NYSE: AXIL

Our Strategy

The Company is growing its business through the expansion
of product lines serving various hearing protection markets, including outdoors, manufacturing, and construction, via its online platforms
and an expanding network of retail points of sale. During fiscal year 2026, the Company broadened its retail presence to approximately
6,000 stores through expanded partnerships with big-box retailers, including Walmart. Additionally, AXIL’s full product line became
available at certain U.S. Marine Corps Exchange (MCX) locations in the first quarter of fiscal 2027, extending access to military personnel
and their families. The Company is further expanding its product offerings in the public safety and security markets with the introduction
of the CRX digital hearing protection platform.

Sales are primarily driven by paid advertising, expansion
of the distribution network, strategic partnerships, and retail sales. The Company continues to expand its marketing footprint across
organic social media, affiliate marketing, and search engine optimization. The Company has increased its focus on opportunities in domestic
and international distribution and retail sales and is allocating resources to expand its sales team based on capital performance and
available opportunities.

Hearing Enhancement and Protection Segment

AXIL designs, manufactures, markets, and distributes
advanced hearing enhancement and protection products for a wide range of applications and industries. Our product portfolio includes
earplugs, earmuffs, earbuds, and outdoor speakers, many of which incorporate Bluetooth and wireless audio technologies. These products
serve consumers in sporting goods, tactical, industrial, and recreational markets, as well as military, law enforcement, and federal
agencies.

The Company also continued to invest in product innovation
during fiscal year 2026. We currently offer 27 products across 114 stock keeping units (SKUs), with plans to expand the line. Product
development is guided by consumer preferences and brand alignment, supported by third-party design services. Sales are primarily direct-to-consumer
through our website (www.goaxil.com), as well as through third-party e-commerce platforms, dealers, and big box retail chains.

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Our key offerings include:

·

GS Extreme® 3.0 –
Bluetooth-enabled earbuds for sound enhancement and hearing protection

·

AXIL® X30 LT – Dual-mode
in-ear hearing protection and enhancement device with up to 25 decibel noise reduction

·

XCOR® True Wireless –
Digital earbuds with touch control

·

MX Series Earmuffs – Bluetooth earmuffs with
HearPRO™ digital hearing protection technology

·

X-PRO – X20 passive plugs
and X30i passive plugs with SoundShield filter

AXIL holds three active patents, one patent pending,
five registered trademarks and twelve pending trademark registrations related to this segment. For additional detail, see “Intellectual
Property.” As the segment grows, we continue to enter new distribution and licensing agreements across target markets, including
construction, aviation, agriculture, forestry, fitness, power sports, target shooting, motorcycling, and live event environments. We
currently operate primarily in the U.S., with a growing presence in Canada, Europe, Australia, New Zealand, Asia and Africa.

The Company is growing the business as it continues
to enter into new distribution and licensing agreements. During fiscal year 2026, AXIL expanded its retail presence through a broadened
partnership with Walmart, with the MX PRO and MX Passive models launching across approximately 1,250 Walmart stores as of the filing
of this report. Additionally, AXIL’s full product line is expected to become available at certain U.S. Marine Corps Exchange (MCX)
locations in the first quarter of fiscal 2027, extending access to military personnel and their families. There is continued focus on
public safety and security markets, as well as entertainment venues. Sales are primarily driven by paid advertising, the expansion of
our distribution network, and strategic partnerships, with continued growth expected, including offline sales. The Company continues
to expand our marketing footprint in organic social, affiliate, and search engine optimization. The Company has increased its focus on
opportunities in domestic and international distribution and retail sales and is allocating resources to expand its sales team, based
on capital performance and available opportunities.

Hearing Enhancement and Protection Competition:

The hearing enhancement and protection products are
in a distinct market that overlaps between the consumer electronics and the hearing protection device sectors. We believe the global
hearing protection devices market is growing due to the greater awareness of hearing loss. According to the Center for Disease Control
and Prevention, 53% of noise-exposed workers report not wearing hearing protection. Demand for innovative products for hearing protection
is rising as consumers seek devices that are both comfortable and offer superior hearing protection.

The hearing protection and enhancement segment competes
with ISOtunes, Walker’s, SureFire, Sordin and others. Many of our competitors in this market have more broadly diversified product
lines, well established supply and distribution systems, loyal customer bases and significant financial, marketing, research and development,
and other resources. We believe our principal competitive advantages include: brand recognition; product technology and innovation; product
quality and safety; price; breadth of product lines; network of technology and content partners; access to third party retailers; sales
channels, distributors, retailers and OEM partners; and patent protection.

