LOS ANGELES, April 10, 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 the third quarter ended February 29, 2024.
Highlights for the Quarter Ended February 29, 2024
- Net Sales (revenue) increased 14.4% to approximately $6.47 million in the third quarter, as compared to the prior year period.
- Gross profit as a percentage of sales was 71.5% in the third quarter, as compared to 74.6% for the prior year period.
- Operating expenses as a percentage of net revenue were 73.1% in the third quarter, compared to 70.7% for the prior year period.
- Loss before provision for income taxes was $46,345 and benefit provision from income taxes was $827,436 in the third quarter.
- Reported third quarter net income of $781,091 or $0.04 on a fully diluted basis compared to $162,048 or $0.01 for the prior year period.
Key Updates Since AXIL’s Last Quarterly Earnings Release
- As part of our rebranding the Company changed its name to AXIL Brands, Inc. and stock ticker symbol to “AXIL”.
- Completed uplist to the NYSE American Stock Exchange.
- In March 2024, AXIL repurchased 207,748,250 shares of Series A preferred stock equivalent, in the aggregate, to 10,387,413 shares of the Company’s common stock on an as converted basis resulting in the reduction of approximately 83% of the Company’s outstanding Series A preferred shares or approximately 55% of the Company’s total outstanding shares on a fully diluted basis.
“We are extremely pleased with our business performance and the significant objectives achieved during this quarter. Our successful listing on the NYSE American stock exchange and recent repurchase of our Series A preferred shares enhances our ability to execute our enterprise growth strategy and unlock value for our shareholders.” Commented Jeff Toghraie, Chairman and Chief Executive Officer. “Looking ahead, we remain committed to expansion into new markets, optimizing operations and creating sustainable long term growth.”
| AXIL BRANDS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS |
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| February 29, 2024 | May 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 4,887,567 | $ | 4,832,682 | ||||
| Accounts receivable, net | 719,504 | 417,016 | ||||||
| Inventory, net | 3,443,293 | 1,311,864 | ||||||
| Due from related party | 18,536 | — | ||||||
| Prepaid expenses and other current assets | 656,328 | 801,360 | ||||||
| Deferred tax asset | 234,161 | — | ||||||
| Total Current Assets | 9,959,389 | 7,362,922 | ||||||
| OTHER ASSETS: | ||||||||
| Property and equipment, net | 212,146 | 157,463 | ||||||
| Intangible assets, net | 324,549 | 382,674 | ||||||
| Right of use asset | 53,224 | 101,845 | ||||||
| Other assets | 12,195 | 12,195 | ||||||
| Goodwill | 2,152,215 | 2,152,215 | ||||||
| Total Other Assets | 2,754,329 | 2,806,392 | ||||||
| TOTAL ASSETS | $ | 12,713,718 | $ | 10,169,314 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 1,890,844 | $ | 908,606 | ||||
| Customer deposits | 37,140 | 183,688 | ||||||
| Equipment payable, current | — | 2,200 | ||||||
| Contract liabilities, current | 880,450 | 827,106 | ||||||
| Notes payable, current | 3,310 | 172,588 | ||||||
| Due to related party | — | 158,072 | ||||||
| Lease Liability, current | 54,322 | 65,824 | ||||||
| Income Tax Liability | 68,019 | 230,913 | ||||||
| Other current liabilities | 307,794 | 305,664 | ||||||
| Total Current Liabilities | 3,241,879 | 2,854,661 | ||||||
| LONG TERM LIABILITIES: | ||||||||
| Notes payable, long term | 143,840 | — | ||||||
| Lease liability, long term | — | 36,752 | ||||||
| Contract liabilities, long term | 541,108 | 605,942 | ||||||
| Total Long Term Liabilities | 684,948 | 642,694 | ||||||
| Total Liabilities | 3,926,827 | 3,497,355 | ||||||
| Commitments and contingencies (see Note 11) | — | — | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $0.0001 par value; 300,000,000 shares authorized; 250,000,000 shares issued and outstanding as of February 29, 2024 and May 31, 2023, respectively | 25,000 | 25,000 | ||||||
| Common stock, $0.0001 par value: 450,000,000 shares authorized; 5,878,939 and 5,863,939 shares issued, and outstanding as of February 29, 2024 and May 31, 2023, respectively | 588 | 586 | ||||||
| Additional paid-in capital | 10,274,677 | 10,113,365 | ||||||
| Accumulated deficit | (1,513,374 | ) | (3,466,992 | ) | ||||
