Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 8, 2025

 

AXIL BRANDS, INC.

(Exact name of Registrant as Specified in its Charter)

 

Delaware	001-41958	47-4125218
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

9150 Wilshire Boulevard, Suite 245, Beverly Hills, California 90212

(Address of principal executive offices, including ZIP code)

 

[phone]

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		AXIL		The NYSE American LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On January 8, 2025, AXIL Brands, Inc. (the “Company”) issued a press release announcing its consolidated financial results for the three months ended November 30, 2024. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and in this Item 2.02 have been furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing regardless of any general incorporation language.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Earnings Press Release of AXIL Brands, Inc., dated January 8, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	AXIL BRANDS, INC.
Date: January 8, 2025	By:	/s/ Jeff Toghraie
	Name:	Jeff Toghraie
	Title:	Chief Executive Officer

 

 

 

 

AXIL Brands Reports Second Quarter Fiscal Year 2025 Financial Results

 

LOS ANGELES, January 8, 2025 (GLOBE NEWSWIRE) – AXIL Brands, Inc. (“AXIL” 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, announces financial and operational results for the second quarter ended November 30, 2024 (2Q25).

 

Financial Highlights for the Quarter Ended November 30, 2024

 

·

Revenue in 2Q25 was $7.7 million, as compared to $8.4 million in the prior year period

 

·

Gross profit as a percentage of sales was 71.1% in 2Q25, as compared to 74.3% for the prior year period

 

·

Operating expenses as a percentage of sales were 62.4% in 2Q25, as compared to 59.3% for the prior year period

 

·

Net income in 2Q25 was $0.6 million, as compared to $1.0 million in the prior year period

 

·

Adjusted EBITDA in 2Q25 was $1.0 million, as compared to $1.4 million in the prior year period

 

·

Net cash provided by operating activities for the six months ended November 30, 2024 was $1.9 million , as compared to $1.3 million for the prior year period

 

·

Cash as of November 30, 2024 was $5.2 million, as compared to $3.3 million as of May 31, 2024

 

·

Weighted average dilutive shares for 2Q25 was 8,168,657, as compared to 18,632,689 in the prior year period

 

“The second quarter of our fiscal year is seasonally strong due to the holiday shopping season. However, the 2Q25 period was slightly different than 2Q24 from a timing and reporting standpoint, as Cyber Monday and the day before Cyber Monday in calendar year 2024 fell into our fiscal third quarter, whereas the full holiday weekend from Black Friday to Cyber Monday was part of our second quarter of fiscal 2024. Consequently, a significant portion of these sales will be recognized in the third quarter of this fiscal year,” commented AXIL Chairman and Chief Executive Officer Jeff Toghraie.

 

“We continue to take steps to diversify our distribution strategy for our hearing protection and enhancement products beyond our online presence. Over the last six months, we have announced relationships with international distributors that we expect to contribute in a more meaningful way going forward. Moreover, we also expect to establish additional international distribution agreements that will allow us to expand the AXIL brand to incremental targeted markets.

 

“Domestically, we are making strong inroads into the retail channel. We are in over 1,000 retail locations, including Bass Pro Shops, Scheel’s, and select Walmart stores. Ultimately, we would like to expand our retail presence by an order of magnitude, and given our financial discipline, we expect to be able to recognize a healthy margin contribution that is comparable to what we recognize in our online channels. A core corporate value at AXIL is achieving efficient profitability. We prioritize sustainable growth and avoid pursuing revenue expansion solely for top-line growth if it compromises operating leverage.

 

“In addition to our planned diversification of distribution channels, we aim to give consumers compelling reasons to choose AXIL-branded hearing safety and enhancement products. We intend to achieve this by maintaining our technological leadership and introducing both new and enhanced hearing products with improved functionality and ergonomics across various price points. Accordingly, we expect to launch the successor series to our TRACKR earmuffs in the first half of calendar year 2025.

 

“Finally, our solid cash position of $5.2 million at the end of 2Q25 enables us to internally finance our strategic growth plans, with no anticipated reliance on external market funding. We believe our dual strategies of distribution channel diversification and continued product innovation, which should all be able to be funded internally, will generate sustainable shareholder value. I extend my gratitude to our shareholders for their continued support and remain confident that AXIL's greatest achievements are still to come.” concluded Mr. Toghraie.

