UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~August 31, 2023~~February 29, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: ~~000-56351~~001-41958

~~Reviv3 Procare Company~~AXIL Brands, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		47-4125218
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

901 Fremont Avenue, Unit 158, Alhambra, CA		91803
(Address of Principal Executive Offices)		(Zip Code)

(888) 638-8883

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class		Trading symbol(s)		Name of each exchange on which registered
~~None~~Common Stock, $0.0001 par value per share		AXIL	~~N/A~~	The NYSE	~~N/A~~ American LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 11, 2023,~~April 9, 2024, there were ~~117,076,949~~5,878,939 shares of the registrant’s common stock, $0.0001 par value, outstanding.

AXIL BRANDS, INC. AND SUBSIDIARY

INDEX

~~REVIV3 PROCARE COMPANY AND SUBSIDIARY~~

~~INDEX~~

-i-

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and in particular Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; and the economy in general or the future of the beauty and hair care industry and the hearing protection and ear bud business, all of which ~~were~~are subject to various risks and uncertainties.

There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements, many of which are outside of our control. They include: the impact of unstable market and general economic conditions on our business, financial condition and stock price, including inflationary cost pressures, interest rate increases, decreased discretionary consumer spending, supply chain disruptions and constraints, labor shortages, ongoing economic disruption, the possibility of an economic recession and other macroeconomic factors, geopolitical events and uncertainty, including the effects of the Ukraine-Russia conflict, the effects of the Israel-Hamas conflict, and other downturns in the business cycle or the economy; our financial performance and liquidity, including our ability to successfully generate sufficient revenue to support our operations; our ability to repay our outstanding ~~loans;~~loans, if any; risks related to our operations and international markets, such as fluctuations in currency exchange rates, different regulatory environments, trade barriers and sanctions, exchange controls, and social and political instability; changes in the regulatory environment in which we operate, including environmental, health and safety regulations, including those related to climate change; our ability to protect and defend our intellectual property; continuity and security of information technology infrastructure and the potential impact of cybersecurity breaches or disruptions to our management information systems; competition; our ability to retain our management and employees and the potential impact of ongoing labor shortages; demands on management resources; availability and cost of the raw materials we use to manufacture our products, including the impacts of inflationary cost pressures and ongoing supply chain disruptions and constraints, which have been, and may continue to be, exacerbated by the Russia-Ukraine conflict and the Israel-Hamas conflict; additional tax expenses or exposures; product liability claims; the potential outcome of any legal or regulatory proceedings; including ongoing litigation, the disposition of which may have an adverse effect upon our business, financial condition, or results of operations; integrating acquisitions and achieving the expected savings and synergies, including our recent acquisition of hearing protection and ear bud businesses; global or regional catastrophic events, including the effects of natural disasters, which may be worsened by the impact of climate change; effectiveness of our marketing strategy, demand for and market acceptance of our products, as well as our ability to successfully anticipate consumer trends; business divestitures; labor relations; the potential impact of environmental, social and governance matters; ~~and~~ implementation of environmental remediation ~~matters.~~matters; our ability to remediate the material weaknesses in our internal control over financial reporting; our ability to maintain stock exchange listing; and the risk that the increase in the stock price following the recent reverse stock split will not be maintained or that the reverse stock split will not otherwise have its intended effect.

When used in this Quarterly Report on Form 10-Q and other reports, statements, and information we have filed with the Securities and Exchange Commission (the “SEC”), in our press releases, presentations to securities analysts or investors, in oral statements made by or with the approval of an executive officer, the words or phrases “believes,” “may,” “can,” “will,” “expect,” “should,” “could,” “would,” “continue,” “anticipate,” “intend,” “likely,” “estimate,” “project,” “plan,” “design,” ~~“potential”,~~“potential,” “focus” or similar expressions and variations thereof are intended to identify such forward-looking statements. However, any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We caution that these statements by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict.

We do not assume the obligation to update any forward-looking statement, except as required by applicable law. You should carefully evaluate such statements in light of factors described in this Quarterly ~~Report.~~Report on Form 10-Q. In this Quarterly Report on Form 10-Q, ~~Reviv3 Procare Company~~AXIL Brands, Inc. (“~~Reviv3 Procare,~~AXIL Brands, Inc.,” “AXIL Brands,” the “Company,” “we,” “us,” and “our”) has identified material factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.

-ii-

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~AUGUST 31, 2023~~FEBRUARY 29, 2024

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Financial Statements:

Consolidated Balance Sheets - As of ~~August 31, 2023~~February 29, 2024 (Unaudited) and May 31, ~~202~~32023	F-1

Consolidated Statements of Operations - For the three and nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023 ~~and 2022~~ (Unaudited)	F-2

Consolidated Statements of Changes in Stockholders’ Equity - For the three and nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023 ~~and 2022~~(Unaudited)	F-3

Consolidated Statements of Cash Flows – For the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023 ~~and 2022~~ (Unaudited)	F-4

Condensed Notes to Unaudited Consolidated Financial Statements	F-5

-1-

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS


	August 31, 2023			May 31, 2023			February 29, 2024			May 31, 2023
	(Unaudited)						(Unaudited)

ASSETS
CURRENT ASSETS:
Cash	$	5,061,723		$	4,832,682		$	4,887,567		$	4,832,682
Accounts receivable, net		455,886			417,016			719,504			417,016
Inventory, net		2,069,968			1,311,864			3,443,293			1,311,864
Due from related party								18,536			—
Prepaid expenses and other current assets		485,609			801,360			656,328			801,360
Deferred tax asset								234,161			—

Total Current Assets		8,073,186			7,362,922			9,959,389			7,362,922

OTHER ASSETS:
Property and equipment, net		199,561			157,463			212,146			157,463
Intangible assets, net		363,299			382,674			324,549			382,674
Right of use asset		86,111			101,845			53,224			101,845
Other assets		12,194			12,195			12,195			12,195
Goodwill		2,152,215			2,152,215			2,152,215			2,152,215

Total Other Assets		2,813,380			2,806,392			2,754,329			2,806,392

TOTAL ASSETS	$	10,886,566		$	10,169,314		$	12,713,718		$	10,169,314

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	1,077,005		$	908,606		$	1,890,844		$	908,606
Customer deposits		92,817			183,688			37,140			183,688
Equipment payable, current		1,375			2,200			—			2,200
Contract liabilities, current		909,883			827,106			880,450			827,106
Notes payable		155,334			172,588
Notes payable, current								3,310			172,588
Due to related party		58,980			158,072			—			158,072
Lease Liability, current		68,558			65,824			54,322			65,824
Income Tax Liability		296,902			230,913			68,019			230,913
Other current liabilities		768,185			305,664			307,794			305,664

Total Current Liabilities		3,429,039			2,854,661			3,241,879			2,854,661

LONG TERM LIABILITIES:
Notes payable, long term								143,840			—
Lease liability, long term		18,650			36,752			—			36,752
Contract liabilities, long term		561,359			605,942			541,108			605,942

Total Long Term Liabilities		580,009			642,694			684,948			642,694

Total Liabilities		4,009,048			3,497,355			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 August 31, 2023 and May 31, 2023		25,000			25,000
Common stock, $0.0001 par value: 450,000,000 shares authorized; 117,076,949 shares issued, and outstanding as of August 31, 2023 and May 31, 2023		11,708			11,708
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		10,153,350			10,102,243			10,274,677			10,113,365
Accumulated deficit		(3,312,540	)		(3,466,992	)		(1,513,374	)		(3,466,992	)

Total Stockholders’ Equity		6,877,518			6,671,959
Total Stockholders' Equity								8,786,891			6,671,959

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,886,566		$	10,169,314
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY							$	12,713,718		$	10,169,314

See accompanying condensed notes to these unaudited consolidated financial statements.

F-1

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the Three Months Ended
August 31,
2023 2022

Sales, net $ 6,106,269 $ 4,237,358

Cost of sales 1,458,703 954,704
24 % 23 %
Gross profit 4,647,566 3,282,654
76 % 77 %
OPERATING EXPENSES:
Marketing and selling expenses 3,206,841 1,977,976
Compensation and related taxes 279,989 280,688
Professional and consulting expenses 426,775 466,450
General and administrative 560,204 358,139

Total Operating Expenses 4,473,809 3,083,253
74 % 73 %
INCOME FROM OPERATIONS 173,757 199,401

OTHER INCOME (EXPENSE):
Gain on debt settlement - 50,500
Other income 9,835 -
Interest income 38,493 1,837
Interest expense and other finance charges (1,644 ) (1,458 )

Other Income (Expense), Net 46,684 50,879

INCOME BEFORE PROVISION FOR INCOME TAXES 220,441 250,280

Provision for income taxes 65,989 74,753

NET INCOME $ 154,452 $ 175,527

NET INCOME PER COMMON SHARE:
Basic $ 0.00 $ 0.00
Diluted $ 0.00 $ 0.00

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 117,076,949 102,402,140
Diluted 372,451,949 314,223,880

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

See accompanying condensed notes to these unaudited consolidated financial statements.
F-2

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
~~FOR THE THREE MONTHS ENDED AUGUST 31, 2023 AND 2022~~(UNAUDITED)
~~(UNAUDITED)~~
~~For the three months ended August 31, 2023~~

For the nine months ended February 29, 2024 For the nine months ended February 29, 2024
Common Stock Total Common Stock Additional Total
Preferred Stock Issued Additional Paid-in Accumulated Stockholders’ Preferred Stock Issued/Issuable Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Equity Shares Amount Shares Amount Capital Deficit Equity
Balance, May 31, 2023 250,000,000 $ 25,000 117,076,949 $ 11,708 $ 10,102,243 $ (3,466,992 ) $ 6,671,959 250,000,000 $ 25,000 5,863,939 $ 586 $ 10,113,365 $ (3,466,992 ) $ 6,671,959

Stock options expense - - - - 51,107 - 51,107 —   —   —   —   153,320 —   153,320

Net income for the three months ended August 31, 2023 - - - - - 154,452 154,452
Restricted stock awards —   —   15,000 2 7,992 —   7,994

Balance, August 31, 2023 250,000,000 $ 25,000 117,076,949 $ 11,708 $ 10,153,350 $ (3,312,540 ) $ 6,877,518
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 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 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 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

~~For the three months ended August 31, 2022~~
Common Stock Total
Preferred Stock Issued Additional Paid-in Accumulated Stockholders’
Shares Amount Shares Amount Capital Deficit Equity
Balance, May 31, 2022 - $ - 41,945,881 $ 4,195 $ 5,472,084 $ (5,291,567 ) $ 184,712

Shares issues for acquisition of business 250,000,000 25,000 73,183,893 7,318 3,975,162 - 4,007,480

Stock options expense - - - - 97,283 - 97,283

Net income for the three months ended August 31, 2022 - - - - - 175,527 175,527

Balance, August 31, 2022 250,000,000 $ 25,000 115,129,774 $ 11,513 $ 9,544,529 $ (5,116,040 ) $ 4,465,002
See accompanying condensed notes to these unaudited consolidated financial statements.
F-3

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

For the Nine Months Ended
For the Three Months Ended August 31, February 29, February 28,
2023 2022 2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 154,452 $ 175,527 $ 1,953,618 $ 1,064,475
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 28,237 19,669 83,634 66,944
Bad debts 52,866 - 143,395 13,782
Stock based compensation 51,107 97,283 161,314 155,067
Gain on debt forgiveness - (50,500 )
Gain on settlement (79,182 ) (50,500 )
Provision (benefit) for deferred income taxes (397,054 ) —
Change in operating assets and liabilities:
Accounts receivable (91,736 ) (93,901 ) (445,883 ) (134,622 )
Inventory (758,104 ) 432,998 (2,131,429 ) 297,213
Prepaid expenses and other current assets 315,751 (204,130 ) 145,032 (296,787 )
Deposits —   (3,810 )
Accounts payable and accrued expenses 168,399 52,247 1,061,420 87,879
Other current liabilities 438,006 296,106 (144,052 ) 860,973
Contract liabilities 38,194 82,334 (11,490 ) 259,362

NET CASH PROVIDED BY OPERATING ACTIVITIES 397,172 807,633 339,323 2,319,976

CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired on business acquisition - 1,066,414 —   1,066,414
Purchase of property and equipment (50,960 ) (6,400 )
Purchases of property and equipment (80,192 ) (65,650 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (50,960 ) 1,060,014
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 (825 ) (825 ) (2,200 ) (2,200 )
Repayment of note payable (17,254 ) - (25,438 ) (22,797 )
Advances (payments) from a related party (99,092 ) 2,732
Advances (repayments) to/from a related party (176,608 ) 63,008

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (117,171 ) 1,907
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (204,246 ) 485,861

NET INCREASE IN CASH 229,041 1,869,554 54,885 3,806,601

CASH - Beginning of period 4,832,682 373,731 4,832,682 373,731

CASH - End of period $ 5,061,723 $ 2,243,285 $ 4,887,567 $ 4,180,332
-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,644 $ 125 $ 4,681 $ 3,173
Income taxes $ - $ - $ —   $ —

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for asset purchase agreement $ - $ 4,007,480 $ —   $ 4,007,480
Right of use assets recognized as lease liability $ —   $ 131,970
Tangible assets (excluding cash) acquired in business combination $ - $ 1,740,729 $ —   $ 1,740,729
Intangible assets acquired in business combination $ - $ 456,945 $ —   $ 456,945
Goodwill acquired in business combination $ - $ 2,152,215 $ —   $ 2,152,215
Liabilities assumed in business combination $ - $ 1,408,823 $ —   $ 1,408,823
See accompanying condensed notes to these unaudited consolidated financial statements.
F-4

