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Seguin Natural Hair Products (SNHR)

Filed: 14 Nov 16, 12:00am

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934  

 

For the Quarterly Period ended September 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  

For the transition period from _____________ to   _____________

 

Commission file number:      333-205822

 

SEGUIN NATURAL HAIR PRODUCTS, INC.

 

(Exact name of registrant as specified in its charter)

 

NEVADA 35-7654530
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

 

2505 Anthem Village E. Dr., Henderson, NV 89058
(Address of principal executive offices) (Zip Code)

 

(702) 738-2051

 

(Issuer's telephone number, including area code)

(Former name, former address and former fiscal year if changed since last report)

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.  Yes  ¨  No  x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ¨  Nox

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange:

 

 Large accelerated filer¨Accelerated filer                   ¨
 Non-accelerated filer¨Smaller reporting companyx

 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.)  

Yes  x  No¨

 

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  March 31, 2016 there were 16,500,000 shares of the Company’s common stock were issued and outstanding.

 

 

 

  

SEGUIN NATURAL HAIR PRODUCTS, INC.

FORM 10-Q

For the Quarter Ended September 30, 2016

 

TABLE OF CONTENTS

 

PART I 
  
ITEM 1.  FINANCIAL STATEMENTSF-1
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS4
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK7
ITEM 4.  CONTROLS AND PROCEDURES7
  
PART II – OTHER INFORMATION8
  
ITEM 1.  LEGAL PROCEEDINGS8
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS8
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES8
ITEM 4.  MINE SAFETY DISCLOSURES8
ITEM 5.  OTHER INFORMATION8
ITEM 6.  EXHIBITS8

 

 

 

 

 

Seguin Natural Hair Products, Inc.

 

September 30, 2016

 

Index to the Financial Statements 

 

Contents Page(s)

Balance sheets at September 30, 2016 (unaudited) and March 31, 2016 (audited) F-2
   
Statements of operations for the six and three months ended September 30, 2016 and 2015 (unaudited) F-3
   
Statement of stockholders’ equity for the six months ended September 30, 2016 (unaudited) F-4
   
Statement of cash flows for the six months ended September 30, 2016 and 2015 (unaudited) F-5
   
Notes to the financial statements (unaudited) F-6

  

F-1

 

 

 Seguin Natural Hair Products, Inc.

 Balance Sheets  

    
       
       
  September 30, 2016  March 31, 2016 
  (unaudited)  (audited) 
       
ASSETS   
 CURRENT ASSETS:        
 Cash $2,015  $21,781 
 Prepaid Expenses  596   2,379 
         
 Total Current Assets  2,611   24,160 
         
Total Assets $2,611  $24,160 
         
 LIABILITIES AND STOCKHOLDERS' EQUITY        
 CURRENT LIABILITIES:        
 Advances from stockholders  236   236 
         
 Total Current Liabilities  236   236 
         
Total Liabilities  236   236 
         
 COMMITMENTS AND CONTINGENCIES        
         
 STOCKHOLDERS' EQUITY:        
 Common stock par value $0.0001: 500,000,000 shares authorized;        
 16,500,000 shares issued and outstanding  1,650   1,650 
 Additional paid-in capital  73,232   63,332 
 Accumulated deficit  (72,507)  (41,058)
         
 Total Stockholders' Equity  2,375   23,924 
         
 Total Liabilities and Stockholders' Equity $2,611  $24,160 
         

 

See accompanying notes to the financial statements.

 

 

F-2

 

 

 Seguin Natural Hair Products, Inc.

