LDSN 10-K/A
Aphoenity International Holdings Inc. (LDSN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||
| SECURITIES EXCHANGE ACT OF 1934 | |||
| For the fiscal year ended |
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| OR | |||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||
| SECURITIES EXCHANGE ACT OF 1934 | |||
| For the transition period from ______________ to ______________ |
Commission file number:
(previously known as Luduson G Inc.).
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (zip code) |
Registrant’s telephone number, including
area code: +
Securities registered pursuant to Section 12(b)
of the Act:
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.0001 par value
Title of each class
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether
the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. Yes ☐ No
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
| Common Stock | Outstanding as of April 10, 2026 | |
| Common Stock, $0.0001 par value per share | shares |
The aggregate market value
of the voting and non-voting stock held by non-affiliates of the registrant as of the last business day of the registrants most recently
completed second fiscal quarter, based on the price at which the common equity was last sold on the OTC Markets on June 30, 2023 was
approximately $
EXPLANATORY NOTE
Luduson G Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) to amend the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 2, 2025 (the “Original 2024 Form 10-K”). The purpose of this Amendment No. 1 is to revise the financial statements under Item 8 and provide the report of independent registered public accounting firm. This Amendment No. 1 also amend, modify and update other information in the Original 2024 Form 10-K, and reflect events occurring after the filing of the Original 2024 Form 10-K.
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TABLE OF CONTENTS
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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K/A Amendment No. 1 includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-K/A Amendment No. 1 including, without limitation, statements in the “Market Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s market projections, financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company’s business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.
These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as “believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,” or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’s financial condition or results of operations for its limited history; (ii) the Company’s business and growth strategies; and, (iii) the Company’s financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’s limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section herein.
Consequently, all of the forward-looking statements made in this Form 10-K/A Amendment No. 1 are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Corporate History
We were incorporated under the laws of the State of Delaware on March 6, 2014, under the name “Jovanovic-Steele, Inc.” Our name was changed to Baja Custom Designs, Inc. on November 30, 2017. On May 8, 2020, we acquired Luduson Holding Company Limited, a limited liability company organized under the laws of British Virgin Islands (“LHCL”). The acquisition was originally for entering into the gaming technology business. The Company’s name was further changed to Luduson G Inc. (“Luduson” or “LDSN”) on July 15, 2020. However, we disposed LHCL on May 29, 2023 due to a realignment of the Company’s business direction.
On May 24, 2023, we entered into a Share Exchange Arrangement to acquire Glamourous Group Holding Limited (“GGHI”), a limited liability company incorporated in the United Kingdom of England and Wales by the issuance of 320,000,000 common shares to Ho Chi Wan, the sole shareholder of GGHI. The Company issued an equivalent of 91.9% fully diluted shares to the business owner of GGHI, Ms. Ho Chi Wan, in exchange for 100% of GGHI shares and its whole operation. After such a transaction, Ms. Wan gained control of the Company and in effect completed a business combination of GGHI with the Company, resulting in a reverse acquisition (the “Reverse Acquisition”). The acquisition was completed on July 06, 2023.
On September 26, 2023, the Company underwent a group restructuring (the “Group Restructuring”), where GGHI was struck off and disposed of, and where Glamorous Holdings International Company Limited and Glamourous Holdings Company Limited (HK) (together the “Hong Kong Subsidiaries”) were acquired from Ms. Ho Chi Wan. The Hong Kong Subsidiaries were 100% owned by Ms. Ho Chi Wan prior to the Group Restructuring and are considered common control.
On March 28, 2024, the Company acquired LWH Consulting Sdn Bhd (“LWH Consulting”), a limited liability company incorporated in Malaysia, at no consideration to carry out the provision of listing consulting services for clients with business interests in the Greater Bay Area in China and other parts of the world and assisting them to achieve the largest market value for listing in a short period. On September 28, 2024, the Company disposed LWH Consulting to Ms. Ho Chi Wan.
In line with the Company’s revisited investment focus, the Hong Kong Subsidiaries were disposed of on December 20, 2024, to Ms. Ho Chi Wan. Glamourous Pictures Group Limited was acquired from Mr. Man Fai Cheng, the Company’s Chief Executive Officer.