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 1 – Organization
As part of the Company’s ongoing rebranding efforts, the Company changed its name from Reviv3 Procare Company ~~(the “Company”~~(“Reviv3”) to AXIL Brands, Inc. effective February 14, 2024. Reviv3 was incorporated in the State of Delaware on May 21, 2015, as a reorganization of Reviv3 Procare, LLC which was organized on July 31, 2013. The Company has moved its corporate headquarters to 901 Fremont Avenue, Unit 158, Alhambra, California 91803. ~~Its phone number is (888) 638-8883.~~ In March 2022, the Company incorporated a subsidiary “Reviv3 Acquisition Corporation” and in June 2022, completed the asset acquisition of the Axil & Associated Brand Corp. ~~business~~ (“~~AXIL”~~Axil & Associated Brands”). business. The Company is now engaged in the manufacturing, marketing, sale and distribution of high-tech hearing and audio innovations that provide cutting edge solutions for consumers, with varied applications across many industries; as well as professional quality hair and skin care products. These ~~products~~product lines are both sold throughout the United States, Canada, Europe and Asia. On February 14, 2024, the Company successfully completed efforts to uplist from the over-the-counter, or OTC, markets to the NYSE American exchange (“NYSE American”).
Note 2 – Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission ~~(“SEC”~~(the “SEC”). In the opinion of the management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows as of ~~August 31,~~February 29, 2024, and February 28, 2023, ~~and 2022,~~ and for the periods then ended, have been made. Those adjustments consist of normal and recurring adjustments. Certain information and note disclosures normally included in our annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended May 31, 2023. The results of operations for the three and nine months ended ~~August 31, 2023~~February 29, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending 2024. The unaudited consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated upon consolidation.
Reverse Stock Split
Effective as of January 16, 2024, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation with the Delaware Secretary of State to implement a reverse stock split (the “Reverse Stock Split”) of the Company’s issued shares of common stock at a ratio of 1-for-20 approved by the Company’s Board of Directors (the “Board”). The Reverse Stock Split does not affect the total number of shares of common stock that the Company is authorized to issue and any fractional shares remaining after the Reverse Stock Split were rounded up to the nearest whole share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise specified.
Reclassifications
Certain amounts presented for the three and nine months ended February 28, 2023, reflect reclassifications made to conform to the presentation in ~~consolidation.~~our current reporting period. These reclassifications had no effect on the previously reported net income. Approximately $12,000 was reclassified from Professional and consulting expenses to Compensation and related taxes for the three months ended February 28, 2023, and approximately $76,000 was reclassified from Professional and consulting expenses to Compensation and related taxes for the nine months ended February 28, 2023. The reclassification had no effect on previously presented total operating expenses.
Liquidity and Capital Resources
We are currently engaged in ~~our~~ product sales and development. Although we earned net income and have cash provided by operations for the ~~three~~nine months ended ~~August 31, 2023,~~February 29, 2024, we had an accumulated deficit of $~~3,312,540~~1,513,374 as of ~~August 31, 2023~~February 29, 2024 and have incurred operating losses and cash used in operations in the past. We currently expect to earn net income and positive cash flows from operations during the current fiscal year ending May 31, 2024. We believe our current cash balances, coupled with anticipated cash flow from operating activities, will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements. We intend to continue to control our cash expenses as a percentage of expected revenue on an annual basis and thus may use our cash balances in the short-term to invest in revenue growth. As a result of the acquisition of ~~AXIL’s~~the Axil & Associated Brands’ business, we have generated and expect we will continue to generate sufficient cash for our operational needs, including any required debt payments, for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements. Management is focused on growing the Company’s existing products, introducing new products, as well as expanding its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus, maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands, including those resulting from the purchase of ~~AXIL’s~~the Axil & Associated Brands’ assets in June 2022, may lead to cash utilization at levels greater than recently experienced. The Company cannot provide any assurance that it will be able to raise additional capital or obtain necessary financing on acceptable terms, or at all. Subject to the foregoing, management believes that the Company has sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements.
F-5

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (continued)
Use of estimates
The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, inventory valuations and classifications, the useful life of property and equipment, the valuation of deferred tax assets, the value of stock-based compensation, contract liability, allowance on sales returns, valuation of lease liabilities and related right of use assets, fair value of securities issued for business combinations, fair value of assets acquired and liabilities assumed in business combinations and the fair value of non-cash Common Stock issuances.
Cash and cash equivalents
The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation. (See Note 14)
Accounts receivable and allowance for doubtful accounts
On June 1, 2023, the Company adopted ASC 326, "Financial Instruments - Credit Losses". In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The amount of the allowance is determined principally on the basis of past collection experience and known financial factors regarding specific customers.
Accounts receivables comprise of receivables from customers and receivables from merchant processors. The Company has a policy of providing an allowance for doubtful accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to bad debt expense and included in the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist primarily of cash prepayments to vendors for inventory and prepayments for trade shows and marketing events which will be utilized within a year, prepayments on credit cards and the right to recover assets (for the cost of goods sold) associated with the right of returns for products sold.
Inventory
The Company values inventory, consisting of finished goods and raw materials, at the lower of cost and net realizable value. Cost is determined using an average cost method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its net realizable value. The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classifies inventory markdowns in the statement of operations as a component of cost of goods sold. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. The Company continuously evaluates the levels of inventory held and any inventory held above the expected level of sales in the next ~~twelve~~12 months, is classified as non-current inventory.
F-6

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Critical Accounting Policies (continued)
Property and Equipment
Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed, and any resulting gains or losses are included in the statement of operations.
Product warranty
The Company provides a one-year, two-year or three-year limited warranty on its hearing enhancement and hearing protection products. The Company records the costs of repairs and replacements, as they are incurred, to the cost of sales.
Revenue recognition
The Company follows Accounting Standards Codification (“ASC”) 606, “Revenue From Contracts With Customers.” This revenue recognition standard (new guidance) has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied.
The Company sells a variety of electronic hearing and enhancement products and hair and skin care products. The Company recognizes revenue for the agreed upon sales price when a purchase order is received from the customer and subsequently the product is shipped to the customer, which satisfies the performance obligation. Consideration paid to the customer to promote and sell the Company’s products is typically recorded as a reduction in revenues.
The five steps for the revenue recognition are as follows:
Identify the contract with a customer. The Company generally considers completion of a sales order (which requires customeracceptance of the Company’s click-through terms and conditions for website sales and authorization of payment through credit card or another form of payment for sales made over the phone) or purchase orders from non-consumer customers as a customer contract provided that collection is considered probable. For payments that are not made upfront by credit card, the Company assesses customer creditworthiness based on credit checks, payment history, and/or other circumstances. For payments involving third party financier payors, the Company validates customer eligibility and reimbursement amounts prior to shipping the product.
Identify the performance obligations in the contract. Product performance obligations include shipment of products and related accessories, and service performance obligations include extended warranty coverage.
However, as the historical redemption rate under our warranty policy has been low, the option is not accounted for as a separate performance obligation. The Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.
F-7

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Critical Accounting Policies (continued)
Determine the transaction price and allocation to performance obligations. The transaction price in the Company’s customer contractsconsists of both fixed and variable consideration. Fixed consideration includes amounts to be contractually billed to the customer while variable consideration includes the 30-days and 60-days right of return that applies to ~~AXIL~~hearing enhancement and ~~Reviv3~~protection products and hair and skincare products, respectively. To estimate product returns, the Company analyzes historical return levels, current economic trends, and changes in customer demand. Based on this information, the Company reserves a percentage of product sale revenue and accounts for the estimated impact as a reduction in the transaction price.
Allocate the transaction price to the performance obligations in the contract. For contracts that contain multiple performance obligations,the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis.
Recognize revenue when or as the Company satisfies a performance obligation. Revenue for products is recognized at a point in time, which is generally upon shipment. Revenue for services (extended warranty) is recognized over time on a ratable basis over the warranty period.
As of ~~August 31, 2023,~~February 29, 2024, and May 31, 2023, contract liabilities amounted to $~~1,471,242~~1,421,558 and $1,433,048, respectively. As of February 29, 2024 and May 31, 2023, ~~Contract~~contract liabilities associated with product invoiced but not received by customers at the balance sheet date was $0 and $0, respectively; contract liabilities associated with unfulfilled performance obligations for warranty services offered for a period of one, two and three years was ~~$1,350,680~~$1,293,627 and $1,320,401, respectively, and contract liabilities associated with unfulfilled performance obligations for customers’ right of return was ~~$120,562~~$127,931 and $112,647, respectively. Our contract liabilities amounts are expected to be recognized over a period of between one year to three years. Approximately ~~$854,943~~$880,450 will be recognized in year ~~1, $458,614~~one, $455,170 will be recognized in year 2,two, and ~~$157,685~~$85,938 will be recognized in year 3.three.
Revenue recognized, during the three months ended ~~August 31, 2023,~~February 29, 2024, that was included in the contract liability balance upon the acquisition of ~~AXIL~~Axil & Associated Brands was $72,955. Revenue recognized, during the nine months ended February 29, 2024, that was included in contract liability balance upon the acquisition of Axil & Associated Brands was $~~97,439~~259,201.
Cost of Sales
The primary components of cost of sales include the cost of the product and shipping ~~fees.~~fees related to product procurement.
Shipping and Handling Costs
The Company accounts for shipping and handling fees in accordance with ASC 606. While amounts charged to customers for shipping products are included in revenues, the related costs of shipping products to customers are classified in marketing and selling expenses as incurred. Shipping costs included in marketing ~~and selling~~ expense were $~~253,452~~313,318 and $~~285,329~~283,237 for the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023, respectively. Shipping costs included in the marketing and ~~2022,~~selling expense were $807,333 and $790,759 for the nine months ended February 29, 2024 and February 28, 2023, respectively.
Sales, Marketing ~~selling~~ and ~~advertising~~Advertising
~~Marketing, selling~~Sales, marketing and advertising costs are expensed as incurred.
Customer Deposits
Customer deposits consisted of prepayments from customers to the Company. The Company will recognize the prepayments as revenue upon delivery of products in compliance with its revenue recognition policy.
F-8

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Significant Accounting Policies (continued)
Fair value measurements and fair value of financial instruments
The Company adopted ASC 820, ~~“Fair~~“Fair Value Measurements and ~~Disclosures” (“ASC 820”)~~Disclosures,” for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1:   Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:   Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:   Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The estimated fair value of certain financial instruments, including prepaid expenses, deposits, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
Business Combinations
For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets acquired and liabilities assumed of the acquired business, at their fair values.
Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or (2) if the contingent consideration is classified as a liability, the changes in fair value and accretion costs are recognized in earnings. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates.
Goodwill
Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value.
F-9

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Critical Accounting Policies (continued)
The Company performs its annual goodwill impairment assessment on May 31st of each year or as impairment indicators dictate.
When evaluating the potential impairment of goodwill, management first assesses a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the quantitative impairment testing methodology primarily using the income approach (discounted cash flow method).
Under the quantitative method we compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, then the amount of impairment to be recognized is the amount by which the carrying amount exceeds the fair value.
When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results.
Income Taxes
The Company accounts for income taxes pursuant to the provision of ASC 740-10, ~~“Accounting~~“Accounting for Income ~~Taxes” (“ASC 740-10”)~~Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.
The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying consolidated balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.
The Company has adopted ASC 740-10-25, ~~“Definition~~“Definition of ~~Settlement”~~Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the ~~IRS~~Internal Revenue Service (“IRS”) and state taxing authorities, generally for three years after they are filed.
F-10

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Critical Accounting Policies (continued)
Impairment of long-lived assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment loss during the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 and ~~2022.~~February 28, 2023.
Stock-based compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, ~~“Compensation~~“Compensation — Stock ~~Compensation” (“ASC 718”)~~Compensation,” which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
For non-employee stock option based awards, the Company follows ~~ASU~~Accounting Standards Update (“ASU”) 2018-7, which substantially aligns share based compensation for employees and non-employees.
Net income ~~(loss)~~ per share of Common Stock
Basic net income ~~(loss)~~ per share is computed by dividing the net income ~~(loss)~~ by the weighted average number of common shares during the period. Diluted net income ~~(loss)~~ per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. ~~At August 31,~~For both the three months ended and nine months ended February 29, 2024 and February 28, 2023, ~~the Company had~~ ~~5,375,000~~certain stock options and ~~250,000,000~~restricted stock awards were excluded from the computation of diluted common shares ~~of preferred stock~~ outstanding ~~all of which were potentially dilutive securities. At August 31, 2022,~~as they would have an anti-dilutive impact on the ~~Company had~~ ~~5,300,000~~ ~~options and~~ ~~250,000,000~~ ~~shares of preferred stock outstanding, all of which were potentially dilutive securities.~~ Company’s net income.
The following table sets forth the computations of basic and diluted net income per common share:
Schedule of net loss per share
For the Three Months Ended For the Three Months Ended For the Nine Months Ended
August 31, February 29, February 28, February 29, February 28,
2023 2022 2024 2023 2024 2023

Net income $ 154,452 $ 175,527 $ 781,091 $ 162,048 $ 1,953,618 $ 1,064,475

Weighted average basic shares 117,076,949 102,402,140 5,863,939 5,849,501 5,863,939 5,574,312
Dilutive securities:
Convertible preferred stock 250,000,000 206,521,739 12,500,000 12,500,000 12,500,000 11,767,399
Stock options 5,375,000 5,300,000 212,975 280,000 205,201 156,026
Weighted average dilutive shares 255,375,000 211,821,739 18,576,914 18,629,501 18,569,140 17,497,737

Earnings per share:
Basic $ 0.00 $ 0.00 $ 0.13 $ 0.03 $ 0.33 $ 0.19
Diluted $ 0.00 $ 0.00 $ 0.04 $ 0.01 $ 0.11 $ 0.06
F-11

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 2 – Basis of Presentation and Summary of Critical Accounting Policies (continued)
Lease Accounting
In February 2016, the FASB issued ASU ~~No.~~ 2016-02, “Leases~~(“ASU 2016-02”)~~,” which requires lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases under the prior guidance (ASC ~~Topic~~ 840). Under the new guidance, codified as ASC ~~Topic~~ 842, the lease liability must be measured initially based on the present value of future lease payments, subject to certain conditions. The right-of-use asset must be measured initially based on the amount of the liability, plus certain initial direct costs. The new guidance further requires that leases be classified at inception as either (a) operating leases or (b) finance leases. For operating leases, periodic expense is generally flat (straight-line) throughout the life of the lease. For finance leases, periodic expense declines over the life of the lease. The new standard, as amended, provides an option for entities to use the cumulative-effect transition method. As permitted, the Company adopted ASC ~~Topic~~ 842 effective June 1, 2019. The adoption of ASC ~~Topic~~ 842 did not have a material impact on the Company’s consolidated financial statements.
The Company’s renewed lease for its corporate headquarters commencing December 1, 2022, under lease agreements classified as an operating lease. Please see Note 11 – ~~‘Commitments~~“Commitments and ~~Contingencies’~~Contingencies” under “Leases” below for more information about the Company’s leases.
Segment Reporting
The Company follows ASC ~~Topic~~ 280, “Segment Reporting.” The Company’s management reviews the Company’s consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company’s reportable segments are: (a) the sale of hearing protection and hearing enhancement products, and (b) the sale of hair care and skin care products. See Note 15 – ~~“BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION”~~“Business Segment and Geographic Area Information” for more information about the Company’s reportable segments.
Recently Issued Accounting Pronouncements
In August 2020, the FASB issued ASU ~~No.~~ 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity ~~(ASU 2020-06)~~,” which simplifies the accounting for certain convertible instruments. Among other things, under ASU 2020-06, the embedded conversion features no longer must be separated from the host contract for convertible instruments with conversion features not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. ASU 2020-06 also eliminates the use of the treasury stock method when calculating the impact of convertible instruments on diluted Earnings per Share. For the Company, the provisions of ASU 2020-06 are effective for its fiscal year beginning on June 1, 2024. Early adoption is permitted, subject to certain limitations. The Company is evaluating the potential impact of adoption on its consolidated financial statements.
Other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
F-12

