LDDD 10-K & 10-Q changes, risk factors and insider trading

There are numerous hospitals and private clinics providing medicalpreventive examinationhealthcare services and,and at the high end of the market, many Chinese hospitals have VIP wards that cater to affluent customers.products. We face significant competition from two main types of competitors: the medical examination departments of major public hospitals and private medical examination companies. The private preventive healthcare market is further segmented into large franchise companies, regional providers and numerous local independent medical examination centers located in nearly every city in China. We compete primarily on the basis of price, quality of service, convenience, location, brand recognition and reputation. We do not have the same level of brand recognition as some of the medical examination centers of large public hospitals, and in some regional markets our brand is not as established and our geographical coverage is not as extensive as that of our private competitors. Furthermore, we lack the equipment necessary for certain highly technical medical tests. Many competing hospitals that are government-owned are exempt from income taxes on their medical income, which provides them with a significant competitive advantage over us. Furthermore, competing hospitals, clinics or other facilities may commence new operations or expand existing operations, which would increase their competitive position and potentially erode our business, financial condition, results of operations and prospects.

Expansion of our healthcare services could be affected by the expansion of government-sponsored social medical insurance availablein toChina if the Chinese populationCompany that isdoes not availablequalify now.for such coverage.

Most Currently, most government-sponsored social medical insurance in China does not cover medicalpreventive examinations.healthcare, Inparticularly certainin locationsconnection wherewith government-sponsored socialoutpatient medical insurance covers medical examinations, we have cooperating hospitals that are qualified institutions under such insurance coverage.services. Currently, most of ourthe Company’s individual customers pay directly for medicalthe examinations.Company’s preventive healthcare services. If government-sponsored social medical insurance is further expanded to cover medicalpreventive examinationshealthcare comparable to those of the Company in morethe geographicalgeographic locations,areas where the Company operate, and Longduoduothe Company does not become a qualified institution for such coverage, certain of ourthe Company’s customers may discontinue or terminate their relationship with us,the Company, and certain individual customers may opt to use other medical institutions covered by such medical insurance rather than pay for ourthe Company’s healthcare services. As a result, the expansion of government-sponsored social medical insurance could materially and adversely affect our business, financial condition and results of operations.

The development of our business will continue to place a significant strain on our limited personnel, management, and other resources. Our future success depends upon the continued services of our executive officers,officers- Xu Huibo, our President and Chairman of the Board of Director, Director; Zhou Hongxiao, Chief Executive Officer (CEO), Secretary and director,director; andKang Liping, our Chief Financial Officer, Kang Liping.Officer. They are developing our business, which will depend on our ability to identify and retain competent employees with the skills required to execute our business objectives. The loss of the services of any of our officers or our failure to timely identify and retain competent personnel could negatively impact our ability to develop our products and services, which could adversely affect our financial results and impair our growth.

Furthermore, the SEC has issued statements primarily focused on companies with significant China-based operations, such as us. For example, on July 30, 2021, Gary Gensler, Chairmanthen-Chairman of the SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations. The statement also addressed risks inherent in companies with a Variable Interest Entity, or a VIE structure. We do not have a VIE structure and are not in an industry that is subject to foreign ownership limitations by China. Further, we believe that we have robust disclosures relating to our operations in China, including the relevant risks noted in Chairman Gensler’s statement. However, it is possible that the Company’s periodic reports and other filings with the SEC may be subject to enhanced review by the SEC and this additional scrutiny could affect our ability to effectively raise capital in the United States.

In response to the SEC’s July 30 statement, the China Securities Regulatory Commission (CSRC) announced on August 1, 2021, that “it is our belief that Chinese and U.S. regulators shall continue to enhance communication withon the principle of mutual respect and cooperation, and properly address the issues related to the supervision of China-based companies listed in the U.S. so as to form stable policy expectations and create a benign rules framework for the market.” While the CSRC will continue to collaborate “closely with different stakeholders including investors, companies, and relevant authorities to further promote transparency and certainty of policies and implementing measures,” it emphasized that it “has always been open to companies’ choices to list their securities on international or domestic markets in compliance with relevant laws and regulations.”

