The accompanying notes are an integral part of these condensed
unaudited financial statements.
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 1 – Organization
Reviv3 Procare Company (the “Company”)
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 is engaged in the manufacturing, marketing, sale and distribution of professional quality hair and skin care
products throughout the United States, Canada, Europe and Asia.
Note 2 – Basis of Presentation and
Summary of Significant Accounting Policies
Basis of Presentation
The unaudited financial statements for the
three and six months ended November 30, 2019 and 2018 have been prepared by us pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of the management, all adjustments necessary to present fairly our financial position,
results of operations, and cash flows as of November 30, 2019 and 2018, 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 financial
statements prepared in accordance with generally accepted accounting principles have been omitted. The unaudited financial statements
should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on
Form 10-K for the year ended May 31, 2019. The results of operations for the three months and six months ended November 30, 2019
are not necessarily indicative of the results to be expected for the full year.
Going Concern
As reflected in the accompanying financial
statements, the Company has a net loss of $130,983 for the six months ended November 30, 2019. Additionally, the Company
has an accumulated deficit of $4,769,125 at November 30, 2019. These factors raise substantial doubt about the Company’s
ability to continue as a going concern for a period of 12 months from the issuance date of this report. The ability of the Company
to continue as a going concern is dependent on the Company’s ability to continue its business plan, raise capital, and generate
sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the
Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenue and in
its ability to raise additional funds, there can be no assurances to that effect. The financial statements do not include any adjustments
related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going concern.
Use of estimates
The preparation of the financial statements
in conformity with accounting principles generally accepted in the 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, the useful
life of property and equipment, the valuation of intangible assets, the valuation of deferred tax assets, the value of stock-based
compensation, 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.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 2 – Basis of Presentation and
Summary of Significant Accounting Policies (continued)
Accounts receivable and allowance for
doubtful accounts
The Company has a policy of providing on 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 of
$0 and $2,993 at November 30, 2019 and May 31, 2019, respectively, consist primarily of costs paid for future services which will
occur within a year and cash prepayment to vendors. Prepaid expenses at May 31, 2019 primarily included cash prepayment to vendors.
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.
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.
Revenue recognition
Effective June 1, 2018, the Company adopted
Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, which is effective for public
business entities with annual reporting periods beginning after December 15, 2017. This new 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 impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and
disclosures and there was no cumulative effect of the adoption of ASC 606.
The Company sells a variety of hair care products. The Company recognizes revenue on a gross basis as a principal 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. See Note 11 for revenue disaggregation disclosures.
Cost of Sales
The primary components of cost of sales include
the cost of the product and freight-in.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 2 – Basis of Presentation and Summary of Significant
Accounting Policies (continued)
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 $10,314 and $9,154 for the three months ended November 30, 2019 and 2018, respectively. Shipping
costs included in marketing and selling expense were $20,606 and $18,357 for the six months ended November 30, 2019 and 2018, respectively.
Marketing, selling and advertising
Marketing, selling 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.
Fair value measurements and fair value of financial instruments
The Company adopted ASC 820, “Fair Value
Measurements and Disclosures” (“ASC 820”), 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.
Income Taxes
The Company accounts for income taxes pursuant
to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), 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.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 2 – Basis of Presentation and
Summary of Significant Accounting Policies (continued)
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 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
of 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 and state taxing authorities, generally
for three years after they are filed.
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 recorded impairment losses of $474 during the six months ended November 30, 2019.
Stock-based compensation
Stock-based compensation is accounted for based
on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC
718”), 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.
Pursuant to ASC Topic 505-50, “Equity
Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is
determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date
is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based
on the fair value of the award at the reporting date.
Net loss per share of common stock
Basic net loss per share is computed by dividing
the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the
weighted average number of common shares and potentially dilutive securities outstanding during the period. At November 30, 2019
and 2018, the Company had no potentially dilutive securities outstanding.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 2 – Basis of Presentation and
Summary of Significant Accounting Policies (continued)
Accounting Changes
In February 2016, the FASB issued ASU No. 2016-02,
Leases, 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 under the prior guidance. Under the new guidance, codified as ASC Topic
842, Leases, 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. As permitted, the Company adopted ASC Topic 842 effective May 1, 2019 using the optional cumulative-effect transition
method. The Company, signed a lease for 3 years on December 1, 2019 and will record the initial lease liability and right-of-use
asset, in the same aggregate amount. The Company’s right-of-use asset relates to the lease involving office space and will
be amortized over the lease term of three years. The adoption of ASC Topic 842 did not otherwise have a material impact on the
Company’s financial statements.
Recently Issued Accounting Pronouncements
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the disclosure requirements on fair
value measurements under ASC Topic No. 820, Fair Value Measurement, as amended (“ASC 820”). For public companies, ASU
2018-13 removes (a) the prior requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair
value hierarchy (please see Note 3 below for discussion of the three-level hierarchy for measuring fair value), (b) the policy
for timing of transfers between levels, and (c) the valuation processes used for level 3 fair value measurements. For public companies,
ASU 2018-13 also adds, among other things, a requirement to disclose the range and weighted average of significant unobservable
inputs used in Level 3 fair value measurements. This amendment is effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2019. Early adoption was permitted upon issuance of ASU 2018-13. The Company has not
adopted ASU 2018-13 and, based on its preliminary assessment, does not believe the impact of adoption will be material on its financial
statements.
