Company: LHI
Filing Date: 2025-11-20
Form Type: F-1/A
Source: 0001213900-25-112807
Chunk: 38

Company: Living Homeopathy International Ltd.
Filing Date: 2025-11-20
Form: F-1/A
Chunk 38
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 mentor-mentee program and set
up mentor-mentee program related code of conduct to prevent the mentor-mentee program from becoming a pyramid structure as pyramid schemes
are prohibited in Hong Kong pursuant to the Pyramid Schemes Prohibition Ordinance (Cap. 617, Laws of Hong Kong). See “Business – Marketing” on page 81 of the prospectus for details. It is an offence for a person to participate in a pyramid
scheme. A person who knowingly promotes a pyramid scheme also commits an offence. The Pyramid Schemes Prohibition
Ordinance that came into effect on January 1, 2012 provides for a broad definition of “Pyramid Scheme.” See “Regulation - Regulations Related to our Business Operation in Hong Kong” on page 84 of this prospectus for more details. The Pyramid Schemes
Prohibition Ordinance defines a pyramid scheme as a scheme in which: (1) new participants must provide a participation payment to a participant
or promoter of the scheme; (2) the participation payment is entirely or substantially induced by the prospect that the new participant
will be entitled to a recruitment payment; and (3) the recruitment payment is entirely or substantially derived from the introduction
to the scheme of a further new participant.

The broad definition of “Pyramid Scheme” may enhance compliance and regulatory risks for genuine multi-level marketing schemes for legitimate business, which may become more susceptible to frivolous claims and more exposed to litigations, which may potentially increase legal and compliance cost and distract managerial attention from business operations and growth. Consequentially, our business, financial condition and results of operations will be adversely affected. If we are guilty of knowingly promoting a pyramid scheme, not only may the relevant contracts be rendered void through illegality, but pecuniary penalties or imprisonment sentences may be imposed. In addition, we may be required to make changes to our business model including the mentor-mentee program and aspects of our sales compensation plan, any of which could materially adversely affect our business, financial condition and results of operation.

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If we experience product recalls, we may incur significant and unexpected costs and damage to our reputation, which in turn could have a material adverse effect on our business, financial condition or results of operations.

We may be subject to product recalls, withdrawals or seizures if any of the products we sell are believed to cause injury, not safe or cause an adverse effect or if we are alleged to have violated governmental regulations in the production, labeling, promotion