Our China operations are subject to PRC laws and regulations including but not limited to the laws and regulations on taxation, employment and social welfare, product quality and consumer protection, foreign investment, foreign exchange, online trading and E-commerce, food business and so on. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. A failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our businessbusiness, investments and results of operations.

Our operating subsidiaries are incorporated under and governed by the laws of the PRC. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general, such as foreign investment, corporate organization and governance, commerce, taxation and trade. As a significant part of our business is conducted in China, our operations are principally governed by PRC laws and regulations. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us. Uncertainties due to evolving laws and regulations could also impede the ability of a China-based company, such as our company, to obtain or maintain permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities could impose material sanctions or penalties on us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other PRC government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, our PRC subsidiarysubsidiaries may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our operations.

The PRC government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies. Any such intervention in or influence on our business operations or action to exert more oversight and control over securities offerings and other capital markets activities, once taken by the PRC government, could adversely affect the business, financial condition and results of operations and the value of China-based companies, or significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.

Longduoduo recently has engaged Bush & Associates CPA LLC as its independent auditor. Bush & Associates is headquartered in the State of Nevada. The PCAOB is able to, and does, fully conduct inspections of our auditor’s work papers. There remains a risk, however, that the government of the PRC might in the future impose restrictions on the communication of information to auditors or by auditors of issuers whose operations are located within the PRC, in such a way that investors in the securities of such issuers do not receive the full benefit of the audits. In that situation, it could occur that the SEC would bar trading platforms subject to U.S. jurisdiction from listing Longduoduo’s securities for trading. Such an occurrence would be likely to cause the value of Longduoduo’s securities to diminish significantly.

During the year ended June 30, 2025,2026, our total revenue was $4,262,663,$1,822,457, of which $120,866$6,539 was attributable to the sale of healthcare services, primarily derived from sales of “Immunological Ozonated Autohemotherapy”, “Meridian-regulating and Consciousness-restoring Iatrotechnics”, “Assay”, “PRP” and other healthcare services. The remaining $4,141,797$1,815,918 of revenue was attributable to commissions earned by the Company from its service as sales agent for Honghai.Inner Mongolia Honghai Health Management Co., Ltd. (“Honghai”). In June of 2023, the Company began to engage in the sales agent business and focused on the sales of preventive healthcare solutions administered by Honghai, with whom we have a Sales Agency Agreement. As of June 30, 2025,2026, we operate through five entities: Longduoduo Health Technology, Tianju, Qingguo, Rongbin and Chengheng, which are established in Huhhot, Ulanqab, Huhhot, Baotou and Ordos, respectively, which include four of the largest cities in Inner Mongolia, China.

Annual to annual revenue fell by 42%57% as compared with the operating revenue of $7,389,842$4,262,663 for the year ended June 30, 2024. The decrease was primarily attributable to the fact that Inner Mongolia was emerging from the pandemic during the year ended June 30, 2024. A large number of customers received services during that period that they had earlier paid for but could not receive. This resulted in a surge in revenue during the year ended June 30, 2024.2025. One other important factor influencing revenue in the recent yearyears is the impact of the economic environment. The prevailing economic environment, whichcharacterized by waning confidence in economic prospects, has ledcompelled consumers to aadopt decreasesignificantly inmore customercautious healthspending expenditures.behavior, curtailing discretionary expenditures on preventive healthcare services and physical examinations. Management believes that the government has recently introduced policies to promote economic recovery, but it may take some time for the situation to truly improve. Meanwhile, as we wait for the economy to revive, the Company is implementing plans to improve its operations by adjusting its operational policies.

Cost of revenue relates solely to our healthcare service revenue, and mainly consists of our payments to the third-party healthcare service providers who perform healthcare services for our customers. During the year ended June 30, 2025,2026, our cost of revenue was $91,099,$16,958, with the result that our gross profitloss from service revenue was $29,767$10,419 (a gross margin of 25%-159%). As the total service revenue is minimal, profit turns negative due to fixed depreciation and refund adjustments. By comparison, our gross profit from healthcare service revenue for the year ended June 30, 20242025 was $154,250,$29,767, representing 47%25% of service revenue for that year.