On August 26, 2025, the Company’s Board of Directors approved a reverse stock split of its common stocks issued and outstanding at a ratio of one (1) new share for every one thousand (1,000) old shares then-held by each shareholders (the “Reverse Stock Split”). This approval is still subject to FINRA clearance. Any fractional shares that would otherwise result shall be rounded up to the nearest higher whole share. The Reverse Stock Split did not reduce the number of authorized shares of the common stock and the par value of the Company’s ordinary shares remains to be USD 0.0001 per share.
On October 1, 2025, the Company effected a business combination with Aphoenity International Holdings Inc, a Wyoming entity, which subsequently succeeded the prior Delaware entity as holding company of the group structure. Aphoenity International Holdings Inc’s board of directors and officers are composed of the same members as Luduson G Inc., and its shareholding structure is identical to Luduson G Inc. at the time it succeeded Luduson G Inc. as holding company of the group structure.
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Our corporate structure is set forth as below:
The Company started off primarily in the business of building and fostering relationships between leading influencers and brands, including engagements in influencer management, commercial film production and online ecosystem development company. Due to high demand, the Company expanded and evolved into a boutique listing consulting firm. Leveraging its extensive industry relationships, broad network, and solid expertise, the consulting arm assists clients in accessing global capital markets, including the US stock exchanges—one of the most dynamic financial markets with a diverse investor base—enhancing liquidity and optimizing market opportunities. Bilingual advantages have garnered us a foothold in South-East Asia, including but not limited to Malaysia, Singapore, Vietnam and Cambodia.
Our new goal is to establish a premier advisory platform that empowers clients with strategic guidance and seamless access to international financial hubs, fostering sustainable growth, maximizing market potential, and enhancing shareholder value.
Our principal executive and registered offices are located at 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, telephone number +852 2824 8560.
History
We were established as part of the Chapter 11 Plan of Reorganization of Pacific Shores Development, Inc. (“PSD”). PSD and its subsidiary, Jovanovic-Steele, were in the real estate development business, and the real estate crash and the recession of 2008 made it impossible for them to obtain the financing needed to carry on their projects. In 2010, PSD filed for chapter 11 bankruptcy protection. The U.S. Bankruptcy Court for the Southern District of California ordered the incorporation of the Company and the distribution of the following securities:
| · | 80,000 shares of the Company’s common stock were distributed to all general unsecured creditors of PSD on a pro rata basis according to amount of debt held; | |
| · | 500,000 shares of the Company’s common stock were distributed to all administrative creditors of PSD, with these creditors receiving one share of common stock in the Company for each $0.10 of PSD’s administrative debt held; | |
| · | 2,500,000 common stock purchase warrants of the Company were distributed to all administrative creditors of PSD, with these creditors receiving five common stock purchase warrants of the Company for each $0.10 of PSD’s administrative debt held. The 2,500,000 warrants consisted of 500,000 “A Warrants” each convertible into one share of common stock at an exercise price of $4.00; 500,000 “B Warrants” each convertible into one share of common stock at an exercise price of $5.00; 500,000 “C Warrants” each convertible into one share of common stock at an exercise price of $6.00; 500,000 “D Warrants” each convertible into one share of common stock at an exercise price of $7.00; and 500,000 “E Warrants” each convertible into one share of common stock at an exercise price of $8.00. All warrants are exercisable at any time prior to August 30, 2020. |
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The exercise price of the warrants was reduced to $0.10 per share on April 7, 2020, and on April 15, 2020, the warrant expiration date was extended to August 30, 2025.
On March 6, 2014, we issued 20,000 common shares for services at par value, $0.0001 per share, for total value of $2. On June 16, 2014, we issued a total of 15,000,000 common shares for services at par value, $0.0001 per share, for total value of $1,500. On August 1, 2017, we issued a total of 10,000 common shares for services at par value, $0.0001 per share, for a total value of $1.
