AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”). INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

PRELIMINARY OFFERING CIRCULAR JULY ___, 2025

BIO ESSENCE CORPORATION

2955 Main Street

Ste. 100

Irvine, CA 92614

888-816-1494

OFFERING SUMMARY

Up to 100,000,000 shares of

Common Stock

SEE “SECURITIES BEING OFFERED” AT PAGE 47

The Company has not engaged any underwriter, to act as the broker-dealer of record in connection with this Offering. See “Plan of Distribution and Selling Securityholders” for details. To the extent that the Company’s officers and directors make any communications in connection with the Offering they intend to conduct such efforts in accordance with an exemption from registration contained in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, therefore, none of them is required to register as a broker-dealer.

The company expects that, not including state filing fees, the amount of expenses of the offering that we will pay will be approximately $890,000 based on the maximum number of shares sold in this offering.

This offering (the “Offering”) will terminate at the earlier of (1) the date at which the Maximum Offering amount has been sold, (2) the date which is one year from this offering being qualified by the United States Securities and Exchange Commission, or (3) the date at which the offering is earlier terminated by the company at its sole discretion. The Offering is being conducted on a best-efforts basis and there is no minimum number of shares that needs to be sold in order for funds to be released to the company and for this Offering to close, which may mean that the company does not receive sufficient funds to cover the cost of this Offering. The company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be made available to the company. After the initial closing of this offering, we expect to hold closings on at least a monthly basis.

The holders of Bio Essence Corporation preferred stock (the “Preferred Stock”) are entitled to an aggregate vote of the following:

Series A – Cumulative Control Voting of 75%

Holders of the Preferred Stock will continue to hold a majority of the voting power of all of the company’s equity stock at the conclusion of this Offering and therefore control the board.

The Company has granted Piggyback Registration Rights for current holders of common stock and the underlying conversion rights of the currently outstanding Convertible Notes.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

This offering is inherently risky. See “Risk Factors” on page 4. THERE IS NO ASSURANCE THAT THE NECESSARY FUNDS WILL BE RAISED OR THAT THE ISSUER WILL BE ABLE TO BE SUCCESSFUL IN THEIR BUSINESS OPERATIONS AS DESCRIBED HEREIN.

Sales of these securities will commence approximately 10 days after the approval of this Offering.

The company is following the “Offering Circular” format of disclosure under Regulation A.

TABLE OF CONTENTS

In this Offering Circular, the term “Bio Essence Corporation”, “Bio Essence”, “BIOE”, “we,” “us, “our” or “the company” refers to BIO ESSENCE CORPORATION, a California corporation.

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

RISK FACTORS

The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

Risks relating to our business

The herbal, vitamin, and nutraceuticals industry is an intensely competitive market.

While there is evidence of strong consumer appeal, we cannot assure you that consumers will continue to embrace using herbs, vitamins, or nutraceuticals. Many factors must be considered when investing in this industry due to regulations set by both U.S. and international committees that oversee the industry. We face significant competition from others in this industry. The herbal, vitamins and nutraceuticals industry is highly fragmented with smaller companies offering products to large multi-national corporations, which have large, integrated manufacturing lines. These large corporations can produce a more robust supply of herbs, vitamins, and nutraceuticals products. There are other companies that may not compete directly with our operations but supply us or provide source product for our end product. These companies may in turn help our competitors by providing the same source product for their products.

There are thousands of herbal, vitamin and nutraceuticals companies both privately held and publicly traded today. Many have greater financial resources than our company and to the extent we compete directly with any given company with said greater financial resources, we may be at a disadvantage. Other risks within our industry are outlined within Registration Statement and are related to regulations set forth by industry committees and to the extent the Food and Drug Administration (“FDA”) is involved, they could have an effect on what source products we use and cannot use. No assurances can be made that any ruling from the FDA or other organization will not ban the use of any source product which may hurt our sales.

The company has minimal operating capital, no significant assets and no revenue from operations.

The company currently has minimal operating capital and for the foreseeable future will be dependent upon its ability to finance its planned operations from the sale of securities or other financing alternatives. There can be no assurance that it will be able to successfully raise operating capital in this or other offerings of securities, or to raise enough funds to fully construct operational entertainment centers. The failure to successfully raise operating capital could result in its inability to execute its business plan and potentially lead to bankruptcy, which would have a material adverse effect on the company and its investors.

We may not be able to compete successfully against current and future competitors.

While many companies compete directly against us for market share, others complement us by providing resource product to produce our end product. Many of our competitors have financial resources that extend far beyond ours, which may adversely affect our ability to compete. We cannot make any assurances to you that we will be successful in our business endeavors if we (a) are unable to compete with a competitor, (b) lose our ability to source product from a competitor or partner, (c) are unable to raise sufficient funds to compete against others, (d) lose our employees to a competitor, or (e) lose advantages over our product offerings against a superior competitor due to price, branding, marketing, and/or distribution power.

We hold no patents on our products, and our business employs proprietary technology (know-how) and information may be difficult to protect and/or infringe on the intellectual property rights of third parties.

The Company currently relies on trade secrets, proprietary know-how, and technology methods that we seek to protect, in part, by confidentiality agreements. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. We currently do not hold patents from the United States Patent and Trademark Office (“USPTO”) or hold any FDA approvals. Management believes that part of applying for a patent allows competitors to copy our products and would force the company to file lawsuit against the offending parties upon infringement. As a small company, management believes that it is more effective to mitigate this risk by relying on our trade secrets than to file a patent and allow others to review our processes. Therefore, our success depends, in part, on our ability to keep competitors from reverse engineering our products, methods, know-how and maintain trade secrecy and operate without infringing on the proprietary rights of third parties. Additionally, as a herbal, nutraceuticals company, we are not bound by any law or rules to obtain FDA approval for any of our products at this time.

We cannot assure you that the patents of others will not have an adverse effect on our ability to conduct our business, that any of our trade secrets and applications will be protected, that we will develop additional proprietary technology (know-how) or methods that is defensible against theft or will provide us with competitive advantages or will not be challenged by third parties.

Regulations and oversight by the FDA or other governmental entities may adversely affect our business.

We may be subject to regulations or oversight implemented by the FDA, which may materially affect our ability to conduct business, including, but not limited to, limit the number or types of products we are able to produce. Additionally, regulations may change over time. Added oversight from the FDA or other governmental entities may increase the cost associated with operating as an herb, vitamin, and nutraceuticals company, which would adversely affect our shareholders.

Negative media coverage on our industry may adversely affect our business and the value of our common stock.

While we strive to produce high quality products, there have been reports of fraud, misrepresentation, and counterfeiting relating to herbs and vitamins in our industry. As a result, some regulatory agencies have initiated investigations into these allegations, including investigations into some of our competitors. While we are not the target of any investigation, business may diminish or be adversely affected by the negative publicity affecting our industry as a whole, which would in turn negatively affect the value of our common stock. Future media coverage or administrative investigations may further damage the reputation of our industry, which may harm our reputation and the value of our common stock.

We were acquired in a stock purchase transaction via a change of control by the current majority shareholder in the Company.

Our majority shareholder, Jian Yang acquired the Company in 2016. We are currently making efforts to develop additional products to grow our business after years of stagnation. Our management believes there are strong merits to our business and seek to meet those challenges. However, we have not been profitable and there can be no assurance that we will operate profitably or will have adequate working capital to meet our obligations as they become due. Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly evolving markets. Such risks include adequately adapting to a competitive market, managing our operations, and expanding our business in a sustainable way.

We cannot be certain that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected, and we may not have the resources to continue or expand our business operations.

We have experienced losses, and we may not achieve or sustain profitability in the future

We have suffered net losses of $145,888 and $81,740 for the six months ended June 30, 2025 and 2024, respectively. For the three months ended June 30, 2025 and 2024, the Company has a net income of $59,864 and a net loss of $215,678, respectively. For the fiscal years ended December 31, 2024 and 2023, the Company has suffered a net loss of $1,308,796 and $971,879, respectively. These losses are primarily due to expenses incurred by the Company related to its operations and are outlined in detail in our audited financial statements    . We have no ability to predict if we will become profitable. We anticipate that our cost of revenues and operating expenses will increase substantially in the foreseeable future as we continue to grow our business and develop our new products. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenues sufficiently to offset these higher expenses. Many of our efforts to generate revenues from our business are new, and any failure to increase our revenues or generate revenues from our products could prevent us from attaining or increasing profitability. We do not expect to be profitable in the foreseeable future and we cannot be certain that we will be able to attain profitability on a quarterly or annual basis, or if we do, that we will sustain profitability.

The company may raise more capital and future fundraising rounds could result in dilution.

Bio Essence may need to raise additional funds to finance its operations or fund its business plan. Even if the company manages to raise subsequent financing or borrowing rounds, the terms of those borrowing rounds might be more favourable to new investors or creditors than to existing investors such as you. New equity investors or lenders could have greater rights to our financial resources (such as liens over our assets) compared to existing shareholders. Additional financings could also dilute your ownership stake, potentially drastically. See “Dilution” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Plan of Operation” for more information.

The most likely source of future financing presently available to us is through the sale of shares of our common stock. Any sale of common stock will result in dilution of equity ownership to existing shareholders. This means that, if we sell shares of our common stock or issue stock as consideration for a purchase, more shares will be outstanding and each existing shareholder will own a smaller percentage of the shares then outstanding. To raise additional capital, we may have to issue additional shares, which may substantially dilute the interests of existing shareholders. Alternatively, we may have to borrow large sums, and assume debt obligations that require us to make substantial interest and capital payments.

As of the date of this filing, we have earned revenue. However, we cannot guarantee we will be successful in continuing to generate revenue or be successful in raising funds through the sale of shares to pay for the Company’s business plan and expenditures. Failure to generate revenue or to raise funds could cause us to go out of business, which would result in the complete loss of your investment.

There is substantial doubt as to the Company’s ability to continue as a going concern.

Our auditor’s report on our 2024 and 2023 financial statements expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business. The Company has suffered recurring losses and generated negative cash flows from operations. These raise substantial doubt about our ability to continue as a going concern. The accompanying audited financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. The Company incurred net loss of $145,888 and $81,740 for the six months ended June 30, 2025 and 2024, respectively. The Company also had an accumulated deficit of $10,595,158 as of June 30, 2025.The Company incurred a net income of $59,864 and a net loss of $215,678 for the three months ended June 30, 2025 and 2024, respectively. The Company incurred net loss of $1,308,796 and $971,879 for the years ended December 31, 2024 and 2023, respectively. The Company also had an accumulated deficit of $10,449,270 as of December 31, 2024. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company disposed non-profitable subsidiaries BEH and BEP, and is actively seeking other business opportunities including expanding OEM business and looking for potential acquisition targets. Management also intends to raise funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Because substantial doubt exists as to whether the Company can continue as a going concern, it may be more difficult for the company to attract investors. Our future is dependent upon our ability to obtain financing to continue operations and attain profitable operations. We will seek additional funds through private placements of our common stock. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue in existence

We depend heavily on our management, without whose services, our business operations could cease.

