As of August 31, 2026, the Company had an accumulated deficit of approximately $59.3 million. The Company has historically funded its operations primarily through the issuance of the Company's common stock, par value $0.001 per share ("Common Stock"). The Company also has a $5.0 million revolving line of credit, which was undrawn and available for general corporate purposes, including working capital, as of August 31, 2026. The Company's $15.0 million delayed draw term loan may be used only to finance permitted acquisitions and is not available to fund operations. Both facilities are subject to financial covenants, including a maximum leverage ratio and a minimum fixed charge coverage ratio, which are tested quarterly regardless of amounts outstanding (see Note 24, Credit Facility). The Company generated a net loss of $12.2 million and used $3.5 million of cash in operations for the nine months ended August 31, 2026. The Company's future results will depend on its ability to continue generating sufficient revenue to fund operating expenses and to effectively market its products.

In accordance with ASC 205-40, Presentation of Financial Statements—Going Concern, management evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. In performing this evaluation, management considered the Company's net loss of $12.2 million for the nine months ended August 31, 2026, which included approximately $10.5 million of non-cash impairment and inventory charges, substantially all of which were recorded in connection with the cessation of in-house ammunition production and the rationalization of certain launcher components, and net cash used in operating activities of $3.5 million. Management also considered the Company's liquidity and absence of outstanding borrowings, the reduction in inventory purchasing during the third quarter, the Company's inventory on hand, and projected cash flows, which reflect the seasonally stronger fourth fiscal quarter and do not assume additional tariff refunds, a recurrence of the decrease in accounts receivable, or borrowings under the Credit Agreement. Based on this evaluation, management concluded that no conditions or events exist that, when considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued.