UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORMForm 10-Q

(Mark One)

[X]
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2017

or

¨

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to_____________

For the quarterly period endedFebruary 29, 2016

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________________ to _________________________

Commission File Number333-190391

SCIENCE TO CONSUMERS, INC.

SCIENCE TO CONSUMERS, INC.

(Exact name of registrant as specified in its charter)

Nevada

33-1227949

N33-1227949

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

Room 1618, American Bank Centre,

555 Ren Min Road, Guangzhou China

N/A

Faraday Str. 31, Leipzig, Germany04159

(Address of principal executive offices)

(Zip Code)

49 (0) 1738264717+86 139 022 55701

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 the past 90 days.
[X]x YES    [   ]o 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).
[X]x YES    [   ]o NO

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

Large accelerated filer [   ]

¨

Accelerated filer [   ]

¨

Non-accelerated filer [   ]
(Do

¨ (Do not check if a smaller reporting company)

Smaller reporting company [X]

x

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
[   ]o YES    [X]x NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[   ]o YES    [   ]o NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
31,920,000 common shares issued and outstanding as of May 17, 2016.


TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION3

31,920,000 common shares issued and outstanding as of April 10, 2017

 
 Item 1.Financial Statements3
 
 

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

3

Item 2.

Management'sManagement’s Discussion and Analysis of Financial Condition and Results of OperationOperations

6

4

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

13

11

Item 4.

Controls and Procedures

13

11

PART II - OTHER INFORMATION

13

Item 1.

Legal Proceedings

13

12

Item 1A.

Risk Factors

13

12

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

13

12

Item 3.

Defaults Upon Senior Securities

13

12

Item 4.

Mine Safety Disclosures

12

Item 5.

Other Information

12

Item 6.

Exhibits

13

SIGNATURES

14

2
 
Item 5.Table of ContentsOther Information14
Item 6.Exhibits15
SIGNATURES16


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The condensed interim financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.


 

SCIENCE TO CONSUMERS, INC.

CONDENSED FINANCIAL STATEMENTS

FEBRUARY 28, 2017

3
Table of Contents

 

SCIENCE TO CONSUMERS, INC.

CONDENSED FINANCIAL STATEMENTS

FEBRUARY 29, 2016TABLE OF CONTENTS

 

FEBRUARY 28, 2017

 


SCIENCE TO CONSUMERS, INC.

TABLE OF CONTENTS

FEBRUARY 29, 2016

Condensed Balance Sheets as of February 29, 201628, 2017 (Unaudited) and May 31, 20152016

F-3

F-2

Condensed Statements of Operations for the Three and Nine Month PeriodsMonths Ending February 28, 2017 and February 29, 2016 and 2015 (Unaudited)

F-4

F-3

Condensed Statements of Cash Flows for the Three Month PeriodsNine Months Ending February 28, 2017 and February 29, 2016 and 2015 (Unaudited)

F-5

F-4

Notes to the Condensed Financial StatementStatements (Unaudited)

F-6 - F-9

F-5



F-1
Table of Contents

SCIENCE TO CONSUMERS, INC.

CONDENSED BALANCE SHEETS

  February 29,  May 31, 
  2016  2015 
  (Unaudited)    
ASSETS      
Current Assets      
     Cash and cash equivalents$ – $ 1,749 
Total Current Assets   1,749 
       
Website development costs 9,871   
       
Total Assets$ 9,871 $ 1,749 
       
LIABILITIES AND STOCKHOLDERS’ DEFICIT      
Liabilities      
       
Current Liabilities      
     Accounts payable 24,304   
     Due to related party 5,698   
     Loan from director 8,891  8,891 
       
Total Liabilities 38,893  8,891 
       
Stockholders’ Deficit      
      Common stock, par value $0.001; 525,000,000 shares authorized, 31,943,833 shares
      (May 31, 2015 – 29,900,000 shares) issued and outstanding;
 31,944  29,900 
     Additional paid in capital 72,206  61,100 
     Accumulated deficit (133,172) (98,142)
Total Stockholders’ Deficit (29,022) (7,142)
       
Total Liabilities and Stockholders’ Deficit$ 9,871 $ 1,749 

 

February 28,

2017

 

 

May 31,

2016

 

 

 

(unaudited)

 

 

 

 

ASSETS

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

 

$3,306

 

Total Current Assets

 

 

 

 

 

3,306

 

 

 

 

 

 

 

 

 

 

Website development costs

 

 

5,807

 

 

 

8,420

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$5,807

 

 

$11,726

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

27,637

 

 

 

16,857

 

Due to related party

 

 

7,656

 

 

 

7,675

 

Loan from director

 

 

8,891

 

 

 

8,891

 

Loan payable

 

 

31,000

 

 

 

31,000

 

Convertible debenture, net of unamortized discount of $7,027

 

 

10,973

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

86,157

 

 

 

64,423

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Common stock, par value $0.001; 525,000,000 shares authorized, 31,900,000 shares issued and outstanding

 

 

31,900

 

 

 

31,900

 

Additional paid in capital

 

 

77,100

 

 

 

59,100

 

Stock Subscriptions

 

 

13,150

 

 

 

13,150

 

Accumulated deficit

 

 

(202,500)

 

 

(156,847)

Total Stockholders’ Deficit

 

 

(80,350)

 

 

(52,697)

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

$5,807

 

 

$11,726

 

See accompanying notes to the unaudited condensed financial statements.


