VITASPRING BIOMEDICAL CO. LTD. - Quarter Report: 2020 April (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10−Q

(Mark One)

 

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

  

For the quarterly period ended: April 30, 2020

 

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

 

For the transition period from ____________ to _____________

 

Commission File Number: 333-216465

 

VITASPRING BIOMEDICAL CO. LTD.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada		37-1836726
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

400 Spectrum Center Dr. #1620

Irvine, CA 92618 


 (Address of principal executive offices, Zip Code)

 

(949)202-9235

(Registrant’s telephone number, including area code) 

                                                                                                     

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ⌧ No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ⌧ No  ☐

 

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

 

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☐ (Do not check if a smaller reporting company)	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 Exchange Act).  Yes ☐ No ⌧

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of April 30, 2020 is as follows:

 

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		10,902,006

  

EXPLANATORY NOTE

On June 15, 2020, the Company filed a “Notification of Late Filing” on Form 12b-25 pursuant to Rule 12b-25 of the Exchange Act to further delay the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2020.  In reliance upon the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Granting Exemptions From Specified Provisions of the Exchange Act and Certain Rules Thereunder dated March 4, 2020 (Release No. 34-88318) as modified and superseded by a new SEC order issued on March 25, 2020 (Release No. 34-88465) (collectively, the “Order”) we have further delayed the filing of our Quarterly Report on Form 10-Q for the quarter ended April 30, 2020 (the “Report”) due to circumstances related to the coronavirus disease 2019 (“COVID-19”).]

 

 

 

VITASPRING BIOMEDICAL CO. LTD.

 

Quarterly Report on Form 10-Q

For the Quarter Ended April 30, 2020

 

  

TABLE OF CONTENTS

 

 

PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements - unaudited			3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			17
Item 4.	Controls and Procedures			17
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings			18
Item 1A.	Risk Factors			18
Item 2.	Unregistered Sale 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			18
Signatures				18

 

 

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PART I

FINANCIAL INFORMATION

 

ITEM 1.       FINANCIAL STATEMENTS.

 

 

 

 

 

 

 

VITASPRING BIOMEDICAL CO. LTD. Consolidated Condensed Balance Sheets APRIL 30, 2020 AND JANUARY 31, 2020

 

ASSETS
		(Unaudited)
		April 30, 2020		January 31, 2020
CURRENT ASSETS
Cash and cash equivalents		$                     893		$                          -
Total current assets		893		-
Total assets		$                     893		$                          -
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Credit card liability		$                  8,660		$                          -
Advance from related party		9,978		-
Total current liabilities		18,638		-
Total liabilities		18,638		-
COMMITMENTS AND CONTINGENCIES		-		-
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value, 225,000,000 and
75,000,000 shares, respectively authorized
10,902,006 and 10,902,006 shares, respectively issued
and outstanding		3,634		3,634
Additional paid-in capital		18,262		18,262
Accumulated deficit		(39,641)		(21,896)
Total stockholders' deficit		(17,745)		-
Total liabilities and stockholders' deficit		$                     893		$                          -

 

 

 

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)  

3           VITASPRING BIOMEDICAL CO. LTD. Consolidated Condensed Statements of Operations THREE MONTH ENDED APRIL 30, 2020 AND 2019 (UNAUDITED)

 

		Three months ended
		April 30, 2020		April 30, 2019
Revenues		$                       -		$              7,215
Cost of goods sold		-		904
Gross profit from operations		-		6,311
Operating expenses:
Selling, general and administrative expenses (Schedule I)		17,745		14,821
Loss from operations		(17,745)		(8,510)
Net loss from operations before
provision for income tax benefit (expense)		(17,745)		(8,510)
Provision for income tax benefit (expense)		-		-
Net loss		$          (17,745)		$            (8,510)
Net loss per share:  Basic and diluted		$                       -		$                       -
Weighted average number of
shares outstanding:  Basic and
diluted		10,902,006		10,902,006

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)  

 

 

