UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 001-41958 AXIL Brands, Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 47-4125218 | | -- ...

Financial Performance - Revenue for the second quarter ended November 30, 2024, was $7.7 million, a decrease from $8.4 million in the prior year period [8] - Gross profit as a percentage of sales was 71.1% in 2Q25, down from 74.3% in the prior year period [8] - Operating expenses as a percentage of sales increased to 62.4% in 2Q25 from 59.3% in the prior year period [8] - Net income for 2Q25 was $0.6 million, compared to $1.0 million in the prior year period [8] - Adjusted EBITDA for 2Q25 was $1.0 million, down from $1.4 million in the prior year period [8] Operational Strategy - The company is diversifying its distribution strategy for hearing protection and enhancement products beyond online sales, establishing relationships with international distributors [4] - AXIL is making significant inroads into the retail channel, with products available in over 1,000 retail locations, including Bass Pro Shops and select Walmart stores [5] - Plans to launch a successor series to the TRACKR earmuffs in the first half of calendar year 2025, focusing on technological leadership and improved product functionality [6] Financial Position - The company reported a solid cash position of $5.2 million at the end of 2Q25, allowing for internal financing of strategic growth plans [7] - Net cash provided by operating activities for the six months ended November 30, 2024, was $1.9 million, compared to $1.3 million for the prior year period [8] Market Presence - AXIL Brands operates in the United States, Canada, the European Union, and throughout Asia, focusing on premium hearing enhancement and protection products as well as hair and skincare products [18]

Core Insights - AXIL Brands, Inc. has launched the 'X Series' Earplugs, which aim to provide superior hearing protection while maintaining comfort and style [1][2] - The earplugs are designed for various lifestyles and activities, addressing the needs of over two-thirds of Americans who require consistent hearing protection [2][3] Product Features - The 'X Series' includes two models: X20 Passive Earplugs and X30i Dynamic Sound-Filtered Earplugs, both featuring innovative designs and superior comfort [4][5] - X20 Passive Earplugs are made from hypoallergenic silicone, fitting over 95% of ear sizes, and come in eight dynamic colors [4] - X30i Dynamic Sound-Filtered Earplugs feature advanced acoustic filters and an easy toggle switch for users to switch between hearing modes [5] Market Availability - The 'X Series' Earplugs will be available for purchase starting November 21, 2024, on AXIL's website and select global retailers [6] Company Overview - AXIL Brands is an emerging global consumer products company specializing in premium hearing enhancement and protection products, as well as hair and skincare products [7]

