Quarterly Report for Quarter Ending February 28, 2026 (Form 10-Q)

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, 2025 filed with the SEC on August 21, 2025. 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, professional quality hair and skin care products under various trademarks and brands, and the delivery of marketing services to support both its owned brands and third-party clients.

Beginning in the three months ended February 28, 2026, we operate in three reportable segments: (i) hearing enhancement and protection, (ii) hair and skin care, and (iii) marketing services.

Through our hearing enhancement and protection segment, we design, innovate, engineer, manufacture, market and service specialized systems in hearing enhancement, hearing protection, wireless audio, and communication. Through our hair and skin care segment, we manufacture, market, sell, and distribute professional quality hair and skin care products. Our marketing services segment is conducted through our wholly owned subsidiary, Sharper Vision Marketing Inc., which was formed to leverage our direct-to-consumer expertise in support of both our internal brands and third-party clients. This segment is focused on delivering performance-driven marketing solutions and represents an expansion of our capabilities to drive growth and enhance brand visibility.

Our overall business strategy centers on building strong market awareness of our products across multiple sales channels. We primarily drive revenue and brand recognition through targeted online marketing and advertising campaigns. This awareness is designed to create a multiplier effect. By expanding the number of points of sale both online and offline we aim to capture more sales and customers for every dollar spent on advertising. We aim to optimize customer acquisition by converting the market awareness generated through paid campaigns into purchases across a broader range of retail and distribution locations.

In addition to growing our overall distribution and retail footprint, the Company has reached a significant milestone in its wholesale channel strategy by securing several strategic supply agreements with leading national retail chains. These agreements have already generated multiple purchase orders in the first half of calendar 2026. While there can be no assurance that additional purchase orders will be received or regarding the timing or volume of fulfillment, we expect this expanded national retail presence to drive meaningful revenue growth and significantly enhance brand visibility among a much wider customer base.

On February 24, 2026, we formed Reviv3 ProCare Company, a wholly owned subsidiary, as part of a broader initiative to support the potential strategic separation or other transaction involving the hair and skin care business. These initiatives are intended to enhance long-term growth and strategic flexibility.

On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the imposition of certain tariffs previously assessed on imports. Following that decision, the U.S. Court of International Trade issued orders directing CBP to liquidate unliquidated entries and reliquidate certain non-final liquidated entries without regard to IEEPA duties, while CBP develops a new automated refund process to administer potential refunds, and the court continues to oversee CBP's progress through required status reports.

The Company has paid IEEPA duties on certain import transactions historically. While these court decisions create the possibility of refunds, the amount and timing of any potential recovery remains uncertain and depends on, among other factors, (i) the liquidation status and finality of the Company's relevant import entries under U.S. customs laws (including statutory time frames for reliquidation and administrative protests), and (ii) the scope, timing, validation rules, and phased implementation of CBP's refund process, which CBP has indicated will initially exclude certain complex entry scenarios.

As of February 28, 2026, we have not recorded a receivable related to potential tariff refunds and cannot reasonably estimate the amount or timing of any refunds. If refunds are received in future periods, they could have a favorable impact on cash flows and results of operations in the period of receipt or realization; however, there can be no assurance that the Company will recover any material portion of the IEEPA duties paid.

We have paid approximately $900,000 in IEEPA duties since April 2025, of which $321,059 is included in Inventory, net on the accompanying consolidated balance sheets as of February 28, 2026 and the remainder has been recorded in cost of sales over the period of which the inventory was sold consistent with our accounting policies. These amounts represent total amounts paid and should not be interpreted as an estimate of potential refunds or recoveries.

In addition, following the U.S. Supreme Court's decision, as described above, the U.S. President imposed a new tariff surcharge of not less than 10% under Section 122 of the Trade Act of 1974 on all imports, subject to certain exceptions. The tariffs under this statute took effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute). The U.S. President also indicated a desire to increase such tariffs to 15% and to seek to extend such tariffs under other statutes. The imposition of such tariffs may continue to strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the U.S. In addition, the scope and durability of existing and future tariff measures remain uncertain.

In December 2025, we announced the securing of a new nationwide retail distribution partnership with a major U.S. retailer, positioning next-generation hearing protection products for broad in-store availability beginning in fiscal 2026. We believe our expanded retail footprint strengthens our market presence and supports broader consumer adoption of our hearing protection solutions.

In September 2025, we announced a partnership with a major national salon chain across Canada to offer our full Reviv3 Procare® line, a collaboration that significantly expands our brand's professional reach through one of the country's most influential haircare networks.