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VITASPRING BIOMEDICAL CO. LTD. Consolidated Condensed Statements of Cash Flows THREE MONTHS ENDED APRIL 30, 2020 AND 2019 (UNAUDITED)

 

		Three months ended
		April 30, 2020		April 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$       (17,745)		$         (8,510)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation expense		-		112
Changes in assets and liabilities:
Prepaid expenses		-		1,410
Inventory		-		904
#REF!		-		7,600
Credit card liability		8,660		-
Advance from related party		9,978		-
Net cash provided by operating activities		893		1,516
Net increase in cash and cash equivalents		893		1,516
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR		-		105
CASH AND CASH EQUIVALENTS, END OF THE YEAR		$              893		$           1,621
Supplemental cash flow disclosures:
Income taxes paid		$                   -		$                   -
Interest expense paid		$                   -		$                   -

 

See Accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

5

 

See Accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

 

6

VITASPRING BIOMEDICAL CO. LTD.

Three Months ended April 30, 2020 and 2019

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

VitaSpring Biomedical Co., Ltd (formerly Shemn Corp.) (“the Company”) was incorporated in the State of Nevada on September 6, 2016. The Company plans to distribute healthcare related products.

Note 2 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of $39,641 and a positive cash flow from operations amounting to $893 for the three months ended April 30, 2020. The Company had $0 in revenues for the three months ended April 30, 2020. The Company currently has losses and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is 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.

Note 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

Basis of presentation

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

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $893 of cash equivalents as of April 30, 2020.

Prepaid Expenses

Prepaid Expenses are recorded at fair market value. The Company had $0 in prepaid expenses as of April 30, 2020.

Inventories

Inventories are stated at the lower of cost or market. Cost is principally determined using the first-in, first out (FIFO) method. The Company had $0 in raw materials inventory as of April 30, 2020.

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. The Company estimates that the useful life of necessary equipment is 5 years.

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Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

Accounts Payable

Accounts Payable discloses a liability to a creditor, carried on open account, usually for purchases of goods and services. The Company had $0 in accounts payable as of April 30, 2020.

Credit Card Liability

Credit card liability represents amounts owed to credit card issuers for money borrowed to pay merchants for goods and services based on the cardholder’s promise to pay the card issuer borrowed amounts plus other agreed upon charges. The Company had $8,660 in credit card liability as of April 30, 2020.

Fair Value of Financial Instruments

AS topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1:	defined as observable inputs such as quoted prices in active markets;
Level 2:	defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;
Level 3:	defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities;

c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts. For the three months ended April 30, 2020, the Company generated $0 in revenue.

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of April 30, 2020, there were no potentially dilutive debt or equity instruments issued or outstanding.

8

 

 

Comprehensive Income

Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. As of April 30, 2020, there were no differences between our comprehensive loss and net loss.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Foreign Currency Translation

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

Recent Accounting Pronouncements

Management has reviewed all the recently issued, but not yet effective, accounting pronouncements and does not believe any of these pronouncements will have a material impact on the Company.

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance changes how companies account for certain aspects of share-based payments to employees. Among other things, under the new guidance, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in-capital (“APIC”), but will instead record such items as income tax expense or benefit in the income statement, and APIC pools will be eliminated. Companies will apply this guidance prospectively. Another component of the new guidance allows companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards, whereby forfeitures can be estimated, as required today, or recognized when they occur. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach. All of the guidance will be effective for the Company in the fiscal year beginning February 1, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company in the fiscal year beginning February 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance requires an entity to measure inventory at the lower of cost or net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation, rather than the lower of cost or market in the previous guidance. This amendment applies to inventory that is measured using first-in, first-out (FIFO). This amendment is effective for public entities for fiscal years beginning after December 15, 2016, including interim periods within those years. A reporting entity should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures.

 

9

Note 4 – ADVANCE FROM RELATED PARTY

During February 2020, one of the Company’s major shareholders, related party, advanced to the Company $9,978. The advance is unsecured, non-interest bearing and due on demand. The shareholder advance amounted to $9,978 at April 30, 2020.