| Total Stockholders’ Equity | 8,786,891 | 6,671,959 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 12,713,718 | $ | 10,169,314 | ||||
| AXIL BRANDS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
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| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| February 29, | February 28, | February 29, | February 28, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales, net | $ | 6,469,343 | $ | 5,656,461 | $ | 20,997,289 | $ | 16,625,818 | ||||||||
| Cost of sales | 1,845,017 | 1,437,976 | 5,467,458 | 4,085,645 | ||||||||||||
| 25 | % | 26 | % | 25 | % | |||||||||||
| Gross profit | 4,624,326 | 4,218,485 | 15,529,831 | 12,540,173 | ||||||||||||
| 75 | % | 74.0 | % | 75 | % | |||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Sales and marketing | 3,398,949 | 3,173,383 | 10,278,570 | 8,250,257 | ||||||||||||
| Compensation and related taxes | 228,869 | 360,802 | 713,504 | 1,214,213 | ||||||||||||
| Professional and consulting | 552,922 | 216,687 | 1,471,025 | 832,958 | ||||||||||||
| General and administrative | 547,465 | 251,025 | 1,732,942 | 841,761 | ||||||||||||
| Total Operating Expenses | 4,728,205 | 4,001,897 | 14,196,041 | 11,139,189 | ||||||||||||
| 71 | % | 68 | % | 67 | % | |||||||||||
| (LOSS) INCOME FROM OPERATIONS | (103,879 | ) | 216,588 | 1,333,790 | 1,400,984 | |||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Gain on debt settlement | — | — | 79,182 | 50,500 | ||||||||||||
| Other income | 6,114 | — | 19,138 | — | ||||||||||||
| Interest income | 52,915 | 6,721 | 129,233 | 13,262 | ||||||||||||
| Interest expense and other finance charges | (1,495 | ) | (1,714 | ) | (4,779 | ) | (4,927 | ) | ||||||||
| Other Income, Net | 57,534 | 5,007 | 222,774 | 58,835 | ||||||||||||
| (LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (46,345 | ) | 221,595 | 1,556,564 | 1,459,819 | |||||||||||
| (Benefit) Provision for income taxes | (827,436 | ) | 59,547 | (397,054 | ) | 395,344 | ||||||||||
| NET INCOME | $ | 781,091 | $ | 162,048 | $ | 1,953,618 | $ | 1,064,475 | ||||||||
| NET INCOME PER COMMON SHARE: | ||||||||||||||||
| Basic | $ | 0.13 | $ | 0.03 | $ | 0.33 | $ | 0.19 | ||||||||
| Diluted | $ | 0.04 | $ | 0.01 | $ | 0.11 | $ | 0.06 | ||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 5,863,939 | 5,849,501 | 5,863,939 | 5,574,312 | ||||||||||||
| Diluted | 18,576,914 | 18,629,501 | 18,569,140 | 17,497,737 | ||||||||||||
| AXIL BRANDS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) |
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| For the nine months ended February 29, 2024 | ||||||||||||||||||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Issued/Issuable | 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 | — | — | — | — | 153,320 | — | 153,320 | |||||||||||||||||||||
| Restricted stock awards | — | — | 15,000 | 2 | 7,992 | — | 7,994 | |||||||||||||||||||||
| Net income | — | — | — | — | — | 1,953,618 | 1,953,618 | |||||||||||||||||||||
| Balance, February 29, 2024 | 250,000,000 | $ | 25,000 | 5,878,939 | $ | 588 | $ | 10,274,677 | $ | (1,513,374 | ) | $ | 8,786,891 | |||||||||||||||
| For the three months ended February 29, 2024 | ||||||||||||||||||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Issued/Issuable | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance, November 30, 2023 | 250,000,000 | $ | 25,000 | 5,863,939 | $ | 586 | $ | 10,215,580 | $ | (2,294,465 | ) | $ | 7,946,701 | |||||||||||||||
| Stock options expense | — | — | — | — | 51,105 | — | 51,105 | |||||||||||||||||||||
| Restricted stock awards | — | — | 15,000 | 2 | 7,992 | — | 7,994 | |||||||||||||||||||||
| Net income | — | — | — | — | — | 781,091 | 781,091 | |||||||||||||||||||||
| Balance, February 29, 2024 | 250,000,000 | $ | 25,000 | 5,878,939 | $ | 588 | $ | 10,274,677 | $ | (1,513,374 | ) | $ | 8,786,891 | |||||||||||||||
| For the nine months ended February 28, 2023 | ||||||||||||||||||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Issued/Issuable | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance, May 31, 2022 | — | $ | — | 2,107,385 | $ | 211 | $ | 5,476,068 | $ | (5,291,567 | ) | $ | 184,712 | |||||||||||||||
| Shares issued for acquisition of business | 250,000,000 | 25,000 | 3,659,195 | 366 | 3,982,115 | — | 4,007,481 | |||||||||||||||||||||