F-2
Table of Contents

SCIENCE TO CONSUMERS, INC.

CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

  For the  For the  For the  For the 
  three month  three month  nine month  nine month 
  period ended  period ended  period ended  period ended 
  February 29,  February 28,  February 29,  February 28, 
  2016  2015  2016  2015 
             
REVENUES$ – $ – $ – $ – 
             
OPERATING EXPENSES            
             
   Advertising and Promotion       15 
   Amortization Expense 291    581   
   Bank Service Charges   48    169 
   Professional Fees 18,501  11,866  34,449  40,856 
             
TOTAL OPERATING EXPENSES 18,792  11,914  35,030  41,040 
             
NET LOSS FROM OPERATIONS (18,792) (11,914) (35,030) (41,040)
             
PROVISION FOR INCOME TAXES        
             
NET LOSS$ (18,792)$ (11,914)$ (35,030)$ (41,040)
             
NET LOSS PER SHARE: BASIC ANDDILUTED$ (0.00)$ (0.00)$ (0.00)$ (0.00)
             
WEIGHTED AVERAGE NUMBER OFSHARES OUTSTANDING: BASIC ANDDILUTED 31,568,000  29,900,000  30,465,000  29,900,000 

(unaudited)

 

 

For the

three months

ended

February 28,

2017

 

 

For the

three months

ended

February 29,

2016

 

 

For the

nine months

ended

February 28,

2017

 

 

For the

nine months

ended

February 29,

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization expense

 

 

871

 

 

 

291

 

 

 

2,613

 

 

 

581

 

General and administrative

 

 

4,092

 

 

 

 

 

 

12,231

 

 

 

 

Professional fees

 

 

4,005

 

 

 

18,501

 

 

 

17,090

 

 

 

34,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

 

8,968

 

 

 

18,792

 

 

 

31,934

 

 

 

35,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM OPERATIONS

 

 

(8,968)

 

 

(18,792)

 

 

(31,934)

 

 

(35,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of discount on convertible debenture

 

 

(9,327)

 

 

 

 

 

(10,973)

 

 

 

Interest expense

 

 

(899)

 

 

 

 

 

(2,746)

 

 

 

 

 

 

 

��

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM OPERATIONS BEFORE TAXES

 

 

(19,194)

 

 

(18,792)

 

 

(45,653)

 

 

(35,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(19,194)

 

$(18,792)

 

$(45,653)

 

$(35,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER OUTSTANDING SHARE: BASIC AND DILUTED

 

$(0.00)

 

$(0.00)

 

$(0.00)

 

$(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

 

31,900,000

 

 

 

31,568,000

 

 

 

31,900,000

 

 

 

30,465,000

 

See accompanying notes to the unaudited condensed financial statements.


F-3
Table of Contents

SCIENCE TO CONSUMERS, INC.
CONDENSED

STATEMENTS OF CASH FLOWS
(Unaudited)

  For the  For the 
  nine months  nine months 
  ended  ended 
  February 29,  February 28, 
  2016  2015 
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss for the period$ (35,030)$ (41,040)
       
Adjustments to reconcile net loss:      
         Amortization 581   
       
Changes in assets and liabilities:      
         Accounts payable and accrued liabilities 13,852   
CASH FLOWS USED IN OPERATING ACTIVITIES (20,597) (41,040)
       
CASH FLOWS FROM FINANCING ACTIVITIES      
       
Advances from related party 5,698   
Loans from director   674 
Proceeds from sale of common stock 13,150  45,000 
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 18,848  45,674 
       
       
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,749) 4,634 
Cash and cash equivalents, beginning of period 1,749  5,171 
Cash and cash equivalents, end of period$ – $ 9,805 
       
SUPPLEMENTAL CASH FLOW INFORMATION:      
         Interest paid$ – $ – 
         Income taxes paid$ – $ – 

(unaudited)

 

 

For the

nine months

ended

February 28,

2017

 

 

For the

nine months

ended

February 29,

2016

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

$(45,653)

 

$(35,030)

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss:

 

 

 

 

 

 

 

 

Accretion of discount on convertible debenture

 

 

10,973

 

 

 

 

Amortization

 

 

2,613

 

 

 

581

 

 

 

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

10,780

 

 

 

13,852

 

Due to related party

 

 

(2,569)

 

 

 

CASH FLOWS USED IN OPERATING ACTIVITIES

 

 

(23,856)

 

 

(20,597)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advances from related party

 

 

2,550

 

 

 

5,698

 

Proceeds from convertible debenture

 

 

18,000

 

 

 

 

Proceeds from sale of common stock

 

 

 

 

 

13,150

 

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

 

 

20,550

 

 

 

18,848

 

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(3,306)

 

 

(1,749)

Cash and cash equivalents, beginning of period

 

 

3,306

 

 

 

1,749

 

Cash and cash equivalents, end of period

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid

 

$

 

 

$

 

Income taxes paid

 

$

 

 

$

 

See accompanying notes to the unaudited condensed financial statements.


F-4
Table of Contents

SCIENCE TO CONSUMERS, INC.

NOTES TO THE FINANCIAL STATEMENTS

FEBRUARY 28, 2017

(unaudited)

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Science to Consumers, Inc. (the “Company”) is a development stage company which registered in the State of Nevada on April 15, 2013 formed to distribute Argan Oil products. ScienceIn addition, the Company is looking to Consumers, Inc. will position itself to take full advantage of the distributing Argan oilmarket, sell, and distribute anti-aging products, from manufacturers to customers. In addition,as on December 29, 2015 the Company signed a five-year exclusive licensing agreement with Biomatrix, Inc. for the People’s Republic of China and Europe. Science to Consumers, Inc., is also focused on anti-aging and good-for-your-body products. The agreement will allow Science to Consumers Inc., to market and sell at least six of its special formulated anti-aging products including the DermaLastyl line. The Company will position itself to take full advantage of the distributing its products from their manufacturers to their customers.

NOTE 2 – CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial positions, results of operations, and cash flows on February 29, 2016,28, 2017, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31, 20152016 audited financial statements. The results of operations for the nine months ended February 29, 201628, 2017 are not necessarily indicative of the operating results for the full year.

NOTE 3 – GOING CONCERN

The Company has no revenues as of February 28, 2017. The Company currently has accumulated deficit and working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

NOTE 34 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a May 31 fiscal year end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $nil of cash as of February 29, 201628, 2017 and $1,749$3,306 of cash as of May 31, 2015.2016.

F-5
Table of Contents

SCIENCE TO CONSUMERS, INC.

NOTES TO THE FINANCIAL STATEMENTS

FEBRUARY 28, 2017

(unaudited)

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, amounts due to a related party, and a loan from a director.director, a loan payable and a convertible debenture. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Website Development Costs

Website development costs consist of costs incurred to develop internet websites to promote, advertise, and earn revenue with respect to the Company’s business operations. Costs are amortized on a straight line basis over 3 years from when the internet web site has been completed.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of February 29, 201628, 2017 and May 31, 2015.2016.

Comprehensive Income
The Company has which established

ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity.Deficit. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

NOTE 4 – GOING CONCERN

Impact of New Accounting Standards

The accompanyingCompany does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had no revenues as of February 29, 2016. The Company currently has working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.position, or cash flow.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

F-6
Table of Contents

SCIENCE TO CONSUMERS, INC.

NOTES TO THE FINANCIAL STATEMENTS

FEBRUARY 28, 2017

(unaudited)

NOTE 5 – LICENSE AGREEMENT DEPOSIT

On December 29, 2015, the Company entered into an exclusive license agreement with Biomatrix Inc. (“Biomatrix”), a Delaware corporation, pursuant to which the Company obtained the exclusive rights to sell certain proprietary skincare products of Biomatrix by direct to consumer marketing and sales in the territories of China and Europe. In consideration for the marketing, sales and distribution services to be provided by the Company, Biomatrix has agreed to supply product inventory at a rate not less favorable than that provided to any third party. Additionally, Biomatrix has agreed to transfer to the Company 100% equity ownership of Biomatrix Inc. (“Biomatrix Arizona”), an Arizona corporation, which holds all right and title to the product distribution rights acquired. In consideration of transfer of title and rights acquired, the Company issued 2,000,000 restricted shares of common stock to Biomatirx.Biomatrix. Upon closing of the transaction, Biomatrix Arizona will become a wholly owned subsidiary of the Company. As of February 29, 2016,28, 2017, the transaction had not closed and the Company has not received ownership of the Biomatrix Arizona equity.

The initial term of the exclusive license agreement is 5 years, subject to the Company achieving minimum sales of $250,000 and $500,000 during the first and second years of the agreement, respectively.respectively, commencing after the transaction has closed. Thereafter, the term will automatically renew for successive 5 year periods provided that the Company achieve a minimum $500,000 in sales of the licensed products during each calendar year of the term, excluding the first year.


On December 16, 2015, the Company issued to Biomatrix 2,000,000 shares of the Company’s common stock pursuant to the license agreement. As of February 29, 2016,28, 2017, the shares of Biomatrix Arizona were not received by the Company and the transaction had not closed. Due to the value of Biomatrix Arizona and the Company’s uncertain future revenues generated by the license, the fair value of the 2,000,000 shares issued has been recorded as $nil.

NOTE 6 – DUE TO RELATED PARTY

As of February 29, 2016,28, 2017, the Company was indebted to the Chief Executive Officer of the Company for $5,698$7,656 (May 31, 20152016 - $nil)$7,675), for expenses paid on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand.

NOTE 7 – LOAN FROM DIRECTOR

As of February 29, 2016,28, 2017, the Company owed a director of the Company $8,891 (May 31, 20152016 - $8,891) related to a loan to the Company for business operations. The loan is unsecured, non-interest bearing and due on demand.

NOTE 8 – LOAN PAYABLE

On May 1, 2016, the Company entered into a loan agreement in which the note holder agreed to provide a loan to the Company in the principal amount of up to $50,000. The loan is unsecured, bears interest at 8.5% per annum and is payable on May 1, 2017. As at February 28, 2017, the note holder has provided $31,000 to the Company pursuant to the loan agreement. As at February 28, 2017, the Company recorded $2,159 of interest payable (May 31, 2016 - $188).

