AXIL Brands, Inc. Reports First Quarter Fiscal Year 2025 Financial Results
LOS ANGELES, Oct. 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 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 SUBSIDIARY CONSOLIDATED BALANCE SHEETS |
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| August 31, 2024 |
May 31, 2024 |
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| (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 SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023 (UNAUDITED) |
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| 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 SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023 (UNAUDITED) |
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| 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 SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED AUGUST 31, 2024 AND 2023 (UNAUDITED) |
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| 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) 638-8883
investors@axilbrands .com