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 3 – Accounts Receivable, net
Accounts receivable, consisted of the following:
Schedule of accounts receivable
August 31,
2023 May 31,
2023 February 29,
2024 May 31,
2023
Customers Receivable $ 529,656 $ 345,264 $ 913,024 $ 345,264
Merchant Processor Receivable 76,477 167,232 40,786 167,232
Less: Allowance for Doubtful Debts (150,247 ) (95,480 ) (234,306 ) (95,480 )
Accounts receivable, net $ 455,886 $ 417,016 $ 719,504 $ 417,016

The Company recorded bad debt expense of $~~52,866~~79,068 and $0119,757 during the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023, respectively. The Company recorded bad debt expense of $143,395and ~~2022,~~$13,782 during the nine months ended February 29, 2024 and February 28, 2023, respectively.
Note 4 – Inventory, net
Inventory consisted of the following:
Schedule of Inventory
Schedule of inventory
August 31,
2023 May 31,
2023 February 29,
2024 May 31,
2023
Finished Goods $ 1,878,669 $ 1,198,218 $ 3,257,573 $ 1,198,218
Raw Materials 191,299 113,646 185,720 113,646
Inventory, net $ 2,069,968 $ 1,311,864 $ 3,443,293 $ 1,311,864

At ~~August 31, 2023~~February 29, 2024 and May 31, 2023, inventory held at third party locations amounted to $~~114,630~~77,803 and $0, respectively. At ~~August 31, 2023~~February 29, 2024 and May 31, 2023, inventory in-transit amounted to $~~345,628~~369,243 and $135,482, respectively.
During the ~~three~~nine months ended ~~August 31, 2023,~~February 29, 2024, the Company did not record any allowance on slow moving inventory that would be included in cost of sales. As of ~~August 31, 2023,~~February 29, 2024, there was no slow moving inventory.
Note 5 – Property and Equipment
Property and equipment, stated at cost, consisted of the following:
Schedule of Property and Equipment
Schedule of property and equipment
Estimated Life August 31,
2023 May 31,
2023 Estimated Life February 29, 2024 May 31,
2023
Furniture and Fixtures 5 years $ 5,759 $ 14,598 5 years $ 25,644 $ 14,598
Computer Equipment 3 years 30,968 33,146 3 years 30,968 33,146
Plant Equipment 5-10 years 216,738 165,778 5-10 years 216,738 165,778
Automobile 5 years 15,000 15,000 5 years 15,000 15,000
Tractor Trailer 15 years 9,347 -
Less: Accumulated Depreciation (68,904 ) (71,059 ) (85,551 ) (71,059 )
Total Property and Equipment, net $ 199,561 $ 157,463 $ 212,146 $ 157,463

Depreciation expense amounted to $~~8,862~~8,237 and $~~3,523~~4,554 for the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023, respectively. Depreciation expense amounted to $25,508and ~~2022,~~$12,046 for the nine months ended February 29, 2024 and February 28, 2023, respectively.
F-13

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024

Note 6 – Intangible Assets
The Company acquired intangible assets through the Business Combination. (See Note 13). These intangible assets consisted of the following:
Schedule of intangible assets
Estimated Life August 31,
2023 May 31,
2023 Estimated Life February 29, 2024 May 31,
2023
Licensing rights 3 years $ 11,945 $ 11,945 3 years $ 11,945 $ 11,945
Customer Relationships 3 years 70,000 70,000 3 years 70,000 70,000
Trade Names 10 years 275,000 275,000 10 years 275,000 275,000
Website 5 years 100,000 100,000 5 years 100,000 100,000
Less: Accumulated Amortization (93,646 ) (74,271 ) (132,396 ) (74,271 )
Total Intangible Assets, net $ 363,299 $ 382,674 $ 324,549 $ 382,674

Goodwill arising through the business combination was $2,152,215 at ~~August 31, 2023~~February 29, 2024 (see Note 13).
Amortization expense amounted to $19,375and $~~16,146~~19,376 for the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023, respectively. Amortization expense amounted to $58,126and ~~2022,~~$54,898 for the nine months ended February 29, 2024 and February 28, 2023, respectively.
Note 7 – Other Current Liabilities
Other current liabilities comprised of the following:
Schedule of other current liabilities
August 31,
2023 May 31,
2023 February 29, 2024 May 31,
2023
Credit Cards $ 12,308 $ 833 $ 17,470 $ 833
Accrued Interest 10,904 10,343 — 10,343
Royalty Payment Accrual 34,062 8,792 10,551 8,792
Sales Tax Payable 227,894 240,559 277,992 240,559
Other Accrued Expenses 456,097 17,464 1,781 17,464
Affiliate Accrual 26,920 27,673 — 27,673
Total Other Current Liabilities $ 768,185 $ 305,664 $ 307,794 $ 305,664

F-14

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 8 – Equipment Payable
During the fiscal year ended May 31, 2019, the Company purchased a forklift under an installment purchase plan. The loan amount is $16,500 payable in 60 monthly installment payments of $317 comprising of principal payment of $275 and interest payment of $42. At ~~August 31, 2023~~February 29, 2024 and May 31, 2023, the balance outstanding on the loan was ~~$1,375~~$0 and ~~$2,200, respectively, of which the $1,375 balance is payable within the next year.~~$2,200, respectively. The Company recorded an interest expense of ~~$125~~$334 and ~~$125,~~$334, associated with the equipment financing during the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023, ~~and 2022,~~ on the loan in the accompanying unaudited consolidated financial statements.
~~The amounts of loan payments due within the next fiscal year ending May 31, are as follows:~~
Schedule of loan payment due
Total
2024 $ 1,375
Equipment Payable, Net $ 1,375
Note 9 – Notes Payable
During the year ended May 31, 2020, a commercial bank granted to the Company a loan (the “Loan”) in the amount of $150,000, which is administered under the authority and regulations of the U.S. Small Business Administration pursuant to the Economic Injury Disaster Loan Program (the “EIDL”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Loan, which is evidenced by a note dated May 18, 2020, bears interest at an annual rate of 3.75% and is payable in installments of principal and interest of $731 per month, beginning May 18, 2021 until May 13, 2050. The Company has to maintain a hazard insurance policy including fire, lightning, and extended coverage on all items used to secure this loan to at least 80% of the insurable value. Proceeds from loans granted under the CARES Act are intended to be used for payroll, costs to continue employee group health care benefits, rent, utilities, and certain other qualified costs (collectively, “qualifying expenses”). The Company used the loan proceeds for qualifying expenses. During the year ended May 31, 2022, the Company received additional $10,000 of borrowings under the program. The Company received a loan forgiveness for $10,000 during the year ended May 31, 2022. The Company recorded interest receivable of $437 and accrued interest of $~~10,904~~ ~~and $~~10,343, as of ~~August 31, 2023~~February 29, 2024 and May 31, 2023, respectively.
Schedule of notes payable
Notes Payable as of February 29, 2024 May 31,
2023
Insurance Financing $ — $ 21,335
Financing Charges — 1,253
Economic Injury Disaster Loan Program (EIDL) 147,150 150,000
Total 147,150 172,588
Less: Current portion (3,310 ) (172,588 )
Non-current portion $ 143,840 $ —
~~During the three months ended August 31, 2023 the Company continued to pay its insurance financing loan, which had a total principal of $53,337~~ ~~for the general and excess liability insurance policies. The loan has a finance charge of $3,164~~ and is payable in 10 monthly installments of $5,650 each beginning November 1, 2022. Through the three months ended August 31, 2023, nine installments have been paid and the outstanding balance of the loan amounted to $~~5,334~~.
Schedule of notes payable
Notes Payable as of
August 31,
2023 May 31,
2023
Insurance Financing $ 5,334 $ 21,335
Financing Charges - 1,253
Economic Injury Disaster Loan Program (EIDL) 150,000 150,000
Total 155,334 172,588
Less: Current portion (155,334 ) (172,588 )
Non-current portion $ - $ -
F-15

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 10 – Stockholders’ Equity
Shares Authorized
As of ~~August 31, 2023,~~February 29, 2024, the authorized capital of the Company consists of 450,000,000 shares of common stock, par value $0.0001 per share and 300,000,000 shares of preferred stock, par value $0.0001 per share. Any fractional shares remaining after the Reverse Stock Split were rounded up to the nearest whole share.
Preferred Stock
The preferred stock may be issued from time to time in one or more series. The Board ~~of Directors of the Company (the “Board”)~~ is expressly authorized to provide for the issuance of all or any of the shares of the ~~Preferred Stock~~preferred stock in one or more series, and to fix the number of shares and to determine or alter, for each such series, such voting powers, full or limited, or no voting powers and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed until the resolution adopted by the Board providing the issuance of such shares. The Board is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issue of shares of that series. In case the number of shares of any such series shall be so decreased, the decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.
During the fiscal year ended May 31, 2023, the Company issued 250,000,000 shares of non-voting Series A Preferred Stock, which, following the reverse stock split of the Company’s common stock, are convertible into shares of ~~Company Common Stock~~the Company’s common stock on a ~~one-to-one~~one-to-twenty ratio, pursuant to the Asset Purchase Agreement (See Note 13 and ~~Common Stock~~“Common Stock” section below). These 250,000,000 shares of non-voting Series A Preferred Stock were valued at the fair market value of $3,100,000 at issuance.
The holders of shares of Series A Preferred Stock ~~shall~~ have no rights to dividends with respect to such shares. No dividends or other distributions shall be declared or paid on the ~~Common Stock~~common stock unless and until dividends at the same rate shall have been paid or declared and set apart upon the Series A Preferred Stock, based upon the number of shares of ~~Common Stock~~common stock into which the Series A Preferred Stock may then be converted. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred Stock are entitled to receive out of the assets of the Company the sum of $0.0001 per share before any payment or distribution shall be made on our shares of ~~Common Stock.~~common stock. The Series A Preferred Stock shall not be subject to redemption at the option, election or request of the Company or any holder or holders of the Series A Preferred Stock. Each share of Series A Preferred Stock is convertible at the option of the holder thereof, at any time after the second anniversary of the date of the first issuance of the shares of Series A Preferred Stock into ~~one~~twenty fully paid and nonassessable ~~share~~shares of ~~Common Stock~~common stock provided, however, that the holder may not convert that number of shares of Series A Preferred Stock which would cause the holder to become the beneficial owner of more than 5% of the Company’s ~~Common Stock~~common stock as determined in accordance with Sections 13(d) and (g) of the Exchange Act and the applicable rules and regulations thereunder.
The conversion provisions of the Company’s Series A Preferred Stock was proportionately adjusted in connection with the Reverse Stock Split but did not adjust the number of shares issued and outstanding. Please see Note 17 – Subsequent Events included herein for additional information about the Series A Preferred Stock.
As of ~~August 31, 2023~~February 29, 2024 and May 31, 2023, 250,000,000 shares of ~~Preferred Stock~~preferred stock were issued and outstanding.
F-16

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 10 – Stockholders’ Equity (continued)
Common Stock
As of ~~August 31, 2023,~~February 29, 2024, ~~117,076,949~~5,878,939 shares of common stock were issued and outstanding.
NoThe Reverse Stock Split as more fully discussed in Note 1, did not change the par value of the common stock, modify any voting rights or other terms of the common stock, or change the number of authorized shares of ~~Common~~the Company. Any fractional shares remaining after the Reverse Stock Split were rounded up to the nearest whole share.
15,000 restricted stock awards were issued during the ~~three~~nine month period ended ~~August 31, 2023.~~February 29, 2024 (See below).
Stock Options
~~The~~On February 14, 2024, the Board ~~approved~~amended the Company’s original 2022 Equity Incentive Plan (the “Plan”), which was originally approved on March 21, 2022. The effective date of the amended Plan is October 31, 2023. Under the Plan, equity-based awards may be made to employees, officers, directors, non-employee directors and consultants of the Company and its Affiliates (as defined in the Plan) in the form of (i) Incentive Stock Options (to eligible employees only); (ii) Nonqualified Stock Options; (iii) Restricted Stock; (iv) Stock Awards; (v) Performance Shares; or (vi) any combination of the foregoing. The Plan will terminate upon the close of business on the day next preceding ~~March 21, 2032,~~October 31, 2033, unless terminated earlier in accordance with the terms of the Plan. The Board serves as the Plan administrator and may amend or terminate the Plan without stockholder approval, subject to certain exceptions.
The total number of shares initially authorized for issuance under the Plan was ~~10.0 million~~500,000 shares. The Plan was amended and restated to provide the sum of 1,250,000 shares of common stock authorized for issuance under the Plan. The Plan provides for an annual increase on April 1 of each calendar year, beginning in 2022 and ending in 2031, subject to Board approval prior to such date. Such potential increase may be equal to the lesser of (i) 4% of the total number of shares of the Company’s common stock outstanding on May 31 of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Board. The number of shares authorized for issuance under the Plan will not change unless the Board affirmatively approves an increase in the number of shares authorized for issuance prior to April 1 of the applicable year. Shares surrendered or withheld to pay the exercise price of a stock option or to satisfy tax withholding requirements will not be added back to the number of shares available under the Plan. To the extent that any shares of common stock awarded or subject to issuance or purchase pursuant to awards under the Plan are not delivered or purchased, or are reacquired by the Company, for any reason, including a forfeiture of restricted stock or failure to earn performance shares, or the termination, expiration or cancellation of a stock option, or any other termination of an award without payment being made in the form of shares of common stock will be added to the number of shares available for awards under the Plan. The number of shares available for issuance under the Plan will be adjusted for any increase or decrease in the number of outstanding shares of common stock resulting from payment of a stock dividend on common stock, a stock split or subdivision or combination of shares of common stock, or a reorganization or reclassification of common stock, or any other change in the structure of shares of common stock, as determined by the Board. Shares available for awards under the Plan will consist of authorized and unissued shares.
Two types of options may be granted under the Plan: (1) Incentive Stock Options, which may only be issued to eligible employees of the Company and are required to have exercise price of the option not less than the fair market value of the common stock on the grant date, or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110% of the fair market value of the common stock on the grant date; and (2) Non-qualified Stock Options, which may be issued to participants under the Plan and which may have an exercise price less than the fair market value of the common stock on the grant date, but not less than par value of the stock.
The Board may grant or sell restricted stock to participants (i.e., shares that are subject to a subject to restrictions or limitations as to the participant’s ability to sell, transfer, pledge or assign such shares) under the Plan. Except for these restrictions and any others imposed by the Board, upon the grant of restricted stock, the recipient generally will have rights of a stockholder with respect to the restricted stock. During the applicable restriction period, the recipient may not sell, exchange, transfer, pledge or otherwise dispose of the restricted stock. The Board may also grant awards of common stock to participants under the Plan, as well as awards of performance shares, which are awards for which the payout is subject to achievement of such performance objectives established by the Board. Performance shares may be settled in cash.
F-17

