UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2015
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to _______ to _______
Commission File Number 333-190391
SCIENCE TO CONSUMERS, INC.
(Exact name of registrant as specified in its charter)
| Nevada |
EIN 33-1227949 |
| (State or other jurisdiction of incorporation or
organization) |
(IRS Employer Identification No.)
|
| Faraday Str. 31, Leipzig, Germany |
04159
|
| (Address of principal executive offices) |
(Zip Code) |
49 (0) 1738264717
(Registrants 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] 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).
[X] YES [ ] NO
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] |
|
Accelerated filer [ ] |
| Non-accelerated filer [ ] |
(Do not check if a smaller reporting company)
|
Smaller reporting company [X]
|
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act)
[X] YES
[ ] 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.
[ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
29,900,000 common shares issued and outstanding as of April 10, 2015.
TABLE OF CONTENTS
2
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.
3
SCIENCE TO CONSUMERS, INC.
CONDENSED FINANCIAL STATEMENTS
FEBRUARY 28, 2015
4
SCIENCE TO CONSUMERS, INC.
TABLE OF CONTENTS
FEBRUARY 28, 2015
SCIENCE TO CONSUMERS, INC.
CONDENSED BALANCE SHEETS (Unaudited)
| |
|
February 28, |
|
|
May 31, |
|
| ASSETS |
|
2015 |
|
|
2014 |
|
| Current Assets |
|
|
|
|
|
|
| Cash and
cash equivalents |
$ |
- |
|
$ |
5,171 |
|
| Legal Trust Account |
|
9,805 |
|
|
- |
|
| Total Current Assets |
|
9,805 |
|
|
5,171 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Total Assets |
$ |
9,805 |
|
$ |
5,171 |
|
| |
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
| Loan from
director |
$ |
8,890 |
|
$ |
8,216 |
|
| |
|
|
|
|
|
|
| Total Liabilities |
|
8,890 |
|
|
8,216 |
|
| |
|
|
|
|
|
|
| Stockholders Equity (Deficit) |
|
|
|
|
|
|
Common stock,
par value $0.001; 525,000,000 shares
authorized,
29,900,000 and 4,250,000 shares
issued and outstanding |
|
29,900 |
|
|
4,250 |
|
|
Additional paid in capital |
|
43,100 |
|
|
23,750 |
|
| Accumulated deficit |
|
(72,085 |
) |
|
(31,045 |
) |
| Total Stockholders Equity (Deficit) |
|
915 |
|
|
(3,045 |
) |
| |
|
|
|
|
|
|
| Total Liabilities and
Stockholders Equity |
$ |
9,805 |
|
$ |
5,171 |
|
See accompanying notes to condensed financial statements.
F-1
SCIENCE TO CONSUMERS, INC.
CONDENSED STATEMENTS OF
OPERATIONS
(Unaudited)
| |
|
For the three |
|
|
For the three |
|
|
For the nine |
|
|
For the nine |
|
| |
|
months ended |
|
|
months ended |
|
|
months ended |
|
|
months ended |
|
| |
|
February 28, |
|
|
February 28, |
|
|
February 28, |
|
|
February 28, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| REVENUES |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
| Advertising and Promotion |
|
- |
|
|
- |
|
|
15 |
|
|
36 |
|
| Bank Service Charges |
|
48 |
|
|
60 |
|
|
169 |
|
|
277 |
|
| Professional Fees |
|
11,866 |
|
|
7,500 |
|
|
40,856 |
|
|
17,693 |
|
| Business License and Permit
|
|
|
|
|
|
|
|
- |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL OPERATING
EXPENSES |
|
11,914 |
|
|
7,560 |
|
|
41,040 |
|
|
18,006 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET LOSS FROM
OPERATIONS |
|
(11,914 |
)
|
|
(7,560 |
)
|
|
(41,040 |
)
|
|
(18,006 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| PROVISION FOR INCOME
TAXES |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET LOSS |
$ |
(11,914 |
) |
$ |
(7,560 |
) |
$ |
(41,040 |
) |
$ |
(18,006 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND
DILUTED |
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF
SHARES OUTSTANDING: BASIC
AND DILUTED |
|
29,900,000 |
|
|
4,250,000 |
|
|
29,900,000 |
|
|
3,531,136 |
|
See accompanying notes to condensed financial statements.
F-2
SCIENCE TO CONSUMERS, INC.
