Axil Brands, Inc.
For the period ended Feb 28, 2026. Filed Apr 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2026 · Filed Apr 8, 2026
AXIL$5.16-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-30; filed 2026-01-08.
0001520138-26-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-04-08.
0001520138-26-000104
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 59 previous paragraphs and 68 current paragraphs.
29 unchanged; 24 reworded; 15 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Beginning in the three months ended February 28, 2026, we operate in three reportable segments: (i) hearing enhancement and protection, (ii) hair and skin care, and (iii) marketing services.
Current report
On February 24, 2026, we formed Reviv3 ProCare Company, a wholly owned subsidiary, as part of a broader initiative to support the potential strategic separation or other transaction involving the hair and skin care business. These initiatives are intended to enhance long-term growth and strategic flexibility.
Current report
On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the imposition of certain tariffs previously assessed on imports. Following that decision, the U.S. Court of International Trade issued orders directing CBP to liquidate unliquidated entries and reliquidate certain non-final liquidated entries without regard to IEEPA duties, while CBP develops a new automated refund process to administer potential refunds, and the court continues to oversee CBP’s progress through required status reports.
Current report
The Company has paid IEEPA duties on certain import transactions historically. While these court decisions create the possibility of refunds, the amount and timing of any potential recovery remains uncertain and depends on, among other factors, (i) the liquidation status and finality of the Company’s relevant import entries under U.S. customs laws (including statutory time frames for reliquidation and administrative protests), and (ii) the scope, timing, validation rules, and phased implementation of CBP’s refund process, which CBP has indicated will initially exclude certain complex entry scenarios.
Current report
As of February 28, 2026, we have not recorded a receivable related to potential tariff refunds and cannot reasonably estimate the amount or timing of any refunds. If refunds are received in future periods, they could have a favorable impact on cash flows and results of operations in the period of receipt or realization; however, there can be no assurance that the Company will recover any material portion of the IEEPA duties paid.
Current report
We have paid approximately $900,000 in IEEPA duties since April 2025, of which $321,059 is included in Inventory, net on the accompanying consolidated balance sheets as of February 28, 2026 and the remainder has been recorded in cost of sales over the period of which the inventory was sold consistent with our accounting policies. These amounts represent total amounts paid and should not be interpreted as an estimate of potential refunds or recoveries.
Current report
In addition, following the U.S. Supreme Court’s decision, as described above, the U.S. President imposed a new tariff surcharge of not less than 10% under Section 122 of the Trade Act of 1974 on all imports, subject to certain exceptions. The tariffs under this statute took effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute). The U.S. President also indicated a desire to increase such tariffs to 15% and to seek to extend such tariffs under other statutes. The imposition of such tariffs may continue to strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the U.S. In addition, the scope and durability of existing and future tariff measures remain uncertain.
Current report
Outlook
Current report
Based on our current expectations and assumptions regarding continued retail expansion, we expect revenue for the fourth quarter of fiscal 2026 to be in the range of $8 million to $10 million, representing approximately 39% to 74% year-over-year growth. We anticipate our gross margins for the fourth quarter of fiscal 2026 to be in the range of 67% to 71%. For the full fiscal year 2026, we expect revenue in the range of $30.2 million to $32.2 million, which implies 15% to 23% growth compared to fiscal 2025.
Current report
We are providing this outlook based on current expectations; however, we have not historically provided guidance and may not continue to do so. These statements are forward-looking and subject to risks and uncertainties, including those related to our retail expansion, consumer demand, and gross margins, as well as those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2025, which should be read in conjunction with this Form 10-Q.
Current report
Net sales increased by $371,663, or 5.4%, to $7,294,030 for the three months ended February 28, 2026, compared to $6,922,367 for the prior-year period. The increase was primarily driven by continued growth in demand for our hearing enhancement and protective equipment products. This growth was partially offset by lower sales in our hair and skin care segment, which were impacted by the absence of a significant distributor order that was fulfilled in the prior-year period.