Other accounting standards that have been issued
or proposed by 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.
Reclassification
Certain prior year amounts have
been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results
of operations or cash flow.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 3 – Accounts Receivable
Accounts receivable, consisted of the following:
|
|
November 30, 2019
|
|
May 31, 2019
|
Accounts Receivable
|
|
$
|
53,260
|
|
|
$
|
82,365
|
|
Less: Allowance for doubtful debts
|
|
|
(435
|
)
|
|
|
(2,777
|
)
|
|
|
$
|
52,825
|
|
|
$
|
79,588
|
|
The Company recorded bad debt recovery of $2,342
and bad debt expense of $297 during the six months ended November 30, 2019 and 2018, respectively.
Note 4 – Inventory
Inventory consisted of the following:
|
|
November 30, 2019
|
|
May 31, 2019
|
Finished Goods
|
|
$
|
49,680
|
|
|
$
|
69,256
|
|
Raw Materials
|
|
$
|
252,289
|
|
|
|
195,322
|
|
|
|
$
|
301,969
|
|
|
$
|
264,578
|
|
At
November 30, 2019 and May 31, 2019, inventory held at third party locations amounted to $556
and $13,176, respectively. At November 30, 2019 and May
31, 2019, inventory in- transit amounted to $2,670 and $3,450, respectively.
During the six months ended November 30, 2019
the Company sold some of the slow- moving inventory which had been written off and recovered $769. During the six months ended
November 30, 2018, the Company wrote down inventory for obsolescence of $636 which is included in cost of sales.
Note 5 – Property and Equipment
Property and equipment, stated at cost, consisted
of the following:
|
Estimated Life
|
|
|
|
November 30, 2019
|
|
May 31, 2019
|
Furniture and Fixtures
|
5 years
|
|
|
|
$ 5,759
|
|
$ 5,759
|
Computer Equipment
|
3 years
|
|
|
|
17,392
|
|
17,392
|
Plant Equipment
|
5-10 years
|
|
|
|
29,720
|
|
20,490
|
Less:
Accumulated Depreciation
|
|
|
|
(16,377)
|
|
(10,838)
|
|
|
|
|
|
$ 36,494
|
|
$ 32,803
|
Depreciation expense amounted to $2,770 and
$1,130 for the three months ended November 30, 2019 and 2018, respectively. Depreciation expense amounted to $5,539 and $2,043
for the six months ended November 30, 2019 and 2018, respectively.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 6 – Accounts Payable and Accrued
Expenses
Accounts payable and accrued expenses comprised
of the following:
|
|
November 30, 2019
|
|
May 31, 2019
|
Trade Payables
|
|
$
|
152,212
|
|
|
$
|
14,610
|
|
Credit Cards
|
|
|
12,786
|
|
|
|
14,407
|
|
Other
|
|
|
2,109
|
|
|
|
3,454
|
|
|
|
$
|
167,107
|
|
|
$
|
32,471
|
|
Note 7 – Equipment Financing Payable
During the 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 instalment payments of
$317 comprising of principal payment of $275 and interest payment of $42. As of November 30, 2019, and May 31, 2019, the balance
outstanding on the loan was $13,305 and $15,210. $3,300 of the loan is payable within one year and the balance $10,005, is payable
after one year from November 30, 2019. The Company recorded an interest expense of $29 and $15, respectively on the loan in the
accompanying unaudited financial statements for the six months and three months ended November 30, 2019.
The amounts of loan payments due in the next
five years ended November 30, are as follows:
|
2020
|
|
$
|
3,300
|
|
|
2021
|
|
|
3,300
|
|
|
2022
|
|
|
3,300
|
|
|
2023
|
|
|
3,300
|
|
|
2024
|
|
|
105
|
|
|
|
|
$
|
13,305
|
|
Note 8 – Stockholders’ Equity
Shares Authorized
The authorized capital of the Company consists
of 100,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.0001
per 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 is expressly authorized to provide for the issuance of all
or any of the shares of the 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 of Directors providing the issuance of such shares. The Board of Directors 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.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 8 – Stockholders’ Equity
(continued)
Common Stock
As of November 30, 2019, 41,285,891 shares
of common stock were outstanding.
No stock was issued during the six months ended
November 30, 2019.
During the six months period ended November
30, 2018, the Company issued 760,000 shares of common stock for $304,000 cash proceeds to third party investors at $0.40 per share.
During the six months period ended November
30, 2018, the Company recorded 12,500 shares of common stock for shares earned by third party consultant for providing services
to the Company. The shares were valued at $0.40 per share or $5,000 based on recent common stock sales.
