November 26, 2019
Yin Yan
Chief Executive Officer
Bio Essence Corp.
8 Studebaker Drive
Irvine, CA 92618
Re: Bio Essence Corp.
Amendment No. 1 to Form S-1
Filed October 28, 2019
File No. 333-232839
Dear Ms. Yan:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Amendment No. 1 to Form S-1
Prospectus Summary and Risk Factors, page 5
1. This section does not contain all of the information cited in the
asterisk. Accordingly,
please revise to delete this note or revise.
2. We note your discussion on page 6 concerning your sales channels. With a
view to
revised disclosure, please tell us whether you have conducted material
sales through each
of the identified channels. Given that these channels appear to be in
the United States,
please tell us whether your sales are concentrated in the United States.
With reference to
your disclosure on page 14, please also tell us whether material sales
volume is conducted
through your service providers.
Yin Yan
FirstName LastNameYin Yan
Bio Essence Corp.
Comapany 26, 2019 Essence Corp.
November NameBio
November 26, 2019 Page 2
Page 2
FirstName LastName
Summary of Business and Present Offering, page 5
3. Please include a brief description of the offering in this section.
Risk Factors, page 6
4. Please add a risk factor to disclose that there is substantial doubt
about your ability to
continue as a going concern. In this risk factor, please describe this
going concern opinion
and how it impacts your business operations. Additionally, please
disclose your working
capital deficit and net losses to date.
Risks Related to Our Business and Industry, page 6
5. We note that you offer your products and services in China. Please
advise whether any
additional permits or certificates are necessary to market your
products in China.
The herbal, vitamin, and nutraceuticals industry is an intensely competitive
market, page 6
6. Please remove the reference to the prospectus as a "Private Placement
Memorandum."
Please also revise other statements throughout the prospectus that
refer to the transaction
as a private offering.
We have experienced losses and we may not achieve or sustain profitability in
the future, page 8
7. Please revise this risk factor to quantify your losses for the past
two fiscal years and most
recent interim period.
Detailed Description of Business, page 13
8. Please disclose the basis for your statement that Bio Essence is a
"leader" in the
nutraceutical industry. Discuss any metrics that support the claim.
9. Please revise the organizational chart on page 14 to ensure that it
reflects the current size
and structure of your company. For example, you appear to show the CEO
and CFO as
separate individuals, but those functions are performed by the same
person.
Bio Essence Herbal Essentials dba Bio Essence Health Science, page 14
10. You state that BE Essentials provides "potent" dietary supplements.
Please tell us whether
the U.S. Food and Drug Administration or comparable regulatory body
has made any
conclusions regarding the efficacy of your products.
Outlook, page 15
11. Please provide the basis for the 20% growth that you expect over the
next two years and
what metric you are expecting to grow.
Yin Yan
FirstName LastNameYin Yan
Bio Essence Corp.
Comapany 26, 2019 Essence Corp.
November NameBio
November 26, 2019 Page 3
Page 3
FirstName LastName
Fusion Naturals, page 15
12. We note your statement that your products are "clinically proven."
Please clarify which of
your products are clinically proven and discuss the clinical results.
Also discuss whether
any regulatory authority has reviewed the trial data and/or approved
the products.
13. Please provide the basis for your estimate of $40 million in sales
within 5 years. Given the
extent of the projected increase, substantially revise the prospectus
to discuss all material
assumptions, including, as applicable, the estimated costs to add
production capacity,
increase brand recognition and develop the distribution network. To
the extent that you
wish to present this forecast in your revised prospectus, please also
clarify whether this is
an annual revenue figure or is cumulative for the five-year period.
Bio Essence Pharmaceutical, page 15
14. In the description of the production process you refer to research and
development experts
and a manufacturing facility and warehouse. We note that you currently
have 13
employees. Please indicate whether you perform research and
development and staff the
manufacturing and distribution facility internally or whether these
functions are staffed by
a third party.
Challenges, page 17
15. Please disclose the name of the market research analytics firms that
have provided future
forecasts for the nutraceuticals industry. In your response letter,
please tell us whether
you commissioned these reports or any other market reports or
forecasts presented in the
prospectus.
The U.S., China, India and Japan Vitamin and Dietary Supplement Market, page 17
16. Please explain the difference between the dietary supplement market
and the
nutraceuticals market. Please also provide the source for the Japanese
market estimate of
$30 billion.
Experts, page 19
17. In this section you state that the company has a team of American
medical doctors. Please
clarify whether these individuals are employees of the company and if
so please provide
additional details about the number of doctors and how they are unique
in the industry.
