VSBC 10-K & 10-Q changes, risk factors and insider trading

As of January 31, 2025,2026, we owed $2,411,000 to a related-party vendor, which is owned by our former officer, and $810,105$1,037,983 in advances from related parties, including advances made by a former Chief Executive Officer and Chairman of the Board. These obligations are unsecured, and are not subject to formal long-term repayment schedules, and may be payable on demand. On May 18, 2026, the Company entered into a deferred payment agreement for its accounts payable with a related party,party. bothBoth parties agreed to defer collection efforts for a period of twenty-four (24) months from May 18, 2026, and the related party will not demand immediate repayment of the outstanding balance.2026. The continuation of related-party financial support is not assured.

Operating expenses were $385,411 for the year ended January 31, 2026, compared with $679,914 for the year ended January 31, 2025, compared with $1,118,562 for the prior fiscal year.2025. For the years ended January 31, 2025,2026, and 2024,2025, the operating expenses were primarily attributed to professional fees of $180,700$125,673 and $283,070,$180,700, stock-based compensation of $109,911$0 and $164,865,$109,911, lease expenses of $99,171$0 and $255,210,$99,171, payrollsalary and related expenses of $252,041$231,250 and $138,730,$252,041, depreciation of $9,957 and $15,062,$9,957, impairmentfranchise interest and penalty related to delay payment of equipmentfranchise tax of $0$555 and $10,449$0, and general and administrative expenses of $28,134$17,976 and $251,176,$28,135, respectively.

We did not record a current income tax provision on our operating losses for the years ended January 31, 20252026, and 2024,2025, due to our net operating loss position and a full valuation allowance against deferred tax assets. However, during the yearyears ended January 31, 2026, and 2025, we recognized $95,008$29,957 and $95,008, respectively, in interest and penalties on historical income tax obligations relating to fiscal year 2022. In accordance with ASC 740-10-45,740-10-45-25, these amounts are classified as income tax expense in our statementstatements of operations.

As of January 31, 2025,2026, and 2024,2025, current assets were comprised of $272$2,084 and $13$272 in cashcash, $8,443 and $0 and $23,614 in deposits,prepaid expense respectively.

As of January 31, 2025,2026, and 2024,2025, current liabilities were comprised of $2,411,000 and $2,411,000 in accounts payable - related party, $494,751$652,027 and $339,001$494,751 in accounts payable and other payables, $313,722$344,234 and $218,714$313,722 in income tax payable,and $0franchise tax payable and $93,334 in operating lease liabilities$1,037,983 and $810,105 and $425,482 in advances from related parties, respectively.

Our working capital deficiency increased by $565,402,$405,411, or 16.32%,10.06%, to $4,029,306$4,434,717 as of January 31, 2025,2026, compared to working capital deficiency of $3,463,904$4,029,306 as of January 31, 2024.2025. The increase was primarily due to an increase in advances from related parties,party, accounts payable and other payable and increase in income tax payable, offset by a decrease in operating lease liabilities and current assets.payable. The 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 consistconsists of obligations to related parties that are unsecured, non-interest-bearing, and payable on demand, with no formal repayment terms.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.

We have not generated positive cash flows from operating activities. For the year ended January 31, 2025,2026, net cash flows used in operating activities was $14,675,$2,688, consisting of a net loss of $774,922,$415,368, reduced by depreciation expense of $9,957, non-cash lease expenses of $89,652, stock-based compensation of $109,911, advances from related party for operating expenses of $369,689,$223,378, income tax expenses payable of $95,008$29,957, franchise interest and penalty payable of $555 and reduced by a net change in working capital of $86,030.$148,833.

For the year ended January 31, 2024,2025, net cash flows used in operating activities was $34,920,$14,675, consisting of a net loss of $1,118,562,$774,922, reduced by depreciation expensesexpense of $15,062, impairment of equipment of $10,449,$9,957, non-cash lease expenses of $166,030,$89,652, stock-based compensation of $164,865,$109,911, advances from related party for operating expenses of $205,523,$369,689, accountsincome receivabletax expenses payable of $380,000$95,008 and reduced by a net change in working capital of $141,713.$86,030.

During the years ended January 31, 2025,2026, and 2024,2025, we had financing inflow of $14,934$4,500 and $5,277$14,934 from advances from related party,parties, respectively.

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, thewe Company hashave 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 of January 31, 2025,2026, we had a net loss of $774,922,$415,368, an accumulated deficit of $5,281,503,$5,696,871, a working capital deficiency of $4,029,306,$4,434,717, and negative operating cash flowsflow of $14,675,$2,688, 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 advances from related parties, 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 Companywe be unable to continue as a going concern. Management’s plans include seeking additional equity financing, negotiating extensions of related-party obligations, and reducing discretionary operating expenditures.

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,to stock-basedtax compensation,expense leasevaluation liabilities,allowances and the assessment of our ability to continue as a going concern assessment.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 stock-based compensation, lease accounting, and 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 of the financial statements, thewe Company hashave limited liquidity and substantial obligations that may be payable on demand.

We have not generated revenue during the threesix months ended AprilJuly 30,31, 2026. As of AprilJuly 30,31, 2026, we had cash of $8,167,$13,367, total assets of $11,432,$14,822, total liabilities of $4,517,844,$4,677,051, an accumulated deficit of $5,772,715, positive operating cash flows of $6,083$5,928,532 and a stockholders’ deficit of $4,506,412.$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 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.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.

