Company: LHI
Filing Date: 2025-01-27
Form Type: DRS/A
Source: 0001213900-25-006939
Chunk: 142

Company: Living Homeopathy International Ltd.
Filing Date: 2025-01-27
Form: DRS/A
Chunk 142
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 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 16 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 [19] of this prospectus, and
“Regulation - Regulations Related to our Business Operation in Hong Kong” on page [85] 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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We have set up mentor-mentee program-related code of conduct to regulate mentor and mentee conducts and delineate their rights and obligations, setting for the mechanism on compliance supervision, including company supervision, mentor supervision over mentee behavior and self-regulation subject to Company’s monitoring .

Quality Control

Quality control is critical to our business and development. We have maintained a quality control practice ranging from manufacturer selection and product quality check.

We require our