Seguin Natural Hair Products (SNHR) 10-Q 2017 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

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

EXCHANGE ACT OF 1934  

For the Quarterly Period ended December 31, 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  ☒

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  ☐   No☒

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 company  ☒

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

Yes  ☒   No☐

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  February 21, 2017, 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 December 31, 2016

TABLE OF CONTENTS

PART I
ITEM 1.  FINANCIAL STATEMENTS	F-1
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 4.  CONTROLS AND PROCEDURES	7
PART II - OTHER INFORMATION	8
ITEM 1.  LEGAL PROCEEDINGS	8
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	8
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES	8
ITEM 4.  MINE SAFETY DISCLOSURES	8
ITEM 5.  OTHER INFORMATION	8
ITEM 6.  EXHIBITS	8

 2

Seguin Natural Hair Products, Inc.

December 31, 2016

Index to the Financial Statements

Contents	Page(s)
Balance sheets at December 31, 2016 (unaudited) and March 31, 2016	F-2
Statements of operations for the nine and three months ended December 31, 2016 and 2015 (unaudited)	F-3
Statement of cash flows for the nine months ended December 31, 2016 and 2015 (unaudited)	F-4
Notes to the financial statements (unaudited)	F-5

F-1 

Seguin Natural Hair Products, Inc.

Balance Sheets

(Unaudited)

	December 31, 2016			March 31, 2016
ASSETS
CURRENT ASSETS:
Cash	$	554		$	21,781
Prepaid Expenses		99			2,379
Total Current Assets		653			24,160
Total Assets	$	653		$	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		82,662			63,332
Accumulated deficit		(83,895	)		(41,058	)
Total Stockholders' Equity		417			23,924
Total Liabilities and Stockholders' Equity	$	653		$	24,160

See accompanying notes to the unaudited financial statements.

 F-2

Seguin Natural Hair Products, Inc.

Statements of Operations

(Unaudited)

	For nine months			For nine months			For three months			For three months
	ending			ending			ending			ending
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015
Revenue	$	-		$	-		$	-		$	-
Operating Expenses
Professional fees		30,039			34,095			2,830			3,307
General and administrative expenses		12,798			2,278			8,558			42
Total operating expenses		42,837			36,373			11,388			3,349
Loss from Operations		(42,837	)		(36,373	)		(11,388	)		(3,349	)
Income Tax Provision		-			-			-			-
Net Loss	$	(42,837	)	$	(36,373	)	$	(11,388	)	$	(3,349	)
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 unaudited financial statements.

 F-3

Seguin Natural Hair Products, Inc.

Statements of Cash Flows

(Unaudited)

	For the nine months			For the nine months
	ending			ending
	December 31, 2016			December 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(42,837	)	$	(36,373	)
Adjustments to reconcile net loss to net cash used in operating activities
Changes in operating assets and liabilities:
Prepaid Expenses		2,280			-
Accrued expenses and other current liabilities		-			3,307
Net cash used in operating activities		(40,557	)		(33,066	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from (repayment to) stockholders		-			156
Capital contribution		19,330			-
Net cash provided by financing activities		19,330			156
Net change in cash		(21,227	)		(32,910	)
Cash at beginning of the reporting period		21,781			44,710
Cash at end of the reporting period	$	554		$	11,800
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$	-		$	-
Income tax paid	$	-		$	-

See accompanying notes to the unaudited financial statements.

F-4 

Seguin Natural Hair Products Inc.

December 31, 2016 and 2015

Notes to the Financial Statements

(unaudited)

Note 1– Organization and Basis of Representation

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.

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, 2016 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on July 13, 2016.

Note2 – 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 December 31, 2016, a net loss and net cash used in operating activities for the reporting periodthen 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.

Note3 – 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.

F-5 

Note 4 – 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.

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. The total due at December 31, 2016 is $236.

Capital Contribution

During the nine months ended 12/31/16, Oivi Launonen, CEO of the Company, made a total capital contribution of $19,330.

F-6

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.

 3

(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.

4

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.  

Our plan of operations

We will need a significant infusion of capital, whether in the form of debt or equity financing to implement our business plan. We have no commitment for additional funding. Without this capital infusion, it is highly unlikely that we will be able to implement our business plan.

Results of Operations

For the three andnine months endedDecember 31, 2016 and 2015

We did not generate any revenues during these periods. Operating expenses for the three and nine months ended December 31, 2016 were $11,388 and $42,837 as compared to $3,349 and $36,373 for the three and nine months ended December 31, 2015. The increase in operating expenses for the nine months ended December 31, 2016 as compared to the nine months ended December 31, 2015 is primarily attributable to legal and accounting fees incurred in connection with updating of the Company’s filings with the SEC.

The basic and diluted Net Loss per share of common stock for the three and nine months ended December 31, 2016 and 2015 was $(0.00) and $(0.00).

Until such time as we can implement our business plan we anticipate ongoing losses.

Liquidity and Capital Resources

AtDecember 31, 2016 and March 31, 2016

We had nominal assets at both December 31, 2016 and March 31, 2016. As of December 31, 2016, we had $554 in cash as compared to $21,781at March 31, 2016. Total liabilities at December 31, 2016 were $236 consisting of advances from shareholders totaling $236. At March 31, 2016, liabilities totaled $236 consisting of $236 as advances from related shareholders. Advances from shareholders are due on demand with no interest due on the outstanding balance. Unless our officers continue to advance funds to the Company, of which there can be no assurance, or the Company receives an infusion of capital, it is unlikely that the Company will continue operations. At December 31, 2016 we had an accumulated deficit of $(83,895) as compared to $(41,058) at March 31, 2016.

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 December 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.

 5

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.

 6

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.

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 December 31, 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.

7 

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

 8

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:  February 21, 2017

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

9