RISKS RELATED TO OUR DEVELOPMENT-STAGE STATUSBUSINESS AND BUSINESS STRATEGY

We are not currently conducting commercial operationsoperations, butand weour havehistorical hadrevenues aare historynot indicative of revenuefuture generation.results.

Given our financial condition and development-stagethe status,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.

We currently have a singleone director whoand also serves as our soleone executive officer.officer, Weand dothe same person does not haveserve independentin directorsboth or standing committees.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.

ManagementAs 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 AprilJanuary 30,31, 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.

As of AprilJuly 30,31, 2026, we had federal net operating loss (“NOL”) carryforwards.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.

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.

Given our development-stage status, 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.

Companies with limited operating histories, development-stagelimited businessor models,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 development-stagesuspended status,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.

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 development-stageour suspended commercial operations. Such actions may seek monetary damages, corporate governance changes, or other equitable relief.

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 statementsstatement representrepresents 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.

As of AprilJuly 30,31, 2026, we have not reinitiated revenue-generating operations.

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the period ended AprilJuly 30,31, 2026, which are included herein.

Our operating results for the three and six months ended AprilJuly 30,31, 2026, and 2025 and the changes between those periods for the respective items are summarized as follows.

For the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025

We generated no revenue during the three months ended AprilJuly 30,31, 2026, and 2025, respectively.2025. We are currently focusing on restructuring our product strategy and developing long-term partnerships rather than pursuing short-term sales.

Operating expenses were $75,844$161,817 for the three months ended AprilJuly 30,31, 2026, compared with $69,147$99,067 for the three months ended AprilJuly 30,31, 2025. For the three months ended AprilJuly 30,31, 2026, and 2025, the operating expenses were primarily attributed to professional fees of $12,200$98,174 and $3,500,$35,200 salariesrelating andto relatedour status as a public company, payroll expenses of $57,813 and $57,813, depreciation of $2,489$1,660 and $2,489$2,490 and general and administrative expenses of $3,342$4,170 and $5,345,$3,564, respectively.

Provision for Income Taxes Expenses

We did not record a current income tax provision on our operating losses for the three months ended AprilJuly 30,31, 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 AprilJuly 30,31, 2026, and 2025, we recognized $0 and $11,394,$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.

We had a net loss of $75,844$155,817 for the three months ended AprilJuly 30,31, 2026, and $80,541$110,845 for the three months ended AprilJuly 30,31, 2025. The decreaseincrease in net loss of $4,697$44,972 was primarily due to an increase in operating expenses, includingother professionalincome, fees,and a decrease in general and administrative expenses and provision for income tax expenses.

The following table summarizes our changes in working capital deficiency as of AprilJuly 30,31, 2026, and January 31, 2026.

As of AprilJuly 30,31, 2026, and January 31, 2026, current assets were comprised of $8,167$13,367 and $2,084 in cash, $1,605$1,455 and $8,443 in prepaid expenses, respectively.

As of AprilJuly 30,31, 2026, and January 31, 2026, current liabilities were comprised of $2,411,000$0 and $2,411,000 in accounts payable - related party, $711,641$139,420 and $652,027$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 $1,052,351$1,185,582 and $1,037,983in advances from related party, respectively.

Our working capital deficiency increasedreduced by $73,355,$2,183,488, or 1.65%,49.23%, to $4,508,072$2,251,229 as of AprilJuly 30,31, 2026, compared to working capital deficiency of $4,434,717 as of January 31, 2026. The increaseimprovement in working capital was primarily 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. Our related party accounts payable is subject to the May 18, 2026, deferral agreement. 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 threesix months ended AprilJuly 30,31, 2026, and 2025, the Company recognized $0 and $11,394,$23,172, respectively, in interest and penalties associated with historical income tax liabilities and franchise tax expensesobligations relating to fiscal year 2022,2022. In accordance with ASC 740-10-45-25, these interest and penalties associated with income tax obligations are classified as income tax expense in accordancethe withCompany’s ASCstatements 740-10-45-25.of operations.

The following table summarizes our cash flows for the threesix months ended AprilJuly 30,31, 2026, and 2025:

We have funded our activities primarily through shareholderadvances advances,from whichrelated-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, research, and regulatorythe initiatives.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.

For the threesix months ended AprilJuly 30,31, 2025, net cash flows used in operating activities $787,was $1,973, consisting of a net loss of $80,541,$191,386, reduced by depreciation expense of $2,489,$4,979, advances from related party for operating expenses of $30,434,$104,415, income tax expenses payable of $11,394$22,372 and a net change in working capital of $35,437.$57,647.

We had no investing activitiesactivity during the threesix months ended AprilJuly 30,31, 2026, and 2025.

During the threesix months ended AprilJuly 30,31, 2026, and 2025, thenet Companycash receivedprovided by financing activities consisted of related party advances of $0 and $515 by financing activities,$2,500, respectively.

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 AprilJuly 30,31, 2026, we had a net loss of $75,844$231,661 and an accumulated deficit of $5,772,715,$5,928,532, and a working capital deficiency of $4,508,072,$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 positivedoes operatingnot represent cash flowsgenerated of $6,083, which is due toby 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.

As of AprilJuly 30,31, 2026, we did not have any off-balance sheet arrangements.

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.

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 are 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 stock-based compensation, lease accounting, andthe going concern assessment.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 AprilJuly 30,31, 2026, include, but are not limited to: