F-1/A: Park Ha Biological Launches $2.8M Unit Offering Amid Losses

Park Ha Biological Technology Co., Ltd. announces a best-efforts public offering of 20 million units, each comprising one Class A Ordinary Share and one warrant, aiming to raise up to $2.8 million for store expansion.

Summary

• The company is offering 20,000,000 units on a best-efforts basis at a public offering price of $0.14 per unit.
• Each unit consists of one Class A Ordinary Share and one warrant to purchase one Class A Ordinary Share (up to nine Class A Ordinary Shares via a zero exercise price option).
• The company does not expect to receive any proceeds from the exercise of the warrants due to the zero exercise price option.
• Estimated net proceeds to the company from this offering are approximately $2.517 million, assuming the maximum offering, after deducting placement agent commissions and estimated offering expenses.
• The net proceeds are intended for the expansion of directly operated stores.
• Total revenue increased by $386,269 to $1,239,197 for the six months ended April 30, 2025, from $852,928 for the six months ended April 30, 2024.
• The company recorded a net loss of $19,835,994 for the six months ended April 30, 2025, compared to a net income of $48,900 for the six months ended April 30, 2024.
• Net income decreased by $373,481 to $478,561 for the fiscal year ended October 31, 2024, from $852,042 for the fiscal year ended October 31, 2023.
• As of April 30, 2025, the company had 39 franchisees in China, a decrease from 45 franchisees as of October 31, 2024.
• The company's Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol BYAH, with a last reported sale price of $0.2683 per share on November 28, 2025.
• On September 2, 2025, the company received a notice from Nasdaq regarding non-compliance with the minimum bid price of $1 per share, with a compliance period until March 2, 2026.
• The company operates as a Cayman Islands holding company, conducting all operations in China through its PRC Subsidiaries, and does not use a variable interest entity structure.

Sentiment

Score: 3

Explanation: The company is facing significant financial challenges, including a substantial net loss in the most recent period and declining annual net income. The decrease in franchisees and the Nasdaq minimum bid price deficiency signal operational and market difficulties. While the capital raise provides some funding, its 'best-efforts' nature and the zero-proceeds warrants suggest a challenging fundraising environment and further dilution for Class A shareholders. These factors collectively indicate a high-risk investment.

Positives

• Total revenue increased by $386,269 to $1,239,197 for the six months ended April 30, 2025, from $852,928 for the same period in 2024.
• The company has an established brand, Park Ha, focusing on solutions for problematic skin, with proprietary beauty products and complimentary after-sales services.
• Park Ha Jiangsu serves as a research and development center focused on skincare products for sensitive skin.
• The company employs an innovative social marketing model and digital customer engagement strategy, utilizing platforms like Douyin, RED, and WeChat Video.
• A stable supply chain system is in place, with functional and compatibility testing on raw materials and regular supplier visits.
• The management team is described as strong and diversified, with the CEO and CTO having over ten years of industry experience.
• The company holds 21 registered trademarks, 12 registered patents, 5 registered copyrights, and 1 domain name in China.
• PRC Subsidiaries have obtained all requisite governmental authorizations material for their current business operations in China.

Negatives

• The company reported a significant net loss of $19,835,994 for the six months ended April 30, 2025, a substantial decline from a net income of $48,900 in the prior year period.
• Net income decreased by $373,481 to $478,561 for the fiscal year ended October 31, 2024, from $852,042 in 2023.
• The number of franchisees decreased from 45 as of October 31, 2024, to 39 as of April 30, 2025.
• The company received a Nasdaq notice on September 2, 2025, for failing to meet the minimum bid price of $1 per share, with a compliance deadline of March 2, 2026.
• The offering is on a 'best-efforts' basis with no minimum, meaning the company may not raise sufficient capital to fund its business plans.
• No additional proceeds are expected from the exercise of the warrants due to the zero exercise price option.
• New investors will experience an immediate dilution of $0.02 per Class A Ordinary Share, as the as-adjusted net tangible book value after the offering is $0.12 per share compared to the $0.14 offering price.
• The company relies on dividends from its PRC Subsidiaries for cash and financing, which can be restricted by PRC laws and regulations.
• A dual-class share structure with different voting rights (Class B has 20 votes per share, Class A has 1 vote) limits the influence of Class A shareholders, with the CEO controlling over 90% of total voting power.
• The company does not own the formulas for its products, relying on third-party manufacturers, which poses a risk if competitors use the same manufacturers.
• There is a concentration risk with suppliers, as six suppliers accounted for 10% or more of total purchases for the six months ended April 30, 2025.
• There is no established public trading market for the Warrants, and the company does not intend to list them.
• The company does not maintain any insurance to cover its assets, operations, or business interruptions.

