VitaSpring posts $156K Q2 loss with no revenue
VitaSpring Biomedical Co., Ltd. (VSBC) reported no revenue for the three and six months ended July 31, 2026 and remains pre‑revenue while it rebuilds product offerings and sales channels in stem‑cell and exosome-based wellness and regenerative medicine markets. The company recorded a net loss of $155,817 for the quarter and $231,661 for the six months, compared with losses of $110,845 and $191,386 a year earlier, driven mainly by higher professional fees associated with public company reporting.
Liquidity is strained: cash was $13,367, current assets $14,822, current liabilities $2,266,051 and working capital deficit $2,251,229 as of July 31, 2026. Total liabilities were $4,677,051 and stockholders’ deficit $4,662,229, with an accumulated deficit of $5,928,532. A key vendor-related party agreed on May 18, 2026 to defer collection of $2,411,000 of payables for 24 months, which was reclassified to long‑term debt and accounted for as a Troubled Debt Restructuring with a 0% effective interest rate. The company discloses substantial doubt about its ability to continue as a going concern and continues to depend on unsecured, on‑demand advances from a former CEO and other related parties. Internal control over financial reporting has a continuing material weakness, and management changed in September 2026 with new leadership appointed and the prior CEO and director resigning.
Positive
- Working capital deficiency improved by $2.18 million to $2.25 million, primarily from reclassifying a $2.41 million related‑party payable to long‑term debt under a 24‑month, interest‑free deferral agreement.
- Operating cash flow turned slightly positive, at $11,283 for the six months ended July 31, 2026, aided by $147,599 of operating expenses paid directly by a related party.
- Related-party vendor agreed to defer $2.41 million of payables interest‑free for 24 months from May 18, 2026, easing near‑term liquidity pressure.
- Management transition completed in September 2026 with appointment of a new CEO, CFO and Chairman, potentially adding fresh oversight and strategic direction.
Negative
- Substantial doubt about going concern due to minimal cash, recurring losses, a $2.25 million working capital deficit and dependence on uncertain future financing.
- No revenue since fiscal 2022, with the business still in a pre‑relaunch phase and no signed agent or clinic supply agreements as of the report date.
- Large stockholders’ deficit of $4.66 million and total liabilities of $4.68 million as of July 31, 2026 constrain access to capital and uplisting prospects.
- Heavy reliance on related parties, including $1.19 million of on‑demand advances and a $2.41 million deferred payable to a related‑party supplier, with no assurance of continued support.
- Single, non‑contracted related‑party supplier in Taiwan for all products, with only oral arrangements and no alternative qualified suppliers, creating significant supply and conflict‑of‑interest risk.
- Material weakness in internal control over financial reporting persists, with ineffective disclosure controls and limited accounting resources.
- Common stock trades on OTC Pink and is not compliant with Rule 15c2‑11, impairing liquidity and the ability to raise equity capital.
Filing Explained
Operations have not restarted: funding and sales arrangements are absent, while planned equity financing could dilute existing holders if issued.
VitaSpring Biomedical reports that it had not resumed revenue-generating operations as of
The six-month operating cash inflow of
The company currently relies on one Taiwan supplier that is a related party, with no written agreement covering future orders. It has not entered into any sales-agent agreement or clinic supply arrangement, so the operating model described in the filing remains unlaunched.
As of
Key Figures
Key Terms
going concern financial
Troubled Debt Restructuring financial
material weakness financial
OTC Pink Limited marketplace market
Section 382 financial
Rule 15c2-11 regulatory
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
Did VSBC generate any revenue in the quarter ended July 31, 2026?
What was VSBC’s net loss for the July 31, 2026 quarter and year-to-date period?
What is VitaSpring Biomedical’s liquidity and working capital position as of July 31, 2026?
What related-party debts does VSBC owe, including the $2.41 million deferral?
Why is there going-concern doubt for VSBC?
What internal control issues did VitaSpring Biomedical disclose?
What management changes occurred at VSBC after July 31, 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No.
(Exact name of registrant as specified in its charter) |
| ||
State or other jurisdiction of Incorporation or organization |
| (IRS Employer Identification No.) |
| ||
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
None |
| N/A |
| N/A |
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. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a 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 | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of September 17, 2026, the registrant had
TABLE OF CONTENTS
|
| Page No. |
| |
PART I – FINANCIAL INFORMATION | ||||
|
|
|
|
|
Item 1 | Financial Statements (Unaudited) |
| 3 |
|
|
|
|
|
|
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 4 |
|
|
|
|
|
|
Item 3 | Quantitative and Qualitative Disclosures about Market Risk |
| 11 |
|
|
|
|
|
|
Item 4 | Controls and Procedures |
| 11 |
|
|
|
|
|
|
PART II – OTHER INFORMATION | ||||
|
|
|
|
|
Item 1 | Legal Proceedings |
| 12 |
|
|
|
|
|
|
Item 1A | Risk Factors |
| 12 |
|
|
|
|
|
|
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds |
| 18 |
|
|
|
|
|
|
Item 3 | Defaults Upon Senior Securities |
| 18 |
|
|
|
|
|
|
Item 4 | Mine Safety Disclosures |
| 18 |
|
|
|
|
|
|
Item 5 | Other Information |
| 18 |
|
|
|
|
|
|
Item 6 | Exhibits |
| 19 |
|
| 2 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
VITASPRING BIOMEDICAL CO., LTD.
INDEX TO FINANCIAL STATEMENTS
Balance Sheets (unaudited) |
| F-1 |
|
|
|
| |
Statements of Operations (unaudited) |
| F-2 |
|
|
|
| |
Statement of Changes in Stockholders’ Deficit (unaudited) |
| F-3 |
|
|
|
| |
Statements of Cash Flows (unaudited) |
| F-4 |
|
|
|
| |
Notes to the Unaudited Financial Statements |
| F-5 - F-12 |
|
| 3 |
| Table of Contents |
VITASPRING BIOMEDICAL CO., LTD.
BALANCE SHEETS
(Unaudited)
|
| July 31 |
|
| January 31 |
| ||
|
| 2026 |
|
| 2026 |
| ||
ASSETS |
|
|
|
|
|
| ||
CURRENT ASSETS |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Prepaid expenses |
|
|
|
|
|
| ||
Total current assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
LONG-TERM ASSET |
|
|
|
|
|
|
|
|
Equipment and vehicle, net |
|
|
|
|
|
| ||
Total long-term asset |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable - related party |
| $ |
|
| $ |
| ||
Accounts payable and other payables |
|
|
|
|
|
| ||
Payroll liability |
|
|
|
|
|
| ||
Income tax payable |
|
|
|
|
|
| ||
Advances from related party |
|
|
|
|
|
| ||
Total current liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITY |
|
|
|
|
|
|
|
|
Loan payable - related party |
|
|
|
|
|
| ||
Total long-term liability |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $ |
|
|
|
|
|
| ||
Additional paid-in capital |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total stockholders’ deficit |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ deficit |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these unaudited financial statements.
| F-1 |
| Table of Contents |
VITASPRING BIOMEDICAL CO., LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
|
| July 31 |
|
| July 31 |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Payroll expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total other income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before provision for income taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: Basic and diluted |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Weighted average number of shares outstanding: Basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
See the accompanying Notes, which are an integral part of these unaudited financial statements.
| F-2 |
| Table of Contents |
VITASPRING BIOMEDICAL CO., LTD.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
For the Three and Six Months Ended July 31, 2026
|
|
|
|
|
|
|
| Additional |
|
|
|
|
| Total |
| |||||
|
| Common Stock |
|
| Paid-in |
|
| Accumulated |
|
| Stockholders’ |
| ||||||||
|
| Number of shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Deficit |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, January 31, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance, April 30, 2026 |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance, July 31, 2026 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||
For the Three and Six Months Ended July 31, 2025
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated |
|
| Total Stockholders’ |
| ||||||||
|
| Number of shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Deficit |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, January 31, 2025 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance, April 30, 2025 |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance, July 31, 2025 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||
See the accompanying Notes, which are an integral part of these unaudited financial statements.
