AXIL AXIL Brands Inc

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 the first quarter ended August 31, 2024.

Highlights for the Quarter Ended August 31, 2024

• Net Sales (revenue) of $5.85 million as compared to $6.1 million in the prior year period.
• Gross profit as a percentage of sales was 71% in the first quarter of fiscal 2025, as compared to 76.1% for the prior year period.
• Operating expenses as a percentage of sales were 73.4% in the first quarter of fiscal 2025, compared to 73.3% for the prior year period.
• Net Cash provided by operating activities was $897,318 as compared to $397,172 in the prior year period.
• Net increase in cash was $894,848 as compared to $229,041 in the prior year period.
• Weighted average dilutive shares was 6,172,379 compared to 18,622,597 in the prior year period.
• As a result of the above, we reported a net loss of $109,805, and depreciation and amortization and stock-based compensation of $310,759, for the first quarter of fiscal 2025, compared to a net income of $154,452 in the prior year period.

"The first quarter marked a strong start to the fiscal year for AXIL," commented Chairman and Chief Executive Officer Jeff Toghraie. "We achieved significant progress by expanding into new channels and diversifying our business mix. Our continued investment in innovation and the development of compelling new products for both domestic and international markets remain a priority. We are excited by the opportunities that lie ahead and remain committed to operational excellence and delivering value to our shareholders."

Results from Operations
AXIL BRANDS, INC. AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS
		August 31, 2024				May 31, 2024
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	4,148,724			$	3,253,876
Accounts receivable, net			599,150				509,835
Inventory, net			3,273,419				3,394,023
Prepaid expenses and other current assets			322,168				809,126
Total Current Assets			8,343,461				7,966,860
OTHER ASSETS:
Property and equipment, net			251,055				260,948
Intangible assets, net			347,942				309,104
Right of use asset			18,284				36,752
Deferred tax asset			231,587				231,587
Other assets			12,195				16,895
Goodwill			2,152,215				2,152,215
Total Other Assets			3,013,278				3,007,501
TOTAL ASSETS		$	11,356,739			$	10,974,361
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	1,373,106			$	967,596
Customer deposits			74,053				154,762
Contract liabilities- current			938,498				905,311
Notes payable			144,257				146,594
Due to related party			53,505				11,798
Lease liability, current			18,650				36,752
Income tax liability			242,296				242,296
Other current liabilities			229,848				332,936
Total Current Liabilities			3,074,213				2,798,045
LONG TERM LIABILITIES:
Contract liabilities- long term			398,681				480,530
Total Long Term Liabilities			398,681				480,530
Total Liabilities			3,472,894				3,278,575
Commitments and contingencies (see Note 10)			-				-
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 par value; 300,000,000 shares authorized; 31,133,500 and 42,251,750 shares issued and outstanding as of August 31, 2024 and May 31, 2024, respectively			3,113				4,225
Common stock, $0.0001 par value: 450,000,000 shares authorized; 6,464,852 and 5,908,939 shares issued, issuable and outstanding as of August 31, 2024 and May 31, 2024, respectively			647				591
Additional paid-in capital			8,124,160				7,825,240
Accumulated deficit			(244,075	)			(134,270	)
Total Stockholders' Equity			7,883,845				7,695,786
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	11,356,739			$	10,974,361

AXIL BRANDS, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023(UNAUDITED)
		2024				2023
Sales, net		$	5,851,272			$	6,106,269
Cost of sales			1,697,624				1,458,703
Gross profit			4,153,648				4,647,566
OPERATING EXPENSES:
Sales and marketing			2,669,471				3,206,841
Compensation and related taxes			190,648				279,989
Professional and consulting			947,849				426,775
General and administrative			486,382				560,204
Total Operating Expenses			4,294,350				4,473,809
INCOME (LOSS) FROM OPERATIONS			(140,702	)			173,757
OTHER INCOME (EXPENSE):
Other income			2,266				9,835
Interest income			28,631				38,493
Interest expense and other finance charges			-				(1,644	)
Other Income (Expense), Net			30,897				46,684
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES			(109,805	)			220,441
Provision (benefit) for income taxes			-				65,989
NET INCOME (LOSS)		$	(109,805	)		$	154,452
NET INCOME (LOSS) PER COMMON SHARE:
Basic		$	(0.02	)		$	0.03
Diluted		$	(0.02	)		$	0.01
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			6,172,379				5,853,847
Diluted			6,172,379				18,622,597

