Executive Summary / Key Takeaways

• Niche Biotech Focus: Yubo International Biotech ($YBGJ) is uniquely positioned in the research, development, and application of endometrial stem cells, aiming to establish the world's first public repository under its VIVCELL brand, alongside a diversified portfolio of health and personal care products and services in China.
• Severe Financial Headwinds: The company reported nil sales for the first half of 2025, significant net losses of $592,136, and a negative working capital of $4.37 million as of June 30, 2025, leading to a "going concern" warning.
• Shareholder-Backed Liquidity: Immediate liquidity concerns are being addressed through continuous financial support from its largest shareholder and a recent debt-for-equity conversion of $3.20 million in shareholder loans, though this transaction did not generate new cash proceeds.
• Complex Regulatory Environment: Operations are heavily exposed to evolving PRC laws and regulations, particularly concerning its Variable Interest Entity (VIE) structure, cybersecurity, data privacy, and overseas listings, posing substantial risks to its business continuity and stock value.
• Long-Term Potential vs. Execution Risk: While the specialized stem cell focus offers a differentiated long-term growth avenue, the company faces significant execution challenges in commercialization, securing sustainable financing, and effectively competing against larger, more established biotech players.

The VIVCELL Vision: Pioneering Endometrial Stem Cells in China

Yubo International Biotech Limited ($YBGJ) operates as a U.S. holding company, primarily conducting its day-to-day business in China through a Variable Interest Entity (VIE) structure centered around Yubo International Biotech Beijing Limited (Yubo Beijing). This structure is a strategic necessity, as PRC laws restrict direct foreign investment in certain sensitive industries, including Yubo Beijing's core focus. At its heart, Yubo Beijing is a technology company dedicated to the research, development, and application of endometrial stem cells, with an ambitious goal to establish the world's first public endometrial stem cell repository under its VIVCELL brand.

The company's strategic intent is to leverage this foundational stem cell research into a diversified portfolio. Beyond its core stem cell services, which include cell testing and health management consulting (a service line initiated in Q3 2023), YBGJ offers a range of VIVCELL-branded health and personal care products. These include healthcare products for the respiratory system, skincare, hair care, healthy beverages, and male and female personal care items. This broad product offering aims to capture various segments of the burgeoning Chinese wellness market, extending the reach of its underlying biotech expertise.

YBGJ's technological differentiation lies in its specialized focus on endometrial stem cells. While specific quantitative performance metrics for this technology are not publicly detailed, the strategic emphasis on building a "public repository" implies a long-term vision for broad accessibility and diverse applications in regenerative medicine and personalized health solutions. The company's intangible assets, including "Distribution software," "Experience center software," "Patents acquired from related party," and a "Wechat application," underscore investments in operationalizing and protecting its intellectual property. This specialized focus aims to create a niche competitive moat, potentially leading to superior product efficacy in personalized health and wellness, fostering stronger customer loyalty, and enabling premium pricing in the future.

In the competitive landscape, YBGJ positions itself as a specialized player in consumer-oriented stem cell applications. Direct competitors like Cellectis (CLLS), Bluebird Bio (BLUE), and Organogenesis (ORGO) generally operate at a larger scale with more advanced therapeutic pipelines or established medical-grade product lines. Cellectis, with its gene-editing cell therapies, offers higher precision and R&D depth. Bluebird Bio, focused on genetic diseases, boasts a more established pipeline and faster market expansion. Organogenesis, specializing in regenerative wound care, benefits from consistent product sales and robust distribution. YBGJ's strength lies in its customer-facing services and adaptability within the consumer health market, potentially offering more accessible solutions and a broader product variety. However, it likely lags in technological sophistication for advanced therapies, innovation speed, and operational execution compared to these larger, more financially robust rivals. Indirect competitors, such as traditional pharmaceutical companies and emerging AI-driven health tech firms, also pose a threat by offering alternative health solutions that could impact YBGJ's market share in health management services.