When our net service revenue in fiscal year 20252026 was combined with commission revenue (for which there is no cost of revenue), we achieved gross profit of $4,171,564.$1,805,499. However, we realized onlya $552,679 in incomeloss from operations of $633,181 for the year ended June 30, 20252026 because the Company incurred significant marketing expense in connection with establishing its brand as a new company.company, coupled with high fixed costs including staff costs and office expenses. The Company will continue to invest heavily in advertising and promotion expenses in the near future as it continues to establish and expand its brand and products and services.

Our net incomeloss for the year ended June 30, 20252026 was $492,260,$642,267, compared to a net income of $1,363,278$492,260 in the year ended June 30, 2024.2025.

Our reporting currency is the U.S. dollar. Our functional currency is the local currency, which is the Renminbi (RMB) for our Chinese subsidiaries, the Hong Kong Dollar (HKD) for our Hong Kong subsidiaries, and the U.S. Dollar (USD) for our BVI subsidiary. Results of operations and cash flow for RMB and HKD are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by OANDA on the balance sheet date. Translation adjustments resulting from this process are included in other comprehensive income (loss). For the years ended June 30, 20252026 and 2024,2025, foreign currency translation adjustments of $22,921$102,000 and $(11,722),$22,921, respectively, have been reported as other comprehensive income in the consolidated statement of operations and comprehensive income.

As of June 30, 2025,2026, the Company hadheld $1,642,721$1,588,930 in cash and cash equivalents.equivalents, On the same date, we had ayet working capital ofwas only $983,123, $501,414. This divergence primarily becausereflects weour received $335,484use of customer prepayments to fund operations: of the $790,429 in deferred revenue on the balance sheet at June 30, 2026, from customers as prepayment for future services and products but used the majority of the deposited sum to pay ongoing expenses and so had only $133,610$138,287 in prepayments on our June 30, 20252026 balance sheet, most had been applied to ongoing expenses, leaving just $138,287 in prepayments on the balance sheet. Going forward, we will strive to achieve a better balance of customer deposits and prepayments; but we will achieve that better balance only when profits from operations and funds from financing are adequate to support the expansion effort that will be necessary for successful operations.

For the year ended June 30, 2025,2026, weoperating hadactivities used $163,109 in cash, compared with $277,365 of cash provided by operating activities of $277,365, compared to $582,282 forin the year ended June 30, 2024.2025. Cash providedused byin operations during the year ended June 30, 20252026 was primarily due to recording a net incomeloss of $492,260,$642,267, which was partially offset by deferred$423,744 revenue.of customer deposits received.

In connection with the preparation of our financial statements for the three months ended DecemberMarch 31, 2025,2026, there was no accounting estimate made which was (a) subject to a high degree of of uncertainty and (b) material to our results.

Three Months Ended DecemberMarch 31, 20252026 Compared to Three Months Ended DecemberMarch 31, 20242025 The following table shows key components of the unaudited results of operations during the three months ended DecemberMarch 31, 20252026 and 20242025:

During the three months ended DecemberMarch 31, 2025,2026, our total revenue was $345,265,$187,392, of which $4,103$1,350 was attributable to the sale of healthcare services, primarily derived from sales of “Immunological Ozonated Autohemotherapy”, “Meridian-regulating and Consciousness-restoring Iatrotechnics”, “Assay”, “PRP” and other healthcare services. The remaining $341,162$186,042 of revenue was attributable to commissions earned by the Company from its service as sales agent for Inner Mongolia Honghai Health Management Co., Ltd. (“Honghai”). In June of 2023, the Company began to engage in the sales agent business and focused on the sales of preventive healthcare solutions administered by Honghai, with whom we have a Sales Agency Agreement. As of DecemberMarch 31, 2025,2026, we operate through five entities: Longduoduo Health Technology, Tianju, Qingguo, Rongbin, Chengheng which are established in Huhhot, Ulanqab, Huhhot, Baotou, Ordos, respectively, which include four of the largest cities in Inner Mongolia, China.