On April 3, 2020, Linda Masters, the Company’s then Chief Executive Officer and President, entered into a Stock Purchase Agreement (the “2020 SPA”), pursuant to which Ms. Masters agreed to sell to Lan CHAN 14,960,000 shares of common stock of the Company, par value $0.0001 (the “Shares”), representing approximately 95.8% of the issued and outstanding common stock of the Company, for aggregate consideration of Three Hundred Ninety One Thousand Dollars ($391,000) in accordance with the terms and conditions of the 2020 SPA. The acquisition of the Shares consummated on April 15, 2020, and was purchased by Lan CHAN with his personal funds. As a result of the acquisition, Mr. Chan holds a controlling interest in the Company and may unilaterally determine the election of the Board and other substantive matters requiring approval of the Company’s stockholders.
Upon the consummation of the sale of the Shares, Linda Masters, the Company’s then Chief Executive Officer, President and director, and Kathleen Chula, the Company’s then Vice President and Director, resigned from all of their positions with the Company, effective April 15, 2020. Their resignations were not due to any dispute or disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Concurrently with such resignations, Lan CHAN was appointed to serve as the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole Director of the Company, until the next annual meeting of stockholders of the Company and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. None of the directors or executive officers has a direct family relationship with any of the Company’s directors or executive officers, or any person nominated or chosen by the Company to become a director or executive officer. Mr. Chan will serve in his positions without compensation. The Company hopes to enter into a compensatory arrangement with each officer in the future.
Acquisition of LHCL
On May 8, 2020, we executed a Share Exchange Agreement, or the “Share Exchange Agreement,” with Luduson Holding Company Limited, a limited liability company organized under the laws of British Virgin Islands, or “LHCL,” and the shareholders of LHCL. Pursuant to the Share Exchange Agreement, we purchased Ten Thousand (10,000) shares of LHCL, or the “LHCL Shares,” representing all of the issued and outstanding shares of common stock of LHCL. As consideration, we agreed to issue to the shareholders of LHCL Ten Million (10,000,000) shares of our common stock, at a value of US $0.10 per share, for an aggregate value of US $1,000,000. We consummated the acquisition of LHCL on May 22, 2020. LHCL is a business-to-business gaming technology company. As a result of our acquisition of LHCL, we entered into the business-to-business gaming technology industry.
Reverse Acquisition and Spin-Out
On May 29, 2023, the Company disposed of LHCL to Mr. Lan CHAN, a substantial shareholder of the Company at a consideration of $2,821. There was no gain or loss arising from the disposal.
On July 06, 2023, the Company completed the Reverse Takeover of Glamourous Group Holding Limited (“GGHI”), a limited liability company incorporated in the United Kingdom of England and Wales, by the issuance of 320,000,000 common shares to Ho Chi Wan, the sole shareholder of GGHI, on July 01, 2023. The then-Company continued trading under Luduson G Inc. The issuance of the shares was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) thereof on the basis that the transaction did not involve a public offering. The shares are subject to restrictions on resale pursuant to Commission Rule 144 under the Securities Act.
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The Company issued an equivalent of 91.9% fully diluted shares to the business owner of the GGHI, Ms Ho Chi Wan, in exchange for 100% of the Target and the whole operation. After such a transaction, Ms Wan gained control of the Company and in effect completed a business combination of the Target with the Company, resulting in a reverse acquisition (the “Reverse Acquisition”). Glamourous Group Holding Limited includes an experienced team with full employment contracts, expertise, and customer and supplier list, but has immaterial tangible assets and liabilities. The estimated NAV is foreseen to create a big profit for the Company, with more than 1,000 Greater China influencers having a very dominant track record in the Hong Kong movie industry.
