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]

Core Insights - AXIL Brands, Inc. reported a record revenue of $27.5 million for fiscal year 2024, reflecting 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][5] - The company experienced a 26% increase in cost of sales, amounting to $7.3 million, primarily due to increased branding and marketing efforts [3] - Gross profit margin decreased to 73.4% from 75.3% year-over-year, attributed to costs associated with expansion into new retail and distribution channels [3] - Operating expenses as a percentage of net revenues rose to 68.0% from 66.9%, mainly due to higher marketing, selling expenses, and increased compensation [3] - Net income per common share on a fully diluted basis was $0.21, up from $0.10 in the prior year, while basic net income per share increased to $0.57 from $0.32 [3][10] Financial Performance - Consolidated net sales increased by 17% to $27.5 million for the fiscal year ended May 31, 2024, compared to $23.5 million in the prior year [3] - Cost of sales increased by $1.5 million, resulting in a cost of sales percentage of 26.6% for the fiscal year, compared to 24.7% in the previous year [3] - Gross profit for the fiscal year was $20.2 million, with a gross profit margin of 73.4% [9] - Operating expenses totaled $18.7 million, leading to an income from operations of $1.5 million [9] - The company reported a net income of $2.0 million for the fiscal year, compared to $1.8 million in the previous year [9] Shareholder Information - The weighted average outstanding shares on a diluted basis for 2024 were 16,168,181, a reduction of 49% from the previous year [4][10] - The company’s strategic initiatives for 2025 focus on enhancing global presence and forming strategic partnerships to drive sustainable growth [5]

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]

[Fiscal Year 2024 Financial Results](index=1&type=section&id=Fiscal%20Year%202024%20Financial%20Results) AXIL Brands achieved record net sales and significant EPS growth in fiscal year 2024, driven by strategic expansion despite slight margin compression [Financial Highlights](index=1&type=section&id=Highlights%20for%20Fiscal%20Year%20Ended%20May%2031%2C%202024) AXIL Brands reported record net sales of **$27.5 million** for fiscal year 2024, a **17% increase** year-over-year, driven by marketing and sales initiatives in its hearing protection segment, while gross margin slightly decreased to **73.4%** from **75.3%**, and net income per diluted share more than doubled to **$0.21** from **$0.10** Fiscal Year 2024 Key Financial Metrics (vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $27.5M | $23.5M | +17% | | Gross Profit Margin | 73.4% | 75.3% | -1.9 p.p. | | Operating Expense % of Revenue | 68.0% | 66.9% | +1.1 p.p. | | Diluted EPS | $0.21 | $0.10 | +110% | - The decrease in gross profit margin was primarily attributed to costs associated with expansion into new retail and distribution channels[3](index=3&type=chunk) - The increase in operating expenses as a percentage of revenue was mainly due to higher marketing and selling expenses, increased compensation, and costs related to the NYSE American exchange listing[3](index=3&type=chunk) - The company significantly reduced its weighted average outstanding shares on a diluted basis by **49%** as of August 13, 2024, compared to the weighted average for fiscal year 2024[4](index=4&type=chunk)[5](index=5&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted successful strategic execution leading to record revenue, with a fiscal year 2025 focus on international expansion, strategic partnerships, and product adaptation for broader market reach and sustainable growth - The CEO, Jeff Toghraie, stated that strategic initiatives for 2025 are focused on enhancing global presence, fostering strategic partnerships, and adapting offerings to diverse market needs[5](index=5&type=chunk) - The CFO, Jeff Brown, noted that the **17% revenue growth** was largely driven by expanding distribution and retail channels[5](index=5&type=chunk) - The hearing protection and enhancement segment accounted for approximately **95% of total revenue** for fiscal year 2024, with no single customer representing more than **10% of sales**[5](index=5&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, showing total assets grew to **$11.0 million**, total liabilities decreased to **$3.3 million**, and stockholders' equity strengthened to **$7.7 million**, while net income was **$2.0 million** and operating cash flow was minimal at **$2,677** due to a substantial increase in inventory [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of May 31, 2024, AXIL's total assets increased to **$11.0 million** from **$10.2 million** in the prior year, primarily driven by a significant rise in inventory to **$3.4 million**, while total liabilities decreased to **$3.3 million** from **$3.5 million**, and total stockholders' equity strengthened to **$7.7 million** from **$6.7 million** Selected Balance Sheet Items (as of May 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Assets | $10,974,361 | $10,169,314 | | Total Liabilities | $3,278,575 | $3,497,355 | | Total Stockholders' Equity | $7,695,786 | $6,671,959 | - Inventory, net, more than doubled to **$3,394,023** from **$1,311,864** in the prior year[7](index=7&type=chunk) - Cash decreased to **$3,253,876** from **$4,832,682** in the prior