Facilities and Logistics, page 20
18. Please revise to expand your disclosure concerning your production
facility. Given the
financial projections made elsewhere in the prospectus and your legal
proceedings
disclosure on page 21, your disclosure in this section should discuss
when you moved to
the new production facility, its size and capacity, and whether new
facilities or significant
capital expenditures will be necessary to achieve the growth forecasts
that you present.
Yin Yan
Bio Essence Corp.
November 26, 2019
Page 4
Our Services, page 20
19. We note in the first bullet point that you establish a health record
that matches a suitable
doctor. Please revise to explain this process and clarify whether
these doctors are
employees of the company.
Liquidity and Capital Resources, page 26
20. Please provide an evaluation of your ability to meet upcoming cash
requirements over
both the short and long term. Current liabilities exceed current
assets at June 30, 2019, and
you have incurred substantial losses and cash outflows in the periods
presented. Please
provide your quantified analysis of the funds necessary to maintain
current operations,
achieve stated objectives or plans, and pay potential damages from the
pending litigation.
Discuss the expected sources of the necessary funds. Please refer to
Sections 501.03 and
501.13 of the Financial Reporting Codification for guidance. Please
consider combining
the discussions of liquidity on pages 26 and 28 into a single section
for clarity.
Directors, Executive Officers, Promoters and Control Persons, page 29
21. We note your disclosure that Ms. Yan separately devotes 20 hours per
week to another
business. Accordingly, please add a risk factor to discuss constraints
on your executives'
ability to devote time to the business.
22. Please revise the discussions of your management's business experience
to provide clear
disclosure regarding the activities of each officer or director during
the last five years,
including the companies at which each executive worked and the dates
of employment at
each company. In addition, for each director, briefly discuss the
specific experience,
qualifications, attributes or skills that led to the conclusion that
the person should serve as
a director.
Dilution, page 33
23. Please advise why a dilution section is not required by Item 506 of
Regulation S-K or
revise as necessary.
Use of Proceeds, page 33
FirstName LastNameYin Yan
24. It appears that you have no specific plan for your use of proceeds.
Please revise your
Comapany NameBio Essence Corp.
disclosure to discuss the principal reasons for the offering and add a
risk factor concerning
November lack2019specific plan. Please refer to Item 504 of Regulation S-K.
the 26, of a Page 4
FirstName LastName
Yin Yan
FirstName LastNameYin Yan
Bio Essence Corp.
Comapany 26, 2019 Essence Corp.
November NameBio
November 26, 2019 Page 5
Page 5
FirstName LastName
Exhibit Index, page 39
25. Please revise the exhibit index to list the legal opinion separately
as Exhibit 5.
Signatures, page 40
26. The registration statement should be signed by the registrant, its
principal executive
officer, its principal financial officer, its controller or principal
accounting officer and
by at least a majority of the board of directors or persons performing
similar functions.
Please refer to the signature page of Form S-1 and Instructions 1 and
2.
Exhibits
27. Please have counsel revise the legal opinion to remove references to
the State of Maryland
as the state of incorporation on page two of the opinion.
28. Please file the Board Director Agreement that was entered in June 2019
as an exhibit to
the registration statement.
29. Please file your material leaseholds as exhibits.
General
30. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
31. Please revise your disclosure throughout to explain whether you will
be registering your
common stock under the Exchange Act in connection with this offering.
If not, then add a
separate risk factor to explain that you will not be subject to the
proxy rules under Section
14 of the Exchange Act, the prohibition of short-swing profits under
Section 16 of the
Exchange Act, the beneficial ownership reporting requirements of
Sections 13(d) and (g)
of the Exchange Act, and that your periodic reporting obligations
under Section 13(a) will
be automatically suspended under Section 15(d) of the Exchange Act to
the extent that
you have fewer than 300 shareholders.
32. Please tell us how you will determine whether a particular sale of
common stock will be
made pursuant to the primary offering, in which the net proceeds will
go to the company,
or the secondary offering, in which proceeds will go to selling
shareholders/affiliates of
the company who are selling the IPO Shares.
Yin Yan
FirstName LastNameYin Yan
Bio Essence Corp.
Comapany 26, 2019 Essence Corp.
November NameBio
Page 6
November 26, 2019 Page 6
FirstName LastName
You may contact David Burton at (202) 551-3626 or Terence O'Brien at
(202) 551-
3355 if you have questions regarding comments on the financial statements and
related
matters. Please contact Chris Edwards at (202) 551-6761 or Joe McCann at (202)
551-6262 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Devin W. Bone, Esq.