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RELATED PARTY TRANSACTIONS (AS RESTATED)
 12 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS (AS RESTATED)

NOTE 18 – RELATED PARTY TRANSACTIONS (AS RESTATED)

During the year ended March 31, 2024, we paid $410,173 in service fees to two independent contractors consisting of a $244,640 payment due upon termination without cause. The two independent contractors were issued 168,581 shares of Common Stock for a total value of $449,370, which consisted of an issuance of 134,240 shares due upon termination without cause. We issued 25,000 shares in the aggregate to our advisory committee members for service for a total value of $43,240. Through our acquisition of Gemini, a related party relationship was created through one of our Members of the Board of Directors by ownership of entities that transacts with Gemini. There was $201,646 included in our Accounts Receivable at March 31, 2024 as a result of this relationship. Additionally, we owed $150,866 to Jagemann Precision Tooling, a division of JSC, at March 31, 2024.

On July 24, 2023, Fred Wagenhals departed as CEO and the Board appointed Mr. Wagenhals the Company’s Executive Chairman. Mr. Wagenhals received the following payments in connection with his transition from CEO to Executive Chairman: (i) total cash payments of $1,060,290; (ii) 300,000 shares of Common Stock for a total value of $639,000.

On July 26, 2023, we obtained a $1.6 million letter of credit with Northern Trust for collateral for a bond related to a judgment assessed to GunBroker. On July 17, 2023, we generated a $1.6 million certificate of deposit with Northern Trust for security on the letter of credit. The term of the certificate of deposit is twelve months and includes interest of approximately 5%. Per the terms of the Merger Agreement, the Seller is required to pay or be liable for these losses.

In July of 2023, the Company filed suit in the Delaware Chancery Court against director and the Company's largest shareholder Steve Urvan for claims arising out of the Company’s acquisition of certain companies referenced as the GunBroker family of companies. The Company alleges that Mr. Urvan’s repeatedly failed and refused to honor contractual defense and indemnification obligations arising under that certain Merger Agreement, along with alleged misrepresentations.

On November 3, 2022, the Company entered into a Settlement Agreement (the “2022 Urvan Settlement Agreement”) with Steven F. Urvan and Susan T. Lokey (collectively with each of their respective affiliates and associates, the “Urvan Group”).

Pursuant to the 2022 Urvan Settlement Agreement, the Urvan Group has agreed to withdraw its notice of stockholder nomination of its seven director candidates (the “Urvan Candidates”) and its demand to inspect books and records, pursuant to Section 220 of the General Corporation Law of the State of Delaware, and the Company agreed to immediately increase the size of the Board from seven to nine directors and appoint Christos Tsentas and Wayne Walker (each, a “New Director” and the New Directors together with Mr. Urvan, the “Urvan Group Directors”) to the Board to serve as directors with terms expiring at the 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”). The Company will include the Urvan Group Directors in its director candidates slate for the 2022 Annual Meeting and any subsequent Annual Meeting of Stockholders of the Company occurring prior to the Termination Date (as defined below). The Company has agreed to not increase the size of the Board above nine directors prior to the Termination Date unless the increase is approved by at least seven directors. Mr. Wagenhals will continue to serve as a director and Chairman of the Board.

Unless otherwise mutually agreed to in writing by each party, the 2022 Urvan Settlement Agreement will remain in effect until the date that is the earlier of (i) 30 days prior to the earlier of (A) the deadline set forth in the notice requirements of Federal “Universal Proxy Rules” promulgated under Rule 14a-19(a) and Rule 14a-19(b) under the Securities Exchange Act of 1934, as amended (the “UPR Deadline”) relating to the Company’s 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) and (B) any deadline that may be set forth in the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate”) or Bylaws (the “Bylaws”) following the execution of the 2022 Urvan Settlement Agreement relating to the nomination of director candidates for election to the Board at the 2023 Annual Meeting, and (ii) 90 days prior to the first anniversary of the 2022 Annual Meeting (such date, the “Termination Date”). However, if the Company notifies Mr. Urvan in writing at least 15 days prior to such Termination Date that the Board irrevocably offers to re-nominate the Urvan Group Directors for election at the 2023 Annual Meeting and Mr. Urvan accepts such offer within 15 days of receipt of such notice, the Termination Date will be automatically extended until the earlier of (i) 30 days prior to the earlier of (A) the UPR Deadline relating to the Company’s 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”) and (B) any deadline that may be set forth in the Certificate or the Bylaws following execution of the 2022 Urvan Settlement Agreement relating to the nomination of director candidates for election to the Board at the 2024 Annual Meeting, and (ii) 90 days prior to the first anniversary of the 2023 Annual Meeting. Notwithstanding the foregoing, the “Termination Date” shall not occur prior to 20 days after Mr. Urvan’s departure from the Board. Pursuant to the 2022 Urvan Settlement Agreement, the Urvan Group agreed to certain standstill provisions effective during the period prior to the Termination Date. The Urvan Group agreed not to, among others, (i) nominate, recommend for nomination or give notice of an intent to nominate directors to be elected, (ii) seek to amend the certificate of incorporation or bylaws of the Company, (iii) demand an inspection of the Company’s books and records or (iv) knowingly initiate, make or in any way participate, directly or indirectly, incertain extraordinary transaction. The Company paid approximately $500,000 of the Urvan Group’s costs, fees and expenses per the terms of the 2022 Urvan Settlement Agreement.

