UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

(Mark One)

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

For the quarterly period ended: March 31, 2011

OR

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

For the transition period from ________________to ________________

Commission File Number: 333-144888

CHINA SHESAYS MEDICAL COSMETOLOGY INC.
(Exact Name of Registrant as Specified in Its Charter)

(86) 028-8548-2277
(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.

Yes [X]      No [  ]

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

Yes [  ]      No [  ]

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

Large accelerated filer [  ]      Accelerated filer [  ]      Non-accelerated filer [  ]      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).

Yes [  ]      No [X]

As of May 13, 2011, there were a total of 18,600,012 shares of the registrant’s common stock outstanding, $0.001 par value.

EXPLANATORY NOTE

China Shesays Medical Cosmetology Inc. (the “Company”, “SHESAYS” or “China Shesays”) is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q/A (the "Amended 10-Q") to amend its Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the Securities and Exchange Commission (the "SEC") on May 16, 2011 (the "Original 10-Q"). This Amended 10-Q is being filed to amend and restate our consolidated financial statements and related disclosures for the quarter ended March 31, 2011 as discussed in Note 3 to the accompanying restated financial statements.

Background of the Restatement

On July 15, 2011, as a result of the preparation of the responses to comments the Company received from the Securities and Exchange Commission (the “SEC”) in connection with the SEC’s review of the Company’s Amendment No. 2 to the Registration Statement on Form S-1 filed on May 13, 2011, after its communications with the Company’s auditor, the Company determined that the Company’s financial statements for the year ended December 31, 2010, and the three months period ended March 31, 2011 should no longer be relied upon as a result of certain errors regarding: (i) pre-operating expenses wrongly recorded as other current assets; (ii) under-provisions of rental expenses for clinics that had not yet commenced business; (iii) income tax expense for the above items; (iv) foreign currency translation gain or loss for the above items; and (v) an over statement of payments to acquire property and equipment in cash flows from investing activities and increases in other payables and accrued liabilities included in cash flows from operating activities in the statement of cash flows for the year ended December 31, 2010. An explanation of the error and its impact on the Company's financial statements is contained in Note 3 to the financial statements contained in Part I of this report.

Restatement of Other Financial Statements

Along with the filing of this Amended 10-Q, we are concurrently filing an amendment to our Annual Report on Form 10-K for the year ended December 31, 2010. The amendment to our Annual Report on Form 10-K is being filed to restate our audited financial statements and related financial information for the year ended December 31, 2010 to correct the errors as set forth above.

Amendments to the Original 10-Q

For the convenience of the reader, this Amended 10-Q sets forth the Original 10-Q, as modified and superseded where necessary to reflect the restatement. The following items have been amended principally as a result of, and to reflect, the restatement:

• Part I - Item 1. Financial Statements and Notes to Financial Statements;

• Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations; and

• Part II - Item 6. Exhibits.

In accordance with applicable SEC rules, this Amended 10-Q includes certifications from our Chief Executive Officer and Chief Financial Officer dated as of the date of this filing. Except for the items noted above, no other information included in the Original 10-Q is being amended by this Amended 10-Q. The Amended 10-Q continues to speak as of the date of the Original 10-Q, and we have not updated the filing to reflect events occurring subsequently to the Original 10-Q date, other than those associated with the restatement of the Company's financial statements. Accordingly, this Amended 10-Q should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original 10-Q.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CHINA SHESAYS MEDICAL COSMETOLOGY INC.
("CHINA SHESAYS") AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these condensed consolidated financial statements

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CHINA SHESAYS MEDICAL COSMETOLOGY INC.
("CHINA SHESAYS") AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated financial statements

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CHINA SHESAYS MEDICAL COSMETOLOGY INC.
("CHINA SHESAYS") AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated financial statements

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CHINA SHESAYS MEDICAL COSMETOLOGY INC.
AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)