At this time our management is wholly responsible for the development and execution of our business plan. Our management is under no contractual obligation to remain employed by us, although they have no present intent to leave. If our management should choose to leave us for any reason before we have hired additional personnel our operations may fail. Even if we are able to find additional personnel, it is uncertain whether we could find qualified management who could develop our business along the lines described herein or would be willing to work for compensation we could afford. Without such management, we could be forced to cease operations and investors in our common stock or other securities could lose their entire investment.

Ms. Yan is Involved in other businesses that may occupy her time.

The Company’s sole officer, Ms. Yan, is involved in operating other businesses that may occupy some of her time. Specifically, Ms. Yin owns two real estate brokerages in Nevada and California and is a licensed real estate broker in both states. She is also a Chairwoman and CEO of MarWynn Holdings Inc. (Nasdaq MWYN) As a result, Ms. Yin’s professional obligations to those companies could interfere with her work and duties associated with managing and operating the Company. This could have a detrimental effect on the Company’s ability to grow, as well as its operations. Ms. Yin has represented to the Company that she believes she can associate with these other businesses without compromising her duties to the Company.

Bio Essence might experience the risk of managing growth.

We are a small company with a limited number of employees. We expect to experience a period of significant expansion in headcount, facilities, infrastructure and overhead and anticipate that further expansion will be required to address potential growth and market opportunities. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate managers. Our future financial performance and its ability to compete effectively will depend, in part, on its ability to manage any future growth effectively.

We expect to expand our operations by increasing its sales and marketing efforts, research into other development opportunities such as functional beverages and TCM products and services. The anticipated growth could place a significant strain on our management, and operational and financial resources. Effective management of the anticipated growth shall require expanding Bio Essence management and financial controls, hiring additional appropriate personnel as required, and developing additional expertise by existing management personnel. However, there can be no assurances that these or other measures implemented by Bio Essence shall effectively increase its capabilities to manage such anticipated growth or to do so in a timely and cost-effective manner. The failure to effectively manage growth could have a material adverse effect on Bio Essence operations.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.”

We are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements are time-consuming and expensive and could have a negative effect on our business, results of operations and financial condition.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934 (“Exchange Act”) and requirements of the Sarbanes-Oxley Act of 2002 (“SOX Act”). The cost of complying with these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. SOX Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we must commit significant resources, may be required to hire additional staff and need to continue to provide effective management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join the Company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

Regulations, including those contained in and issued under the SOX Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), increase the cost of doing business and may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to obtain or retain listing of our common stock.

The current regulatory climate for public companies, even small and emerging growth companies such as ours, may make it difficult or prohibitively expensive to attract and retain qualified officers, directors and members of board committees required to provide for our effective management in compliance with the rules and regulations which govern publicly-held companies, including, but not limited to, certifications from executive officers and requirements for financial experts on boards of directors. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles.  For example, the enactment of the SOX Act has resulted in the issuance of a series of new rules and regulations and the strengthening of existing rules and regulations by the SEC.  Further, recent and proposed regulations under Dodd-Frank heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters.  We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, the management of our business could be adversely affected.

We will be obligated to develop and maintain proper and effective internal controls over financial reporting.

We may not complete our analysis of our internal controls over financial reporting in a timely manner, or these internal controls may have one or more material weaknesses, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. Section 404 of SOX Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. We will be required to perform the annual review and evaluation of our internal controls no later than for the fiscal year ending January 31st on any given year. However, we initially expect to qualify as a smaller reporting company and as an emerging growth company, and thus, we would be exempt from the auditors’ attestation requirement until such time as we no longer qualify as a smaller reporting company and an emerging growth company. We would no longer qualify as a smaller reporting company if the market value of our public float exceeded $75 million as of the last day of our second fiscal quarter in any fiscal year following this offering. We would no longer qualify as an emerging growth company at such time as described in the risk factor immediately below.

We are in the early stages of the costly and challenging process of compiling the system and processing documentation necessary to evaluate our internal controls needed to comply with Section 404. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline.

There is no minimum offering.

There is no minimum number of shares of common stock that must be sold by the Company prior to the closing of the IPO. As a result, there can be no assurance that Bio Essence will raise sufficient funds through the IPO to carry out its Business Plan as currently proposed, or that the net proceeds from the initial subscriptions for common stock will be in an amount sufficient to enable Bio Essence to continue operations in any meaningful manner .

New investors will experience immediate dilution upon investing in the Company

As of June 30, 2025, we had a net tangible book value of approximately $(3,115,193)or $(0.08)deficit per share of common stock, based upon 38,009,000 shares of common stock outstanding on such date. Net tangible book value per share represents the amount of our total assets reduced by the amount of our total intangible assets and our total liabilities and divided by the total number of shares of common stock outstanding.

Shareholders purchasing shares under the IPO and/or Resale will experience an immediate dilution of the value of their investment of at least $0.04 per share. In other words, every share purchased at $1.00 under the IPO or Resale will be immediately diluted by $0.04, meaning the net tangible book value of the shares will be $0.01. This calculation assumes all shares offered under the IPO are purchased. If the Company fails to sell all 100,000,000 shares offered under the IPO, new shareholders will experience larger dilution, and the net tangible book value of the Company’s shares will be less than the $0.01 per share projected.

Investors should use caution in purchasing shares though the IPO or Resale, given that the new investor’s stock will experience immediate, significant dilution.

Bio Essence might experience potential fluctuations in operating results.

Significant annual and quarterly fluctuations in Bio Essence results of operations may be caused by, among other factors, the volume of revenues generated by Bio Essence, the timing of new product or service announcements and releases by Bio Essence and its competitors in the marketplace, and general economic conditions. There can be no assurances that the level of revenues and profits, if any, achieved by Bio Essence in any particular fiscal period shall not be significantly lower than in others, including comparable fiscal periods. Bio Essence expense levels are based, in part, on its expectations as to future revenues.

As a result, if future revenues are below expectations, net income or loss may be disproportionately affected by a reduction in revenues, as any corresponding reduction in expenses may not be proportionate to the reduction in revenues. As a result, Bio Essence believes that period-to-period comparisons of its results of operations may not necessarily be meaningful and should not be relied upon as indications of future performance.

We have not developed independent corporate governance.

We do not presently have audit, compensation, or nominating committees. This lack of independent controls over our corporate affairs may result in conflicts of interest between our officers, directors and our stockholders. We presently have no policy to resolve such conflicts. As a result, our directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures to form audit and other board committees in a manner consistent with rules of a national securities exchange, there is no assurance that we will not be subject to any conflicts of interest. As a result, potential investors may be reluctant to provide us with funds necessary to expand our operations.

Our profitability depends upon achieving success in our future operations through implementing our business plan, increasing sales, and expanding our customer and distribution bases, for which there can be no assurance given.

Profitability depends upon many factors, including the success of the Company’s marketing program, the Company’s ability to identify and obtain the rights to additional products to add to its existing product line, expansion of its distribution and customer base, maintenance or reduction of expense levels and the success of the Company’s business activities. The Company anticipates that it will continue to incur operating losses in the future. The Company’s ability to achieve profitable operations will also depend on its ability to develop and maintain an adequate marketing and distribution system.

Bio Essence needs to continue to attract and retain professional and qualified personnel, which may require the issuance of stock warrants or options.

Bio Essence’s ability to realize its objectives is dependent on its ability to attract and retain additional, qualified personnel. Competition for such personnel can be intense, and there can be no assurance that Bio Essence’s results will not be adversely affected by difficulty in attracting and/or retaining qualified personnel. To the extent it does enter into employment agreements, there can be no assurance that such agreements shall fully protect Bio Essence from competitive injury if any of these individuals leave the company.

One method of attracting talent is issuing stock warrants or options. This provides the Company with a way to compensate key personnel. If issued, the warrants and options would also have a dilutive effect on the interests of the purchasers of stock, thus triggering the anti-dilution rights of the Founders. Moreover, in the event Bio Essence requires additional equity financing pursuant to the shares offered under this IPO, purchasers of the additional shares may experience further dilution to the extent that such shares may be issued for a value less than the price paid for shares offered hereunder.

We will be controlled by existing shareholders after the IPO.

Upon the completion of the IPO, the directors and officers currently in place will continue to oversee the Company’s operations. Jian Yang, our former director and majority shareholder, will likely continue to maintain control of the Company by virtue of owning a majority of the Company’s issued and outstanding common stock.

As a result, Ms. Yang will likely have a significant influence on the affairs and management of the Company, as well as on all matters requiring stockholder approval, including electing and removing members of its board of directors, causing the Company to engage in transactions with affiliated entities, causing or restricting the sale or merger of the Company and changing the company’s dividend policy. Such concentration of ownership and control could have the effect of delaying, deferring or preventing a change in control of Bio Essence even when such a change of control would be in the best interests of the company’s other stockholders.

Notably, all of Ms. Yang’s shares are being registered under the Resale. As such, there is a possibility that Ms. Yang may divest herself of a majority, or all, of her stock in the Company. This would lead to a change in control over the Company. At this time, the Company believes that such a divestiture is unlikely. While the results of the Resale are unpredictable, the Company believes that, at the close of the Resale and IPO, it will likely remain controlled by Ms. Yang or a small number of shareholders.

Limitations on director and officer liability and our indemnification of our officers and directors may discourage stockholders from bringing suit against a director.  

Article IX, Section 4 of the Bylaws provide that officers and directors will be indemnified by the Company to the fullest extent of California law. These provisions may discourage stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on our behalf against a director. In addition, our Certificate of Incorporation and Bylaws provide for mandatory indemnification of directors and officers to the fullest extent permitted by governing state law.  

Our business relies on international commerce and international crises may negatively affect our performance.

While our business is tied to general economic conditions, it may also be effective by international turmoil, such as tariff war. The Company does not have any ability to predict or plan against such international crises and may be negatively affected as a result of the same. The Company may also be at risk should future pandemics or international crises interrupt the supply chain or adversely affect the Company’s business in other ways.

Risks relating to this Offering and our shares

Our stock price may be volatile or may decline regardless of our operating performance, and the price of our common stock may fluctuate significantly.

Once our shares begin trading, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

These and other factors may lower the market price of our common stock, regardless of our actual operating performance. The stock markets and trading facilities, including the OTC Bulletin Board, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities in many companies. In the past, stockholders of some companies have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources, and the attention of management could be diverted from our business.