Note 5 – COMMON STOCK

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

On January 26, 2017 the Company issued 3,000,000 shares of common stock to a director for cash proceeds of

$3,000 at $0.001 per share par value. Par value was used because company had just begun and had no value beyond par value at this stage.

In March 2018 the Company issued 17,667 shares of common stock for cash proceeds of $515 at $0.03 per share par value.

In April 2018 the Company issued 20,500 shares of common stock for cash proceeds of $587 at $0.03 per share par value.

In May 2018 the Company issued 60,000 shares of common stock for cash proceeds of $1,719 at $0.03 per share par value.

In August 2018 the Company issued 239,166 shares of common stock for cash proceeds of $7,175 at $0.03 per share par value.

In September 2018 the Company issued 112,000 shares of common stock for cash proceeds of $3,360 at $0.03 per share par value.

In October 2018 the Company issued 184,669 shares of common stock for cash proceeds of $5,540 at $0.03 per share par value.

On November 29, 2018, the Company amended its articles of incorporation, to affect a 3 to 1 stock split for the Company. At a special meeting on November 1, 2018, the majority of shareholders approved the amendment to the articles of incorporation. On December 12, 2018, the Company filed an 8-K Form regarding the split procedure. The Stock Split increased the number of shares of common stock from 2,030,000 to 6,090,000 shares. The number of restricted shares of common stock increased from 3,000,000 to 9,000,000 shares. The number of authorized shares of common stock under the Certificate of Incorporation was adjusted to 225,000,000 shares.

There were 10,902,006 shares of common stock issued and outstanding as of January 31, 2019.

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

There were 10,902,006 shares of common stock issued and outstanding as of April 30, 2020.

Note 6 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For the three months ended April 30, 2020, the Company incurred $17,745 in selling, general and administrative expenses. See financial statements – supplementary information schedule I for details.

 

 

 

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Note 7 – COMMITMENTS AND CONTINGENCIES

None

Note 8 – INCOME TAXES

The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits. As of April 30, 2020, the Company had net operating loss carry forwards of approximately $39,642 that may be available to reduce future years’ taxable income in varying amounts through 2041. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred  tax asset relating to these tax loss carry-forwards.

The valuation allowance at April 30, 2020 was approximately $8,325. The net change in valuation allowance during the three months ended April 30, 2020 was $3,727. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of April 30, 2020. All tax years since inception remains open for examination by taxing authorities.

The provision for Federal income tax consists of the following:

 

 

April 30, 2020			January 31, 2020
Non-current deferred tax assets	$		- $	- $
Net-operating loss carry forwards		8,325		4,598
Valuation allowance	(8,325)		(4,598)
Net-deferred tax assets	$	-	$	-

The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the three months ended April 30, 2020 are as follows:

 

 

April 30, 2020			January 31, 2020
Computed “expected tax expense (benefit)	$	(3,727)	$	(1,453)
Change in valuation allowance	3,727		1,453
Actual tax expense (benefit)	$	-	$	-

Note 9 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to April 30, 2020 through the date these financial statements were issued and has determined that there were no material subsequent events to disclose in these financial statements.

 

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VitaSpring Biomedical Co., Ltd

NOTES TO THE FINANCIAL

April 30, 2020 (UNAUDITED)

 

 

 

 

SUPPLEMENTARY INFORMATION

 

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VITASPRING BIOMEDICAL CO., LTD
SUPPLEMENTARY INFORMATION
SCHEDULE I - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
THREE MONTHS ENDED APRIL 30, 2020 AND 2019
(UNAUDITED)
		Three months ended
		April 30, 2020		April 30, 2019
Bank charges		$                    85		$                 125
Depreciation expense		-		112
Office expense		510		18
Professional fees		17,150		13,156
Rent		-		1,410
Telephone		511		20
Total selling, general and administrative expenses		$            17,745		$            14,821

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

 

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

 

Caution Regarding Forward-Looking Information

 

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

 

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

 

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

Overview

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.

