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Concentrations

3 Months Ended

Aug. 31, 2019

Note 11 – 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, 2019 and May 31, 2019, the Company held cash of approximately $87,273 and $102,454, respectively, in excess of federally insured limits. The Company has not experienced any losses in such accounts through August 31, 2019.

Concentration of Revenue, Product Line, and Supplier

During the three months ended August 31, 2019 sales to four customers, which each represented over 10% of our total sales, aggregated to approximately 54% of the Company’s net sales at 15%, 15%, 13% and 11%. During the three months ended August 31, 2018 sales to three customers, which each represented over 10% of our total sales, aggregated to approximately 59% of the Company’s net sales at 25%, 18% and 16%.

During the three months ended August 31, 2019 sales to customers outside the United States represented approximately 51% which consisted of 30% from Canada, 15% from Italy and 6% from UK and during the three months ended August 31, 2018 sales to customers outside the United States represented approximately 33% which consisted of 27% from Canada and 6% from Hong Kong.

During the three months ended August 31, 2019, sales by product lines which each represented over 10% of sales consisted of approximately 29% from sales of prep cleanser and shampoo, 16% from sale of moisturizer and conditioner and 30% from sale of introductory kit (shampoo, conditioner and treatment spray). During the three month period ended August 31, 2018, sales by product line which each represented over 10% of sales consisted of approximately 23% from sales of hair shampoo, 16% from sales of hair shampoo and conditioner, 20% from sale of hair treatment spray and repair products and 22% from sale of introductory kit (shampoo, conditioner and treatment spray).

During the three months ended August 31, 2019 and 2018, sales by product line comprised of the following:

Product	2019		2018
Prep Cleanser & Shampoo	$	36,712	$	30,590
Mosituriser & Conditioner		19,665		23,181
Treatment Spray		8,243		12,999
Cellular Complex		8,320		8,371
Hair masque		1,740		2,698
Thickening spray		2,553		2,345
Introductory kit		37,836		31,095
Fragrance shampoo and conditioner		—		25,000
Thermal protect		2,578		1,367
Bundle		5,745		—
Others		2,290		3,534
Total	$	125,682	$	141,180

As of August 31, 2019, accounts receivable from four customers which each represented over 10% of total sales represented approximately 89% at 29%, 26%, 23%, and 11% 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 $116,698 (85% of the purchases at 70% and 15%) and four vendors totaling approximately $86,500 (87% of the purchases) during the three months ended August 31, 2019 and 2018, respectively.