F-7
Table of Contents

SCIENCE TO CONSUMERS, INC.

NOTES TO THE FINANCIAL STATEMENTS

FEBRUARY 28, 2017

(unaudited)

NOTE 9 – CONVERTIBLE DEBENTURE

On September 26, 2016, the Company issued a convertible debenture for $18,000. Pursuant to the terms of the agreement, the note is unsecured, bears interest at 10% per annum, and is due six months from the date of issuance. At any time up to and including the maturity date, the unpaid amount of principal and interest can be converted at the holder’s option at a conversion price equal to a 20% discount of the average share closing price for the thirty days preceding the date of conversion, not to be below $0.05 per share. The 20% discount provides for rate of conversion that is below market value, thus is characterized as a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $18,000 as additional paid-in capital and reduced the carrying value of the convertible debenture to $nil. The carrying value will be accreted over the term of the convertible debenture up to its face value of $18,000. The embedded conversion option does not qualify for derivative accounting and bifurcation under ASC 815 “Derivatives and Hedging”. At February 28, 2017, the Company had amortized $10,973 of the debt discount to this convertible debenture and had accrued interest of $775 related to this convertible debenture.

Convertible Debentures consist of the following as of February 28, 2017:

Noteholder (issue date)

 

February 28,

2017

 

 

 

 

 

September 26, 2016 debenture

 

$18,000

 

 

 

 

 

 

 

 

 

18,000

 

Less: debt discount

 

 

(7,027)

 

 

 

 

 

Total

 

$10,973

 

NOTE 10 – COMMON STOCK

The Company has 525,000,000, $0.001 par value shares of common stock authorized.

On September 11, 2015, the Company issued 20,000 shares of stock at $0.30 per share for cash proceeds of $6,000.

On December 16, 2015, the Company issued 2,000,000 restricted shares to Biomatrix, Inc. with a fair value of $nil pursuant to the license agreement referred to Note 5.

On December 16, 2015, the Company issued 15,500 shares of stock at $0.30 per share for cash proceeds of $4,650.

On January 20, 2016, the Company issued 8,333 shares of stock at $0.30 per share for cash proceeds of $2,500.

There were 31,943,83331,900,000 shares of common stock issued and outstanding as of February 29, 2016.28, 2017.

NOTE 911 – WARRANTS

The following table summarizes the continuity of share purchase warrants:

     Weighted 
     Average 
  Number of  Exercise Price 
  Warrants  $ 
       
Balance, May 31, 2014    
Issued 150,000  0.50 
Balance, May 31, 2015 and February 29, 2016 150,000  0.50 


 

 

Number of

Warrants

 

 

Weighted Average

Exercise

Price

$

 

 

 

 

 

 

 

 

Balance, May 31, 2015

 

 

150,000

 

 

 

0.50

 

 

 

 

 

 

 

 

 

 

Issued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, May 31, 2016 and February 28, 2017

 

 

150,000

 

 

 

0.50

 

F-8
Table of Contents

SCIENCE TO CONSUMERS, INC.

NOTES TO THE FINANCIAL STATEMENTS

FEBRUARY 28, 2017

(unaudited)

As at February 29, 2016,28, 2017, the following share purchase warrants were outstanding:

 Exercise  
 Price Weighted Average
Number of Warrants$Expiry DateRemaining Life (years)
50,0000.50September 17, 20171.55
100,0000.50September 18, 20171.55
    
150,000  1.55

Number of Warrants

 

 

Exercise

Price

$

 

 

Expiry Date

 

Weighted Average Remaining Life (years)

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

0.50

 

 

September 17, 2017

 

 

0.55

 

100,000

 

 

 

0.50

 

 

September 18, 2017

 

 

0.55

 

 

 

 

 

 

 

 

 

 

 

 

 

150,000

 

 

 

 

 

 

 

 

 

0.55

 

NOTE 1012 – COMMITMENTS AND CONTINGENCIES

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

NOTE 1113 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10) the Companyhas analyzed its operations subsequent to February 29, 201628, 2017 to the date these financial statements were issued.


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Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of OperationOperations

FORWARD-LOOKING

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry'sindustry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common stock”shares” refer to the common shares ofin our commoncapital stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Science to Consumers, Inc., unless the context clearly requires or states otherwise.otherwise indicated.

Corporate Overview

We were incorporated in the State of Nevada on April 15, 2013. Our company is planning to be a distributor of Argan oil and Argan oil products to stores, spas, massage therapy offices and individuals in Germany. We intend to bring the 100% pure and organic Argan oil and skin products made with Argan oil directly from the manufacturers in Morocco to Germany and in the future to the rest of Europe. In addition, we are also looking to market, sell, and distribute anti-aging products, as on December 29, 2015 our company signed a five-year exclusive licensing agreement with Biomatrix, Inc. for the People’s Republic of China and Europe. The agreement will allow Science to Consumers Inc., to market and sell at least six of the special formulated anti-aging products including the DermaLastyl line. The first products that our company plans to sell is DermLastyl skin care products. DermaLastyl is a trademarked anti-aging cream that aims to help to reduce wrinkles through the use of science. The key ingredient, Tropoelastin, is a patented formulation of elastin produced by genetic engineering that aims to promote healing and renewing of the skin. The DermaLastyl line are genetically engineered products on the market that aims to help restore elastin and elastic properties to the skin and around the eyes. We expect to generate revenues in China from sales of our products to individual customers and commercial customers such as spas, stores and massage therapy offices. Both individualIn addition, an e-commerce strategy is being developed to market the Products online in China and commercial customers willan e-commerce website is being developed for the Chinese market and should be able to order our productsready by telephone, ourthe end of October 2016. Our corporate website has been updated and changed to reflect our name change towww.sciencetoconsumers.com.can be found at www.sciencetoconsumers.com.