Current report
Income from operations for the three months ended February 28, 2026, was $214,239 compared to $583,109 for the three months ended February 28, 2025. The decrease in income from operations of $368,870 related primarily to an increase in sales and marketing costs.
Current report
Adjusted EBITDA decreased by $419,752 or 47.1% from $890,546 for the three months ended February 28, 2025 to $470,794 for the three months ended February 28, 2026. Adjusted EBITDA as a percentage of sales, net for the three months ended February 28, 2026 and 2025, was 6.5% and 12.9%, respectively. Adjusted EBITDA decreased primarily due to an approximately $400,000 increase in sales and marketing expenses, reflecting continued investment in our direct-to-consumer channel and broader brand-building initiatives aimed at driving long-term revenue growth.
Current report
For the Nine Months Ended February 28, 2026 Compared to the Nine Months Ended February 28, 2025
Current report
We are actively evaluating strategic alternatives for the hair and skin care business, including a potential spin-off, sale, or initial public offering, which could occur within the next two years depending on operational performance and market conditions. These initiatives could impact the Company’s capital structure, ownership of the hair and skin care business, and future liquidity.
Removed paragraphs (6)
Previous report
We have two reportable segments: hair and skin care, and hearing enhancement and protection. In addition, we have recently incorporated a wholly owned subsidiary with the intent to offer marketing services. This new subsidiary is expected to support third-party clients by leveraging our direct-to-consumer expertise to deliver performance-driven marketing solutions.
Previous report
We continue to make progress on our supply chain transition strategy in response to elevated U.S. tariffs and broader geopolitical risks. Key initiatives include relocating senior manufacturing leadership to the United States and advancing early-stage domestic production capabilities. While tariff-related cost pressures impacted fiscal 2025, we do not expect a material ongoing effect into fiscal 2026 based on current tariff levels. If tariff rates change or other changes in trade policy are implemented, the expected impact on our operations could change.
Previous report
Net sales increased by $402,285 or 5.2% from $7,732,574 in the three months ended November 30, 2024 as compared to $8,134,859 for the three months ended November 30, 2025. The increase in net sales was primarily driven by a material order from a leading national membership-based retail chain partially offset by the timing of Thanksgiving sales events.
Previous report
Income from operations for the three months ended November 30, 2025, was $903,071 compared to $672,871 for the three months ended November 30, 2024. The increase in income from operations of $230,200 or 34.2% was primarily related to the decrease in stock-based compensation and gained efficiencies within the Company resulting in reduced operating expenses, partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the three months ended November 30, 2025.
Previous report
Adjusted EBITDA increased by $141,401 or 13.9% from $1,013,952 for the three months ended November 30, 2024 to $1,155,353 for the three months ended November 30, 2025. Adjusted EBITDA as a percentage of sales, net for the three months ended November 30, 2025 and 2024, was 14.2% and 13.1%, respectively. Adjusted EBITDA increased primarily due to improved operating efficiency partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the current period.
Previous report
For the Six Months Ended November 30, 2025 Compared to the Six Months Ended November 30, 2024
Reworded paragraphs (24)
Previous wording
The Company is engaged in the manufacturing, marketing, sale and distribution of high-tech, innovative hearing and audio enhancement and protection products that provide cutting-edge solutions for people with varied applications across many industries and professional quality hair and skin care products under various trademarks and brands.
Current wording
The Company is engaged in the manufacturing, marketing, sale and distribution of high-tech, innovative hearing and audio enhancement and protection products that provide cutting-edge solutions for people with varied applications across many industries, professional quality hair and skin care products under various trademarks and brands, and the delivery of marketing services to support both its owned brands and third-party clients.
Previous wording
Through our hearing enhancement and protection segment, we design, innovate, engineer, manufacture, market and service specialized systems in hearing enhancement, hearing protection, wireless audio, and communication. Through our hair and skin care segment, we manufacture, market, sell, and distribute professional quality hair and skin care products.
