Quarterly Report for Quarter Ending July 31, 2025 (Form 10-Q)

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 statements represent 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 development-stage biomedical company focused on cell-based technologies for regenerative and preventative health applications. Our business model historically involved sourcing stem cells and exosome products from a related-party vendor and reselling those products to customers. We are currently evaluating future commercialization opportunities involving regenerative medicine, cell-based technologies, and related healthcare applications.

During the three and six months ended July 31, 2025, and 2024, we did not generate any revenue as we restructured our commercial strategy, evaluated supplier and regulatory considerations, and assessed future business direction.

Accordingly, our activities during the current fiscal year have primarily consisted of:

	·	Administrative and corporate compliance activities,
	·	Evaluation of future commercialization strategy,
	·	Maintenance of regulatory positioning,
	·	Management of related party obligations, and
	·	Seeking additional capital to support future operations.

As of July 31, 2025, 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, 2025, which are included herein.

Our operating results for the three and six months ended July 31, 2025, and 2024 and the changes between those periods for the respective items are summarized as follows.

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For the three months ended July 31, 2025, compared to the three months ended July 31, 2024

		Three Months Ended
		July 31
		2025				2024				Changes
Revenues		$	-			$	-			$	-
Operating expenses			99,067				218,662				(119,595	)
Loss from operations			(99,067	)			(218,662	)			119,595
Provision for income tax expense			(11,778	)			-				(11,778	)
Net loss		$	(110,845	)		$	(218,662	)		$	107,817

Revenue

During the three months ended July 31, 2025, and 2024, we did not generate any revenue. During the year 2023, we suspended commercial sales activity while evaluating our operating model and funding alternatives. 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 $99,067 for the three months ended July 31, 2025, compared with $218,662 for the three months ended July 31, 2024. For the three months ended July 31, 2025, and 2024, the operating expenses were primarily attributed to professional fees of $35,200 and $58,324, stock-based compensation of $0 and $41,216, lease expenses of $0 and $55,068, salaries and related expenses of $57,812 and $51,838, depreciation of $2,490 and $2,490 and general and administrative expenses of $3,565 and $9,726, respectively.

Provision for Income Taxes Expenses

We did not record a current income tax provision for the three months ended July 31, 2025, or 2024, based on our net operating loss position and a full valuation allowance against deferred tax assets.

However, during the three months ended July 31, 2025, we recognized $11,778 of interest and penalties accrued on historical income tax obligations attributable to fiscal year 2022. 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, this amount is presented within the income tax expense line on the statement of operations and does not represent a current provision on operating income. No such interest or penalty charges were incurred during the three months ended July 31, 2024.

Net Loss

We had a net loss of $110,845 for the three months ended July 31, 2025, and $218,662 for the three months ended July 31, 2024. The decrease in net loss of $107,817 was primarily due to lower operating expenses, including reductions in professional fees, lease expenses, stock-based compensation, and general and administrative costs, offset by an increase in salaries and related expenses and provision for income tax expenses.

For the six months ended July 31, 2025, compared to the six months ended July 31, 2024

		Six Months Ended
		July 31
		2025				2024				Changes
Revenues		$	-			$	-			$	-
Operating expenses			168,214				435,493				(267,279	)
Loss from operations			(168,214	)			(435,493	)			267,279
Provision for income taxes			(23,172	)			-				(23,172	)
Net loss		$	(191,386	)		$	(435,493	)		$	244,107

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Revenue

During the six months ended July 31, 2025, and 2024, we did not generate any revenue. During the year 2023, we suspended commercial sales activity while evaluating our operating model and funding alternatives. 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 $168,214 for the six months ended July 31, 2025, compared with $435,493 for the six months ended July 31, 2024. For the six months ended July 31, 2025, and 2024, the operating expenses were primarily attributed to professional fees of $38,700 and $90,350, stock-based compensation of $0 and $82,433, lease expenses of $0 and $105,171, salaries and related expenses of $115,625 and $136,416, depreciation of $4,979 and $4,979 and general and administrative expenses of $8,910 and $16,144, respectively.

Provision for Income Taxes Expenses

We did not record the current income tax provision for the six months ended July 31, 2025, or 2024 due to our net operating loss position and full valuation allowance against deferred tax assets.

However, during the six months ended July 31, 2025, we recognized $23,172 interest and penalties accrued on historical income tax attributable to fiscal year 2022, of which $11,778 was recognized during the three months ended July 31, 2025. 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. No such interest, penalty, or minimum tax charges were incurred during the six months ended July 31, 2024.