At this stage, we have no revenues. The past operations had the Companyour company engaged in preparing our business plan and the development of our website and e-commerce shopping cart.cart for China. Our potential client list consists of 4 companies ranging from beauty stores, spas massage therapy offices, and cosmetic distributors.

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The majority of our business will be initially marketed in China, Hong Kong, and Germany but as our operations expand, we plan to expand to other European markets. We are also looking at opportunities to expand our operations and expand other product lines in the USA, European, and Asian markets.


Our company will focus on providing helpful customer service. We are currently selling six products that are available to be purchased through our website, and wholesale orders are also being accepted from June 1, 2016. The CompanyOur company plans on engaging in an e-commerce strategy to be able to drive its online sales. In addition, theour company is targeting cosmetic distribution companies in China and Hong Kong as part of its sales strategy. Our company is also looking at distributing its licensed products through some potential JV partnerships.

The Company

Our company is also working with the LicenseeLicensor to re-design and re-package the product line to better reflect the Chinese market place.

One June 1, 2013, we entered into a web site design agreement with Smart Creations. As compensation, our company will pay Smart Creations $300 upon completion of the creation of our company’s website which was estimated to be completed on October 30, 2013. We have since re-designing our website in order to better market our brand and image to consumers and to better reflect our existing business. We will always look at updating our website as we grow and as our business evolves. The re-design should be completed prior to October 31, 2015.

On July 31, 2014, our company’s board of directors approved a resolution to effect a 7 new for 1 old forward split of our authorized and our issued and outstanding shares of common stock. A Certificate of Change for the stock split was filed and became effective with the Nevada Secretary of State on August 19, 2014. Consequently, our authorized share capital increased from 75,000,000 to 525,000,000 shares of common stock and our issued and outstanding common stock, at that time, increased from 4,250,000 to 29,900,000 shares, all with a par value of $0.001.

The forward stock split was approved by the Financial Industry Regulatory Authority (FINRA) with an effective date of August 19, 2014.

On November 25, 2014, our board of directors approved an agreement and plan of merger to merge with our wholly-owned subsidiary Science to Consumers, Inc., a Nevada corporation, to effect a name change from Argan Beauty Corp. to Science to Consumers, Inc. Science to Consumers, Inc. was formed solely for the change of name.

Articles of Merger to effect the merger and change of name were filed and became effective with the Nevada Secretary of State on December 23, 2014. The name change was reviewed by the FINRA and was approved for filing with an effective date of December 24, 2014. The name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on December 24, 2014 under the symbol "BEUT". Our CUSIP number is 808645105.

Effective August 18, 2015, Burt Ensley resigned as chief executive officer of our company. Mr. Ensley will remain as a company advisor. In connection with the resignation of Mr. Ensley, Edwon Lam was appointed as chief executive officer.

Mr. Ensley's resignation was not the result of any disagreement with our company regarding our operations, policies, practices or otherwise.

Our principal executive office is located at Faraday Str. 31, Leipzig, Germany, 04159.Room 1618, American Bank Centre, 555 Ren Min Road, Guangzhou, China. Our telephone number is 49 (0) 173 8264 717.+86 139 022 55701.

We do not have any subsidiaries.

We have never declared bankruptcy nor have we been in receivership.

Our Current Business

On October 1, 2013, Science to Consumers Inc., a private Nevada corporation (the “Assignor”), entered into a License Agreement with Protein Genomics Inc., a Delaware corporation, pursuant to which the Assignor acquired the rights from Protein Genomics Inc. to sell certain products. The terms of the Assignment Agreement signed on October 1, 2013 have not been met and mutually both parties agreed to enter into a new agreement with similar terms and pricing were negotiated and entered into a new agreement on January 19, 2015.

On January 19, 2015, our company, as assignee, entered into an Assignment Agreement with the Assignor, pursuant to which we have acquired the right, title and interest to the License Agreement and all obligations, benefits and advantages thereunder in relation to the territory under the License Agreement for consumer skin care products supplied by Protein Genomics. Under the terms of the Assignment Agreement, Burt Ensley, the current sole director and officer of the Assignor and a former chief executive officer of our company, shall be issued 2,000,000 shares of common stock of our company was to be issued as consideration for the transfer of the License Agreement.


Under the License Agreement our company will provide direct to consumer sales, marketing and distribution of finished consumer skin care products provided by Protein Genomics via direct response advertisements and other worldwide marketing and distribution channels. Our company will create direct response advertisements for the products in consultation with Protein Genomics, which shall initially consist of direct response print advertisements and television commercials and other forms of direct response advertisements.