| F-3 |
| Table of Contents |
VITASPRING BIOMEDICAL CO., LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Six Months Ended |
| |||||
|
| July 31 |
| |||||
|
| 2026 |
|
| 2025 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
|
|
|
| ||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
|
|
| ( | ) | |
Other receivable |
|
|
|
|
| ( | ) | |
Payroll liability |
|
|
|
|
|
| ||
Accounts payable and other payables |
|
| ( | ) |
|
| ( | ) |
Income tax and franchise tax expenses payable |
|
| ( | ) |
|
|
| |
Advances from related party for operating expenses |
|
|
|
|
|
| ||
Net cash provided by (used in) operating activities |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITY |
|
|
|
|
|
|
|
|
Advances from related party |
|
|
|
|
|
| ||
Net cash provided by financing activity |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
|
|
|
| ||
Cash at beginning of period |
|
|
|
|
|
| ||
Cash at end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Income taxes paid |
| $ |
|
| $ |
| ||
Interest expense paid |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
|
Reclassification of accounts payable - related party to loan payable - related party |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these unaudited financial statements.
| F-4 |
| Table of Contents |
VITASPRING BIOMEDICAL CO., LTD.
Notes to Unaudited Financial Statements
July 31, 2026
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
VitaSpring Biomedical Co., Ltd (“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 the 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 in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. As of July 31, 2026, the Company had cash of $
The Company’s minimal cash balance, recurring operating losses, and significant working capital deficit raise substantial doubt about its ability to continue as a going concern within one year after the financial statements are issued. The Company has historically financed its operations through advances from related parties and equity issuances. Management plans to continue seeking additional capital through equity financing, strategic partnerships, and related-party support in order to fund operating expenses and meet its obligations as they become due. However, there can be no assurance that such financing will be available on acceptable terms, or at all. Based on current cash resources of $
Management has concluded that its plans, which depend on obtaining financing that is not within the Company’s control, cannot be considered probable of being effectively implemented and therefore do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. Management evaluated the Company’s ability to continue as a going concern for the one-year period following the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission, including Rule 8-03 of Regulation S-X, which governs the form and content of interim financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim period presented, have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.
| F-5 |
| Table of Contents |
The accompanying unaudited interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended January 31, 2026, as filed with the SEC on June 17, 2026.
Segment Reporting
The Company operates in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, which establishes standards for reporting information about operating segments in financial statements.
The Company’s chief operating decision maker (“CODM”), who is the Chief Executive Officer, regularly reviews financial information to make operating decisions, allocate resources, and assess performance. The CODM does not evaluate the business on a disaggregated basis, and discrete financial information is not available by product line, service, or geographic location.
The Company’s operations are conducted within a single line of business, and the Company operates as one reportable segment. As of July 31, 2026, the Company had no long-lived assets, as its vehicle and equipment are fully depreciated and have a net book value of $0. The CODM, who is the Company’s Chief Executive Officer, uses net loss as reported in the statements of operations to assess performance and allocate resources. The significant segment expense categories regularly provided to the CODM are professional fees, payroll expenses and general and administrative expenses.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the period. Significant estimates include, but are not limited, to tax expense valuation allowances, and the assessment of the Company’s ability to continue as a going concern. Management bases its estimates on historical experience, current conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company had cash of $
Prepaid Expenses
Prepaid expenses consist of amounts paid in advance for services and are charged to expense over the period benefited.
Equipment, Depreciation, Amortization, and Capitalization
Equipment and vehicle are stated at cost. The Company records depreciation and amortization when appropriate using the straight-line method over the estimated useful life of the assets. The Company estimates that the useful life of necessary equipment is
| F-6 |
| Table of Contents |
During the six months ended July 31, 2026, and 2025, the Company recognized depreciation of $
As of July 31, 2026, and January 31, 2026, vehicle and equipment consisted of the following:
|
| July 31, |
|
| January 31, |
| ||
|
| 2026 |
|
| 2026 |
| ||
Vehicle |
| $ |
|
| $ |
| ||
Furniture and equipment |
|
|
|
|
|
| ||
Computers |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
Accumulated impairment |
|
| ( | ) |
|
| ( | ) |
Total vehicle and equipment, net |
| $ |
|
| $ |
| ||
Accounts Payable
The Company recognizes accounts payable when obligations arise from the receipt of goods and services in the ordinary course of business. Accounts payable are recorded at cost and represent amounts owed to vendors and service providers that are non-interest-bearing and typically settled within standard payment terms.
The Company regularly evaluates accounts payable balances to ensure completeness and accuracy and considers all amounts current unless otherwise specified.
All accounts payable are classified as current liabilities. The Company did not incur any material interest or penalties on past due balances during the periods presented.
As of July 31, 2026 and January 31, 2026, the Company’s accounts payable included $
Revenue Recognition
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
Revenue related to contracts with customers is evaluated utilizing the following steps:
| (i) | Identify the contract, or contracts, with a customer; |
| (ii) | Identify the performance obligations in the contract; |
| (iii) | Determine the transaction price; |
| (iv) | Allocate the transaction price to the performance obligations in the contract; |
| (v) | Recognize revenue when the Company satisfies a performance obligation. |
The Company did not generate any revenue during the six months ended July 31, 2026, and 2025 and currently does not have active revenue-generating operations.
| F-7 |
| Table of Contents |
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 to be sustained. Recognized income tax positions are measured at the largest amount that is greater than
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 income tax payable balance of $
During the six months ended July 31, 2026 and 2025, the Company paid income taxes of $
Under ASC 740-10-45-25, the classification of interest and penalties related to income taxes as a component of income tax expense or as another expense classification is an accounting policy election. The Company has elected to classify interest and penalties associated with historical tax obligations relating to fiscal year 2022 as income tax expense.
Fair Value of Financial Instruments
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, loan payable - related party and the Company’s advances from related party, approximates its fair value due to their short-term maturity.
| F-8 |
| Table of Contents |
Basic (Loss) Income Per Share
The Company computes (loss) income per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period.
Diluted (loss) income per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares when their inclusion would be anti-dilutive.
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding, as of July 31, 2026, and 2025.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses and the CODM. The Company adopted ASU 2023-07, and the required disclosures are included in Note 3 – Segment Reporting.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which require, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our fiscal year ending January 31, 2026. The Company has adopted ASU 2023-09 since January 31, 2026.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In May 2025, the FASB issued ASU 2025-04 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”) which clarifies the guidance on the accounting for share-based payment awards that are granted by an entity as consideration payable to its customer, with the intent to reduce diversity in practice and improve existing guidance by revising the definition of a “performance condition” and eliminating a forfeiture policy election for service conditions associated with share-based consideration payable to a customer. It also clarifies the guidance in Topic 606 on the variable consideration constraint does not apply to share-based consideration payable to a customer “regardless of whether an award’s grant date has occurred”. ASU 2025-04 will be effective for the annual periods beginning after December 15, 2026, with early adoption permitted. The Company does not believe ASU 2025-04 will have a material impact on its financial position, results of operations or financial statement disclosure.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05). The amendments in this update provide a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The Company adopted ASU 2025-05 during the period ended July 31, 2026. Because the Company has no revenue, accounts receivable, or contract assets, the adoption had no effect on its financial statements.