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On June 6, 2010, SN Strategies Corp., the Parent, China Shesays Medical Cosmetology Inc., the Merger Sub, a Nevada corporation, wholly owned by the Parent and incorporated on May 20, 2010, Perfect Support, known as the Acquired Sub, and the stockholders of the Acquired Sub, entered into an Agreement and Plan of Merger pursuant to which the Merger Sub agreed to acquire 100% of the common stock of the Acquired Sub. In connection with the merger, the Merger Sub issued to the stockholders of the Acquired Sub 10 shares of its common stock of $0.001 each amounting to $0.01 for 50,000 shares of the Acquired Sub’s common stock of $1 each amounting to $50,000 which represents 100% of the outstanding shares of the Acquired Sub’s common stock. The 10 shares of common stock of the Merger Sub were subsequently converted to 13,500,012 shares of common stock of the Parent Company.

Concurrent with the merger, the Merger Sub merged with and into the Parent at the effective time of the merger. The Merger Sub no longer exists, and the Parent’s name was subsequently changed to the Merger Sub’s name.

For financial reporting purposes, the merger has been accounted for as a recapitalization of the Parent whereby the historical financial statements and operations of the Acquired Sub become the historical financial statements of the Company, with no adjustments to the carrying values of the assets and liabilities. Share and per share amounts reflect the effects of the recapitalization for all periods presented. In addition, the presentation for all periods includes equity transactions of the Acquired Sub as adjusted for the effects of the recapitalization.

On July 8, 2010, Sichuan Shesays established a PRC limited liability company, Leshan Jiazhou Shesays Junge Cosmetology Company Limited (“Leshan Jiazhou Shesays”) with a registered capital of $736,594 to which Sichuan Shesays contributed $265,984 in cash and a set of machinery totaling $470,610 in lieu of cash. Leshan Jiazhou Shesays is a clinic for providing professional medical beauty services and cosmetic surgery services to customers in PRC. In accordance with its business permit, the Company’s right of operation expires on June 17, 2014.

On August 18, 2010, Sichuan Shesays together with a third party established a PRC limited liability company, Yibin Shesays Junge Cosmetology Clinic Company Limited (“Yibin Shesays”) with a registered capital of $734,981. Sichuan Shesays contributed $587,985 in cash to the registered capital of Yibin Shesays, representing 80% of the equity of Yibin Shesays. Yibin Shesays is a clinic for providing professional medical beauty services and cosmetic surgery services to customers in PRC. In accordance with its business permit, the Company’s right of operation expires on December 31, 2014.

On October 20, 2010, Sichuan Shesays established a PRC limited liability company, Zigong Shesays Junge Cosmetology Clinic Company Limited (“Zigong Shesays”) with a registered capital of $751,213. Sichuan Shesays contributed $244,219 in cash and a set of machinery totaling $506,994 in lieu of cash. Zigong Shesays is a clinic for providing professional medical beauty services and cosmetic surgery services to customers in PRC. In accordance with its business permit, the Company’s right of operation expires on October 19, 2014.

China Shesays, Perfect Support, Chengdu Boan, Sichuan Shesays, Leshan Jiazhou Shesays, Yibin Shesays and Zigong Shesays are hereinafter referred to as (“the Company”).

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On April 27, 2010, the Company through its PRC subsidiary, Chengdu Boan entered into a series of contractual arrangements consisting of four agreements with Sichuan Shesays and the stockholders of Sichuan Shesays. Those four agreements and their consequences are described below.

In the PRC restructuring transaction described above, the Company gained indirect control of Sichuan Shesays and its subsidiaries and Sichuan Shesays and its subsidiaries are considered VIEs of the Company.

