0001697884-22-000010.txt : 20220615 0001697884-22-000010.hdr.sgml : 20220615 20220615153016 ACCESSION NUMBER: 0001697884-22-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20220430 FILED AS OF DATE: 20220615 DATE AS OF CHANGE: 20220615 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITASPRING BIOMEDICAL CO. LTD. CENTRAL INDEX KEY: 0001697884 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 371836726 FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-216465 FILM NUMBER: 221017647 BUSINESS ADDRESS: STREET 1: 400 SPECTRUM CENTER DR. #1620 CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 9492029235 MAIL ADDRESS: STREET 1: 400 SPECTRUM CENTER DR. #1620 CITY: IRVINE STATE: CA ZIP: 92618 FORMER COMPANY: FORMER CONFORMED NAME: Shemn Corp. DATE OF NAME CHANGE: 20170210 10-Q 1 vsbc_quarted10q.htm
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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 April 30, 2022

 

[ ] 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: 333-216465

 

VITASPRING BIOMEDICAL CO. LTD.

(Exact Name of Registrant as Specified in Its Charter)

 

NV   37-1836726
     

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employer Identification No.)

 

 

 

400 Spectrum Center Drive, Suite 1620

Irvine, CA, 92618

 (Address of principal executive offices, Zip Code)

 

(949)202-9235

(Registrant’s telephone number, including area code) 

                                                                                                     

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

 

Indicate by check mark whether the 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 (X) No ( )

 

 

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

 

  Large accelerated filer ( ) Accelerated filer ( )
  Non-accelerated Filer (X) Smaller reporting company (X)
    Emerging growth company (X)

 

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. ( )

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ( ) No (X)

 

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of April 30, 2022 is as follows:

 

Class of Securities   Shares Outstanding
Common Stock, $0.0001 par value   206,520,030

  

 

 
 

 

 

VITASPRING BIOMEDICAL CO. LTD.

 

Quarterly Report on Form 10-Q

For the Quarter Ended April 30, 2022

 


  

TABLE OF CONTENTS

 

 

PART I – FINANCIAL INFORMATION  
           
Item 1. Condensed Consolidated Financial Statements - unaudited     4  
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations     18  
Item 3. Quantitative and Qualitative Disclosures About Market Risk     21  
Item 4. Controls and Procedures     21  
           
PART II – OTHER INFORMATION  
           
Item 1. Legal Proceedings     22  
Item 1A. Risk Factors     22  
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds     22  
Item 3. Defaults Upon Senior Securities     22  
Item 4. Mine Safety Disclosures     22  
Item 5. Other Information     22  
Item 6. Exhibits     22  
           
Signatures       22  

 

 

 
 

 

 

PART I

FINANCIAL INFORMATION

 

ITEM 1.       FINANCIAL STATEMENTS.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

VITASPRING BIOMEDICAL CO., LTD BALANCE SHEETS

APRIL 30, 2022 AND JANUARY 31, 2022

   

(Unaudited)

April 30, 2021

   January 31, 2022
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents $ 79,151 $ 107,212

Accounts receivable, net of allowance for doubtful accounts

of $0 at April 30, 2022 2022 and $0 at Januery31, 2022 (Note 3)

  2,120,132   2,952,022
Prepaid expenses   4,817   2,634
Total current assets   2,204,100   3,061,868
         
LONG-TERM ASSETS        
Property and equipment, net   60,870   64,636
Operating lease right-of-use asset   414,129   459,955
Deposits   17,614   17,614
Total long-term assets   492,613   542,205
Total assets $ 2,696,713 $ 3,604,073
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES        
        Accounts payable $ - $ 1,211,500
Income tax payable   286,723   210,923
Advances from related party   94,358   94,358
Total current liabilities   381,081   1,556,781
         
 LONG-TERM LIABILITIES        
       Operating lease liabilities, net of current   419,554   463,572
       Deferred tax liability (Note 9)   5,374   6,181
Total long-term liabilities   424,928  

469,753 

Total liabilities   806,009    2,026,534 
        
 COMMITMENTS AND CONTINGENCIES       
STOCKHOLDERS' EQUITY        

Common stock, $0.0001 par value, 500,000,000 and 500,000,000 shares,

respectively authorized 206,520,030 and 206,520,030

shares,respectively issued and outstanding

  20,652   20,652
Stockholder receivables   (109,528)   (137,634
Additional paid-in capital   886,200    877,797 
Retained earnings (accumulated deficit)   1,093,380    816,724 
Total stockholders' equity   1,890,704    1,577,539 
         
Total liabilities and stockholders' equity   2,696,713   3,604,073 
         

 

 

 

See accompanying notes and independent accountant's review report.

 

5

 

 

 

 

VITASPRING BIOMEDICAL CO., LTD

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED APRIL 30, 2022 AND 2021 (UNAUDITED)

 

 

   

Three month ended

April 30, 2022

 

Three month ended

April 30, 2021

         
Revenues $         1,490,000 $            533,800
Cost of goods sold   922,000                  294,000
Gross profit from operations                568,000                  239,800
         
Operating Expenses        
Selling, general and administrative expenses (Schedule I)                   224,873                   60,390
Income (loss) from operations before                343,127                 179,410
         
Other Income (expense)   8,522   -
                       Other Income   8,522   -
         
Net Income (loss) before provision for income tax benefit (expense)   351,649   179,410
Provision for income tax benefit (expense)                 (74,993)                               56,252
Net Income $         276,656 $          235,662
         
Net income per share:  Basic and diluted $ -   -

Weighted average number of shares outstanding: Basic and diluted

 

                          206,520,030                         205,418,001

 

 

 

 

See accompanying notes and independent auditor's report.

 

6

 

 

 

 

 

 

VITASPRING BIOMEDICAL CO., LTD

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED APRIL 30, 2022 (UNAUDITED)

 

 

                         
    Number of Shares   Common Stock   Shareholder Receivables   Additional Paid-In Capital   Retained Earnings (Accumulated Deficit)   Total Stockholders'  Equity (Deficit)
Balance, January 31, 2022               206,520,030                    20,652  $                 (137,634)  $                  877,797                 816,724                    1,577,539
                         
  Stock-based compensation                   -                          -                      28,106                        8,403                                -                         36,509
                         
Net income                                -                                   -                                   -                                   -                     276,656                   276,656
                         
Balance, April 30, 2022             206,520,030  $                    20,652                 (137,634)                  877,797  $                  816,724               1,577,539

 

 

 

 

 

 

 

See accompanying notes and independent auditor's report.