Risks

• Funds or assets in the PRC or Hong Kong may not be available to fund operations or for other uses outside due to government restrictions and limitations.
• Uncertainties exist with respect to the PRC legal system, including rapid changes in laws and regulations, which could materially adversely affect the business.
• The PRC government may intervene or influence operations at any time, potentially limiting the ability to offer securities or causing their value to decline.
• Approval or filing with the CSRC or other PRC regulatory agencies may be required to maintain listing status or conduct future offshore securities offerings.
• Continued U.S. regulatory and legislative focus, including the HFCAA, may adversely affect the market price of Class A Ordinary Shares and could lead to delisting.
• Greater oversight by the Cyberspace Administration of China (CAC) over data security, particularly for companies seeking foreign listings, could impact the business.
• Reliance on dividends from PRC Subsidiaries for cash and financing requirements, with potential limitations on their ability to pay dividends.
• Difficulties may arise in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against the company or its management.
• Overseas regulators may face difficulties in conducting investigations or collecting evidence within China.
• Fluctuations in currency exchange rates could have a material and adverse effect on the value of investments.
• Governmental regulations on currency conversion may limit the ability to utilize revenues effectively.
• Changes in PRC political, economic, and governmental policies may adversely impact the business.
• Failure to comply with PRC laws and regulations related to labor and employee benefits may result in penalties or additional costs.
• PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies may delay or prevent the use of financing proceeds.
• Certain PRC regulations may make it more difficult to pursue growth through acquisitions.
• The company may be classified as a PRC resident enterprise for tax purposes, leading to unfavorable tax consequences for the company and its shareholders.
• PRC regulations relating to offshore investment activities by PRC residents may limit PRC Subsidiaries' ability to change registered capital or distribute profits.
• The company operates in a dynamic industry with a limited operating history, meaning historical results may not be indicative of future performance.
• The beauty industry is highly competitive, and failure to compete effectively could lead to loss of market share.
• Success is dependent on the continued popularity of products and the ability to anticipate and respond to changes in industry trends and consumer preferences.
• Business depends on the quality, effectiveness, and safety of products; any loss of consumer confidence could damage the brand.
• Inability to provide superior customer experiences could materially and adversely affect the business and reputation.
• Reliance on a limited number of suppliers for raw materials creates a concentration risk and potential for supply chain disruptions.
• A significant portion of revenue is derived from a few major customers, making the company vulnerable to decreases in demand from them.
• The success of the franchise business model is critical, and growth through franchising may not occur as rapidly as anticipated.
• The dual-class share structure with different voting rights may adversely affect the value and liquidity of Class A Ordinary Shares.
• The dual-class share structure limits the ability of Class A shareholders to influence corporate matters and could discourage change of control transactions.
• Future issuances of Class B Ordinary Shares may be dilutive to holders of Class A Ordinary Shares.
• Failure to satisfy Nasdaq continued listing requirements (e.g., minimum bid price) could result in delisting.
• The 'best efforts' nature of the offering means no minimum capital raise is guaranteed, potentially leaving the company with insufficient funds.
• There is no public market for the Warrants, and the company does not expect one to develop.
• Holders of Warrants will have no rights as a shareholder until they acquire Class A Ordinary Shares upon exercise.
• If no current and effective prospectus for Warrant Shares, public holders can only exercise on a cashless basis, reducing potential upside.
• The company may not receive any additional funds upon the exercise of the Warrants due to the zero exercise price option.
• The CEO, Ms. Xiaoqiu Zhang, has significant influence over the company, and her interests may not always align with those of other shareholders.
• As an emerging growth company and foreign private issuer, the company is eligible for reduced reporting and corporate governance requirements, which may provide less protection to investors.
• The trading price of Class A Ordinary Shares is likely to be volatile.
• Failure to maintain an effective system of internal control over financial reporting could lead to inaccurate financial results or fraud.

Future Outlook

The company intends to use the net proceeds from this offering for the expansion of its directly operated stores. Its growth strategies include strengthening the development of its own products, improving training practices (including opening vocational training schools), enhancing social media-based sales and marketing capabilities, improving supply chain capacity, and seeking strategic investment, acquisition, and other cooperation opportunities. Future R&D will focus on small molecule peptide hydration penetration technology. The company also plans to launch new brands targeting male groups. It is currently evaluating options, including a share consolidation, to regain compliance with Nasdaq's minimum bid price requirement.

