Ammo, Inc., the owner of GunBroker.com, is reporting that a Special Committee of its Board of Directors has retained a law firm to conduct an independent investigation, focused on fiscal years 2020 through 2023, to determine whether certain transactions, fees and stock awards were classified correctly and/or valued by company management during that period.
The company’s outside auditors have reportedly indicated that they are not prepared to rely on representation from company management for the period in question until the investigation and all appropriate remediation, if necessary, is completed.
The independent investigation will initially focus on determining whether the company and its management control persons at the time:
- Accurately disclosed all executive officers, members of management and potential related party transactions in fiscal years 2020 through 2023;
- Properly characterized certain fees paid for investor relations and legal services as reductions of proceeds from capital raises rather than period expenses in fiscal years 2021 and 2022; and
- Appropriately valued unrestricted stock awards to officers, directors, employees, and others in fiscal years 2020 through 2022.
Ammo, Inc. said this independent investigation is in its early stages, and to ensure the fairness of that process, it does not plan to comment further pending the investigation’s completion.
Concurrent with this process, the Board requested and received the resignation of then-CFO Rob Wiley on September 19, 2024. The Board immediately appointed Paul Kasowski as the company’s new CFO, who has served as the company’s chief compliance and transformation officer since January 2024.
“Since my appointment as CEO in July 2023, I have prioritized laying a foundation for long-term value creation and helping Ammo mature as a public company,” said Jared Smith, CEO and Board member of Ammo, Inc. “The appointment of Paul will support these efforts. He brings additive experience in a variety of areas, including enhancing margins, improving internal processes, and positioning businesses to transform.”
Before joining the company, the company said Kasowski was the SVP of business transformation for Kinder’s Seasonings & Sauces from January 2022 to July 2023, during which time he “professionalized financial reporting and implemented margin improvement projects.” Previously, from December 2020 to December 2021, he was the CFO for Arizona Natural Resources, a privately owned manufacturer of beauty care products, where he oversaw finance, accounting, IT, HR, planning, and sourcing. Kasowski was also the vice president of financial planning and analysis for Igloo Products Corp. from April 2019 to December 2020. From 2003 to 2019, he held progressing roles in finance, strategy and operations for Del Monte Foods and Ainsworth Pet Nutrition.
In an 8-K filing, Ammo, Inc. said there are no arrangements or understandings between Kasowski and any other persons under which Kasowski will become the company’s CFO. The company and Kasowski entered into an Employment Agreement concerning his appointment on September 20, 2024. The Employment Agreement has an initial one-year term, which will automatically extend for an additional one-year term unless the company or Kasowski opt-out with 90 days’ notice.
Kasowski’s Employment Agreement provides for a base salary of $325,000 per year, which may be increased annually at the discretion of Ammo, Inc.’s Board. His Employment Agreement provides for an annual equity award of 100,000 shares of Common Stock, vested quarterly. The Employment Agreement also provides that the new CFO can earn a yearly cash performance-based bonus of up to 100 percent of his base salary at the sole discretion of the company’s Compensation Committee of the Board.
If Ammo, Inc. terminates Kasowski without cause or he resigns for Good Reason (as defined by the Employment Agreement), Kasowski is entitled to a severance payment equal to 12 months of his salary and 100 percent of any remaining unvested equity due under his Employment Agreement and would immediately become vested and issuable.
The Employment Agreement also contains confidentiality and standard officer indemnification provisions.
Kasowski earned his M.S. in Supply Chain Management from Michigan State University, an MBA from Ohio University and a B.S. in Finance from Robert Morris University.
Pursuant to a recommendation by the Compensation Committee, the Board also exercised its discretion to approve a Separation Agreement for Robert Wiley.
Wiley signed the Separation Agreement on September 19, 2024. Pursuant to the Separation Agreement, Wiley will be entitled to separation compensation in the amount of $406,250.00 paid in equal bi-monthly installments over fifteen calendar months, fifty thousand shares of common stock, a lump sum payment for accrued and unused vacation and paid time off, family health benefits under the company’s employer-sponsored plans until September 30, 2025, and unreimbursed expenses.
The former CFO gave the company a general liability release, and the Parties agreed to several standard restrictive covenants. Additionally, the Separation Agreement requires Wiley to cooperate and assist the company in facilitating the transfer of duties to his successor.
Image courtesy Ammo, Inc.
