Watchtower Firearms Files for Chapter 11 Bankruptcy Amid Financial Challenges
Last Thursday, Texas-based firearms manufacturer Watchtower Firearms has filed for Chapter 11 bankruptcy in the Northern District of Texas, signaling significant financial struggles. The company, which was established in 2022, had ambitious plans to carve out a niche in the firearms industry. However, operational challenges, mounting tax obligations, and substantial vendor debts have led to a financial crisis that forced the company to seek bankruptcy protection.
This filing comes at a time when the firearms market is experiencing a downturn, with declining gun sales and manufacturers across the industry adjusting their production expectations. As Watchtower attempts to restructure its debt and continue operations, its future remains uncertain.
Company Background and Market Strategy
Watchtower Firearms was founded in 2022 and quickly expanded by acquiring F-1 Firearms, a Texas-based manufacturer, in June 2023. Following the acquisition, F-1 Firearms was rebranded as Watchtower Firearms, with the company setting its sights on three primary markets:
• Everyday consumers
• Domestic and foreign military
• Law enforcement agencies
Despite this strategic focus, Watchtower struggled to gain the brand recognition and financial success it had hoped for. Instead, the company faced growing operational difficulties and increasing financial burdens, leading to its Chapter 11 bankruptcy filing on February 27, 2025.
Watchtower Firearms Responds
Following the news of its bankruptcy filing, Watchtower Firearms provided The Loadout Magazine with the following statement via social media:
“Hey guys, here is where we stand. WATCHTOWER is not going away whatsoever. Chapter 11 is only used to restructure a company. We have had to do so as a result of criminal action outside of the company’s control. Orders are still flowing, guns are still being made, and vendors are still being paid. We are looking forward to being able to tell our story soon, but for the purpose of litigation, we’re not going to put out defamatory, confidential, or just incorrect information until the appropriate time.”
This statement suggests that Watchtower will continue to operate while using Chapter 11 as a restructuring tool rather than a sign of closure. The company also alluded to external criminal actions that contributed to its current financial challenges, though no further details were provided.
Factors Contributing to Financial Decline
Watchtower’s financial troubles stem from several key challenges, including:
• Significant vendor and service provider debt
• Operational inefficiencies
• Large tax obligations to the U.S. Treasury Department
Broader economic factors have likely compounded these issues. Rising inflation, higher interest rates, and shifting consumer spending habits have impacted the firearms market. Gun sales have declined significantly, with 23 million firearms sold in 2020, compared to 15.3 million in 2024, representing a 33.48% drop. This downward trend has affected manufacturers industry-wide, forcing many to scale back production.
Bankruptcy Filing Details
Chapter 11 bankruptcy is a reorganization process that allows companies to restructure their debts while continuing operations. According to IRS guidelines, Watchtower now has an opportunity to reorganize its finances and propose a viable debt repayment plan. If unsuccessful, the case could be converted to Chapter 7 bankruptcy, which would result in liquidation of assets to pay off creditors.
Financial Status & Creditors
In its bankruptcy petition, Watchtower Firearms listed its estimated assets and liabilities between $10 million and $50 million. The company also noted that funds would be available to distribute to unsecured creditors.
Among Watchtower’s notable creditors are:
• DASAN USA/Alpha Foxtrot – $686,592
• U.S. Department of Treasury (excise taxes) – $409,903
• 2020 Exhibits, Inc. – $359,781
• Total major debts: $1,456,276
While this is not the full extent of Watchtower’s financial obligations, these figures highlight some of the company’s most significant debts. Despite this, Watchtower has indicated it plans to continue operating and work toward financial recovery.
Leadership and Legal Representation
Watchtower Firearms is led by Jason Colosky, who holds 100% of the company’s common stock. Preferred stockholders include:
• WTF Resources, LLC – 37.8%
• Function 1 Consulting Group – 9.5%
• Other minority stakeholders
The company has retained Joseph Acosta of Condon Tobin as its legal representative for the bankruptcy proceedings.
Future Outlook
Despite its financial struggles, Watchtower Firearms continues to develop and market its products. At SHOT Show 2025, the company introduced new firearms, including:
• Apache Commander pistol
• Raider 15 rifle
• Bridger 7mm bolt-action rifle (currently available for pre-order)
Watchtower’s statement reassures customers that orders are still being fulfilled, vendors are being paid, and new products are still being developed. However, the mention of criminal actions outside of the company’s control raises questions about what may have contributed to its financial troubles—questions that will likely remain unanswered until ongoing litigation allows for more transparency.
Conclusion
Watchtower Firearms’ bankruptcy filing underscores the difficulties facing firearms manufacturers in a changing market. While the company aims to restructure its debt and continue operations, it faces significant financial hurdles. With declining gun sales, economic pressures, and large outstanding debts, Watchtower’s ability to successfully reorganize will be closely watched by industry observers and creditors alike.
For now, Watchtower Firearms remains in business, striving to navigate these challenges while maintaining its product lineup and commitment to the firearms industry. The company has made it clear that it is not shutting down, and as litigation unfolds, more details about the circumstances surrounding its financial struggles may come to light.