In June 2025, the Company expanded its leadership team by hiring a senior contractor to lead growth initiatives in our hair and skin care division. This individual brings extensive experience in brand development and channel expansion. His appointment reflects our commitment to scaling this business segment and capitalizing on emerging industry growth.

We also gained media recognition in leading military publications, including Military Times, Air Force Times, Marine Corps Times, and Navy Times, highlighting our hearing protection and enhancement technology. We believe this visibility strengthens our credibility among professional and tactical users.

On July 4, 2025, legislation commonly referred to as The One Big Beautiful Bill Act of 2025 ("OBBBA") was enacted in the U.S., making permanent certain provisions of the Tax Cuts and Jobs Act and introducing changes to corporate tax provisions. We are currently assessing the impact of OBBBA on our consolidated financial statements.

Outlook

Based on our current expectations and assumptions regarding continued retail expansion, we expect revenue for the fourth quarter of fiscal 2026 to be in the range of $8 million to $10 million, representing approximately 39% to 74% year-over-year growth. We anticipate our gross margins for the fourth quarter of fiscal 2026 to be in the range of 67% to 71%. For the full fiscal year 2026, we expect revenue in the range of $30.2 million to $32.2 million, which implies 15% to 23% growth compared to fiscal 2025.

We are providing this outlook based on current expectations; however, we have not historically provided guidance and may not continue to do so. These statements are forward-looking and subject to risks and uncertainties, including those related to our retail expansion, consumer demand, and gross margins, as well as those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended May 31, 2025, which should be read in conjunction with this Form 10-Q.

Results of Operations

		Three months ended								Nine months ended
		February 28, 2026				February 28, 2025				February 28, 2026				February 28, 2025
Sales, net		$	7,294,030			$	6,922,367			$	22,285,107			$	20,506,213
Cost of sales			2,252,209				1,955,939				7,072,115				5,888,090
Gross profit			5,041,821				4,966,428				15,212,992				14,618,123
Total operating expenses			4,827,582				4,383,319				13,683,944				13,502,845
Income from operations			214,239				583,109				1,529,048				1,115,278
Net income after tax		$	203,046			$	576,662			$	1,242,223			$	1,100,563

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

		For the Three Months Ended February 28,								For the Nine Months Ended February 28,
		2026				2025				2026				2025
Net income (GAAP)		$	203,046			$	576,662			$	1,242,223			$	1,100,563
Provision for income taxes			64,306				53,085				412,479				120,335
Interest income, net			(31,297	)			(42,920	)			(98,774	)			(97,595	)
Depreciation and amortization			54,370				45,666				183,971				93,001
Total EBITDA (Non-GAAP)			290,425				632,493				1,739,899				1,216,304
Adjustments:
Stock-based compensation			180,369				258,053				560,603				860,517
Total Adjusted EBITDA (Non-GAAP)		$	470,794			$	890,546			$	2,300,502			$	2,076,821
Sales, net (GAAP)		$	7,294,030			$	6,922,367			$	22,285,107			$	20,506,213
Adjusted EBITDA as a percentage of Sales, net (Non-GAAP)			6.5	%			12.9	%			10.3	%			10.1	%

For the Three Months Ended February 28, 2026 Compared to the Three Months Ended February 28, 2025

Net sales increased by $371,663, or 5.4%, to $7,294,030 for the three months ended February 28, 2026, compared to $6,922,367 for the prior-year period. The increase was primarily driven by continued growth in demand for our hearing enhancement and protective equipment products. This growth was partially offset by lower sales in our hair and skin care segment, which were impacted by the absence of a significant distributor order that was fulfilled in the prior-year period.

Cost of sales includes the cost of products, freight-in costs, customs duties, and depreciation related to fixed assets that are used in the production and distribution process to bring goods to their saleable condition and location. The overall cost of sales increased by $296,270 or 15.1% from $1,955,939 in the three months ended February 28, 2025 to $2,252,209 in the three months ended February 28, 2026. Cost of sales as a percentage of net revenues for the three months ended February 28, 2026 was 30.9% as compared to 28.3% for the three months ended February 28, 2025. Cost of sales as a percentage of revenue increased primarily due to increased tariffs.

Gross profit increased by $75,393 or 1.5% from $4,966,428 in the three months ended February 28, 2025 to $5,041,821 for the three months ended February 28, 2026. Gross profit as a percentage of sales for the three months ended February 28, 2026 was 69.1%, as compared to 71.7% for the three months ended February 28, 2025. Gross profit as a percentage of sales decreased primarily due to higher customs duties.

Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses increased by $444,263 or 10.1% from $4,383,319 in the three months ended February 28, 2025 to $4,827,582 in the three months ended February 28, 2026. Operating expenses as a percentage of net revenues for the three months ended February 28, 2026 was 66.2% compared to 63.3% for the three months ended February 28, 2025. Included in operating expenses were non-cash stock-based compensation of $180,369 and $258,053 in the three months ended February 28, 2026 and 2025, respectively. Operating expenses increased primarily due to higher sales and marketing expenses of approximately $400,000, reflecting increased investment in retail sales promotional initiatives and efforts to enhance overall brand awareness.

Income from operations for the three months ended February 28, 2026, was $214,239 compared to $583,109 for the three months ended February 28, 2025. The decrease in income from operations of $368,870 related primarily to an increase in sales and marketing costs.

For the three months ended February 28, 2026, provision for income tax expense was $64,306. For the three months ended February 28, 2025, we had a provision for income tax expense of $53,085.

As a result of the above, we reported a net income of $203,046 and $576,662 for the three months ended February 28, 2026 and 2025, respectively.

Adjusted EBITDA decreased by $419,752 or 47.1% from $890,546 for the three months ended February 28, 2025 to $470,794 for the three months ended February 28, 2026. Adjusted EBITDA as a percentage of sales, net for the three months ended February 28, 2026 and 2025, was 6.5% and 12.9%, respectively. Adjusted EBITDA decreased primarily due to an approximately $400,000 increase in sales and marketing expenses, reflecting continued investment in our direct-to-consumer channel and broader brand-building initiatives aimed at driving long-term revenue growth.

Basic and diluted earnings per share for the three months ended February 28, 2026 were $0.03 and $0.02, respectively, compared to basic and diluted earnings per share of $0.09 and $0.07, respectively, for the three months ended February 28, 2025.

For the Nine Months Ended February 28, 2026 Compared to the Nine Months Ended February 28, 2025

Net sales increased by $1,778,894 or 8.7% from $20,506,213 in the nine months ended February 28, 2025 to $22,285,107 for the nine months ended February 28, 2026. The increase in net sales was primarily driven by a material order from our retail channels.

The overall cost of sales increased by $1,184,025 or 20.1% from $5,888,090 in the nine months ended February 28, 2025 to $7,072,115 in the nine months ended February 28, 2026. Cost of sales as a percentage of net revenues for the nine months ended February 28, 2026 was 31.7% as compared to 28.7% for the comparable period in 2025. Cost of sales as a percentage of sales increased, primarily driven by a higher mix of lower-margin sales to distributors in our hair and skin care segment and increased sales to a leading national membership-based retail chain in our hearing enhancement and protection equipment, which carries tighter margins than our direct-to-consumer channel, as well as higher customs duties.

Gross profit for the nine months ended February 28, 2026 and 2025 was $15,212,992 and $14,618,123, respectively. Gross profit as a percentage of sales for the nine months ended February 28, 2026, was 68.3% as compared to 71.3% for the comparable period in 2025. The decrease in the gross profit margin for the nine months ended February 28, 2026 was primarily due to lower margins related to a material order with a leading national membership-based retail chain and higher customs duties.

Operating expenses consisted of marketing and selling expenses, compensation and related taxes, professional and consulting fees, and general and administrative costs. Operating expenses increased by $181,099 or 1.3% from $13,502,845 in the nine months ended February 28, 2025 to $13,683,944 in the nine months ended February 28, 2026. Operating expenses as a percentage of net revenues for the nine months ended February 28, 2026, were 61.4% compared to 65.8% for the nine months ended February 28, 2025. Included in operating expenses were non-cash stock-based compensation of $560,603 and $860,517 in the nine months ended February 28, 2026 and 2025, respectively. Operating expenses increased primarily due to higher sales and marketing expenses, reflecting increased investment in direct-to-consumer initiatives and brand awareness. This increase was partially offset by improved operating efficiencies, including lower professional and consulting fees and reduced stock-based compensation, as well as the absence of a $220,000 accounts payable forgiveness recognized in the prior-year period that did not recur.

Income from operations for the nine months ended February 28, 2026, was $1,529,048 compared to income of $1,115,278 for the nine months ended February 28, 2025. The increase in income from operations of $413,770 or 37.1% was primarily driven by a material order from a leading national membership-based retail chain, partially offset by increased operating expenses and by a forgiveness of accounts payable of approximately $220,000, included in General and administrative on the accompanying consolidated statement of operations, that did not recur in the nine months ended February 28, 2026.