CONDENSED STATEMENTS OF CASH
FLOWS
(Unaudited)
| |
|
For the nine |
|
|
For the nine |
|
| |
|
months ended |
|
|
months ended |
|
| |
|
February 28, |
|
|
February 28, |
|
| |
|
2015 |
|
|
2014 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(41,040 |
)
|
$ |
(18,006 |
)
|
| Adjustments to reconcile net loss to net cash
(used in) operating activities: |
|
|
|
|
|
|
| Changes in assets and
liabilities: |
|
|
|
|
|
|
| Accounts payable |
|
- |
|
|
- |
|
| CASH FLOWS (USED IN)
OPERATING ACTIVITIES |
|
(41,040 |
) |
|
(18,006 |
) |
| |
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
| Loans from
director |
|
674 |
|
|
25,000 |
|
|
Proceeds from sale of common stock |
|
45,000 |
|
|
7,500 |
|
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
|
|
45,674 |
|
|
32,500 |
|
| |
|
|
|
|
|
|
| NET INCREASE (DECREASE) IN CASH |
|
4,634 |
|
|
14,494 |
|
| Cash, beginning of period |
|
5,171 |
|
|
3,065 |
|
| Cash, end of period |
$ |
9,805 |
|
$ |
17,559 |
|
| |
|
|
|
|
|
|
| SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
Interest paid |
$ |
- |
|
$ |
- |
|
| Income
taxes paid |
$ |
- |
|
$ |
- |
|
See accompanying notes to condensed financial statements.
F-3
SCIENCE TO CONSUMERS, INC.
NOTES TO THE CONDENSED
FINANCIAL STATEMENTS
FEBRUARY 28, 2015
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Science to Consumers, Inc. is a start-up company
registered in the State of Nevada on April 15, 2013 and formed to distribute
Argan oil products. Science to Consumers, Inc. will position itself to take full
advantage of the distribution of Argan oil products from manufacturers to
customers. In addition, under a License Agreement with Protein Genomics Inc., a Delaware corporation, assigned to the Company on January 19, 2015, the 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. The 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.
NOTE 2 - SUMMARY OF SIGNIFICANT 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 $9,805 of cash in a legal trust as of February 28, 2015 and $ 5,171 as of
May 31, 2014.
Fair Value of Financial Instruments
The Companys 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.
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.
F-4
SCIENCE TO CONSUMERS, INC.
NOTES TO THE CONDENSED
FINANCIAL STATEMENTS
FEBRUARY 28, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the
Companys 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 Companys 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 28, 2015.
Comprehensive Income
The Company has which established standards for 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. 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.
Recent Accounting Pronouncements
Science to Consumers, Inc. does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the
Companys results of operations, financial position or cash flow.
NOTE 3 – 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 position, results of operations and cash flows as of and for the period ended February 28, 2015 and for all periods presented have been made.
Certain information and footnote disclosures normally included in 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 November 30, 2013 audited financial statements. The results of operations for the nine months ended February 28, 2015 are not necessarily indicative of the operating results for the full year ended May 31, 2015
NOTE 4 - GOING CONCERN
The accompanying 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 28, 2015. The Company currently has limited working
capital, and has not completed its efforts to establish a stabilized source of
revenues sufficient to cover operating costs over an extended period of
time.
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 managements 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 5 - LOAN FROM DIRECTOR
As of February 28, 2015, a director loaned $10,214 to the
Company for business operations.
The director was repaid $1,324 to reduce the
loan outstanding.
The loans are unsecured, non-interest bearing and due on
demand.
The balance due to the director was $8,890 as of February 28,
2015.
F-5
SCIENCE TO CONSUMERS, INC.
NOTES TO THE CONDENSED
FINANCIAL STATEMENTS
FEBRUARY 28, 2015
NOTE 6 - COMMON STOCK
The Company has 525,000,000, $0.001 par value shares of common
stock authorized.
On May 13, 2013, the Company issued 3,000,000 shares of common
stock to a director for cash proceeds of $3,000 at $0.001 per share.
On November 15, 2013, the Company issued 1, 250,000 shares of
common stock for cash proceeds of $ 25,000 at $0.02 per share.
On July 31, 2014, our companys board of directors approved a
resolution to effect a 7 new for 1 old forward split of our authorized and
outstanding shares of common stock. A Certificate 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 4,250,000 to
29,750,000 shares, all with a par value of $0.001.
On September 17, 2014, the Company issued 50,000 shares of
common stock for cash proceeds of $ 15,000 at $0.30 per share.
On September 18, 2014, the Company issued 100,000 shares of
common stock for cash proceeds of $ 30,000 at $0.30 per share.
There were 29,900,000 shares of common stock issued and
outstanding as of February 28, 2015.
NOTE 7 - 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 8 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has
analyzed its operations subsequent to February 28, 2015 to the date these
financial statements were issued, and has determined that it does not have any
material subsequent events to disclose in these financial statements.
F-6
| Item 2. |
Management's Discussion and Analysis of
Financial Condition and Results of Operation |
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'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 in this quarterly report, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to shares of our common 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.
