Company: LHI
Filing Date: 2025-02-14
Form Type: DRS/A
Source: 0001213900-25-014190
Chunk: 157

Company: Living Homeopathy International Ltd.
Filing Date: 2025-02-14
Form: DRS/A
Chunk 157
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 mentor or mentee and if a mentor, which mentor level
that such participant sits at.

We structure our mentor-mentee program to
be in compliance with the Pyramid Schemes Prohibition Ordinance which 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. Our
mentor-mentee program was a business model that we believe was suitable for our business development which serves as our
marketing and sales network as well as a network that we can leverage to gradually enhance public awareness of homeopathy and our
products. For example, public awareness of homeopathy by word of mouth and acceptance of homeopathy is critical to our business
success, and we believe the mentor-mentee network benefits customer education to enhance market awareness of homeopathy and our
homeopathic products as alternative treatment to conventional medicines with a focus on holistic physical and emotional therapy.
See “Risk Factors – Risks related to our Business and Industry -- Unfavorable publicity or consumer acceptance of our products generally could reduce our sales” on page 17 of this prospectus for more details. In addition, the one-off
membership fee of HKD500 (US$63.9) is a nominal amount which we mainly use to fund the education and training for the members with
regard to homeopathy and other administrative fees, and the economic benefits of participants are substantially the entitlement to
product discounts and sales commissions associated with product sales. See “Risk Factors – Risks Related to our Business
- If the relevant laws and regulations regulating “Pyramid Scheme” become increasingly broad on the scope of Pyramid Schemes, there will be more pressure on compliance cost, managerial resources, and business, and our business, financial conditions, and results of operations will be materially and adversely affected” on page 20 of this prospectus, and
“Regulation - Regulations Related to our Business Operation in Hong Kong” on page 90 of this prospectus for more
details. For the year ended March 31, 2023 and 2024, total commissions to our mentors and mentees amounted to $3,296,728 and
$3,011,692, respectively.

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