Hair and Skin Care Segment

AXIL’s hair and skin care segment involves
the outsourced manufacturing, marketing, and distribution of professional-grade products under the Reviv3 Procare® brand. We currently
offer eight products across sixteen SKUs, with plans to expand the line in response to evolving customer needs. Our manufacturing is
fulfilled through third-party co-packers and partners.

The product line includes shampoos, conditioners,
scalp treatments, styling aids, and skin health solutions designed to promote healthy hair follicles and scalp function. Products are
formulated to work as a system or individually, and include solutions for cleansing, conditioning, repair, protection, and volume enhancement.

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Sales are driven by a multi-channel strategy including:

·

Direct-to-consumer
via our e-commerce site and third-party platforms

·

Domestic and
international distributors

·

Professional
salon partnerships

We currently maintain 14 distribution agreements
across the U.S., Canada, Europe, and Asia, which are non-exclusive, and hold one registered trademark in this segment. In addition to
expanding core distribution, including a partnership with a major national salon chain across Canada entered into during fiscal 2026,
we are actively exploring growth through co-branding, private-label partnerships, and enhanced digital marketing initiatives.

Hair and Skin Care Competition:

The global hair care market continues to demonstrate
significant growth potential. According to Mordor Intelligence, the global hair care market is expected to increase from approximately
$82.5 billion in 2026 to $108.6 billion by 2031, reflecting a projected compound annual growth rate of approximately 5.7%. North America
currently represents the largest regional market, while Asia-Pacific is expected to experience the fastest growth during the forecast
period.

The Company believes these industry trends support
continued demand for products addressing hair health, hair loss, scalp care, and related wellness needs.

The hair and skin care segment competes with Keranique,
Zenagen, Revita and others. Many of our competitors in this market have more broadly diversified product lines, well established supply
and distribution systems, loyal customer bases and significant financial, marketing, research and development and other resources. We
believe our principal competitive advantages include product quality, online marketing, and drug-free solutions for healthy scalp and
hair.

Key Customers

For the hearing enhancement and protection segment
which accounted for 96% of consolidated net revenues, one customer accounted for 23% of our net revenues in the fiscal year ended May
31, 2026. Approximately 65% of our consolidated net revenues were direct-to-consumer through our owned e-commerce sites and third-party
online marketplaces for the fiscal year ended May 31, 2026, compared with approximately 80% for the fiscal year ended May 31, 2025. During
fiscal year 2026, the Company expanded its brick-and-mortar retail presence, including through an expanded partnership with Walmart across
approximately 1,250 stores. Subsequent to fiscal year end, the Company announced the addition of certain U.S. Marine Corps Exchange (MCX)
locations as a distribution channel, with availability expected to begin in July 2026. Walmart did not individually account for more
than 10% of net sales in fiscal year 2026, and we believe these relationships represent significant new retail opportunities for the
Company.

As is customary in the industry, none of our customers
are under any obligation to continue purchasing products from us in the future.

Key Suppliers

Similar to other specialty retailers, we
purchase a significant portion of our total inventory from a limited number of vendors. During fiscal year 2026, a single vendor accounted
for 79% of total purchases in our hearing enhancement and protection segment. In our hair and skin
care segment, three vendors accounted for 91% of total purchases in the respective segment, each accounting for 62%, 18%, and 11%, respectively.
The loss of any one or more of these key vendors or our failure to establish and maintain relationships with these and other vendors
could have a material adverse effect on our results of operations and financial condition. Our relationships with our vendors allowed
us to maintain a competitive in-stock position.

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Customer Service and Support

Key elements of our customer service approach are
listening to customers, empathizing with their concerns, responding timely to their requests, and following up with them to make sure
any issues have been properly addressed. In order to ensure that sufficient quality of service is provided, we use a customer service
platform that integrates all of our systems to provide complete and timely data and tracks all support tickets and conversations with
customers. Our customer service manager performs regular monthly reviews of performance metrics and reviews processes.

Governmental Regulation

We are subject to a variety of laws, rules and regulations
in numerous jurisdictions within the U.S., Canada, Europe, Australia, New Zealand, Asia, and Africa. These laws, rules and regulations
cover several diverse areas including consumer health and safety, and employee health and safety. These U.S. federal, state, and foreign
laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving
and can be subject to significant change. The compliance costs and operational burdens imposed by these laws and regulations could be
significant. As a result of the often rapidly evolving changes, the application, interpretation, and enforcement of these and other laws
and regulations are often uncertain and may be interpreted and applied inconsistently from jurisdiction to jurisdiction and inconsistently
with our current policies and practices. We are committed to conducting our business in accordance with applicable laws, rules and regulations.

