Management's Discussion and Analysis of Financial Condition and Results of
Operations
Caution Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q, including, without limitation, statements
containing the words "believes", "anticipates", "expects" and words of similar
import, constitute forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; fluctuations and difficulty in
forecasting operating results; changes in business strategy or development
plans; business disruptions; the ability to attract and retain qualified
personnel; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-Q and investors are cautioned
not to place undue reliance on such forward-looking statements. The Company
disclaims any obligation to update any such factors or to publicly announce the
result of any revisions to any of the forward-looking statements contained
herein to reflect future events or developments.
Overview
VitaSpring Biomedical Co. Ltd., formerly Shemn Corp., was incorporated in Nevada
on September 6, 2016. We are a start-up business company. From inception, we
have produced leather fashion design items. Our former President and Director,
Liu Shan Shan, showcased our items with potential clients and wholesale
purchasers.
Recent Developments
Effective January 21, 2020, Liu Shan Shan, the previous sole officer and
director and majority shareholder the Company, entered into stock purchase
agreements for the sale of an aggregate of 9,000,000 shares of Common Stock of
the Company, representing approximately 82.55% of the issued and outstanding
shares of Common Stock of the Company as of such date, to twenty-five (25)
purchasers, included Li-Li Chu (2,666,666 shares), a 10% shareholder, and the
incoming CEO, Chu Pao-Chi (1,666,667 shares), and the incoming Secretary, Kao
Cheng-Hsiang (800,000 shares).
Also effective January 21, 2020, Liu Shan Shan appointed Chu Pao-Chi Chairman of
the Board of Directors, and Chief Executive Officer Officer of the Company, Kao
Cheng-Hsiang Secretary of the Company, Lin Jer-Li Chief Technical Officer of the
Company and Chen Yen Xun Technical Vice-President of the Company.
On March 30, 2020, the Company filed a Certificate of Amendment to its Articles
of Incorporation (the "Articles of Amendment") with the Secretary of State of
the State of Nevada effecting a name change of the Company to VitaSpring
Biomedical Co. Ltd. (the "Corporate Action"). The Corporate Action and the
Amended Articles became effective on April 21, 2020, following compliance with
notification requirements of the Financial Industry Regulatory Authority.
Business Plan
We have been engaged in the business of developing and marketing products that
promote wellness and a healthy lifestyle since 2019. A change of 100% of
Company's ownership occurred effectively on January 21, 2020. As a result, we
changed Company name from Shemn Corp. to VitaSpring Biomedical Co. Ltd. on
February 17, 2020. Under new management, we ceased producing and distributing
leather products. Our sole objective is to develop new drugs of cell medicine.
We also plan to establish a GTP cell production center in Taiwan for the
production of X.MSC cytopharmaceuticals. The estimated annual output is the
amount sufficient for 10,000 people (20 million cells/ does). The GTP cell
center is currently under construction. Trial production is expected to begin in
June, 2020. Mass production in August, 2020.
We do not sell products in a form for use by consumers although we may, in the
future, develop products for use by consumers.
19
Results of Operations for the Six months ended July 31, 2022 Compared to the Six
months ended July 31, 2021
Revenue and cost of goods sold
For the Six months ended July 31, 2022 and July 31, 2021 the Company generated
total revenue of $1,490,000 and $1,924,200 from selling products to the
customer. The cost of goods sold for the quarter ended July 31, 2022 and July
31, 2021 was $922,000 and $1,343,200, which represent the cost of raw materials.
Operating expenses
Total operating expenses for the quarter ended July 31, 2022 and July 31, 2021
were $399,384 and $150,713. The operating expenses for the Six months ended July
31, 2022 included Selling, general and administrative expenses.
Net Income
The net income/(loss) for the quarter ended July 31, 2022 and July 31, 2021 was
$177,188 and 430,287, respectively.
Liquidity and Capital Resources and Cash Requirements
At July 31, 2022, the Company had cash of $21,590. The Company had a working
capital of $1,635,229.
During the quarter ended July 31, 2022, the Company generated $(85,622) of cash
in operating activities.
During the quarter ended July 31, 2022 the Company used $0 in investing
activities.
During the quarter ended July 31, 2022, the Company used no cash in financing
activities.
We cannot guarantee that we will manage to sell all the shares required. We will
attempt to raise the necessary funds to proceed with all phases of our plan of
operation.
As of the date of this report, the current funds available to the Company will
not be sufficient to continue maintaining a reporting status.
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt we can continue as an on-going business for the next twelve
months unless we obtain additional capital. Our only sources for cash at this
time are investments by others in this offering, selling our paper dung products
and loans from our director. We must raise cash to implement our plan and stay
in business.
Management believes that current trends toward lower capital investment in
start-up companies pose the most significant challenge to the Company's success
over the next year and in future years. Additionally, the Company will have to
meet all the financial disclosure and reporting requirements associated with
being a publicly reporting company. The Company's management will have to spend
additional time on policies and procedures to make sure it is compliant with
various regulatory requirements, especially that of Section 404 of the
Sarbanes-Oxley Act of 2002. This additional corporate governance time required
of management could limit the amount of time management has to implement is
business plan and impede the speed of its operations.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in a start-up stage of operations and have
generated limited revenues since inception. We cannot guarantee that we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources and possible cost overruns due to price and cost increases in services
and products.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations
or other relationships with unconsolidated entities that would be expected to
have a material current or future effect upon our financial condition or results
of operations.
Going Concern
The Company has a retained earnings of 949,245 and a positive cash flow from
operations amounting to $132,521 for the six months ended July 31, 2022. The
Company had $1,490,000 in revenues for the six months ended July 31, 2022. The
Company currently earned profit for the period and is in the process of
completing its efforts to establish a stabilized source of revenue sufficient to
cover operating costs over an extended period. Therefore, there is still a
substantial doubt about the Company's ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future,
on additional investment capital to fund operating expenses. The Company intends
to position itself so that it will be able to raise additional funds through the
capital markets. In light of management's efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
20
Recent Accounting Pronouncements
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740):
Intra-Entity Transfer of Assets Other than Inventory, which requires the
recognition of the income tax consequences of an intra-entity transfer of an
asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective
for interim and annual periods beginning after December 15, 2018, with early
adoption permitted. .
In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current
lease accounting to require lessees to recognize (i) a lease liability, which is
a lessee's obligation to make lease payments arising from a lease, measured on a
discounted basis, and (ii) a right-of-use asset, which is an asset that
represents the lessee's right to use, or control the use of, a specified asset
for the lease term. ASU 2016-02 does not significantly change lease accounting
requirements applicable to lessors; however, certain changes were made to align,
where necessary, lessor accounting with the lessee accounting model. This
standard will be effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years.
Management has considered all recent accounting pronouncements issued since and
their potential effect on our financial statements. The Company's management
believes that these recent pronouncements will not have a material effect on the
Company's consolidated financial statements.
Other recent accounting pronouncements issued by the FASB, including its
Emerging Issues Task Force, the American Institute of Certified Public
Accountants, and the Securities and Exchange Commission did not or are not
believed by management to have a material impact on the Company's present or
future financial statements.
© Edgar Online, source Glimpses