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

Sales of substantial amounts of our common stock in the public market after this Registration Statement is deemed effective,, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this IPO, we will have 38,009,000 shares of common stock outstanding—assuming all shares of the IPO are sold.  Our shares of common stock offered herein will be freely tradable without restriction under the Securities Act, except for any shares of our common stock that may be subsequently held or acquired by our directors, executive officers and other “affiliates,” as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

If securities or industry analysts do not publish research or publish inaccurate or unfavourable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our common stock could be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceased coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to make a formal assessment of the effectiveness of our internal controls over financial reporting under Section 302. In addition, at such time as we cease to be an “emerging growth company,” as more fully described in these Risk Factors, we will be required to comply with Section 404. At such time, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.

Our management and other affiliates have significant control of our common stock and could control our actions in a manner that conflicts with the interests of other stockholders.

After the IPO, we anticipate that our current majority shareholder—Jian Yang—will continue to beneficially own the majority of our common stock, representing the majority of the voting power of our outstanding capital stock. As a result, Ms. Yang will be able to exercise considerable influence over matters requiring approval by our stockholders, including the election of directors, and may not always act in the best interests of other stockholders. Such a concentration of ownership may have the effect of delaying or preventing a change in our control, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices.

We do not expect to pay any cash dividends for the foreseeable future.

The continued operation and growth of our business will require substantial cash. Accordingly, we do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition, contractual restrictions relating to indebtedness we may incur, restrictions imposed by applicable law and other factors our Board of Directors deems relevant. Accordingly, if you purchase shares in this offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

Our Shares will likely be considered “penny stocks”

Our shares likely will be “penny stocks” as that term is generally defined in the Exchange Act and the rules and regulations promulgated thereunder to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock. Penny stocks are volatile and subject to additional regulation. As such, an investment in the Company is especially risky and should be done only if the investor is comfortable losing part or all of his or her investment.

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement and claims where the forum selection provision is applicable, which could result in less favourable outcomes to the plaintiff(s) in any such action.

Investors in this offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the company arising out of or relating to the subscription agreement. Section 27 of the Exchange Act does create exclusive federal jurisdiction over all suits brought to enforce and duty or liability created by the Exchange Act or the rules and regulations thereunder. Section 22 of the Securities Act creates a concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the by the Securities Act or the rules and regulations thereunder.

If the company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To the company’s knowledge, the enforceability of a contractual pre-dispute, jury trial waiver in connection with claims arising under the state or federal securities laws has not been finally adjudicated by the courts. However, the company believes that a contractual pre-dispute jury trial waiver provision is generally enforceable. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. The company believes that this is the case with respect to the subscription agreement. Investors should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

If an investor brings a claim against the company in connection with matters arising under the subscription agreement, including claims under federal securities laws, an investor may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the company. If a lawsuit is brought against the company under the subscription agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the subscription agreement with a jury trial. No condition, stipulation or provision of the subscription agreement serves as a waiver by any holder of common shares or by Bio Essence of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

In addition, when the shares are transferred, the transferee is required to agree to all the same conditions, obligations and restrictions applicable to the shares or to the transferor with regard to ownership of the shares, that were in effect immediately prior to the transfer of the shares, including but not limited to the subscription agreement.

There is little to no current market for Bio Essences’ shares.

There is little to no formal marketplace for the resale of our securities. Shares of the company’s Common Stock may eventually be traded to the extent any demand and/or trading platform(s) exists. However, there is no guarantee there will be demand for the shares, or a trading platform that allows you to sell them. Investors should assume that they may not be able to liquidate their investment or pledge their shares as collateral for some time.

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares. If you invest in our Preferred Stock, your interest will be diluted immediately to the extent of the difference between the Offering price per share of our Preferred Stock and the pro forma net tangible book value per share of our Preferred Stock after this Offering.

As of June 30, 2025, the net tangible book value of the Company was a deficit of $(3,115,193). Based on the number of shares of Common Stock issued and outstanding as of the date of the offering 38,009,000 shares that equates to a net tangible book value of approximately ($0.08) per share of Common Stock on a pro forma basis. Based on the total number of shares of Common Stock that would be outstanding assuming full subscription 100,000,000 at total net proceeds of $4,210,000, that equates to approximately $0.01 of tangible net book value per share. The full dilution table based on percentage of the subscription in:  

Thus, if the Offering is fully subscribed, the net tangible book value per share of Common Stock owned by our current stockholders will have immediately increased by approximately $0.09 without   any additional investment on their behalf and the net tangible book value per share for new investors will be immediately diluted by $0.04 per share.

Future dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the company. The investor’s stake in a company could be diluted due to the company issuing additional shares. In other words, when the company issues more shares, the percentage of the company that you own will go down, even though the value of the company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g., convertible bonds, preferred shares or warrants) into stock.

If the company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the company offers dividends, and most early-stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most often occurs when the company sells more shares in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to number of convertible notes that the company has issued and may issue in the future, and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value, it’s important to realize how the value of those shares can decrease by actions taken by the company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

PLAN OF DISTRIBUTION AND SELLING SECURITYHOLDERS

Plan of Distribution

Bio Essence is offering a maximum of 100,000,000 shares of Common Stock on a “best efforts” basis.

The cash price per share of Common Stock is Five Cents (USD $0.05).

The company intends to market the shares in this Offering both through online and offline means. Online marketing may take the form of contacting potential investors through electronic media and posting our Offering Circular or “testing the waters” materials on an online investment platform.

The offering will terminate at the earliest of: (1) the date at which the maximum offering amount has been sold, (2) the date which is one year from this offering being qualified by the Commission, and (3) the date at which the offering is earlier terminated by Bio Essence in its sole discretion.

The company may undertake one or more closings on an ongoing basis. After each closing, funds tendered by investors will be available to the company. After the initial closing of this offering, the company expects to hold closings on at least a monthly basis.

The company is offering its securities in all states.

TAX CONSEQUENCES FOR RECIPIENT (INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES) WITH RESPECT TO THE INVESTMENT PURCHASE PACKAGES ARE THE SOLE RESPONSIBILITY OF THE INVESTOR. INVESTORS MUST CONSULT WITH THEIR OWN PERSONAL ACCOUNTANT(S) AND/OR TAX ADVISOR(S) REGARDING THESE MATTERS.

Selling Shareholders

No founders will be selling securities into the offering; all net proceeds in this offering will go to Bio Essence.

Piggyback Rights

Existing holders of common stock, convertible preferred shares and convertible notes will be eligible to obtain Piggyback Rights with respect to their ability to remove restrictive legends from their shares and obtain free trading stock.

Investors’ Tender of Funds

After the Offering Statement has been qualified by the Securities and Exchange Commission (the “SEC”), the company will accept tenders of funds to purchase the shares. Prospective investors who submitted non-binding indications of interest during the “test the waters” period will receive an automated message from us indicating that the Offering is open for investment. (NOTE: AT THIS TIME NO “TEST THE WATER” PRESENTATIONS HAVE BEEN MADE, NO PROSPECTIVE INVESTIONS HAVE SUBMITTED INDICATIONS OF INTEREST AND NO PRESENTATION MATERIALS ARE AVAILABLE). We will conduct multiple closings on investments (so not all investors will receive their shares on the same date). Each time the company accepts funds transferred from the Escrow Agent is defined as a “Closing.”

Process of Subscribing

You will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if you are not an “accredited investor” as defined under securities law, you are investing an amount that does not exceed the greater of 10% of your annual income or 10% of your net worth (excluding your principal residence).

Any potential investor will have ample time to review the Subscription Agreement, along with their counsel, prior to making any final investment decision.

If a subscription is rejected, all funds will be returned to subscribers within thirty days of such rejection without deduction or interest. Upon acceptance by us of a subscription, a confirmation of such acceptance will be sent to the subscriber. Escrow Agent has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the securities.

The company intends to engage a registered transfer agent with the SEC, who will serve as transfer agent to maintain shareholder information on a book-entry basis; there are no set up costs for this service, fees for this service will be limited to secondary market activity. The company estimates the aggregate fee due to the transfer agent for the above services to be $35,000 annually.

USE OF PROCEEDS TO ISSUER

The following discussion addresses the use of proceeds from this Offering. The company currently estimates that, at a per share price of Five Cents (USD $0.05), the net proceeds from the sale of the 100,000,000 shares of Common Stock will likely be $4,110,000 after deducting the estimated offering expenses of approximately $890,000.

The following table breaks down the use of proceeds into different categories under various funding scenarios:

THE COMPANY’S BUSINESS

BIOESSENCE MISSION STATEMENT

Bio Essence is committed to consistently providing our customers with the highest quality of products to support their wellness and vitality at a fair profit to reward our shareholders.

OVERVIEW

Bio Essence believes that quality of life is key, our focus is on preventative measures, rather than treatments. As such, we have pioneered the convergence of modern science with traditional medicines that have been in use for centuries. Since its establishment in 2000, Bio Essence has extended its reach to the Asian market in Taiwan, Hong Kong, and China, as well as into the United Kingdom and various regions internationally.

Vision

We envision a world in which a clean, healthy, lifestyle, supported by holistic products and practices, is the foundation of preventative medicine.

Values

Our core values consist of the “Five T’s”:

Corporate History

Bio Essence

Bio Essence Corporation (“the Company” or “Bio Essence”) was incorporated in 2000 in the state of California. Fusion Diet Systems (“FDS”) was incorporated in 2010 in the state of Utah. Bio Essence and FDS have been under common control since 2016. Bio Essence and FDS are mainly engaged in manufacturing and distributing health supplement products. On March 1, 2017, the 100% shareholder of FDS transferred all of her ownership in FDS to Bio Essence. On December 7, 2021, the Company dissolved FDS.

In January 2017, Bio Essence incorporated two subsidiaries in the state of California: Bio Essence Pharmaceutical Inc. (“BEP”) and Bio Essence Herbal Essentials, Inc. (“BEH”), Bio Essence transferred its manufacturing operation to BEP and transferred its distributing operation to BEH. On December 12, 2023, the Company entered into an agreement with Newways Inc. to sell the 100% equity ownership of BEP for $300,000. On March 28, 2024, the Company entered into an agreement with Health Up Inc. to sell the 100% equity ownership of BEH for $400,000.

Bio Essence incorporated a wholly owned subsidiary McBE Pharma Inc. (“McBE”) in the state of California, McBE will be engaged in developing, manufacturing and sales of prescription medicine. McBE has not engaged in any operations since its inception. On April 15, 2024, the Company dissolved McBE.