 

7

 

 

 

 

VITASPRING BIOMEDICAL CO., LTD

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED APRIL 30, 2022 AND 2021 (UNAUDITED)

 

 

   

 

Three months ended

April 30, 2022

 

 

Three months

ended

 April 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES        
Net income (loss) $              276,656 $         235,662
Adjustments to reconcile net income (loss) to net cash used in operating activities:        
Depreciation expense                         3,766                            -
Stock-based compensation                     36,509                 35,104
Deferred tax (benefit) expense                         (807)                            (56,252)
Changes in assets and liabilities:        
Accounts receivable                831,890                            -
Prepaid expenses                       (2,183)                            -
Inventory                     -               144,000
Accounts payable and accrued liabilities                  (1,251,500)                           183
Operating lease liabilities                         3,617                            -
Income tax payable                    1,808                            -
Advances from related party                         -                   162
Net cash provided by (used in) operating activities                       (28,061)                 358,859
         
Net increase (decrease) in cash and cash equivalents                       (28,061)                   358,859
         
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR   107,212   45,398
CASH AND CASH EQUIVALENTS, END OF THE PERIOD $                 79,151 $               404,257
         
Supplemental cash flow disclosures:        
Income taxes paid $                        - $                        -
Interest expense paid $                            - $                       -

 

 

 

See accompanying notes and independent auditor's report.

 

8

 

 

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

 

VitaSpring Biomedical Co., Ltd (formerly Shemn Corp.) (“the Company”) was incorporated in the State of Nevada

on September 6, 2016. The Company aims to build a cell medical industry, invest in research and development of stem cell applications in regenerative medicine, establish advanced medical research centers and high standard cell production centers, and provide “GTP” standard stem cell preparations for the development of cellular drugs. Through the development of cell medicine, it will become a leading international business group in the fields of regenerative medicine applied to the innovative fields of medicine, preventive health care, beauty, and anti-aging. The “GTP Cell Center” is basis for its business, which is cross-domain in biotechnology medical treatment, medicine and medical materials, and focuses on the development of cell medical treatment.

 

Note 2 – 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 Company has retained earnings of $1,093,380 and a negative cash flow from operations amounting to $28,061 for the three months ended April 30, 2022. The Company had $1,490,000 in revenues for the three months ended April 30, 2022. There is substantial doubt about the Company’s ability to continue as a going concern due to the limited operating history of the business. As such, no assurance that the Company will continue to be profitable. 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 will 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 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is January 31.

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 year. Actual results could differ from those estimates.

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 $79,151 of cash and cash equivalents as of April 30, 2022.

Allowance for Doubtful Accounts

The allowance for doubtful accounts represents an estimate by the Company's management of specific accounts deemed uncollectible. The estimate takes into account prior bad debt experience and customer receivables outstanding for 90 days or more. Allowance for doubtful accounts was $0 as of April 30, 2022.

Prepaid Expenses and Deposits

Prepaid Expenses are recorded at cost less amortized value. The Company had $4,817 in prepaid expenses and deposits as of April 30, 2022.

 

 

9

 

 

 

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Inventories

Inventories are stated at the lower of cost or market. Cost is principally determined using the first-in, first out (FIFO) method. The Company had $0 in finished goods inventory as of April 30, 2022. The Company had $0 prepaid inventory as of April 30, 2022.

 

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. The Company estimates that the useful life of necessary equipment is 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals, and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

Accounts Payable and Accrued Liabilities

Accounts payable discloses a liability to a creditor, carried on open account, usually for purchases of goods and services. Accrued liabilities represent unpaid goods and services. The Company had $0 in accounts payable and accrued liabilities as of April 30, 2022.

 

Credit Card Liability

Credit card liability represents amounts owed to credit card issuers for money borrowed to pay merchants for goods and services based on the cardholder’s promise to pay the card issuer borrowed amounts plus other agreed upon charges. The Company had $0 in credit card liability as of April 30, 2022.

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short- term maturity.

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.

 

 

10

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts. For the three months ended April 30, 2022, the Company generated

$1,490,000 in revenue.

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the year.

 

Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of April 30, 2022, there were no potentially dilutive debt or equity instruments issued or outstanding.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as all changes in stockholders’ equity, exclusive of transactions with owners, such as capital investments. Comprehensive income (loss) includes net income (loss), changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. As of April 30, 2022, there were no differences between our comprehensive income (loss) and net income (loss).

Stock-Based Compensation

The Company measures all stock-based awards granted to employees, directors and non-employees based on the fair value on the date of grant in accordance with ASC Topic 718, Compensation – Stock Compensation. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues awards with either service-only vesting conditions and records the expense using the straight-line method or service and performance vesting conditions and records the expense when achievement of the performance condition becomes probable using the graded-vesting method. The Company accounts for forfeitures as they occur.

 

The fair value of stock-based grant awards is estimated using the fair value of the Company’s most recent historical transaction with third parties. The Company classifies stock-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

 

 

 

11

 

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Foreign Currency Translation

The Company’s functional and reporting currency is the U.S. dollar. Transactions may occur in foreign currencies and management has adopted ASC Topic 830, Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains (losses) arising on translation or settlement of foreign currency denominated transactions or balances are included in the statement of operations.

Leases

The Company determines whether a contract is or contains a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on the Company’s balance sheets.

 

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, we use the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are generally expensed as incurred and may include certain index-based changes in rent and other non-fixed payments for services provided by the lessor. The Company’s leases do not contain any material residual guarantees or material restrictive covenants.

 

Lease arrangements with lease and non-lease components are generally accounted for separately. For certain equipment leases, such as vehicles, the Company will account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, the Company will apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

 

Risk Factors

The following risks could adversely affect the Company’s business, financial condition, cash flows, and results of operations. These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future years.

 

The COVID-19 pandemic has adversely affected significant portions of our business and could have a material adverse effect on our financial condition and results of operations. The Company is subject to numerous pandemic-related risks, including those described below. The degree to which COVID-19 impacts the results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and severity of the pandemic, the actions taken to contain the virus or treat its impact, other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to what extent normal economic and operating conditions can resume. We are similarly unable to predict the extent of the impact of the pandemic on our customers, suppliers, vendors, and other partners, and their financial conditions, but a material effect on these parties could also materially adversely affect us.

  

 

12

 

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Risk Factors (Continued)

The pandemic has resulted in authorities imposing, and businesses and individuals implementing, numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, and shutdowns. These measures have impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors, suppliers, and partners.

