Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v2.4.0.8
Discontinued Operations
 6 Months Ended
May 31, 2014
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS
The Company is discontinuing and exiting the Gel Perfect color nail polish business effective as of the end of the second quarter of fiscal 2014. The Gel Perfect brand has had declining sales in fiscal 2013 and fiscal 2014 to date. Second quarter net sales were $(2,978,010) and net sales for the six months ended May 31, 2014 were $(2,725,966). The negative net sales were due to the large amount of returns received during the respective periods. In addition, the Company has recorded a reserve for returns of $1,957,011 in the second quarter of fiscal 2014 based on the liability with its retail customers for potential returns or mark down agreements. The expense as a result of recording the reserve for returns is reflected as a reduction of net sales. The Company has elected to record Gel Perfect on its financial statements as a discontinued operation. The components of the discontinued operations for the three and six months ended May 31, 2014, which are reflected on the consolidated statement of operations as (Loss) from Discontinued Operations are:
 
Three Months Ended
Six Months Ended
 
May 31, 2014
May 31, 2013
May 31, 2014
May 31, 2013
Revenues:
 
 
 
 
Sales of health and beauty-aid products-net
$
(2,978,010
)
$
582,467

$
(2,725,966
)
$
3,096,189

Total revenues
(2,978,010
)
582,467

(2,725,966
)
3,096,189

Costs and Expenses:
 
 
 
 
Cost of sales
$
803,016

$
691,237

$
1,353,483

2,005,009

Selling, general and administrative expenses
$
76,632

$
245,646

$
148,749

565,803

Advertising, cooperative and promotions
$
25,400

$
665,233

$
126,308

962,075

Total expenses
905,048

1,602,116

1,628,540

3,532,887

( Loss) before benefit from for income taxes
$
(3,883,058
)
$
(1,019,649
)
$
(4,354,506
)
$
(436,698
)
(Benefit from) income taxes
$(1,424,866)
$(376,250)
$(1,598,929)
$(163,228)
(Loss) from Discontinued Operations
$
(2,458,192
)
$
(643,399
)
$
(2,755,577
)
$
(273,470
)