Environmental Matters: We believe that we
are in compliance with applicable foreign, federal, state, and local laws, rules and regulations relating to the protection of the environment,
and that continued compliance will not have any material effect on our capital expenditures, earnings, or competitive position.

Intellectual Property

We intend to protect our technology by filing patent
applications for the technologies that we consider important to our business. We also rely on trademarks, trade secrets, copyrights and
unpatented know-how to protect our proprietary rights.

We recognize the value of our intellectual property
and have taken, and will continue to take, appropriate measures to safeguard it against misappropriation. There can be no assurance,
however, that such actions will provide meaningful protection from competition. In the absence of intellectual property protection, we
may be vulnerable to competitors who attempt to copy or imitate our products or processes.

While we believe that our patents and other proprietary
rights are important to our business, we also believe that, due to the rapid pace of technological change in the markets we serve, the
successful manufacture and sale of our products also depends upon our engineering, manufacturing, marketing and servicing skills.

It is our practice to require that all of our employees
and third-party product development consultants assign to us all rights to inventions or other discoveries relating to our business that
were made while working for us. In addition, all employees and third-party product development consultants agree not to disclose any
private or confidential information relating to our technology, trade secrets or intellectual property.

At May 31, 2026, we held three active U.S. patents
and had one pending U.S. patent application covering various aspects of our technology. Our U.S. patents expire at various times beginning
in 2035 and extending through 2038. During the fiscal year ended May 31, 2026, none of our U.S. patents expired.

We have six federally registered trademarks and 12
trademarks pending registration, which we consider to be of material importance to our business. The registrations for these trademarks
are in good standing with the U.S. Patent & Trademark Office. Our trademark registrations must be renewed at various times, and we
intend to renew our trademarks, as necessary, for the foreseeable future.

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In addition, we own reviveprocare.com and www.goaxil.com.
As with phone numbers, we do not have and cannot acquire any property rights to an Internet address. The regulation of domain names in
the United States and in other countries is also subject to change. Regulatory bodies could establish additional top-level domains, appoint
additional domain name registrars or modify the requirements for holding domain names. As a result, we might not be able to maintain
our domain names or obtain comparable domain names, which could harm our business.

Seasonality

While our business is not subject to substantial
seasonal fluctuations, we do experience typical variations in consumer demand around certain holidays and promotional periods. These
fluctuations are consistent with industry norms and do not materially impact our overall operating results.

Human Capital Management

As of May 31, 2026, we had thirteen full-time employees
and two part-time employees, all of whom were employed in the United States and none employed outside the United States. None of our
employees are covered by collective bargaining agreements or work councils. Our human capital resources objectives include, as applicable,
identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. Overall,
we consider our employee relations to be good and believe our culture to be central to the success of the Company.

Health and Safety: The health and safety
of our employees is of utmost importance to us. We are continuing to enhance our safety program with additional training and internal
risk and hazard assessments. We conduct policy and procedure reviews to ensure compliance with health and safety guidelines and regulatory
requirements. We provide protective gear (e.g., eye protection, masks, and gloves) as required by applicable standards and as appropriate.
Our goal is to achieve a level of work-related injuries as close to zero as possible through continuous investment in our safety program.

Compensation and Benefits: Our compensation
and benefits program is designed to attract and reward individuals who demonstrate the ability and desire to enhance our workplace culture,
support our values, drive our operational and strategic goals, and create long-term value for our stockholders.

Our Office and Corporate History

Our principal executive office is located at 9150
Wilshire Boulevard, Suite 245, Beverly Hills, California 90212. Our telephone number is (888) 638-8883. Axil Brands, Inc. 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.

Available Information

We file Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
Our filings with the SEC are available on the SEC’s website at www.sec.gov. We also maintain websites at www.goaxil.com and reviveprocare.com.
We make available, free of charge, in the Investors section of our website, documents we file with or furnish to the SEC, including our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports. We make
this information available as soon as reasonably practicable after we electronically file such materials with, or furnish such information
to, the SEC. The information found on our website is not part of this or any other report we file with, or furnish to, the SEC. Any reference
to our websites in this Form 10-K is intended to be an inactive textual reference only. Copies of such documents are available in print
at no charge to any stockholder who makes a request. Such requests should be made to our corporate secretary at our corporate headquarters,
9150 Wilshire Boulevard, Suite 245, Beverly Hills, California 90212.

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