Note 9 – Commitments and Contingencies
As discussed in Note 2 above, the Company adopted
ASU No. 2016-02, 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 under the prior guidance. The Company
has a lease agreement in connection with its office and warehouse facility in California under an operating lease which expired
in October 2019. Rent expense amounted to $23,880 and $22,470 for the three months ended November 30, 2019 and 2018, respectively.
Rent expense amounted to $47,547 and $47,537 for the six months ended November 30, 2019 and 2018, respectively.
Subsequent to November 30, 2019, the Company
signed an extension of the lease from December 1, 2019 for 3 years. The rent will be $7,567.34 per month for the first year and
increase by a certain amount each year.
Future minimum rental payments required under
this operating lease are as follows:
|
|
Total
|
|
1 Year
|
|
2 Year
|
|
3 Year
|
Operating Lease
|
|
$
|
282,705
|
|
|
$
|
90,808
|
|
|
$
|
94,235
|
|
|
$
|
97,662
|
|
Total
|
|
$
|
282,705
|
|
|
$
|
90,808
|
|
|
$
|
94,235
|
|
|
$
|
97,662
|
|
The Company adopted ASC Topic 842 effective
June 1, 2019 and pursuant to that the Company will record the initial lease liability and right-of-use asset, in regards to the
lease on December 1, 2019. The Company’s right-of-use asset relates to lease involving office space and will be amortized
over the lease term of three years.
Note 10 – Related Party Transactions
The Company’s Chief Executive Officer,
from time to time, provided advances to the Company for working capital purposes. At November 30, 2019 and May 31, 2019, the Company
had a payable to the officer of $7,787 and $210, respectively. These advances are due on demand and non-interest bearing.
During the six months ended November 30, 2018,
the Company paid $280 to an affiliated company for advisory services rendered. The affiliated company is managed by the Company’s
Chief Executive Officer.
REVIV3 PROCARE COMPANY
CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOVEMBER 30, 2019 AND 2018
Note 11 – Concentrations and Revenue
Disaggregation
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 November 30, 2019 and May 31, 2019,
the Company held cash of approximately $98,330 and $102,454, respectively, in excess of federally insured limits. The Company has
not experienced any losses in such accounts through November 30, 2019.
Concentration of Revenue, Product Line,
and Supplier
During the three months ended November 30,
2019 sales to one customer, which represented over 10% of our total sales at 48%. During the six months ended November 30, 2019
sales to three customers, which each represented over 10% of our total sales, aggregated to approximately 55% of the Company’s
net sales at 35%, 10% and 11%. During the three months ended November 30, 2018 sales to two customers, which each represented over
10% of our total sales, aggregated to approximately 51% of the Company’s net sales at 37% and 14%. During the six months
ended November 30, 2018 sales to two customers, which each represented over 10% of our total sales, aggregated to approximately
45% of the Company’s net sales at 30% and 15%.
During
the three months ended November 30, 2019, sales to customers outside the United States represented approximately 21% which consisted
of 13% from Canada and 8% from Italy and during the six months ended November 30, 2019, sales to customers outside the United States
represented approximately 30% which consisted of 18% from Canada, 10% from Italy and 2% from UK. During the three months ended
November 30, 2018 sales to customers outside the United States represented approximately 39% which consisted of 19% from Canada,
14% from Italy, 1% from UK and 5% from Hong Kong. During the six months ended November 30, 2018 sales to customers outside the
United States represented approximately 37% which consisted of 23% from Canada,
9% from Italy, 5% from Hong Kong and 1% from United Kingdom.
During
the six months ended November 30, 2019, sales by product lines which each represented over 10% of sales consisted of approximately
16% from sales of prep cleanser and shampoo, 10% from sale of moisturizer and conditioner, 19% from sale of introductory kit (shampoo,
conditioner and treatment spray) and 35% from sale of fragrance shampoo and conditioner. During the six month period ended November
30, 2018, sales by product line which each represented over 10% of sales consisted of approximately 18% from sales of prep shampoo
and conditioner, 13% from sales of moisturizer and conditioner, 15% from sale of fragrance shampoo and conditioner and 21% from
sale of introductory kit (shampoo, conditioner and treatment spray).
During the six months ended November 30, 2019
and 2018, sales by product line comprised of the following:
|
|
For the Six months ended November 30,
|
Hair Care Products
|
|
2019
|
|
2018
|
Shampoos and Conditioners
|
|
|
88
|
%
|
|
|
87
|
%
|
Ancillary Products
|
|
|
12
|
%
|
|
|
13
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
As of November 30, 2019, accounts receivable
from three customers which each represented over 10% of total sales represented approximately 87% at 31%, 30%, and 26% and at May
31, 2019, accounts receivable from five customers represented approximately 94% at 30%, 13%, 23%, 14% and 14%, respectively.
The Company purchased inventories and products
from two vendors totaling approximately $196,962 (88% of the purchases at 76% and 12%) and three vendors totaling approximately
$241,220 (75% of the purchases) during the six months ended November 30, 2019 and 2018, respectively.