In December 2025, the FASB issued ASU 2025-12, “Codification Improvements”, which makes minor corrections, clarifications, and enhancements across the FASB Accounting Standards Codification. ASU 2025-12 is effective for the Company for its fiscal year and all interim periods beginning February 1, 2027, on a prospective basis. Early adoption is permitted. The Company is evaluating the impact that the updated standard will have on its financial statement disclosures.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.
| F-9 |
| Table of Contents |
Reclassifications of Prior Period Amounts
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported total assets, total liabilities, stockholders’ equity, net loss, or cash flows. The following are the summaries of reclassification:
Balance Sheets: |
|
|
|
|
|
|
|
|
| |||
January 31, 2026 |
| Originally Reported |
|
| Reclassification |
|
| Current Reported |
| |||
Accounts payable and other payables |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Payroll liability |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Six Months ended July 31, 2025 |
| As Reported |
|
| Reclassify |
|
| As Revised |
| |||
General and administrative expenses |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Professional fees |
| $ |
|
| $ |
|
| $ |
| |||
Payroll expenses |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended July 31, 2025 |
| As Reported |
|
| Reclassify |
|
| As Revised |
| |||
General and administrative expenses |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Professional fees |
| $ |
|
| $ |
|
| $ |
| |||
Payroll expenses |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
Six Months ended July 31, 2025 |
| As Reported |
|
| Reclassify |
|
| As Revised |
| |||
Accounts payable and other payables |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
Payroll liability |
| $ |
|
| $ |
|
| $ |
| |||
Note 4 – RELATED PARTY TRANSACTIONS AND BALANCES
Advances from Related Party
During the six months ended July 31, 2026, and 2025, the Company received cash advances of $
Due to Related Party
In prior years, the Company sourced all of its inventory from a vendor wholly owned by shareholders who collectively hold more than 20% of the Company’s outstanding common shares as of July 31, 2026. As of January 31, 2026, amounts due to this related party totaled $
As of January 31, 2026, the Company did not have written agreements governing the repayment terms of related-party balance. These obligations are unsecured, non-interest-bearing, and payable on demand.
On May 18, 2026, the Company entered into a deferred payment agreement with this related party, both parties agreed to defer collection efforts for a period of twenty-four (24) months from May 18, 2026, interest-free and the related party will not demand immediate repayment of the outstanding balance of $
| F-10 |
| Table of Contents |
The Company evaluated the modification of terms of new agreement under ASC 470-60, “Troubled Debt Restructuring -TDR”, and concluded that the debt modification constitutes a Troubled Debt Restructuring (TDR). A restructuring of debt qualifies as a TDR when both of the following conditions are present:
| · | The Company (as debtor) is experiencing financial difficulty; and |
| · | The creditor, for economic or legal reasons related to the Company’s financial difficulties, grants a concession that it would not otherwise consider. |
Both conditions are present. The Company has not generated any revenue and has financed its operations through advances from a related party, and
Note 5 – EQUITY
Common Stock
The number of authorized shares of common stock under the Articles of Incorporation is
During the six months ended July 31, 2026, and 2025, the Company did not issue any shares of common stock.
There were
Note 6 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is from time to time involved in routine litigation incidental to the conduct of its business. Management believes that no pending litigation matters to which it is a party is likely to have a material adverse effect on the Company’s financial condition or results of operations. There are no material pending legal proceedings to which the Company is a party or of which any of its property is the subject, and no such proceeding is known by the Company to be contemplated by a governmental authority.
As previously disclosed in our Company’s Form 10-K for the fiscal year ended January 31, 2023, and in its Report on Form 8-K filed August 11, 2025, certain of its former officers are involved in civil and criminal proceedings in Taiwan relating to alleged unauthorized use of proprietary know-how and intellectual property. The Company is not a named party to these proceedings.
As of July 31, 2026, and through the date of issuance of these financial statements, management is not aware of any developments that would cause the Company to conclude that these matters will have a material adverse effect on its financial condition or results of operations.
Note 7 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events in accordance with Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events. Management reviewed all events and transactions that occurred after the balance sheet date of July 31, 2026, through the date the financial statements were issued. These financial statements were issued on September 17, 2026, and subsequent events were evaluated through that date.
| F-11 |
| Table of Contents |
Management Transition
On September 7, 2026, the Company completed a transition of its management and board of directors. Effective at 11:56 p.m. Pacific Time on September 7, 2026, Shao-Hsiang Shih was elected as a director of the Company and, effective at 11:57 p.m. Pacific Time, was appointed Chairman of the Board. Effective at the same time, Jing-Zhou Chen was appointed Chief Executive Officer, President, Chief Financial Officer and Secretary of the Company and designated as the Company’s principal executive officer, principal financial officer and principal accounting officer.
Effective at 11:58 p.m. Pacific Time on September 7, 2026, Ssu-Chuan Lai resigned as a director, Chairperson of the Board, Chief Executive Officer, President, Chief Financial Officer and Secretary of the Company. Dr. Lai’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
No compensation is payable to Mr. Shih for his service as a director or Chairman of the Board or to Mr. Chen for his service as an officer unless and until otherwise determined by the Board.
Based on its evaluation, management has determined that the management transition described above is the only material subsequent event requiring disclosure or adjustment through the date the financial statements were issued.
| F-12 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our unaudited financial statements and the related notes included in this Quarterly Report on Form 10-Q. The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements due to various factors, including those described in our filings with the Securities and Exchange Commission (“SEC”).
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statement represents management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Unless otherwise indicated, references to “we,” “us,” “our,” or “the Company,” mean VitaSpring Biomedical Co., Ltd.
All dollar amounts refer to US dollars unless otherwise indicated.
Overview
We are a biomedical company focused on the wellness, healthy aging, regenerative medicine, preventive healthcare, skincare and anti-aging markets, with an initial focus on Taiwan, Mainland China and Southeast Asia. Our business model is to identify market opportunities and end-user requirements in those markets, to direct the development and manufacture of products designed to meet them, and to sell those products through appointed sales agents and directly to end users.
We conducted commercial operations from our fiscal year ended January 31, 2018 through our fiscal year ended January 31, 2022, generating cumulative revenue of approximately $5.9 million, including $5,613,200 in the fiscal year ended January 31, 2022. Commercial sales were suspended after that period while our supplier requalified its production process and while the regulations governing cell-derived products in our target markets remained unsettled. We have maintained our supplier relationship and our personnel throughout that period and are currently re-establishing our product offerings and sales channels.
Our products are based on PCMSC, a mesenchymal stem cell derived from placental tissue, and on exosome-based materials derived from those cells, with applications in wellness, healthy aging, regenerative medicine, preventive healthcare, skincare and anti-aging. Our products are manufactured by our supplier in Taiwan, which owns and controls the applicable cell culture processes, growth media and formulations. We do not own any issued patents and have no patent applications pending, and we conducted no research and development activities during the fiscal years ended January 31, 2026 and 2025.
We are currently developing two sales channels. The first is a membership subscription program directed at the longevity market in Taiwan, Mainland China and Southeast Asia, under which members would receive a specified quantity of our products according to membership level, developed both through authorized sales agents appointed for particular territories and sales channels and through direct enrollment. The second is a supply relationship with medical clinics serving the longevity market, under which we would supply products to participating clinics for provision to their existing patients. As of the date of this report we have not entered into any agent agreements or clinic supply arrangements. Longer-term objectives include development of a stem cell bank, generation of data and processes capable of being licensed, and expansion of applications in regenerative medicine and related fields.
| 4 |
| Table of Contents |
We currently purchase all of our finished products from one supplier located in Taiwan, which is a related party. The supplier is wholly owned by shareholders who collectively hold more than 20% of our outstanding common shares. We are not party to any exclusivity arrangement with the supplier, and we have no written supply agreement covering future orders. On May 18, 2026, we and the supplier entered into an agreement deferring payment of $2,411,000 of outstanding payables owed to the supplier for twenty-four months without interest (see Note 4 to our financial statements included in Item 1 of this report). The supplier has advised us that future product supply will not be conditioned on repayment of that balance and that future orders may be placed on an advance-deposit basis or on payment terms of approximately 30 to 90 days; those statements are not contractually binding. We expect to enter into specific agreements covering individual orders as those orders are placed, and we are also evaluating additional sources of supply.