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Our company shall manage all creative testing, media, buying, telemarketing fulfillment and credit card processing relating to the sale of the consumer skin care products through direct response advertisements and will work with Protein Genomics on appropriate publicity and home shopping opportunities for the products. We may also work together with respect to the packaging of the products.

Our company may also present buying opportunities online of the products as part of our overall web strategy including order acceptance, billing and collection.

Protein Genomics will provide our company with finished inventory, claims substantiation with respect to each product including any relevant clinical data and support for any such claims, assistance in securing testimonials and cooperation from experts and arranging for appearances by our former chief executive officer, Burt Ensley, to promote the products in our direct response advertising channels. Protein Genomics will also provide us with fully cleared content required by our company to create the direct response advertisements, ensure that any patents and intellectual property are in good standing and defend against any potential competition or infringement.

The terms of the Assignment Agreement signed on January 19, 2015 havewere not been met and a new agreement with similar terms and pricing were negotiated and entered into on December 29, 2015.

Effective December 29, 2015, we entered into an exclusive license agreement with Biomatrix Inc., a Delaware corporation, pursuant to which we obtained the exclusive rights to sell certain proprietary skincare products of Biomatrix by direct to consumer marketing and sales in the territories of China and Europe. In consideration for the marketing, sales and distribution services to be provided by our company, Biomatrix has agreed to supply product inventory at a rate not less favorable than that provided to any third party. Additionally, Biomatrix has agreed to transfer to our company 100% equity ownership of Biomatrix Inc., an Arizona corporation which holds all right and title to the product distribution rights acquired. In consideration of transfer of title and rights acquired, we agreed to issue to Biomatrix (Delaware) 2,000,000 restricted common shares in the capital stock of our company.

The initial term of the exclusive license agreement is for 5 years, subject to our company achieving minimum sales of $250,000 and $500,000 during the first and second years of the agreement, respectively. Thereafter, the term will automatically renew for successive 5 year periods provided that we achieve a minimum $500,000 in sales of the licensed products during each calendar year of the term, excluding the first year.

Closing of the transaction is subject to completion of due diligence and to the transfer of the Biomatrix, Arizona securities to our Company.company. Biomatrix Arizona will become our wholly owned subsidiary upon completion of the transaction.

Our Current Products

We are currently selling six products that are available to be purchased through our website, and wholesale orders are also being accepted from June 1, 2016. The CompanyOur company plans on engaging in an e-commerce strategy to be able to drive its online sales. In addition, the company is targeting cosmetic distribution companies in China and Hong Kong as part of its sales strategy.

The Company

Our company is also working with the Licenseeour distributors to re-design and re-package the product line to better reflect the Chinese market place. In addition, patents and trademarks are also being applied for in China to better protect the brand being developed in China by our company’s distributors.

The products being sold by the Companyour company currently are Dermalastyl Facial Scrub, Dermalastyl Bx Pro, Dermalastyl Bx Elastropin, Dermalastyl-e Intensive Eye Serum, Dermalastyl-m Wrinkle Eye Radicator, Dermalastyl-m Anti- Wrinkle after shave for Men.

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Marketing and Promotional Activities

our distributor SHI TU KANG TRADING CO LTD ("STK") has signed a memorandum of understanding (MOU) with China Qipao Society (also known as The Chinese Cheongsam Association in some countries) to promote our Chinese brand name “朶米蘭詩” and generate sales through their apps “CQP 旗美薈”. China Qupao Society has more than 200,000 active members with about 420 international branches worldwide. As Qipao is not only the Chinese traditional costume, but also a great symbol of Chinese culture. Through their frequent show events and networks, our company will achieve brand awareness and promotion of our provide a better understanding of our company's skin care benefits to the female CQP members

STK has signed an official agreement on behalf of our company with Hai Tao Base ("HTB") to import products and display our products in the three most busiest and eye catching locations in Guangzhou downtown as well as University Campuses in both Guangzhou City and Conghua City. Similar to A S Watson chain stores in Hong Kong, HTB has signed contracts to major drug stores and expand their physical networks of more than 100 locations in the Guangdong area. Drug stores include Banzhi Lin (寶芝林), Great Forest (大森林),and Conghua GuangJi Tang (廣濟堂). The store expansion of HTB will definitely help our company to create product awareness and market penetration and as a result generating more profit.

For the Hong Kong market, our company has decided to work with SaSa for consignment terms at various hot sales locations. Our company is also talking to different media companies including: OKI Media (http://okimedia.com.hk); Finger Shopping (http://www.fingershopping.com); HKTV Mall (http://www.hktvmall.com); FlyOn (http://www.flyonasia.com); Yahoo HK (https://hk.deals.yahoo.com/hong-kong) and Groupon (http://www.groupon.hk).

Results of Operations for the Three and Nine Months Ended February 29, 201628, 2017 and February 28, 201529, 2016

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the Ninethree and nine months ended February 29, 201628, 2017 and February 28, 2015.29, 2016.