A History Forged in China: Structural Evolution and Operational Footprint

The company's current structure is the culmination of a strategic evolution. Yubo Beijing was incorporated in China in June 2016, initially focusing on nebulizer sales. The U.S. holding company, Yubo International Biotech Limited, was formed through a reverse merger in January 2021, acquiring Platinum International Biotech Co., Ltd. (a Cayman Islands holding company), which in turn controlled Yubo Beijing through the VIE agreements established in September 2020. This complex structure is crucial for YBGJ to operate in China's restricted sectors while accessing international capital markets.

YBGJ has expanded its operational footprint through several subsidiaries, including Yubo Global Biotechnology Chengdu Co. Ltd and Yubo Jingzhi Biotechnology Chengdu Co. Ltd., and acquired Phoenix Club Bio-Medical Technology Chengdu, Co., Ltd. in October 2023. In 2024, it further expanded by acquiring a 70% equity interest in EpiAis Biomedical Engineering Shenzhen Co., Ltd. The company has secured essential operational licenses from PRC authorities, including the Food Operation License Permit and Medical License Distribution Enterprise Filing Certificate, indicating compliance with local business requirements. However, a notable operational delay includes the non-commencement of a project to prepare 300 sets of endometrial stem cell harvesting packages as of June 30, 2025, under an agreement with a related party.

Recent Financial Performance: A Challenging Reality

YBGJ's recent financial performance paints a picture of significant challenges. For the three and six months ended June 30, 2025, the company reported nil sales, a stark decline from $3,488 in sales for the six months ended June 30, 2024. This downturn is attributed by management "primarily due to downturn in market and economic conditions in China." The absence of revenue generation underscores a critical hurdle for a company aiming to commercialize advanced biotech applications and consumer products.

Despite the lack of sales, the company managed to reduce its net loss. For the three months ended June 30, 2025, the net loss was $249,722, compared to $598,348 for the same period in 2024. Similarly, for the six months ended June 30, 2025, the net loss was $592,136, an improvement from $1.01 million in the prior year period. This reduction in losses was "primarily due to decrease in total operating expenses," which fell to $249,699 for Q2 2025 from $470,436 in Q2 2024, and to $592,094 for H1 2025 from $882,517 in H1 2024. The decrease in operating expenses was largely driven by lower occupancy and other operating expenses. Additionally, other income/expense saw a significant decrease, primarily due to a "loss on obsolete inventory in the second quarter of 2024" and "first half of 2024," which did not recur in 2025.

A critical financial implication of YBGJ's operational status is that its PRC subsidiaries and VIE have not generated any profit since inception through June 30, 2025. Consequently, they have negative retained earnings and have not accrued statutory reserve funds. This also means that Yubo Chengdu, the WFOE, which is contractually entitled to 90% of Yubo Beijing's after-tax profit, "has not paid any fee to the WFOE to date." Furthermore, the company has recorded a 100% valuation allowance against its deferred tax assets, as management has not yet determined that future utilization of net operating loss carryforwards is "more likely than not" to be realized. These factors highlight the nascent stage of the company's commercialization efforts and the significant financial challenges it faces in achieving sustainable profitability.

Liquidity and the Going Concern Question

YBGJ's liquidity position is precarious, raising substantial doubt about its ability to continue as a going concern. As of June 30, 2025, the company reported a minimal cash balance of $10,416 and a significant negative working capital of $4.37 million. Historically, the company has relied heavily on "loans from our shareholders and capital contributions" to fund its operations.

Management's plan to address the going concern issue centers on securing additional capital from existing shareholders and seeking third-party financing. A crucial development occurred on March 31, 2025, when Jun Wang, the largest shareholder, provided a financial support letter committing to "continuous financial support" for 12 months. Based on this, management "believe[s] that our cash on hand and working capital will be sufficient to meet our and Yubo Beijing’s anticipated cash requirements through 2025."

Further bolstering its balance sheet, a subsequent event on July 23, 2025, saw YBGJ enter into a Securities Purchase Agreement to issue 50.60 million shares of Class A Common Stock to entities controlled by its President and CEO, Jun Wang and Yang Wang. The consideration for this transaction was the "cancellation of certain shareholder loans of the Company that are due and payable to Jun Wang and Yang Wang," totaling approximately $3.20 million. While this significantly reduces liabilities, it is important to note that the company "will not receive any net proceeds from the Transaction," meaning it does not directly inject new cash for operations.