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 10 – Stockholders’ Equity (continued)
Each equity-based award granted under the Plan will be evidenced by an award agreement that specifies the terms of the award and such additional limitations, terms and conditions as the Board may determine, consistent with the provisions of the Plan.
Upon the occurrence of a change in control, unless otherwise provided in an award agreement: (i) all outstanding stock options will become immediately exercisable in full; (ii) all outstanding performance shares will vest in full as if the applicable performance conditions were achieved in full, subject to certain adjustments, and will be paid out as soon as practicable; and (iii) all restricted stock will immediately vest in full. The Plan defines a change in control as (i) the adoption of a plan of merger or consolidation of the Company with any other corporation or association as a result of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; (ii) the approval by the Board of an agreement providing for the sale or transfer (other than as security for obligations of the Company) of substantially all the assets of the Company; or (iii) in the absence of prior Board approval, the acquisition of more than 20% of the Company’s voting capital stock by any person within the meaning of Rule 13d-3 under the Exchange Act (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company).
Subject to the Plan’s terms, the Board has full power and authority to determine whether, to what extent and under what circumstances any outstanding award will be terminated, canceled, forfeited or suspended. Awards to that are subject to any restriction or have not been earned or exercised in full by the recipient will be terminated and canceled if such recipient is terminated for cause, as determined by the Board in its sole discretion.
The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term and expected dividend yield rate over the expected option term. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC ~~Topic~~ 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award.
The Company utilizes the simplified method to estimate the expected life for stock options granted to employees. The simplified method was used as the Company does not have sufficient historical data regarding stock option exercises. The expected volatility is based on historical volatility. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected life of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.
Pursuant to the Plan, on May 10, 2022, the Company issued to two Company officers non-statutory stock options to purchase, in the aggregate, up to ~~5,300,000~~265,000 shares of its ~~Common Stock,~~common stock, at an exercise price of $~~0.09~~1.80 per share valued at $477,000 and expiring on April 20, 2032. The options vest over time with 25% of the options vesting on September 1, 2022 and thereafter vesting 1/24^th24th on the 1^st1st of every month. ~~2,890,625~~As of February 29, 2024, 194,219 of the options were ~~vested as of August 31, 2023.~~vested.
The Company computed the aggregate grant date fair value of $477,000using the Black-Scholes option pricing model, which is being recorded as stock-based compensation expense over the vesting period. During the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023, ~~and 2022,~~ the Company recorded stock-based compensation expense of $~~51,107~~ 51,105and $~~97,283~~30,922, respectively, for these options, in the accompanying unaudited consolidated financial statements. During the nine months ended February 29, 2024 and February 28, 2023, the Company recorded a stock-based compensation expense of $153,320 and $155,067, respectively, for these options, in the accompanying unaudited financial statements.
F-18

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 10 – Stockholders’ Equity (continued)
Pursuant to the Plan, on November 1, 2022, the Company issued non-statutory stock options, to a former executive officer of the Company, to purchase, in the aggregate, up to ~~300,000~~15,000 shares of its ~~Common Stock,~~common stock, at an exercise price of $~~0.20~~4.00 per share valued at approximately $60,000 and expiring on October 31, 2032. ~~75,000~~3,750 shares vested as of January 29, 2023, and the remaining 1~~225,000~~1,250 were forfeited in April 2023 when the executive officer left the Company. The fair value of the ~~75,000~~3,750 vested options using the Black-Scholes option pricing model isof $15,000.
The following table summarizes the activity relating to the Company’s stock options held by executive officers:
Schedule of summarizes relating to the company’s stock
Number of Options Weighted Average Exercise Price Weighted Average Remaining Term

Outstanding at May 31, 2022 265,000 $ 1.80 10.0
Granted 15,000 $ 1.80 9.68
Less: Forfeited (11,250 ) $ 4.00 9.68
Outstanding at May 31, 2023 268,750 $ 1.80 8.92

Granted — — —
Less: Forfeited — — —
Outstanding at February 29, 2024 268,750 $ 1.80 8.17
Less: Unvested at February 29, 2024 (74,531 ) $ 1.80 8.17
Vested at February 29, 2024 194,219 $ 1.80 8.17
Restricted Stock Awards
Schedule of summarizes relating to the company’s stock
Number of Options Weighted Average Exercise Price Weighted Average Remaining Term

Outstanding as May 31, 2022 5,300,000 $ 0.09 10.0
Granted 300,000 $ 0.20 9.68
Less: Forfeited (225,000 ) $ 0.20 9.68
Outstanding as May 31, 2023 (5,375,000 ) $ 0.09 8.92
Granted - - -
Less: Forfeited - - -
Less: Unvested at August 31, 2023 (2,484,375 ) $ 0.09 8.67
Vested at August 31, 2023 2,890,625 $ 0.09 8.67
On February 14, 2024, the Board appointed new directors to the Board who will participate in the Company’s non-employee director compensation arrangements. Under the terms of those arrangements and pursuant to the Plan, on February 14, 2024, the Company granted each of its three Board members 5,000 restricted stock awards for an aggregate of 15,000 shares of the Company’s common stock that will vest on the one year anniversary of the grant, subject to the respective director’s continued service as a member of the Board, with a total grant date fair value of $195,000. During the nine months ended February 29, 2024 and February 28, 2023, the Company recorded a stock-based compensation expense related to the restricted stock awards of $7,994 and $0, respectively.
Note 11 – Commitments and Contingencies
Leases
As discussed in Note 2 above, the Company adopted ASU ~~No.~~ 2016-02, “Leases~~Leases~~” on June 1, 2019, which require lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases. In November 2022, the Company entered into an extension of its lease for a ~~two year~~two-year term beginning December 1, 2022. The rent iswas $6,098 per month for the first year and then increased to $6,342 per month. On September 22, 2023, the Company entered into a lease in Draper, Utah for a one-year term beginning October 1, 2023. The rent is $4,680 per month for the first year and will increase by ~~a certain amount~~two percent the following year.
The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, or if the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.
F-19
AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2024
Note 11 – Commitments and Contingencies (continued)
The Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.
~~F-19~~

~~REVIV3 PROCARE COMPANY AND SUBSIDIARY~~
~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~
~~AUGUST 31, 2023~~
~~Note 11 – Commitments and Contingencies (continued)~~
Lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Variable payments change due to facts or circumstances occurring after the commencement date, other than the passage of time, and do not result in a remeasurement of lease liabilities. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.
The Company computed an initial lease liability of $131,970for the new lease agreement and an initial ROU asset in the same amount which was recorded on the books at the commencement of the lease on December 1, 2022. During the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023, ~~and 2022,~~ the Company recorded a lease expense in the amount of $~~18,659~~55,976 and $~~23,559~~65,776, respectively. As of ~~August 31, 2023,~~February 29, 2024, the lease liability balance was $~~87,208~~54,322 and the right of use asset balance was $~~86,111~~53,224. A lease term of three years and a discount rate of 12% was used.
Supplemental balance sheet information related to leases was as follows:
Schedule of supplemental balance sheet information
August 31,
2023 May 31,
2023 February 29, 2024 May 31,
2023
Assets
Right of use assets $ 131,970 $ 131,970 $ 131,970 $ 131,970
Accumulated reduction (45,859 ) (30,125 ) (78,746 ) (30,125 )
Operating lease assets, net $ 86,111 $ 101,845 $ 53,224 $ 101,845

Liabilities
Lease liability $ 131,970 $ 131,970 $ 131,970 $ 131,970
Accumulated reduction (44,762 ) (29,394 ) (77,648 ) (29,394 )
Total lease liability, net 87,208 102,576 54,322 102,576
Current portion (68,558 ) (65,824 ) (54,322 ) (65,824 )
Non-current portion $ 18,650 $ 36,752 $ — $ 36,752

Maturities of operating lease liabilities were as follows as of ~~August 31, 2023:~~February 29, 2024:
Schedule of maturities of operating lease liabilities
Operating Lease
Operating Lease (fiscal year-end)
2024 $ 50,456 $ 19,025
2025 36,752 38,049
Total $ 87,208 $ 57,074
Less: Imputed interest $ - (2,752 )
Present value of lease liabilities $ 87,208 $ 54,322
Contingencies
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. While the ultimate resolution is unknown, we do not expect that these lawsuits will individually, or in the aggregate, have a material adverse effect to our results of operations, financial condition, or cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance that any expense, liability, or damages that may ultimately result from the resolution of these matters will be covered by our insurance or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our business, operating results, financial condition, or cash flows. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our financial statements. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. We reevaluate and update accruals as matters progress over time. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance. In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, our ultimate liability in connection with these matters is not expected to have a material adverse effect on our results of operations, financial position or cash flows, and the amounts accrued for any individual matter are not material. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.
On November 23, 2020, the Company was served a copy of a complaint filed by Jacksonfill, LLC in the Fourth Circuit Court for Duval County, Florida. The complaint alleged breach of ~~Agreement~~agreement for non-payments for certain products against the Company. On September 2, 2023, Jacksonfill, LLC and the Company settled the dispute in the Circuit Court of the Fourth Judicial Circuit in Duval County, Florida per a binding settlement agreement. There is no admission of liability by the Company and on September 27, 2023 the Company ~~has agreed to pay~~paid attorneys on behalf of Jacksonfill, LLC ~~$125,000~~the settlement in ~~connection with the settlement. Currently, the Company has recorded a liability of $204,182 to provide for the reserve of~~ the amount of $125,000. The reserve that was provided in ~~question, which is~~the financial statements in excess of ~~what~~ the final settlement ~~agreement provides. The adjustment will be made~~payment was recorded as a gain on settlement and is included in fiscal year 2024 other income in the ~~subsequent reporting period.~~amount of $79,182.
F-20

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 12 – Related Party Transactions
During the nine months ended February 29, 2024, the Company paid bonuses that totaled $42,000 to Jeff Brown, Chief Operating Officer. The Company’s Chairman and Chief Executive Officer (“CEO”), Jeff Toghraie, is the managing director of Intrepid Global Advisors (“Intrepid”). Intrepid has, from time to time, provided advances to the Company for working capital ~~purposes.~~purposes and is paid consulting fees throughout the year. Intrepid was paid $93,811 in consulting fees for the nine months ended February 29, 2024. At ~~August 31, 2023~~February 29, 2024, the Company had net amounts receivable from Intrepid of $18,536 due to timing of transactions posting and, at May 31, 2023, the Company had amounts payable to Intrepid of $~~58,980~~ ~~and $~~124,378~~, respectively.~~. These receivables and advances were short-term in nature and non-interest bearing. Additionally, pursuant to a voting agreement, effective June 16, 2022 as amended effective November 7, 2022, with ~~AXIL~~Axil & Associated Brands and Intrepid, ~~Global Advisors,~~ we are subject to certain limitations on our ability to sell our capital stock until June 2024.
During the nine months ended February 29, 2024 and February 28, 2023, the CEO has not received cash compensation nor was any accrued as the CEO does not have an employment agreement.
During the nine months and three months ended ~~August 31, 2023,~~February 29, 2024, the Company paid $173,500 and $58,000, respectively, as a consulting fee for product development to Weston T. Harris, a ~~major~~ stockholder of ~~AXIL,~~Axil & Associated Brands. During the nine months and three months ended February 29, 2024, the Company also paid $~~35,805~~106,442 and $37,312 respectively, to ~~his~~the sons of Weston T. Harris as compensation for services relating to packaging design and affiliate ~~marketing during the same period.~~ marketing.
On June 16, 2022, the Company and its wholly owned subsidiary Reviv3 Acquisition Corporation completed the acquisition of both (i) the hearing protection business of ~~AXIL,~~Axil & Associated Brands, consisting of ear plugs and ear muffs, and (ii) ~~AXIL’s~~Axil & Associated Brands’ ear bud business pursuant to the Asset Purchase Agreement, dated May 1, 2022 asand amended on June 15, 2022 and September 8, 2022 (the “Axil Asset Purchase Agreement”), by and among the Company, Reviv3 Acquisition Corporation, ~~AXIL~~Axil & Associated Brands and certain stockholders of ~~AXIL. One of the stockholders of AXIL is Intrepid Global Advisors, Inc.~~Axil & Associated Brands. As of ~~August 31, 2023,~~February 29, 2024, Intrepid ~~Global Advisors, Inc.~~ held ~~no outstanding common stock of AXIL and 19.50%~~21.3% of the outstanding common stock of the ~~Company.~~Company and no shares of Axil & Associated Brands.
Note 13 – Business Combination
On June 16, 2022, the Company completed the acquisition of certain assets of ~~AXIL, a Delaware corporation,~~Axil & Associated Brands, pursuant to the Axil Asset Purchase Agreement, ~~dated May 1, 2022 and amended on June 15, 2022 and September 8, 2022. by and among the Company, its subsidiary, AXIL, and certain of AXIL’s stockholders,~~ providing for the acquisition of ~~AXIL’s~~Axil & Associated Brands’ hearing protection business and ear bud business. The business constituted substantially all of the business operations of ~~AXIL~~Axil & Associated Brands but did not include ~~AXIL’s~~Axil & Associated Brands’ hearing aid line of business.
~~One of the stockholders of AXIL is Intrepid.~~ As of June 16, 2022, Intrepid held 4.68% of the outstanding common stock of ~~AXIL~~Axil & Associated Brands and 22.33% of the outstanding ~~Common Stock~~common stock of the Company. As of ~~August 31, 2023,~~February 29, 2024, Intrepid held no outstanding common shares of AXIL, & Associated Brands, as they were distributed with the Axil Asset Purchase Agreement. ~~Jeff~~Mr. Toghraie, Chairman and ~~Chief Executive Officer~~CEO of the Company is athe managing director of Intrepid.
As consideration for the ~~Asset Purchase, AXIL~~asset purchase, Axil & Associated Brands received a total of ~~323,183,893~~ 253,659,195 shares comprised of (a) ~~73,183,893~~ 3,659,195shares of the Company’s ~~Common Stock~~common stock and (b) 250,000,000shares of non-voting Series A Preferred Stock, which are convertible into shares of ~~Company Common Stock~~the Company’s common stock on a ~~one-to-one~~1-to-20 ratio. The Series A Preferred Shares may not be converted or transferred for a period of two years following the closing of the acquisition. Thereafter, no holder of Series A Preferred Shares may convert such shares into a number of shares of Company ~~Common Stock~~common stock that would cause the holder to beneficially own more than 5% of the Company’s ~~Common Stock,~~common stock, as determined in accordance with Sections 13(d) and (g) of the Exchange Act. The purchase price was computed to be $4,007,480based on a fair value of $~~0.0124~~ 0.0158per share on the date of acquisition.
The Company is utilizing the ~~AXIL~~Axil & Associated Brands’ assets to expand into the hearing enhancement business through its newly incorporated subsidiary.
The acquisition is accounted for by the Company in accordance with the acquisition method of accounting pursuant to ASC 805 ~~“Business Combinations”~~“Business Combinations” and pushdown accounting is applied to record the fair value of the assets acquired by the Company. Under this method, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired was allocated to goodwill.
F-21