 

Use of Non-GAAP Financial Measures

 

The Company calculates EBITDA by taking net income calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), and adjusting for income taxes, interest income or expense, and depreciation and amortization. The Company calculates adjusted EBITDA as EBITDA, further adjusted for stock-based compensation. Adjusted EBITDA is also presented as a percentage of revenue, which is calculated by dividing the non-GAAP Adjusted EBITDA for a period by revenue for the same period. Other companies may calculate EBITDA and adjusted EBITDA differently, limiting the usefulness of these measures for comparative purposes. The Company believes that these non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to the Company’s financial condition and results of operations, and management considers EBITDA and adjusted EBITDA important indicators in evaluating the Company’s business on a consistent basis across various periods for trend analyses. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements and are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Investors should not rely on any single financial measure to evaluate our business. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in a schedule to this press release.

 

 

 

AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED EBITDA and ADJUSTED EBITDA

FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2024 AND 2023

 

		For the Three Months Ended								For the Six Months Ended
		November 30,								November 30,
		2024				2023				2024				2023
Net income (GAAP)		$	633,706			$	1,018,075			$	523,901			$	1,172,527
Income taxes			67,250				364,393				67,250				430,382
Interest (income) expense, net			(26,044	)			(36,185	)			(54,675	)			(73,034	)
Depreciation and amortization			34,440				27,785				47,335				56,022
Total EBITDA (Non-GAAP)			709,352				1,374,068				583,811				1,585,897
Adjustments:
Stock-based compensation			304,600				51,108				602,464				102,215
Total Adjusted EBITDA (Non-GAAP)		$	1,013,952			$	1,425,176			$	1,186,275			$	1,688,112
Sales, net (GAAP)		$	7,732,574			$	8,421,677			$	13,583,846			$	14,527,946
Adjusted EBITDA as a percentage of Sales, net (Non-GAAP)			13.1	%			16.9	%			8.7	%			11.6	%

 

 

 

AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

		November 30, 2024				May 31, 2024
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	5,213,897			$	3,253,876
Accounts receivable, net			1,444,218				509,835
Inventory, net			2,664,489				3,394,023
Prepaid expenses and other current assets			724,778				809,126
Total Current Assets			10,047,382				7,966,860
OTHER ASSETS:
Property and equipment, net			305,433				260,948
Intangible assets, net			324,907				309,104
Right of use asset			737,251				36,752
Deferred tax asset			121,791				231,587
Other assets			20,720				16,895
Goodwill			2,152,215				2,152,215
Total Other Assets			3,662,317				3,007,501
TOTAL ASSETS		$	13,709,699			$	10,974,361
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	1,619,252			$	967,596
Customer deposits			496,404				154,762
Contract liabilities, current			956,022				905,311
Notes payable			143,342				146,594
Due to related party			178,520				11,798
Lease liability, current			207,077				36,752
Income tax liability			67,250				242,296
Other current liabilities			331,395				332,936
Total Current Liabilities			3,999,262				2,798,045
LONG TERM LIABILITIES:
Lease liability			531,081				—
Contract liabilities			357,205				480,530
Total Long Term Liabilities			888,286				480,530
Total Liabilities			4,887,548				3,278,575
Commitments and contingencies			—				—
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 November 30, 2024 and May 31, 2024, respectively			3,113				4,225
Common stock, $0.0001 par value: 450,000,000 shares authorized; 6,466,852 and 5,908,939 shares issued, issuable and outstanding as of November 30, 2024 and May 31, 2024, respectively			647				591
Additional paid-in capital			8,428,760				7,825,240
Retained Earnings/(Accumulated deficit)			389,631				(134,270	)
Total Stockholders' Equity			8,822,151				7,695,786
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	13,709,699			$	10,974,361

 

 

 

AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2024 AND 2023 

(UNAUDITED)

 

