Longduoduo's China Operations Face Regulatory Headwinds, Distribution Hurdles

TL;DR

**LDDD is a risky China-centric holding company with no direct operational control and significant regulatory hurdles to repatriate profits, making it a speculative bet at best.**

AI Summary

Longduoduo Co Ltd (LDDD) is a Nevada-incorporated holding company that conducts all its business operations through seven subsidiaries located in the People's Republic of China (PRC). As of December 31, 2024, the aggregate market value of voting stock held by non-affiliates was $79,322,230, with 30,015,036 shares of common stock outstanding. The company's corporate structure involves intermediary holding companies in Hong Kong and the British Virgin Islands, including Longduoduo HK and LDD Technology Limited, which ultimately control the seven PRC operating entities like Beijing Julong Health Consulting Co., Limited and Inner Mongolia Qingguo Health Consulting Company Limited. A significant risk highlighted is the dependence on distributions from its principal Chinese subsidiary, Julong, to finance administrative expenses and potential shareholder distributions, which are subject to stringent PRC foreign exchange and dividend regulations. The company has not yet made any transfers or distributions from its PRC subsidiaries to the Nevada parent or U.S. investors, and Julong does not plan to declare dividends to LDDJK. Furthermore, LDDD faces potential delisting risks under the Holding Foreign Companies Accountable Act (HFCAA) if its auditor, Bush & Associates CPA LLC, cannot be fully inspected by the PCAOB for two consecutive years, although currently, the PCAOB can inspect its Nevada-based auditor's work papers.

Why It Matters

Longduoduo's structure as a Nevada holding company with all operations in China creates significant investor risk due to PRC regulatory control over profit repatriation and potential delisting under the HFCAA. This setup means investors are not directly owning a Chinese operating entity, but rather a holding company reliant on complex, regulated cross-border transfers. The lack of any historical dividend or asset transfers from its PRC subsidiaries to the U.S. parent or investors, as explicitly stated in the filing, signals a critical challenge for shareholder returns. This model also places LDDD in a precarious competitive position against companies with more direct operational control or less exposure to U.S.-China regulatory tensions.

Risk Assessment

Risk Level: high — The risk level is high due to Longduoduo's complete dependence on its PRC subsidiaries for all operations and cash flow, coupled with strict PRC government controls on foreign exchange and dividend distributions. The filing explicitly states, "Chinese regulatory authorities could prevent our principal Chinese subsidiary from making distributions to its Nevada parent, which would likely result in a material change in our operations and cause the value of our securities to significantly decline or become worthless." Additionally, the company faces potential delisting under the HFCAA if PCAOB inspections are hindered, despite currently using a Nevada-based auditor, Bush & Associates CPA LLC.

Analyst Insight

Investors should exercise extreme caution and thoroughly evaluate the significant regulatory and operational risks associated with Longduoduo's China-centric holding company structure. Given the explicit statement that no dividends or distributions have been made to U.S. investors and the lack of plans for Julong to declare dividends, investors should consider this a highly speculative investment with substantial capital repatriation challenges.

Revenue Breakdown

Key Numbers

• $79,322,230 — Aggregate market value of voting stock held by non-affiliates (as of December 31, 2024)
• 30,015,036 — Shares of common stock outstanding (as of the filing date)
• 7 — Number of PRC operating subsidiaries (all business operations are conducted through these entities)
• 2 — Consecutive years of non-inspection by PCAOB (trigger for potential delisting under HFCAA)
• 10% — Minimum after-tax profit allocation to statutory reserve (required for PRC subsidiaries annually)
• 50% — Statutory reserve cap as percentage of registered capital (for PRC subsidiaries)
• 10.0% — Potential PRC withholding tax rate on dividends (if Longduoduo is considered a PRC tax resident enterprise)
• 5% — Lower PRC withholding tax rate on dividends (potentially available under Double Tax Avoidance Arrangement for Hong Kong entities)
• RMB400 million — Revenue threshold for China's anti-monopoly review (company currently below this threshold)
• 0 — Dividends or distributions paid to Longduoduo or U.S. investors (as of the date of this Report)

Key Players & Entities

• Longduoduo Co Ltd (company) — Nevada holding company
• People's Republic of China (regulator) — location of all business operations and regulatory oversight
• Bush & Associates CPA LLC (company) — independent auditor
• Public Company Accounting Oversight Board (regulator) — responsible for auditor inspections under HFCAA
• Holding Foreign Companies Accountable Act (regulator) — U.S. law impacting foreign-based companies
• Beijing Julong Health Consulting Co., Limited (company) — principal PRC subsidiary
• LDDJK Hong Kong Limited (company) — intermediary holding company for distributions
• State Administration of Foreign Exchange (regulator) — PRC authority controlling currency conversion
• China Securities Regulatory Commission (regulator) — PRC authority overseeing securities
• Nasdaq Stock Market (regulator) — exchange where common stock price is reported

