F-1/A: Meiwu Tech Pivots to Skincare, Eyes Bitcoin Investment

Meiwu Technology Company Limited is raising capital through a primary and secondary offering to fund its new functional skincare business and a strategic Bitcoin treasury allocation.

Summary

• Meiwu Technology Company Limited is conducting a best-efforts primary offering of up to 38,000,000 Ordinary Shares at a fixed public offering price of $0.8 per share.
• Chairman Changbin Xia is also offering to resell 12,000,000 Ordinary Shares at $0.8 per share, from which the company will not receive any proceeds.
• The company plans to use the net proceeds from the primary offering for online marketing campaigns (9.5%), establishing 1,500 offline affiliate stores (28%), working capital (12.5%), and Bitcoin investment (50%).
• Meiwu has transitioned its business focus from its former online and mobile commerce for food products and SMS services to functional skincare products and training services, terminating its Variable Interest Entity (VIE) structure in December 2024.
• The functional skincare business generated 94.6% of total revenue for the six months ended June 30, 2025, and 38.0% for the year ended December 31, 2024.
• The company reported a net loss of $1,361,018 for the six months ended June 30, 2025, a significant increase from a net loss of $345,611 for the same period in 2024.
• Total net revenues for the six months ended June 30, 2025, increased to $2,477,852 from $86,159 in the prior year period, driven by the new functional skincare segment.
• For the full year 2024, the company reported a net income of $5,114,684, primarily due to an $8,220,215 gain on disposal of subsidiaries, compared to a net loss of $16,312,705 in 2023.
• The company has implemented two reverse stock splits: 1-for-35 on December 20, 2023, and 1-for-20 on April 1, 2025.
• Meiwu Technology is a British Virgin Islands holding company with primary operations in China, subject to PRC laws and regulations, including those concerning foreign investment and data security.

Sentiment

Score: 4

Explanation: The company is undergoing a high-risk, high-reward strategic pivot. While the new skincare business shows strong revenue growth, the overall net loss has widened, and the significant Bitcoin allocation introduces substantial volatility and regulatory uncertainties. Chinese regulatory risks remain a major concern, leading to a cautious outlook.

Positives

• The company has successfully pivoted its business strategy, with the new functional skincare segment driving a substantial increase in net revenue to $2,477,852 for the six months ended June 30, 2025, up from $86,159 in the prior year period.
• Strategic allocation of 50% of net proceeds from the primary offering to Bitcoin investment aims to diversify corporate cash holdings and potentially serve as a long-term store of value.
• Significant investment in R&D for functional skincare products, including cooperation agreements with research institutions and acquisition of six skincare formulations/products patents for approximately $1.46 billion.
• Plans to establish a network of over 1,500 offline affiliate stores and conduct extensive online marketing campaigns to expand market coverage and brand influence for the new skincare business.
• The company reported a net income of $5,114,684 for the year ended December 31, 2024, a notable improvement from previous years' losses, largely due to gains from subsidiary disposals.

Negatives

• Net loss significantly widened to $1,361,018 for the six months ended June 30, 2025, compared to $345,611 for the same period in 2024, primarily due to increased sales and marketing and general and administrative expenses associated with the business transition.
• The company relies on third-party manufacturers for product formulas and production, which could pose risks if agreements are not enforced or if competitors introduce similar products at lower prices.
• The beauty industry is highly competitive, with many larger multinational and domestic players possessing greater resources and brand recognition, potentially limiting Meiwu's market share and profitability.
• The Bitcoin treasury strategy exposes the company to extreme price volatility, custody risks, and significant legal, commercial, regulatory, and technical uncertainties associated with digital assets.
• The company's historical financial performance has been volatile, with significant net losses in prior years, and the new strategies have not been tested over an extended period or under different market conditions.

Risks

• The Chinese government may intervene or influence operations at any time, potentially resulting in material changes to operations or the value of securities, and could limit or hinder the ability to offer securities to investors.
• Uncertainties in the interpretation and enforcement of PRC laws and regulations, which can change quickly with little advance notice, could limit legal protections and adversely affect business operations.
• Securities may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect or investigate the company's auditor for two consecutive years, potentially leading to delisting.
• Reliance on dividends and other distributions from PRC subsidiaries to fund cash and financing requirements, which may be limited by PRC regulations on profit distribution and currency conversion.
• The Bitcoin treasury strategy exposes the company to high volatility in Bitcoin prices, which could significantly influence financial results and the market price of Ordinary Shares.
• Risks related to the custody of Bitcoin, including loss or destruction of private keys, cyberattacks, or the possibility that custodially-held Bitcoin may become part of a custodian's insolvency estate.
• The functional skincare business operates in a dynamic and highly competitive industry, and success depends on the ability to anticipate and respond to rapidly changing consumer preferences and trends.
• New product introductions may not be as successful as anticipated, potentially impacting revenue, margins, and overall business prospects.
• Reliance on third-party service providers for logistics services, which could lead to disruptions, compromised products, or impaired customer experience if services are unreliable.
• Potential for infringement claims of intellectual property rights or other rights of third parties, which could be expensive to defend and disrupt business operations.
• Failure to obtain and maintain requisite licenses, permits, registrations, and filings applicable to the business, or to comply with evolving product safety laws and standards, could result in penalties and reputational damage.
• Security breaches and cyberattacks against internal systems and networks, or those of third-party service providers, could damage reputation, lead to data loss, and adversely affect financial condition.