For the nine months ended February 28, 2026, provision for income tax expense was $412,479. For the nine months ended February 28, 2025, provision for income tax expense was $120,335.

As a result of the above, we reported a net income of $1,242,223 and $1,100,563 for the nine months ended February 28, 2026 and 2025, respectively.

Adjusted EBITDA increased by $223,681 or 10.8% from $2,076,821 in the nine months ended February 28, 2025 to $2,300,502 in the nine months ended February 28, 2026. Adjusted EBITDA as a percentage of sales, net for the nine months ended February 28, 2026 and 2025, were 10.3% and 10.1%, respectively. Adjusted EBITDA improved due to a material order from our retail channels, partially offset by a forgiveness of accounts payable of approximately $220,000 that did not recur in the current period.

Basic and diluted earnings per share for the nine months ended February 28, 2026 were $0.18 and $0.15, respectively, compared to basic and diluted earnings per share of $0.17 and $0.13, respectively, for the nine months ended February 28, 2025.

Liquidity and Capital Resources

We are currently engaged in product sales and development. Although we have experienced operating losses in prior periods, we expect to continue generating net income and positive cash flow in the fiscal year ending May 31, 2026. Based on our current cash balances and anticipated operating cash flows, we believe we have sufficient liquidity to meet working capital needs for at least one year from the issuance date of the accompanying consolidated financial statements.

We plan to manage expenses relative to expected revenue and may reinvest near-term cash to support revenue growth. In recent years, we have generated sufficient cash to support our operations and required debt payments, and we expect this to continue, although we cannot provide any assurance. Management remains focused on expanding product lines and our customer base to drive revenue. However, future cash demands may exceed historical levels. If needed, we may seek additional capital, although there is no assurance that financing will be available on acceptable terms or at all. Subject to these uncertainties, we believe we have sufficient capital and liquidity to fund operations for at least one year from the issuance date of the accompanying consolidated financial statements.

We are actively evaluating strategic alternatives for the hair and skin care business, including a potential spin-off, sale, or initial public offering, which could occur within the next two years depending on operational performance and market conditions. These initiatives could impact the Company's capital structure, ownership of the hair and skin care business, and future liquidity.

Cash Flows for the nine months ended February 28, 2026 and 2025

Operating Activities

Net cash provided by operating activities for the nine months ended February 28, 2026, was $790,330, compared to $1,734,230 for the nine months ended February 28, 2025. The decrease was driven primarily by a significant inventory purchase associated with a material order from our retail channels.

Investing Activities

Net cash flows used in investing activities for the nine months ended February 28, 2026 and 2025, was $208,850 and $255,778, respectively, due to the purchase of intangibles and property and equipment for our business.

Financing Activities

Net cash flows provided by financing activities for the nine months ended February 28, 2026 was $167,655 primarily related to net advances made from a related party of $169,425. Net cash provided by financing activities for the nine months ended February 28, 2025 was $11,142.

As of February 28, 2026, we had a secured Economic Injury Disaster Loan outstanding, administered pursuant to the CARES Act in the principal amount of $138,459, with a maturity date of May 18, 2050. The Company continues to pay interest and principal on the loan.

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, preferred stock, 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 to obtain, more costly and more dilutive. 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 February 28, 2026, we did 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.

Significant Accounting Policies and Estimates

Significant accounting policies and practices are those that are both most important to the portrayal of the Company's financial condition and results, and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates.

Accounts receivable and allowance for credit losses

The Company has a policy of providing an allowance for credit losses 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 provision for credit losses and included in the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Revenue recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the product is transferred to the customer, typically upon shipment. In determining the transaction price, we consider discounts, promotional incentives, and expected returns. These estimates require judgment based on historical experience and current market conditions. Changes in customer behavior or promotional strategies could impact the timing and amount of revenue recognized.

Goodwill

Goodwill represents the excess of the consideration paid over the fair value of net assets acquired in a business combination. We evaluate goodwill for impairment at least annually during the fourth quarter, or more frequently if circumstances or events suggest potential impairment. Throughout the year, we monitor for indicators that might trigger an interim impairment review. Our testing may begin with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If a quantitative test is performed, fair value is estimated based on the amount a market participant would pay in a hypothetical sale of the reporting unit. When the fair value exceeds the carrying value, goodwill is considered to be not impaired. If the carrying value exceeds fair value, an impairment charge is recorded for the amount of the excess, limited to the total carrying amount of goodwill.