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. We expect to generate revenues from sales of our products to
individual customers and commercial customers such as spas, stores and massage
therapy offices. Both individual and commercial customers will be able to order
our products by telephone, our website has been updated and changed to reflect
our name change to www.sciencetoconsumers.com using our special contact form, or
directly at an arranged meeting with our representative. We will import 100%
pure Argan oil and all the skin care products made with Argan oil straight from
the manufacturer in Morocco and deliver them to our clients in Germany without
the help of commission base agents. We are also looking at securing other
products to distribute in the North American market.
At this stage, we have no revenues. The only operations we have
engaged in are preparing our business plan and the development of our website.
Our potential client list consists of 4 companies ranging from beauty stores,
spas and massage therapy offices.
The majority of our business will be initially marketed in
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
product lines in the USA market.
6
Our company will focus on providing helpful customer service.
We will have vast selection of products as well as same-day delivery services
within 100 miles radius. We also offer a no minimum order size and no shipping
charges, as well as returns of unused, saleable products for an instant
credit.
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 companys website which was estimated to
be completed on October 30, 2013. We are now looking at re-designing our website
in order to better market our brand and image to consumers. This re-design
should be completed prior to January 31, 2015 and the new website domain will be
www.sciencetoconsumers.com.
On July 31, 2014, our companys 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 29,750,000 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 new CUSIP number is 808645105.
Our principal executive office is located at Faraday Str. 31,
Leipzig, Germany, 04159. Our telephone number is 49 (0) 173 8264 717.
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.
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 chief executive officer of our company, will be issued 2,000,000 shares of common stock of our company as consideration for the transfer of the License Agreement.
The Assignment Agreement shall terminate and the shares shall
be cancelled and returned in the event that:
- the acquisition of the Assignor is not completed by March 31, 2015;
- should the Assignee waive the acquisition completion date, above, the
sales of the products have not generated gross revenues of $250,000 within 12
months of January 19, 2015, or
- Burt Ensley does not complete the Stock Purchase Agreement dated June 23,
2014 and amended on January 26, 2015 with Vitaliy Gorelik, president, chief
financial officer, treasurer and sole director of the Assignee, by April 30,
2015.
7
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.
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 inventor, 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 chief executive officer and director, 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.
Results of Operations for the Three and Nine Months Ended
February 28, 2015 and 2014
The following summary of our results of operations should be
read in conjunction with our unaudited condensed financial statements for the
three and nine months ended February 28, 2015 and 2014.
Our operating results for the three and nine months ended
February 28, 2015 and 2014 are summarized as follows:
| |
|
|
Three Months Ended
|
|
|
Nine Months Ended |
|
| |
|
|
February 28, |
|
|
February 28, |
|
| |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
Advertising and promotion |
$ |
Nil |
|
$ |
Nil |
|
$ |
15 |
|
|
36 |
|
| |
Bank service charges |
$ |
48 |
|
$ |
60 |
|
$ |
169 |
|
|
277 |
|
| |
Professional fees |
$ |
11,866 |
|
$ |
7,500 |
|
$ |
40,856 |
|
|
17,693 |
|
| |
Net Loss |
$ |
(11,914 |
) |
$ |
(7,560 |
) |
$ |
(41,040 |
) |
|
(18,006 |
) |
Our net loss for the three months ended February 28, 2015 was
$11,914. Our net loss for the nine months ended February 28, 2015 was $41,040.
During the three and nine months ended February 28, 2015 we did not generate any
revenue.
Our net loss for the three months ended February 28, 2014 was $7,560. Our net loss for the nine months ended February 28, 2014 was $18,006.
During the three months ended February 28, 2015, our operating
expenses were bank service charges of $48 and professional fees of $11,866.
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 $40,855. The weighted average number of shares outstanding were
29,900,000 and 29,900,000 for the three and nine months ended February 28, 2015,
respectively.
During the three months ended February 28, 2014, our operating expenses were bank service charges of $60 and professional fees of $7,500. During the nine months ended February 28, 2014, our operating expenses were advertising and promotion of $36, bank service charges of $277 and professional fees of $17,693. The weighted average number of shares outstanding were 4,250,000 and 3,531,136 for the three and nine months ended February 28, 2015, respectively.
8
Liquidity and Financial Condition
Working Capital
| |
|
|
2015 |
|
|
2014 |
|
| |
Current Assets |
$ |
9,805 |
|
$ |
5,171 |
|
| |
Current Liabilities |
$ |
8,890 |
|
$ |
8,216 |
|
| |
Working Capital |
$ |
915 |
|
$ |
(3,045 |
)
|
Cash Flows
| |
|
|
Nine Months |
|
|
Nine Months |
|
| |
|
|
Ended |
|
|
Ended |
|
| |
|
|
February 30, |
|
|
February 30, |
|
| |
|
|
2015 |
|
|
2014 |
|
| |
Net cash used in operating activities |
$ |
(41,040 |
) |
$ |
(18,006 |
) |
| |
Net cash (used in) provided by investing activities |
$ |
Nil |
|
$ |
Nil |
|
| |
Net cash provided by financing activities
|
$ |
45,674 |
|
$ |
32,500 |
|
| |
Increase in Cash During the Period |
$ |
4,634 |
|
$ |
14,494 |
|
As at February 28, 2015, our total assets were $9,805 compared
to $5,171 in total assets at May 31, 2014. Total assets were comprised of $9,805
in legal trust accounts. As at February 28, 2015, our current liabilities were
$8,890 compared to $8,216 in current liabilities as at May 31, 2014.