Management Comments

• "We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future."
• "Our management monitors the cash position of each entity within our organization regularly and prepares budgets on a monthly basis to ensure each entity has the necessary funds to fulfill its obligation for the foreseeable future and to provide adequate liquidity."
• "In the event that there is a need for cash or a potential liquidity issue, it will be reported to our Chief Financial Officer and subject to approval by our board of directors, we will enter into an intercompany loan for the applicable subsidiary in accordance with applicable PRC laws and regulations."
• "Our CEO and CTO each has over ten years of experience in the industry and plays essential roles in reaching out to potential customers. We believe that their experience, coupled with their profound understanding of the beauty industry and their passion and determination, make them effective business leaders. They are firmly committed to our mission and customer-oriented approach, helping more customers to solve skin problems."
• "We believe that we compete primarily based on perceived value, including pricing and innovation, product efficacy, service to the customer, promotional activities, advertising, special events, new product introductions, e-commerce initiatives, direct sales, and other activities."
• "We believe it is crucial to establish our brand awareness and differentiate ourselves from our competitors in order to attract new franchisees and investors."
• "We believe the key to a robust supply chain system lies in maintaining a good relationship with our existing suppliers, ensuring our suppliers consistency in meeting our quality, quantity and delivery requirements, as well as diversifying our suppliers."

Industry Context

The company operates in the highly competitive beauty market in China, competing with established multinational and domestic brands like Fanwenhua, DR PLANT, and Beauty Farm, which have larger market shares and longer operating histories. The industry is characterized by consumers expecting intimate product use experiences on social media platforms, leading many local enterprises to invest in online communities, VR product trials, live online sales, and social app advertising. The company's Online-to-Offline (O2O) business model leverages e-commerce platforms like Douyin and Meituan to drive traffic to physical stores. The primary target audience is young adults and middle-aged women in urban centers, with future plans to expand to male demographics.

Comparison to Industry Standards

• Competes with established multinational and domestic brands such as Fanwenhua, DR PLANT, and Beauty Farm, which have over 100 franchisees nationwide, a longer operating history, and higher market share.
• Larger and more established competitors benefit from economies of scale, allowing them to produce goods at lower costs per unit, potentially creating pricing advantages that make it difficult for the company to compete on price while maintaining profitability.

Management Changes

Corporate Governance

Legal Proceedings

• As of the date of this prospectus, the company is not involved in any legal or administrative proceedings that may have a material adverse impact on its business, balance sheets, or results of operations and cash flows.

Related Party Transactions

• Xiaoqiu Holding Ltd, a company solely owned by CEO Xiaoqiu Zhang, holds 19,050,000 Class B Ordinary Shares, giving her approximately 91.63% of the total voting power after the offering.
• Changxin International Limited Partnership, where Li Wang, Xiaoyan Zhu, and Guozhen Liu are limited partners, holds 2,500,000 Class A Ordinary Shares.
• In August 2025, Park Ha Cayman transferred US$1.4 million to WFOE as investments.

Stakeholder Impact

• **Shareholders (Class A)**: Will experience significant dilution from the offering and have limited influence due to the dual-class voting structure. Face a material risk of delisting from Nasdaq due to bid price non-compliance.
• **New Investors**: Will face immediate dilution and a high degree of risk, with no expected proceeds from warrant exercises.
• **Employees**: Potential benefits from intensified training practices and the planned opening of vocational training schools.
• **Customers**: The company aims to provide cost-effective solutions and enhanced experiences through its O2O model and value-added services.
• **Franchisees**: Receive training, stable supply chain, and guidance, but the recent decrease in franchisee numbers suggests potential challenges in this segment.
• **Creditors**: The holding company's reliance on dividends from PRC Subsidiaries, which can be restricted by PRC laws, could impact its ability to meet financing requirements.

Next Steps

• Complete the current best-efforts unit offering.
• Utilize net proceeds for the expansion of directly operated stores.
• Strengthen the development of own products, focusing on small molecule peptide hydration penetration technology.
• Improve training practices, including opening vocational training schools in inland and western China.
• Enhance social media-based sales and marketing capabilities on platforms like Douyin, RED, and WeChat Video.
• Improve supply chain capacity by partnering with additional third-party manufacturers and establishing warehouse/distribution centers.
• Evaluate and selectively seek strategic alliances, investment, and acquisition opportunities in the beauty industry.
• Launch new brands targeting male groups across all ages.
• Evaluate options to regain Nasdaq compliance, including a share consolidation, by March 2, 2026.
• File with the CSRC within three business days after the completion of this offering, as required by the Trial Measures.

Key Dates

Recommendation

The company's recent financial performance, marked by a substantial net loss in the latest six-month period and declining annual net income, raises significant concerns about its operational health. The decrease in the number of franchisees suggests a weakening of its core business model. Furthermore, the Nasdaq minimum bid price deficiency notice indicates a serious risk of delisting, which would severely impact liquidity and investor confidence. While the current unit offering provides some capital, its 'best-efforts' nature and the zero-proceeds warrants suggest a challenging fundraising environment and further dilution for Class A shareholders. The dual-class share structure also concentrates voting power, limiting minority shareholder influence. Given these compounding negative factors and high risks, a seasoned investor would likely recommend selling the stock.

Keywords

Skincare, Beauty, Cosmetics, Problematic Skin, Franchise, China, Nasdaq, F-1/A, Unit Offering, Warrants, Class A Ordinary Shares, Biological Technology, D. Boral Capital, D. Boral Capital LLC