Net Loss

We had a net loss of $191,386 for the six months ended July 31, 2025, and $435,493 for the six months ended July 31, 2024. The decrease in net loss of $244,107 was primarily due to lower operating expenses, including the elimination of lease expenses, the completion of stock-based compensation recognition, salaries and related expenses and general and administrative costs, offset by increases in provision for income tax expenses.

Balance Sheet Data

Liquidity and Capital Resources

The following table summarizes our changes in working capital deficiency as of July 31, 2025, and January 31, 2025.

		July 31				January 31,
		2025				2025				Change
Current assets		$	7,893			$	272			$	7,621
Current liabilities		$	4,223,606			$	4,029,578			$	194,028
Working capital (deficiency)		$	(4,215,713	)		$	(4,029,306	)		$	(186,407	)

As of July 31, 2025, and January 31, 2025, current assets were comprised of $799 and $272 in cash, $6,925 and $0 in prepaid expenses, $169 and $0 in other receivable, respectively.

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As of July 31, 2025, and January 31, 2025, current liabilities were comprised of $2,411,000 and $2,411,000 in accounts payable - related party, $559,492 and $494,751 in accounts payable and other payables, $336,094 and $313,722 in income tax and franchise tax expenses payable and $917,020 and $810,105 in advances from related party, respectively.

Our working capital deficiency increased by $186,407, or 4.63%, to $4,215,713 as of July 31, 2025, compared to working capital deficiency of $4,029,306 as of January 31, 2025. The increase was primarily attributable to increases in advances from a related party, accounts payable and other payables, and accrued historical tax obligations. Advances paid directly by related parties on our behalf 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 our liabilities consists of obligations to related parties that are unsecured, non-interest-bearing, and payable on demand, with no formal repayment terms. Our related party accounts payable is subject to the May 18, 2026, deferral agreement. Given our current financial condition, there can be no assurance that we will be able to continue operations absent additional capital. We 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 tax liabilities, and no current income tax provision was recognized due to our net operating loss position and full valuation allowance. During the six months ended July 31, 2025, we recognized $23,172 interest and penalties on historical income tax obligations relating to fiscal year 2022, which are classified as income tax expense in accordance with our policy under ASC 740-10-45-25.

Cash Flow Data

The following table summarizes our cash flows for the six months ended July 31, 2025, and 2024:

		Six Months Ended
		July 31
		2025				2024				Change
Cash used in operating activities		$	(1,973	)		$	(6,444	)		$	4,471
Cash provided by financing activity		$	2,500			$	11,956			$	(9,456	)
Net change in cash		$	527			$	5,512			$	(4,985	)

We have funded our activities primarily through shareholder advances, which were discretionary and not subject to a written agreement. 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, research, and regulatory initiatives. 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 had $799 in cash as of July 31, 2025, and our existing liquidity and cash resources are not 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.

Cash Flows from Operating Activities

For the six months ended July 31, 2025, net cash flows used in operating activities were $1,973, consisting of a net loss of $191,386, adjusted for depreciation expense of $4,979, advances from related party for operating expenses of $104,415, accrued income-tax related interest and penalties of $22,372, and a net change in working capital of $57,647.

For the six months ended July 31, 2024, net cash flows used in operating activities was $6,444, consisting of a net loss of $435,493, adjusted for depreciation expense of $4,979, advances from related party for operating expenses of $335,998, non-cash lease expenses of $89,652, stock-based compensation of $82,433 and increased by a net change in working capital of $84,013.

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Cash Flows from Investing Activities

We had no investing activities during the six months ended July 31, 2025, and 2024.

Cash Flows from Financing Activities

During the six months ended July 31, 2025, and 2024, net cash provided by financing activities consisted of related party advances of $2,500 and $11,956, 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, the Company has 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, 2025, we had an accumulated deficit of $5,472,889, a working capital deficiency of $4,215,713, and negative operating cash flow of $1,973, which is due to our limited 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, 2025, we did not have any off-balance sheet arrangements.

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.

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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, income tax valuation allowances and the assessment of our 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. Management has determined that our most critical accounting estimates are those relating to income tax valuation allowances and the going concern assessment.

Significant estimates and assumptions reflected in the financial statements for the quarter ended July 31, 2025, 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.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment during the next twelve months.