Stockholders equity was $915 as of February 28, 2015 compared to stockholders'
equity of ($3,045) as of May 31, 2014.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating
activities. For the nine months ended February 28, 2015, net cash flows used in
operating activities was $41,040 compared to $18,005 for the nine months ended
February 28, 2014.
Cash Flows from Investing Activities
For the nine months ended February 28, 2015 and 2014 we did not
have any cash flows in investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either
advancements or the issuance of equity. For the nine months ended February 28,
2015, cash flow provided by financing activities was $45,674 compared to $32,500
for the nine months ended February 28, 2015.
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.
9
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.
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, 2016 |
|
| |
Professional fees |
$ |
36,000 |
|
| |
Establishing an office |
$ |
5,000 |
|
| |
Marketing & Advertising |
$ |
100,500 |
|
| |
Website development |
|
31,500 |
|
| |
General and administrative expenses |
|
30,000 |
|
| |
Total |
$ |
203,000 |
|
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 $203,000 that we require for the next 12 months, we
had $Nil in cash as of February 28, 2015, and a working capital of $915. 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.
10
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, 2014, 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, capital expenditures or capital resources that is 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.
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 $9,805 of cash in a legal trust as of February 28, 2015 and $5,171 as of May
31, 2014.
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.
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.
11
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 companys 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 28, 2015.
Comprehensive Income
Our company has which established standards for reporting and
display of comprehensive income, its components and accumulated balances. When
applicable, our company would disclose this information on its Statement of
Stockholders Equity. 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 recently issued
accounting pronouncements to have a significant impact on our companys results
of operations, financial 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
|
Managements 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.
12
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.
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.
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 |
None.
13
*
Filed herewith
14
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: April 10, 2015 |
/s/
Burt Ensley |
| |
Burt Ensley |
| |
Chief Executive Officer |
| |
(Principal Executive Officer) |
| |
|
| |
|
| |
|
| Dated: April 10, 2015 |
/s/
Vitaliy Gorelik |
| |
Vitaliy Gorelik |
| |
President, Chief Financial Officer, Treasurer
and Director |
| |
(Principal Financial Officer and Principal
Accounting |
| |
Officer) |
15
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Burt Ensley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Science to Consumers, Inc.;
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
| |
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
| |
|
|
| |
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
| |
|
|
| |
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
| |
|
|
| |
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
| |
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
| |
|
|
| |
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
| Date: April 10, 2015 |
|
| |
|
| |
|
| /s/ Burt
Ensley |
|
| Burt Ensley |
|
| Chief Executive Officer |
|
| (Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Vitaliy Gorelik, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Science to Consumers, Inc.;
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
| |
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
| |
|
|
| |
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
| |
|
|
| |
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
| |
|
|
| |
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
| |
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
| |
|
|
| |
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
| Date: April 10, 2015 |
|
| |
|
| |
|
| /s/ Vitaliy
Gorelik |
|
| Vitaliy Gorelik |
|
| President, Chief Financial Officer, Treasurer and |
|
| Director |
|
| (Principal Financial Officer and Principal Accounting |
|
| Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Burt Ensley, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
| (1) |
the Quarterly Report on Form 10-Q of Science to
Consumers, Inc. for the period ended February 28, 2015 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
| |
|
| (2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Science to Consumers, Inc. |
| Dated: April 10, 2015 |
|
| |
|
| |
|
| |
/s/ Burt Ensley |
| |
Burt Ensley |
| |
Chief Executive Officer |
| |
(Principal Executive Officer) |
| |
Science to Consumers, Inc. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Science to
Consumers, Inc. and will be retained by Science to Consumers, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Vitaliy Gorelik, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
| (1) |
the Quarterly Report on Form 10-Q of Science to
Consumers, Inc. for the period ended February 28, 2015 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
| |
|
| (2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Science to Consumers, Inc. |
| Dated: April 10, 2015 |
|
| |
|
| |
|
| |
/s/ Vitaliy Gorelik |
| |
Vitaliy Gorelik |
| |
President, Chief Financial Officer, Treasurer
and Director |
| |
(Principal Financial Officer and Principal
Accounting |
| |
Officer) |
| |
Science to Consumers, Inc. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Science to
Consumers, Inc. and will be retained by Science to Consumers, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.
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