Group Restructuring
On September 26, 2023, the Company underwent a group restructuring (the “Group Restructuring”), where GGHI was struck off and disposed of, and where Glamorous Holdings International Company Limited and Glamourous Holdings Company Limited (HK) (together the “Hong Kong Subsidiaries”) were acquired from Ms. Ho Chi Wan. The Hong Kong Subsidiaries were 100% owned by Ms. Ho Chi Wan prior to the Group Restructuring and are considered common control. On March 28, 2024, the Company acquired LWH Consulting Sdn Bhd (“LWH Consulting”), a limited liability company incorporated in Malaysia, at no consideration to carry out the provision of listing consulting services for clients with business interests in the Greater Bay Area in China and other parts of the world and assisting them to achieve the largest market value for listing in a short period. On September 28, 2024, the Company disposed LWH Consulting to Ms. Ho Chi Wan. In line with the Company’s revisited investment focus, the Hong Kong Subsidiaries were disposed of on December 20, 2024 to Ms. Ho Chi Wan. Glamourous Pictures Group Limited was acquired at no consideration from Mr. Man Fai Cheng, the Company’s Chief Executive Officer.
On October 1, 2025, the Company effected a business combination with Aphoenity International Holdings Inc, a Wyoming entity, which subsequently succeeded the prior Delaware entity as holding company of the group structure. Aphoenity International Holdings Inc’s board of directors and officers are composed of the same members as Luduson G Inc., and its shareholding structure is identical to Luduson G Inc. at the time it succeeded Luduson G Inc. as holding company of the group structure.
The Company is continuously refining the stages of its restructuring plan, focusing on optimizing operations and enhancing strategic initiatives to drive sustainable growth. As part of this transformation, we are actively evaluating new opportunities and aligning our resources to strengthen our market position. In line with these efforts, we will be introducing fresh leadership and innovative perspectives to propel the Company forward. We anticipate announcing our new strategic direction in the coming months, marking a significant step in our evolution and commitment to long-term success.
Our Products and Services
The operating entity, Glamourous began as a dynamic player in the business consulting space, providing expert guidance to companies seeking to enhance their operations, expand their market presence, and achieve sustainable growth. Leveraging deep industry expertise, the company initially focused on offering strategic business solutions tailored to the evolving needs of corporations across various sectors. As the financial landscape became increasingly complex and global capital markets presented new opportunities, Glamourous identified a growing demand for specialized advisory services, particularly in corporate finance and capital market access.
Recognizing this shift, the Group strategically transformed into a boutique consulting firm, dedicated to assisting businesses in navigating the intricacies of financial markets. With a strong foundation in strategic planning, investor relations, and corporate structuring, Glamourous now provides tailored solutions that enable companies to enhance their financial positioning, optimize shareholder value, and access capital more efficiently. By leveraging its extensive network, deep industry relationships, and market insights, the firm empowers clients to successfully position themselves for growth, achieve regulatory compliance, and expand their investor base. Through a client-centric approach and a commitment to excellence, Glamourous continues to support businesses in unlocking new market opportunities and achieving long-term financial success.
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Markets and Regions
Southeast Asia presents significant consulting opportunities across various industries, driven by rapid economic growth, digital transformation, and evolving regulatory landscapes. While the initial aim was to serve customers having business interests in the Greater Bay area, excluding China from our market focus in the second half allows us to strategically navigate geopolitical tensions while capitalizing on the immense potential within ASEAN nations.
The Company initially focused on movie streaming platforms are influencers and KOLs, which are personalities on these platforms that have amassed huge exposure and popularity. KOL can make great profits from marketing and online live selling, catering a unified entertainment universe for China market, Asia market and all overseas Chinese around the world.
Our Strategies
As The Company expands its business scope from entertainment into boutique listing consulting, a strategic approach is essential to leverage its existing network and industry expertise. The Company will capitalize on its well-established connections in the entertainment sector to attract high-profile clients and niche businesses seeking personalized listing consulting. By integrating entertainment-driven engagement strategies with corporate advisory services, the Company can offer unique branding and marketing solutions that differentiate its consulting services from traditional firms. Additionally, fostering partnerships with financial institutions, investors, and regulatory bodies will enhance credibility and streamline the listing process for clients.
To strengthen its position in the boutique listing consulting industry, the Company will utilize its entertainment background to implement innovative storytelling techniques to enhance client branding and public relations, ensuring maximum visibility and investor confidence. A dedicated team of financial analysts and corporate strategists will provide tailored advisory services, guiding businesses through regulatory compliance, market positioning, and post-listing growth strategies. This synergy between entertainment and finance will create a competitive edge in a rapidly evolving marketplace.