 Statements of Operation 

 

    
             
  For six months  For six months  For three months  For three months 
  ending  ending  ending  ending 
  September 30, 2016  September 30, 2015  September 30, 2016  September 30, 2015 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                 
 Revenue $-  $-  $-  $- 
                 
 Operating Expenses                
 Professional fees  27,209   30,788   5,797   10,538 
 General and administrative expenses  4,240   2,236   115   671 
                 
 Total operating expenses  31,449   33,024   5,912   11,209 
                 
 Loss from Operations  (31,449)  (33,024)  (5,912)  (11,209)
                 
 Income Tax Provision  -   -   -   - 
                 
 Net Loss $(31,449) $(33,024) $(5,912) $(11,209)
                 
 Net Loss per Common Share - Basic and Diluted $(0.00) $(0.00) $(0.00) $(0.00)
                 
 Weighted average common shares outstanding:                
 - basic and diluted  16,500,000   16,500,000   16,500,000   16,500,000 
                 
                 

 

 See accompanying notes to the financial statements. 

 

 

F-3

 

 

Seguin Natural Hair Products, Inc.

Statement of Stockholders' Equity

For the six months Ended September 30, 2016

(unaudited) 

                
                
  Common Stock, $0.0001 Par Value  Additional     Total 
  Number of     Paid-in     Stockholders' 
  Shares  Amount  Capital  Accumulated Deficit  Equity 
                
 Balance, March 31, 2015  16,500,000  $1,650  $44,550  $(1,570) $44,630 
                     
 Capital Contribution          18,782   -   18,782 
                     
 Net loss              (39,488)  (39,488)
                     
 Balance, March 31, 2016  16,500,000   1,650   63,332   (41,058)  23,924 
                     
 Capital Contribution          9,900   -   9,900 
                     
 Net loss              (31,449)  (31,449)
                     
 Balance, September 30, 2016  16,500,000  $1,650  $73,232  $(72,507) $2,375 
                     
                     
                     

 

See accompanying notes to the financial statements.

 

 

 

F-4

 

 

 Seguin Natural Hair Products, Inc.

 Statements of Cash Flows  

    
       
  For the six months  For the six months 
  ending  ending 
  September 30, 2016  September 30, 2015 
  (unaudited)  (unaudited) 
         
 CASH FLOWS FROM OPERATING ACTIVITIES:        
 Net loss $(31,449) $(33,024)
         
 Adjustments to reconcile net loss to net cash used in operating activities        
 Changes in operating assets and liabilities:        
 Prepaid Expenses  1,783   2,863 
         
 Net cash used in operating activities  (29,666)  (30,161)
         
 CASH FLOWS FROM FINANCING ACTIVITIES:        
 Advances from (repayment to) stockholders  -   255 
 Capital contribution  9,900   - 
         
 Net cash provided by financing activities  9,900   255 
         
 Net change in cash  (19,766)  (29,906)
         
 Cash at beginning of the reporting period  21,781   44,710 
         
 Cash at end of the reporting period $2,015  $14,804 
         
 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:        
         
 Interest paid $-  $- 
         
 Income tax paid $-  $- 

 

See accompanying notes to the financial statements.

 

F-5

 

 Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

 

Note 1 - Organization and Operations

 

Seguin Natural Hair Products Inc.

 

Seguin Natural Hair Products Inc. (the “Company”) was incorporated on April 29, 2014 under the laws of the State of Nevada.Initial operations have included organization and incorporation, target market identification, marketing plans, capital formation and property acquisitions. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace. The Company has generated no revenues since inception.

 

The Company intends to proceed in the business of developing, marketing, and selling shampoo, conditioner and other hair care products made from all natural ingredients.

 

Note 2 - Significant and Critical Accounting Policies and Practices

 

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

 

Basis of Presentation – Unaudited Interim Financial Information

 

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the audited financial statements of the Company for the year ended March 31, 2016and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on July 16, 2016.

 

Fiscal Year End

 

The Company elected March 31st as its fiscal year end date upon its formation.

 

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

 

(i)Assumption as a going concern:Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business;
(ii)Valuation allowance for deferred tax assets:Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, (d) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

 

F-6

 

Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

 

Development Stage Company

 

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. The Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.

 

The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements.  Upon adoption, the Company no longer presents or discloses inception-to-date information and other remaining disclosure requirements of Topic 915.

 

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses approximate their fair value because of the short maturity of this instrument.