Our operating results for the three and Ninenine months ended February 28, 2017 and February 29, 2016 and February 28, 2015areare summarized as follows:



  Three Months Ended  Nine Months Ended 
  February 29  February 28  February 29  February 28 
  2016  2015  2016  2015 
Advertising and promotion$ Nil $ Nil $ Nil $ 15 
Amortization expense$ 291 $ Nil $ 581 $ Nil 
Bank service charges$ Nil $ 48 $ Nil $ 169 
Professional fees$ 18,501 $ 11,866 $ 34,449 $ 40,856 
Net Loss$ (18,792)$ (11,914)$ (35,030)$ (41,040)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

February 28

2017

 

 

February 29

2016

 

 

February 28

2017

 

 

February 29

2016

 

Amortization

 

$871

 

 

$291

 

 

$2,613

 

 

$581

 

General and administrative

 

$4,092

 

 

$-

 

 

$12,231

 

 

$-

 

Professional fees

 

$4,005

 

 

$18,501

 

 

$17,090

 

 

$34,449

 

Net Loss

 

$(19,194)

 

$(18,792)

 

$(45,653)

 

$(35,030)

Our net loss for the three months ended February 29, 201628, 2017 was $18,792 compared to a net loss of $11,914 for the same period in 2015.$19,194. Our net loss for Ninenine months ended February 28, 20162017 was $35,030 compared to a net loss of $41,040 during the same period in 2015.$35,030. During the Ninenine months ended February 29, 201628, 2017 we did not generate any revenue.

During the three months ended February 28, 2017, our operating expenses were amortization expenses of $871, general and administrative of $4,095 and professional fees of $4,005. During the three months ended February 29, 2016, our operating expenses were amortization expenses of $291 and professional fees of $18,501. During the three months ended February 28, 2015, our operating expenses were bank service charges of $48 and professional fees of $11,866. The increase in operating expenses for this period compared to the previous period is primarily due to an increase in professional fees.general and administrative expenses.

During the Ninenine months ended February 28, 2017, our operating expenses were amortization expenses of $2,613, general and administrative of $12,231 and professional fees of $17,090. During the nine months ended February 29, 2016, our operating expenses were amortization expenses of $581 and professional fees of $34,449. During the Nine months ended February 28, 2015, our operating expenses were advertising and promotion of $15, bank service charges of $169 and professional fees of $40,856. The decreaseincrease in operating expenses for this period compared to the previous period is primarily due a decreaseto an increase in professional fees.general and administrative expenses.

The weighted average number of shares outstanding were 30,465,00031,900,000 and 29,900,00030,465,000 for the Ninenine months ended February 28, 2017 and February 29, 2016, and February 28, 2015, respectively.

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Liquidity and Financial Condition

Working Capital      
  At February 29  At May 31, 
  2016  2015 
Current Assets$ Nil $ 1,749 
Current Liabilities$ 38,893 $ 8,891 
Working Capital Deficit$ (38,893)$ (7,142)

Cash Flows      
  At February 29  At February 28, 
  2016  2015 
Net cash used in operations$ (20,597)$ (41,040)
Net cash (used in) provided by investing activities$ Nil $ Nil 
Net cash (used in) provided by financing activities$ 18,848 $ 45,674 
Increase (Decrease) in Cash During the Period$ (1,749)$ 4,634 

Working Capital

 

 

At

February 28,

 

 

At

May 31,

 

 

 

2017

 

 

2016

 

Current Assets

 

$-

 

 

$3,306

 

Current Liabilities

 

$86,157

 

 

$64,423

 

Working Capital

 

$(86,157)

 

$(61,117)

Cash Flows

 

 

At

February 28,

 

 

At

February 29,

 

 

 

2018

 

 

2016

 

Net cash (used in) provided by operations

 

$(23,856)

 

$(20,597)

Net cash (used in) provided by investing activities

 

$-

 

 

$-

 

Net cash (used in) provided by financing activities

 

$20,550

 

 

$18,848

 

Increase (Decrease) in Cash During the Period

 

$(3,306)

 

$(1,749)

As at February 29, 2016,28, 2017, our total current assets were $9,871$Nil compared to $1,749$3,306 in total current assets at May 31, 2015.2016. Total current assets were comprised of $9,871 in website development costs, as at February 29, 2016 we had no cash orand cash equivalents. As at February 29, 2016,28, 2017, our current liabilities were $38,893$86,157 compared to $8,891$64,423 in current liabilities as at May 31, 2015.2016. Stockholders’ deficitequity was $29,022($80,350) as of February29, 2016February 28, 2017 compared to stockholders' deficitequity of $7,142($52,697) as of May 31, 2015.2016.


Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the Ninenine months ended February 29, 2016,28, 2017, net cash flows used in operating activities was $20,597$23,856 compared to $41,040net cash provided by operating activities of $20,597 for the Ninenine months ended February 28, 2015.29, 2016.

Cash Flows from Investing Activities

For the Ninenine months ended February 28, 2017 net cash provided by investing activities was $Nil compared to net cash used in investing activities of $Nil for the nine months ended February 29, 2016 cash flows used in investing activities were $0 compared to $0 for the Nine months ended February 28, 2015.2016.

Cash Flows from Financing Activities

For the Ninenine months ended February 29, 201628, 2017, cash flows from financing activities were $18,848was $20,500 compared to $45,674net cash flows from financing activities of $18,848 for the Ninenine months ended February 28, 2015.29, 2016.