FAQ

Risk Factors

• Dependence on PRC Subsidiary Distributions [high — regulatory]: Longduoduo is heavily reliant on distributions from its principal Chinese subsidiary, Julong, to fund its administrative expenses and potential shareholder distributions. These distributions are subject to stringent PRC foreign exchange and dividend regulations, posing a significant risk to the company's ability to access its operating cash flows.
• Potential HFCAA Delisting [high — regulatory]: The company faces potential delisting from U.S. exchanges under the Holding Foreign Companies Accountable Act (HFCAA) if its auditor, Bush & Associates CPA LLC, cannot be fully inspected by the PCAOB for two consecutive years. While currently the PCAOB can inspect the Nevada-based auditor's work papers, this remains a persistent risk.
• Reliance on Third-Party Service Provider [high — operational]: The company's operating subsidiaries primarily act as sales agents for health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. Over 97% of gross revenue for the year ended June 30, 2025, was derived from this agency relationship, creating a significant dependency on Honghai's services and business continuity.
• PRC Withholding Tax on Dividends [medium — financial]: If Longduoduo is considered a PRC tax resident enterprise, dividends distributed from its PRC subsidiaries could be subject to a 10.0% PRC withholding tax. A lower rate of 5% may be available under a Double Tax Avoidance Arrangement for Hong Kong entities, but this introduces complexity and potential tax liabilities.
• PRC Statutory Reserve Requirements [medium — regulatory]: PRC subsidiaries are required to allocate a minimum of 10% of their after-tax profits to a statutory reserve annually, capped at 50% of registered capital. This requirement restricts the amount of distributable profits available for repatriation to the parent company.

Industry Context

Longduoduo operates in the healthcare services sector, specifically focusing on preventive healthcare solutions for cardiovascular and cerebrovascular diseases. The company acts as a sales agent for third-party providers, indicating a business model reliant on partnerships and distribution networks rather than direct service provision. The competitive landscape likely involves numerous domestic and international healthcare providers, with a growing emphasis on preventive care and early disease detection.

Regulatory Implications

The company faces significant regulatory hurdles due to its PRC operations. Stringent foreign exchange and dividend regulations can impede cash repatriation. Furthermore, the potential for delisting under the HFCAA due to auditor inspection issues presents a critical compliance risk. Compliance with PRC statutory reserve requirements also impacts profit distribution.

What Investors Should Do

1. Monitor PCAOB inspection status of Bush & Associates CPA LLC.
2. Assess the sustainability of the revenue model dependent on Honghai.
3. Evaluate the impact of PRC foreign exchange and dividend regulations on cash repatriation.

Key Dates

• 2021-10-25: Incorporation of Longduoduo Company Limited — Marks the establishment of the Nevada-incorporated holding company.
• 2023-06-20: Signing of Sales Agency Agreements with Honghai — Established the primary revenue-generating relationship for the operating subsidiaries, with agreements expiring on June 20, 2026.
• 2025-06-30: Year-end for revenue reporting — Over 97% of gross revenue for this period came from commissions earned through the agency relationship with Honghai.

Glossary

HFCAA

Holding Foreign Companies Accountable Act. A U.S. law that can lead to the delisting of foreign companies from U.S. stock exchanges if their auditors are not subject to full inspection by the Public Company Accounting Oversight Board (PCAOB). (Poses a significant delisting risk for Longduoduo if its auditor cannot be inspected by the PCAOB.)

PCAOB

Public Company Accounting Oversight Board. A non-profit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors. (Its ability to inspect Longduoduo's auditor is critical for the company's continued listing on U.S. exchanges.)

PRC

People's Republic of China. (The jurisdiction where Longduoduo's primary business operations and subsidiaries are located, subjecting the company to its regulations.)

Statutory Reserve

A mandatory allocation of a portion of a company's net profit to a reserve fund, as required by law in certain jurisdictions like the PRC. (Reduces the amount of profits available for distribution by PRC subsidiaries.)

Sales Agency Agreement

A contract where one party (the agent) agrees to promote and sell products or services on behalf of another party (the principal). (Forms the basis of Longduoduo's revenue generation through its relationship with Honghai.)

