Executive Summary / Key Takeaways

• Safety Shot (NASDAQ:SHOT) is undergoing a profound strategic transformation, evolving into a dual-focused entity that combines patented functional wellness products with a bold entry into the decentralized finance (DeFi) ecosystem.
• The company's core Sure Shot Dietary Supplement, backed by clinical trials demonstrating statistically significant blood alcohol content (BAC) reduction, anchors its functional beverage segment, recently expanded through the acquisition of Yerbaé Brands Corp.
• A groundbreaking alliance with BONK founding contributors signals a full strategic pivot, involving a $25 million investment in BONK tokens and a 10% perpetual revenue share in LetsBonk.fun, alongside reserving the "BNKK" ticker symbol.
• Despite historical financial challenges, including negative working capital and a Nasdaq bid price compliance issue, recent financing activities and the BONK alliance have significantly bolstered liquidity, with the company reporting over $15 million in cash and settled outstanding debt post-Q2 2025.
• The investment thesis for Safety Shot is a high-risk, high-reward proposition, hinging on the successful execution and integration of its expanded functional beverage portfolio and the realization of substantial value from its innovative, yet speculative, foray into the rapidly evolving DeFi space.

The Genesis of Safety Shot: A Transformative Journey

Safety Shot, Inc. embarked on its journey in October 2018 as Jupiter Wellness Inc., initially exploring various wellness products. A pivotal moment arrived in August 2023 with the acquisition of GBB Drink Lab Inc.'s assets, including the patents for the Sure Shot Dietary Supplement. This strategic move prompted a rebranding, with the company adopting the name Safety Shot, Inc. and its current NASDAQ ticker, SHOT, signaling a decisive pivot towards the functional beverage market. Concurrently, Safety Shot divested SRM Entertainment, Inc., streamlining its focus. The Sure Shot Dietary Supplement, designed to reduce blood alcohol content, launched in December 2023, laying the groundwork for its current wellness offerings.

Proprietary Science: The Core of Safety Shot's Wellness Mission

At the heart of Safety Shot's functional beverage strategy lies its proprietary technology, specifically the patented formulation of the Sure Shot Dietary Supplement. This over-the-counter drink is engineered to lower blood alcohol content (BAC) by supporting its metabolism, while also aiming to boost clarity, energy, and overall mood. The product incorporates 28 active ingredients, all classified as Generally Regarded As Safe (GRAS), and is produced in a Good Manufacturing Practices (GMP) compliant facility.

The tangible benefits of this technology are supported by clinical trials conducted from January to June 2024. These trials demonstrated a "statistically significant reduction in the Blood Alcohol Content (BAC) of the participants" within 30 minutes of consumption. Furthermore, the studies noted "observable enhancements in cognitive abilities" among test subjects. For investors, this scientific validation provides a critical competitive moat, positioning Safety Shot with a unique, differentiated solution in the liquid dietary supplement market. The company is also actively pursuing research and development (R&D) for a convenient powdered stick pack version and is initiating R&D for next-generation nootropics and sleep solutions, leveraging its "Core 'Feel Better Fast' Expertise." These initiatives aim to expand its patented wellness approach into high-growth cognitive and restorative sleep markets, enriching its product portfolio and addressing evolving consumer demands, thereby strengthening its long-term growth strategy.

Strategic Expansion and the Functional Beverage Arena

Safety Shot's strategic growth in the functional beverage market gained significant momentum with the acquisition of Yerbaé Brands Corp. on June 27, 2025. This $6.00 million acquisition, paid in common shares, integrated Yerbaé's premium plant-based energy beverages into Safety Shot's portfolio, broadening its appeal within the health-conscious consumer segment. The company's primary focus in the beverage sector now encompasses both the Sure Shot Dietary Supplement and Yerbaé's energy drinks.

In the competitive landscape, Safety Shot operates as a niche player, positioning itself as an emerging challenger rather than a market leader. Its strengths lie in targeted innovation and proprietary formulations for specific health issues, such as alcohol reduction, which offer a unique value proposition and potentially greater efficiency in addressing consumer health concerns compared to more generalized offerings. However, Safety Shot currently lags in market positioning, brand recognition, and broader distribution compared to larger, more established competitors like Celsius Holdings (NASDAQ:CELH), Monster Beverage (NASDAQ:MNST), and Boston Beer Company (NYSE:SAM).

A direct comparison of recent financial performance underscores these disparities. Safety Shot's latest TTM Gross Profit Margin of -174.94%, Operating Profit Margin of -7504.97%, and Net Profit Margin of -4589.14% are deeply negative, contrasting sharply with Celsius (50%, 11%, 11%), Monster (54%, 26%, 20%), and Boston Beer (44%, 4%, 3%). This highlights Safety Shot's current unprofitability and smaller operational scale. Furthermore, Safety Shot's Price/Sales ratio of 138.42 is exceptionally high compared to Celsius (4.54), Monster (7.05), and Boston Beer (1.76), indicating that its market capitalization is currently far outstripping its revenue, likely reflecting speculative investor interest in its future potential rather than current fundamentals. While its Debt/Equity ratio of 0.45 is not extreme, its total equity is negative, signaling underlying financial strain. The company's smaller scale also contributes to higher customer acquisition costs and potential supply chain dependencies, making it vulnerable to the robust distribution networks and marketing prowess of its larger rivals. Despite these challenges, Yerbaé's recent partnership with national foodservice provider Guckenheimer, leveraging Vistar's distribution, is a strategic move to expand reach into corporate dining, potentially enhancing Safety Shot's competitive standing.