As required by ASC 810-10, the Company performs a qualitative assessment to determine whether the Company is the primary beneficiary of Sichuan Shesays and its subsidiaries which are identified as VIEs of the Company. A quality assessment begins with an understanding of the nature of the risks in the entity as well as the nature of the entity’s activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and the parties involved in the design of the entity. The Company’s assessment on the involvement with Sichuan Shesays and its subsidiaries reveals that the Company has the absolute power to direct the most significant activities that impact the economic performance of Sichuan Shesays and its subsidiaries. Under the accounting guidance, the Company is deemed to be the primary beneficiary of Sichuan Shesays and its subsidiaries and the results of Sichuan Shesays and its subsidiaries are consolidated in the Company’s consolidated financial statements for financial reporting purposes. As of March 31, 2011, Sichuan Shesays and its subsidiaries had total assets of $9,605,885 (restated) and total liabilities of $5,305,554 (restated). As of December 31, 2010, Sichuan Shesays and its subsidiaries had total assets of $7,621,593 (restated) and total liabilities of $4,059,585 (restated).

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Depreciation expenses for the three months ended March 31, 2011 and 2010 were $215,190 and $108,539 respectively.

As of March 31, 2011 and December 31, 2010, included in deposits paid for property and equipment are advance payments of renovation costs paid on behalf of the subsidiary which is still in the process of incorporation amounting to $2,298,250 and $1,482,309 respectively.

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Notes payable consisted of the following:

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The income tax expenses for the three months ended 2011 and 2010 are summarized as follows:

The tax effects of significant items comprising deferred tax assets as of March 31, 2011 and December 31, 2010 are as follows:

The reconciliation of income taxes computed at the statutory income tax rate to total income taxes for the three months ended March 31, 2011 and 2010 is as follows:

On November 12, 2010, the Company issued 48,000 warrants with an exercise price of $2 per share in conjunction with the issuance of 600,000 shares of common stock in a private placement to a professional service provider pursuant to a Financial Advisory Service Agreement entered into on June 12, 2010. The warrants are exercisable at any time from June 12, 2010 to June 12, 2012. As of March 31, 2011, no warrants have been exercised or cancelled.

The Company evaluates these warrants provided in connection with the private placement in accordance with ASC 815 and has concluded that equity classification is appropriate for these warrants, due to the fact that these warrants are required to be physically settled in shares of the common stock of the Company and there are no provisions that could require net-cash settlement. Accordingly, the fair value of the warrants of $7,911 was recognized as additional paid-in capital and as a reduction of additional paid-in capital at the date of grant. The fair value of the warrants was estimated using Black-Scholes Option Pricing Model.

The following assumptions are used to calculate the fair value of the warrants:

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As of March 31, 2011, the total amount owed to those suppliers was $34,418.

No single customer accounted for more than 10% of the service revenue for the three months ended March 31, 2011 and 2010.

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

Business Overview

Overview

We are a Nevada holding company operating in the cosmetology industry. Substantially all of our operations are conducted in China through BOAN, our wholly-owned subsidiary in China, and through our contractual arrangements with several of our consolidated affiliated entities in China, including SHESAYS and its subsidiaries.

SHESAYS was established in May 2005 and specializes in cosmetology treatments, integrating medical treatment and education. At present, we have such core clinical departments as cosmetic surgery, cosmetic dermatology, cosmetic dentistry, cosmetic Traditional Chinese Medicine (“TCM”). Services provided in cosmetic surgery include eye shaping, facial contour, rhinoplasty, face shaping, wrinkles elimination, breast surgery, chiloplasty, liposuction slimming, ear reshaping, gynecology / male plastic surgery. Cosmetic dermatology department provides services of laser depilation, acne/pock removal, facelift and wrinkle decrease of Cutera Titan, laser whitening, pore minimizing, skin rejuvenation etc. Cosmetic dentistry includes the services of optical fluoride whitening, repair of uneven denture, porcelain teeth / cercon, orthodontic treatment, comfortable painless teeth cleaning, complex tooth extraction face-lift surgery, orthodontic caries-prevention and correction for children, adult orthodontics invisible. Traditional Chinese Medicine, also known as TCM, is the medical theory and practices of Chinese culture, especially herbal medicine, acupuncture and osteopathy, for preventing or treating illness, or promoting health and well-being. Cosmetic TCM is to use traditional Chinese medicine, such as acupuncture and moxibustion, to provide cosmetic service, such as to dispel freckle, lose weight, as well as to enhance the endocrine system. The major difference of Chinese medicine from Western medicine is that it focuses on "health" rather than on "healing" because Chinese medicine promotes overall wellness of an individual, as opposed to the approach of Western medicine in treating the symptoms of an illness.