There is considerable uncertainty regarding the business impacts from such measures and potential future measures. Shelter-in-place orders and other measures, including work-from-home and social distancing policies implemented to protect employees.

 

The pandemic has caused the Company to modify its business practices, including with respect to employee travel; employee work locations; cancellation of physical participation in meetings, events, and conferences; and social distancing measures.

The Company may take further actions as required by government authorities or others, or that we determine are in the best interests of our employees, customers, suppliers, vendors, and partners. Work-from-home and other measures introduce additional operational risks, including cybersecurity risks, and have affected the way we conduct our product development, validation, and qualification, customer support, and other activities, which could have an adverse effect on our operations. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions.

 

Note 4 – ADVANCES FROM RELATED PARTY

 

For the three months ended April 30, 2022, one of the Company's major shareholders, a related party, had outstanding advances to the Company. Advances are unsecured, non-interest bearing and due on demand and amounted to $94,358 as of April 30, 2022.

 

Note 5 – COMMON STOCK

 

The number of authorized shares of common stock under the Certificate of Incorporation was 75,000,000, $0.001 par value, when the Company was incorporated on September 6, 2016. The number of authorized shares of common stock under the Certificate of Incorporation was amended to 225,000,000 shares on November 29, 2018. The number of authorized shares of common stock under the Certificate of Incorporation was amended to 500,000,000 shares,

$0.0001 par value, on May 22, 2020.

 

Effective on January 21, 2020, Liu Shan Shan, the previous sole officer and director and a majority shareholder of the Company owning a total of 82.55% of the issued and outstanding shares of common stock of the Company, together with all other minority shareholders (31) of the Company owning an aggregate of 17.45% of the issued and outstanding shares of common stock of the Company, entered into stock purchase agreement for the sale of 100% of the outstanding shares of common stock of the Company (10,902,006 shares), to a group of purchasers (32), including Li- Li Chu (2,666,666 shares); the incoming CEO, Chu Pao-Chi (1,666,667 shares); and the incoming Secretary, Kao Chen-Hsiang (800,000 shares).

 

On May 12, 2020, the Company amended its articles of incorporation to affect the following: (a) the number of authorized shares of common stock under the Certificate of Incorporation was amended to 500,000,000 shares, having a $0.0001 par value; (b) a stock split on a 1:5 basis, such that each share of the issued and outstanding Common stock of the Corporation be forward split into five (5) shares of Common stock of the Corporation, effective on June 8, 2020 (the “Record Date”).

 

 

13

 

 

 

 
 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

 

Note 5 – COMMON STOCK (Continued)

 

On May 12, 2021, the Company issued 1,000,000 shares of common stock to investors for cash proceeds of $50,000 at a price of $0.005 per share.

 

On May 12, 2021, the Company issued 7,135,015 shares of common stock related to its stock-based compensation plan to certain non-U.S. consultants, directors, and employees of the Company.

 

There were 206,520,030 and 209,670,030 shares of common stock issued and outstanding as of January 31, 2022 and 2021, respectively.

 

There were 206,520,030 shares of common stock issued and outstanding as of April 30, 2022.

 

Note 6 – STOCK-BASED COMPENSATION

 

The Company’s stock-based compensation programs are long-term retention programs that are intended to attract, retain, and provide incentives for employees, officers, and directors, and to align stockholder and employee interests.

 

Under the 2020 Stock Plan, the Company grants Incentive Stock Options (“ISO”), Nonstatutory Stock Options (“NSO”), Restricted Stock (“RS”) and Restricted Stock Units (“RSU). ISO and NSO are granted under service conditions. RS and RSU are granted under vesting criteria set by the Administrator and could be based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator at their discretion. Stock options granted to employees generally vest over a four-year period, although certain grants may vest over a longer or shorter period. Stock options granted to non-employees generally vest over a one-year period.

 

Valuation of Stock-Based Compensation

 

Stock-based compensation cost is measured at the grant date based on the fair value of the award. The fair value of the awards are fixed at grant date and amortized over the longer of the remaining performance or service period. The fair value of stock-based grant awards is estimated using the fair value of the Company’s most recent historical transaction with third parties.

 

A summary of restricted share activity under the 2020 Stock Plan for the three months ended April 30, 2022 are as follows:

 

    Number of Shares  

Weighted

Average

Exercise

Price

 

Weighted

Average

Remaining

Contractual Life

(Years)

January 31, 2022   53,931,440 $ -   1
Granted   -   -    
Exercised   -   -    
Forfeited   -   -    
             
April 30, 2022   53,931,440 $ -   1
             

 

 

14

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 6 – STOCK-BASED COMPENSATION (Continued)

A summary of the status of the Company’s nonvested shares for the three months ended as of April 30, 2022, and changes during the three months ended April 30, 2022 are as follows:

 

    Number of Shares  

Weighted

Average

Grant Date

Fair Value

Nonvested at January 31, 2022   53,931,440 $ 0.005
Granted   -   0.005
Vested   -   -
Forfeited   -   0.005
         
Nonvested at April 30, 2022   53,931,440 $ 0.005
         
Expected to vest   53,931,440 $ 0.005
         

 

Compensation Costs

 

The Company recognizes the estimated compensation cost of all stock-based awards generally on a straight-line basis over the requisite service period of the entire award, which is generally the vesting period. The estimated compensation cost is based on the fair value of the common stock on the date of grant. The Company accounts for forfeitures as they occur.

 

As of April 30, 2022, there was $109,528 of unrecognized compensation cost related to non-vested stock-based awards which will be recognized over a weighted average period of one year. Total unrecognized compensation cost will be adjusted for future changes based on actual forfeitures. Share-based compensation recognized for the three months ended April 30, 2022 amounted to $36,509.

 

Note 7 – COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

In July 2021, the Company entered into a non-cancelable operating lease for an office facility in Irvine, California. The lease agreement requires 36 monthly lease payments that range from $14,796 to $16,013 per month. The lease commences in August 2021 and expires in July 2024. The lease has a remaining lease term of less than three years, with no options to extend.