year[7](index=7&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the fiscal year ended May 31, 2024, the company achieved net sales of **$27.5 million**, a **17% increase** from **$23.5 million** in 2023, with gross profit growing to **$20.2 million**, but income from operations decreased to **$1.5 million** from **$2.0 million** due to higher operating expenses, while net income rose to **$2.0 million**, up from **$1.8 million** in the prior year Consolidated Statements of Operations (for the years ended May 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Sales, net | $27,498,539 | $23,521,027 | | Gross profit | $20,193,937 | $17,710,811 | | Income from operations | $1,503,380 | $1,984,211 | | Net income | $2,003,134 | $1,824,575 | - Sales and marketing expenses increased to **$13.4 million** from **$11.7 million**, and professional and consulting fees rose to **$2.6 million** from **$1.4 million**, contributing to higher total operating expenses[10](index=10&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS%27%20EQUITY) Stockholders' equity increased from **$6.7 million** at the end of fiscal 2023 to **$7.7 million** at the end of fiscal 2024, driven by net income of **$2.0 million**, partially offset by a preferred stock buyback that cost approximately **$1.25 million** - Total Stockholders' Equity increased from **$6,671,959** at the end of FY2023 to **$7,695,786** at the end of FY2024[12](index=12&type=chunk)[13](index=13&type=chunk) - The company executed a preferred stock buyback, which reduced equity by **$1,246,490**[12](index=12&type=chunk)[13](index=13&type=chunk) - Net income of **$2,003,134** contributed positively to the accumulated deficit and overall equity[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For fiscal year 2024, net cash provided by operating activities was only **$2,677**, a sharp decline from **$2.9 million** in the prior year, primarily due to a **$2.1 million** increase in inventory, while net cash used in investing activities was **$160,525**, and financing activities used **$1.4 million**, largely for a preferred stock repurchase, resulting in a net decrease in cash of **$1.6 million**, with the year-end cash balance at **$3.3 million** Summary of Cash Flows (for the years ended May 31) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,677 | $2,918,136 | | Net Cash from Investing Activities | ($160,525) | $1,000,764 | | Net Cash from Financing Activities | ($1,420,958) | $540,051 | | **Net Decrease in Cash** | **($1,578,806)** | **$4,458,951** | | **Cash - End of year** | **$3,253,876** | **$4,832,682** | - The significant decrease in operating cash flow was mainly driven by a **$2,129,054** cash outflow for inventory buildup[13](index=13&type=chunk) - The primary use of cash in financing activities was a **$1,246,490** repurchase of preferred stock[13](index=13&type=chunk) [Company Overview and Outlook](index=10&type=section&id=Company%20Overview%20and%20Outlook) AXIL is a global consumer products company specializing in hearing enhancement/protection products under the AXIL® brand and hair/skincare products under the Reviv3 Procare brand, with forward-looking statements highlighting strategic goals such as international expansion and new partnerships, while acknowledging risks including competition, customer concentration, regulatory changes, and macroeconomic instability - AXIL is a global e-commerce company manufacturing and marketing premium hearing products (AXIL®) and hair/skincare products (Reviv3 Procare)[15](index=15&type=chunk) - Forward-looking statements emphasize a focus on international growth, strategic partnerships, and expanding distribution channels[16](index=16&type=chunk) - The company identifies several risks, including competition, ability to grow sales, reliance on key customers, regulatory changes, and the impact of unstable economic conditions[16](index=16&type=chunk)

Core Viewpoint - AXIL Brands is currently undervalued in the market despite its growth initiatives and strong revenue performance, facing challenges such as rising operating expenses and high customer concentration risks [1][4]. Group 1: Financial Performance - AXIL Brands' stock is trading below its historical median, indicating potential undervaluation [1]. - The company reported a 14.4% year-over-year revenue growth in the third quarter of fiscal 2024, reflecting effective sales strategies [9]. - As of February 29, 2024, AXIL holds strong current assets of $9.96 million, including $4.89 million in cash and cash equivalents [5]. Group 2: Market Position and Strategy - AXIL is expanding its global presence in markets such as the EU, Canada, and Asia, reducing dependence on any single market [2][3]. - Recent agreements with Racing Electronics and Kinsey's are expected to drive revenue growth and enhance market position [2][9]. - The company has a modest market capitalization of $37 million and is focusing on premium audio enhancement and protection products, which contributed 93% to total revenues for the fiscal year ended May 31, 2023 [7][8]. Group 3: Challenges and Risks - AXIL faces challenges including rising operating expenses, declining gross profit margins, and inventory management issues [4]. - High customer concentration risks are evident, with three customers accounting for 94% of net sales [4]. - Increased accounts payable and reduced cash flow from operating activities highlight cash flow volatility [4].

