NOTE 6.

SHIPPING AND HANDLING COSTS

The Company pays shipping and handling costs on behalf of customers for purchased apparel merchandise. These costs are billed back to the customer through the billing invoice. The shipping and handling costs associated with merchandise ordered by the Company are included as part of inventory as these costs are allocated across the merchandise received. With House Wrap orders, the customer pays the shipping cost. The shipping and handling costs billed back to customer orders was approximately $29,000 and $46,000 for the nine month periods ended July 31, 2015 and 2014, respectively. These amounts are included in both revenue and selling, general and administrative expenses.