Company: LDDD
Filing Date: 2025-09-26
Form Type: 10-K
Source: 0001213900-25-091988
Chunk: 4

Company: Longduoduo Co Ltd
Filing Date: 2025-09-26
Form: 10-K
Item: Item 1
Chunk 4
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 necessary
to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses.
In order for us to pay dividends to our shareholders, we will rely on payments made from our principal PRC subsidiary to LDDJK Hong Kong
Limited (“LDDJK”). If Longduoduo is unable to receive profits from the operations of our PRC subsidiaries through LDDJK,
we will be unable to pay dividends on our common stock.

The
PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC
through the Administrative Regulations of the PRC on Foreign Exchange (the “Foreign Exchange Regulations”), and the Notice
of State Administration of Foreign Exchange on Promulgation of the Provisions on Foreign Exchange Control on Direct Investments in China
by Foreign Investors. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit
foreign currency for the payment of dividends from our profits, if any. The Foreign Exchange Regulations will present a barrier to currency
transactions between our U.S. parent company and our Chinese operating subsidiary. If we raise funds in the U.S. dollars for the purpose
of funding our operations in China, we will be required to obtain SAFE approval of the conversion of the dollars into Renminbi, which
could be denied.

Current
PRC regulations permit Longduoduo’s PRC subsidiaries to pay dividends to Longduoduo and its Hong Kong subsidiary only out of their
accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries
in China is required to set aside at least 10% of its after-tax profits each year to fund a statutory reserve until such reserve reaches
50% of its registered capital. Our subsidiaries in China are also required to further set aside a portion of their after-tax profits
to fund their employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of the subsidiary’s
board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future
losses in excess of retained earnings of the PRC subsidiary, the reserve funds are not distributable as cash dividends except in the
event of liquidation. If one or more of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing the
debt may restrict its ability to pay dividends or