Longduoduo Co Ltd (LDDD)

Longduoduo Company Limited is a Nevada holding company that functions exclusively as a holding entity, with all business operations carried out by seven limited companies organized and located in the People's Republic of China (PRC). The company operates in the preventive healthcare market, focusing on the prevention of myocardial infarction, cerebral infarction, hemiplegia, cardiovascular and cerebrovascular diseases, and gastrointestinal digestive disorders. The industry is highly competitive, with competition primarily from major public hospitals and private medical companies, and the private preventive healthcare market is further segmented into large national companies, regional providers, and numerous local independent medical centers. The company's operating subsidiaries serve as sales agents for third-party healthcare service providers and as distributors of services provided by third-party healthcare service providers, with a primary focus on selling health maintenance services provided by Inner Mongolia Honghai Health Management Co., Ltd. (Honghai).

The company faces significant competition from two main types of competitors: major public hospitals and private medical companies. The private preventive healthcare market is further segmented into large national companies, regional providers, and numerous local independent medical centers. The company believes its primary competitive advantages include strong sales and marketing efforts, an innovative approach to the healthcare market, and a flexible management mechanism. However, some current or future competitors may have longer operating histories, greater brand recognition, better supplier relationships, larger customer bases, or greater financial, technical, or marketing resources. The company does not have the same level of brand recognition as some large public hospitals, and in some regional markets its brand is not as established and its geographical coverage is not as extensive as that of private competitors. Additionally, the company lacks the equipment necessary for certain highly technical medical tests, and many competing government-owned hospitals are exempt from income taxes on their medical income, providing them with a significant competitive advantage.

The company generates revenue through two primary streams: commission revenue from serving as a sales agent for Honghai, and service revenue from principal sales of healthcare services and products. During the year ended June 30, 2026, over 99.6% of gross revenue came from commissions earned through the agency relationship with Honghai. The company's operating subsidiaries are party to separate Sales Agency Agreements with Honghai, each expiring on June 20, 2029, under which Honghai is responsible for developing and providing services, and the operating subsidiaries are responsible for promoting and selling the services. The company also continues a principal sales business, where it purchases and resells services and products from third-party healthcare service providers, although this business has declined significantly. The company's customer base primarily consists of individual customers who pay directly for preventive healthcare services, as most government-sponsored social medical insurance in China does not cover preventive healthcare.

The company's principal sales business involves providing preventive healthcare solutions as a principal, including Meridian-regulating and Consciousness-restoring iatrotechnics, a traditional Chinese medicine treatment that is anti-thrombotic to prevent and treat cardiovascular and cerebrovascular diseases; Double Blood Purification, a treatment for cardiovascular and cerebrovascular diseases involving the removal of pathogens and toxins from the blood through physical means such as filtration; Immunological Ozonated Autohemotherapy, prevention and treatment of cardiovascular and cerebrovascular diseases relying on the use of an ozone therapy device to remove pathogens and toxins from the blood; and PRP (platelet-rich plasma), prevention and treatment of joint inflammation and injury through the use of platelet rich plasma. These medical services are provided by licensed medical institutions, such as hospitals or medical clinics, and the healthcare service providers bear the risk of liability related to the medical procedures. The company has one cooperation agreement in force, dated November 18, 2024 and expiring on November 18, 2027, with Inner Mongolia Jiuzun Health Examination Co., Ltd, under which Zhongyi Hospital Branch offers customers services such as the Third-generation Ozone Therapy Device – Autologous Blood Immunotherapy.

The company's commission revenue from its agency relationship with Honghai totaled $1,815,918 for the year ended June 30, 2026, compared to $4,141,797 for the year ended June 30, 2025. Service revenue from principal sales was $6,539 for the year ended June 30, 2026, compared to $120,866 for the year ended June 30, 2025. The company's cost of revenue relates solely to healthcare service revenue and mainly consists of payments to third-party healthcare service providers. For the year ended June 30, 2026, cost of revenue was $16,958, resulting in a gross loss from service revenue of $10,419, representing a gross margin of -159%. By comparison, the gross profit from service revenue for the year ended June 30, 2025 was $29,767, representing 25% of service revenue for that year. When net service revenue was combined with commission revenue, for which there is no cost of revenue, the company achieved gross profit of $1,805,499 for the year ended June 30, 2026.