AXIL BRANDS, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYFOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023(UNAUDITED)
For the three months ended August 31, 2024
										Common Stock																Total
		Preferred Stock								Issued/Issuable								Additional Paid-in				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Equity
Balance, May 31, 2024			42,251,750			$	4,225				5,908,939			$	591			$	7,825,240			$	(134,270	)		$	7,695,786
Stock options expense			-				-				-				-				72,632				-				72,632
Stock based compensation			-				-				-				-				225,232				-				225,232
Preferred Stock converted to Common Stock			(11,118,250	)			(1,112	)			555,913				56				1,056				-				-
Net loss for the three months ended August 31, 2024			-				-				-				-				-				(109,805	)			(109,805	)
Balance, August 31, 2024			31,133,500			$	3,113				6,464,852			$	647			$	8,124,160			$	(244,075	)		$	7,883,845

For the three months ended August 31, 2023
										Common Stock																Total
		Preferred Stock								Issued And Issuable								Additional Paid-in				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Equity
Balance, May 31, 2023			250,000,000			$	25,000				5,863,939			$	586			$	10,113,365			$	(3,466,992	)		$	6,671,959
Stock options expense			-				-				-				-				51,107				-				51,107
Net income for the three months ended August 31, 2023			-				-				-				-				-				154,452				154,452
Balance, August 31, 2023			250,000,000			$	25,000				5,863,939			$	586			$	10,164,472			$	(3,312,540	)		$	6,877,518

AXIL BRANDS, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023(UNAUDITED)
		August 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	(109,805	)		$	154,452
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			12,895				28,237
Bad debts			18,785				52,866
Stock-based compensation			297,864				51,107
Change in operating assets and liabilities:
Accounts receivable			(108,100	)			(91,736	)
Inventory			120,603				(758,104	)
Prepaid expenses and other current assets			486,958				315,751
Accounts payable and accrued expenses			405,511				168,399
Other current liabilities			(178,731	)			438,006
Contract liabilities			(48,662	)			38,194
NET CASH PROVIDED BY OPERATING ACTIVITIES			897,318				397,172
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangibles			(41,840	)			-
Purchase of property and equipment			-				(50,960	)
NET CASH USED IN INVESTING ACTIVITIES			(41,840	)			(50,960	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of equipment financing			-				(825	)
Repayment of note payable			(2,337	)			(17,254	)
Advances (payments) from a related party			41,707				(99,092	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			39,370				(117,171	)
NET INCREASE IN CASH			894,848				229,041
CASH - Beginning of period			3,253,876				4,832,682
CASH - End of period		$	4,148,724			$	5,061,723
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	-			$	1,644
Income taxes		$	-			$	-

About AXIL

AXIL (NYSE American) is an emerging global e-commerce consumer products company. The Company is a manufacturer and marketer of premium hearing enhancement and protection products, including ear plugs, earmuffs, and ear buds, under the AXIL® brand and premium hair and skincare products under its in-house Reviv3 Procare brand - selling products in the United States, Canada, the European Union and throughout Asia. To learn more, please visit www.reviv3.com for the Reviv3® brand and, for the AXIL® brand, visit www.goaxil.com.

Forward-Looking Statements

This press release contains a number of forward-looking statements within the meaning of the federal securities laws. The use of words such as “anticipate,” “believe,” “expect,” “continue,” “will,” “prepare,” “should,” and “focus,” among others, generally identify forward-looking statements. These forward-looking statements are based on currently available information, and management’s beliefs, projections, and current expectations, and are subject to a number of significant risks and uncertainties, many of which are beyond management’s control and may cause the Company’s results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things: (i) the Company’s ability to grow its net sales and operations, including developing new products and expanding internationally, and perform in accordance with any guidance; (ii) our ability to generate sufficient revenue to support the Company’s operations and to raise additional funds or obtain other forms of financing as needed on acceptable terms, or at all; (iii) potential difficulties or delays the Company may experience in implementing its cost savings and efficiency initiatives; (iv) the Company’s ability to compete effectively with other hair and skincare companies and hearing enhancement and protection companies; (v) the concentration of the Company’s customers, potentially increasing the negative impact to the Company by changing purchasing or selling patterns; (vi) changes in laws or regulations in the United States and/or in other major markets, such as China, in which the Company operates, including, without limitation, with respect to taxes, tariffs, trade policies or product safety, which may increase the Company product costs and other costs of doing business, and reduce the Company’s earnings; (vii) the Company’s ability to engage in strategic partnerships and expand its distribution and retail channels; and (viii) the impact of unstable market and general economic conditions on the Company’s business, financial condition and stock price, including inflationary cost pressures, the possibility of an economic recession and other macroeconomic factors, geopolitical events, and uncertainty, decreased discretionary consumer spending, supply chain disruptions and constraints, labor shortages, ongoing economic disruption, including the effects of the Ukraine-Russia conflict and the Israel-Hamas conflict, and other downturns in the business cycle or the economy. There can be no assurance as to any of these matters, and potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s filings with the U.S. Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company does not assume any obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Investor Relations:AXIL Investor Relations Team(888) 638-8883investors@axilbrands .com