Outdoor Holding Co. Pays $4.4M to Settle Lawsuit, Eyes Future Growth for GunBroker.com

ATLANTA, GA – February 23, 2026 – Outdoor Holding Company (Nasdaq: POWW, POWWP), the parent company of the prominent online firearms marketplace GunBroker.com, announced today it has reached a $4.4 million settlement to resolve a significant lawsuit with payment processor Innovative Computer Professionals, Inc., which operates as Digital Cash Processing (DCP).

The agreement brings an end to a high-stakes legal battle that was pending in the United States District Court for the District of Minnesota. Company leadership framed the decision as a strategic move to eliminate a costly distraction and sharpen its focus on future growth and innovation for its core e-commerce platform.

The Price of Clearing the Decks

Under the terms of the settlement, Outdoor Holding Company (OHC) will make a one-time payment of $4.4 million to DCP, which serves as a full and final resolution of the matter. Upon payment, both parties are set to file for a dismissal with prejudice. While the agreement includes customary mutual releases, it does not constitute an admission of liability or wrongdoing by OHC or its subsidiary. The company expects to record the charge in the current quarter.

Leadership emphasized that the settlement was a calculated business decision. After a careful evaluation, OHC’s Board of Directors concluded that resolving the litigation now would remove ongoing uncertainty and prevent substantial future legal costs that would have been incurred through a prolonged trial.

“We have spent a lot of time, energy, and effort resolving legacy disputes, which has been a distraction from our core mission,” said Steve Urvan, the company’s Chairman and CEO, in a statement. “While we were prepared to vigorously defend these claims through trial, removing the distraction and uncertainty and ending the substantial associated legal expense is in the Company’s best interest.”

The financial impact of the payment is expected to be partially mitigated by a reduction in budgeted legal expenses over the next several years. OHC assured investors that the settlement is not anticipated to have a material impact on its liquidity, capital resources, or ongoing operations.

A History of High-Stakes Disputes

The now-settled lawsuit with DCP stemmed from a May 2021 payment processing agreement. DCP had alleged that GunBroker.com breached the contract and was seeking damages reportedly in the realm of $100 million, a claim that OHC consistently denied. This case was one of several significant challenges the company has navigated in recent years.

Urvan’s reference to “legacy disputes” points to a turbulent period for the company, formerly known as AMMO, Inc. The fiscal year ending March 31, 2025, was particularly costly, with the company reporting a substantial loss from continuing operations of $65.2 million. This loss was driven in part by significant operating expenses, including a $29.1 million contingency for prior litigation against CEO Steve Urvan himself and a $14.1 million increase in legal and professional fees tied to a financial restatement and an investigation by the Securities and Exchange Commission (SEC).

However, the company has been systematically working to resolve these issues. In December 2025, OHC settled the SEC investigation without incurring financial penalties, though it agreed to enhance its internal controls and compliance measures. The $4.4 million DCP settlement appears to be the latest step in this broader campaign to clear its slate and move forward.

Sharpening Focus on a Digital Future

The resolution of the DCP litigation aligns perfectly with OHC's significant strategic pivot away from manufacturing and toward its high-margin, tech-driven marketplace. In a decisive move in April 2025, the company divested its ammunition manufacturing assets to Olin Winchester for approximately $75 million, signaling a clear intention to concentrate its resources on GunBroker.com.

With this latest legal hurdle removed, OHC leadership can now fully dedicate its attention to its stated goals. “Reaching this resolution allows us to dedicate our time and resources to areas that improve shareholder value: streamlining operations, reducing transaction friction, strategic innovation, and growth,” Urvan stated.

This renewed focus is bolstered by a key legal victory from September 2025. In a case brought by Microtech Knives, Inc., the U.S. District Court for the Northern District of Georgia granted summary judgment in favor of GunBroker.com. That ruling affirmed the platform's status as a legitimate online marketplace and validated its intellectual property protection policies, placing it on similar legal footing as major e-commerce players like eBay and Etsy. This precedent provides critical legal clarity for its business model as it pursues innovation.

Navigating a Complex and Regulated Market

As the largest online marketplace in the United States dedicated to firearms and related products, GunBroker.com operates in a uniquely complex and highly regulated industry. The platform serves as an intermediary for third-party sellers, a model that requires strict adherence to a web of federal, state, and local laws governing firearm sales. Its system, which uses licensed firearms dealers as transfer agents for all regulated transactions, is central to its compliance strategy.

Investors appear to have welcomed the news of the settlement, viewing the removal of legal uncertainty as a significant positive. The company's stock (POWW) saw an immediate 4% increase in value following the announcement. While this market reaction is encouraging, some analysts maintain a cautious outlook, with one AI-based analysis from TipRanks holding a neutral rating, suggesting that the company still needs to demonstrate sustained profitability and growth following its strategic shift.

With the DCP litigation now in the rearview mirror, Outdoor Holding Company is better positioned to prove its new model can deliver. The company's ability to innovate within its regulated space, enhance the user experience on GunBroker.com, and execute its growth strategy will be the key metrics by which its success is measured moving forward.