Plan of Operation and Future Financings

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

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Cash Requirements

We estimate our operating expenses and working capital requirements for the twelve month period to be as follows:

Estimated Expenses For the Twelve Month Period ending February 28, 2017
Professional fees$ 30,000
Establishing an office in China$ 13,000
Online Advertising$ 5,000
Import Licenses3,500
General and administrative expenses60,000
Total$ 111,500


Estimated Expenses For the Twelve Month Period ending February 28, 2018

 

 

 

 

Professional fees

 

$30,000

 

Establishing an office in China

 

$13,000

 

Online Advertising

 

$5,000

 

Import Licenses

 

 

13,500

 

General and administrative expenses

 

 

50,000

 

Total

 

$111,500

 

At present, our cash requirements for the next 12 months outweigh the funds available to maintain our operations or development of any future properties. Of the $111,500 that we require for the next 12 months, we had $0$Nil in cash as of February 29, 2016,28, 2017, and a working capital deficit of $38,893.$86,157. Until we complete a transaction, acquisition or business combination, our cash requirements will be in regards to maintaining our corporate existence, and ensuring compliance with our SEC continuous disclosure obligations, including our financial reporting requirements. In addition, we will require additional capital in order to investigate and conclude any future transaction, acquisition or business combination. In order to improve our liquidity, we plan to pursue additional equity financing from private investors or possibly a registered public offering. We do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

We have suffered recurring losses from operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due. In their report on our audited financial statements for the year ended May 31, 2015,2016, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that isare material to stockholders.

Critical Accounting Policies

Basis of Presentation

The financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Accounting Basis

Our company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). Our company has adopted a May 31 fiscal year end.

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Cash and Cash Equivalents

Our company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. Our company had $nil$Nil of cash as of February 29, 201628, 2017 and $1,749$3,306 of cash as of May 31, 2015.2016.


Fair Value of Financial Instruments

Our company’s financial instruments consist of cash and cash equivalents and amounts due to shareholder. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Website Development Costs

Website development costs consist of costs incurred to develop internet websites to promote, advertise, and earn revenue with respect to our company’s business operations. Costs are amortized on a straight line basis over 3 years from when the internet web site has been completed.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Our company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, our company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing our company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing our company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of February 29, 201628, 2017 and May 31, 2015.2016.

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Comprehensive Income

Our company has which established

ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income, its components and accumulated balances. When applicable, our company would disclose this information on itsour Statement of Stockholders’ Equity.Deficit. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. Our company has not had any significant transactions that are required to be reported in other comprehensive income.


Recent Accounting Pronouncements

Our company does not expect the adoption of any other recentrecently issued accounting pronouncements to have a materialsignificant impact on our company's results of operations, financial statements.position, or cash flow.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and chief financial officer (our principal financial officer and principal accounting officer), to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

On April 7, 2016, KLJ & Associates, LLP resigned as our independent registered public accounting firm.

The reports of KLJ & Associates, LLP on our financial statements as of and for the fiscal years ended May 31, 2015 and 2014 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle except to indicate that there was substantial doubt about our ability to continue as a going concern.None.

During the fiscal years ended May 31, 2015 and 2014, there have been no disagreements with KLJ & Associates, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction KLJ & Associates, LLP would have caused them to make reference thereto in connection with their report on the financial statements for such years.

On April 25, 2016, our company engaged Yichien Yeh, CPA as its new independent registered public accounting firm.
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Item 6. Exhibits

Exhibit

Number

Description

(3)

Articles of Incorporation and Bylaws

3.1

Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on August 6, 2013)

3.2

Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on August 6, 2013)

3.3

Certificate of Change (incorporated by reference to our Current Report on Form 8-K filed on August 22, 2014)

3.4

Articles of Merger (incorporated by reference to our Current Report on Form 8-K filed on December 30, 2014)

(10)

(10)

Material Contracts

10.1

Web Site Design Agreement between our company and Smart Creations (incorporated by reference to our Registration Statement on Form S-1 filed on August 6, 2013)

10.2

License Assignment Agreement dated January 19, 2015 (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2015)

10.3

Exclusive License Agreement dated December 16, 2015 between the Company and Biomatrix Inc. (incorporated by reference to our Current Report on Form 8-K filed on January 6, 2016)

(31)

(31)

Rule 13a-14(a) / 15d-14(a) Certifications

31.1*

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

31.2*

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer

(32)

(32)

Section 1350 Certifications

32.1**

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

32.2**

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer

101**

101

Interactive Data File

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

_________

* Filed herewith.


** Furnished herewith.

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SIGNATURES

SIGNATURES

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

SCIENCE TO CONSUMERS, INC.

(Registrant)

Dated: July 19, 2017

Dated: May 19, 2016

/s/ Vitaliy Gorelik

Vitaliy Gorelik

President, Chief Financial Officer, Treasurer, and

Director

(Principal Financial Officer and Principal

Accounting Officer)

Officer)

Dated: July 19, 2017

Dated: May 19, 2016

/s/ Edwon Lam

Edwon Lam

Chief Executive Officer

(Principal Executive Officer)



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