Financial Performance - Net sales increased by 14.4% to approximately $6.47 million in the third quarter compared to the prior year period[5] - Gross profit margin decreased to 71.5% in the third quarter from 74.6% in the prior year period[5] - Operating expenses as a percentage of net revenue rose to 73.1% in the third quarter from 70.7% in the prior year period[5] - Reported net income for the third quarter was $781,091, or $0.04 per fully diluted share, compared to $162,048, or $0.01 per share in the prior year[5] - For the nine months ended February 29, 2024, net income was $1,953,618, compared to $1,064,475 for the same period in the prior year[10] - For the nine months ended February 29, 2024, net income increased to $1,953,618 compared to $1,064,475 for the same period in 2023, representing an 83.5% growth[17] - Operating cash flow for the nine months ended February 29, 2024, was $339,323, a significant decrease from $2,319,976 in the prior year[17] - The company reported a net increase in cash of $54,885, bringing the total cash at the end of the period to $4,887,567, compared to $4,180,332 at the end of the previous period[17] - Stock-based compensation for the nine months ended February 29, 2024, was $161,314, slightly up from $155,067 in the same period last year[17] Assets and Liabilities - Total current assets increased to $9.96 million as of February 29, 2024, compared to $7.36 million as of May 31, 2023[7] - Total liabilities increased to $3.93 million as of February 29, 2024, compared to $3.50 million as of May 31, 2023[8] - The company has a total stockholders' equity of $5,859,584 as of February 28, 2023, up from $5,546,814 as of November 30, 2022[15] - Total liabilities assumed in the business combination amounted to $1,408,823[18] Corporate Actions - The company completed the repurchase of 207,748,250 shares of Series A preferred stock, reducing outstanding Series A preferred shares by approximately 83%[5] - The company changed its name to AXIL Brands, Inc. and its stock ticker symbol to "AXIL" as part of a rebranding effort[5] - The company acquired cash of $1,066,414 through business acquisition during the investing activities[17] - The company has recognized significant non-cash investing activities, including $4,007,480 for stock issued for asset purchase agreements[17] Strategic Goals and Challenges - The company aims to expand into new markets and optimize operations for sustainable long-term growth[4] - The company is focused on expanding its market presence in the United States, Canada, the European Union, and Asia with its AXIL® and Reviv3 Procare brands[19] - Management anticipates challenges in achieving net sales growth and integrating the AXIL® brand due to market conditions and competition[20]

Financial Performance - Net sales for the three months ended February 29, 2024, were $6.47 million, a 14.4% increase from $5.66 million in the same period last year[18]. - Net income for the nine months ended February 29, 2024, was $1.95 million, a significant increase from $1.06 million for the same period in 2023, reflecting an 83.3% growth[18]. - Net income for the three months ended February 29, 2024, was $781,091, compared to $162,048 for the same period in 2023, representing a year-over-year increase of approximately 382%[73]. - For the nine months ended February 29, 2024, net sales increased by $4,371,471 or 26.3% to $20,997,289 compared to $16,625,818 for the same period in 2023, driven by increased marketing spend and stronger sales channels[162]. - Gross profit for