Most importantly, the Company. will emphasize long-term relationship-building with its clients by offering ongoing advisory support beyond the listing phase. By integrating interactive content, virtual investor roadshows, and engagement-driven experiences, the company can ensure sustained investor interest and brand loyalty for its clients. Additionally, expanding its consulting reach into international markets through strategic alliances and localized expertise will drive business growth. Through a combination of entertainment-driven engagement, financial expertise, and a global outlook, the Company is poised to redefine boutique listing consulting with an innovative and client-centric approach.
INTELLECTUAL PROPERTY AND PATENTS
As The Company expands into boutique listing consulting, protecting intellectual property (IP) and strengthening brand identity will be crucial for maintaining a competitive edge. The company will develop proprietary consulting frameworks, digital tools, and data-driven methodologies to enhance the listing process for clients. These assets will be safeguarded through trademarks, copyrights, and potential patents where applicable, ensuring exclusivity and value differentiation. Additionally, leveraging the company’s existing entertainment IP—such as interactive media, digital engagement platforms, and content marketing expertise—will allow for innovative storytelling and branding solutions tailored to clients seeking public listings.
The Company will evolve to reflect its diversified portfolio while maintaining its reputation for creativity, innovation, and industry leadership. A strong branding strategy will position us as a premium boutique listing consultant, emphasizing its ability to merge entertainment-driven engagement with financial expertise. Consistent messaging, a refined corporate identity, and targeted marketing campaigns will reinforce brand recognition and trust among clients, investors, and stakeholders. Through a combination of IP protection and strategic branding, The Company aims to solidify its presence in the boutique listing consulting sector while maintaining its legacy of entertainment-driven innovation.
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COMPETITION
The boutique listing consulting market in South-East Asia is highly competitive, with a mix of global financial advisory firms, specialized local consultancies, and investment banks offering listing advisory services. Established firms such as the “Big Four” accounting companies and major financial institutions dominate the industry with extensive experience in IPO advisory, regulatory compliance, and investor relations. Their strong brand recognition, deep market expertise, and established networks with stock exchanges and institutional investors create a high entry barrier for new players. However, these firms often focus on large-scale corporate clients, leaving opportunities for boutique consultancies like us, to cater to niche businesses and emerging companies that require more personalized and strategic guidance.
Local boutique consultancies across major financial hubs like Hong Kong, Singapore, and Tokyo provide another layer of competition. These firms specialize in regional regulations, industry-specific listing requirements, and local investor relations, offering tailored services that global players may lack. Many of these consultancies have strong relationships with regional stock exchanges and regulatory bodies, allowing them to expedite listing approvals and provide insights into evolving compliance frameworks. To compete effectively, the Company will need to establish strong regulatory expertise, cultivate local partnerships, and differentiate itself by leveraging its entertainment industry background for unique branding and marketing-driven IPO strategies.
Another competitive force comes from investment banks and brokerage firms that integrate listing consulting as part of their broader financial services. These firms offer end-to-end solutions, including underwriting, market-making, and post-listing financial strategies, giving them an advantage in securing clients seeking comprehensive support. While we may not directly compete with these large financial institutions in capital market transactions, it can position itself as a specialist in branding, digital investor engagement, and alternative listing solutions, complementing the services of traditional financial advisors. Strategic collaborations with investment banks can also enhance the Company’s credibility and expand its service offerings.
Technology-driven consulting firms are also emerging as key competitors, leveraging AI-driven analytics, blockchain-based financial solutions, and digital marketing tools to optimize the listing process. These firms use data-driven insights to help companies navigate valuation, investor targeting, and regulatory challenges with greater precision. To stay competitive, we must integrate digital tools into our consulting framework, utilizing data analytics, virtual investor roadshows, and digital storytelling to enhance client visibility and engagement. By combining traditional listing expertise with innovative digital strategies, the Company can carve out a unique niche in the competitive Asian market.