Headquartered in Chengdu, Sichuan province, P.R. China, SHESAYS aims to expand its business outside of Chengdu. In 2010, SHESAYS established three new outpatient clinics in the cities of Yibin, Leshan and Zigong, Sichuan province, and is constructing a new flagship store, a comprehensive cosmetology hospital in Chengdu.

For three months ended March 31, 2011, we generated revenues of $3,575,129, which represents a growth of 10.1% compared to $3,247,925 for three months ended March 31, 2010. This increase in revenue is attributed to our increased sale to the existing and new customers in 2011. During the first quarter of 2011, 7,181 customers visited our hospital and clinics, compared to 7,296 in the first quarter of 2010, and we provided services to 4,620 and 4,285 customers in the first quarter of 2011 and 2010, respectively. Our net income decreased from $1,133,664 for the three months ended March 31, 2010 to $633,170 for the three months ended March 31, 2011, a 44.1% decline. The decrease in net income was mainly due to our increased marketing efforts and expense related to maintenance cost of listing on OTCBB.

Our business operates in China and financial statements are denominated in Chinese Renminbi (RMB), but we report our financial results in our SEC filings in U.S. dollars. The conversion of our financial statements from RMB to U.S. dollars results in translation adjustments, which are reported as a line item after net income and before comprehensive income. The net income is added to the retained earnings on our balance sheet; while the translation adjustment is added to a line item on our balance sheet labeled “accumulated other comprehensive income,” because it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business. For three months ended March 31, 2011 and 2010, we recorded foreign currency translation gains of $15,720 and $399 respectively.

Results of Operations

Three Months Ended March 31, 2011, Compared to the Three Months Ended March 31, 2010:

Total Revenues

Total revenues for the three months ended March 31, 2011 increased by approximately $0.3 million or 10.1% to $3.6 million as compared to $3.2 million for the three months ended March 31, 2010. Our revenue growth was driven by continued efforts to attract new customers at three clinics in Leshan, Yibin and Zigong. We did not increase our prices from period to period.

Compared to the same period of 2010, cosmetic surgery service revenue increased 4.3% to $1.7 million, professional medical beauty service revenue increased 19.1% to $1.6 million, cosmetic dentistry service revenue decreased 80.5% to $27,509 and sales of goods increased 91.3% to $0.2 million. We have been enhancing marketing of professional medical beauty service as well as efforts on sales of goods which have higher year-over-year increases.

For the first quarter of 2011, revenues of our current headquarter hospital increased by 0.7% to $3.3 million, from $3.2 million in the first quarter of 2010. Three new clinics launched in the second half of 2010 contributed approximately $0.3 million to revenues.

Cost of Revenue

Our cost of revenue for the three months ended March 31, 2011 was $0.9 million, an increase of $0.2 million, or 26.9% from $0.7 million for the three months ended March 31, 2010. The increase in cost of revenue in 2010 was due to the increase in customer service revenue. In addition, we had a promotion for a specific medical beauty service during the first quarter of 2011 which has higher costs of revenue compared to other services. Cost of revenue as a percentage of revenue increased from 22.6% to 26.0% as compared to the prior comparative period due to cost of revenues for professional medical beauty service increased by $0.2 million or 136.5% from $0.1 million to $0.3 million.

Gross Profit

Our gross profit for the three months ended March 31, 2011 was $2.6 million, an increase of $0.1 million or 5.2% from $2.5 million for the three months ended March 31, 2010. The increase in gross profit in the first quarter of 2011 was due to the increase in total revenues. Our overall gross profit margin as a percentage of revenue was 74.0% for the three months ended March 31, 2011 compared to 77.4% of the same period of the previous year. The gross margin was slightly lower in the first quarter of 2011 due to the increase in costs of professional medical beauty service.