the nine months ended February 29, 2024 was $15,529,831, up from $12,540,173 in the prior year, reflecting a significant increase in sales[161]. Assets and Liabilities - Total assets increased to $12.71 million as of February 29, 2024, up from $10.17 million on May 31, 2023, representing a growth of 25.1%[15]. - Total stockholders' equity rose to $8.79 million as of February 29, 2024, compared to $6.67 million on May 31, 2023, marking a 31.7% increase[16]. - Total liabilities increased to $3.93 million as of February 29, 2024, from $3.50 million on May 31, 2023, an increase of 12.4%[16]. - As of February 29, 2024, the company reported an accumulated deficit of $1,513,374, highlighting ongoing financial challenges despite recent profitability[31]. Cash Flow and Operating Activities - Cash provided by operating activities decreased significantly to $339,323 from $2,319,976 year-over-year, indicating a decline of about 85.3%[25]. - Cash and cash equivalents at the end of the period increased to $4,887,567 from $4,180,332, reflecting a net increase of $54,885[25]. - The company expects to generate sufficient cash flow from operations to meet its working capital requirements for at least one year from the date of the financial statements[31]. Expenses - Operating expenses for the three months ended February 29, 2024, were $4.73 million, up from $4.00 million in the same period last year, indicating an 18.2% increase[18]. - Operating expenses increased by $3,056,852 or 27.4%, totaling $14,196,041 for the nine months ended February 29, 2024, with operating expenses as a percentage of net sales at 67.6% compared to 67.0% in the prior year[165]. - Depreciation and amortization expenses increased to $83,634 from $66,944, reflecting a rise of approximately 25%[25]. Inventory and Receivables - Accounts receivable increased to $719,504 as of February 29, 2024, from $417,016 on May 31, 2023, representing a 72.5% rise[15]. - Inventory levels rose to $3.44 million as of February 29, 2024, compared to $1.31 million on May 31, 2023, reflecting a 162.5% increase[15]. - Inventory net as of February 29, 2024, was $3,443,293, representing a significant increase of 162.3% from $1,311,864 on May 31, 2023[80]. Stock and Equity - The company completed a reverse stock split at a ratio of 1-for-20 effective January 16, 2024, aimed at improving its stock price and market perception[29]. - The Company issued 250,000,000 shares of non-voting Series A Preferred Stock valued at $3,100,000 during the fiscal year ended May 31, 2023[91]. - As of February 29, 2024, 5,878,939 shares of common stock were issued and outstanding[95]. Legal and Compliance - The company settled a legal dispute with Jacksonfill, LLC for $125,000, resulting in a gain on settlement of $79,182 recorded in fiscal year 2024 other income[120]. - The company does not expect ongoing legal proceedings to have a material adverse effect on its financial condition or cash flows[194]. - The internal control over financial reporting was also assessed as ineffective as of February 29, 2024, based on established criteria[190]. Business Operations and Strategy - The acquisition of Axil & Associated Brands in June 2022 is anticipated to continue generating cash for operational needs, including debt payments[32]. - The company is utilizing Axil & Associated Brands' assets to expand into the hearing enhancement business through a newly incorporated subsidiary[128]. - Direct-to-consumer sales accounted for 88.4% of AXIL's sales during the three months ended February 29, 2024[137].