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 13 – Business Combination (continued)
The following is a summary of the fair value of the assets acquired and liabilities assumed at the date of acquisition:
Schedule of estimated fair value of the assets acquired
Cash $ 1,066,414
Accounts receivable 227,786
Inventory 1,342,461
Prepaid expenses 62,452
Other assets 108,030
Accounts payable (285,665 )
Contract liabilities (1,043,332 )
Other current liabilities (79,826 )
Net tangible assets acquired $ 1,398,320

Identifiable intangible assets
Licensing rights $ 11,945
Customer relationships 70,000
Tradenames 275,000
Website 100,000
Total Identifiable intangible assets $ 456,945

Consideration paid $ 4,007,480
Total net assets acquired 1,855,265
Goodwill purchased $ 2,152,215

Note 14 – Concentrations
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade accounts receivable and cash deposits, investments and cash equivalents instruments. The Company maintains its cash in bank deposits accounts. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At ~~August 31, 2023~~February 29, 2024 and May 31, 2023, the Company held cash of approximately $~~4,309,828~~ 4,146,736and $4,582,682, respectively, in excess of federally insured limits. The Company has not experienced any losses in such accounts through ~~August 31, 2023.~~February 29, 2024.
Concentration of Revenue, Accounts Receivable, Product Line, and Supplier – Hair and Skin Care Products
During the three months ended ~~August 31, 2023~~February 29, 2024, hair and skin care product sales to one customer, which represented over 10% of our total sales, totaled 52%. During the three months ended February 28, 2023, there were sales to one customer, which represented over 10% of our total sales, and totaled 16%. During the nine months ended February 29, 2024, hair and skin care product sales to two customers, which each represented over 10% of our total sales, aggregated to approximately 40% of the Company’s net sales at ~~13%~~, ~~12%~~29% and ~~15%~~11%. During the ~~three~~nine months ended ~~August 31, 2022,~~February 28, 2023, there were no sales to ~~any~~one customer, which represented over 10% of our total ~~sales.~~sales, and totaled 13%.
During the three months ended ~~August 31, 2023~~February 29, 2024, hair and skin care product sales to customers outside the United States represented approximately ~~31%~~ 80%to Canada. During the three months ended ~~August 31, 2022,~~February 28, 2023, sales to customers outside the United States represented approximately 7% 26%, which consisted of 5% 25%~~from~~ sales to Canada and 1% to Italy. During the ~~balance from several other countries.~~nine months ended February 29, 2024, hair and skin care product sales to customers outside the United States represented approximately 54% to Canada. During the nine months ended February 28, 2023, sales to customers outside the United States represented approximately 24%, which consisted of 21% sales to Canada and 3% to Italy.
F-22

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 14 – Concentrations (continued)
During the three months ended ~~August 31,~~February 29, 2024, hair and skin care product sales by product line which each represented over 10% of sales consisted of approximately 34% from sales of hair shampoo, 30% from sales of hair conditioner, 14% from bundle kits (shampoo, conditioner and spray), and 18% from hair treatment product. During the three months ended February 28, 2023, hair and skin care product sales by product line which each represented over 10% of sales consisted of approximately ~~17%~~25% from sales of hair shampoo, ~~and~~ ~~28%~~15% from ~~sales of hair~~ conditioner, 7%37% from ~~shampoo and conditioner bundles,~~ ~~30%~~ ~~from~~sale of bundle kits, and ~~18%~~13% from other hair treatment ~~product.~~products. During the ~~three~~nine months ended ~~August 31, 2022,~~February 29, 2024, hair and skin care product sales by product line which each represented over 10% of sales consisted of approximately ~~11%~~25% from sales of hair shampoo, ~~34%~~25% from sales of hair conditioner, 24% from bundle kits, and 19% from hair treatment product. During the nine months ended February 28, 2023, hair and skin care product sales by product line which each represented over 10% of sales consisted of approximately 21% from sales of hair shampoo, 11% from sales of shampoo and conditioner ~~and 35%~~bundles, 49% from sale of bundle kits, ~~(shampoo, conditioner~~ and ~~spray).~~11% from sales of other hair treatment products.
During the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023, sales by product line comprised of the following:
Schedule of sales by product line
For the Three Months ended For the Nine Months Ended
February 29, February 28,
Hair Care Products August 31, 2023 August 31, 2022 2024 2023
Shampoo 25 % 21 %
Shampoos and Conditioners 52 % 45 % 7 % 11 %
Conditioner 25 % 8 %
Bundle Kits
30 % 35 % 24 % 49 %
Ancillary Products 18 % 20 % 19 % 11 %
Total 100 % 100 % 100 % 100 %

At ~~August 31, 2023,~~February 29, 2024, hair and skin care product’s ~~only~~ accounts receivables from customers that accounted for more than 10% of sales transactions were from ~~three separate customers~~one customer at ~~36%~~, ~~26%, and~~ ~~23%~~25%. At May 31, 2023, hair and skin care product’s ~~only~~ accounts receivable from one customer accounted for more than 10% of sales transactions.
The Company purchased inventories and products from ~~two~~five vendors totaling approximately $~~84,000~~36,790 and three vendors totaling approximately $75,725 for the three months ended ~~August 31, 2023.~~February 29, 2024 and February 28, 2023, respectively. Hair and skin care inventory product purchased from three vendors totaling approximately $297,833, (95% of the purchases at 61%, 12% and 22%), during the fiscal year ended May 31, 2023. The Company purchased inventories and products from five vendors totaling approximately $339,884 and from eight vendors totaling $293,204 for the nine months ended February 29, 2024 and February 28, 2023, respectively.
Concentration of Revenue, Accounts Receivable, Product Line, and Supplier – Ear Protection and Enhancement Products
~~AXIL is~~AXIL’s products are sold direct-to-consumer, therefore, ~~during the three months ended August 31, 2023,~~ ~~96.3%~~88.4% and 94.0% of sales was direct to ~~customers.~~customers during the three months ended February 29, 2024 and February 28, 2023, respectively. There was no single customer that accounted for greater than 10% of total ~~sales.~~sales in those periods. During the ~~three~~nine months ended ~~August 31, 2022,~~ ~~96.4%~~ ofFebruary 29, 2024 and February 28, 2023, sales ~~was~~ direct to customers ~~with no~~accounted for 91.7% and 97.1%, respectively. No single customer that accounted for greater than 10% of total sales in ~~that period.~~those periods.
During the three months ended ~~August 31, 2023~~February 29, 2024, AXIL sales to customers outside the United States represented approximately ~~4.9%~~2.6% which consisted of ~~4.2%~~2.3% from Canada and the remaining from various countries. During the three months ended ~~August 31, 2022~~February 28, 2023, sales of AXIL product to customers outside the United States represented ~~4.4%~~3.9% which consisted of ~~3.9%~~2.7% from Canada and the remaining from various countries. During the nine months ended February 29, 2024, AXIL sales to customers outside the United States represented approximately 3.7% which consisted of 3.5% from Canada and the remaining from various countries. During the nine months ended February 28, 2023, sales of AXIL product to customers outside the United States represented 4.2% which consisted of 3.3% from Canada and the remaining from various countries.
Manufacturing is outsourced primarily overseas via a number of third-party vendors, the largest vendor accounted for ~~94.6%~~ 78.3% and 89.2%of all purchases for the three months and nine months ended ~~August 31, 2023.~~February 29, 2024, respectively. For the fiscal year ended May 31, 2023, the two largest vendors accounted for 82%and 10%of all purchases.
F-23

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 14 – Concentrations (continued)
During the three months ended ~~August 31, 2023,~~February 29, 2024, AXIL ~~sale~~gross sales of ear buds for PSAP (personal sound amplification product) and hearing protection by product line which each represented over 10% of gross sales consisted approximately ~~55.9%~~ 47.2%~~($5.1M)~~ from Ghost Stryke, ~~11.2%~~ 12.9%~~($11.2M)~~ from Trackr earmuffs and ~~32.8%~~ 38.6%~~($3.0M)~~ of gross sales of other Bluetooth and ear buds. During the three months ended ~~August 31, 2022,~~February 28, 2023, AXIL ~~sale~~gross sales of ear buds and hearing protection by product line which represented over 10%of gross sales was ~~90.7%~~ 87.7%from Ghost Stryke model GS-X ~~($5.5M).~~and 11.3% from Trackr earmuffs.
During the ~~three~~nine months ended ~~August 31,~~February 29, 2024, AXIL gross sales of ear buds for PSAP (personal sound amplification product) and hearing protection by product line which each represented over 10% of gross sales consisted approximately 52.8% from Ghost Stryke, 13.0% from Trackr earmuffs and 33.1% of gross sales of other Bluetooth and ear buds. During the nine months ended February 28, 2023, AXIL gross sales of ear buds and hearing protection by product line which represented over 10% of gross sales was 89.9% from Ghost Stryke model GS-X.
During the nine months ended February 29, 2024 and February 28, 2023 gross sales by hearing enhancement and protection products comprised of the following:
Schedule of sales by product comprised
For the three months ended
August 31, August 31,
Ear Protection & Enhancement Products 2023 2022
Ghost Stryke 55.9 % 90.7 %
Trackr Earmuffs 11.2 % 8.2 %
Other Bluetooth and ear buds 32.8 % 1.0 %
Accessories, other 0.1 % 0.1 %
Total 100.0 % 100.0 %
Schedule of sales by product comprised
For the Nine Months Ended
February 29, February 28,
Ear Protection & Enhancement Products 2024 2023
Ghost Stryke 52.8 % 89.9 %
Trackr earmuffs 13.0 % 9.0 %
Other Bluetooth and ear buds 33.1 % 1.0 %
Accessories, other 1.1 % 0.1 %
Total 100.0 % 100.0 %
Note 15 – Business Segment and Geographic Area Information
Business Segments
The Company, directly or through its subsidiaries, markets and sells its products and services directly to consumers and through its dealers. In June 2022, the Company acquired a hearing enhancement and hearing protection business. The Company’s determination of its reportable segments is based on how its chief operating decision makers manage the business.
F-24

~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
~~AUGUST 31, 2023~~FEBRUARY 29, 2024
Note 15 – Business Segment and Geographic Area Information (continued)
The Company’s segment information is as follows:

Schedule of segment information
Three Months Ended Nine Months Ended
Three months ended February 29, February 28, February 29, February 28,
Net Sales August 31, 2023 August 31, 2022 2024 2023 2024 2023
Hair care and skin care $ 314,853 $ 485,236 $ 476,864 $ 302,415 $ 1,022,458 $ 1,206,385
Hearing enhancement and protection 5,791,416 3,752,122 5,992,479 5,354,046 19,974,831 15,419,433
Total net sales $ 6,106,269 $ 4,237,358 $ 6,469,343 $ 5,656,461 $ 20,997,289 $ 16,625,818

Operating earnings
Operating earnings (loss)
Segment gross profit:
Hair care and skin care $ 221,524 $ 324,105 $ 247,859 $ 202,016 $ 641,966 $ 842,447
Hearing enhancement and protection 4,426,042 2,958,549 4,376,467 4,016,469 14,887,865 11,697,726
Total segment gross profit $ 4,647,566 $ 3,282,654 $ 4,624,326 $ 4,218,485 $ 15,529,831 $ 12,540,173
Selling and Marketing 3,206,841 1,977,976 3,398,949 3,173,383 10,278,570 8,250,257
General and Administrative 1,266,968 1,105,277 1,329,256 828,513 3,917,471 2,888,931
Consolidated operating income $ 173,757 $ 199,401
Consolidated operating income (loss) $ (103,879 ) $ 216,588 $ 1,333,790 $ 1,400,984

Total Assets:
Hair care and skin care $ 4,259,041 $ 781,328 $ 4,232,913 $ 1,243,359 $ 4,232,913 $ 1,243,359
Hearing enhancement and protection 6,627,525 6,185,244 8,480,805 8,047,093 8,480,805 8,047,093
Consolidated total assets $ 10,886,566 $ 6,966,572 $ 12,713,718 $ 9,290,452 $ 12,713,718 $ 9,290,452

Payments for property and equipment
Hair care and skin care $ - $ - $ —   $ —   $ —   $ —
Hearing enhancement and protection 50,960 6,400 9,347 11,250 80,192 65,650
Consolidated total payments for property and equipment $ 50,960 $ 6,400 $ 9,347 $ 11,250 $ 80,192 $ 65,650