 

 

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Results of Operations for the Three Months Ended April 30, 2020 Compared to the Three Months Ended April 30, 2019

Revenue and cost of goods sold

For the three months ended April 30, 2020 and April 30, 2020 the Company generated total revenue of $0 and $7,215 from selling products to the customer. The cost of goods sold for the year ended April 30, 2020 and April 30, 2019 was $0 and $904, which represent the cost of raw materials.

Operating expenses

Total operating expenses for the year ended April 30, 2020 and April 30, 2019 were $17,745 and $14,821.  The increase was primarily related to increased general and administrative expenses.  The operating expenses for the year ended April 30, 2019 including consultants for marketing services and professional fees relating to our SEC filings.

Net Loss

The net loss for the year ended April 30, 2020 and April 30, 2019 was $17,745 and $8,510 accordingly.

 

Liquidity and Capital Resources and Cash Requirements

At year ended April 30, 2020, the Company had cash of $893. The Company had a working capital deficit of $17,745.

During the year ended April 30, 2020, the Company used $893 of cash in operating activities.  

During the year ended April 30, 2020 the Company used no cash in investing activities.

During the year ended April 30, 2020, the Company generated $0 of 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.

 

 

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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 consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates, the realization of assets and satisfaction of liabilities in the normal course of business. We incurred losses from operations of $17,745 and $8,510 for the three months ended April 30, 2019 and 2020, respectively, and had an accumulated deficit of $39,641 at April 30, 2020. In addition, we used cash from operating activities of $893 for the year ended April 30, 2020.  These factors raise substantial doubt about our ability to continue as a going concern.

The Company will require additional funding to execute its future strategic business plan. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support its cost structure. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

While the Company is attempting to establish an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, the Company’s cash position may not be adequate to support the Company’s daily operations. Management intends to raise additional funds by seeking equity and/or debt financing; however there can be no assurances that it will be successful in those efforts. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to obtain financing, further implement its business plan, and generate revenues.

There are significant risks and uncertainties which could negatively affect the Company’s operations. These are principally related to the existence of events of default under the Company’s outstanding debt obligations, which could trigger penalties. Furthermore, if our current indebtedness is not restructured, paid or converted into equity, which is at the debt holder’s discretion, our current operations do not generate sufficient cash to pay interest and principal on these obligations when they become due. Accordingly, there can be no assurance that we will be able to pay these or other obligations which we may incur in the future. In the event we are unable to restructure, pay or convert into equity the balance of our outstanding indebtedness, the holders may obtain judgments against us and seek to enforce such judgments against our assets, in which event we will be required to cease our business activities and the equity of our stockholders will be effectively wiped out.

Our only sources of additional funds to meet continuing operating expenses, fund additional research and development and fund additional working capital are through the sale of securities, and/or debt instruments. We are actively seeking additional debt or equity financing, but no assurances can be given that such financing will be obtained or what the terms thereof will be. We may need to discontinue a portion or all of our operations if we are unsuccessful in generating positive cash flow or financing for our operations through the issuance of securities.

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.

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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.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 

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

 

Item 4 - Controls and Procedures

 

Disclosure Controls and Procedures

 

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

 

Management's Report on Internal Control over Financial Reporting

 

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

Based on this evaluation, the Company's management concluded its internal control over financial reporting was effective as of April 30, 2020. 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended April 30, 2020, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

 

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PART II

OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

None

 

Item 1A – Risk Factors

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

 

None

 

Item 3 - Defaults upon Senior Securities

 

None

 

Item 4 - Mine Safety Disclosures

 

N/A

 

Item 5 - Other Information

 

None

 

ITEM 6.	EXHIBITS.

 

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

 

Exhibit No.	Description
31.1*	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2018 formatted in Extensible Business Reporting Language (XBRL).

 

* Filed herewith

SIGNATURES

 

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

 

Date: June 16, 2020	VITASPRING BIOMEDICAL CO. LTD.
	By:	/s/ Chu Pao-Chi
		Chu Pao-Chi Chief Executive Officer
		(Principal Executive Officer)

 

 

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