		For the Three Months Ended								For the Six Months Ended
		November 30,								November 30,
		2024				2023				2024				2023
Sales, net		$	7,732,574			$	8,421,677			$	13,583,846			$	14,527,946
Cost of sales			2,234,527				2,163,738				3,932,151				3,622,441
Gross profit			5,498,047				6,257,939				9,651,695				10,905,505
OPERATING EXPENSES:
Sales and marketing			3,377,760				3,672,780				6,047,231				6,879,621
Compensation and related taxes			276,674				204,646				467,322				484,635
Professional and consulting			736,169				694,258				1,684,018				1,303,288
General and administrative			434,573				422,343				920,955				800,292
Total Operating Expenses			4,825,176				4,994,027				9,119,526				9,467,836
INCOME FROM OPERATIONS			672,871				1,263,912				532,169				1,437,669
OTHER INCOME (EXPENSE):
Gain on settlement			—				79,182				—				79,182
Other income			2,041				3,189				4,307				13,024
Interest income			27,340				37,825				55,971				76,318
Interest expense and other finance charges			(1,296	)			(1,640	)			(1,296	)			(3,284	)
Other income (expense), net			28,085				118,556				58,982				165,240
INCOME BEFORE PROVISION FOR INCOME TAXES			700,956				1,382,468				591,151				1,602,909
Provision for income taxes			67,250				364,393				67,250				430,382
NET INCOME		$	633,706			$	1,018,075			$	523,901			$	1,172,527
NET INCOME PER COMMON SHARE:
Basic		$	0.10			$	0.17			$	0.08			$	0.20
Diluted		$	0.08			$	0.05			$	0.06			$	0.06
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			6,450,226				5,863,939				6,303,002				5,863,939
Diluted			8,168,657				18,632,689				8,194,882				18,632,689

 

 

 

AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED NOVEMBER 30, 2024 AND 2023

(UNAUDITED)

 

		November 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	523,901			$	1,172,527
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			47,335				56,022
Bad debts			27,954				64,327
Stock-based compensation			602,464				102,215
Gain on settlement			—				(79,182	)
Gain on forgiveness of account payable			(218,699	)			—
Deferred income taxes			109,796				—
Change in operating assets and liabilities:
Accounts receivable			(962,337	)			(600,626	)
Inventory			729,534				(1,040,351	)
Prepaid expenses and other current assets			80,524				(267,407	)
Accounts payable			870,357				1,092,735
Other current liabilities			165,959				576,718
Contract liabilities			(72,614	)			175,135
NET CASH PROVIDED BY OPERATING ACTIVITIES			1,904,174				1,252,113
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangibles			(41,840	)			—
Purchase of property and equipment			(65,783	)			(70,845	)
NET CASH USED IN INVESTING ACTIVITIES			(107,623	)			(70,845	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of equipment financing			—				(1,650	)
Repayment of note payable			(3,252	)			(24,657	)
Advances (payments) from a related party			166,722				(25,212	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			163,470				(51,519	)
NET INCREASE IN CASH			1,960,021				1,129,749
CASH - Beginning of period			3,253,876				4,832,682
CASH - End of period		$	5,213,897			$	5,962,431
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	2,908			$	3,284
Income taxes		$	132,500			$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Initial recognition of right of use assets recognized as lease liability		$	767,269			$	—

 

 

 

About AXIL Brands

 

AXIL Brands (NYSE American: AXIL) is an emerging global 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® brand - selling products in the United States, Canada, the European Union, and throughout Asia.

 

To learn more, please visit the Company's AXIL® website at www.axilbrands.com and its Reviv3® website at www.reviv3.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 and improved products, diversifying its distribution channels, and expanding internationally, and perform in accordance with any guidance; (ii) the Company’s 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:
CORE IR
[phone]
[e-mail]

 

 

 

Cover	Jan. 08, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 08, 2025
Entity File Number	001-41958
Entity Registrant Name	AXIL BRANDS, INC.
Entity Central Index Key	0001718500
Entity Tax Identification Number	47-4125218
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	9150 Wilshire Boulevard
Entity Address, Address Line Two	Suite 245
Entity Address, City or Town	Beverly Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90212
City Area Code	888
Local Phone Number	638-8883
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	AXIL
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false

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