In addition to our executive officers, we have two employees: a Vice President, Legal and Operations, who is responsible for our corporate, accounting, SEC reporting, tax and public-market matters and for business development, and a bookkeeper responsible for our accounting records. Compensation for both has been accrued and remains unpaid as a result of our cash position. We do not own or lease any material real property; our principal executive offices are virtual and are provided by a third party under a month-to-month arrangement, and we do not maintain our own laboratory or manufacturing facility.
During the six months ended July 31, 2026, and 2025, we did not generate any revenue. We have not generated revenue since the fiscal year ended January 31, 2022, and our ability to resume sales depends on obtaining capital sufficient to fund initial product purchases and on completing the agent and clinic arrangements described above.
Accordingly, our activities during the current fiscal year have primarily consisted of:
| · | Administrative and corporate compliance activities, |
| · | Re-establishing our product offerings and sales channels, |
| · | Maintaining our supplier relationship and monitoring regulatory developments affecting cell-derived products in our target markets, |
| · | Management of related party obligations, and |
| · | Seeking additional capital to support future operations. |
As of July 31, 2026, we have not reinitiated revenue-generating operations.
Results of Operations
The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the period ended July 31, 2026, which are included herein.
Our operating results for the three and six months ended July 31, 2026, and 2025 and the changes between those periods for the respective items are summarized as follows.
For the three months ended July 31, 2026, compared to the three months ended July 31, 2025
|
| Three Months Ended |
|
|
|
| ||||||
|
| July 31 |
|
|
|
| ||||||
|
| 2026 |
|
| 2025 |
|
| Changes |
| |||
Revenues |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Operating expenses |
|
| 161,817 |
|
|
| 99,067 |
|
|
| 62,750 |
|
Loss from operations |
|
| (161,817 | ) |
|
| (99,067 | ) |
|
| (62,750 | ) |
Other income |
|
| 6,000 |
|
|
| - |
|
|
| 6,000 |
|
Provision for income taxes |
|
| - |
|
|
| (11,778 | ) |
|
| 11,778 |
|
Net loss |
| $ | (155,817 | ) |
| $ | (110,845 | ) |
| $ | (44,972 | ) |
| 5 |
| Table of Contents |
Revenue
We generated no revenue during the three months ended July 31, 2026, and 2025. We are currently focusing on restructuring our product strategy and developing long-term partnerships rather than pursuing short-term sales.
Operating Expenses
Operating expenses were $161,817 for the three months ended July 31, 2026, compared with $99,067 for the three months ended July 31, 2025. For the three months ended July 31, 2026, and 2025, the operating expenses were primarily attributed to professional fees of $98,174 and $35,200 relating to our status as a public company, payroll expenses of $57,813 and $57,813, depreciation of $1,660 and $2,490 and general and administrative expenses of $4,170 and $3,564, respectively.
Other Income
During the three months ended July 31, 2026, the Company received security rent deposit refund of $6,000. The security deposit was expensed in prior year, the refund of $6,000 was recognized as other income.
Provision for Income Taxes
We did not record a current income tax provision on our operating losses for the three months ended July 31, 2026, and 2025, due to our net operating loss position and a full valuation allowance against deferred tax assets.
However, during the three months ended July 31, 2026, and 2025, we recognized $0 and $11,778, respectively, interest and penalties on historical income tax obligations relating to fiscal year 2022, which are classified as income tax expense in accordance with ASC 740-10-45-25, we have elected to classify interest and penalties related to income tax obligations as income tax expense. Accordingly, these amounts are presented within the income tax expense line on the statement of operations and do not represent a current provision on operating income.
Net Loss
We had a net loss of $155,817 for the three months ended July 31, 2026, and $110,845 for the three months ended July 31, 2025. The increase in net loss of $44,972 was primarily due to an increase in operating expenses, other income, and a decrease in provision for income tax expenses.
For the six months ended July 31, 2026, compared to the six months ended July 31, 2025
|
| Six Months Ended |
|
|
|
| ||||||
|
| July 31 |
|
|
|
| ||||||
|
| 2026 |
|
| 2025 |
|
| Changes |
| |||
Revenues |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Operating expenses |
|
| 237,661 |
|
|
| 168,214 |
|
|
| 69,447 |
|
Loss from operations |
|
| (237,661 | ) |
|
| (168,214 | ) |
|
| (69,447 | ) |
Other income |
|
| 6,000 |
|
|
| - |
|
|
| 6,000 |
|
Provision for income taxes |
|
| - |
|
|
| (23,172 | ) |
|
| 23,172 |
|
Net loss |
| $ | (231,661 | ) |
| $ | (191,386 | ) |
| $ | (40,275 | ) |
| 6 |
| Table of Contents |
Revenue
We generated no revenue during the six months ended July 31, 2026, and 2025. We are currently focusing on restructuring our product strategy and developing long-term partnerships rather than pursuing short-term sales.
Operating Expenses
Operating expenses were $237,661 for the six months ended July 31, 2026, compared with $168,214 for the six months ended July 31, 2025. For the six months ended July 31, 2026, and 2025, the operating expenses were primarily attributed to professional fees of $110,374 and $38,700 relating to our status as a public company, payroll expenses of $115,625 and $115,625, depreciation of $4,149 and $4,979 and general and administrative expenses of $7,513 and $8,910, respectively.
Other Income
During the six months ended July 31, 2026, the Company received security rent deposit refund of $6,000. The security deposit was expensed in prior year, the refund of $6,000 was recognized as other income.
Provision for Income Taxes
We did not record a current income tax provision on our operating losses for the six months ended July 31, 2026, and 2025, due to our net operating loss position and a full valuation allowance against deferred tax assets.
However, during the six months ended July 31, 2026, and 2025, we recognized $0 and $23,172, respectively, interest and penalties on historical income tax obligations relating to fiscal year 2022, which are classified as income tax expense in accordance with ASC 740-10-45-25, we have elected to classify interest and penalties related to income tax obligations as income tax expense. Accordingly, these amounts are presented within the income tax expense line on the statement of operations and do not represent a current provision on operating income.
Net Loss
We had a net loss of $231,661 for the six months ended July 31, 2026, and $191,386 for the six months ended July 31, 2025. The increase in net loss of $40,275 was primarily due to an increase in operating expenses, other income, and a decrease in provision for income tax expenses.
Balance Sheet Data
As of July 31, 2026, we had total assets of $14,822, total liabilities of $4,677,051 and a stockholders’ deficit of $4,662,229. The principal balance sheet movements during the six months ended July 31, 2026, were the reclassification of $2,411,000 of accounts payable - related party from current liabilities to long-term liability in connection with the deferred payment agreement entered into on May 18, 2026, and an increase in advances - related party to $1,185,582 as of July 31, 2026 from $1,037,983 as of January 31, 2026, reflecting operating expenses paid directly by a related party on our behalf. Our property and equipment are substantially fully depreciated.
Liquidity and Capital Resources
The following table summarizes our changes in working capital deficiency as of July 31, 2026, and January 31, 2026.
|
| July 31 |
|
| January 31 |
|
|
|
| |||
|
| 2026 |
|
| 2026 |
|
| Change |
| |||
Current assets |
| $ | 14,822 |
|
| $ | 10,527 |
|
| $ | 4,295 |
|
Current liabilities |
| $ | 2,266,051 |
|
| $ | 4,445,244 |
|
| $ | (2,179,193 | ) |
Working capital (deficiency) |
| $ | (2,251,229 | ) |
| $ | (4,434,717 | ) |
| $ | 2,183,488 |
|
As of July 31, 2026, and January 31, 2026, current assets were comprised of $13,367 and $2,084 in cash, $1,455 and $8,443 in prepaid expenses, respectively.
| 7 |
| Table of Contents |
As of July 31, 2026, and January 31, 2026, current liabilities were comprised of $0 and $2,411,000 in accounts payable - related party, $139,420 and $169,455 in accounts payable and other payables, $598,197 and $482,572 in payroll liability, $342,852 and $344,234 in income tax and franchise tax payable and $1,185,582 and $1,037,983in advances from related party, respectively.