OPERATIONS

Management

A highly skilled “leadership” team will be assembled to provide the day-to-day management and direction of the resort (resort consisting of the hotels, indoor water park and indoor theme park). Individuals chosen for this team must have the necessary skill set and demonstrate the ability to be an effective leader.

The management team will utilize a hands-on approach and will spend the majority of their time directly communicating and interacting with guests and staff alike. The executive level managers will inspire line level managers to be true leaders by acting as: manager, psychologist and cheerleader all at the same time.

Customer Interactions

Our company engages with customers through three distinct yet complementary channels, each representing a core component of our revenue model: (1) direct-to-consumer interactions via our online platform, (2) collaborations with licensed medical professionals who support the delivery and oversight of certain products and services, and (3) strategic white-label partnerships with third-party businesses that resell our offerings under their own brand identities. These channels allow us to serve a diverse customer base while maintaining flexibility, scalability, and regulatory compliance across multiple market segments.

Across all channels, our goal is to maintain high-quality, compliant, and reliable customer engagement, while supporting scalability and strong relationships at both the consumer and enterprise levels.

Human Resources

At this time, the Company does not have a dedicated human resources department or employee solely responsible for HR functions. All human resource-related matters, including recruitment, onboarding, compliance, and personnel management, are currently overseen directly by the President. As the Company grows, we intend to assess the need for expanding our internal HR capabilities to support future hiring, organizational development, and regulatory compliance.

Employees

As of the date of this filing, the Company employs four full-time employees. In order to maintain operational efficiency and focus internal resources on core business functions, the Company strategically outsources several administrative and support roles, including accounting, compliance, and certain customer service functions, to experienced third-party providers. This lean approach allows us to control overhead costs while leveraging specialized expertise and maintaining agility as we grow.

As part of our strategic growth plan, the Company intends to allocate up to 10% of the proceeds from this offering toward expanding and supporting our internal team. These funds may be used to hire additional personnel, provide training and development, improve employee benefits, and enhance operational capacity in key areas such as operations, marketing, and customer support. Investing in human capital will allow us to strengthen our infrastructure, improve service quality, and support the long-term scalability of the business.

Continuous Improvement - Employer/Employee Based

The Company is committed to fostering a culture of continuous improvement, both for the organization as a whole and for the development of its employees. We recognize that our most valuable asset is our team, and as such, we prioritize creating an environment that supports ongoing learning, personal growth, and professional development.

While our current team is small, we place strong emphasis on employee empowerment and engagement. The President is actively involved in ensuring that employees have the tools, resources, and support needed to excel in their roles. We encourage open communication, feedback, and the sharing of innovative ideas to drive operational efficiencies and improve the overall employee experience.

To support continuous growth, we are committed to providing opportunities for skill enhancement and career progression. This includes access to relevant training, professional development programs, and performance-based incentives. As the Company expands, we will continue to refine our approach to employee development, incorporating best practices and ensuring that all team members feel valued and motivated to contribute to our shared success.

MARKET OPPORTUNITY

Domestic and International growth of the nutraceuticals industry appear to be in a healthy position overall and future forecasts given by market research organizations such as the New Hope Network, an organization that offers news and insights into the natural products industry. While Eastern consumers are aware of benefits of consuming herbs and vitamins, consumers around the western world are looking for natural alternatives to traditional approaches to western medicine. According to Global Industry Analysts, Inc., herbal supplements and remedies cause little to no side effects and provide greater efficacy also illustrates how the market continues to experience robust growth. Factors that fueled growth in the marketplace includes herbs in preventive health and alternative medicine regimens, supplier innovations, and Current Good Manufacturing Practices (CGMP) for dietary supplements by the FDA.

According to the National Health Interview Survey by the Center of Disease Control and Prevention’s National Center for Health Statistics, one in five U.S. adults regularly take herbal supplements. North America is the largest region for herbal supplements and remedies, according to Global Industry Analysts, Inc., accounting for the largest market share. Multi- herbs also dominate the market, capturing a significant share of overall herbal supplements and remedies world-wide.

Other new trends that are entering into this market are the rising demand for natural health and food supplements. Fish oils, herbal supplements and other natural offerings such as probiotic acidophilus and detoxes are emerging as alternatives to conventional synthetic supplements. Food supplements such as Omega 3s, herbal extracts, multi-vitamins, probiotics, chondroitin, and glucosamine experienced healthy growth rates over the past few years. There is also increased demand for herbal and botanical products in multi-formula and combo packed format, as well as chewable capsules and tablets.

The U.S., China, India and Japan Vitamin and Dietary Supplement Market

Euromonitor International expects that the U.S. vitamin and dietary supplement market—a segment of the nutraceuticals market—will grow to $28.7 billion by 2021. With more consumers focused on a diet full of natural, whole foods, as well as functional, value-added products like nutritional beverages and dietary supplements, the market is well positioned to continue its growth. Transparency Market Research estimates that the global nutraceuticals market will reach $278.95 billion by 2020. The estimates are due in part to the growing conscious of consumers towards functional foods and beverage, dietary supplements and personal care.

Social and demographic factors play a huge role in China as the working age population of 18-59 years old in China is projected to decline from 925 million today to 700 million in 2050. By that time, nearly 500 million people will be over the age of 60, compared with 200 million today. China has a strong history in herbal and botanical products along with Hong Kong and Taiwan.

The market in India is largely controlled by pharmaceutical drug manufacturers, while 30% is controlled by Ayurveda medicine manufacturers. The Indian market is rapidly growing due to supplements and nutraceuticals being viewed as lifestyle products. Popular supplement categories in India are joint care, hair loss, memory, and childcare products.

Challenges

Domestic and International growth of the nutraceuticals industry appear to be in a healthy position overall and future forecasts given by well-known market research analytic firms have placed strong figures for its continued progress. The industry currently enjoys favorable demographics as many Americans and citizens around the world are focused on wellness, which includes a diet full of natural, whole foods, as well as functional, value-added products like nutritional beverages and dietary supplements. Clean labels with simple ingredients and clear messaging also add to this broad appeal.

With the growth of the nutraceuticals industry, provisions from the Food Safety Modernization Act (FSMA) brings new regulations that nutraceutical companies will face various manufacturing challenges. With these additional regulatory challenges, companies are adjusting their production to meet growing consumer demand for clean label products, responsibly sourced ingredients, sustainable packaging and pressure to extend shelf life for their supply chain. To reduce further risk under FSMA, nutraceutical companies are utilizing good manufacturing practices (GMP) and designating hygienic zoning programs to differentiate between unprocessed and processed food locations.

At present, there are thousands of herbal, vitamin and nutraceuticals companies both privately-held and publicly-traded today. While many compete directly against each other for market share, others complement each other by providing resource product to produce the end product. Many have financial resources beyond our ability to compete. We cannot make any assurances to you that we will be successful in our business endeavors if we (a) are unable to compete with a competitor, (b) we lose our ability to source product from a competitor or partner, (c) we are unable to raise sufficient funds to compete against others (d) we lose our employees to a competitor, or (e) we lose advantages over our product offerings against a superior competitor due to price, branding, marketing, and/or distribution power.

Opportunities

The global dietary supplements market is expected to reach $278 billion USD by 2024, at a Compound Annual Growth Rate of 9.6% from 2016 to 2024 (Grand View Research, Inc.). At 31.4 % market share, the United States supplement market represents the largest single country of the global supplement industry (NBJ Global Supplement Business Report). However, at $43.5 billion, Asia’s total supplement sales surpassed U.S. sales for the first time in 2018. China has been a notable area of opportunity in the industry, gaining the most market share of any global market by adding $10 billion in annual sales over the past ten years.

Compared with the consumer market ten years ago, consumer demand for individualized nutritional products has increased. In the past, brands recommended products to consumers; but with the popularity of information technology, the richness of shopping channels, and the broadening of consumer horizons, consumers are increasingly aware of what they want and they are looking to the industry to provide it.

There are currently three major trends in the consumer demand for supplement products:

Issues

As the pressures of life increase and its pace accelerates, people know the importance of taking nutritional supplements. But there are so many health care products available that not everyone knows how to choose the optimal product for their own unique needs.

Although some companies offer a personalized nutrition program, they typically develop their personalized diet programs, consultations, or dietary packages based only on information obtained through questionnaires that focus on dietary habits and physical activity. Others use biometric data monitors to generate their personalized nutrition plans by combining a few existing products. Although these models are taking individual data into account to provide personalized nutrition programs, dietary recommendations, or dietary products, these products are only a slight improvement over the “one size fits all” model.

Bio Essence’ Personalized Nutrition

Bio Essence recognizes a critical gap in the market—consumers increasingly seek personalized, holistic nutritional care, yet many existing solutions fail to address their diverse needs in a comprehensive manner. By understanding the challenges people face in maintaining their health and wellness, Bio Essence has developed a unique approach that goes beyond traditional offerings. We provide a tailored, all-encompassing solution that integrates personalized nutrition, expert guidance, and high-quality products, designed to support the unique health goals of each individual. Our commitment is to fill this void in the market by offering a truly personalized experience, enabling our customers to take control of their well-being with the assurance that their nutritional needs are being met in a way that’s both effective and sustainable.

Scientific Testing

Nutritional genomics will focus on the interaction of dietary nutrition and genes at the molecular level and assess that impact on human health. This work will allow us to establish nutritional interventions based on individual genomic structural features. These advances will provide a means with which to propose a more personalized nutrition policy, so that the results of nutrition research can be more effectively applied to the prevention of disease and achieve the purpose of promoting human health.

Expert Knowledge

NCP (nutrition care process) is a specialized field that relies on nutrition-related knowledge and professional medical diagnostic methods. According to the definition of the American Dietetic Association, nutrition care is divided into four steps: nutrition assessment, nutrition diagnosis, nutrition intervention, and nutrition monitoring and evaluation.

Internet Platform

By leveraging digital technologies such as the Internet, big data, and artificial intelligence, experts provide consumers with more suitable medical nutrition treatment solutions through remote nutrition consultation services and interpretation of data.

Our Process

Our process for delivering personalized nutrition services is straightforward, yet meticulously tailored to each individual. The journey begins when a customer registers on our user-friendly online platform. Upon registration, they are asked to provide a DNA sample and complete a comprehensive lifestyle survey, which helps us better understand their unique health profile, preferences, and goals. This dual approach—combining genetic insights with lifestyle data—forms the foundation of our personalized service.

Once we receive this information, our team of experts meticulously analyzes the data to create a customized supplement that is perfectly aligned with the customer’s specific nutritional needs. This personalized formulation is then produced by our trusted, FDA-registered manufacturing partner, ensuring the highest standards of quality, safety, and efficacy.