Current wording
Through our hearing enhancement and protection segment, we design, innovate, engineer, manufacture, market and service specialized systems in hearing enhancement, hearing protection, wireless audio, and communication. Through our hair and skin care segment, we manufacture, market, sell, and distribute professional quality hair and skin care products. Our marketing services segment is conducted through our wholly owned subsidiary, Sharper Vision Marketing Inc., which was formed to leverage our direct-to-consumer expertise in support of both our internal brands and third-party clients. This segment is focused on delivering performance-driven marketing solutions and represents an expansion of our capabilities to drive growth and enhance brand visibility.
Previous wording
In addition to growing our overall distribution and retail footprint, the Company has reached a significant milestone in its wholesale channel strategy by securing several strategic supply agreements with leading national retail chains. These agreements have already generated multiple purchase orders with fulfillment anticipated in the first half of calendar 2026. While there can be no assurance that additional purchase orders will be received or regarding the timing or volume of fulfillment, we expect this expanded national retail presence to drive meaningful revenue growth and significantly enhance brand visibility among a much wider customer base.
Current wording
In addition to growing our overall distribution and retail footprint, the Company has reached a significant milestone in its wholesale channel strategy by securing several strategic supply agreements with leading national retail chains. These agreements have already generated multiple purchase orders in the first half of calendar 2026. While there can be no assurance that additional purchase orders will be received or regarding the timing or volume of fulfillment, we expect this expanded national retail presence to drive meaningful revenue growth and significantly enhance brand visibility among a much wider customer base.
Previous wording
In December 2025, we announced our securement of a new nationwide retail distribution partnership with a major U.S. retailer, positioning a next-generation hearing-protection offering for broad in-store availability beginning in the third quarter of fiscal 2026.
Current wording
In December 2025, we announced the securing of a new nationwide retail distribution partnership with a major U.S. retailer, positioning next-generation hearing protection products for broad in-store availability beginning in fiscal 2026. We believe our expanded retail footprint strengthens our market presence and supports broader consumer adoption of our hearing protection solutions.
Previous wording
Cost of sales includes the cost of products, freight-in costs, customs duties, and depreciation related to fixed assets that are used in the production and distribution process to bring goods to their saleable condition and location. The overall cost of sales increased by $364,095 or 16.3% from $2,234,527 in three months ended November 30, 2024 to $2,598,622 in the three months ended November 30, 2025. Cost of sales as a percentage of net revenues for the three months ended November 30, 2025 was 31.9% as compared to 28.9% for the three months ended November 30, 2024. Cost of sales increased as a percentage of revenue primarily due to a material order with a leading national membership-based retail chain, which carried tighter margins compared to our direct-to-consumer business.
Current wording
Cost of sales includes the cost of products, freight-in costs, customs duties, and depreciation related to fixed assets that are used in the production and distribution process to bring goods to their saleable condition and location. The overall cost of sales increased by $296,270 or 15.1% from $1,955,939 in the three months ended February 28, 2025 to $2,252,209 in the three months ended February 28, 2026. Cost of sales as a percentage of net revenues for the three months ended February 28, 2026 was 30.9% as compared to 28.3% for the three months ended February 28, 2025. Cost of sales as a percentage of revenue increased primarily due to increased tariffs.
Previous wording
Gross profit increased by $38,190 or 0.7% from $5,498,047 in the three months ended November 30, 2024 to $5,536,237 for the three months ended November 30, 2025. Gross profit as a percentage of sales for the three months ended November 30, 2025 was 68.1%, as compared to 71.1% for the three months ended November 30, 2024. Gross profit increased due to higher sales volumes, partially offset by lower margins related to a material order with a leading national membership-based retail chain.