Outstanding liabilities include RMB 1.56 million ($218,958) in past due rent as of June 30, 2025, and $432,028 in advances from prospective customers/distributors, which are subject to verbal agreements and can be requested for return. The company's ability to pay dividends is also constrained by PRC regulations, which require subsidiaries and VIEs to generate retained earnings and accrue statutory reserves before distributing funds. These factors collectively underscore the critical need for YBGJ to achieve profitable operations or secure substantial external financing to ensure its long-term viability.

Risks on the Horizon: A Complex Operating Environment

Investing in YBGJ involves significant risks, primarily stemming from its operational structure and the evolving regulatory landscape in China. The company's reliance on a Variable Interest Entity (VIE) structure, necessitated by PRC foreign investment restrictions, is a fundamental vulnerability. As management explicitly states, "Our contractual arrangements with Yubo Beijing have not been tested in a court of law." Should the PRC government deem these arrangements non-compliant or alter relevant laws, YBGJ could face "severe penalties," be forced to relinquish its interests, or forfeit contractual rights. Such actions could lead to a "material adverse change in our operations" and cause the Class A common stock to "significantly decline or become worthless."

The PRC government's "significant authority to intervene or influence" the China operations of offshore holding companies like YBGJ presents a pervasive risk. Recent enhancements in supervision over overseas listings, cybersecurity, and data privacy, coupled with anti-monopoly actions, could "significantly limit or completely hinder our ability to offer or continue to offer securities to investors." Yubo Beijing processes customer personal information, which may be deemed sensitive. While the company believes it is currently not subject to mandatory cybersecurity review or security assessments for outbound data transfer, it "cannot guarantee... that we will not be subject to the cybersecurity review in the future." Any such review could lead to "suspension of operations or other disruptions," "penalties," and reputational damage. Stricter data localization requirements could also "significantly increase our operating costs or cause delays or disruptions."

Furthermore, uncertainties surrounding the "enactment, implementation, and interpretation of the Overseas Listing Filing Rules" mean that future securities offerings may require approvals or filings with Chinese regulatory bodies like the CSRC and CAC. Failure to obtain these could result in "significant time and costs" or "sanctions," further restricting YBGJ's ability to raise capital. While YBGJ's auditor is U.S.-based and subject to PCAOB inspection, there remains a risk that regulatory authorities could apply "additional and more stringent criteria," potentially leading to delisting under the Holding Foreign Companies Accountable Act if PCAOB inspections are impeded. Finally, the enforceability of civil liabilities against YBGJ's China-resident executive officers and directors in U.S. courts is doubtful, as China does not have reciprocal treaties for judgment enforcement with the United States. These multifaceted risks underscore the highly speculative nature of an investment in YBGJ.

Conclusion

Yubo International Biotech ($YBGJ) presents a compelling, albeit high-risk, investment narrative centered on its pioneering efforts in endometrial stem cell research and application within the vast Chinese healthcare and wellness market. The company's vision to establish the world's first public endometrial stem cell repository, coupled with its diversified VIVCELL product lines and health management services, offers a unique long-term growth opportunity in a specialized biotech niche. This technological differentiation, while not yet yielding substantial financial returns, forms the bedrock of its strategic positioning against broader biotech players.

However, the company's current financial state is precarious, marked by nil sales in the first half of 2025, recurring net losses, and a significant negative working capital, which collectively raise substantial doubt about its ability to continue as a going concern. While immediate liquidity challenges are being addressed through robust shareholder support and strategic debt-for-equity conversions, the path to sustainable profitability remains unproven. The complex and evolving Chinese regulatory environment, particularly concerning its VIE structure, data security, and overseas listing rules, introduces profound operational and investment risks. For YBGJ to realize its potential, it must successfully commercialize its stem cell initiatives, secure additional sustainable financing, and adeptly navigate the intricate competitive and regulatory landscape. Investors should weigh the significant long-term potential of its unique technological focus against the immediate and substantial financial and regulatory headwinds.