Our working capital deficiency reduced by $2,183,488, or 49.23%, to $2,251,229 as of July 31, 2026, compared to working capital deficiency of $4,434,717 as of January 31, 2026. The improvement in working capital was due to the reclassification of $2,411,000 of accounts payable - related party to a long-term loan payable pursuant to the deferred payment agreement dated May 18, 2026; total liabilities increased from $4,445,244 to $4,677,051 over the same period (see Financial Statements, Note 4), partly offset by an increase in advances from related party and accounts payable and other payables. Advances paid directly by related parties on behalf of the Company for operating expenses are reflected as operating activities, while cash proceeds received directly from related parties are classified as financing activities. A substantial portion of the Company’s liabilities consists of obligations to related parties that are unsecured, non-interest-bearing, and payable on demand, with no formal repayment terms.
Given the Company’s current financial condition, there can be no assurance that the Company will be able to continue operations absent additional capital. The Company may be required to significantly curtail or cease operations if financing is not obtained in the near term.
The income tax payable balance primarily relates to historical income tax liabilities and franchise tax expenses, and no current income tax was recognized due to our net operating loss position and full valuation allowance. During the six months ended July 31, 2026, and 2025, the Company recognized $0 and $23,172, respectively, in interest and penalties associated with historical income tax obligations relating to fiscal year 2022. In accordance with ASC 740-10-45-25, these interest and penalties associated with income tax obligations are classified as income tax expense in the Company’s statements of operations.
During the six months ended July 31, 2026, and 2025, the Company paid income taxes of $0 and $0, respectively, During the six months ended July 31, 2026, the Company also paid $1,382 in franchise taxes, which reduced the related historical tax payable balance.
Cash Flow Data
The following table summarizes our cash flows for the six months ended July 31, 2026, and 2025:
|
| Six Months Ended |
|
|
|
| ||||||
|
| July 31 |
|
|
|
| ||||||
|
| 2026 |
|
| 2025 |
|
| Change |
| |||
Cash provided by (used in) operating activities |
| $ | 11,283 |
|
| $ | (1,973 | ) |
| $ | 13,256 |
|
Cash provided by financing activity |
| $ | - |
|
| $ | 2,500 |
|
| $ | (2,500 | ) |
Net change in cash |
| $ | 11,283 |
|
| $ | 527 |
|
| $ | 10,756 |
|
We have funded our activities primarily through advances from related-party shareholders. Those advances were historically discretionary and not subject to a written agreement. On May 18, 2026, we entered into a deferred payment agreement with a related party covering $2,411,000 of those obligations, as described above and in Note 4 to our financial statements. Advances outside that agreement remain discretionary, unsecured and payable on demand. We continue to rely on external funding and available cash balances to meet our working-capital needs. Management believes that additional capital will be required to support operations over the next twelve months.
We expect to continue to require additional capital to support operations, and the resumption of product sales. Management is exploring potential sources of financing, including private placements of equity or debt securities and strategic partnerships. There is no assurance that additional funding will be available on acceptable terms. If we cannot secure sufficient financing, we may need to delay or scale back parts of our business plan.
We believe our current cash resources will not be sufficient to fund planned operations for the next twelve months without additional capital. The continuation of our business depends on our ability to raise funds and generate future revenue.
| 8 |
| Table of Contents |
Cash Flows from Operating Activities
Net cash provided by operating activities was $11,283 for the six months ended July 31, 2026. This inflow does not represent cash generated by our operations; it arises because a related party paid operating expenses directly on our behalf. Net cash provided by operating activities consisted of a net loss of $231,661, offset by depreciation expense of $4,149, operating expenses of $147,599 paid directly by a related party on our behalf, and a net change in working capital of $92,578, less franchise taxes paid of $1,382.
For the six months ended July 31, 2025, net cash flows used in operating activities was $1,973, consisting of a net loss of $191,386, reduced by depreciation expense of $4,979, advances from related party for operating expenses of $104,415, income tax expenses payable of $22,372 and a net change in working capital of $57,647.
Cash Flows from Investing Activity
We had no investing activity during the six months ended July 31, 2026, and 2025.
Cash Flows from Financing Activities
During the six months ended July 31, 2026, and 2025, net cash provided by financing activities consisted of related party advances of $0 and $2,500, respectively.
We expect to continue to rely on equity financing and, where available, strategic partnerships or grants to meet our capital needs. Our ability to raise additional capital will depend on market conditions, investor interest, and our progress in commercializing our stem-cell and biomedical technologies.
Capital Requirements and Liquidity Outlook
We have incurred losses and negative cash flow from operations. We believe that our current cash resources are not sufficient to fund our operations for the next twelve months without additional financing. To meet our capital needs, we plan to seek additional equity or debt financing and may also pursue strategic partnerships or licensing opportunities. There is no assurance that such financing will be available on favorable terms or at all. If we cannot obtain adequate funding, we may need to delay, scale back, or discontinue some of our business activities.
Going Concern
We evaluate our ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements — Going Concern. This evaluation requires us to assess whether conditions or events raise substantial doubt about our ability to meet our obligations as they become due during the twelve months following the issuance of these financial statements. As discussed in Note 2 to the financial statements, we have limited liquidity and substantial obligations that may be payable on demand.
Our financial statements have been prepared assuming we will continue as a going concern. As disclosed in Note 2 to our financial statements, as of July 31, 2026, we had a net loss of $231,661 and an accumulated deficit of $5,928,532, and a working capital deficiency of $2,251,229. Net cash provided by operating activities of $11,283 for the period arose solely from operating expenses paid directly by a related party on our behalf and does not represent cash generated by our operations. These factors raise substantial doubt about our ability to continue as a going concern within one year from the issuance of these financial statements. Our ability to continue as a going concern depends upon our ability to obtain additional funding, restructuring related-party obligations, and implement a business plan that generates sustainable revenues. There can be no assurance that we will be successful in these efforts. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be unable to continue as a going concern. Management’s plans to alleviate substantial doubt are dependent upon obtaining additional financing and therefore cannot be considered probable of being effectively implemented.
Off-Balance Sheet Arrangements
As of July 31, 2026, we did not have any off-balance sheet arrangements.
| 9 |
| Table of Contents |
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
While existing working capital and anticipated financing sources may provide limited support for our operations, our current cash resources are not sufficient to fund our operations over the next twelve months without additional financing. We will require additional capital to continue operations and execute our business plan. There can be no assurance that such financing will be available on acceptable terms, or at all. If we are unable to obtain adequate funding, we may be required to delay, scale back, or discontinue certain or all of our operations. In addition to funding our operating expenses, we will require capital to fund initial purchases of product inventory before we can resume sales. We have no committed source of that capital, and the amount and timing of any resumption of sales will depend on the capital we are able to raise and on completing the sales agent and clinic arrangements described under “Overview” above.
Critical Accounting Policies and Estimates
Use of Estimates
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements requires management to make estimates and assumptions, including, but not limited to tax expense valuation allowances, and the assessment of the Company’s ability to continue as a going concern. Our significant accounting policies are described in Note 3 to the financial statements. We consider the following policies and estimates to be critical because they involve significant judgments and assumptions and could materially affect our financial condition and results of operations. Critical estimates are those estimates that in accordance with U.S. GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial statements. Management has determined that our most critical accounting estimates are those relating to the going concern assessment and to income taxes, including the valuation allowance recorded against our deferred tax assets.