Core Insights - AXIL Brands, Inc. has signed a distribution agreement with Terrang MP-Sec France for exclusive rights to distribute its hearing protection products in several European countries [1][2][3] - The agreement aims to strengthen AXIL's distribution network within the EU and support its global presence, with expectations for growth and enhanced customer support in the region [3] Company Overview - AXIL is an emerging global e-commerce consumer products company that manufactures and markets premium hearing enhancement and protection products, as well as hair and skincare products [4] - The company operates under the AXIL® brand for hearing products and Reviv3® for hair and skincare, selling in the United States, Canada, the European Union, and Asia [4] Distribution Agreement Details - Terrang MP-Sec France will distribute AXIL's product portfolio in France, Belgium, Netherlands, Luxembourg, Denmark, Spain, Portugal, Sweden, Finland, Italy, and Switzerland [2] - The product lineup includes AXIL's hearing performance systems such as GS Extreme 2.0®, XCOR®, XCOR Digital®, and the Trackr™ series [2] Strategic Goals - The CEO of AXIL emphasized that the agreement is part of a strategy to diversify revenue channels in the international market [3] - The collaboration with Terrang MP-Sec France leverages their strong relationships in military, police, and security sectors, enhancing AXIL's distribution capabilities [3]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $5.85 million, a decrease of 4.1% compared to $6.1 million in the prior year period[2] - Gross profit margin decreased to 71% in the first quarter of fiscal 2025 from 76.1% in the prior year period[2] - Operating expenses as a percentage of sales were 73.4%, slightly up from 73.3% in the prior year period[2] - The company reported a net loss of $109,805 for the first quarter of fiscal 2025, compared to a net income of $154,452 in the prior year period[2] - Net income for the three months ended August 31, 2023, was $154,452, while for the same period in 2024, it reported a net loss of $109,805[9] Cash Flow and Assets - Net cash provided by operating activities increased to $897,318 from $397,172 in the prior year period[2] - The company generated net cash provided by operating activities of $897,318 for the three months ended August 31, 2024, compared to $397,172 in 2023, representing a 126.4% increase[9] - Total cash at the end of the period for August 31, 2024, was $4,148,724, down from $5,061,723 in 2023, indicating a decrease of 18%[9] - Total current assets increased to $8.34 million from $7.97 million as of the previous quarter[4] - Total liabilities increased to $3.47 million from $3.28 million in the prior quarter[5] Shareholder Value and Expenses - Weighted average diluted shares decreased to 6,172,379 from 18,622,597 in the prior year period[2] - Stock-based compensation increased significantly to $297,864 in 2024 from $51,107 in 2023, reflecting a 482% rise[9] Operational Strategy and Market Focus - The company emphasized its commitment to innovation and expanding into new channels for future growth[3] - AXIL Brands is focused on operational excellence and delivering value to shareholders amid ongoing market challenges[3] - AXIL is focused on expanding its product offerings in hearing enhancement and protection, as well as hair and skincare products, targeting markets in the U.S., Canada, EU, and Asia[10] - The company anticipates growth in net sales and operations, including the development of new products and international expansion, despite facing significant risks and uncertainties[11] - The company is actively engaging in strategic partnerships and expanding its distribution channels to enhance market presence and competitiveness[11] Inventory and Receivables Management - The company reported a change in accounts receivable of $(108,100) in 2024, compared to $(91,736) in 2023, indicating a worsening in collection efficiency[9] - Inventory changes showed an increase of $120,603 in 2024, contrasting with a significant decrease of $(758,104) in 2023, suggesting a shift in inventory management strategy[9] Investment Activities - AXIL's cash flows from investing activities showed a net cash used of $(41,840) in 2024, compared to $(50,960) in 2023, indicating a slight improvement in investment efficiency[9]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 AXIL Brands, Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 47-4125218 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Employer | | Incorporation or Organization) | Identification No.) | FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITI ...

Core Insights - AXIL Brands, Inc. is experiencing substantial revenue growth but is facing challenges related to rising costs and margin compression as it scales its operations [1][11] Fiscal 2024 Results - AXIL Brands reported earnings per share of 21 cents for fiscal 2024, up from 10 cents the previous year [2] - Year-over-year net sales grew by 17%, reaching $27.5 million compared to $23.5 million in the prior year, primarily driven by marketing initiatives in the hearing protection segment [2] Key Business Metrics - The company’s sales growth reflects effective strategic initiatives, particularly in expanding distribution and retail channels, despite rising costs compressing margins [3] - Gross profit increased to $20.2 million from $17.7 million, with a slight narrowing of gross margin to 73.4% from 75.3% due to expansion costs [4] Profitability and Income - AXIL Brands achieved a net income of $2 million, up from $1.8 million a year earlier, with net income available to common shareholders increasing to $3.3 million due to a gain on the redemption of preferred shares [4] - Operating income was $1.5 million, down from $2 million in the prior year, with a net profit margin of 7.3%, slightly lower than the previous year's 7.8% [5] Cost Analysis - The cost of sales rose by 26% to $7.3 million from $5.8 million, driven by increased branding and marketing expenses [6] - Operating expenses increased by 19% year-over-year to $18.7 million, reflecting higher marketing, selling expenses, and general administrative costs [6] Cash Flow and Financial Position - Net cash provided by operating activities decreased to $2,677 from $2.9 million in the prior year, indicating strain on cash flow [7] - Cash reserves fell to $3.25 million from $4.83 million, reflecting ongoing investments and preferred stock repurchases [7] Liabilities and Financial Discipline - Total liabilities slightly decreased to $3.28 million from $3.5 million, indicating some financial discipline amid rising expenses [8] Management Strategy - Management is focused on expanding global presence and strategic partnerships, aiming for sustainable growth in dynamic markets [9] Shareholder Developments - The weighted average outstanding shares on a fully diluted basis dropped by 49% to 8.3 million shares, primarily due to the redemption of preferred shares [10]

LOS ANGELES, Aug. 15, 2024 (GLOBE NEWSWIRE) -- AXIL Brands, Inc. ("AXIL," "we," "us," "our," or the "Company") (NYSE American: AXIL), an emerging global consumer products company for AXIL® hearing protection and enhancement products and Reviv3® hair and skin care products, today announced financial and operational results for fiscal year 2024. May 31, 2024 May 31, 2023 Highlights for Fiscal Year Ended May 31, 2024 All comparisons are to the full year of the prior year, unless otherwise noted. Consolidated n ...

