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Concentrations and Revenue Disaggregation

9 Months Ended

Feb. 28, 2021

Concentrations and Revenue Disaggregation

Note 12 – 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 February 28, 2021 the Company held cash of approximately $228,721, in excess of federally insured limits. The Company has not experienced any losses in such accounts February 28, 2021.

Concentration of Revenue, Product Line, Accounts Receivable and Supplier

During the three months ended February 28, 2021 sales to one customer, which each represented over 10% of our total sales, aggregated to approximately 17% of the Company’s net sales. During the nine months ended February 28, 2021 sales to two customers, which each represented over 10% of our total sales, aggregated to approximately 41% of the Company’s net sales at 28%, and 13%. During the three months ended February 29, 2020 sales to four customers, which each represented over 10% of our total sales, aggregated to approximately 68% of the Company’s net sales at 21%, 20%, 15% and 12%. During the nine months ended February 29, 2020, sales to three customers, which each represented over 10% of our total sales, aggregated to approximately 48% of the Company’s net sales at 26%, 10% and 12%.

During the three months ended February 28, 2021, sales to customers outside the United States represented approximately 35% which consisted of sales of 27% from Canada, 7% from Italy and 1% from United Kingdom during the nine months ended February 28, 2021, sales to customers outside the United States represented approximately 22% which consisted of 17% from Canada and 5% from Italy. During the three months ended February 29, 2020, sales to customers outside the United States represented approximately 42% which consisted of 41% from Canada and 1% from other countries and during the nine months ended February 29, 2020, sales to customers outside the United States represented approximately 33% which consisted of 24% from Canada, 8% from Italy and 1% from UK.

During the nine months ended February 28, 2021, sales by product lines which each represented over 10% of sales consisted of approximately 35% from sale of introductory kit (shampoo, conditioner and treatment spray) and 28% from sale of fragrance shampoo and conditioner. During the three months ended February 28, 2021, sales by product lines which each represented over 10% of sales consisted of approximately 43% from sale of introductory kit (shampoo, conditioner and treatment spray), 19% from sale of prep cleanser and shampoo and 11% from sale of moisturizer and conditioner. During the nine months ended February 29, 2020, sales by product lines which each represented over 10% of sales consisted of approximately 17% from sale of introductory kit (shampoo, conditioner and treatment spray) and 26% from sale of fragrance shampoo and conditioner. During the three months ended February 29, 2020, sales by product lines which each represented over 10% of sales consisted of approximately 25% from sale of introductory kit (shampoo, conditioner and treatment spray), 26% from sale of prep shampoo and 10% from prime moisturizer and conditioner.

During the nine months ended February 28, 2021 and February 29, 2020, sales by product line comprised of the following:

	For the nine months ended
Hair Care Products	February 28, 2021			February 29, 2020
Shampoos and Conditioners		86	%		80	%
Ancillary Products		14	%		20	%
Total		100	%		100	%

As of February 28, 2021, accounts receivable from three customers represented approximately 91% at 11%, 27% and 44% and at May 31, 2020, accounts receivable from one customer represented approximately 69%, respectively.

The Company purchased inventories and products from three vendors totaling approximately $241,805 (84% of the purchases at 42%, 27% and 15%) and one vendor totaling approximately $203,916 (77% of the purchases) during the nine months ended February 28, 2021 and February 29, 2020, respectively. The Company purchased inventories and products from two vendors totaling approximately $180,626 (96% of the purchases at 55% and 41%) and one vendor totaling approximately $39,450 (89% of the purchases) during the three months ended February 28, 2021 and February 29, 2020, respectively.