Depreciation and amortization
Hair care and skin care $ 1,418 $ 1,423 $ 1,417 $ 1,417 $ 4,251 $ 4,258
Hearing enhancement and protection 26,819 18,246 26,197 22,512 79,383 62,686
Consolidated total depreciation and amortization $ 28,237 $ 19,669 $ 27,614 $ 23,929 $ 83,634 $ 66,944

Geographic Area Information
During the three months ended ~~August 31,~~February 29, 2024, approximately 96% of our consolidated net sales were to customers located in the U.S. (based on the customer’s shipping address). During the three months ended February 28, 2023, approximately ~~96%~~94% of our consolidated net sales were to customers located in the U.S. (based on the customer’s shipping address). All Company assets are located in the U.S.
During the nine months ended February 29, 2024, approximately 95% of our consolidated net sales were to customers located in the U.S. (based on the customer’s shipping address). During the nine months ended February 28, 2023, approximately 94% of our consolidated net sales were to customers located in the U.S. (based on the customer’s shipping address).
F-25
AXIL BRANDS, INC. AND SUBSIDIARY
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2024
Note 16 – Income Taxes
We calculated our interim tax provision in accordance with ASC ~~Topic~~ 270, ~~“Interim~~“Interim Reporting,” and ASC ~~Topic~~ 740, ~~“Accounting~~“Accounting for Income ~~Taxes.~~Taxes.” As the end of each interim quarterly period, we estimate our annual effective tax rate and apply that rate to our ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects of other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur.
We recorded an income tax ~~expense~~benefit of $~~65,989~~ ~~and $74,753~~397,054 for the ~~three~~nine months ended ~~August~~February 29, 2024 that was related to the reversal of fiscal year ended May 31, 2023 income tax liability due to filing of the federal and ~~2022, respectively.~~state tax returns, as well as additional net operating losses which can offset current year income tax liability. In addition, there are remaining net operating losses that created a deferred tax asset which management believes are fully realizable. For the nine months ended February 28, 2023 provision for income tax expense was $395,344.
The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2020, 2021, 2022 and ~~2022~~2023 Corporate Income Tax Returns are subject to ~~Internal Revenue Service~~IRS examination.
Note 17 – Subsequent Events
Corporate Actions
On March 5, 2024, the Board approved and the Company entered into repurchase agreements with certain stockholders of the Company to purchase in the aggregate 207,748,250 shares of Series A Preferred Stock of the Company (equivalent, in aggregate, to 10,387,413 shares of the Company’s common stock on an as converted basis) for the aggregate cash consideration of $1,246,490. Following the repurchase, 42,251,750 shares of Series A Preferred Stock remain outstanding. The Company funded the repurchase through cash on hand.
~~F-25~~F-26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with, and is qualified in its entirety by, the unaudited consolidated financial statements and related notes thereto included in Item 1 in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended May 31, 2023 filed with the SEC on August 21, 2023. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations contains not only statements that are historical facts, but also statements that are forward-looking.
Although the forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in herein and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects. Please see “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q for additional information.
Overview
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.
As part of the Company’s ongoing rebranding efforts, the Company changed its name from Reviv3 Procare Company to AXIL Brands, Inc. effective February 14, 2024. On February 14, 2024, the Company successfully completed efforts to uplist (the “Uplist Transaction”) from the over-the-counter, or OTC, markets to the NYSE American exchange (“NYSE American”).
On May 1, 2022, we entered into an Asset Purchase Agreement dated May 1, 2022 and amended on June 15, 2022 and September 8, 2022 with AXIL ~~a Delaware corporation, and~~& Associated Brands, a leader in hearing protection and enhancement products, for the acquisition of both the hearing protection business of AXIL & Associated Brands consisting of ear plugs and ear muffs, and ~~AXIL’s~~AXIL & Associated Brands’ ear bud business. These businesses constituted substantially all of the business operations of ~~AXIL.~~AXIL & Associated Brands. The acquisition was completed subsequently on June 16, 2022. On September 8, 2022, the Company and AXIL & Associated Brands entered into an amendment to the Asset Purchase Agreement which eliminated the provision in the Asset Purchase Agreement requiring the Company to effectuate a reverse stock split of our ~~Common Stock~~common stock and preferred stock pursuant to the Asset Purchase Agreement within a certain period of time.
Effective as of January 16, 2024, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation with the Delaware Secretary of State to implement the reverse stock split of the Company’s issued shares of common stock at a ratio of 1-for-20 approved by the Board of Directors. The reverse stock split did not affect the total number of shares of common stock that the Company is authorized to issue and any fractional shares remaining after the Reverse Stock Split were rounded up to the nearest whole share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise specified.
As a result of the acquisition of ~~AXIL’s~~AXIL & Associated Brands’ assets, the Company has two reportable segments: hair care and skin care, and hearing enhancement and protection.
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 care and skin care segment, we manufacture, market, sell, and distribute professional quality hair and skin care products.
The Company’s overall business strategy is to establish market awareness of our products through our direct-to-consumer campaigns. We believe the increase in awareness will allow the Company to increase distribution and gain customers through our distribution partners’ retail establishments, with the goal of helping us achieve growth in market share and diversify our sales channels.
-2-

Results of Operations
~~For the Three months Ended August 31, 2023 Compared to the Three months Ended August 31, 2022~~
Our results of operations are summarized ~~below .~~below.
Three months ended Nine Months Ended Three Months Ended
August 31, February 29,
2024 February 28,
2023 February 29,
2024 February 28,
2023
2023 2022

Net Sales $ 6,106,269 $ 4,237,358
Sales, net $ 20,997,289 $ 16,625,818 $ 6,469,343 $ 5,656,461
Cost of sales 1,458,703 954,704 5,467,458 4,085,645 1,845,017 1,437,976
Gross profit 4,647,566 3,282,654 15,529,831 12,540,173 4,624,326 4,218,485
Total operating expenses 4,473,809 3,083,253 14,196,041 11,139,189 4,728,205 4,001,897
Income from operations 173,757 199,401
Net income after tax $ 154,452 $ 175,527
Income (Loss) from operations 1,333,790 1,400,984 (103,879) 216,588
Net income $ 1,953,618 $ 1,064,475 $ 781,091 $ 162,048

For the Nine Months Ended February 29, 2024 Compared to the Nine Months Ended February 28, 2023
Net sales for the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023 were $20,997,289 and ~~2022 were $6,106,269 and $4,237,358,~~$16,625,818, respectively. Net sales for the nine months ended February 29, 2024 increased by ~~$1,868,911~~$4,371,471 or ~~44.1% for the three months ended August 31, 2023,~~26.3%, as compared to the ~~three~~nine months ended ~~August 31, 2022, due to a combination of increased market awareness and higher demand of AXIL products attributed to~~February 28, 2023. The increase was driven primarily by an increase in ~~online~~marketing campaign spend and ~~non-digital marketing campaigns and brand advertising.~~strength in our sales channels for the Company’s products.
Cost of sales primarily includes ~~primarily~~ the cost of products and freight-in costs. For the ~~three~~nine months ended ~~May 31, 2023,~~February 29, 2024, the overall cost of sales increased by ~~$503,999~~$1,381,813 or ~~52.8%~~33.8%, as compared to the comparable period ~~in 2022,~~ended February 28, 2023, which was primarily due to the relative increase in sales of ~~AXIL~~Company products. Cost of sales as a percentage of net revenues for the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 was ~~23.9%~~26.0% as compared to ~~22.5%~~24.6% for the comparable period in ~~2022.~~2023. The ~~small overall~~marginal increase in cost of sales, as a percentage of sales, iswas primarily attributable to ~~an increase in shipping costs.~~higher transportation costs and lower margin product sales. The Company will continue to work to increase efficiencies in procurement and logistics, as well as focus on enhanced production capabilities.
Gross profit for the ~~three~~nine months ended ~~August 31,~~February 29, 2024 and February 28, 2023 was $15,529,831 and ~~2022 was $4,647,566 and $3,282,654,~~$12,540,173, respectively. Gross profit as a percentage of sales for the ~~three~~nine months ended ~~August 31, 2023,~~February 29, 2024, was ~~76.1%~~74.0% as compared to ~~77.5%~~75.4% for the same comparable period in ~~2022.~~2023. The decrease in the gross profit margin for the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 was primarily attributable to ~~the expansion~~an increase in sales of ~~current marketing campaigns, costs attributed to new product awareness, and advertising and related promotional activities~~lower margin products in both our segments, partially offset by a decrease in discounts in our sales of AXIL products.
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 $3,056,852 or 27.4% from $11,139,189 for the nine months ended February 28, 2023 to $14,196,041 for the nine months ended February 29, 2024. Operating expenses as a percentage of net sales for the nine months ended February 29, 2024 were 67.6% compared to 67.0% for the comparable period in 2023. Operating expenses increased primarily due to a net increase in advertising and marketing expenses by $2,028,313 for expansion of current marketing campaigns and costs attributable to new product awareness, and a net increase of $891,181 for business general and administrative costs. The increase in general and administrative costs was primarily attributed to the increase in public related costs associated with our Uplist Transaction. Additionally, there was an increase of $638,067 for professional and consulting expenses to enhance existing business processes. This increase was partially offset by the optimization of our workforce resulting in an overall reduction of $500,709 for compensation and related taxes for the nine months ended February 29, 2024 as compared to the comparable period in 2023.
Income from operations for the nine months ended February 29, 2024 and February 28, 2023 was $1,333,790 and $1,400,984, respectively. The decrease in income from operations for the nine months ended February 29, 2024, of $67,194 or 4.8% compared to the nine months ended February 28, 2023, was primarily driven by the increase in professional and compliance expenses due to the Uplist Transaction and an increase in sales of lower margin products.
For the nine months ended February 29, 2024 the provision for income taxes amounted to a benefit of $397,054, that was related to the reversal of fiscal year ended May 31, 2023 income tax liability due to filing of the federal and state tax returns, as well as additional net operating losses which can offset current year income tax liability. In addition, there are remaining net operating losses that created a deferred tax asset which management believes are fully realizable. Provision for income tax expense was $395,344 for the nine months ended February 28, 2023.
-3-
As a result of the above, we reported a net income of $1,953,618 and $1,064,475, for the nine months ended February 29, 2024 and February 28, 2023, respectively, an increase of $889,143.
For the Three Months Ended February 29, 2024 Compared to the Three Months Ended February 28, 2023
Net sales for the three months ended ~~August 31,~~February 29, 2024 and February 28, 2023 were $6,469,343 and ~~2022 were $4,473,809~~$5,656,461, respectively. Net sales for the three months ended February 29, 2024 increased by $812,882 or 14.4%, as compared to the three months ended February 28, 2023, due to the increase in marketing campaign spend and ~~$3,083,253,~~strength in our sales channels for AXIL products.
For the three months ended February 29, 2024, the overall cost of sales increased by $407,041 or 28.3%, as compared to the three months ended February 28, 2023, which was also primarily due to the relative increase in sales of the Company’s products. Cost of sales as a percentage of net revenues for the three months ended February 29, 2024 was 28.5% as compared to 25.4% for the comparable period in 2023. The marginal increase in cost of sales, as a percentage of sales, was primarily attributable to an increase in transportation costs. The Company will continue to work to increase efficiencies in procurement and logistics.
Gross profit for the three months ended February 29, 2024 and 2023 was $4,624,326 and $4,218,485, respectively. Gross profit as a percentage of sales for the three months ended February 29, 2024, was 71.5% as compared to 74.6% for the comparable period in 2023. The decrease in the gross profit margin for the nine months ended February 29, 2024 was primarily attributable to an increase in sales of lower margin products in both our segments, partially offset by a decrease in discounts in our sales of AXIL products.
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 $726,308 or 18.1% from $4,001,897 in the three months ended February 28, 2023 to $4,728,205 in the three months ended February 29, 2024. Operating expenses as a percentage of net revenues for the three months ended ~~August 31, 2023,~~February 29, 2024, were ~~73.3%~~73.1% compared to ~~72.8%~~70.7% for the ~~comparable period~~three months ended February 29, 2024. The increase in ~~2022. Operating~~operating expenses ~~increased by $1,390,556 or 45.1% year-over-year due~~related primarily to ana net increase in advertising and marketing expenses ~~by $1,170,172 in the AXIL spend~~of $225,566 for ~~displaying our products through various advertising platforms,~~expansion of current marketing campaigns and ~~the remaining $220,384 primarily~~costs attributable to ~~increases in headcount in the Company’s sales~~new product awareness, and ~~marketing department related~~a net increase of $336,235 for professional and consulting expenses and to ~~its AXIL~~enhance existing business processes. General and ~~other business operating expenses. The~~administrative costs increased by $296,440 primarily due to an increase in ~~marketing and advertising~~public related costs ~~which were aimed at increasing~~associated with our ~~AXIL customer base~~Uplist Transaction. This increase was partially offset by ~~a decrease~~the optimization of our workforce resulting in ~~operating expenses~~an overall reduction of $131,933 for ~~the Reviv3 products~~compensation and related taxes for the three months ended ~~August 31, 2023~~February 29, 2024 as compared to ~~the comparable period in 2022.~~three months ended February 28, 2023.
~~Income~~Loss from operations for the three months ended ~~August 31, 2023 and 2022~~February 29, 2024 was ~~$173,757 and $199,401, respectively.~~$103,879 compared to income of $216,588 for the three months ended February 28, 2023. The ~~year-over-year~~ decrease in income from operations of ~~$25,644~~$320,467 or (148.03%) was primarily ~~driven from~~related to the increase in operating costs related to our Uplist Transaction and expanded marketing ~~costs and general and administrative expenses~~campaign as well as the increased sales of lower margin products partially offset by a decrease in discounts.
For the ~~AXIL business.~~
~~Provision~~three months ended February 29, 2024 provision for income taxes amounted to ~~$65,989~~a benefit of $827,436 that was related to the reversal of fiscal year ended May 31, 2023 income tax liability due to filing of the federal and ~~$74,753 for~~state tax returns, as well as additional net operating losses which can offset current year income tax liability. In addition, there are remaining net operating losses that created a deferred tax asset which management believes are fully realizable. For the three months ended ~~August 31,~~February 28, 2023, ~~and 2022, respectively.~~provision for income tax expense was $59,547.
As a result of the above, we reported a net income of ~~$154,452~~$781,091 and ~~$175,527,~~$162,048 for the three months ended ~~August 31,~~February 29, 2024 and three months ended February 28, 2023, ~~and 2022,~~ respectively, ~~a decrease~~an increase of ~~$21,075.~~$619,043 or 382.0%.
~~-3-~~-4-