Significant estimates and assumptions reflected in the financial statements for the quarter ended July 31, 2026, include, but are not limited to:
Going Concern Assessment
In accordance with ASC 205-40, we evaluate whether conditions or events raise substantial doubt about our ability to continue as a going concern within one year from the issuance date of the financial statements. This assessment requires management to evaluate liquidity, forecasted cash flows, and the availability of financing or related-party support. As discussed in Note 2 to the financial statements, the Company has limited liquidity and substantial obligations that may be payable on demand.
Because these estimates require management judgment, actual results could differ materially from those estimates.
Income Taxes and Deferred Tax Assets
We account for income taxes using the liability method under ASC 740. Deferred tax assets are recognized for temporary differences between financial statement and tax bases of assets and liabilities. A valuation allowance is established when it is more likely than not that all or part of a deferred tax asset will not be realized. Determining the amount of valuation allowance requires significant judgment in estimating future taxable income, applicable tax strategies, and the expected timing of reversals of temporary differences.
Material Commitments
None.
| 10 |
| Table of Contents |
Purchase of Significant Equipment
We do not intend to purchase any significant equipment during the next twelve months.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company and not required to provide this information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (CEO), who serves as both our principal executive officer and our principal financial officer, is responsible for establishing and maintaining disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act 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 management, including the CEO, to allow timely decisions regarding required disclosure.
As of the end of the fiscal quarter ended July 31, 2026, management conducted an evaluation, under the supervision and with the participation of our CEO, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our CEO concluded that our disclosure controls and procedures were not effective as of July 31, 2026, due to a material weakness in our internal control over financial reporting, as described below.
Material Weakness in Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or deterioration in compliance with policies or procedures.
As previously reported in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, management assessed the effectiveness of our internal control over financial reporting as of January 31, 2026 using the criteria set forth in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that assessment, management concluded that our internal control over financial reporting was not effective as of that date due to the material weakness described below, which has not been remediated as of July 31, 2026:
| · | Material Weakness Identified: We did not maintain an adequate segregation of duties or employ sufficient accounting personnel with appropriate experience in U.S. GAAP and SEC reporting requirements. This deficiency increased the risk of material misstatements in the financial reporting process. |
Remediation Plan
We are committed to improving our internal control environment. Management intends to engage external accounting consultants with SEC reporting experience, formalize closing and review procedures, and improve segregation of duties as financial resources permit. Due to our limited personnel and single-executive-officer management structure, as well as our limited financial resources, management’s ability to fully segregate accounting and financial reporting functions remains limited.
We intend to implement the remediation measures described above as funding permits and as we are able to retain appropriate personnel.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the fiscal quarter ended July 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 11 |
| Table of Contents |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time involved in routine litigation incidental to the conduct of our business. There are no material pending legal proceedings to which the Company is a party or of which any of its property is the subject, and no such proceeding is known by the Company to be contemplated by a governmental authority. Management believes that no pending litigation matter to which it is a party is likely to have a material adverse effect on the Company’s financial condition or results of operations.
As previously disclosed in our Company’s Form 10-K for the fiscal year ended January 31, 2023, and in our Report on Form 8-K filed August 11, 2025, certain of our former officers are involved in civil and criminal proceedings in Taiwan relating to alleged unauthorized use of proprietary know-how and intellectual property. The Company is not a named party to these proceedings.
As of July 31, 2026, and through the date of this report, management is not aware of any developments that would cause the Company to conclude that these matters will have a material adverse effect on its financial condition or results of operations.
Item 1A. Risk Factors
The risk factors set forth below are restated in their entirety and supersede the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.
RISKS RELATED TO OUR FINANCIAL CONDITION, LIQUIDITY AND GOING CONCERN
Substantial doubt exists regarding our ability to continue as a going concern.
We have not generated revenue during the six months ended July 31, 2026. As of July 31, 2026, we had cash of $13,367, total assets of $14,822, total liabilities of $4,677,051, an accumulated deficit of $5,928,532 and a stockholders’ deficit of $4,662,229. We have incurred recurring losses since inception and expect to continue incurring losses for the foreseeable future. Based on our current cash position and expected expenditure, we do not have sufficient liquidity to fund operations for the next twelve months without additional financing.
Our financial statements have been prepared assuming we will continue as a going concern. Management has concluded that substantial doubt exists regarding our ability to continue as a going concern within twelve months from the issuance of our financial statements. Our independent registered public accounting firm has included a going concern explanatory paragraph in prior audit reports.
We have no committed financing arrangements and no revenue-generating operations. Our ability to continue operations depends entirely upon raising additional capital or obtaining continued financial support from related parties. There can be no assurance that such capital will be available on acceptable terms, if at all. If we are unable to secure adequate funding, we may be forced to significantly curtail or cease operations, seek protection under applicable insolvency laws, or liquidate our assets.
| 12 |
| Table of Contents |
Our liabilities substantially exceed our assets, which may impair our ability to obtain financing and satisfy uplisting requirements.
Our negative stockholders’ equity position may adversely affect investor confidence and impair our ability to obtain financing on favorable terms. Certain trading platforms and exchanges impose minimum stockholders’ equity requirements, minimum bid price requirements and independent director requirements, and we currently have no independent directors. We may need to effect a reverse stock split to satisfy minimum bid price requirements, which could adversely affect stockholder value. Our current financial condition may limit our ability to satisfy such requirements, thereby restricting our ability to uplist our common stock to OTCQB or a national securities exchange. Certain markets, including the OTCQB and the national securities exchanges, require minimum stockholders’ equity thresholds that we currently do not meet.
We may not be able to satisfy our obligations as they become due.
A substantial portion of our liabilities consists of unsecured obligations to related parties and vendors. These obligations may be payable on demand. If creditors demand repayment or decline to extend payment terms, we may be unable to satisfy such obligations when due, which could result in default, litigation, or insolvency proceedings. To date, no formal demand for repayment has been made.
RISKS RELATED TO OUR BUSINESS AND STRATEGY
We are not currently conducting commercial operations, and our historical revenues are not indicative of future results.
We conducted commercial operations from our fiscal year ended January 31, 2018 through our fiscal year ended January 31, 2022 and have not generated revenue since that time. We do not manufacture any products ourselves, we did not incur research and development expenses in the period ended July 31, 2026 or the fiscal year ended January 31, 2026, we have not initiated clinical trials, and we have not obtained regulatory approvals. We are re-establishing our product offerings and sales channels, but we have not entered into any sales agent agreement or clinic supply arrangement, and we will require capital to fund initial product purchases before we can resume sales. Our historical revenues were generated under different market and regulatory conditions and are not indicative of the revenue, if any, that we may generate in the future.
Our business model is speculative and subject to significant execution risk.
| · | Our future success depends on numerous factors, including: |
| · | Securing sufficient capital; |
| · | Recruiting qualified personnel; |
| · | Obtaining regulatory approvals; |
| · | Protecting intellectual property; |
| · | Re-establishing our supply arrangements and sales channels; |
| · | Entering into strategic partnerships; |
| · | Achieving market acceptance. |
Each of these elements involves significant uncertainty. Failure in any of these areas could materially adversely affect our business.
We may change our business strategy.
Given our financial condition and the early stage of our re-entry into commercial operations, we may revise or modify our business strategy. Such changes may expose us to additional risks and uncertainties and may not result in successful operations.
| 13 |
| Table of Contents |
We currently depend on a single supplier for all of our products, and we have no written supply agreement.
