its consolidated subsidiaries are required to maintain either (i) a fixed charge coverage ratio of not less than 1.25 to 1.00, measured quarterly on a trailing twelve-month basis, or (ii) minimum liquidity held with the Lender equal to at least two times the loan balances of 4880 Alpha LLC. Compliance with either covenant satisfies this requirement. The amendment applies from the date the original Business Loan Agreement was entered into, and the Company was in compliance with the liquidityamended covenant requirement as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, the Company has drawn $7.9 million under the Loan.

Comparison of the threesix months ended MarchJune 31,30, 2026 and 2025

Net cash used in operating activities was $1.7$8.3 million for the threesix months ended MarchJune 31,30, 2026, compared to net cash provided by operating activities of $1.3$0.2 million for the threesix months ended MarchJune 31,30, 2025. The change reflects the Company’s net loss, which was adjusted for non-cash items such as stock-based compensation, alongside an increase in inventory and a decrease in unearned revenue. These impacts were partially offset by an increase in accounts payable and aunearned decrease in prepaid expenses and other current assets.revenue.

Net cash used in investing activities was $1.3$3.1 million for the threesix months ended MarchJune 31,30, 2026, compared to $0.1 million for the threesix months ended MarchJune 31,30, 20252025. andThe consistedchange primarilywas ofdriven by the purchase of property and equipment related to building improvements, inclusive of capitalized interest, and additions to capitalized software.improvements.

Net cash used in financing activities was $1.1$1.4 million for the threesix months ended MarchJune 31,30, 2026, compared to $1.7$3.3 million for the threesix months ended MarchJune 31,30, 2025. The change was primarily driven by stock repurchases, partially offset by proceeds from borrowings related to building improvements.

As of MarchJune 31,30, 2026 and through the date of this filing, we do not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

While our significant accounting policies are described in more detail in Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025 included elsewhere in this Quarterly Report, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our balance sheet and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Generally, customers may return non-firearm products within 30 days of purchase. Revenue is recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns. Sales returns reserve totaled $0.4$0.2 million as of MarchJune 31,30, 2026 and $0.4 million as of December 31, 2025 and is included in accrued expenses and other current liabilities within the condensed consolidated balance sheets.

Additionally, we sell gift cards, which do not have expiration dates, and do not deduct non-usage fees from outstanding gift card balances. Gift card sales represent an open performance obligation for the future delivery of promised goods or services to be provided by us and is considered a liability to be subsequently recognized as revenue upon redemption by the customer, which is typically within one year of issuance. Over time, a portion of the outstanding balance of gift cards will not be redeemed by the customer, which is referred to as “breakage”. Revenue is recognized for expected breakage over time in proportion to the pattern of redemption by customers to the extent that breakage revenue is not immaterial. The determination of the gift card breakage is based on historical redemption patterns. As of MarchJune 31,30, 2026 and December 31, 2025, unredeemed gift card balances were immaterial.

PEW Logistics service revenue consists of order fulfillment services, e-commerce platform hosting services, and storage solutions. Revenue from order fulfillment services is recognized when control of the goods is transferred to the end customer, which occurs upon delivery. Revenue from e-commerce platform hosting services is recognized ratably over the contractual service period. Revenue from storage solutions is recognized each month based on the volume of goods stored and the period during which storage services are provided. The Company commenced revenue-generating activities for PEW Logistics during the three months ended March 31, 2026, and increased during the three months ended June 30, 2026.

We record adjustments to inventories, which are reflected in cost of goods sold, if the cost of specific inventory items on hand exceeds the amount that we expect to realize from the ultimate sale or disposal of the inventory. A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if necessary. No provision was recognized during the three and six months ended MarchJune 31,30, 2026 and 2025.2025 In addition, we record an estimated reserve amount for the net realizable value of expected future inventory returns related to our sale returns reserve. The inventory returns reserve balance was $0.2 million as of June 30, 2026 and $0.3 million as of December 31, 2025, and is included in inventory, net within the condensed consolidated balance sheets.

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, and cash flows is included in Note 3 of our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025 included elsewhere in this Quarterly Report.