 

The components of lease expense are as follows:

 

For the three months ended April 30, 2022, operating lease costs amounted to $46,196. Other information related to leases are as follows:

Supplemental Cash Flows Information: for the three months ended April 30, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

-   Operating cash flows from operating leases: $44,388 Right-of-use assets obtained in exchange for lease obligations:

- Operating leases: $551,650

 

Weighted Average Remaining Lease Term for operating leases: 2.3 years Weighted Average Discount Rate for operating leases: 0.330%

Future minimum lease payments under non-cancelable leases as of April 30, 2022 are as follows:

 

Fiscal Year   Operating Leases
   2022 * $ 136,715
2023   188,402
2024   96,075
Thereafter   -
Total future minimum lease payments   421,192
     
Less imputed interest   (1,638)
     
Total $ 419,554

 

*Excluding the three months ended April 30, 2022

 

    April  30, 2022
Operating lease liabilities $ 135,825
Operating lease liabilities, net of current $ 283,729

 

 

Note 8 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the three months ended April 30, 2022, the Company incurred $224,873 in selling, general and administrative expenses. See financial statements – supplementary information Schedule I for details.

 

15

 

 
 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 9 – INCOME TAXES

 

There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in time may change based on the outcome of tax audits, as well as changes to, or further interpretations of, regulations. The Company adjusts its income tax expense in the period in which these events occur. If such changes take place, there is a risk that the tax rate may increase or decrease in any period.

 

The FASB guidance contained in ASC Topic 740, Income Taxes, addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a threshold of “more likely than not” for recognition and derecognition of tax positions taken or expected to be taken in a tax return.

 

The Company adopted this guidance and is now required to recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Additionally, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first financial reporting period in which that threshold is no longer met. Changes in recognition or measurement will be reflected in the period in which the change in judgment occurs.

 

The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are three years for federal and four years for California. In evaluating the Company’s tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations, and tax planning strategies are considered. The Company had no material adjustments to its liabilities for unrecognized income taxes under the guidelines of the ASC Topic 740 for uncertainty in income taxes and believes their estimates are appropriate based on current facts and circumstances.

 

The components of provision for income taxes are:

 

 

   

April 30,

2022

 

January 31,

2022

Income taxes (payable)/receivable currently:        
Federal $ (75,000) $ (210,923)
State   (800)   -
              Total income taxes payable currently   (75,800)   (210,923)
Deferred income tax        
Federal        
Deferred tax benefit (liability) – end of period/year   (5,374)    (6,181)
Valuation allowance   -    -
Total deferred tax benefit (liability) – end of period/year   (5,374)   (6,181)
Deferred tax benefit (liability) – beginning of period/year   (6,181)    93,929
Valuation allowance   -    (93,929)
Total deferred tax benefit (liability) – beginning of period/year   (6,181)   - 
Total federal deferred tax benefit (liability)   (807)   (6,181)
         

 

State        
Deferred tax benefit (liability) – end of period/year $     -
Deferred tax benefit (liability) – beginning of period/year       -
Total state deferred tax benefit (liability)       -
         
Total deferred tax income (expense)   807   (6,181)
Provision for income tax benefit (expense) $ (74,993)   (217,104)
         
Deferred tax asset (liability) - long-term $ (5,374)   (6,181)

 

 

 

Note 10 – CONCENTRATION OF CREDIT RISK

The Company had one customer that accounted for more than 10% of the Company’s total sales for the three months ended April 30, 2022. The one customer represented $1,490,000 and 100% in aggregate of total sales for the three months ended April 30, 2022.

 

The Company had one vendor that accounted for more than 10% of the Company’s total purchases for the three months ended April 30, 2022. The one vendor represented 100% of the Company’s total purchases for the three months ended April 30, 2022. If the Company lost this one vendor, this could have a negative impact upon the financial well-being of the Company.

 

Note 11 – SUBSEQUENT EVENTS

 

In accordance with ASC Subtopic 855-10, Subsequent Events, the Company has evaluated subsequent events for potential recognition and/or disclosure through June 13, 2022, the date these financial statements were issued and has determined that there were no material subsequent events to disclose in these financial statements.

 

 

16

 

 

 

VITASPRING BIOMEDICAL CO., LTD

SUPPLEMENTARY INFORMATION

SCHEDULE I - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES THREE MONTHS

ENDED APRIL 30, 2022 AND 2021

(UNAUDITED)

 

 

 
    Three months ended
    April 30, 2022   April 30, 2021
Auto and truck expense $ 915 $                         -   
Bank charges   406                          670
Depreciation expense   3,766                             -   
Insurance   8,859                             -   

 

Lease cost

  46,146   -
Meals and entertainment   140                             -   

 

Office expense

  3,728                     461
Payroll expense   31,050                             -   
Professional fees   92,256                    24,250
Stock-based compensation   36,509                   35,104
Outside services   370                          -
Travel expense   728                             -   
         
Total selling, general and administrative expenses $              224,873 $               537,582

 

 

 

 

17

 

 

 
 

 

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

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Caution Regarding Forward-Looking Information

 

This Quarterly Report on Form 10-Q, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business  disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings.

 

Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

 

Overview of Our Business

 

VitaSpring Biomedical Co. Ltd., formerly Shemn Corp., was incorporated in Nevada on September 6, 2016. We are a start-up business company. We have been engaged in the business of developing and marketing products that promote wellness and a healthy lifestyle since 2019. A change of 100% of Company’s ownership occurred effectively on January 21, 2020. As a result, we changed Company name from Shemn Corp. to VitaSpring Biomedical Co. Ltd. on February 17, 2020.

 

VitaSpring Biomedical Co., Ltd aims to build a cell medical industry, invest in research and development of stem cell applications in regenerative medicine, establish advanced medical research centers and high standard cell production centers, and provide “GTP” standard stem cell preparations for the development of cellular drugs.

For future business development and medical applications, VitaSpring cooperates with affiliated companies to support the mass production and commercialization of X.msc-related medical projects. Some X.msc-based projects are researches and trials of Investment New Drugs and part of them are related to X.exosome, the critical material in the related skincare products. VitaSpring management also expect X.msc-related medical projects to implement in hospitals from a small scale in the future five years.

 

Recent Developments

 

On March 30, 2020, VitaSpring filed a Certificate of Amendment to its Articles of Incorporation (the "Articles of Amendment") with the Secretary of State of the State of Nevada effecting a name change of the Company to VitaSpring Biomedical Co. Ltd. (the "Corporate Action"). The Corporate Action and the Amended Articles became effective on April 21, 2020, following compliance with notification requirements of the Financial Industry Regulatory Authority.