Operating Expenses

Our operating expenses increased by approximately $0.8 million to $1.7 million for the three months ended March 31, 2011 from $0.9 million for the same period of the previous year. This 84.2% increase was mainly attributable to the increase in the expense associated with advertising activities and professional and consultant fees related to the listing on OTCBB, as well as pre-operating expenses of our new flagship hospital.

Other Income (Expense):

Other expense for the three months ended March 31, 2011 was $31,044 compared to other expenses of $57,575 for the same period of the previous year. The decrease was mainly due to the bank charges of $23,460 for the load we secured in the first quarter of 2010.

Net Income attributable to the Company

As a result of the factors described above, we had net income attributable to the Company in the amount of $0.5 million for the three months ended March 31, 2011, as compared with $1.1 million for the three months ended March 31, 2010. The decrease in net income was mainly attributed to the significant increase of operating expenses in the three months ended March 31, 2011.

Foreign currency translation gains

Our business operates primarily in Chinese Renminbi (“RMB”), but we report our results in U.S. Dollars. The conversion of our accounts from RMB to U.S. Dollars results in translation adjustments. As a result of a currency translation adjustment gain, our other comprehensive income was $15,720 for the three months ended March 31, 2011, as compared with $399 for the three months ended March 31, 2010. The increase is due to currency exchange fluctuation of Chinese RMB to US Dollars for the period.

Comprehensive Income attributable to the common stockholders

As a result of the factors described above, we had comprehensive income attributable to the common stockholders in the amount of $0.6 million for the three months ended March 31, 2011, as compared with $1.1 million for the three months ended March 31, 2010.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements during the three months ended March 31, 2011, that have, or are reasonably likely to have, a current or future affect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our interests.

Liquidity and Capital Resources

As of March 31, 2011, we had cash and cash equivalents of $1.7 million. We had a working capital deficit of $1.8 million, that is, our current assets were $2.9 million and our current liabilities were $4.7 million as of March 31, 2011. Our net working capital deficit may initially raise substantial doubt as to our ability to continue as a going concern. However, we believe that our strong net cash flow from operating activities, cost reduction and delay on capital expenditure will provide sufficient liquidity to finance our anticipated working capital and capital expenditure requirements for the next 12 months.

Total stockholders' equity as of March 31, 2011 was $5.1 million. The following table provides detailed information regarding our net cash flow for all financial statement periods presented in this report.

Operating Activities

Cash provided by operating activities totaled $1.2 million for the three months ended March 31, 2011 as compared with $1.3 million provided by operating activities for the three months ended March 31, 2010. Compared with the same period in 2010, the slight decrease in net cash provided by operating activities was primarily due to the decrease in net income.

Investing Activities

Cash used in investing activities was $0.7 million for the three months ended March 31, 2011 as compared to $1.2 million used for the three months ended March 31, 2010. The decrease in cash used in investing activities is mainly because we have decreased our investment in property and equipment in the first quarter of 2011 by $0.2 million as compared to the first quarter of 2010, as well as a proceed from disposal of property and equipment of $129,171 in the first quarter of 2011.

Financing Activities

Cash provided in financing activities was $81,899 for the three months ended March 31, 2011 as compared to $0.9 million provided by financing activities for the three months ended March 31, 2010. The decrease was mainly due to a bank loan of $0.9 million was secured in the first quarter of 2010 while there was no new bank loan obtained in the first quarter of 2011.

Based on our current operating plan, we believe that our existing resources, including cash generated from operations, as well as bank loans, will be sufficient to meet our working capital requirement for our current operations. However, in order to fully implement our business plan and continue our growth, we will require additional capital either from our stockholders or from outside sources.

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS.

SIGNATURES

Pursuant to the requirements 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.