AXIL Brands, Inc.

Greetings and welcome to the Axil Brands first quarter 2027's financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Peter Seltzberg, VP Investor Relations. Thank you, Peter. You may begin.

Good afternoon, and thank you for joining us for Axel Brands' first quarter 2027 financial update and earnings conference call. I'm Peter Seltzberg, working with the team here at Axel, and we're excited to get back in front of our shareholders with the first quarter 2027 update. Before we begin, I'd like to remind everyone that certain statements made during today's call may constitute forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our filings with the Securities and Exchange Commission for discussion of these risks and other important factors, as well as an explanation of any non-GAAP items that we may refer to in today's press release and on this call. Presenting on behalf of management today are Jeff Toghraie, Axel's Chief Executive Officer, and Jeff Brown, Axel's Chief Financial Officer. We will begin with prepared remarks and then open the line for Q&A. Thank you for the questions submitted in advance. You can continue to send questions during the call to investors at goaxil.com, and we will add them to the queue. With that, I'll turn the call over to Jeff Toghraie, Axel's chairman and chief executive officer.

Good afternoon, and thank you for joining us. I am pleased to discuss our results for the three months ended August 31st, 2026, and the direction we see in Axel's business at the start of the new fiscal year. We are more constructive on the business than we have been at any point. We see several milestones ahead that we believe will serve shareholders well. In the first quarter, we remained profitable, continued to fund the business from operations, and ended the quarter in the strongest cash position in our history. Operations provided $3.8 million compared with the use of $739,000 a year ago. We closed August 31st with $7.9 million of cash or approximately $0.96 per diluted share, up from $4.5 million on May 31st, and remain debt-free. That is the position from which we intend to fund the next phase of growth, including the XCore 2 launch. For those less familiar with the product, XCore 2 is our next-generation flagship wireless platform. It carries our most advanced active noise reduction and our most immersive sound stage to date. The transition to X-Core 2 is the context for the quarter. Turning to the quarterly results, sales were $6.1 million, down 11.2% from $6.9 million a year ago. Two items explain the comparison. The first is the shift from X-Core 1 to X-Core 2. During the quarter, X-Core 1 orders slowed while customers prepared for the next-generation launch. Direct-to-consumer adhering was down less than 1%. The other side of that transition is already visible. X-Core 2 has produced the strongest early demand of any XIL product to date, and demand remains healthy across retail, distribution, and direct-to-consumer. Those figures are orders, not revenue. On August 26, we announced initial orders of more than $2.8 million. By September 30, that order book had grown to more than $3.6 million. Those figures are orders, not revenue. The product became available on September 15, and the majority of those orders have shipped and will be recognized in the second quarter, with the remainder expected to ship in October. Although orders can be canceled or returned, and this is not a guarantee of revenue, we expect that demand to begin showing up in revenue this quarter and in the periods that follow. The larger factor is the timing of orders from our retail partners. Last year's first quarter included a significant big box order that did not repeat this quarter. Our relationships with major retail chains continue to expand, and follow-on purchase orders have continued to come in. Those partners buy on their own shelf and promo calendars, so the timing of any one order sits outside our control. As we said in August, retail coverage is still early and one order can move a quarter. We expect that effect to moderate as the footprint deepens. That is a coverage issue, not a demand issue. In our observation, this channel is better judged over two to four quarters than by any single quarter comparison. Jeff Brown will now take you through the financials.