 

Under new management, VitaSpring has completed the transition from patent technology into the know-how in the mass-production process of the purifying and culturing technology in the allogeneic mesenchymal stem cell production from the maternal-part placenta. The subject know-how can effectively and steadily culture more than 20 generations of sub-culture cells, which maintain the same level of activity index and contain the magnification of one thousand exosomes than other MSCs in terms of per ml. Accordingly, VitaSpring is able to build stem cell bank regulated by US FDA to provide the ready-to-use allogeneic mesenchymal stem cell for the emergent allogeneic stem cell transplantation at the cost the patient can afford.

 

VitaSpring’s research team has been awarded the 16th, 17 th, 18 th Taiwan National Innovation Award certificates in 2019, 2020, and 2021 and joined the regenerative medicine flagships of the Ministry of Science and Technology from 2007 to 2020, including research projects for the mechanism of human placenta mesenchymal stem cells in different diseases. It highlights the technological foundation for the future clinical application of X.msc.

 

 

18

 
 

 

Business Plan

 

Through the development of cell medicine, we became a leading international business group in the fields of regenerative medicine applied to the innovative fields of medicine, preventive health care, beauty, and anti-aging. We do not sell products in a form for use by consumers although we may, in the future, develop products for use by consumers.

 

We have many unique advantages elevating us to be the best in the industry:

1. Discovery and successful isolation of special mesenchymal stem cells (X.msc)

2. Unlike typical MSCs, X.msc do not promote cancer and tumor growth, and is safe to use for the entire body

3. Homogeneous purification technology

4. Viability of X.msc is 1000 time that of the competitor

5. Able to proliferate and maintain stemness of stem cells to 25+ generations

6. Exclusive composition formula of culture medium

7. The exclusive formula of exosomes have a variety of applications

8. Extensive uses of X.msc

9. Immunomodulation and anti-inflammation effect

10. No ethical issues

 

Available Information

 

We file with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports to be filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

Our corporate headquarters are located at 400 Spectrum Center Dr. #1620, Irvine, CA 92618.  Our telephone number is (949) 202-9235. We maintain a website at www.vitaspringbio.com that links to our electronic SEC filings and contains information about our subsidiaries which is not a part of this report.  All the above documents are available free of charge on our website as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC

 

Results of Operations for the Three months Ended April 30, 2022 Compared to the Three months ended April 30, 2021

 

Revenue and cost of goods sold

 

For the Three months ended April 30, 2022 and April 30, 2021 the Company generated total revenue of $1,490,000 and $533,800 from selling products to the customer. The cost of goods sold for the quarter ended April 30, 2022 and April 30, 2021 was $922,000 and $294,000, which represent the cost of raw materials.

 

Operating expenses

 

Total operating expenses for the quarter ended April 30, 2022 and April 30, 2021 were $224,873 and $60,390. The increase was primarily related to increased selling, general and administrative expenses.

 

Net Income

 

The net income for the quarter ended April 30, 2022 and April 30, 2021 was $276,656 and $235,662, accordingly.

 

Liquidity and Capital Resources and Cash Requirements

 

At April 30, 2022, the Company had cash of $79,151. The Company had working capital of $1,823,019.

 

During the quarter ended April 30, 2022, the Company generated $(28,061) of cash in operating activities.

 

During the quarter ended April 30, 2022 the Company used no cash in investing activities or financing activities.

 

We cannot guarantee that we will manage to sell all the shares required. We will attempt to raise the necessary funds to proceed with all phases of our plan of operation. As of the date of this report, the current funds available to the Company will not be sufficient to continue maintaining a reporting status.

 

Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt we can continue as an on-going business for the next twelve months unless we obtain additional capital. Our only sources for cash at this time are investments by others in this offering, selling our paper dung products and loans from our director. We must raise cash to implement our plan and stay in business.

 

Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations.

 

19

 

 

 

Limited operating history; need for additional capital

 

There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

 

Off-Balance Sheet Arrangements

 

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations. 

 

Going Concern

 

The Company has a retained earnings of $1,093,380 and a negative cash flow from operations amounting to $(28,061) for the three months ended April 30, 2022. The Company had $1,490,000 in revenues for the three months ended April 30, 2022. The Company currently earned profit for the period and is in the process of completing its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period. Therefore, there is still a substantial doubt about the Company’s ability to continue as a going concern. 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 will 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.

Recent Accounting Pronouncements

 

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. .

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

 

Management has considered all recent accounting pronouncements issued since and their potential effect on our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

 

 

20

 

 

 

 Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 

In future periods, the Company may become subject to certain market risks, including changes in interest rates and currency exchange rates.  At the present time, the Company has no identified exposure and does not undertake any specific actions to limit exposures, if any.

 

Item 4 - Controls and Procedures

 

Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's president and chief executive officer (who is the Company's principal executive officer) and the Company's chief financial officer, treasurer, and secretary (who is the Company's principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating the Company's disclosure controls and procedures, the Company's management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company's management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The ineffectiveness of the Company's disclosure controls and procedures was due to material weaknesses identified in the Company's internal control over financial reporting, described below.

 

Management's Report on Internal Control over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over the Company's financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Our management, with the participation of the Company's principal executive officer and principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") (2013). Our system of internal control over financial reporting is designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. 

 

Based on this evaluation, the Company's management concluded its internal control over financial reporting was effective as of April 30, 2022. 

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended April 30, 2022, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

 

21

 

 

 
 

 

PART II

OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

None

 

Item 1A – Risk Factors

 

Item 2 - Sales of Unregistered Equity Securities and Use of Proceeds

 

None

 

Item 3 - Defaults upon Senior Securities

 

None

 

Item 4 - Mine Safety Disclosures

 

N/A

 

Item 5 - Other Information

 

None

 

Item 6 – EXHIBITS.

 

The following exhibits are filed as part of this report or incorporated by reference:

 

Exhibit No. Description
31.1* Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1* Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2* Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
101 Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2022 formatted in Extensible Business Reporting Language (XBRL).

 

* Filed herewith

 

 

 

 

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: June 15, 2022 VITASPRING BIOMEDICAL CO. LTD.  
   

  

 

 

 
  By:  /s/ Kao Cheng-Hsiang  
 

Kao Cheng-Hsiang

Chief Executive Officer

 
     
  (Principal Executive Officer)  

 

 

 

22

 

 

EX-31.1 2 ex31_1.htm

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Kao Cheng-Hsiang, certify that:

 

1.

I have reviewed this Form 10-Q of VitaSpring Biomedical Co., Ltd.;
     
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 13-a-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: June 15, 2022

By: /s/  Kao, Cheng-Hsiang  
    Kao, Cheng-Hsiang  
   

Principal Executive Officer

VitaSpring Biomedical Co., Ltd..