Finally, the custom supplement is packaged and shipped directly to the customer’s door, offering a seamless and convenient experience. This end-to-end process ensures that each customer receives a product that is as unique as their DNA, giving them the confidence that their nutritional needs are being met in the most effective and personalized way possible.

Our Strengths

Internet Platform

Our online platform tailors the optimal health care plan for each person’s own situation through the management and interpretation of big data. In order to effectively manage health in real time, data can be collected using wearable technology. Customers can then use our online platform to interact with doctors and the manufacturers of health care products. With every visit, they are guaranteed to obtain the most accurate information for their individual health situation.

Experts

Bio Essence is based in the United States and has access to a wealth of U.S. medical resources at all levels to ensure that patients enjoy world-class health care consulting services. The Company currently contracts with three American medical doctors. The Company’s numbers regularly increase and decrease, and as a result the exact number of contracted doctors often fluctuates. The contracted doctors participate in our product design and escort each customer through the experience of personalized nutritional care.

The Bio Essence medical advisory team are from American universities such as Harvard and Massachusetts Institute of Technology (MIT) and have a rich background in both the Chinese and American medical industries. The team combines an “all user-centric” attitude with their professional medical backgrounds to protect the health of patients!

Quality Assurance

Bio Essence spares no effort to promote the healthy growth of the industry. We have strictly implemented the first “full safety” quality management model, having strictly adopted the Good Manufacturing Practice (GMP) standard for U.S. health foods in our planned production, facilities, supply engineering, and storage areas. We have implemented the ISO 9001:2000 international quality system. We also operate in strict accordance with the Hazard Analysis and Critical Control Points (HACCP) food safety management system. Our operations fully meet U.S. national food hygiene and safety standards and comply with the U.S. Food and Drug Administration (FDA) for health food hygiene regulations.

With our formulation, the customer only needs to take one to two capsules a day rather buying a lot of bottles of individual supplements.

Our Services

The Company intends to allocate up to 10% of the net proceeds from this offering toward marketing initiatives designed to drive customer acquisition, enhance brand awareness, and establish Bio Essence as a recognized leader in the personalized nutrition space.

Our marketing strategy will be multi-faceted and data-driven, leveraging both digital and strategic channels to reach and engage our target audience. Given the highly personalized nature of our products, our messaging will focus on the unique value proposition we offer: a science-backed, holistic nutrition solution tailored to each individual’s DNA and lifestyle.

Key areas of marketing investment will include:

These marketing initiatives are designed not only to increase short-term customer acquisition but also to build lasting brand equity. As part of our growth strategy, we will continuously analyze campaign performance and optimize our efforts to ensure the most efficient and impactful use of capital. The ultimate goal is to expand our customer base, elevate brand recognition, and secure a leading position in the evolving personalized nutrition market.

TARGET DEMOGRAPHICS

Bio Essence targets a growing segment of health-conscious consumers who are actively seeking personalized, science-backed wellness solutions that go beyond generic, one-size-fits-all products. Our primary demographic includes individuals who value proactive health management, holistic care, and the integration of technology into their wellness routines.

Core customer profiles include:

Bio Essence’ direct-to-consumer online platform, combined with white-label partnerships and collaboration with medical professionals, allows us to effectively reach these demographics through tailored marketing and distribution strategies. As we scale, we will continue to refine our understanding of customer segments using data analytics and feedback to deepen engagement and improve personalization.

REVENUE OPPORTUNITIES

Bio Essence is strategically positioned to capitalize on multiple revenue streams within the rapidly expanding personalized health and wellness market. Our business model is designed to support scalability and diversification, creating long-term revenue potential through the following core and emerging channels:

Together, these revenue opportunities support both immediate monetization and long-term scalability. By diversifying our income sources while staying focused on personalized wellness solutions, Bio Essence is well-positioned to grow sustainably and respond to evolving market demands.

ADVERTISING/COMMUNICATION PLAN

Bio Essence employs a strategic, multi-channel advertising and communication approach designed to build brand awareness, educate consumers, and drive customer acquisition across all three of our customer channels: direct-to-consumer, medical professional referrals, and white-label partnerships.

Our advertising efforts are focused on communicating the unique value of personalized nutrition—anchored in DNA analysis and lifestyle data—as a holistic solution not commonly available through conventional retail or supplement models. We position our brand as trustworthy, science-driven, and user-friendly, helping consumers make informed decisions about their health and wellness.

Key components of our advertising and communication strategy include:

Through these combined efforts, Bio Essence aims to educate, inspire, and engage target audiences—while reinforcing our position as a trusted innovator in the personalized wellness space 

CONFLICTS OF INTEREST

We are not aware of any conflicts of interest between the founders of Bio Essence and the founders. Potential sources of conflicts are discussed below.

General

At the current time management contracts do not have conflicts in the operation of the Company.

Allocation of Our Affiliates’ Time

Bio Essence relies on their executive officers and other professionals who act on behalf of Bio Essence, for the day-to-day operation of our business.

As a result of the executives competing responsibilities, their obligations to other investors and the fact that they will continue to engage in other business activities on behalf of themselves and others, they will face conflicts of interest in allocating their time to Bio Essence and other entities and other business activities in which they are involved. However, the company believes that the executive officers and investment professionals have sufficient depth to fully discharge their responsibilities to the company and the other entities for which they work. The long-term plan is for the executives to resign from their other operations and dedicate their time to Bio Essence.

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

Business Overview 

The Company was incorporated in 2000 in the state of California. Fusion Diet Systems (“FDS”) was incorporated in 2010 in the state of Utah. Bio Essence and FDS have been owned under common control since 2016. Bio Essence and FDS are mainly engaged in manufacturing and distributing health supplement products. In January 2017, Bio Essence incorporated two subsidiaries in the state of California: BEP and BEH, Bio Essence transferred its manufacturing operation into BEP and transferred its distributing operation into BEH. On March 1, 2017, the 100% shareholder of FDS transferred all her ownership in FDS into Bio Essence. On December 7, 2021, the Company dissolved FDS. On November 12, 2021, Bio Essence incorporated a wholly owned subsidiary McBE Pharma Inc. (“McBE”) in the state of California, McBE will be engaged in research and development and manufacture of prescription medicine. As a result of the ownership restructure, BEP, BEH, and MCBE became wholly owned subsidiaries of Bio Essence, and Bio Essence serves as a holding corporation for these subsidiaries. McBE has not engaged in any operations since its inception. On December 12, 2023, the Company entered into an agreement with Newway Inc to sell the 100% equity ownership of BEP for $300,000. On March 28, 2024, the Company entered into an agreement with Health Up Inc to sell the 100% equity ownership of BEH for $400,000. On April 15, 2024, the Company dissolved McBE. 

The Company is mainly engaged in selling the health supplements and providing OEM services. However, the Company currently outsources manufacture / OEM service after disposal of BEP in December 2023.

Related Party Transactions 

Loans from Officer 

As of June 30, 2025 and December 31, 2024, the Company had loans from one major shareholder (also the Company’s senior officer) of $428,146 and $577,546, respectively. As of June 30, 2025 and December 31, 2024, the Company had loan from another major shareholder for $608,631 and $608,631 for settling the litigation. There are no written loan agreements for these loans. These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore, deemed payable on demand. 

On December 31, 2024 and 2023, the Company had loans from one major shareholder (also the Company’s senior officer) of $577,546 and $1,180,046, respectively. On December 31, 2024 and 2023, the Company had loan from another major shareholder for $608,631 for settling the litigation. There are no written loan agreements for these loans. These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore, deemed payable on demand. 

On May 31, 2023, the Board of Directors of the Company, approved a debt-to-equity conversion. The Company and Ms. Yan (the Company’s Chief Executive Officer also the major shareholder) agreed to a debt conversion whereby Ms. Yan receives 5,000,000 shares of the Company’s common stock in exchange for retirement of the $2,500,000 debt. The Board of Directors of the Company executed the Consent Resolution on June 2, 2023. On June 2, 2023, the closing price of the Company’s common stocks trading on OTC Market was $0.51 per share. The Company incurred a $50,000 loss on this conversion.

Critical Accounting Policies and Estimates 

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements (“CFS”), which were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 

While our significant accounting policies are more fully described in Note 2 to our CFS, we believe the following accounting policies are the most critical to assist you in fully understanding and evaluating this management discussion and analysis.

Basis of Presentation 

The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The functional currency of Bio Essence is U.S. dollars (“$’’). The accompanying financial statements are presented in U.S. dollars (“$”). The consolidated financial statements include the financial statements of the Company and its subsidiaries, BEH (up to disposal date), and McBE (up to dissolution date). All significant inter-company transactions and balances were eliminated in consolidation. 

Going Concern

The Company incurred net losses of $145,888 and $338,665 from the company’s continuing operations for the six months ended June 30, 2025 and 2024, respectively. The Company incurred net income of $59,864 and net loss of $215,678 from the company’s continuing operations for the three months ended June 30, 2025 and 2024, respectively. The Company also had an accumulated deficit of $10,595,158 from the company’s continuing operations as of June 30, 2025. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to increase its income by strengthening its sales force, providing attractive sales incentive programs, and increasing marketing and promotion activities. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. 

Credit Losses

On January1, 2023, the Company adopted Accounting Standards Update 2016-13 “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.

The Company’s account receivables and other receivables in the balance sheet are within the scope of ASC Topic 326. As the Company has limited customers and debtors, the Company uses the loss-rate method to evaluates the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment on various factors, including historical experience, credit-worthiness of customers and debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.

Expected credit losses are recorded as allowance for credit losses on the consolidated statements of operations. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amount that is previously reserved for, the Company will reduce the specific allowance for credit losses. 

Accounts Receivable, Net

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2025 and December 31, 2024, there was no bad debt allowance.

Revenue Recognition 

The Company recognizes revenues following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. 

Revenue is measured at the amount of consideration we expect to receive in exchange for the sale of our product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. 

Revenues from sales of goods are measured at net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, and are recognized when the goods are delivered to the customers. 

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customers. 

Revenues from manufacture services are recognized when the manufacture process is completed pursuant to the customers’ requirement and the finished goods were delivered to the customers. 

The Company’s return policy allows for the return of damaged or defective products and shipment errors. A notice of damage or wrong items should make within five days from receiving the goods, and actual return of the products must be completed within 30 days from the date of receiving the goods. Delayed notification for damaged or wrong products will not be accepted for return or exchange. Custom formulas and capsules are not returnable. The amount for return of products was immaterial for the six and three months ended June 30, 2025 and 2024.

Results of operations 

Comparison of continuing operations for the six months ended June 30, 2025 and 2024

The following table sets forth the results of our operations for the periods indicated as a percentage of net sales. Certain columns may not add due to rounding.