| Stock options expense | — | — | — | — | 155,067 | — | 155,067 | |||||||||||||||||||||
| Shares to be issued for cash | — | — | 97,359 | 9 | 447,840 | — | 447,849 | |||||||||||||||||||||
| Net income | — | — | — | — | — | 1,064,475 | 1,064,475 | |||||||||||||||||||||
| Balance, February 28, 2023 | 250,000,000 | $ | 25,000 | 5,863,939 | $ | 586 | $ | 10,061,090 | $ | (4,227,092 | ) | $ | 5,859,584 | |||||||||||||||
| For the three months ended February 28, 2023 | ||||||||||||||||||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Preferred Stock | Issued/Issuable | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance, November 30, 2022 | 250,000,000 | $ | 25,000 | 5,837,899 | $ | 583 | $ | 9,910,371 | $ | (4,389,140 | ) | $ | 5,546,814 | |||||||||||||||
| Stock options expense | — | — | — | — | 30,922 | — | 30,922 | |||||||||||||||||||||
| Shares to be issued for cash | — | — | 26,040 | 3 | 119,797 | — | 119,800 | |||||||||||||||||||||
| Net income | — | — | — | — | — | 162,048 | 162,048 | |||||||||||||||||||||
| Balance, February 28, 2023 | 250,000,000 | $ | 25,000 | 5,863,939 | $ | 586 | $ | 10,061,090 | $ | (4,227,092 | ) | $ | 5,859,584 | |||||||||||||||
| AXIL BRANDS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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| For the Nine Months Ended | ||||||||
| February 29, | February 28, | |||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 1,953,618 | $ | 1,064,475 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 83,634 | 66,944 | ||||||
| Bad debts | 143,395 | 13,782 | ||||||
| Stock based compensation | 161,314 | 155,067 | ||||||
| Gain on settlement | (79,182 | ) | (50,500 | ) | ||||
| Provision (benefit) for deferred income taxes | (397,054 | ) | — | |||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | (445,883 | ) | (134,622 | ) | ||||
| Inventory | (2,131,429 | ) | 297,213 | |||||
| Prepaid expenses and other current assets | 145,032 | (296,787 | ) | |||||
| Deposits | — | (3,810 | ) | |||||
| Accounts payable and accrued expenses | 1,061,420 | 87,879 | ||||||
| Other current liabilities | (144,052 | ) | 860,973 | |||||
| Contract liabilities | (11,490 | ) | 259,362 | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 339,323 | 2,319,976 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash acquired on business acquisition | — | 1,066,414 | ||||||
| Purchases of property and equipment | (80,192 | ) | (65,650 | ) | ||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (80,192 | ) | 1,000,764 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Cash raised for common stock to be issued | — | 447,850 | ||||||
| Repayment of equipment financing | (2,200 | ) | (2,200 | ) | ||||
| Repayment of note payable | (25,438 | ) | (22,797 | ) | ||||
| Advances (repayments) to/from a related party | (176,608 | ) | 63,008 | |||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (204,246 | ) | 485,861 | |||||
| NET INCREASE IN CASH | 54,885 | 3,806,601 | ||||||
| CASH – Beginning of period | 4,832,682 | 373,731 | ||||||
| CASH – End of period | $ | 4,887,567 | $ | 4,180,332 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 4,681 | $ | 3,173 | ||||
| Income taxes | $ | — | $ | — | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Stock issued for asset purchase agreement | $ | — | $ | 4,007,480 | ||||
| Right of use assets recognized as lease liability | $ | — | $ | 131,970 | ||||
| Tangible assets (excluding cash) acquired in business combination | $ | — | $ | 1,740,729 | ||||
| Intangible assets acquired in business combination | $ | — | $ | 456,945 | ||||
| Goodwill acquired in business combination | $ | — | $ | 2,152,215 | ||||
| Liabilities assumed in business combination | $ | — | $ | 1,408,823 | ||||
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 the Company’s website at www.reviv3.com and, for the AXIL® brand, visit www.axilbrands.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 “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 net sales as anticipated and perform in accordance with 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, including integrating the AXIL® brand; (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; and (vii) 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) 638-8883
investors@axilbrands.com
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