A Bold Leap into Decentralized Finance: The BONK Ecosystem Alliance

In a move that signals a profound strategic pivot, Safety Shot announced a groundbreaking alliance with BONK founding contributors in August 2025. This initiative deeply integrates the company with the BONK ecosystem, a significant foray into decentralized finance (DeFi). The alliance involves Safety Shot receiving $25 million in BONK tokens and acquiring a 10% perpetual revenue sharing interest in LetsBonk.fun, a revenue-generating launchpad. To solidify this new direction, the company has reserved the "BNKK" ticker symbol with Nasdaq.

This bold strategic pivot represents a high-risk, high-reward proposition. While it offers a potential new, high-growth revenue stream and diversification beyond traditional consumer products, it also introduces exposure to the inherent volatility and regulatory uncertainties of the cryptocurrency market. A key risk factor includes a clause stating that if LetsBonk.fun ceases operations on or prior to the six-month anniversary of the Preferred Stock Shares issuance, 50% of the issued Preferred Stock Shares are subject to automatic rescission and return to the company. This alliance underscores Safety Shot's willingness to explore unconventional avenues for value creation, positioning it at the intersection of consumer wellness and digital finance.

Financial Performance and Liquidity: A Company in Flux

Safety Shot's recent financial performance reflects a company in a significant transitional phase. For the three months ended June 30, 2025, revenues sharply decreased to $44,948 from $710,240 in the prior year, and for the six months, revenues were $87,049 compared to $880,972 in the first half of 2024. This decline is attributed to the company's redirected focus on the Yerbaé acquisition and the implementation of a new marketing strategy. Gross profit saw a corresponding decrease, falling to $23,878 for the quarter and $44,867 for the six-month period.

Despite the revenue contraction, Safety Shot reported a net income of $13.37 million for the three months ended June 30, 2025, a significant improvement from an $8.27 million net loss in the prior year. Similarly, for the six months, net income reached $8.05 million, compared to a $23.95 million net loss in the first half of 2024. This positive shift in net income was primarily driven by an $18.19 million unrealized gain on equity investment, rather than operational profitability.

Operating expenses saw a reduction, decreasing from $8.62 million to $4.36 million for the quarter, and from $21.58 million to $9.77 million for the six-month period, reflecting reduced spending across marketing, R&D, legal, and stock-based compensation.

Historically, the company faced liquidity challenges, with cash of $466,791 and negative working capital of $3.02 million as of June 30, 2025, which raised substantial doubt about its ability to continue as a going concern.

However, post-period financing activities have significantly altered this picture. In July 2025, Safety Shot completed a registered direct offering and concurrent private placement, generating approximately $16.30 million in gross proceeds. Crucially, following the August 2025 BONK alliance announcement, the company reported having "settled all outstanding debt and currently maintains a strong balance sheet with over $15 million in cash." This substantial injection of capital and debt restructuring provides a much-needed liquidity buffer for its ambitious strategic pivots.

Outlook and the Road Ahead: High Ambition, High Stakes

Safety Shot's outlook is characterized by high ambition, tempered by the inherent risks of its dual strategic focus. Management anticipates a revenue increase in the third quarter of 2025, driven by the integration of Yerbaé and the rollout of a new marketing strategy. The company is also actively pursuing R&D into nootropics and sleep solutions, aiming to expand its "feel better fast" expertise into these growing wellness markets.

However, significant challenges remain. Safety Shot received a Nasdaq notice for non-compliance with the minimum bid price requirement in January 2025, though it secured an extension until December 29, 2025, with a reverse stock split considered if necessary. The company also faces ongoing litigation, including a breach of contract claim from Sabby Volatility Warrant Master Fund Ltd. and a preliminary settlement dispute with Brian John. Regulatory scrutiny on functional beverages, particularly concerning alcohol consumption and sweetened drinks, could also impact the business. The new DeFi venture, while promising, introduces exposure to cryptocurrency market volatility and potential future regulatory changes. The investment thesis for Safety Shot is therefore a speculative one, dependent on the successful execution of these diverse and complex strategic initiatives.

Conclusion

Safety Shot is at a critical juncture, boldly transforming its identity from a niche wellness product provider to a dynamic entity with a dual strategy spanning functional beverages and the decentralized finance ecosystem. The company's patented Sure Shot technology, supported by clinical evidence of its efficacy in reducing blood alcohol content, provides a foundational competitive edge in the wellness market. This core strength is now being amplified by the strategic acquisition of Yerbaé Brands, aiming to capture a larger share of the growing functional beverage market.

The audacious pivot into the BONK ecosystem, marked by a substantial token investment and a perpetual revenue share, represents a high-stakes gamble on a new, potentially explosive growth vector. While this move introduces considerable risk, it also demonstrates management's willingness to innovate and seek unconventional pathways to value creation. Despite a history of financial challenges, recent capital raises and debt settlements have significantly improved Safety Shot's liquidity, providing the necessary resources to pursue its ambitious roadmap. For investors, Safety Shot represents a speculative opportunity, where the potential for substantial returns is directly tied to the successful integration of its expanded beverage portfolio and the astute navigation of its pioneering, yet volatile, entry into the crypto world. The coming quarters will be crucial in determining if this dual-engine strategy can deliver on its promise.