Core Insights - AXIL Brands, Inc. reported a record revenue of $27.5 million for fiscal year 2024, marking a 17% increase compared to $23.5 million in the previous year, driven by enhanced marketing and sales initiatives in the hearing protection segment [3][9] - The company's cost of sales rose by 26% to $7.3 million, influenced by increased branding and marketing efforts, resulting in a cost of sales percentage of 26.6% of net revenues, up from 24.7% in the prior year [4][5] - Operating expenses as a percentage of net revenues increased to 68.0% from 66.9% year-over-year, primarily due to higher marketing, compensation, and administrative expenses [6] Financial Performance - Gross profit margin decreased to 73.4% from 75.3% year-over-year, attributed to costs related to expansion into new retail and distribution channels [5] - Net income per common share on a fully diluted basis was $0.21, up from $0.10 in the previous year, while basic net income per share increased to $0.57 from $0.32 [7][14] - The company reported a net income of $2.0 million for the fiscal year, compared to $1.8 million in the prior year [13] Shareholder Information - The weighted average outstanding shares on a diluted basis decreased by 49% to approximately 8.29 million as of August 13, 2024, from 16.17 million [8][9] - Total stockholders' equity increased to $7.7 million from $6.7 million year-over-year, reflecting a reduction in accumulated deficit [12][15] Strategic Initiatives - The company aims to enhance its global presence and foster strategic partnerships, focusing on international expansion to strengthen its competitive position [9] - AXIL Brands emphasizes maintaining the quality of revenue and optimizing existing partnerships while establishing new ones [9]

Revenue Segmentation - For the fiscal year ended May 31, 2024, the hearing enhancement and protection segment accounted for approximately 95.0% of total revenue, while the hair care and skin care segment accounted for 5.0%[13] - Approximately 91% of sales in the hearing enhancement and protection segment were direct-to-consumer via Shopify and Amazon for the fiscal year ended May 31, 2024[26] Product Development - The company produced 22 products with 38 different SKUs in the hearing enhancement and protection segment, and plans to continue expanding the product lines[16] - The hair care and skin care segment currently produces 8 products with 16 SKUs and plans to expand its product lines in the foreseeable future[21] - The company is exploring new revenue opportunities, including co-branding and private-label manufacturing in the hair care and skin care segment[22] Market Trends - The global hearing protection devices market is growing due to increased awareness of hearing loss, with 53% of noise-exposed workers not wearing hearing protection according to the CDC[19] - The beauty and personal care market is projected to generate a revenue of $646.20 billion in 2024, growing at an annual rate of 3.33% from 2024 to 2028[25] Vendor Relationships - For the hearing enhancement and protection segment, 87% of total purchases were from one vendor, while for the hair care and skin care segment, 97% of total purchases were from two vendors[27] Strategic Focus - The company is focusing on expanding its market share through e-commerce strategies and strategic partnerships[14] - The company is in the early stages of executing geographic expansion into new markets while prioritizing technological improvements in the hearing enhancement sector[14] Intellectual Property - As of May 31, 2024, the company held 3 active U.S. patents and had 3 pending U.S. patent applications, with patents expiring between 2035 and 2038[33] - The company has 3 federally registered trademarks considered material to its business, all in good standing with the U.S. Patent & Trademark Office[33] - The company has a commitment to protecting its intellectual property through various means, including patents and trademarks[32] - The company does not anticipate any material impact on its business from the expiration of patents in the coming years[33] - The company intends to renew its trademark registrations as necessary for the foreseeable future[33] Workforce and Culture - The company employs 14 individuals, all based in the United States, with no employees covered by collective bargaining agreements[36] - The company emphasizes diversity and inclusion in its hiring practices, striving to maintain a diverse workforce[39] Safety and Economic Impact - The company aims to achieve a level of work-related injuries as close to zero as possible through continuous investment in its safety program[38] - The company has no substantial seasonal fluctuations in its business, although lower sales may occur in difficult economic scenarios[35] Corporate Information - The company maintains its corporate office in Alhambra, California, and was incorporated in Delaware on May 21, 2015[40]