AXIL Brands(US:AXIL)2026-01-08 13:01Financial Performance - Net sales for the three months ended November 30, 2025, were $8,134,859, a 5.2% increase from $7,732,574 in the same period of 2024[16]. - Gross profit for the six months ended November 30, 2025, reached $10,171,171, compared to $9,651,695 for the same period in 2024, reflecting an increase of 5.4%[16]. - Net income for the three months ended November 30, 2025, was $704,883, up from $633,706 in the same period of 2024, indicating an increase of 11.2%[16]. - Net income for the six months ended November 30, 2025, was $1,039,177, compared to $523,901 for the same period in 2024, representing a 98% increase[24]. - Adjusted EBITDA for the three months ended November 30, 2025, was $1,155,353, which is 14.2% of net sales, compared to 13.1% in the same period of 2024[162]. - For the six months ended November 30, 2025, net sales increased by $1,407,231 or 10.4% from $13,583,846 in the six months ended November 30, 2024 to $14,991,077[171]. Assets and Liabilities - Total assets increased to $16,239,654 as of November 30, 2025, up from $12,869,795 as of May 31, 2025, representing a growth of approximately 26.5%[14][15]. - Total current liabilities rose to $4,579,472 as of November 30, 2025, compared to $2,462,824 as of May 31, 2025, marking an increase of 86%[14]. - Total stockholders' equity reached $11,079,119 as of November 30, 2025, up from $9,659,708 as of May 31, 2025, representing an increase of 14.7%[15]. - Cash and cash equivalents increased to $4,975,968 as of November 30, 2025, from $4,769,854 as of May 31, 2025, a growth of 4.3%[14]. - Total inventory, net as of November 30, 2025, was $4,719,150, up from $2,533,658 as of May 31, 2025, indicating an increase of 86.2%[81]. Operating Expenses - Operating expenses for the three months ended November 30, 2025, were $4,633,166, a decrease of 4% from $4,825,176 in the same period of 2024[16]. - Operating expenses for the six months ended November 30, 2025 decreased by $263,164 or 2.9% from $9,119,526 in the six months ended November 30, 2024 to $8,856,362[174]. Revenue Recognition and Accounting - The company recognizes revenue upon shipment of products, with extended warranty revenue recognized over time, reflecting adherence to ASC 606 standards[38]. - As of November 30, 2025, contract liabilities amounted to $776,158, a decrease from $963,294 as of May 31, 2025[44]. - Contract liabilities associated with unfulfilled performance obligations for warranty services were $613,632 as of November 30, 2025, down from $841,771 as of May 31, 2025[44]. Legal and Compliance - Management believes that the outcome of ongoing legal proceedings is not expected to have a material adverse effect on the company's financial position or cash flows[198]. - There have been no material changes to the risk factors previously disclosed in the Annual Report for the year ended May 31, 2025[199]. - The company has maintained its commitment to effective disclosure controls and procedures as required by SEC regulations[193]. Shareholder Information - As of November 30, 2025, the Company had 24,873,500 shares of Series A Preferred Stock issued and outstanding, down from 27,773,500 as of May 31, 2025[99]. - The Company issued 250,000,000 shares of non-voting Series A Preferred Stock during the fiscal year ended May 31, 2023, valued at $3,100,000 at issuance[95]. - The total number of shares authorized for issuance under the Plan has been increased to 2,050,000 shares of common stock from the initial 500,000 shares[104]. Market and Operational Developments - The company operates in the manufacturing and distribution of high-tech hearing and audio enhancement products, as well as professional quality hair and skin care products across multiple regions including the U.S., Canada, Europe, and Asia[25]. - The company secured a new nationwide retail distribution partnership with a major U.S. retailer, expected to enhance in-store availability of its next-generation hearing-protection products starting in Q3 of fiscal 2026[155]. - A partnership was established with a major national salon chain in Canada to offer the full Reviv3 Procare® line, expanding brand reach significantly[156].