Bio Essence Corp. Files Q2 2024 10-Q

TL;DR

Bio Essence Corp. filed its Q2 10-Q. All systems go.

AI Summary

Bio Essence Corp. filed its 10-Q for the quarterly period ended June 30, 2024. The company, incorporated in California, is in the pharmaceutical preparations industry. Its principal executive offices are located at 12 Chrysler Unit B, Irvine, CA 92618, with a business phone number of (949) 706-9966.

Why It Matters

This filing provides investors with an update on Bio Essence Corp.'s financial performance and operational status for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing and does not contain immediate red flags.

Key Players & Entities

• Bio Essence Corp. (company) — Registrant
• June 30, 2024 (date) — Quarterly period end date
• California (location) — State of incorporation
• 2834 (industry_code) — Standard Industrial Classification
• 12 Chrysler Unit B, Irvine, CA 92618 (address) — Principal executive offices
• 949-706-9966 (phone_number) — Business phone number

FAQ

Key Financial Figures

• $0.0001 — OLDERS’ DEFICIT Preferred stock $0.0001 par value; authorized shares 10,000,000
• $300,000 — ll the 100% equity ownership of BEP for $300,000. On March 28, 2024, the Company entered
• $400,000 — ll the 100% equity ownership of BEH for $400,000. Bio Essence incorporated a wholly owne
• $338,665 — cern The Company incurred net loss of $338,665 and $116,507 from the Company’s c
• $116,507 — mpany incurred net loss of $338,665 and $116,507 from the Company’s continuing ope
• $215,678 — ely. The Company incurred net losses of $215,678 and $93,443 from the Company’s co
• $93,443 — any incurred net losses of $215,678 and $93,443 from the Company’s continuing ope
• $9,222,214 — pany also had an accumulated deficit of $9,222,214 from the company’s continuing ope
• $2,252 — e from discontinued operation (BEH) was $2,252. Inventory Inventories are stated at
• $8,009 — costs from discontinued operations were $8,009 and $19,959, respectively. During the t
• $19,959 — discontinued operations were $8,009 and $19,959, respectively. During the three months
• $10,542 — m discontinued operations were $nil and $10,542, respectively. Advertising Advertisi

Filing Documents

• ea0211019-10q_bioess.htm (10-Q) — 417KB
• ea021101901ex31-1_bioess.htm (EX-31.1) — 22KB
• ea021101901ex32-1_bioess.htm (EX-32.1) — 12KB
• image_001.jpg (GRAPHIC) — 7KB
• 0001213900-24-070806.txt ( ) — 463KB

Financial Statements

Financial Statements Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 1 2 3 4

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) 5 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 26 Item 4.

Controls and Procedures

Controls and Procedures 26 PART II OTHER INFORMATION 28 Item 1.

Legal Proceedings

Legal Proceedings 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item 3. Defaults Upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 28

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements BIO ESSENCE CORPORATION BALANCE SHEETS AS OF JUNE 30, 2024 AS OF DECEMBER 31, 2023 (UNAUDITED) ASSETS CURRENT ASSETS Cash and equivalents $ 9,489 $ - Accounts receivable 7,890 - Receivable due from disposal of discontinued operations 700,000 300,000 Other receivables 197,294 - Security deposit 2,000 - Total current assets 916,673 300,000 NONCURRENT ASSETS Security deposit - 52,545 Right-of-use assets, net 1,178,577 1,427,918 Property and equipment, net - 3,688 Intangible assets, net 450 567 Total non-current assets 1,179,027 1,484,718 Assets classified as held for sale - 973,862 TOTAL ASSETS $ 2,095,700 $ 2,758,580 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Bank overdraft $ - $ 9,436 Accounts payable 59,620 12,453 Customer deposit 14,090 - Accrued liabilities and other payables 336,664 137,700 Accrued interest on government loans 2,342 2,377 Operating lease liabilities 721,360 495,217 Government loans payable - current portion 1,331 4,596 Loan from shareholders 1,973,877 1,788,677 Total current liabilities 3,109,284 2,450,456 NONCURRENT LIABILITIES Operating lease liabilities 672,677 938,409 Government loans payable 55,773 53,120 Total non-current liabilities 728,450 991,529 Liabilities classified as held for sale - 976,889 TOTAL LIABILITIES 3,837,734 4,418,874 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ DEFICIT Preferred stock $0.0001 par value; authorized shares 10,000,000, no shares issued and outstanding as of June 30, 2024 and December 31, 2023 - - Common stock $0.0001 par value; authorized shares 100,000,000; issued and outstanding shares 38,009,000 as of June 30, 2024 and December 31, 2023 3,801 3,801 Additional paid in capital 7,476,379 7,476,379 Accumulated deficit (9,222,214 ) (9,140,474 ) TOTAL STOCKHOLDERS’ DEFICIT (1,742,034 ) (1,660,294 ) TO

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 (UNAUDITED) AND DECEMBER 31, 2023 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. 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 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. 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. The functional currency of Bio Essence is U.S. do

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS During the preparation of this interim report, the Company determined that it had not appropriately accounted for certain historical transactions under US GAAP. In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Period Misstatements when Quantifying Misstatements in Current Period Financial Statements, the Company evaluated the materiality of the errors from qualitative and quantitative perspectives, individually and in aggregate, and concluded that the errors were material to the Consolidated Statements of Operations for the quarter ending March 31, 2024. Based on this evaluation, on August 19, 2024 the Board of Directors, with the concurrence of management, concluded that the Company’s previously issued financial statements for the period above would need to be restated and could no longer be relied upon. The Company has restated the impacted financial statements for the periods, and presented the effects of the restatement adjustments to the statement below. Going Concern The Company incurred net loss of $338,665 and $116,507 from the Company’s continuing operations for the six months ended June 30, 2024 and 2023, respectively. The Company incurred net losses of $215,678 and $93,443 from the Company’s continuing operations for the three months ended June 30, 2024 and 2023, respectively. The Company also had an accumulated deficit of $9,222,214 from the company’s continuing operations as of June 30, 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

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