Current wording
Gross profit increased by $75,393 or 1.5% from $4,966,428 in the three months ended February 28, 2025 to $5,041,821 for the three months ended February 28, 2026. Gross profit as a percentage of sales for the three months ended February 28, 2026 was 69.1%, as compared to 71.7% for the three months ended February 28, 2025. Gross profit as a percentage of sales decreased primarily due to higher customs duties.
Previous wording
Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses decreased by $192,010 or 4.0% from $4,825,176 in the three months ended November 30, 2024 to $4,633,166 in the three months ended November 30, 2025. Operating expenses as a percentage of net revenues for the three months ended November 30, 2025 was 57.0% compared to 62.4% for the three months ended November 30, 2024. Included in operating expenses were non-cash stock-based compensation of $181,022 and $304,600 in the three months ended November 30, 2025 and 2024, respectively. The decrease in operating expenses was primarily driven by lower sales and marketing costs correlated to a shift from direct-to-consumer sales to our expansion of retail distribution channels, higher operating efficiency through lower professional and consulting fees, in addition to lower stock-based compensation expense, partially offset by the forgiveness of accounts payable of approximately $220,000 that occurred in the three months ended November 30, 2024 and did not recur.
Current wording
Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses increased by $444,263 or 10.1% from $4,383,319 in the three months ended February 28, 2025 to $4,827,582 in the three months ended February 28, 2026. Operating expenses as a percentage of net revenues for the three months ended February 28, 2026 was 66.2% compared to 63.3% for the three months ended February 28, 2025. Included in operating expenses were non-cash stock-based compensation of $180,369 and $258,053 in the three months ended February 28, 2026 and 2025, respectively. Operating expenses increased primarily due to higher sales and marketing expenses of approximately $400,000, reflecting increased investment in retail sales promotional initiatives and efforts to enhance overall brand awareness.
Previous wording
For the three months ended November 30, 2025, provision for income tax expense was $233,115. For the three months ended November 30, 2024, we had a provision for income tax expense of $67,250.
Current wording
For the three months ended February 28, 2026, provision for income tax expense was $64,306. For the three months ended February 28, 2025, we had a provision for income tax expense of $53,085.
Previous wording
As a result of the above, we reported a net income of $704,883 and $633,706 for the three months ended November 30, 2025 and 2024, respectively.
Current wording
As a result of the above, we reported a net income of $203,046 and $576,662 for the three months ended February 28, 2026 and 2025, respectively.
Previous wording
Basic and diluted earnings per share for the three months ended November 30, 2025 were $0.10 and $0.09, respectively, compared to basic and diluted earnings per share of $0.10 and $0.08, respectively, for the three months ended November 30, 2024.
Current wording
Basic and diluted earnings per share for the three months ended February 28, 2026 were $0.03 and $0.02, respectively, compared to basic and diluted earnings per share of $0.09 and $0.07, respectively, for the three months ended February 28, 2025.
Previous wording
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 for the six months ended November 30, 2025. The increase in net sales was primarily driven by a material order from a leading national membership-based retail chain partially offset by the timing of Thanksgiving sales events.
Current wording
Net sales increased by $1,778,894 or 8.7% from $20,506,213 in the nine months ended February 28, 2025 to $22,285,107 for the nine months ended February 28, 2026. The increase in net sales was primarily driven by a material order from our retail channels.
Previous wording
The overall cost of sales increased by $887,755 or 22.6% from $3,932,151 in the six months ended November 30, 2024 to $4,819,906 in the six months ended November 30, 2025. Cost of sales as a percentage of net revenues for the six months ended November 30, 2025 was 32.2% as compared to 28.9% for the comparable period in 2024. The increase in cost of sales, as a percentage of sales, was primarily attributable to an increase in sales to distributors in our hair and skin care products bearing lower margins, and an increase in sales with a leading national membership-based retail chain, which carried tighter margins compared to our direct-to-consumer business.