During the fiscal year ended June 30, 2026, the company underwent significant corporate restructuring. On February 19, 2025, Longduoduo issued 10,020 shares of its common stock to the original shareholders of LDD Technology Limited in exchange for 100% of the outstanding shares of LDD. On April 2, 2025, Julong acquired 100% of Longduoduo Health Technology from Longduoduo HK. On January 7, 2025, Julong acquired all the shares held by the original shareholders of Yihua, and controlled 100% ownership of Yihua. On August 28, 2026, Longduoduo HK was officially deregistered. The company also entered into several new operating lease agreements during the period, including leases for office space in various locations, with annual lease payments ranging from approximately $1,685 to $30,898. The company did not repurchase any of its equity securities during the fiscal quarter ended June 30, 2026, and did not have any unregistered sales of equity securities during the fourth quarter of the fiscal year ended June 30, 2026.

The company's total revenue for the year ended June 30, 2026 was $1,822,457, a decrease of 57% compared to $4,262,663 for the year ended June 30, 2025. Gross profit decreased by 57% to $1,805,499 from $4,171,564. The company realized a loss from operations of $633,181 for the year ended June 30, 2026, compared to income from operations of $552,679 for the prior year. Net loss for the year ended June 30, 2026 was $642,267, compared to net income of $492,260 for the year ended June 30, 2025. The company held $1,588,930 in cash and cash equivalents as of June 30, 2026, with working capital of only $501,414. Net cash used in operating activities was $163,109 for the year ended June 30, 2026, compared to $277,365 of cash provided by operating activities in the prior year.

The company's plan for growth involves leveraging its growing network of medical centers, large and loyal customer base, and established demographic and disease information database to expand the scope of its service offerings and ultimately establish itself as a leading health management service provider and sales agency in China. The company intends to achieve this goal by further expanding its product offerings, continuing to expand its network coverage nationwide, and further upgrading its service standards to enhance the customer experience. The successful execution of this business plan is subject to risks and uncertainties related to the company's ability to maintain and enhance the recognition and reputation of its operating subsidiaries, compete effectively, manage growth and execute strategies effectively, provide superior customer experience and offer services at attractive prices, manage and expand relationships with suppliers, and secure and retain the services of qualified personnel.

The company intends to renew its focus on principal sales after building a firm foundation for its agency sales business. Currently, working with third-party healthcare service providers, the company's operating subsidiaries provide, as principal, preventive healthcare solutions including Meridian-regulating and Consciousness-restoring iatrotechnics, Double Blood Purification, Immunological Ozonated Autohemotherapy, and PRP. The company carefully selects its third-party healthcare service providers based on internal assessments of the quality of the provider's institution and staff, including quality of services, location, price, reputation, and equipment. The company also plans to expand its product offerings and network coverage nationwide, and to upgrade its service standards to enhance the customer experience.

The company's operating expenses consist primarily of advertising and promotion expenses, salaries and benefits, office expenses, professional fees, and depreciation and amortization. Operating expenses in fiscal year 2026 decreased by $1,180,205, primarily attributable to a decrease in advertising and promotion expenses from $1,942,661 in fiscal year 2025 to $904,310 in fiscal year 2026, a decrease in professional fees from $182,198 to $148,627, a decrease in salaries and benefits expenses from $580,370 to $572,400, and a decrease in office expenses from $722,447 to $614,389. 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.

The company anticipates that its future liquidity requirements will arise from the need to fund its growth, pay current obligations, and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from a public offering and/or debt financing. The company expects Zhang Liang, its majority shareholder, to continue to provide support in the future, if needed. However, the company can provide no assurances that it will be able to generate sufficient cash flows from operations and/or obtain additional financing on terms satisfactory to it, if at all, to remain a going concern.

