NOTE 14 — SUBSEQUENT EVENTS

On October 10, 2011, the Board of Directors of the Company approved a $0.07 per share dividend for the fourth quarter ending November 30, 2011, payable to all shareholders as of November 1, 2011 and to be paid on December 2, 2011.

On September 27, 2011, a lawsuit, entitled Shirilla v. CCA Industries, Inc., was instituted against the Company in the Superior Court of California, County of Los Angeles. The plaintiff named in the complaint relating to the lawsuit seeks to have the case certified as a class action. The complaint alleges unfair or deceptive business practices by the Company and asserts that the Company made false and misleading claims about its “Mega-T” product line in violation of the California Consumer Legal Remedies Act and the California Business and Professions Code. The complaint states that the plaintiff is seeking injunction and other equitable remedies, and restitution, disgorgement and unspecified monetary damages and expenses. The Company denies the allegations of wrongdoing and liability with regard to its advertising and other business practices. Moreover, the Company believes that the claims asserted in the Shirilla matter are the same as or similar to those asserted in the class action Wally v. CCA Industries, Inc., which was filed in the same court in 2009 and was settled, without admission of any liability or allegations made in the case, in 2010. The court-approved settlement in Wally dismissed all claims that were made, or could have been made, in the case by members of the plaintiff class. Accordingly, the Company believes the claims asserted in Shirilla are without merit and should be dismissed. There can be no assurance, however, that the court will concur with the Company’s position.

On September 20, 2011, the Company filed Form 8-K announcing that it had voluntarily requested that retailers and other outlets carrying the Company’s Plus+White^® whitening gel return three (3) lots of the oral care product, consisting of approximately 90,000 units of its Plus White whitening gel, shipped in June, July and August 2011. Some of the gel included in these lots liquefied (primarily a cosmetic change to the product) which caused the product to lose its efficacy. The Company has agreed to replace the units or issue credits and refund any consumer for their purchase of the defective product. The Company believes that the gross sales of the defective merchandise delivered to customers, together with additional retailer charges related to the return, were approximately $646,106, which was recorded as an additional reserve for returns in the third quarter ended August 31, 2011. At present, the Company is unable to predict the impact on future sales or the cost it will incur as a result of this action, though the impact could be material.