Revenues

Revenues from the company’s continuing operations for the six months ended June 30, 2025 and 2024 were $281,312 and $41,695, respectively. We had $nil product sales, $280,096 OEM service revenue, and $1,216 shipping and delivery income for the six months ended June 30, 2025. We had $41,695 product sales for the six months ended June 30, 2024. Revenue from the company’s discontinued operations for the six months ended June 30, 2025 and 2024 were $nil and $153,865, respectively.

Costs of revenues 

Costs of revenues from the company’s continuing operations for the six months ended June 30, 2025 and 2024 were $92,080 and $12,508, respectively. We had $nil cost of sales for products and $92,080 cost for OEM service revenue for the six months ended June 30, 2025. We had $12,508 cost of sales for products for the six months ended June 30, 2024. Costs of revenues from the company’s discontinued operations for the six months ended June 30, 2025 and 2024 were $nil and $76,592, respectively. 

Gross profit 

For the factors mentioned above, the gross profits from the company’s continuing operations for the six months ended June 30, 2025 and 2024 were $189,232 and $29,187, respectively. The gross profits from the company’s discontinued operations for the six months ended June 30, 2025 and 2024 was $nil and $77,273, respectively.

Operating expenses 

Selling expenses consisted mainly of advertising, show expenses, products marketing, shipping expenses, and promotion expenses. Selling expenses from the company’s continuing operations for the six months ended June 30, 2025 and 2024 were $29,943 and $nil, respectively. Selling expense from the company’s discontinued operations for the six months ended June 30, 2025 and 2024 was $nil and $13,716, respectively.

General and administrative expenses consisted mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses from the company’s continuing operations were $303,158 for the six months ended June 30, 2025, compared to $346,029 for the six months ended June 30, 2024, a decrease of $42,871 or 12.39%, the decrease was mainly due to decreased office rent and office CAM fee by $113,393, decreased license and permits expense by $1,278, decreased commercial and worker’s compensation insurance expenses by $2,835, which was partly offset by increased salary expense by $64,589 and increased consulting fee by $109,608. General and administrative expenses from the company’s discontinued operations was $nil and $178,936 for the six months ended June 30, 2025 and 2024, respectively.

Other income (expenses), net 

Other expenses from the company’s continuing operations was $1,219 and $21,023 for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, other expenses mainly consisted of interest expense of $1,090 and other expenses of $129. For the six months ended June 30, 2024, other expenses mainly consisted of interest expense of $1,081, loss of $3,012 in disposal of fixed assets, $50,000 loss from security deposit forfeiture from early termination of the lease, offset by other income of $33,086. Other expenses from the company’s discontinued operations were $nil and $5,448 for the six months ended June 30, 2025 and 2024, respectively.

Net loss from continuing operations 

We had a net loss of $145,888 from the company’s continuing operations for the six months ended June 30, 2025, compared to $338,665 for the six months ended June 30, 2024, a decrease of $192,777 or 56.92%.

Net loss from discontinued operations 

We had a net loss of $nil and $81,740 from the company’s discontinued operations for the six months ended June 30, 2025 and 2024, respectively.

Comparison of continuing operations for the three months ended June 30, 2025 and 2024

The following table sets forth the results of our operations for the periods indicated as a percentage of net sales. Certain columns may not add due to rounding.

Revenues

Revenues from the company’s continuing operations for the three months ended June 30, 2025 and 2024 were $259,123 and $41,695, respectively. We had $nil product sales, $259,123 OEM service revenue, and $nil shipping and delivery income for the three months ended June 30, 2025. We had $41,695 product sales for the three months ended June 30, 2024. Revenue from the company’s discontinued operations for the three months ended June 30, 2025 and 2024 were $nil and $nil, respectively.

Costs of revenues 

Costs of revenues from the company’s continuing operations for the three months ended June 30, 2025 and 2024 were $90,479 and $12,508, respectively. We had $nil cost of sales for products and $90,479 cost for OEM service revenue for the three months ended June 30, 2025. We had $12,508 cost of sales for products for the three months ended June 30, 2024. Costs of revenues from the company’s discontinued operations for the three months ended June 30, 2025 and 2024 were $nil and $nil, respectively. 

Gross profit 

For the factors mentioned above, the gross profits from the company’s continuing operations for the three months ended June 30, 2025 and 2024 were $168,644 and $29,187, respectively. The gross profits from the company’s discontinued operations for the three months ended June 30, 2025 and 2024 were $nil and $nil, respectively.

Operating expenses 

Selling expenses consisted mainly of advertising, show expenses, products marketing, shipping expenses, and promotion expenses. Selling expenses from the company’s continuing operations for the three months ended June 30, 2025 and 2024 were $nil and $nil, respectively. Selling expense from the company’s discontinued operations for the three months ended June 30, 2025 and 2024 were $nil and $nil, respectively.

General and administrative expenses consisted mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses from the company’s continuing operations were $107,421 for the three months ended June 30, 2025, compared to $194,200 for the three months ended June 30, 2024, a decrease of $86,779 or 44.69%, the decrease was mainly due to decreased office rent by $109,050, decreased accounting fee by $23,940, which was partly offset by increased salary expense by $36,066, increased professional fee by $7,500, and increased legal expense by $1,450. General and administrative expenses from the company’s discontinued operations was $nil and $nil for the three months ended June 30, 2025 and 2024, respectively.

Other income (expenses), net 

Other expenses from the company’s continuing operations was $559 and $49,865 for the three months ended March 31, 2025 and 2024, respectively. For the three months ended June 30, 2025, other expenses mainly consisted of interest expense of $547 and other expenses of $12. For the three months ended June 30, 2024, other expenses mainly consisted of interest expense of $539, loss of $49,912from security deposit forfeiture due to early termination of the lease, offset by other income of $586. Other expenses from the company’s discontinued operations were $nil and $nil for the three months ended June 30, 2025 and 2024, respectively.

Net income (loss) from continuing operations 

We had a net income of $59,864 from the company’s continuing operations for the three months ended June 30, 2025, compared to net loss of $215,678 for the three months ended June 30, 2024, an increase of $275,542 or 127.76%.

Liquidity and Capital Resources 

As of June 30, 2025, from the company’s continuing operations, we had cash and equivalents of $nil, other current assets of $112,477, other current liabilities of $3,071,326, working capital deficit of $2,958,849, a current ratio of 0.04:1. As of December 31, 2024, from the company’s continuing operations, we had cash and equivalents of $1,371, other current assets of $279,321, other current liabilities of $2,802,700, working capital deficit of $2,522,008, a current ratio of 0.10:1.

The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended June 30, 2025, and 2024, respectively.

Net cash provided by (used in) operating activities for continuing operations

Net cash provided by operating activities for continuing operations was $141,728 for the six months ended June 30, 2025, compared to net cash used in operating activities for continuing operations of $19,563 for the six months ended June 30, 2024. The increase of cash inflow of $161,291 from operating activities of continuing operations for the six months ended June 30, 2025 was principally attributable to increased collection of accounts receivable by $8,043, decreased cash outflow of prepaid expenses and other receivables by $385,089, increased payment from customer deposit by $89,074; which was partly offset by increased payment on prepayment and deposits by $71,649, increased payment on accrued liabilities and other payables by $198,598, and increased payment on accounts payable by $54,212.

Net cash provided by (used in) financing activities for continuing operations 

Net cash used in financing activities for continuing operations was $143,099 for the six months ended June 30, 2025, compared to net cash provided by financing activities for continuing operations of $175,152 for the six months ended June 30, 2024. The net cash used in financing activities for the six months ended June 30, 2025 mainly consisted of $568,800 loan repayment to one major shareholder (also the senior officer) and payment of government loan of $665, partly offset by proceeds of $419,400 loan from one major shareholder (also the senior officer) and increased bank overdraft of $6,966. The net cash provided by financing activities for six months ended June 30, 2024 mainly consisted of proceeds of $185,200 loan from one major shareholder (also the senior officer), partly offset by decreased bank overdraft of $9,436, and repayment of government loan of $612.

Our current liabilities exceed current assets at June 30, 2025, and we incurred substantial losses. We may have difficulty meeting upcoming cash requirements. As of June 30, 2025, our principal source of funds was loans from an officer (also is the Company’s major shareholder). As of June 30, 2025, we believe we will need $1.2 million cash to continue our current business for the next 12 months. In addition to our continuous effort to improve our sales and net profits, we have explored and continue to explore other options to provide additional financing to fund future operations as well as other possible courses of action. Such actions may include, but are not limited to, securing lines of credit, sales of debt or equity securities (which may result in dilution to existing shareholders), loans and cash advances from other third parties or banks, and other similar actions. There can be no assurance that we will be able to obtain additional funding (if needed), on acceptable terms or at all, through a sale of our common stock, loans from financial institutions, or other third parties, or any of the actions discussed above. If we cannot sustain profitable operations, and additional capital is unavailable, lack of liquidity could have a material adverse effect on our business viability, financial position, results of operations and cash flows. 

Contractual Obligations 

Long-Term Debts 

Government loans 

In May and June 2020, BEH, BEP and FDS received total of $215,600 from the Economic Injury Disaster Loan (“EIDL loan”) from the SBA after deducting $100 Uniform Commercial Code (“UCC”) handling charge and filing fee for each company. This is a low-interest federal disaster loan for working capital to small businesses and non-profit organizations of any size suffering substantial economic injury as a result of the Coronavirus (COVID-19), to help the businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. This loan has interest of 3.75% and is not forgivable. The maturity of the loan is 30 years, installment payments including principal and interest of $288 monthly will begin 12 months from the date of the promissory note. On March 4, 2022, The FDS transferred its EIDL loan to BEC due to the dissolution of FDS. The SBA extended the deferment period to allow small businesses and not-for-profits that received EIDL funds do not have to begin payments on the loan until 30 months after the date of the note. Accordingly, the company began to make installment payments in the fourth quarter 2022. 

As of June 30, 2025, the future minimum EIDL loan payments from the company’s continuing operations to be paid by year are as follows:

Results of operations 

Comparison of continuing operations for the years ended December 31, 2024 and 2023 

The following table sets forth the results of our operations for the periods indicated as a percentage of net sales. Certain columns may not be added due to rounding.

Revenues 

Revenues from the company’s continuing operations for the years ended December 31, 2024 and 2023 were $323,940 and $nil, respectively.  We had $37,415 product sales, $282,752 OEM service revenue, and $3,773 shipping and delivery income for the year ended December 31, 2024. Revenues from the company’s discontinued operations for the years ended December 31, 2024 and 2023 were $153,865 and $1,048,597, respectively. 