 

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

 

F-7

 

Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

Cash Equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

 

Related Parties

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

 

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Commitment and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Revenue Recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

Deferred Tax Assets and Income Tax Provision

 

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

 

F-8

 

Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

 

Tax years that remain subject to examination by major tax jurisdictions

 

The Company disclosestax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15.

 

Earnings per Share

 

Earnings per share ("EPS") is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

 

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

 

There were no potentially dilutive common shares outstanding for the reporting period ended September 30, 2016 and 2015.

 

Cash Flows Reporting

 

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

 

F-9

 

Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

Subsequent Events

 

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

 

Recently Issued Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.

 

Note 3 – Going Concern

 

The Company has elected to adopt early application of Accounting Standards Update No. 2014-15,“Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).

 

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the financial statements, the Company had an accumulated deficit at September 30, 2016, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds.

 

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 4 – Stockholders’ Equity (Deficit)

 

Shares Authorized

 

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue Five Hundred Million (500,000,000) shares of Common Stock, par value $0.0001 per share.

 

Common Stock

 

On April 29, 2014, upon formation, the Company issued an aggregate of 12,000,000 shares of the newly formed corporation’s common stock to its Chief Executive Officer at the par value of $0.0001 per share or $1,200 for compensation.

 

For the period from August 4, 2014 through March 31, 2015, the Company sold 4,500,000 shares of common stock at $0.01 per share to 45 individuals, or $45,000.

 

Note 5 – Related Party Transactions

 

Free Office Space

 

The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statement.

 

F-10

 

Seguin Natural Hair Products Inc.

September 30, 2016 and 2015

Notes to the Financial Statements

(unaudited)

 

Shareholder Advances

 

During the year ended March 31, 2015, a significant stockholder of the Company advanced $80 to the Company, which was recorded as non-interest bearing advances from shareholders, payable on demand.

 

During the year ended March 31, 2016, a significant stockholder of the Company advanced $236 to the Company, which was recorded as non-interest bearing advances from shareholders, payable on demand.

 

Note 6 – Subsequent Events

 

The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent event(s) to be disclosed.

 

 

F-11

 

 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Overview

 

We were incorporated on April 29, 2014 in the State of Nevada. Our mission is to develop and sell shampoo and conditioner made from all natural products. We plan to market shampoo and conditioner directly to hair salons throughout the world, through our website at www.seguinhair.com and through the use of various social media platforms.

 

We are a developmental stage company that has no assets or revenue. We have no track record and may never generate any revenues. An investment in our Company should be considered extremely risky as an investor could lose all of their investment if we fail to meet their goals and projections.

 

Plan of Operations

 

Our initial activities have included organization and incorporation, target market identification, marketing plans, capital formation and property acquisitions. Also, a substantial portion of our activities has involved developing a business plan and establishing contacts and visibility in the marketplace. We have generated no revenues since inception and we do not currently have a customer base. As discussed in more detail under “Liquidity and Capital Resources” below, our budget for the 12 months following a sufficient raise in capital is $648,450. We have not yet determined when we will begin to generate revenues. We have enough capital to last until July 2016, assuming we do not commence operations during such period, but will not be able to implement our business plan until we are successful in raising an additional $648,500. Assuming that we are successful in raising the addition capital required to implement our business plan, we foresee the following steps taking place:

 

(a) We would secure a lease for a warehouse that has approximately 5,000 square feet of space. We estimate that a one year lease will cost $36,000.

 

(b) Once we secure warehouse space we would set up our phone system. We estimate that setting up a phone system and purchasing a long distance calling plan would cost $4,800 annually.

 

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(c) We would update and expand our website. This includes making our products available for sale through our website. We estimate this process to take approximately 2 months and cost $25,000.

 

(d) We would purchase the necessary products that we need in order to start producing our shampoo and conditioner. We estimate that it will take up to 60 days to receive all of the necessary products that we need to produce our initial batch shampoo and conditioner. We estimate that these raw products will cost $47,000.

