Discontinued Operations

9 Months Ended

Sep. 30, 2025

3. DISCONTINUED OPERATIONS

Disposal of BEH

On March 28, 2024, the Company entered into a Stock Purchase Agreement (“SPA”) with Health Up Inc., a California corporation (“HUT”), an unrelated party whereby the Company agreed to sell to HUT its wholly owned subsidiary, BEH, in exchange for cash consideration of $400,000. The transaction was closed on April 1, 2024. The Company recorded $377,752 gain on disposal of the subsidiary, which was the difference between the selling price of $400,000 and the carrying value of the net assets of $22,248 of the disposal entity. The following table summarizes the carrying value of the assets and liabilities of BEH at March 31, 2024.

	As of March 31, 2024
ASSETS
CURRENT ASSETS
Cash and equivalents	$	114
Accounts receivable, net		43,164
Other receivables		877,749
Prepaid expenses		52,419
Security deposit		5,364
Inventory, net		184,590
Property and equipment, net		92,274
ROU, Net		112,213
TOTAL ASSETS	$	1,367,887

LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Bank overdraft	$	2,532
Accounts payable		183,170
Taxes payable		14,515
Accrued liabilities and other payables		841,390
Accrued interest on government loans		13,603
Finance lease liabilities		2,694
Operating lease liability		50,331
Loan from officer		29,000
Finance lease liabilities		695
Operating lease liability		61,996
Government loans payable		145,714
TOTAL LIABILITIES	$	1,345,640
Net Assets		22,248
Consideration		400,000
Gain on disposal	$	377,752

The operations of BEH was accounted for as discontinued operations in the accompanying consolidated financial statements for all periods presented. The following table presents the components of discontinued operations reported in the consolidated statements of operations:

	For the Nine Months Ended September 30, 2024

Revenue, Net	$	153,865
Cost of Revenues		76,592
Gross Profit		77,273
Operating Expenses		192,652

Loss from Operations		(115,379	)
Other Income (Expenses)
Interest expense		(4,154	)
Other expenses		(1,294	)

Total Other Expenses		(5,448	)
Loss Before Income Taxes		(120,827	)
Income Tax Expense		-
Net Loss from Discontinued Operations	$	(120,827	)

Bio Essence Corp 10-Q