 
           
 
 

 

 

 

EX-31.2 3 ex31_2.htm

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Kao Cheng-Hsiang, certify that:

 

1. I have reviewed this Form 10-Q of VitaSpring Biomedical Co., Ltd.;
     
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 13-a-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: June 15, 2022

By: /s/  Kao, Cheng-Hsiang  
    Kao, Cheng-Hsiang  
   

Principal Financial Officer

VitaSpring Biomedical Co., Ltd.

 
           
 
 

 

 

EX-32.1 4 ex32_1.htm

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of VitaSpring Biomedical Co., Ltd. (the “Company”), on Form 10-Q for the period ended April 30, 2022, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Kao Cheng-Hsiang, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)Such Quarterly Report on Form 10-Q for the period ended July 31, 2021, 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 such Quarterly Report on Form 10-Q for the period ended July 31, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

     
Date: June 15, 2022 By: /s/ Kao, Cheng-Hsiang
    Kao, Cheng-Hsiang
   

Principal Executive Officer

VitaSpring Biomedical Co., Ltd.

     

 

 

EX-32.2 5 ex32_2.htm

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of VitaSpring Biomedical Co., Ltd. (the “Company”), on Form 10-Q for the period ended April 30, 2022, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Kao Cheng-Hsiang, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)Such Quarterly Report on Form 10-Q for the period ended July 31, 2021, 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 such Quarterly Report on Form 10-Q for the period ended July 31, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

     
Date: June 15, 2022 By: /s/ Kao, Cheng-Hsiang
    Kao, Cheng-Hsiang
   

Principal Financial Officer

VitaSpring Biomedical Co., Ltd.

 

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BALANCE SHEETS - USD ($)
Apr. 30, 2022
Jan. 31, 2022
CURRENT ASSETS    
Cash and cash equivalents $ 79,151 $ 107,212
Accounts receivable, net of allowance for doubtful accounts of $0 at April 30, 2022 2022 and $0 at Januery31, 2022 (Note 3) 2,120,132 2,952,022
Prepaid expenses 4,817 2,634
Total current assets 2,204,100 3,061,868
LONG-TERM ASSETS    
Property and equipment, net 60,870 64,636
Operating lease right-of-use asset 414,129 459,955
Deposits 17,614 17,614
Total long-term assets 492,613 542,205
Total assets 2,696,713 3,604,073
CURRENT LIABILITIES    
        Accounts payable 1,211,500
Income tax payable 286,723 210,923
Advances from related party 94,358 94,358
Total current liabilities 381,081 1,556,781
 LONG-TERM LIABILITIES    
       Operating lease liabilities, net of current 419,554 463,572
       Deferred tax liability (Note 9) 5,374 6,181
Total long-term liabilities 424,928 469,753
Total liabilities 806,009 2,026,534
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Stockholder receivables (109,528) (137,634)
Additional paid-in capital 886,200 877,797
Retained earnings (accumulated deficit) 1,093,380 816,724
Total stockholders' equity 1,890,704 1,577,539
Total liabilities and stockholders' equity $ 2,696,713 $ 3,604,073
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STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended
Apr. 30, 2022
Apr. 30, 2021
Income Statement [Abstract]    
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Cost of goods sold 922,000 294,000
Gross profit from operations 568,000 239,800
Operating Expenses    
Selling, general and administrative expenses (Schedule I) 224,873 60,390
Income (loss) from operations before 343,127 179,410
Other Income (expense) 8,522
                       Other Income 8,522
Net Income (loss) before provision for income tax benefit (expense) 351,649 179,410
Provision for income tax benefit (expense) (74,993) 56,252
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Common Stock [Member]
Receivables from Stockholder [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
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Balance, shares         206,520,030
Beginning balance, value at Jan. 31, 2022 $ 20,652 $ (137,634) $ 877,797 $ 816,724 $ 1,577,539
  Stock-based compensation 28,106 8,403 36,509
Net income $ 276,656 $ 276,656
Ending balance, value at Apr. 30, 2022 $ 20,652 $ (137,634) $ 877,797 $ 816,724 $ 1,577,539
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STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Apr. 30, 2022
Apr. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ 276,656 $ 235,662
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Depreciation expense 3,766
Stock-based compensation 36,509 35,104
Deferred tax (benefit) expense (807) (56,252)
Changes in assets and liabilities:    
Accounts receivable 831,890
Prepaid expenses (2,183)
Inventory 144,000
Accounts payable and accrued liabilities (1,251,500) 183
Operating lease liabilities 3,617
Income tax payable 1,808
Advances from related party 162
Net cash provided by (used in) operating activities (28,061) 358,859
Net increase (decrease) in cash and cash equivalents (28,061) 358,859
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR 107,212 45,398
CASH AND CASH EQUIVALENTS, END OF THE PERIOD 79,151 404,257
Supplemental cash flow disclosures:    
Income taxes paid
Interest expense paid
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ORGANIZATION AND NATURE OF BUSINESS
3 Months Ended
Apr. 30, 2022
Accounting Policies [Abstract]  
ORGANIZATION AND NATURE OF BUSINESS

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

 

VitaSpring Biomedical Co., Ltd (formerly Shemn Corp.) (“the Company”) was incorporated in the State of Nevada

on September 6, 2016. The Company aims to build a cell medical industry, invest in research and development of stem cell applications in regenerative medicine, establish advanced medical research centers and high standard cell production centers, and provide “GTP” standard stem cell preparations for the development of cellular drugs. Through the development of cell medicine, it will become a leading international business group in the fields of regenerative medicine applied to the innovative fields of medicine, preventive health care, beauty, and anti-aging. The “GTP Cell Center” is basis for its business, which is cross-domain in biotechnology medical treatment, medicine and medical materials, and focuses on the development of cell medical treatment.

 

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GOING CONCERN
3 Months Ended
Apr. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

Note 2 – 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 Company has retained earnings of $1,093,380 and a negative cash flow from operations amounting to $28,061 for the three months ended April 30, 2022. The Company had $1,490,000 in revenues for the three months ended April 30, 2022. There is substantial doubt about the Company’s ability to continue as a going concern due to the limited operating history of the business. As such, no assurance that the Company will continue to be profitable. 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 will 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.

 

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.22.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Apr. 30, 2022
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is January 31.

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 year. Actual results could differ from those estimates.

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 $79,151 of cash and cash equivalents as of April 30, 2022.