Costs of revenues 

Costs of revenues from the company’s continuing operations for the years ended December 31, 2024 and 2023 were $106,863 and $nil, respectively. We had $20,513 cost of sales for products and$86,350 cost for OEM service revenue for the year ended December 31, 2024. Costs of revenues from the company’s discontinued operations for the years ended December 31, 2024 and 2023 were $76,592 and $632,120, respectively. 

Gross profit 

For the factors mentioned above, the gross profits from the company’s continuing operations for the years ended December 31, 2024 and 2023 were $217,077 and $nil, respectively. The gross profits from the company’s discontinued operations for the years ended December 31, 2024 and 2023 were $77,273 and $416,477, respectively.

Operating expenses 

Selling expenses consisted mainly of advertising, show expenses, products marketing, shipping expenses, and promotion expenses. There were no selling expenses from the company’s continuing operations for the years ended December 31, 2024 and 2023. Selling expense from the company’s discontinued operations was $13,716 for the year ended December 31, 2024, compared to $111,696 for the year ended December 31, 2023.

General and administrative expenses consisted mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses from the company’s continuing operations were $676,515 for the year ended December 31, 2024, compared to $345,590 for the year ended December 31, 2023, an increase of $330,925 or 95.76%, the increase was mainly due to increased office rent by $272,504, increased consulting fee by $67,620, which was partly offset by decreased accounting fee of $8,690. General and administrative expenses from the company’s discontinued operations was $178,936 for the year ended December 31, 2024, compared to $1,004,784 for the year ended December 31, 2023. 

Other expenses, net 

Other expenses from the company’s continuing operations were $1,105,483 and $57,414 for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, other expenses mainly consisted of interest expense of $2,153, impairment of ROU asset of $1,050,940 due to early termination of the lease, and other expenses of $53,091, which was partly offset by other income of $701. For the year ended December 31, 2023, other expenses mainly consisted of interest expense of $2,197, other expenses of $73,058, which was partly offset by net other income of $17,841. Other expenses from the company’s discontinued operations were $5,448 for the year ended December 31, 2024, compared to other income of $66,877 for the year ended December 31, 2023. 

Net loss from continuing operations 

We had a net loss of $1,565,721 from the company’s continuing operations for the year ended December 31, 2024, compared to $404,604 for the year ended December 31, 2023, an increase of $1,161,117 or 286.98%.

Net loss from discontinued operations 

We had net gain of $256,925 from the company’s discontinued operations for the year ended December 31, 2024 compared to net loss of $567,275 for the year end ended December 31, 2023. 

Liquidity and Capital Resources 

As of December 31, 2024, from the company’s continuing operations, we had cash and equivalents of $1,371, other current assets of $279,321, other current liabilities of $2,802,700, working capital deficit of $2,522,008, a current ratio of 0.10:1. As of December 31, 2023, from the company’s continuing operations, we had cash and equivalents of $nil, bank overdraft of $9,436, other current assets of $300,000, other current liabilities (excluding bank overdraft) of $2,441,020, working capital deficit of $2,150,456, a current ratio of 0.12:1.

The following is a summary of cash provided by or used in each of the indicated types of activities during the years ended December 31, 2024, and 2023, respectively.

Net cash provided by (used in) operating activities for continuing operations

Net cash provided by operating activities for continuing operations was $639,817 for the year ended December 31, 2024, compared to net cash used in operating activities of $981,459 in 2023. The increase of cash inflow of $1,621,276 from operating activities of continuing operations for the year ended December 31, 2024 was principally attributable to $700,000 payment received from sale of BEP and BEH, decreased cash outflow of prepayment and deposits to vendors by $28,187, decreased payment on accounts payable by $15,363, increased payment from customer deposit by $187,115, decreased payment of lease liability by $141,301, decreased payment on accrued labilities and other payables by $213,062, and change of adjustments to reconcile net loss to net cash provided by (used in) operating activities by $879,262; which was partly offset by increased net loss by $336,917 and decreased payment collected on other receivables by $200,969.

Net cash used in investing activities for continuing operations 

Net cash used in investing activities for continuing operations was $114 for the year ended December 31, 2024, compared to net cash used in investing activities for continuing operations of $91,484 in 2023. The net cash used in investing activities for the year ended December 31, 2024 mainly consisted of $114 cash loss due to disposal of subsidiaries. The net cash used in investing activities for the year ended December 31, 2023 was mainly for $3,614 leasehold improvements.

Net cash provided by (used in) financing activities for continuing operations 

Net cash used in financing activities for continuing operations was $613,171 for the year ended December 31, 2024, compared to net cash provided by financing activities for continuing operations of $1,179,137 in 2023. The net cash used in financing activities for the year ended December 31, 2024 mainly consisted of $602,500 loan repayment to one major shareholder (also the senior officer), decreased bank overdraft of $9,436, and payment of government loan of $1,235. The net cash provided by financing activities for the year ended December 31, 2023 consisted of proceeds of $1,170,891 from loan from one major shareholder (also the senior officer), and increased bank overdraft of $9,436, partly offset by repayment of SBA loan of $1,190. 

Our current liabilities exceed current assets at December 31, 2024, and we incurred substantial losses. We may have difficulty meeting upcoming cash requirements. As of December 31, 2024, our principal source of funds was loans from an officer (also is the Company’s major shareholder). As of December 31, 2024, we believe we will need $1.2 million cash to continue our current business for the next 12 months. In addition to our continuous effort to improve our sales and net profits, we have explored and continue to explore other options to provide additional financing to fund future operations as well as other possible courses of action. Such actions may include, but are not limited to, securing lines of credit, sales of debt or equity securities (which may result in dilution to existing shareholders), loans and cash advances from other third parties or banks, and other similar actions. There can be no assurance that we will be able to obtain additional funding (if needed), on acceptable terms or at all, through a sale of our common stock, loans from financial institutions, or other third parties, or any of the actions discussed above. If we cannot sustain profitable operations, and additional capital is unavailable, lack of liquidity could have a material adverse effect on our business viability, financial position, results of operations and cash flows. 

Contractual Obligations

Long-Term Debts

Government loans

In May and June 2020, BEH, BEP and FDS received total of $215,600 from the Economic Injury Disaster Loan (“EIDL loan”) from the SBA after deducting $100 Uniform Commercial Code (“UCC”) handling charge and filing fee for each company. This is a low-interest federal disaster loan for working capital to small businesses and non-profit organizations of any size suffering substantial economic injury as a result of the Coronavirus (COVID-19), to help the businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. This loan has interest of 3.75% and is not forgivable. The maturity of the loan is 30 years, installment payments including principal and interest of $288 monthly will begin 12 months from the date of the promissory note. On March 4, 2022, The FDS transferred its EIDL loan to BEC due to the dissolution of FDS. The SBA extended the deferment period to allow small businesses and not-for-profits that received EIDL funds do not have to begin payments on the loan until 30 months after the date of the note. Accordingly, the company began to make installment payments in the fourth quarter 2022. 

As of December 31, 2024, the future minimum EIDL loan payments from the company’s continuing operations to be paid by year are as follows:

Off-Balance Sheet Arrangements 

We have not entered into any financial guarantees or other commitments to guarantee the obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

SHAREHOLDERS, DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The table below sets forth the directors of the company.

The table below sets forth the officers of Bio Essence.

Biographies

Ms. Yin Yan, Chairwoman and CEO

Ms. Yin Yan has a Juris Doctor degree from New South Wales University College of Law in Australia. She is a registered lawyer in High Court of Australia and the State of New South Wales. She also has an MBA degree in Technology Management and Computer Information System from Arizona State University.

Ms. Yin Yan is an active business leader. She is a major shareholder of Bio Essence Corporation, a public trading company. She has been serving the Board as Chairwoman and Corporate Chief Executive Officer since 2016. She is also a Chairwoman and CEO of a Nasdaq public trading company MarWynn Holdings Inc. (MWYN)

Mr. William E. Sluss, Board Member and CFO

Mr. William E. Sluss has served as a Financial Executive for both private and publicly traded companies over the last thirty years. Most recently, Mr. Sluss has served as director and Chief Financial Officer for Black Bird Biotech, Inc. located in Flower Mound, Texas. Prior to joining Black Bird Biotech, Inc., Mr. Sluss was the Chief Financial Officer and Secretary for EFT Holdings, Inc., a manufacturer and distributor of beauty and nutritional products headquartered in Los Angeles California. Prior to relocating to Los Angeles, California in 2010, Mr. Sluss served as the Chief Financial Officer for AccuForce Staffing Services in Kingsport, Tennessee. Prior to this role, Mr. Sluss was the Chief Financial Officer and Treasurer for Studsvik, Inc., a nuclear services company based in Erwin, Tennessee.

In addition to serving as a Financial Executive, Mr. Sluss has worked as an attorney at Ecoff Campain Tilles & Kay, LLP in Beverly Hills, California where he oversaw corporate and civil litigation.

Mr. Sluss is a licensed Certified Public Accountant and received his Bachelor of Science degree in accounting from the University of Virginia’s College at Wise in 1990. Mr. Sluss received his Juris Doctorate degree from Irvine University College of Law in 2020. Mr. Sluss is a licensed attorney and member of the California Bar.

Dr. Sia Fooladian, Board Member

Sia Fooladian, MD, MPH is a board-certified Cardiac Anesthesiologist, Ironman triathlete, and a passionate advocate for a holistic, integrative approach to health and wellness. With over ten years of clinical experience caring for patients with an array of medical ailments, Dr. Fooladian understands the need for an integrative approach to health. He believes that optimal health can be achieved and maintained by holistic understanding of a patient’s mind, body, and spirit and thereby, merging the best of Eastern and Western modalities to treat the root cause of disease.

Dr. Fooladian holds a BA in history and education from UCLA. He received his MD and MPH in health management from The George Washington University School of Medicine and Health Sciences. He completed his residency and fellowship training at UCLA Medical Center, where he served as Chief Resident. He currently resides and practices in Orange County, California.  

Mr. Tuan Tran, COO

Mr. Tuan Tran has over 20 years of experience in quality and operations working in the Nutrition, Dietary Supplements and OTC industries. Mr. Tran joined Bio Essence Corporation in January of 2020 as the VP of Operations. Mr. Tran’s current responsibilities include but are not limited Production, Warehouse & Distribution, Quality, Customer Service, R&D, Procurement, Human Resources, and Safety.

Mr. Tran has extensive knowledge in FDA regulations, GMPs, food safety, auditing, quality system, HACCP, Process Analytical Technology, CAPA, and Lean Manufacturing. Mr. Tran also specializes in crisis management, regulatory compliance, quality systems implementation, and supplier qualification.