 

(e) Simultaneously, we would order our packing supplies and labels for both our sample size bottles and our regular size bottles. We estimate that it will take 45 days to receive these supplies and labels and cost $3,000.

 

(f) We would order the bottles for our shampoo and conditioner. We plan to order 12,000 sample size bottles that are 250ml (8.45 fluid ounces) at a cost of $0.13 per bottle and 40,000 1 L (33.8 fluid ounces) size bottles at a cost of $0.28 per bottle. This is an aggregate estimated cost of $12,760 ($13,000 with the cost of shipping included). We estimate that it will take 30 days to receive the bottles.

 

(g) We would order the mixers needed to blend the ingredients together to create our products. We estimate that it will take approximately 14 to 20 days to receive the mixers and cost $6,500.

 

(h) We would implement our planned marketing campaign once our products are ready to be shipped and our website has been updated. We plan to spend an estimated $300,000 on our marketing campaign.

 

(i) We would purchase furniture, computers, printers and another items that are necessary for our operations. We plan to spend an estimated $10,000 on these items.

 

In addition, we anticipate the following costs and fees in connection with implementing our business plan:

 

·   We estimate the cost of shipping our products in the first year of operations to be $15,000.

·   We estimate all bookkeeping accounting costs in our first year of operations to be $15,000.

·   We estimate that all necessary travel expenses in our first year of operations will be approximately $60,000.

·   We estimate that employee payroll in our first year of operations to be approximately $65,000.

·   We estimate that attorneys’ fees in our first year of operations will be $20,000.

·   We estimate that electronic filing fees in our first year of operations will be $3,000.

·   We estimate spending an estimated $25,000in our first year of operations on miscellaneous costs.

 

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We expect that if we had the $648,500 that we need in order to commence production that it would take approx. 120 days before we would be in a position to ship out our first order.

 

If we are unable to raise additional cash to fund our operations, we will either have to suspend or cease our expansion plans entirely, or possibly seek a potential business combination.  

 

Going Concern

 

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the financial statements, the Company had an accumulated deficit at March 31, 2016, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may never be sufficient to commence and support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds.

 

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Critical Accounting Policies and Estimates

 

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses. Certain of these accounting policies are considered to be critical accounting policies, as defined below.

 

A critical accounting policy is defined as one that is both material to the presentation of our consolidated financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Critical accounting estimates have the following attributes: (1) they require us to make assumptions about matters that are highly uncertain at the time of the estimate; and (2) different estimates we could reasonably have used, or changes in the estimate we used that are reasonably likely to occur, could have a material effect on our financial condition or results of operations.

 

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Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained or as our operating environment changes. We believe the following critical accounting policies reflect the more significant estimates and assumptions we have used in the preparation of our consolidated financial statements:

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required for smaller reporting companies.

 

ITEM 4.  CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by management, with the participation of the chief executive officer and the chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

 

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was not accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

 

The certification required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2, respectively, to this quarterly report on Form 10-Q.

 

Changes in Internal Control Over Financial Reporting

 

During the period ended September 30, 2016, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

There are no material legal proceedings pending against the Company to the knowledge of management.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5.

OTHER INFORMATION

 

The Company became a reporting company as a result of filing a Registration Statement on Form S-1 with the Securities and Exchange Commission (SEC).  The Registration Statement was declared effective by SEC order on January 21, 2016.  The Registration Statement was filed for the benefit of Selling Security Holders.  The Company will not receive any proceeds from the sale of the Common Stock covered by this prospectus.  Our Common Stock is presently not traded on any market, securities exchange or electronic trading platform.

 

ITEM 6.

EXHIBITS

 

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 The following financial information from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows, and (iv) Notes to Financial Statements

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:  November 11, 2016

 

SEGUIN NATURAL HAIR PRODUCTS, INC.
(Registrant)
  
By:/s/ Oivi Launonen 
 Oivi Launonen
 Chief Executive Officer
 Chief Financial Officer
 (Principal Accounting Officer)

 

 

 

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