Year-Over-Year Comparison

Information comparing the current 10-K to the previous filing is not available in the provided text. Therefore, a comparison of key metrics such as revenue growth, margin changes, and new risks cannot be provided.

Key Financial Figures

• $0.001 — Section 12(g) of the Act: Common Stock, $0.001 par value. Indicate by check mark if

Filing Documents

• ea0258181-10k_longduo.htm (10-K) — 918KB
• ea025818101ex21_longduo.htm (EX-21) — 5KB
• ea025818101ex31-1_longduo.htm (EX-31.1) — 10KB
• ea025818101ex31-2_longduo.htm (EX-31.2) — 10KB
• ea025818101ex32-1_longduo.htm (EX-32.1) — 4KB
• ea025818101ex32-2_longduo.htm (EX-32.2) — 4KB
• image_001.jpg (GRAPHIC) — 38KB
• 0001213900-25-091988.txt ( ) — 4898KB
• lddc-20250630.xsd (EX-101.SCH) — 43KB
• lddc-20250630_cal.xml (EX-101.CAL) — 39KB
• lddc-20250630_def.xml (EX-101.DEF) — 199KB
• lddc-20250630_lab.xml (EX-101.LAB) — 368KB
• lddc-20250630_pre.xml (EX-101.PRE) — 222KB
• ea0258181-10k_longduo_htm.xml (XML) — 444KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 12 Item 1B Unresolved Staff Comments 29 Item 1C Cybersecurity 29 Item 2. Properties. 29 Item 3. Legal Proceedings. 29 Item 4. Mine Safety Disclosure 29 PART II 30 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 30 Item 6. [Reserved] 30 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 31 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 34 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 35 Item 9A.

Controls and Procedures

Controls and Procedures. 35 Item 9B. Other Information. 36 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 36 PART III 37 Item 10. Directors, Executive Officers, and Corporate Governance. 37 Item 11.

Executive Compensation

Executive Compensation. 40 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 41 Item 13. Certain Relationships and Related Transactions, and Director Independence. 42 Item 14. Principal Accountant Fees and Services. 42 PART IV 43 Item 15. Exhibits, Financial Statement Schedules. 43 Item 16 Form 10-K Summary 43 i PART I Cautionary The discussion contained in this Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases like "anticipate," "estimate," "plans," "projects," "continuing," "ongoing," "target," "expects," "management believes," "we believe," "we intend," "we may," "we will," "we should," "we seek," "we plan," the negative of those terms, and similar words or phrases. We base these forward-looking statements on our expectations, assumptions, estimates and projections about our business and the industry in which we operate as of the date of this Form 10-K. These forward-looking statements are subject to a number of risks and uncertainties that cannot be predicted, quantified or controlled and that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this Form 10-K describe factors, among others, that could contribute to or cause these differences. Actual results may vary materially from those anticipated, estimated, projected or expected should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect. B

Business

Business Our operating subsidiaries, Julong, Longduoduo Health Technology, Qingguo, Rongbin, Chengheng, Tianju and Yihua, serve, for some customers, as sales agents for third-party healthcare service providers and, for other customers, as distributors of services provided by third-party healthcare service providers. In both arrangements, the health care providers provide comprehensive and high-quality preventive healthcare solutions, including disease screening, healthcare treatments, healthcare products and other services. The Company mainly focuses on prevention of myocardial infarction, cerebral infarction, hemiplegia, and cardiovascular and cerebrovascular diseases. Commissioned Sales Since June of 2023, our operating subsidiaries have been primarily engaged in selling health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. ("Honghai"). During the year ended June 30, 2025, over 97% of our gross revenue came from commissions earned through our agency relationship with Honghai. Each operating subsidiary is party to a separate Sales Agency Agreement with Honghai, each dated June 20, 2023 and expiring on June 20, 2026, although the content of the five Sales Agency Agreements are identical but for the name of the agent: Longduoduo Health Technology Co., Ltd, Inner Mongolia Rongbin Health Consulting Co., Ltd, Inner Mongolia Chengheng Health Consulting Co., Ltd, Inner Mongolia Qinguo Health Consulting Co., Ltd. or Inner Mongolia Tianju Health Consulting Company Limited. Among the principal terms of the Sales Agency Agreements are: Honghai is responsible for developing and providing services, and our operating subsidiary (the "Agent") is responsible for promoting and selling the services. When the Sales Agency Agreement was signed, the specific services to be marketed were: trioxygen aut

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