Future Outlook

The company plans to further develop its functional skincare business by expanding partnerships with research institutions for new formulas and products, and by developing a network of distributors in second and third-tier cities in China. It also intends to allocate approximately 50% of the net proceeds from the primary offering to establish a strategic Bitcoin treasury position, aiming for long-term value creation and diversification of corporate cash holdings. Future Bitcoin acquisitions are planned through issuances of Ordinary Shares and other securities, with a target average cost basis of less than $115,000 per Bitcoin.

Management Comments

• Management believes that maintaining a Bitcoin position may serve as a potential long-term store of value and a means to diversify corporate cash holdings beyond traditional financial instruments.
• The company intends to keep any future earnings to re-invest in and finance the expansion of its business, and does not anticipate declaring or paying any cash dividends in the foreseeable future.
• Management is directly supervising cash management, with the finance department responsible for establishing cash management policies and procedures among departments and operating entities.

Industry Context

The company's pivot to functional skincare aligns with the industry's projected 5% CAGR over the next five years in China, driven by evolving consumer preferences for ingredient transparency and product efficacy. The beauty training service industry in China is also growing, supported by government encouragement for vocational education and increasing demand for skilled talents in light medical aesthetics. The Bitcoin industry, while experiencing a surge in investor attention and the recent approval of spot Bitcoin ETPs, remains highly volatile and subject to significant regulatory and technical uncertainties, including potential impacts from new digital assets like CBDCs.

Corporate Governance

Legal Proceedings

• No pending legal proceedings to which the company is a party are expected to have a material effect on the company's business, results of operations, or cash flows.

Related Party Transactions

• As of June 30, 2025, the company had no outstanding amounts due to related parties, compared to $1,291,608 as of December 31, 2024, which included interest-free, due-on-demand loans from Chairman Changbin Xia.
• In 2024 and 2023, the company purchased $0 and $18,310, respectively, in food products from related parties.
• In 2024 and 2023, sales to related parties were $0 and $21,215, respectively.

Stakeholder Impact

• Shareholders face potential dilution from the offering and significant volatility risks associated with the Bitcoin treasury strategy, but also potential long-term returns if the new skincare business and Bitcoin strategy are successful.
• Employees will see increased recruitment for new media operations and affiliate store development, particularly in the marketing department, as the company expands its functional skincare business.
• Customers will benefit from new functional skincare products, an expanded network of offline affiliate stores, and enhanced online marketing and customer service initiatives.
• Suppliers and R&D partners will engage in new cooperation agreements for functional skincare product development and manufacturing, potentially leading to increased business opportunities.
• Creditors and investors are exposed to the company's increased net losses in the short term and the inherent risks of operating in China and the volatile cryptocurrency market.

Next Steps

• Conduct online marketing campaigns and incubate livestream e-commerce accounts to enhance exposure of brand IP Gongfuzhiye.
• Establish a network of over 1,500 offline affiliate stores to expand market coverage and influence.
• Recruit approximately 70 franchise development staff to support the establishment of affiliate stores.
• Hold approximately 30 business promotion salons per month across various cities in China to recruit and develop affiliate stores.
• Subsidize partners and affiliate stores for the replacement of store signage with standardized Company-branded signage.
• Provide training to partner stores on technical knowledge of functional skincare products and unified promotional programs.
• Continue to expand partnerships with research institutions to develop new functional skincare formulas and products.
• Organically develop new channels of distribution and new sales relationships across China.
• Acquire Bitcoin over time, allocating approximately 50% of the net proceeds from the primary offering, with a target average cost basis of less than $115,000 per Bitcoin.
• Monitor PRC regulatory developments relating to cryptocurrency and adjust strategies accordingly to avoid potential non-compliance.

Key Dates

Recommendation

The company is undergoing a significant business transformation, pivoting to functional skincare and adopting a high-risk Bitcoin treasury strategy. While the skincare segment shows promising revenue growth, the overall net losses have widened in the most recent period, and the Bitcoin investment introduces substantial market and regulatory volatility. Chinese regulatory uncertainties and potential delisting risks further complicate the outlook. A 'Hold' recommendation is appropriate for a seasoned investor to observe the execution of these new strategies and the impact of regulatory developments before making a stronger commitment, as the long-term success of the new business model and Bitcoin strategy remains unproven despite the capital raise.

Keywords

Skincare, Bitcoin, China, SEC Filing, F-1/A, Meiwu Technology, WNW, Functional Skincare, Cryptocurrency, Nasdaq, PRC Regulation, Corporate Governance, Equity Offering, VIE Termination