Liquidity and Capital Resources
We are currently engaged in ~~our~~ product sales and development. Although we earned a net income in the ~~three~~nine months ended ~~August 31, 2023,~~February 29, 2024, we have incurred operating losses in the past. We currently expect to earn net income during the current fiscal year ending May 31, 2024. We believe our current cash balances, coupled with anticipated cash flow from operating activities, will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements. We intend to continue to control our cash expenses as a percentage of expected revenue on an annual basis and thus may use our cash balances in the short-term to invest in revenue growth. As a result of the acquisition of AXIL ’s& Associated Brands’ assets, we have generated and expect we will continue to generate sufficient cash for our operational needs, including any required debt payments, for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements. Management is focused on growing the Company’s existing product lines, introducing new products, as well as expanding its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands, including those resulting from the purchase of ~~AXIL’s~~AXIL & Associated Brands’ assets in June 2022, may lead to cash utilization at levels greater than recently experienced. The Company cannot provide any assurance that it will be able to raise additional capital or obtain necessary financing on acceptable terms, or at all. Subject to the foregoing, management believes that the Company has sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying unaudited consolidated financial statements.
Cash Flows
Operating Activities
Net cash provided by operating activities for the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 was ~~$397,172,~~$339,323, attributable to a net income of ~~$154,452,~~$1,953,618, items of adjustments to depreciation and amortization, bad debts, ~~other~~gain on settlement, benefit for deferred income taxes and stock based compensation that total ~~$132,210.~~$87,894. There were favorable changes in accounts payable and accrued expenses of ~~$168,399, contract~~$1,061,420 and ~~current liabilities of $476,200, and decrease in~~ prepaid ~~expense~~expenses and other current assets of ~~$315,751. The net decrease in cash was increased~~$145,032 offset primarily by ~~a net decrease in operating assets and liabilities~~an increase of ~~$849,840 primarily due to increase in accounts receivable and inventory.~~inventory of $2,131,429.
Net cash flows provided by operating activities for the ~~three~~nine months ended ~~August 31, 2022~~February 28, 2023 was ~~$807,633,~~$2,319,976, attributable to net income of ~~$175,527,~~$1,064,475, depreciation and amortization of ~~$19,669,~~$66,944, provision for bad debts of $13,782, stock based compensation expense of ~~$97,283,~~$155,067, gain on settlement of debt of $50,500, and net change in operating assets and liabilities of ~~$565,654~~$1,070,209 primarily due to an increase in accounts receivables, increase in prepaid expenses, increase in security deposit offset by a decrease inof inventory, ~~and~~an increase in accounts payable, ~~contract liabilities and~~increase in other current liabilities ~~partially offset by an~~and increase in ~~accounts receivable and prepayments.~~contract liabilities.
Investing Activities
Net cash flows used in investing activities for the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 was ~~$50,960~~$80,192 due to the purchase of property and equipment for the ~~AXIL~~Company’s business. For the ~~three~~nine months ended ~~August 31, 2022,~~February 28, 2023, net cash flows provided were ~~$1,060,014,~~$1,000,764, attributable to the cash received from acquisition of the AXIL ~~business.~~& Associated Brands business and partially offset by the purchase of property and equipment of $65,650 during the same period.
Financing Activities
Net cash flows used in financing activities for the ~~three~~nine months ended ~~August 31, 2023~~February 29, 2024 was ~~$117,171,~~$204,246, and were for repayment of equipment financing and note payable, and a ~~decrease in the amount due from~~prepayment made to a related party. Net cash flows provided by financing activities for the ~~three~~nine months ended ~~August 31, 2022,~~February 28, 2023, amounted to ~~$1,907 as there was an increase~~$485,861, primarily resulting from the Company’s capital raise of $447,850 pursuant to a private placement of shares of common stock, including receipt of $63,008 in ~~amount due from a~~ related party loans, and repayment of ~~equipment financing.~~loans that totaled $24,997.
-5-
During the ~~three~~nine months ended ~~August 31, 2023,~~February 29, 2024, the Company has various financed items and has debt outstanding in order to run the Company’s business operations. In 2019, the Company purchased a forklift under an installment purchase plan. The loan amount is $16,500 payable in 60 monthly installment payments of $322 comprising of principal payment of $275 and interest payment of $42. At August 31, 2023 and 2022, the balance outstanding on the loan was $1,375 and $5,500, respectively, of which the $1,375 balance is payable within the next year.
~~-4-~~

As of ~~August 31, 2023,~~February 29, 2024, we had a secured Economic Injury Disaster Loan outstanding, administered pursuant to the CARES Act in the principal amount of ~~$150,000,~~$147,150, with a maturity date of May 18, 2050. The Company continues to pay interest on the loan. ~~As of August 31, 2023 the Company held insurance financing with an outstanding balance of $5,334 on the general liability and excess liability insurance policies.~~
We are dependent on our product sales to fund our operations and may require additional capital in the future, such as pursuant to the sale of additional common stock or of debt securities or entering into credit agreements or other borrowing arrangements with institutions or private individuals, to maintain operations, which may not be available on favorable terms, or at all, and could require us to sell certain assets or discontinue or curtail our operations. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. In addition, pursuant to a voting agreement, effective June 16, 2022, with AXIL & Associated Brands and Intrepid Global Advisors, Inc., we are subject to certain limitations on our ability to sell our capital stock until June 2024. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans, and/or financial guarantees. We do not have any plans to seek additional financing at this time and anticipate that our existing cash equivalents and cash provided by operations will be sufficient to meet our working capital requirements. However, if the need arises for additional cash, there can be no assurance that we will be able to raise the capital we need for our operations on favorable terms, or at all. We may not be able to obtain additional capital or generate sufficient revenues to fund our operations. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business plans. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to cease operations. If we fail to raise funds, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws.
Off-Balance Sheet Arrangements
As of ~~August 31, 2023,~~February 29, 2024, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of expenses during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.
We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require the most difficult, subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These critical accounting policies relate to revenue recognition, impairment of intangible assets and long-lived assets, inventory, stock compensation, and evaluation of contingencies. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial condition or results of operations.
See the footnotes to our unaudited consolidated financial statements for the three and nine months ended ~~August 31, 2023 and 2022,~~February 29, 2024, included with this Quarterly Report on Form 10-Q for additional discussion of our critical accounting policies and use of estimates.
~~-5-~~-6-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Principal Executive Officer, and Chief Financial Officer (“CFO”) and Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~August 31, 2023.~~February 29, 2024. Based on this evaluation of disclosure controls and procedures as of ~~August 31, 2023,~~February 29, 2024, our CEO and CFO concluded that our disclosure controls and procedures were not effective.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and the Board regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management, including our CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of ~~August 31, 2023~~February 29, 2024 using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission Internal Control-Integrated Framework issued in 2013. Based on the assessment, our management has concluded that as of ~~August 31, 2023,~~February 29, 2024, our internal control over financial reporting was not effective based on those criteria.
Remediation
The Company plans to initiate measures to improve the effectiveness of the internal controls over financial reporting and disclosure controls and procedures. We are ~~currently~~ working with a third-party to enhance the reporting in our accounting systems, as well as increase the level of review when any non-routine accounting entry is proposed. The Company hired additional accounting personnel during the period ended February 29, 2024, to oversee the financial close and reporting process. The Company plans to hire additional staff to aid in segregation of duties to continue to improve our internal controls in the coming fiscal year. We have also started to develop an internal control structure and identify key procedures for financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002 and we are currently in the process of documenting our internal control policies and procedures. ~~We have~~During the period ended February 29, 2024 we adopted written policies and procedures that ~~are being~~were distributed to employees for review and approval by the Board, and ~~should~~we anticipate will be fully implemented during the fiscal year ending May 31, 2024. In addition, the ~~company~~Company has adopted controls related to corporate governance, including a Code of Business Conduct and Ethics that applies to all of our employees, including our CEO and CFO, and to the Board.
Changes in ~~internal control~~Internal Control over ~~financial reporting~~Financial Reporting
~~There~~Other than as described under “Remediation” above, there has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act that occurred during the fiscal quarter ended ~~August 31, 2023~~February 29, 2024 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. Our management is currently taking corrective action to remedy the internal control weaknesses. See section entitled “Remediation” ~~above~~.above.
~~-6-~~-7-

PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. While the ultimate resolution is unknown, we do not expect that these lawsuits will individually, or in the aggregate, have a material adverse effect to our results of operations, financial condition, or cash flows. However, the outcome of any litigation is ~~subject to inherent uncertainties~~inherently uncertain and ~~an adverse result in these~~there can be no assurance that any expense, liability, or ~~other matters may arise from time to time~~damages that may ~~harm~~ultimately result from the resolution of these matters will be covered by our ~~business. We are currently~~insurance or will not ~~aware~~be in excess of ~~any such pending~~amounts recognized or ~~threatened legal proceedings or claims that we believe~~provided by insurance coverage and will have a material adverse effect on our business, operating results, financial condition, or ~~operating results.~~ cash flows.
Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our financial statements. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. We reevaluate and update accruals as matters progress over time. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance. In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, our ultimate liability in connection with these matters is not expected to have a material adverse effect on our results of operations, financial position or cash flows, and the amounts accrued for any individual matter are not material. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.
On November 23, 2020, the Company was served a copy of a complaint filed by Jacksonfill, LLC in the Fourth Circuit Court for Duval County, Florida. The complaint alleged breach of Agreement for non-payments for certain products against the Company. On September 2, 2023, Jacksonfill, LLC and the Company settled the dispute in the Circuit Court of the Fourth Judicial Circuit in Duval County, Florida per a binding settlement agreement. There is no admission of liability by the Company and the Company has agreed to pay Jacksonfill, LLC $125,000 in connection with the settlement. Currently, the Company has recorded a liability of $204,182 to provide for the reserve of the amount in question, which is in excess of what the settlement agreement provides. The adjustment will be made in the subsequent reporting period. Please see Note 11—Commitments and Contingencies to our financial statements included herein for additional information about this matter.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to provide the information required by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
~~None.~~None during the third quarter.
On March 5, 2024, the Board approved and the Company entered into repurchase agreements with certain stockholders of the Company to purchase in the aggregate 207,748,250 shares of Series A Preferred Stock of the Company (equivalent, in aggregate, to 10,387,413 shares of the Company’s common stock on an as converted basis) for the aggregate cash consideration of $1,246,489.50. Following the repurchase, 42,251,750 shares of Series A Preferred Stock remained outstanding. The Company funded the repurchase through cash on hand.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) None.
(c) During the quarter ended February 29, 2024, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
~~(b) None.~~
~~(c) Not applicable.~~
~~-7-~~-8-

ITEM 6. EXHIBITS
Exhibit Filed Furnished
Number Exhibit Description herewith herewith
3.1 Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 6, 2017).
3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed with the SEC on August 25, 2022).
3.3 Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of January 16, 2024 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 16, 2024).
3.4 Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2024).
3.5 Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 6, 2017).
3.6 Amendment to the Bylaws, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2024).
10.1* First Amendment to the 2022 Equity Incentive Plan of Reviv3 Procare Company, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2024).
10.2 Repurchase Agreement, dated March 5, 2024, by and between AXIL Brands, Inc. and Teton 360, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 11, 2024).
10.3 Repurchase Agreement, dated March 5, 2024, by and between AXIL Brands, Inc. and L Grant Foster TTEE - The Williams Family Irrevocable Trust (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 11, 2024).
31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X
31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X
32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X
32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X
101 The following unaudited condensed consolidated financial statements from the Quarterly Report on Form 10-Q for the quarter ended ~~August 31, 2023~~February 29, 2024 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Changes in Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) the Notes to Financial Statements. X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X
* Management compensatory plan or arrangement.
~~-8-~~-9-

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 thereunto duly authorized.
~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC.
Date: ~~October 12, 2023~~April 9, 2024
By: /s/ Jeff Toghraie
Jeff Toghraie
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Monica Diaz Brickell
Monica Diaz Brickell
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
~~-9-~~-10-

		Page
Cautionary Note Regarding Forward Looking Statements		ii

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7

Item 4.	Controls and Procedures	7

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	8

Item 1A.	Risk Factors	8

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8

Item 3.	Defaults Upon Senior Securities	8

Item 4.	Mine Safety Disclosures	8

Item 5.	Other Information	8

Item 6.	Exhibits	9

Signatures		10


	For the Three Months Ended
	August 31,
	2023			2022

Sales, net	$	6,106,269		$	4,237,358

Cost of sales		1,458,703			954,704
		24	%		23	%
Gross profit		4,647,566			3,282,654
		76	%		77	%
OPERATING EXPENSES:
Marketing and selling expenses		3,206,841			1,977,976
Compensation and related taxes		279,989			280,688
Professional and consulting expenses		426,775			466,450
General and administrative		560,204			358,139

Total Operating Expenses		4,473,809			3,083,253
		74	%		73	%
INCOME FROM OPERATIONS		173,757			199,401

OTHER INCOME (EXPENSE):
Gain on debt settlement		-			50,500
Other income		9,835			-
Interest income		38,493			1,837
Interest expense and other finance charges		(1,644	)		(1,458	)

Other Income (Expense), Net		46,684			50,879

INCOME BEFORE PROVISION FOR INCOME TAXES		220,441			250,280

Provision for income taxes		65,989			74,753

NET INCOME	$	154,452		$	175,527

NET INCOME PER COMMON SHARE:
Basic	$	0.00		$	0.00
Diluted	$	0.00		$	0.00

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		117,076,949			102,402,140
Diluted		372,451,949			314,223,880


	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


For the nine months ended February 29, 2024																For the nine months ended February 29, 2024
					Common Stock									Total							Common Stock				Additional					Total
	Preferred Stock				Issued				Additional Paid-in		Accumulated			Stockholders’			Preferred Stock				Issued/Issuable				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity			Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, May 31, 2023		250,000,000	$	25,000		117,076,949	$	11,708	$	10,102,243	$	(3,466,992	)	$	6,671,959			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			—		—		—		—		153,320		—			153,320