Current wording
The overall cost of sales increased by $1,184,025 or 20.1% from $5,888,090 in the nine months ended February 28, 2025 to $7,072,115 in the nine months ended February 28, 2026. Cost of sales as a percentage of net revenues for the nine months ended February 28, 2026 was 31.7% as compared to 28.7% for the comparable period in 2025. Cost of sales as a percentage of sales increased, primarily driven by a higher mix of lower-margin sales to distributors in our hair and skin care segment and increased sales to a leading national membership-based retail chain in our hearing enhancement and protection equipment, which carries tighter margins than our direct-to-consumer channel, as well as higher customs duties.
Previous wording
Gross profit for the six months ended November 30, 2025 and 2024 was $10,171,171 and $9,651,695, respectively. Gross profit as a percentage of sales for the six months ended November 30, 2025, was 67.8% as compared to 71.1% for the comparable period in 2024. The decrease in the gross profit margin for the six months ended November 30, 2025 was primarily due to lower margins related to a material order with a leading national membership-based retail chain.
Current wording
Gross profit for the nine months ended February 28, 2026 and 2025 was $15,212,992 and $14,618,123, respectively. Gross profit as a percentage of sales for the nine months ended February 28, 2026, was 68.3% as compared to 71.3% for the comparable period in 2025. The decrease in the gross profit margin for the nine months ended February 28, 2026 was primarily due to lower margins related to a material order with a leading national membership-based retail chain and higher customs duties.
Previous wording
Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses decreased by $263,164 or 2.9% from $9,119,526 in the six months ended November 30, 2024 to $8,856,362 in the six months ended November 30, 2025. Operating expenses as a percentage of net revenues for the six months ended November 30, 2025, were 59.1% compared to 67.1% for the six months ended November 30, 2024. Included in operating expenses were non-cash stock-based compensation of $380,234 and $602,464 in the six months ended November 30, 2025 and 2024, respectively. The decrease in operating expenses was primarily driven by lower sales and marketing costs correlated to a shift from direct-to-consumer sales to our expansion of retail distribution channels, higher operating efficiency through lower professional and consulting fees, in addition to lower stock-based compensation expense, partially offset by the forgiveness of accounts payable of approximately $220,000 that occurred in the six months ended November 30, 2024 and did not recur.
Current wording
Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses increased by $181,099 or 1.3% from $13,502,845 in the nine months ended February 28, 2025 to $13,683,944 in the nine months ended February 28, 2026. Operating expenses as a percentage of net revenues for the nine months ended February 28, 2026, were 61.4% compared to 65.8% for the nine months ended February 28, 2025. Included in operating expenses were non-cash stock-based compensation of $560,603 and $860,517 in the nine months ended February 28, 2026 and 2025, respectively. Operating expenses increased primarily due to higher sales and marketing expenses, reflecting increased investment in direct-to-consumer initiatives and brand awareness. This increase was partially offset by improved operating efficiencies, including lower professional and consulting fees and reduced stock-based compensation, as well as the absence of a $220,000 accounts payable forgiveness recognized in the prior-year period that did not recur.
Previous wording
Income from operations for the six months ended November 30, 2025, was $1,314,809 compared to income of $532,169 for the six months ended November 30, 2024. The increase in income from operations of $782,640 or 147.1% was primarily related to the decrease in stock-based compensation and gained efficiencies within the Company resulting in reduced operating expenses, partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the six months ended November 30, 2025.
Current wording
Income from operations for the nine months ended February 28, 2026, was $1,529,048 compared to income of $1,115,278 for the nine months ended February 28, 2025. The increase in income from operations of $413,770 or 37.1% was primarily driven by a material order from a leading national membership-based retail chain, partially offset by increased operating expenses and by a forgiveness of accounts payable of approximately $220,000, included in General and administrative on the accompanying consolidated statement of operations, that did not recur in the nine months ended February 28, 2026.