We currently purchase all of our products from one supplier located in Taiwan, which owns and controls the cell culture processes, growth media and formulations used to make them. Our arrangement with the supplier is oral, we have no exclusivity arrangement with the supplier, and we have no written agreement covering future orders, pricing, quantities, delivery or quality. The supplier has advised us that future supply will not be conditioned on repayment of the $2,411,000 balance deferred on May 18, 2026 and that future orders may be placed on an advance-deposit basis or on terms of approximately 30 to 90 days, but those statements are not contractually binding and may not be honored. If the supplier ceases to supply us, changes its terms, or does not complete requalification of its production process, we would have no current source of product and no ability to resume sales until we qualified another supplier. We are evaluating additional sources of supply, but we have not qualified any alternative supplier.
Our supplier is a related party, which creates conflicts of interest.
Our supplier is wholly owned by shareholders who collectively hold more than 20% of our outstanding common shares. Our supply arrangement is oral and was not negotiated at arm’s length, and we have not adopted a formal related-party transaction policy. The terms on which we obtain products, and the supplier’s willingness to continue supplying us and to forbear on the deferred $2,411,000 balance, are subject to the interests of persons who also control a significant portion of our equity. Although we are not obligated to purchase exclusively from the supplier and are evaluating additional sources of supply, we currently have no qualified alternative.
We have not entered into any sales agent or clinic supply agreements.
Both of the sales channels we are developing depend on agreements we have not yet made. We have not appointed any sales agent for any territory or channel, and we have not entered into any supply arrangement with any medical clinic. We may not succeed in entering into these agreements on acceptable terms or at all, and even if we do, the membership and clinic channels may not generate meaningful revenue.
We will need additional capital to purchase inventory before we can resume sales.
We had cash of $13,367 as of July 31, 2026. Resuming sales requires capital sufficient to fund initial product purchases, and our supplier may require advance deposits. We have no committed source of that capital. If we cannot obtain it, we will be unable to resume sales regardless of whether we complete the agent and clinic arrangements described above.
Our target markets are outside the United States and are subject to evolving regulation and geopolitical risk.
Our initial target markets are Taiwan, Mainland China and Southeast Asia. Regulations governing cell-derived products in those markets have been unsettled, and changes in those regulations, or in their interpretation or enforcement, may delay or prevent sales of our products. Our supplier and our products are located in and sourced from Taiwan, and we are exposed to currency fluctuations, trade restrictions, tariffs, and political and military tensions affecting Taiwan and the surrounding region, any of which could interrupt supply or eliminate our access to a target market.
We depend on a small number of personnel whose compensation is accrued and unpaid.
In addition to our executive officers, we have two employees: a Vice President, Legal and Operations and a bookkeeper. Compensation for both has been accrued and remains unpaid because of our cash position, and accrued payroll represents a substantial portion of our current liabilities. If either employee were to resign, we would lose the personnel who perform our corporate, accounting, SEC reporting and tax functions, and we may be unable to replace them or to pay a replacement.
RISKS RELATED TO REGULATORY MATTERS
If we pursue regenerative medicine or biologic-based products, we will be subject to extensive regulatory requirements.
Any future commercialization efforts may subject us to regulation by the U.S. Food and Drug Administration and comparable foreign regulatory authorities. Regulatory approval processes require extensive preclinical and clinical data and may take years to complete. Regulatory authorities may impose additional requirements, delay approvals, or deny approval altogether. We have not yet established FDA-compliant manufacturing facilities or submitted any investigational or marketing applications.
| 14 |
| Table of Contents |
Failure to obtain or maintain regulatory approvals would prevent commercialization.
Even if approvals are obtained, regulatory authorities may impose post-marketing requirements, restrict indications, suspend approvals, or withdraw approval. Regulatory compliance requires substantial financial and managerial resources.
The regulatory landscape for stem-cell and exosome technologies is evolving.
Regulatory authorities have increased scrutiny of regenerative medicine therapies. Changes in regulatory policy, interpretation, or enforcement priorities may adversely affect our ability to develop or commercialize products.
RISKS RELATED TO INTELLECTUAL PROPERTY
We do not currently hold issued patents.
As of the date of this report, we do not own issued patents, nor do we have any pending patent applications. We also do not own any registered trademarks. Our competitive position relies primarily on trade secrets and proprietary know-how. Trade secrets are difficult to protect, and we may not be able to prevent unauthorized disclosure or use.
We may become involved in intellectual property disputes.
If we develop technologies in the future, we may face claims of infringement from third parties. Defending against such claims could be costly and time-consuming. We may be required to pay damages, enter into licensing agreements on unfavorable terms, or cease certain operations.
RISKS RELATED TO RELATED-PARTY TRANSACTIONS AND CONFLICTS OF INTEREST
We have significant obligations to related parties, including a former officer who is involved in criminal proceedings unrelated to us.
Substantially all of our liabilities are obligations to related parties. As of July 31, 2026, we owed $1,185,582 of unsecured, non-interest-bearing advances payable on demand to a former officer who is also a major shareholder, and $2,411,000 to a vendor wholly owned by shareholders who collectively hold more than 20% of our outstanding common shares, collection of which that vendor has agreed to defer, interest-free, for twenty-four months from May 18, 2026. Neither related party is obligated to extend further credit to us or to forbear beyond the agreed deferral period, and we have no committed source of financing that would permit us to repay these amounts if repayment were demanded. In addition, a former officer who is among these creditors is involved in criminal proceedings in Taiwan that are unrelated to us and to which we are not a party. The specific risks arising from these relationships are described below. See also Note 4 to our financial statements included in Item 1 of this report.
We depend on advances from a former officer and major shareholder who is under no obligation to continue funding us.
We have historically funded our operating expenses through cash advances from, and direct payment of expenses by, a former Chief Executive Officer who is also a major shareholder. That party is under no obligation to continue providing funding, and any discontinuation would materially and adversely affect our ability to remain in operation. These advances are unsecured, non-interest-bearing and payable on demand. For the amounts outstanding and the related terms, see Note 4 to our financial statements included in Item 1 of this report.
Due to Related Party
In prior years, the Company sourced all of its inventory from a vendor wholly owned by shareholders who collectively hold more than 20% of the Company’s outstanding common shares as of July 31, 2026. As of January 31, 2026, amounts due to this related party totaled $2,411,000 and are disclosed in Accounts Payable – related party on the balance sheets. As of January 31, 2026, the Company did not have written agreements governing the repayment terms of related-party balance. These obligations are unsecured, non-interest-bearing, and payable on demand.
On May 18, 2026, the Company entered into a deferred payment agreement with this related party, both parties agreed to defer collection efforts for a period of twenty-four (24) months from May 18, 2026, interest-free and the related party will not demand immediate repayment of the outstanding balance of $2,411,000. No assurance can be provided that related parties will continue to provide financial support or refrain from demanding repayment.
| 15 |
| Table of Contents |
The Company evaluated the modification of terms of new agreement under ASC 470-60, “Troubled Debt Restructuring -TDR”, and concluded that the debt modification constitutes a Troubled Debt Restructuring (TDR). A restructuring of debt qualifies as a TDR when both of the following conditions are present:
| · | The Company (as debtor) is experiencing financial difficulty; and |
| · | The creditor, for economic or legal reasons related to the Company’s financial difficulties, grants a concession that it would not otherwise consider. |
Both conditions are present. The Company has not generated any revenue and has financed its operations through advances from a related party, and the related party agreed to a twenty-four month, interest-free deferral of the $2,411,000 balance that it would not otherwise have granted. Because the total future cash payments specified by the new terms ($2,411,000) are not less than the carrying amount of the payable immediately before the restructuring ($2,411,000), no gain is recognized, the carrying amount of the payable is not adjusted, and the new effective interest rate is 0%. Accordingly, no interest expense is recognized over the deferral period and no debt discount is recorded. As of July 31, 2026, the Company reclassified the $2,411,000 balance from current liabilities to long-term liability. No portion of the balance is due within twelve months of July 31, 2026.