Net income for the three months ended August 31, 2023		-		-		-		-		-		154,452			154,452
Restricted stock awards																		—		—		15,000		2		7,992		—			7,994

Balance, August 31, 2023		250,000,000	$	25,000		117,076,949	$	11,708	$	10,153,350	$	(3,312,540	)	$	6,877,518
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																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																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																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


							For the Nine Months Ended
	For the Three Months Ended August 31,						February 29,			February 28,
	2023			2022			2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	154,452		$	175,527		$	1,953,618		$	1,064,475
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,237			19,669			83,634			66,944
Bad debts		52,866			-			143,395			13,782
Stock based compensation		51,107			97,283			161,314			155,067
Gain on debt forgiveness		-			(50,500	)
Gain on settlement								(79,182	)		(50,500	)
Provision (benefit) for deferred income taxes								(397,054	)		—
Change in operating assets and liabilities:
Accounts receivable		(91,736	)		(93,901	)		(445,883	)		(134,622	)
Inventory		(758,104	)		432,998			(2,131,429	)		297,213
Prepaid expenses and other current assets		315,751			(204,130	)		145,032			(296,787	)
Deposits								—			(3,810	)
Accounts payable and accrued expenses		168,399			52,247			1,061,420			87,879
Other current liabilities		438,006			296,106			(144,052	)		860,973
Contract liabilities		38,194			82,334			(11,490	)		259,362

NET CASH PROVIDED BY OPERATING ACTIVITIES		397,172			807,633			339,323			2,319,976

CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired on business acquisition		-			1,066,414			—			1,066,414
Purchase of property and equipment		(50,960	)		(6,400	)
Purchases of property and equipment								(80,192	)		(65,650	)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(50,960	)		1,060,014
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		(825	)		(825	)		(2,200	)		(2,200	)
Repayment of note payable		(17,254	)		-			(25,438	)		(22,797	)
Advances (payments) from a related party		(99,092	)		2,732
Advances (repayments) to/from a related party								(176,608	)		63,008

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(117,171	)		1,907
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES								(204,246	)		485,861

NET INCREASE IN CASH		229,041			1,869,554			54,885			3,806,601

CASH - Beginning of period		4,832,682			373,731			4,832,682			373,731

CASH - End of period	$	5,061,723		$	2,243,285		$	4,887,567		$	4,180,332
		-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	1,644		$	125		$	4,681		$	3,173
Income taxes	$	-		$	-		$	—		$	—

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for asset purchase agreement	$	-		$	4,007,480		$	—		$	4,007,480
Right of use assets recognized as lease liability							$	—		$	131,970
Tangible assets (excluding cash) acquired in business combination	$	-		$	1,740,729		$	—		$	1,740,729
Intangible assets acquired in business combination	$	-		$	456,945		$	—		$	456,945
Goodwill acquired in business combination	$	-		$	2,152,215		$	—		$	2,152,215
Liabilities assumed in business combination	$	-		$	1,408,823		$	—		$	1,408,823

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Schedule of net loss per share
	For the Three Months Ended				For the Three Months Ended				For the Nine Months Ended
	August 31,				February 29,		February 28,		February 29,		February 28,
	2023		2022		2024		2023		2024		2023

Net income	$	154,452	$	175,527	$	781,091	$	162,048	$	1,953,618	$	1,064,475

Weighted average basic shares		117,076,949		102,402,140		5,863,939		5,849,501		5,863,939		5,574,312
Dilutive securities:
Convertible preferred stock		250,000,000		206,521,739		12,500,000		12,500,000		12,500,000		11,767,399
Stock options		5,375,000		5,300,000		212,975		280,000		205,201		156,026
Weighted average dilutive shares		255,375,000		211,821,739		18,576,914		18,629,501		18,569,140		17,497,737

Earnings per share:
Basic	$	0.00	$	0.00	$	0.13	$	0.03	$	0.33	$	0.19
Diluted	$	0.00	$	0.00	$	0.04	$	0.01	$	0.11	$	0.06

Schedule of accounts receivable
	August 31, 2023			May 31, 2023			February 29, 2024			May 31, 2023
Customers Receivable	$	529,656		$	345,264		$	913,024		$	345,264
Merchant Processor Receivable		76,477			167,232			40,786			167,232
Less: Allowance for Doubtful Debts		(150,247	)		(95,480	)		(234,306	)		(95,480	)
Accounts receivable, net	$	455,886		$	417,016		$	719,504		$	417,016

Schedule of Inventory
Schedule of inventory
	August 31, 2023		May 31, 2023		February 29, 2024		May 31, 2023
Finished Goods	$	1,878,669	$	1,198,218	$	3,257,573	$	1,198,218
Raw Materials		191,299		113,646		185,720		113,646
Inventory, net	$	2,069,968	$	1,311,864	$	3,443,293	$	1,311,864

Schedule of Property and Equipment
Schedule of property and equipment
	Estimated Life	August 31, 2023			May 31, 2023			Estimated Life	February 29, 2024			May 31, 2023
Furniture and Fixtures	5 years	$	5,759		$	14,598		5 years	$	25,644		$	14,598
Computer Equipment	3 years		30,968			33,146		3 years		30,968			33,146
Plant Equipment	5-10 years		216,738			165,778		5-10 years		216,738			165,778
Automobile	5 years		15,000			15,000		5 years		15,000			15,000
Tractor Trailer								15 years		9,347			-
Less: Accumulated Depreciation			(68,904	)		(71,059	)			(85,551	)		(71,059	)
Total Property and Equipment, net		$	199,561		$	157,463			$	212,146		$	157,463

Schedule of intangible assets
	Estimated Life	August 31, 2023			May 31, 2023			Estimated Life	February 29, 2024			May 31, 2023
Licensing rights	3 years	$	11,945		$	11,945		3 years	$	11,945		$	11,945
Customer Relationships	3 years		70,000			70,000		3 years		70,000			70,000
Trade Names	10 years		275,000			275,000		10 years		275,000			275,000
Website	5 years		100,000			100,000		5 years		100,000			100,000
Less: Accumulated Amortization			(93,646	)		(74,271	)			(132,396	)		(74,271	)
Total Intangible Assets, net		$	363,299		$	382,674			$	324,549		$	382,674

Schedule of other current liabilities
	August 31, 2023		May 31, 2023		February 29, 2024		May 31, 2023
Credit Cards	$	12,308	$	833	$	17,470	$	833
Accrued Interest		10,904		10,343		—		10,343
Royalty Payment Accrual		34,062		8,792		10,551		8,792
Sales Tax Payable		227,894		240,559		277,992		240,559
Other Accrued Expenses		456,097		17,464		1,781		17,464
Affiliate Accrual		26,920		27,673		—		27,673
Total Other Current Liabilities	$	768,185	$	305,664	$	307,794	$	305,664

Schedule of loan payment due
	Total
2024	$	1,375
Equipment Payable, Net	$	1,375

Schedule of notes payable
Notes Payable as of	February 29, 2024			May 31, 2023
Insurance Financing	$	—		$	21,335
Financing Charges		—			1,253
Economic Injury Disaster Loan Program (EIDL)		147,150			150,000
Total		147,150			172,588
Less: Current portion		(3,310	)		(172,588	)
Non-current portion	$	143,840		$	—

Schedule of notes payable
Notes Payable as of	August 31, 2023			May 31, 2023
Insurance Financing	$	5,334		$	21,335
Financing Charges		-			1,253
Economic Injury Disaster Loan Program (EIDL)		150,000			150,000
Total		155,334			172,588
Less: Current portion		(155,334	)		(172,588	)
Non-current portion	$	-		$	-

Schedule of summarizes relating to the company’s stock
	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Term

Outstanding at May 31, 2022		265,000		$	1.80		10.0
Granted		15,000		$	1.80		9.68
Less: Forfeited		(11,250	)	$	4.00		9.68
Outstanding at May 31, 2023		268,750		$	1.80		8.92


Granted		—			—		—
Less: Forfeited		—			—		—
Outstanding at February 29, 2024		268,750		$	1.80		8.17
Less: Unvested at February 29, 2024		(74,531	)	$	1.80		8.17
Vested at February 29, 2024		194,219		$	1.80		8.17

Schedule of supplemental balance sheet information
	August 31, 2023			May 31, 2023			February 29, 2024			May 31, 2023
Assets
Right of use assets	$	131,970		$	131,970		$	131,970		$	131,970
Accumulated reduction		(45,859	)		(30,125	)		(78,746	)		(30,125	)
Operating lease assets, net	$	86,111		$	101,845		$	53,224		$	101,845

Liabilities
Lease liability	$	131,970		$	131,970		$	131,970		$	131,970
Accumulated reduction		(44,762	)		(29,394	)		(77,648	)		(29,394	)
Total lease liability, net		87,208			102,576			54,322			102,576
Current portion		(68,558	)		(65,824	)		(54,322	)		(65,824	)
Non-current portion	$	18,650		$	36,752		$	—		$	36,752

Schedule of maturities of operating lease liabilities
Operating Lease
Operating Lease (fiscal year-end)
2024	$	50,456	$	19,025
2025		36,752		38,049
Total	$	87,208	$	57,074
Less: Imputed interest	$	-		(2,752	)
Present value of lease liabilities	$	87,208	$	54,322

Schedule of estimated fair value of the assets acquired
Cash	$	1,066,414
Accounts receivable		227,786
Inventory		1,342,461
Prepaid expenses		62,452
Other assets		108,030
Accounts payable		(285,665	)
Contract liabilities		(1,043,332	)
Other current liabilities		(79,826	)
Net tangible assets acquired	$	1,398,320

Identifiable intangible assets
Licensing rights	$	11,945
Customer relationships		70,000
Tradenames		275,000
Website		100,000
Total Identifiable intangible assets	$	456,945

Consideration paid	$	4,007,480
Total net assets acquired		1,855,265
Goodwill purchased	$	2,152,215

Schedule of sales by product line
	For the Three Months ended						For the Nine Months Ended
							February 29,			February 28,
Hair Care Products	August 31, 2023			August 31, 2022			2024			2023
Shampoo								25	%		21	%
Shampoos and Conditioners		52	%		45	%		7	%		11	%
Conditioner								25	%		8	%
Bundle Kits		30	%		35	%		24	%		49	%
Ancillary Products		18	%		20	%		19	%		11	%
Total		100	%		100	%		100	%		100	%

Schedule of sales by product comprised
	For the three months ended
	August 31,			August 31,
Ear Protection & Enhancement Products	2023			2022
Ghost Stryke		55.9	%		90.7	%
Trackr Earmuffs		11.2	%		8.2	%
Other Bluetooth and ear buds		32.8	%		1.0	%
Accessories, other		0.1	%		0.1	%
Total		100.0	%		100.0	%

Schedule of segment information
					Three Months Ended					Nine Months Ended
	Three months ended				February 29,			February 28,		February 29,		February 28,
Net Sales	August 31, 2023		August 31, 2022		2024			2023		2024		2023
Hair care and skin care	$	314,853	$	485,236	$	476,864		$	302,415	$	1,022,458	$	1,206,385
Hearing enhancement and protection		5,791,416		3,752,122		5,992,479			5,354,046		19,974,831		15,419,433
Total net sales	$	6,106,269	$	4,237,358	$	6,469,343		$	5,656,461	$	20,997,289	$	16,625,818

Operating earnings
Operating earnings (loss)
Segment gross profit:
Hair care and skin care	$	221,524	$	324,105	$	247,859		$	202,016	$	641,966	$	842,447
Hearing enhancement and protection		4,426,042		2,958,549		4,376,467			4,016,469		14,887,865		11,697,726
Total segment gross profit	$	4,647,566	$	3,282,654	$	4,624,326		$	4,218,485	$	15,529,831	$	12,540,173
Selling and Marketing		3,206,841		1,977,976		3,398,949			3,173,383		10,278,570		8,250,257
General and Administrative		1,266,968		1,105,277		1,329,256			828,513		3,917,471		2,888,931
Consolidated operating income	$	173,757	$	199,401
Consolidated operating income (loss)					$	(103,879	)	$	216,588	$	1,333,790	$	1,400,984

Total Assets:
Hair care and skin care	$	4,259,041	$	781,328	$	4,232,913		$	1,243,359	$	4,232,913	$	1,243,359
Hearing enhancement and protection		6,627,525		6,185,244		8,480,805			8,047,093		8,480,805		8,047,093
Consolidated total assets	$	10,886,566	$	6,966,572	$	12,713,718		$	9,290,452	$	12,713,718	$	9,290,452

Payments for property and equipment
Hair care and skin care	$	-	$	-	$	—		$	—	$	—	$	—
Hearing enhancement and protection		50,960		6,400		9,347			11,250		80,192		65,650
Consolidated total payments for property and equipment	$	50,960	$	6,400	$	9,347		$	11,250	$	80,192	$	65,650

Depreciation and amortization
Hair care and skin care	$	1,418	$	1,423	$	1,417		$	1,417	$	4,251	$	4,258
Hearing enhancement and protection		26,819		18,246		26,197			22,512		79,383		62,686
Consolidated total depreciation and amortization	$	28,237	$	19,669	$	27,614		$	23,929	$	83,634	$	66,944

Exhibit		Filed	Furnished
Number	Exhibit Description	herewith	herewith
3.1	Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 6, 2017).
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed with the SEC on August 25, 2022).
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of January 16, 2024 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 16, 2024).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2024).
3.5	Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 6, 2017).
3.6	Amendment to the Bylaws, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2024).
10.1*	First Amendment to the 2022 Equity Incentive Plan of Reviv3 Procare Company, effective as of February 14, 2024 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2024).
10.2	Repurchase Agreement, dated March 5, 2024, by and between AXIL Brands, Inc. and Teton 360, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 11, 2024).
10.3	Repurchase Agreement, dated March 5, 2024, by and between AXIL Brands, Inc. and L Grant Foster TTEE - The Williams Family Irrevocable Trust (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 11, 2024).
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		X
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		X
101	The following unaudited condensed consolidated financial statements from the Quarterly Report on Form 10-Q for the quarter ended ~~August 31, 2023~~February 29, 2024 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Changes in Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) the Notes to Financial Statements.	X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	X

	~~REVIV3 PROCARE COMPANY~~AXIL BRANDS, INC.

Date: ~~October 12, 2023~~April 9, 2024

	By:	/s/ Jeff Toghraie
		Jeff Toghraie
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Monica Diaz Brickell
		Monica Diaz Brickell
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)