Allowance for Doubtful Accounts

The allowance for doubtful accounts represents an estimate by the Company's management of specific accounts deemed uncollectible. The estimate takes into account prior bad debt experience and customer receivables outstanding for 90 days or more. Allowance for doubtful accounts was $0 as of April 30, 2022.

Prepaid Expenses and Deposits

Prepaid Expenses are recorded at cost less amortized value. The Company had $4,817 in prepaid expenses and deposits as of April 30, 2022.

 

 

9

 

 

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Inventories

Inventories are stated at the lower of cost or market. Cost is principally determined using the first-in, first out (FIFO) method. The Company had $0 in finished goods inventory as of April 30, 2022. The Company had $0 prepaid inventory as of April 30, 2022.

 

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. The Company estimates that the useful life of necessary equipment is 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals, and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

Accounts Payable and Accrued Liabilities

Accounts payable discloses a liability to a creditor, carried on open account, usually for purchases of goods and services. Accrued liabilities represent unpaid goods and services. The Company had $0 in accounts payable and accrued liabilities as of April 30, 2022.

 

Credit Card Liability

Credit card liability represents amounts owed to credit card issuers for money borrowed to pay merchants for goods and services based on the cardholder’s promise to pay the card issuer borrowed amounts plus other agreed upon charges. The Company had $0 in credit card liability as of April 30, 2022.

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short- term maturity.

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.

 

 

10

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts. For the three months ended April 30, 2022, the Company generated

$1,490,000 in revenue.

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the year.

 

Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of April 30, 2022, there were no potentially dilutive debt or equity instruments issued or outstanding.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as all changes in stockholders’ equity, exclusive of transactions with owners, such as capital investments. Comprehensive income (loss) includes net income (loss), changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. As of April 30, 2022, there were no differences between our comprehensive income (loss) and net income (loss).

Stock-Based Compensation

The Company measures all stock-based awards granted to employees, directors and non-employees based on the fair value on the date of grant in accordance with ASC Topic 718, Compensation – Stock Compensation. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues awards with either service-only vesting conditions and records the expense using the straight-line method or service and performance vesting conditions and records the expense when achievement of the performance condition becomes probable using the graded-vesting method. The Company accounts for forfeitures as they occur.

 

The fair value of stock-based grant awards is estimated using the fair value of the Company’s most recent historical transaction with third parties. The Company classifies stock-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

 

 

 

11

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Foreign Currency Translation

The Company’s functional and reporting currency is the U.S. dollar. Transactions may occur in foreign currencies and management has adopted ASC Topic 830, Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains (losses) arising on translation or settlement of foreign currency denominated transactions or balances are included in the statement of operations.

Leases

The Company determines whether a contract is or contains a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on the Company’s balance sheets.

 

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, we use the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are generally expensed as incurred and may include certain index-based changes in rent and other non-fixed payments for services provided by the lessor. The Company’s leases do not contain any material residual guarantees or material restrictive covenants.

 

Lease arrangements with lease and non-lease components are generally accounted for separately. For certain equipment leases, such as vehicles, the Company will account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, the Company will apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

 

Risk Factors

The following risks could adversely affect the Company’s business, financial condition, cash flows, and results of operations. These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future years.

 

The COVID-19 pandemic has adversely affected significant portions of our business and could have a material adverse effect on our financial condition and results of operations. The Company is subject to numerous pandemic-related risks, including those described below. The degree to which COVID-19 impacts the results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and severity of the pandemic, the actions taken to contain the virus or treat its impact, other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to what extent normal economic and operating conditions can resume. We are similarly unable to predict the extent of the impact of the pandemic on our customers, suppliers, vendors, and other partners, and their financial conditions, but a material effect on these parties could also materially adversely affect us.

  

 

12

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Risk Factors (Continued)

The pandemic has resulted in authorities imposing, and businesses and individuals implementing, numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, and shutdowns. These measures have impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors, suppliers, and partners.

There is considerable uncertainty regarding the business impacts from such measures and potential future measures. Shelter-in-place orders and other measures, including work-from-home and social distancing policies implemented to protect employees.

 

The pandemic has caused the Company to modify its business practices, including with respect to employee travel; employee work locations; cancellation of physical participation in meetings, events, and conferences; and social distancing measures.

The Company may take further actions as required by government authorities or others, or that we determine are in the best interests of our employees, customers, suppliers, vendors, and partners. Work-from-home and other measures introduce additional operational risks, including cybersecurity risks, and have affected the way we conduct our product development, validation, and qualification, customer support, and other activities, which could have an adverse effect on our operations. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions.

 

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.22.1
ADVANCES FROM RELATED PARTY
3 Months Ended
Apr. 30, 2022
Related Party Transactions [Abstract]  
ADVANCES FROM RELATED PARTY

Note 4 – ADVANCES FROM RELATED PARTY

 

For the three months ended April 30, 2022, one of the Company's major shareholders, a related party, had outstanding advances to the Company. Advances are unsecured, non-interest bearing and due on demand and amounted to $94,358 as of April 30, 2022.

 

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.1
COMMON STOCK
3 Months Ended
Apr. 30, 2022
Equity [Abstract]  
COMMON STOCK

Note 5 – COMMON STOCK

 

The number of authorized shares of common stock under the Certificate of Incorporation was 75,000,000, $0.001 par value, when the Company was incorporated on September 6, 2016. The number of authorized shares of common stock under the Certificate of Incorporation was amended to 225,000,000 shares on November 29, 2018. The number of authorized shares of common stock under the Certificate of Incorporation was amended to 500,000,000 shares,

$0.0001 par value, on May 22, 2020.

 

Effective on January 21, 2020, Liu Shan Shan, the previous sole officer and director and a majority shareholder of the Company owning a total of 82.55% of the issued and outstanding shares of common stock of the Company, together with all other minority shareholders (31) of the Company owning an aggregate of 17.45% of the issued and outstanding shares of common stock of the Company, entered into stock purchase agreement for the sale of 100% of the outstanding shares of common stock of the Company (10,902,006 shares), to a group of purchasers (32), including Li- Li Chu (2,666,666 shares); the incoming CEO, Chu Pao-Chi (1,666,667 shares); and the incoming Secretary, Kao Chen-Hsiang (800,000 shares).

 

On May 12, 2020, the Company amended its articles of incorporation to affect the following: (a) the number of authorized shares of common stock under the Certificate of Incorporation was amended to 500,000,000 shares, having a $0.0001 par value; (b) a stock split on a 1:5 basis, such that each share of the issued and outstanding Common stock of the Corporation be forward split into five (5) shares of Common stock of the Corporation, effective on June 8, 2020 (the “Record Date”).