Prior joining Bio Essence Corporation, Mr. Tran had worked in the industry for various companies including AMF Pharma as the Chief Operations Officer, SK Laboratories in the capacity of Vice President of Operations/Quality Director, Captek Softgel International as the Director of Operations, Robinson Pharma as the Director of Compliance, Leiner Health Products as the QA Manager, and Merical/Vita-Pak as the Production Supervisor. In addition to working in the private industry, Mr. Tran also worked in public sector for the Mashantucket Health Pequot Tribal Nation as a Health Inspector.

Mr. Tran received his Bachelors of Science Degree in Public Health from Southern Connecticut State University. He holds certifications in Pharmaceutical Engineering, Six Sigma Green Belt, Food Safety, Technical Writing and HACCP. Mr. Tran is a senior member with the American Society for Quality.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The company intends to pay salaries within 12 months after of the approval of this Offering. The highest paid officers of the company will have employment agreements and salaries negotiated. Salaries are targeted to be as follows:

All compensation will be on behalf of the company by Bio Essence and allocated to the subsidiaries.

In the future, the company will have to pay its officers, directors and other employees, which will impact the company’s financial condition and results of operations, as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The company may choose to establish an equity compensation plan for its management and other employees in the future. Further, as the company grows, the company intends to add additional executives, including but not limited to, a General Manager and Board Secretary.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

GENERALLY

Bio Essence is authorized to issue 500,000,000  shares of common stock, $0.001 par value per share, in the Company and 10,000,000 shares of preferred stock. As of the date of this offering 38,009,000 shares of common stock issued and outstanding, 1,000 shares of Series A Preferred Stock have been authorized, issued and outstanding. See “Description of Capital” and “Principal Shareholders.”

We have reserved 1,428,571 shares of common stock for this issuance under the Bio Essence’s private placement. The Company has not issued any options.

COMMON STOCK

Holders of outstanding shares of common stock are entitled to one vote per share on all matters submitted to a vote of the shareholders. Except as may be required by applicable law, holders of outstanding shares of common stock vote together as a single class. Holders of a majority of the outstanding shares of common stock constitute a quorum at any meeting of shareholders.

PREFERRED STOCK

Holders of the outstanding shares of Series A Preferred Stock, in accordance with the Certificate of Designation, and a conversion right of 1 Series A Preferred Share for 20 Common Shares and super majority voting rights of 75% of all voting.

Principal Shareholders

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Management Services Agreement and Employment Agreements

No Management Services Agreement is in place with any of the management team.

SECURITIES BEING OFFERED

Bio Essence is offering Common Stock in this Offering. The company is qualifying up to 100,000,000 shares of Common Stock under this Offering Statement, of which this Offering Circular is part. Bio Essence authorized capital stock consists of 500,000,000 shares of Common Stock (the “Common Stock”), at $0.001 par value, of which 38,009,000 shares are Common Stock are issued.

The following is a summary of the rights of Bio Essence’ capital common stock as provided in its Amended and Restated Certificate of Incorporation, and Bylaws, which have been filed as exhibits to the Offering Statement of which this Offering Circular is a part.

Common Stock

Shares of our common stock have the following rights, preferences and privileges:

Voting

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting at which a quorum is present will be decided by a majority of the voting power present in person or represented by proxy, except in the case of any election of directors, which will be decided by a plurality of votes cast. There is no cumulative voting.

Dividends

Holders of our common stock are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for payment, subject to the rights of holders, if any, of any class of stock having preference over the common stock. Any decision to pay dividends on our common stock will be at the discretion of our board of directors. Our board of directors may or may not determine to declare dividends in the future. See “Dividend Policy.” The board’s determination to issue dividends will depend upon our profitability and financial condition any contractual restrictions, restrictions imposed by applicable law and the SEC, and other factors that our board of directors deems relevant.

Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the company, the holders of our common stock will be entitled to share pro-rata on the basis of the number of shares held in any of the assets available for distribution after we have paid in full, or provided for payment of, all of our debts and after the holders of all outstanding series of any class of stock have preference over the common stock, if any, have received their liquidation preferences in full.

Other

Our issued and outstanding shares of common stock are fully paid and nonassessable. Holders of shares of our common stock are not entitled to pre-emptive rights. Shares of our common stock are not convertible into shares of any other class of capital stock, nor are they subject to any redemption or sinking fund provisions.

For a complete description of Bio Essences’ capital stock, you should refer to its Amended and Restated Certificate of Incorporation and Bylaws, and applicable provisions of the California General Corporation Law.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

BIOESSENCE, INC.

TABLE OF CONTENTS

BIO ESSENCE CORPORATION

BALANCE SHEETS

As of June 30, 2025

The accompanying notes are an integral part of these consolidated financial statements

BIO ESSENCE CORPORATION

STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements

BIO ESSENCE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

The accompanying notes are an integral part of these consolidated financial statements

BIO ESSENCE CORPORATION

STATEMENTS OF CASH FLOWS

 

		Six Months Ended  June 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(145,888	)		$	(81,740	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense			118				794
Loss on disposal of fixed assets			-				3,012
Gain from disposal of discontinued operations			-				(256,925	)
Operating lease expense			25,346				256,852
Changes in assets/liabilities:
Accounts receivable			155				(7,888	)
Other receivables			17,784				(197,295	)
Receivable from sales of BEP and BEH							-
Prepayment and deposits			(21,104	)			50,545
Accounts payable			(7,046	)			47,166
Customer deposit			103,164				14,090
Tax payable			494				1,668
Accrued interest			-				(35	)
Accrued liability and other payables			(1,305	)			197,293
Payment of lease liability			-				(47,100	)
Net cash provided by (used in) operating activities from continuing operations			141,728				(19,563	)
Net cash used in operating activities from discontinued operations			-				(136,777	)
Net cash provided by (used in) operating activities			141,728				(156,340	)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft			6,966				(9,436	)
Loan from shareholders			419,400				185,200
Repayment to shareholders			(568,800	)			-
Repayment of SBA loan			(665	)			(612	)
Net cash (used in) provided by financing activities from continuing operations			(143,099	)			175,152
Net cash used in financing activities from discontinued operations							(9,323	)
Net cash (used in) provided by financing activities			(143,099	)			165,829
NET INCREASE (DECREASE) IN CASH			(1,371	)			9,489
CASH AT THE BEGINNING OF YEAR			1,371				-
CASH AT THE END OF YEAR		$	-			$	9,489
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS:
Cash and equivalents		$	-			$	9,489
Cash and equivalents included in discontinued operations		$	-			$
Supplemental Cash flow data:
Cash paid for interest		$	1,090			$	5,235
Cash paid for income taxes		$	-			$	800

The accompanying notes are an integral part of these consolidated financial statements

BIO ESSENCE CORPORATION

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Bio Essence Corporation (“the Company” or “Bio Essence”) was incorporated in 2000 in the state of California. Fusion Diet Systems (“FDS”) was incorporated in 2010 in the state of Utah. Bio Essence and FDS have been under common control since 2016. Bio Essence and FDS are mainly engaged in manufacturing and distributing health supplement products. On March 1, 2017, the 100% shareholder of FDS transferred all of her ownership in FDS to Bio Essence. On December 7, 2021, the Company dissolved FDS.

In January 2017, Bio Essence incorporated two subsidiaries in the state of California: Bio Essence Pharmaceutical Inc. (“BEP”) and Bio Essence Herbal Essentials, Inc. (“BEH”), Bio Essence transferred its manufacturing operation to BEP and transferred its distributing operation to BEH. On December 12, 2023, the Company entered into an agreement with Newways Inc. to sell the 100% equity ownership of BEP for $300,000. On March 28, 2024, the Company entered into an agreement with Health Up Inc. to sell the 100% equity ownership of BEH for $400,000.

Bio Essence incorporated a wholly owned subsidiary McBE Pharma Inc. (“McBE”) in the state of California, McBE will be engaged in developing, manufacturing and sales of prescription medicine. McBE has not engaged in any operations since its inception. On April 15, 2024, the Company dissolved McBE.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying consolidated financial statements (“CFS”) are prepared in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and should be read in conjunction with the audited financial statements and notes thereto contained in Bio Essence’s Annual Report filed with the SEC on Form 10-K. The functional currency of Bio Essence is U.S. dollars (“$’’). The accompanying financial statements are presented in U.S. dollars (“$”). The consolidated financial statements for the six months ended June 30, 2025 and 2024 and as of June 30, 2025 and December 31, 2024, include the financial statements of the Company and its subsidiaries, BEH (up to disposal date), and McBE (up to dissolution date). All significant inter-company transactions and balances were eliminated in consolidation.

Going Concern

The Company incurred net loss of $145,888 and $338,665 from continuing operations for the six months ended June 30, 2025 and 2024, respectively. The Company also had an accumulated deficit of $10,595,158 as of June 30, 2025. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company disposed non-profitable subsidiaries BEH and BEP, and is actively seeking other business opportunities including expanding OEM business and looking for potential acquisition targets. Management also intends to raise funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.

Leases

The Company follows ASC 842 and determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities (current and non-current) in the Company’s consolidated balance sheets. Finance leases are included in property and equipment, and finance lease liabilities (current and non-current) in the Company’s consolidated balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived non-financial assets. The Company recognized $1,050,940 impairment loss of ROU assets during the year ended December 31, 2024.

Cash and Cash Equivalents

For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Credit Losses

On January1, 2023, the Company adopted Accounting Standards Update 2016-13 “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of January 1, 2023.

The Company’s account receivables and other receivables in the balance sheet are within the scope of ASC Topic 326. As the Company has limited customers and debtors, the Company uses the loss-rate method to evaluate the expected credit losses on an individual basis. When establishing the loss rate, the Company makes an assessment on various factors, including historical experience, credit-worthiness of customers and debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.

Expected credit losses are recorded as allowance for credit losses on the consolidated statements of operations. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amount that is previously reserved for, the Company will reduce the specific allowance for credit losses.

Accounts Receivable, Net

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of June 30, 2025 and December 31, 2024, there was no bad debt allowance.

Property and Equipment. Net

Property and equipment are stated at cost, less accumulated depreciation, and impairment losses, if any. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets as follows:

Impairment of Long-Lived Assets

Long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by comparing of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of June 30, 2025 and December 31, 2024, there were no significant impairments of its long-lived assets except $1,050,940 impairment of ROU assets during 2024.

Income Taxes

Income taxes are accounted for using an asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.

Under the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income.

At June 30, 2025 and December 31, 2024, the Company did not take any uncertain positions that would necessitate recording a tax related liability. The Company files a U.S. income tax return. With few exceptions, the Company’s U.S. income tax return filed for the years ending on December 31, 2021 and thereafter are subject to examination by the relevant taxing authorities.

The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, “Interim Reporting.” The Company has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period. 

Revenue Recognition

The Company recognizes revenues following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.