Pursuant to the 2022 Urvan Settlement Agreement, the Company will agree to suspend the previously announced separation of Company into Action Outdoor Sports, Inc. and Outdoor Online, Inc., pending the further evaluation of strategic options by the Board. The Company paid approximately $500,000 of the Urvan Group’s costs, fees, and expenses per the terms of the 2022 Urvan Settlement Agreement. Additionally, the Company issued 125,000 shares of Common Stock for a total value of $777,500 to an employee and issued 110,000 shares of Common Stock for a total value of $259,000 to an independent contractor as a result of termination without cause per the terms of the 2022 Urvan Settlement Agreement.

The foregoing summary of the 2022 Urvan Settlement Agreement does not purport to be complete and is subject to, and qualified in its entirety, by reference to the full text of the 2022 Urvan Settlement Agreement, a copy of which was previously filed as Exhibit 10.1 in the Form 8-K filed with the SEC on November 7, 2022, and incorporated herein by reference.

During the year ended March 31, 2023, we paid $551,916 in service fees to two independent contractors of which $223,333 were created as a result of termination without cause as a result of our Proxy Settlement Agreement. The two independent contractors were issued 141,419 shares of our Common Stock for a total value of $791,384 in addition to the issuances described in the foregoing paragraphs. We issued 45,000 shares in the aggregate to its advisory committee members for service for a total value of $245,250.

During the year ended March 31, 2022, we paid $229,083 in service fees to an independent contractor and we issued 60,000 shares in the aggregate to its advisory committee members for service for a total value of $198,000. Through our acquisition of Gemini, a related party relationship was created through Mr. Urvan's ownership of an entity that transacts with Gemini. At March 31, 2022, 2023, and 2024 there $139,164, $182,344, and 201,646 respectively, included in the accounts receivable related to business included in our Accounts Receivable at March 31, 2022 as a result of this relationship.

During the year ended March 31, 2022, the Company paid $50,698 to a third-party service provider owned by an immediate family member of Fred Wagenhals, who was the Company's Chief Executive Officer and Chairman of the Board of Directors at the time, for services rendered.

In December 2020, the Company entered into an agreement with Larson Building to serve as the general contractor for the construction of its Manitowoc, WI manufacturing facility. Larson Building is wholly owned by the brother of Chris Larson, who was an executive officer of the Company at the time. During the years ended March 31, 2023 and 2022, the Company paid $14,584,805 and $11,221,738, respectively, to Larson Building in connection with this project.

After the initial filings of the Company’s Form 10-Ks for the years ended March 31, 2024, 2023 and 2022, the Company was made aware that Chris Larson had received undisclosed payments totaling $814,863 from a vendor from which the Company received services. The payments were made by a third-party service provider. This third-party made payments to Mr. Larson from approximately January 2022 through March 2024 based upon a percentage of revenue received in connection with services rendered to the Company. Mr. Larson separated as an employee from the Company effective November 4, 2022 and was later engaged as a contractor for approximately six months.

Through the Administrative and Management Services Agreement between the Company and JSC, the Company purchased approximately $2.0 million in inventory support services, and incurred $170,355 of rent expenses for the year ended March 31, 2023. The Company purchased approximately $1.7 million in inventory support services, and incurred $408,852 of rent expenses for the year ended March 31, 2022.

See Note 12 for further discussion of related party transactions with JSC.