Quarter to quarter revenue fell by 81%76% as compared with the operating revenue of $1,775,495$777,720 for the three months ended DecemberMarch 31, 2024.2025. One important factor influencing revenue in the recent quarter is the impact of the economic environment. The prevailing economic environment, characterized by waning confidence in economic prospects, has compelled consumers to adopt significantly more cautious spending behavior, curtailing discretionary expenditures.expenditures on preventive healthcare services and physical examinations. Management believes that the government has recently introduced policies to promote economic recovery, but it may take some time for the situation to truly improve. Meanwhile, as we wait for the economy to revive, the Company is implementing plans to improve its operations by adjusting its operational policies.

Cost of revenue relates solely to our service revenue, and mainly consists of our payments to the third-party healthcare service providers who perform healthcare services for our customers. During the three months ended DecemberMarch 31, 2025,2026, our cost of revenue was $5,271,$3,337, with our gross loss from service service revenue was $1,168$1,987 (a gross margin deficit of -28%-147%). Healthcare service volume remained limited this quarter, with equipment depreciation of $2,329,$2,452, our gross margin turned negative. By comparison, our gross profit from service revenue for the three months ended DecemberMarch 31, 31, 20242025 was $13,540,$8,280, representing 32%29% of service revenue for that quarter.

When our net service revenue in the three months ended DecemberMarch 31, 20252026 was combined with commission revenue (for which there is no cost of revenue), we achieved gross profit of $339,994.$184,055. However, we realized a $279,193$197,443 loss from operations for the three months ended DecemberMarch 31, 20252026 because the Company incurred significant marketing expense in connection with establishing its brand as a new company. The Company will continue to invest heavily in advertising and promotion expenses in the near future aswith ita continuesgoal toof establish and expandrevitalizing its brandmarketing and products and services.operations.

Our operating expenses consist primarily of advertising and promotion expenses, salaries and benefits, office expenses, professional fees and depreciation. Our operating expenses during the three months ended DecemberMarch 31, 20252026 decreased by $524,953,$494,597, primarily attributable to:

Our net loss for the three months ended DecemberMarch 31, 20252026 was $274,245,$190,007, compared to a net incomeloss of $501,599$116,320 for the three months ended DecemberMarch 31, 2024.2025.

Our reporting currency is the U.S. dollar. Our functional currency is the local currency, which is the Renminbi (RMB) for our Chinese subsidiaries, the Hong Kong Dollar (HKD) for our Hong Kong subsidiaries, and the U.S. Dollar (USD) for our BVI subsidiary. Results of operations and cash flow for RMB and HKD are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by OANDA on the balance sheet date. Translation adjustments resulting from this process are included in other comprehensive income (loss). For the three months ended DecemberMarch 31, 20252026 and 2024,2025, foreign currency translation adjustments of $33,434$23,602 and $(62,057),$13,220, respectively, respectively, were recognized in other comprehensive income (loss) within the consolidated statements of operations and comprehensive income (loss).

SixNine Months Ended DecemberMarch 31, 20252026 Compared to to SixNine Months Ended DecemberMarch 31, 20242025 The following table shows key components of the unaudited results of operations during the sixnine months ended DecemberMarch 31, 20252026 and 20242025:

During the sixnine months ended DecemberMarch 31, 2025,2026, our our total revenue was $1,004,029,$1,191,421, of which $9,709$11,059 was attributable to the sale of healthcare services, primarily derived from sales of “Immunological Ozonated Autohemotherapy”, “Meridian-regulating and Consciousness-restoring Iatrotechnics”, “Assay”, “PRP” and other healthcare services. The remaining $994,320$1,180,362 of revenue was attributable to commissions earned by the Company from its service as sales agent for Inner Mongolia Honghai Health Management Co., Ltd. (“Honghai”). In June of 2023, the Company began to engage in the sales agent business and focused on the sales of preventive healthcare solutions administered by Honghai, with whom we have a Sales Agency Agreement. As of DecemberMarch 31, 2025,2026, we operate through five entities: Longduoduo Health Technology, Tianju, Qingguo, Rongbin, Chengheng which are established in Huhhot, Ulanqab, Huhhot, Baotou, Ordos, respectively, which include four of the largest cities in Inner Mongolia, China.

