Bio Essence Corp. 2025 Annual Report: Key Highlights and Investor Insights

Executive Summary

Bio Essence Corp. (OTC: BIOE) has released its annual report for the fiscal year ended December 31, 2025. The company, headquartered in Irvine, California, is primarily engaged in selling health supplements and providing OEM (original equipment manufacturer) services. In December 2023, Bio Essence disposed of its BEP manufacturing operation and now outsources all manufacturing/OEM services.

Key Financial Highlights

• Net Income: The company reported a net income of \$896,197 for the year ended December 31, 2025, a significant turnaround that could positively impact investor sentiment.
• Outstanding Shares: As of March 27, 2026, there were 38,009,000 shares of common stock issued and outstanding, with a par value of \$0.0001 per share.
• Market Capitalization: The aggregate market value of common stock held by non-affiliates was approximately \$26.8 million (based on a \$0.50 per share valuation as of December 31, 2025).
• Stockholder Deficit: The company reported a stockholders’ deficit of \$2,072,893 as of December 31, 2025, and \$2,969,090 as of December 31, 2024, highlighting ongoing balance sheet challenges.
• Total Assets: Reported at \$281,024 as of December 31, 2025.
• Principal Source of Funds: Loans from an officer (also the major shareholder) remain the primary funding source. The company estimates it needs \$1.2 million in cash to continue current operations for the next 12 months.
• Going Concern Warning: The report raises substantial doubt about the company’s ability to continue as a going concern, citing recurring losses, negative working capital, and accumulated deficits. Management is seeking new capital and exploring financing options.

Business Operations and Strategic Changes

• Shift in Operations: After selling its BEP operation in December 2023, the company now outsources manufacturing and OEM services.
• Employee Count: The company has only 4 full-time employees, indicating a very lean operation.
• Office Location: The main office is at 2955 Main Street, Suite 300, Irvine, CA 92618. The company does not own any real estate.

Related Party Transactions

• Loans from Shareholders: As of December 31, 2024, the company owed \$1,186,177 to a major shareholder (who is also a senior officer), including \$608,631 related to litigation settlements. These loans are unsecured, non-interest bearing, and payable on demand. The company repaid the outstanding balance in full during 2025.
• Loans to Shareholder: As of December 31, 2025, the company had provided \$385,003 in loans to a major shareholder/senior officer. There are no written agreements; these loans are non-interest bearing and receivable on demand. \$380,000 was repaid on March 20, 2026.

Corporate Governance and Controls

• Internal Controls: The company’s management (CEO Yin Yan and CFO William Sluss) concluded that internal controls over financial reporting and disclosure controls are not effective. Management is working to improve controls.
• No Audit Committee/Financial Expert: There is currently no audit committee or qualified financial expert on the board, citing resource constraints.
• No Code of Ethics: The company currently does not have a code of ethics but plans to implement one as the business expands.
• Executive Compensation: No compensation was paid to executives for the reported period.
• Equity Compensation: No equity compensation plans were approved or outstanding; all plan-related table entries are marked “N/A.”

Shareholder Information

• Largest Shareholder: Yin Yan (CEO and Chairman) holds 13,396,000 shares, making up a significant stake in the company.
• Stock Performance: The company’s shares trade on the OTC Markets under the symbol BIOE. There are 44 record holders as of the most recent practicable date.
• Dividends: The company has not paid any dividends and has not committed to paying dividends in the near future.

Legal and Regulatory Matters

• Litigation: The company is not currently involved in any material legal proceedings. Settlements from prior litigation are reflected in related party transactions.
• Auditor’s Opinion: The independent auditor issued an unqualified opinion on the 2025 and 2024 financial statements but noted substantial doubt regarding the company’s ability to continue as a going concern. No critical audit matters were identified.
• SEC Compliance: The company has filed all required periodic reports and posted all required Interactive Data Files.

Potential Price-Sensitive Issues for Shareholders

• Going Concern Warning: The company’s ability to continue as a going concern is highly uncertain. This is a significant risk factor that could negatively impact share value.
• Reliance on Key Shareholder/Officer for Funding: Operations are heavily reliant on loans from a major shareholder/officer. Any change in this relationship could impact the company’s ability to operate.
• Lack of Internal Controls and Governance Structures: Weaknesses in financial controls and absence of a code of ethics, audit committee, and financial expert are ongoing concerns that may deter institutional investors.
• No Executive Compensation or Equity Incentives: The absence of executive pay or incentives may raise concerns about management retention and alignment with shareholder interests.
• Limited Employee Base and Outsourced Operations: The company’s very small workforce and reliance on third-party manufacturing may impact its ability to scale and respond to business risks.
• Stockholder Deficit: The ongoing negative equity position highlights the need for significant capital improvements to ensure long-term viability.

Conclusion

While Bio Essence Corp. has reported a positive net income for 2025 and continues to operate, the company faces significant risks, including doubts about its ability to continue as a going concern, heavy reliance on related party financing, lack of internal controls, and governance deficiencies. Investors should carefully weigh these factors, as any negative developments in these areas could materially impact the company’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions. The analysis above is based solely on the company’s 2025 annual report and may not capture all developments or risks relevant to investors.

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