 

 

13

 

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

 

Note 5 – COMMON STOCK (Continued)

 

On May 12, 2021, the Company issued 1,000,000 shares of common stock to investors for cash proceeds of $50,000 at a price of $0.005 per share.

 

On May 12, 2021, the Company issued 7,135,015 shares of common stock related to its stock-based compensation plan to certain non-U.S. consultants, directors, and employees of the Company.

 

There were 206,520,030 and 209,670,030 shares of common stock issued and outstanding as of January 31, 2022 and 2021, respectively.

 

There were 206,520,030 shares of common stock issued and outstanding as of April 30, 2022.

 

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.1
STOCK-BASED COMPENSATION
3 Months Ended
Apr. 30, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

Note 6 – STOCK-BASED COMPENSATION

 

The Company’s stock-based compensation programs are long-term retention programs that are intended to attract, retain, and provide incentives for employees, officers, and directors, and to align stockholder and employee interests.

 

Under the 2020 Stock Plan, the Company grants Incentive Stock Options (“ISO”), Nonstatutory Stock Options (“NSO”), Restricted Stock (“RS”) and Restricted Stock Units (“RSU). ISO and NSO are granted under service conditions. RS and RSU are granted under vesting criteria set by the Administrator and could be based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator at their discretion. Stock options granted to employees generally vest over a four-year period, although certain grants may vest over a longer or shorter period. Stock options granted to non-employees generally vest over a one-year period.

 

Valuation of Stock-Based Compensation

 

Stock-based compensation cost is measured at the grant date based on the fair value of the award. The fair value of the awards are fixed at grant date and amortized over the longer of the remaining performance or service period. The fair value of stock-based grant awards is estimated using the fair value of the Company’s most recent historical transaction with third parties.

 

A summary of restricted share activity under the 2020 Stock Plan for the three months ended April 30, 2022 are as follows:

 

    Number of Shares  

Weighted

Average

Exercise

Price

 

Weighted

Average

Remaining

Contractual Life

(Years)

January 31, 2022   53,931,440 $ -   1
Granted   -   -    
Exercised   -   -    
Forfeited   -   -    
             
April 30, 2022   53,931,440 $ -   1
             

 

 

14

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

Note 6 – STOCK-BASED COMPENSATION (Continued)

A summary of the status of the Company’s nonvested shares for the three months ended as of April 30, 2022, and changes during the three months ended April 30, 2022 are as follows:

 

    Number of Shares  

Weighted

Average

Grant Date

Fair Value

Nonvested at January 31, 2022   53,931,440 $ 0.005
Granted   -   0.005
Vested   -   -
Forfeited   -   0.005
         
Nonvested at April 30, 2022   53,931,440 $ 0.005
         
Expected to vest   53,931,440 $ 0.005
         

 

Compensation Costs

 

The Company recognizes the estimated compensation cost of all stock-based awards generally on a straight-line basis over the requisite service period of the entire award, which is generally the vesting period. The estimated compensation cost is based on the fair value of the common stock on the date of grant. The Company accounts for forfeitures as they occur.

 

As of April 30, 2022, there was $109,528 of unrecognized compensation cost related to non-vested stock-based awards which will be recognized over a weighted average period of one year. Total unrecognized compensation cost will be adjusted for future changes based on actual forfeitures. Share-based compensation recognized for the three months ended April 30, 2022 amounted to $36,509.

 

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.22.1
COMMITMENTS AND CONTINGENCIES
3 Months Ended
Apr. 30, 2022
Accounting Policies [Abstract]  
COMMITMENTS AND CONTINGENCIES

Note 7 – COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

In July 2021, the Company entered into a non-cancelable operating lease for an office facility in Irvine, California. The lease agreement requires 36 monthly lease payments that range from $14,796 to $16,013 per month. The lease commences in August 2021 and expires in July 2024. The lease has a remaining lease term of less than three years, with no options to extend.

 

The components of lease expense are as follows:

 

For the three months ended April 30, 2022, operating lease costs amounted to $46,196. Other information related to leases are as follows:

Supplemental Cash Flows Information: for the three months ended April 30, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

-   Operating cash flows from operating leases: $44,388 Right-of-use assets obtained in exchange for lease obligations:

- Operating leases: $551,650

 

Weighted Average Remaining Lease Term for operating leases: 2.3 years Weighted Average Discount Rate for operating leases: 0.330%

Future minimum lease payments under non-cancelable leases as of April 30, 2022 are as follows:

 

Fiscal Year   Operating Leases
   2022 * $ 136,715
2023   188,402
2024   96,075
Thereafter   -
Total future minimum lease payments   421,192
     
Less imputed interest   (1,638)
     
Total $ 419,554

 

*Excluding the three months ended April 30, 2022

 

    April  30, 2022
Operating lease liabilities $ 135,825
Operating lease liabilities, net of current $ 283,729

 

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.1
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
3 Months Ended
Apr. 30, 2022
Accounting Policies [Abstract]  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Note 8 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the three months ended April 30, 2022, the Company incurred $224,873 in selling, general and administrative expenses. See financial statements – supplementary information Schedule I for details.

 

15

 

 

VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2022

(UNAUDITED)

 

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.22.1
INCOME TAXES
3 Months Ended
Apr. 30, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

Note 9 – INCOME TAXES

 

There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in time may change based on the outcome of tax audits, as well as changes to, or further interpretations of, regulations. The Company adjusts its income tax expense in the period in which these events occur. If such changes take place, there is a risk that the tax rate may increase or decrease in any period.

 

The FASB guidance contained in ASC Topic 740, Income Taxes, addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a threshold of “more likely than not” for recognition and derecognition of tax positions taken or expected to be taken in a tax return.

 

The Company adopted this guidance and is now required to recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Additionally, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first financial reporting period in which that threshold is no longer met. Changes in recognition or measurement will be reflected in the period in which the change in judgment occurs.

 

The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are three years for federal and four years for California. In evaluating the Company’s tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations, and tax planning strategies are considered. The Company had no material adjustments to its liabilities for unrecognized income taxes under the guidelines of the ASC Topic 740 for uncertainty in income taxes and believes their estimates are appropriate based on current facts and circumstances.

 

The components of provision for income taxes are:

 

 

   

April 30,

2022

 

January 31,

2022

Income taxes (payable)/receivable currently:        
Federal $