CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCE

3 Months Ended

Mar. 31, 2017

CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCE

CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCE

NOTE 2 - CONCENTRATIONS OF CREDIT RISK AND ECONOMIC DEPENDENCE

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents, to the extent the funds are not being held for investment purposes.

Accounts Receivable

The Company grants credit to its customers, substantially all of whom are retail establishments located throughout the United States and their international locations'. The Company typically does not require collateral from customers. Credit risk is limited due to the financial strength of the customers comprising the Company's customer base and their dispersion across different geographical regions.  The

Company monitors exposure of credit losses and maintains allowances for anticipated losses considered necessary under the circumstances.

Major Customers

The Company had two customers who comprised 51.2% and 48.0% of net revenue during the period ended March 31, 2017, and 65.6% and 29.7% of net revenue during the period ended March 31, 2016.  The loss of these customers would adversely impact the business of the Company.

Approximately 8.5% and 48.9% of the Company's net revenue for both periods ended March 31, 2017 and 2016, was from international sales.

	Gross Revenue %						Gross Accounts Receivable
	Periods Ended March 31,						Periods Ended March 31,
	2017			2016			2017		2016
Customer A		51.2	%		65.6	%	$	2,603,277	$	1,337,076
Customer B		48.0	%		29.7	%		3,512,252		-
		99.2	%		95.3	%	$	6,115,529	$	1,337,076

Major Vendors

The Company had two vendors from which it purchased 93.2% and 3.8% of merchandise sold during the period ended March 31, 2017, and 85.1% and 10.4 % of merchandise sold during the period ended March 31, 2016. The loss of these suppliers could adversely impact the business of the Company.

As of March 31, 2017, approximately 86.7% and 74.1%, respectively, of accounts payable were due to two vendors.

	Purchases %						Accounts Payable
	Periods Ended March 31,						Periods Ended March 31,
	2017			2016			2017		2016
Vendor A		93.2	%		85.1	%	$	2,890,006	$	148,004
Vendor B		3.8	%		10.4	%		138,183		11,311
		97.0	%		95. 5	%	$	3,028,189	$	159,315