The company's capital allocation strategy includes continued investment in advertising and promotion expenses, with $904,310 incurred in fiscal year 2026. The company also invested in fixed assets and office decoration, with net cash used in investing activities of $30,638 for the year ended June 30, 2026. The company has not declared or paid any cash dividends on its common stock since inception, and its board of directors currently intends to retain all earnings for use in the business for the foreseeable future. The company has no equity compensation plans.

The prevailing economic environment, characterized by waning confidence in economic prospects, has compelled consumers to adopt significantly more cautious spending 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. The company is implementing plans to improve its operations by adjusting its operational policies while waiting for the economy to revive.

The company faces significant risks related to its dependence on its relationship with Honghai, as over 99.6% of its revenue during the year ended June 30, 2026 came from commissions from sales on behalf of Honghai. The Sales Agency Agreements terminate in June 2029, and there is no certainty that the relationship will continue past that date. Any number of factors could interfere with the relationship, including adverse events in Honghai's business, Honghai deciding to engage competitive or replacement sales agents, or licensing problems or adverse government regulation interfering with Honghai's business or the company's ability to market Honghai's services. In the event any of these risks is realized, the company's financial results could be significantly less profitable unless and until it is able to replace Honghai as the primary source of its revenue.

The company's operations are subject to extensive PRC government regulation, and changes in China's internal regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and the Data Security Law, may target the company's corporate structure and impact its ability to conduct business in China, accept foreign investments, or list on a U.S. or other foreign exchange. The company is also subject to risks related to the fluctuation of the RMB, which may materially and adversely affect its investment. If the Chinese government reduces the relative value of the RMB compared to the U.S. Dollar, the value in Dollars of the company will decline. Additionally, the company may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection, and may be liable for improper use or appropriation of personal information provided by its customers.

Management's message to shareholders emphasizes the company's strategic shift towards its agency sales business with Honghai, which now accounts for over 99.6% of gross revenue, while also planning to renew focus on principal sales after building a firm foundation for the agency business. The company's strategic priorities include expanding its product offerings, continuing to expand its network coverage nationwide, and further upgrading its service standards to enhance the customer experience. Management acknowledges the challenging economic environment, which has led to cautious consumer spending on preventive healthcare services, and is implementing plans to improve operations by adjusting operational policies. The company intends to fund its growth in large part by raising capital through the sale of securities outside of the PRC, and expects its majority shareholder, Zhang Liang, to continue to provide support in the future if needed.