Period to period revenue fell by 61%64% as compared with the operating revenue of $2,544,567$3,322,287 for the sixnine months ended DecemberMarch 31, 2024.2025. ImportantOne important factor influencing revenue in the recent quarter is the impact of the economic environment. The prevailing economic environment, characterized by waning confidence in economic prospects, has compelled consumers to adopt significantly more cautious spending behavior, curtailing discretionary expenditures.expenditures on preventive healthcare services and physical examinations. Management believes that the government has recently introduced policies to promote economic recovery, but it may take some time for the situation to truly improve. Meanwhile, as we wait for the economy to revive, the Company is implementing plans to improve its operations by adjusting its operational policies.

Cost of revenue relates solely to our service revenue, and mainly consists of our payments to the third-party healthcare service providers who perform healthcare services for our customers. During the sixnine months ended DecemberMarch 31, 2025,2026, our cost of revenue was $11,981,$15,318, with our gross loss from service revenue was $2,272$4,259 (a gross margin deficit of -23%-39%). Healthcare service volume remained limited this quarter; with equipment depreciation of $4,773, $7,225, our gross margin turned negative. By comparison, our gross profit from service revenue for the sixnine months ended DecemberMarch 31, 2024 2025 was $27,859, $36,139, representing 31% of service revenue for that quarter.

When our net service revenue in the sixnine months ended DecemberMarch 31, 20252026 was combined with commission revenue (for which there is no cost of revenue), we achieved gross profit of $992,048.$1,176,103. However, we realized a $363,607$561,050 loss from operations for the sixnine months ended DecemberMarch 31, 20252026 because the Company incurred significant marketing expense in connection with establishing its brand as a new company. The Company will continue to invest heavily in advertising and promotion expenses in the near future as it continues to establish and expandrevitalize its brandmarketing and products and services.operations.

Our operating expenses consist primarily of advertising and promotion expenses, salaries and benefits, office expenses, professional fees and depreciation. Our operating expenses during the sixnine months ended DecemberMarch 31, 20252026 decreased by $587,357,$1,081,954, primarily attributable to:

Our net loss for the sixnine months ended DecemberMarch 31, 31, 20252026 was $385,427,$575,434, compared to a net income of $442,095$325,775 for the sixnine months ended DecemberMarch 31, 2024.2025.

Our reporting currency is the U.S. dollar. Our functional currency is the local currency, which is the Renminbi (RMB) for our Chinese subsidiaries, the Hong Kong Dollar (HKD) for our Hong Kong subsidiaries, and the U.S. Dollar (USD) for our BVI subsidiary. Results of operations and cash flow for RMB and HKD are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by OANDA on the balance sheet date. Translation adjustments resulting from this process are included in other comprehensive income (loss). For the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, foreign currency translation adjustments of $47,320$70,922 and $(15,0681,848), respectively, respectively, were recognized in other comprehensive income (loss) within the consolidated statements of operations and comprehensive income (loss).

As of DecemberMarch 31, 2025,2026, the Company held $1,543,479$1,224,881 in cash and cash equivalents, yet working capital was only $634,590.$502,587. This divergence primarily reflects our use of customer prepayments to fund operations: of the $684,337$643,317 in deferred revenue,revenue on the balance sheet at March 31, 2026, most washad been applied to ongoing expenses, leaving just $151,595 $143,076 in prepayments on the balance sheet. Going forward, we will strive to achieve a better balance of customer deposits and prepayments; but we will achieve that better balance only when profits from operations and funds from financing are adequate to support the expansion effort that will be necessary for successful operations.

The following unaudited table summarizes our cash flows for the sixnine months ended DecemberMarch 31, 20252026 and 2024.2025.

For the sixnine months ended DecemberMarch 31, 2025,2026, we used used $105,572$437,881 cash in our operating activities, compared to $280,261$93,150 provided by operating activities forduring the sixnine months ended DecemberMarch 31, 31, 2024.2025. During the sixnine months ended DecemberMarch 31, 2025,2026, cash used in operations was lower than the $385,427$575,434 net loss, chiefly because customer customer deposits for future services rose by $334,494.$288,535.

Net cash used in investing activities for the sixnine months ended DecemberMarch 31, 20252026 was $30,088,$30,363, compared to $56,306$29,454 for the sixnine months ended DecemberMarch 31, 2024.2025. In both periods, the cash was used for the purchase of fixed assets and office decoration.