Financial Performance - Net sales for the three months ended November 30, 2023, were $8,421,677, a 25.1% increase compared to $6,731,999 for the same period in 2022[18]. - Gross profit for the six months ended November 30, 2023, was $10,905,505, up 31.1% from $8,321,688 in the same period of 2022[18]. - Net income for the three months ended November 30, 2023, was $1,018,075, a 39.9% increase from $726,900 in the same period in 2022[18]. - The company reported a net income of $1,172,527 for the six months ended November 30, 2023, compared to $902,427 for the same period in 2022, reflecting a 30% increase[18]. - Consolidated operating income for the six months ended November 30, 2023, was $1,437,669, representing a 21% increase from $1,184,396 in the same period of 2022[135]. - Net income for the six months ended November 30, 2023, was $1,172,527, an increase of $270,100 compared to $902,427 in the same period in 2022[162]. - Net income for the three months ended November 30, 2023, was $1,018,075, an increase of $291,175 or 40.1% compared to $726,900 for the same period in 2022[168]. Assets and Liabilities - Total assets increased to $13,126,009 as of November 30, 2023, up from $10,169,314 as of May 31, 2023, representing a growth of 29.5%[15][16]. - Total current liabilities rose to $4,476,884 as of November 30, 2023, compared to $2,854,661 as of May 31, 2023, indicating a 57% increase[15]. - Total stockholders' equity increased to $7,946,701 as of November 30, 2023, from $6,671,959 as of May 31, 2023, representing a growth of 19.1%[16]. - The company’s accumulated deficit decreased to $(2,294,465) as of November 30, 2023, from $(3,466,992) as of May 31, 2023, indicating an improvement in financial health[19]. - As of November 30, 2023, contract liabilities amounted to $1,608,183, an increase from $1,433,048 as of May 31, 2023[43]. Cash Flow - Cash and cash equivalents increased to $5,962,431 as of November 30, 2023, from $4,832,682 as of May 31, 2023, marking a growth of 23.4%[15]. - Cash provided by operating activities for the six months ended November 30, 2023, was $1,252,113, down from $2,196,195 in the prior year[25]. - Total cash at the end of the period was $5,962,431, compared to $4,018,170 at the end of the same period in 2022, indicating a 48.5% increase[25]. - Net cash flows used in investing activities for the six months ended November 30, 2023, was $70,845 due to the purchase of property and equipment for the AXIL business[172]. - Net cash flows used in financing activities for the six months ended November 30, 2023, was $51,519, primarily for repayment of equipment financing and note payable[173]. Expenses - Marketing and selling expenses for the three months ended November 30, 2023, were $3,672,780, up 18.5% from $3,098,898 in the same period of 2022[18]. - Operating expenses for the six months ended November 30, 2023, were $9,467,836, an increase of $2,330,544 or 32.7% year-over-year, primarily due to increased marketing and advertising expenses[159]. - Operating expenses for the three months ended November 30, 2023, were $4,994,027, a 14.0% increase compared to the same period in 2022[165]. Acquisitions and Business Development - The company acquired AXIL's hearing protection and ear bud business for a total consideration of $4,007,480, with goodwill of $2,152,215 recognized[118]. - The acquisition of AXIL's business is expected to generate sufficient cash for operational needs for at least one year[28]. - The company has focused on growing existing products and introducing new products to increase revenues[28]. Stock and Shareholder Information - The company plans to increase authorized shares under its Plan by an additional 15,000,000 shares, totaling 25,000,000 shares available[141]. - A potential reverse stock split is being considered, with a range of one-for-three to one-for-twenty-five shares[142]. - The company issued 250,000,000 shares of non-voting Series A Preferred Stock valued at $3,100,000 during the fiscal year ended May 31, 2023[87]. - As of November 30, 2023, the company had 117,076,949 shares of common stock issued and outstanding[91]. Legal and Compliance - The company settled a legal dispute with Jacksonfill, LLC for $125,000, resulting in a gain on settlement of $79,182 recorded in the current quarter[112]. - The Chief Executive Officer and Chief Financial Officer provided certifications pursuant to the Sarbanes-Oxley Act of 2002, ensuring the accuracy of the financial statements[31.1][31.2]. - The company is committed to compliance with the Securities Exchange Act of 1934, as evidenced by the signatures of the CEO and CFO on the report[200]. Future Outlook - Management expects to earn net income and positive cash flows from operations during the fiscal year ending May 31, 2024[28]. - The company is seeking to list its shares on the NYSE American Stock Exchange, although no assurance can be given regarding acceptance[151]. - Management believes that existing cash and anticipated cash flow will be sufficient to meet working capital requirements for at least one year[169].

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 August 31, 2023 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: 000-56351 Reviv3 Procare Company (Exact Name of Registrant as Specified in Its Charter) | Delaware | 47-4125218 | | ...