Total revenue for the year ended June 30, 2026 was $1,822,457 ³, compared to $4,262,663 ⁴ for the year ended June 30, 2025. Net loss for fiscal year 2026 was $642,267 ⁵, compared to net income of $492,260 ⁶ in fiscal year 2025. Basic and diluted loss per share for fiscal year 2026 was $(0.019) ⁷, compared to basic and diluted income per share of $0.015 ⁸ in fiscal year 2025. Gross profit decreased by 57% to $1,805,499 ⁹ from $4,171,564 ¹⁰. Loss from operations was $633,181 ¹¹ in fiscal year 2026, compared to income from operations of $552,679 ¹² in fiscal year 2025. The company held $1,588,930 ¹³ in cash and cash equivalents as of June 30, 2026, compared to $1,642,721 ¹⁴ as of June 30, 2025. Net cash used in operating activities was $163,109 ¹⁵ for fiscal year 2026, compared to $277,365 ¹⁶ of cash provided by operating activities in fiscal year 2025. The company accrued $66,451 ¹⁷ of PRC income tax for the year ended June 30, 2026, compared to $222,268 ¹⁸ for the year ended June 30, 2025. Commission revenue was $1,815,918 ¹⁹ in fiscal year 2026, compared to $4,141,797 ²⁰ in fiscal year 2025. Service revenue was $6,539 ²¹ in fiscal year 2026, compared to $120,866 ²² in fiscal year 2025. Cost of revenue was $16,958 ²³ in fiscal year 2026, compared to $91,099 ²⁴ in fiscal year 2025. Total operating expenses were $2,438,680 ²⁵ in fiscal year 2026, compared to $3,618,885 ²⁶ in fiscal year 2025. Other income, net was $57,365 ²⁷ in fiscal year 2026, compared to $161,849 ²⁸ in fiscal year 2025. The company's working capital was $501,414 ²⁹ as of June 30, 2026. Deferred revenue was $790,429 ³⁰ as of June 30, 2026, compared to $335,484 ³¹ as of June 30, 2025. Prepayments were $138,287 ³² as of June 30, 2026, compared to $133,610 ³³ as of June 30, 2025. Accounts payable was $403,477 ³⁴ as of June 30, 2026, compared to $399,906 ³⁵ as of June 30, 2025. Total assets were $2,063,464 ³⁶ as of June 30, 2026, compared to $2,126,496 ³⁷ as of June 30, 2025. Total liabilities were $1,307,699 ³⁸ as of June 30, 2026, compared to $830,464 ³⁹ as of June 30, 2025. Total stockholders' equity was $755,765 ⁴⁰ as of June 30, 2026, compared to $1,296,032 ⁴¹ as of June 30, 2025. Net loss attributable to common stockholders was $578,631 ⁴² for fiscal year 2026, compared to net income attributable to common stockholders of $460,435 ⁴³ for fiscal year 2025. Foreign currency translation adjustment was $102,000 ⁴⁴ for fiscal year 2026, compared to $22,921 ⁴⁵ for fiscal year 2025. Weighted average number of shares outstanding was 30,015,036 ⁴⁶ for fiscal year 2026, compared to 30,009,878 ⁴⁷ for fiscal year 2025. Advertising and promotion expenses were $904,310 ⁴⁸ in fiscal year 2026, compared to $1,942,661 ⁴⁹ in fiscal year 2025. Professional fees were $148,627 ⁵⁰ in fiscal year 2026, compared to $182,198 ⁵¹ in fiscal year 2025. Salaries and benefits expenses were $572,400 ⁵² in fiscal year 2026, compared to $580,370 ⁵³ in fiscal year 2025. Office expenses were $614,389 ⁵⁴ in fiscal year 2026, compared to $722,447 ⁵⁵ in fiscal year 2025. Net cash used in investing activities was $30,638 ⁵⁶ for fiscal year 2026, compared to $59,375 ⁵⁷ for fiscal year 2025. The company had 51 full-time employees ⁵⁸ as of the filing date.

The company's most material risk is its extreme concentration of revenue from a single source: over 99.6% of revenue during the year ended June 30, 2026 came from commissions earned through its agency relationship with Inner Mongolia Honghai Health Management Co., Ltd. ¹. The Sales Agency Agreements terminate in June 2029, and there is no certainty the relationship will continue past that date. Any adverse event in Honghai's business, Honghai's decision to engage competitive or replacement sales agents, or licensing or regulatory problems could significantly reduce the company's profitability. The company also relies on third-party healthcare service providers to deliver its offered services, and it generally does not control the quality of service or medical care these providers deliver; poor service, mishandling of sensitive personal healthcare information, or medical malpractice could expose the company to reputational harm and liability. The company's operations are subject to extensive PRC government regulation, and changes in China's regulatory mandates, including the M&A rules, Anti-Monopoly Law, and Data Security Law, could impact its ability to conduct business, accept foreign investments, or list on a U.S. exchange. The company is also exposed to risks related to the fluctuation of the RMB, as it relies entirely on revenues earned in the PRC, and any significant revaluation of the RMB could materially affect its cash flows and financial condition. Additionally, the company's ability to pay dividends is restricted by PRC regulations, including requirements to set aside at least 10% of after-tax profits each year to fund a statutory reserve until such reserve reaches 50% of registered capital ².