Previous wording
For the six months ended November 30, 2025, provision for income tax expense was $348,173. For the six months ended November 30, 2024, provision for income tax expense was $67,250.
Current wording
For the nine months ended February 28, 2026, provision for income tax expense was $412,479. For the nine months ended February 28, 2025, provision for income tax expense was $120,335.
Previous wording
As a result of the above, we reported a net income of $1,039,177 and $523,901 for the six months ended November 30, 2025 and 2024, respectively.
Current wording
As a result of the above, we reported a net income of $1,242,223 and $1,100,563 for the nine months ended February 28, 2026 and 2025, respectively.
Previous wording
Adjusted EBITDA increased by $643,433 or 54.2% from $1,186,275 in the six months ended November 30, 2024 to $1,829,708 in the six months ended November 30, 2025. Adjusted EBITDA as a percentage of sales, net for the six months ended November 30, 2025 and 2024, were 12.2% and 8.7%, respectively. Adjusted EBITDA increased primarily due to improved operating efficiency partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the current period.
Current wording
Adjusted EBITDA increased by $223,681 or 10.8% from $2,076,821 in the nine months ended February 28, 2025 to $2,300,502 in the nine months ended February 28, 2026. Adjusted EBITDA as a percentage of sales, net for the nine months ended February 28, 2026 and 2025, were 10.3% and 10.1%, respectively. Adjusted EBITDA improved due to a material order from our retail channels, partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the current period.
Previous wording
Basic and diluted earnings per share for the six months ended November 30, 2025 were $0.16 and $0.13, respectively, compared to basic and diluted earnings per share of $0.08 and $0.06, respectively, for the six months ended November 30, 2024.
Current wording
Basic and diluted earnings per share for the nine months ended February 28, 2026 were $0.18 and $0.15, respectively, compared to basic and diluted earnings per share of $0.17 and $0.13, respectively, for the nine months ended February 28, 2025.
Previous wording
Cash Flows for the six months ended November 30, 2025 and 2024
Current wording
Cash Flows for the nine months ended February 28, 2026 and 2025
Previous wording
Net cash provided by operating activities for the six months ended November 30, 2025, was $195,607, compared to $1,904,174 for the six months ended November 30, 2024. The decrease was driven primarily by a significant inventory purchase associated with a material order from a leading national membership-based retailer.
Current wording
Net cash provided by operating activities for the nine months ended February 28, 2026, was $790,330, compared to $1,734,230 for the nine months ended February 28, 2025. The decrease was driven primarily by a significant inventory purchase associated with a material order from our retail channels.
Previous wording
Net cash flows used in investing activities for the six months ended November 30, 2025 and 2024, was $135,341 and $107,623, respectively, due to the purchase of intangibles and property and equipment for our business.
Current wording
Net cash flows used in investing activities for the nine months ended February 28, 2026 and 2025, was $208,850 and $255,778, respectively, due to the purchase of intangibles and property and equipment for our business.
Previous wording
Net cash flows provided by financing activities for the six months ended November 30, 2025 was $145,848 primarily related to net advances made from a related party of $147,772. Net cash provided by financing activities for the six months ended November 30, 2024 was $163,470 primarily related to net advances from a related party of $166,722.
Current wording
Net cash flows provided by financing activities for the nine months ended February 28, 2026 was $167,655 primarily related to net advances made from a related party of $169,425. Net cash provided by financing activities for the nine months ended February 28, 2025 was $11,142.
Previous wording
As of November 30, 2025, we had a secured Economic Injury Disaster Loan outstanding, administered pursuant to the CARES Act in the principal amount of $138,305, with a maturity date of May 18, 2050. The Company continues to pay interest and principal on the loan.
Current wording
As of February 28, 2026, we had a secured Economic Injury Disaster Loan outstanding, administered pursuant to the CARES Act in the principal amount of $138,459, with a maturity date of May 18, 2050. The Company continues to pay interest and principal on the loan.