The former officer referenced above is involved in criminal proceedings relating to the alleged unauthorized use of intellectual property that was not owned by us and did not arise from our operations. We are not a party to these proceedings, and the allegations do not involve our assets, intellectual property, or current management. Nevertheless, because this individual is a creditor of us, developments in such proceedings could affect repayment discussions, restructuring negotiations, or future financing arrangements. In addition, public association with former management may result in reputational harm or investor concern.
If related parties demand repayment of outstanding amounts or cease providing financial support, our liquidity and ability to continue operations could be materially adversely affected.
Our governance structure may increase conflict-of-interest risk.
We currently have one director and one executive officer, and the same person does not serve in both roles. We have not adopted a formal related-party transaction policy. This structure may increase the risk of conflicts of interest and reduce oversight of management decisions.
RISKS RELATED TO FORMER MANAGEMENT AND LEGAL PROCEEDINGS
Former officers are involved in civil and criminal proceedings that could indirectly affect us.
Certain former officers and directors are involved in legal proceedings in Taiwan relating to alleged unauthorized use of intellectual property. Although we are not a named party, these proceedings may result in reputational harm, disruption of business relationships, or derivative claims.
We may be subject to litigation.
We may become involved in disputes related to intellectual property, contracts, securities laws, or other matters. Litigation is inherently uncertain and may result in substantial costs, diversion of management resources, or adverse judgments.
RISKS RELATED TO INTERNAL CONTROL OVER FINANCIAL REPORTING
We have identified a material weakness in internal control over financial reporting.
As previously reported in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, management concluded that our internal control over financial reporting was not effective as of January 31, 2026, due to insufficient segregation of duties and lack of personnel with appropriate U.S. GAAP and SEC reporting expertise. This material weakness has not been remediated as of July 31, 2026. If we fail to remediate this material weakness, we may be unable to prevent or detect material misstatements in our financial statements.
| 16 |
| Table of Contents |
If we fail to remediate this material weakness, we may be unable to timely file reports with the SEC, which could result in loss of quotation eligibility or trading market restrictions.
RISKS RELATED TO CAPITAL RAISING AND DILUTION
We will require substantial additional capital to execute our business strategy.
We anticipate funding operations through equity offerings, convertible securities, strategic partnerships, or related-party financing. Such financings may be highly dilutive and may include terms unfavorable to existing stockholders. Our net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code.
Future issuances of securities may dilute existing stockholders and depress our stock price.
We may issue additional shares of common stock or securities convertible into common stock at prices below current market value. Such issuances may include warrants, anti-dilution adjustments, or other terms that adversely affect existing stockholders.
Our net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code, which could reduce or eliminate their value.
As of July 31, 2026, we had federal net operating loss (“NOL”) carryforwards of approximately $6.2 Million . Our ability to utilize these NOLs to offset future taxable income, if any, may be significantly limited under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), if we experience an “ownership change” as defined in Section 382.
In general, an ownership change occurs if the percentage of our stock owned by one or more “5-percent shareholders” increases by more than 50 percentage points over a rolling three-year testing period. Because our stock ownership is relatively concentrated and because we may issue additional equity or convertible securities in future financings, we may experience an ownership change under Section 382. An ownership change could materially limit the amount of NOLs that may be utilized annually to offset taxable income. In certain circumstances, such limitations could effectively eliminate the benefit of our NOL carryforwards.
In addition, if we undergo a significant change in business operations or experience future ownership changes, our ability to utilize our NOLs could be further limited. Any such limitation could reduce the potential tax benefits available to us and may adversely affect our financial condition and results of operations.
There can be no assurance that our NOL carryforwards will be available to offset future taxable income, even if we achieve profitability.
RISKS RELATED TO UPLISTING AND MARKET STATUS
Our common stock is thinly traded and may experience significant volatility.
Our common stock trades on the OTC Pink Limited marketplace, which generally has lower liquidity and greater volatility than national securities exchanges. Limited trading volume may result in substantial price fluctuations. The Company is not compliant with Rule 15c2-11 and intends to engage a market maker to file a Form 211 with FINRA on our behalf in September 2026. While we are not compliant, broker-dealers may not publish quotations, the stock may be limited to unsolicited trades or the Expert Market, and both liquidity and the ability to raise equity are impaired.
Our common stock may be subject to penny stock regulations.
If our common stock is deemed a penny stock, broker-dealers may be subject to additional regulatory requirements before effecting transactions, which may reduce liquidity and investor interest.
| 17 |
| Table of Contents |
RISKS RELATED TO CYBERSECURITY AND DATA PROTECTION
We do not maintain a formal cybersecurity risk management framework.
We do not employ dedicated cybersecurity personnel and rely on third-party service providers. A cybersecurity breach could result in operational disruption, reputational damage, regulatory scrutiny, or financial loss.
GENERAL RISK FACTORS
Economic conditions may adversely affect our ability to raise capital.
Adverse economic conditions, including inflation, rising interest rates, and market volatility, may reduce investor appetite for speculative investments and impair our ability to obtain financing.
An investment in our common stock is highly speculative.
Given our lack of current revenue, minimal liquidity, significant liabilities, material weakness in internal controls, governance limitations, regulatory uncertainty, and dependence on future financing, an investment in our common stock is highly speculative and may result in the loss of your entire investment.
We may become subject to securities class action litigation or stockholder derivative actions, which could result in substantial costs and diversion of management attention.
Companies with limited operating histories, limited or suspended commercial operations, minimal revenues, recurring losses, or significant stock price volatility frequently become the target of securities class action litigation or stockholder derivative lawsuits. Given our suspended commercial operations, going-concern uncertainty, dependence on future financing, related-party transactions, material weakness in internal control over financial reporting, and limited trading liquidity, we may be particularly susceptible to such litigation.
Securities class action lawsuits are often brought against companies following periods of stock price volatility, reverse stock splits, dilutive financings, restatements, regulatory developments, or public disclosures regarding internal control deficiencies. Such lawsuits typically allege violations of federal securities laws, including claims under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, or under Sections 11 and 12 of the Securities Act in connection with securities offerings. Even if such claims are without merit, defending against them can be costly, time-consuming, and disruptive to our operations.
In addition, we may become subject to stockholder derivative actions alleging breach of fiduciary duties by our officers or director, particularly given our governance structure, related-party transactions, and our suspended commercial operations. Such actions may seek monetary damages, corporate governance changes, or other equitable relief.
The costs of defending securities litigation or derivative actions may be significant and may exceed the limits of our directors’ and officers’ liability insurance coverage, if any. Adverse judgments, settlements, or regulatory findings could materially adversely affect our financial condition, liquidity, reputation, and ability to raise capital. Furthermore, even the initiation of litigation could result in negative publicity, investor concern, and diversion of management attention from our business.
If we are unable to successfully defend against such claims or manage associated costs, our business, financial condition, and results of operations could be materially adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended July 31, 2026, no director or officer of the Company adopted, modified or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.
| 18 |
| Table of Contents |
Item 6. Exhibits
The following documents are filed as part of this report:
Exhibit Number |
| Description |
10.1* |
| Payment Deferral Agreement, dated May 18, 2026, by and between VitaSpring Biomedical Co., Ltd. and BioSpring Medical Co., Ltd. |
|
|
|
(31) |
| Rule 13a-14(a)/15d-14(a) Certification |
31.1* |
| Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
(32) |
| Section 1350 Certification |
32.1* |
| Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 |
|
|
|
101* |
| Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. |
|
|
|
104* |
| Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in Exhibit 101 Inline XBRL Document Set. |
___________
* Filed herewith, except Exhibit 32.1, which is furnished herewith.
| 19 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VITASPRING BIOMEDICAL CO., LTD. |
|
|
|
|
Date: September 17, 2026 | /s/ Jing-Zhou Chen |
|
| Jing-Zhou Chen |
|
| President and Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
Date: September 17, 2026 | /s/ Shao-Hsiang Shih |
|
| Director |
|
| 20 |