Despite the competitive landscape, the Company has an opportunity to distinguish itself by blending its entertainment-driven engagement strategies with financial consulting expertise. The company can capitalize on its strengths in branding, media, and interactive content to offer clients a more dynamic approach to public listings. By targeting emerging industries such as digital entertainment, esports, and creative startups—where traditional financial firms have limited specialization—we can establish ourselves as the go-to boutique consultant for companies seeking a high-impact, investor-friendly listing experience. Through strategic differentiation, localized expertise, and innovative service offerings, the Company can effectively compete in South-East Asia’s evolving boutique listing consulting market.
EMPLOYEES
As of April 10, 2026, we do not have any full time employees:
We work with our consultants in their specific area of expertise on a contractual basis as they are not employees of the Company.
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GOVERNMENT AND INDUSTRY REGULATIONS
The Company, through its operating entity in Malaysia, is subject to various government and industrial regulations that govern its business operations. Malaysia has a well-established regulatory framework that promotes a conducive environment for businesses while ensuring compliance with statutory requirements. The company operates in accordance with the relevant laws and regulations enforced by Malaysian authorities, including but not limited to the Companies Act 2016, the Income Tax Act 1967, and the Employment Act 1955.
The Companies Act 2016 governs the incorporation, management, and operations of companies in Malaysia. The Company adheres to the requirements related to corporate governance, financial reporting, and disclosure to ensure transparency and accountability in its business dealings. The Income Tax Act 1967 mandates the company to comply with tax obligations, including timely filing of tax returns and payment of taxes, ensuring adherence to the country’s tax regime. In 2024, Malaysia’s tax landscape continues to evolve, with the government implementing measures to enhance tax compliance and revenue collection. Key developments include the introduction of the e-Invoicing system for selected taxpayers, aimed at improving tax administration efficiency and reducing tax evasion. Additionally, corporate tax rates remain at 24%, with certain incentives available for businesses in high-value sectors and technology-driven industries. The Company. remains vigilant in adapting to these changes and fulfilling its tax obligations in line with the updated regulations.
The Employment Act 1955 outlines the rights and responsibilities of employers and employees, and the company is committed to upholding fair labor practices, providing a safe working environment, and ensuring equitable treatment of its workforce.
Additionally, the Company is subject to regulations specific to the technology and digital content industry. The Malaysian Communications and Multimedia Commission (MCMC) oversees the licensing and operations of businesses involved in communications, broadcasting, and multimedia services. The company complies with the Communications and Multimedia Act 1998 and other sector-specific guidelines to ensure that its digital content and platform services meet regulatory standards and safeguard consumer interests.
The Company is also mindful of data protection and privacy regulations under the Personal Data Protection Act 2010 (PDPA), which governs the processing of personal data in commercial transactions. The Company upholds the highest standards in data security and privacy protection to maintain customer trust and ensure compliance with the PDPA.
In line with Malaysia’s commitment to anti-corruption and good governance, the Company abides by the Malaysian Anti-Corruption Commission Act 2009. The company enforces internal policies and procedures to prevent bribery and corruption, fostering a culture of integrity and ethical business conduct.
We continuously monitor developments in government policies and regulatory changes to ensure ongoing compliance and alignment with Malaysia’s legal and industrial standards. The company remains proactive in adapting to evolving regulations, mitigating regulatory risks, and sustaining its position as a responsible corporate entity within the Malaysian market.
Regulations on Tax
Value-Added Tax and Business Tax
In Malaysia, the Goods and Services Tax (GST) was repealed and replaced with the Sales and Service Tax (SST) effective 1 September 2018. As of 2024, the SST system remains in place and continues to apply to businesses operating in Malaysia.
The Sales Tax is imposed on taxable goods manufactured in or imported into Malaysia, with rates generally at 5% or 10%, depending on the type of goods. Certain essential goods may be exempt from sales tax.
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The Service Tax is levied at a standard rate of 6% on specific prescribed services provided in Malaysia. Businesses providing taxable services must register for Service Tax if their annual taxable turnover exceeds RM500,000. However, different thresholds apply to specific sectors such as food and beverage (RM1.5 million) and others.
Businesses are required to comply with SST registration, filing, and payment obligations as stipulated by the Royal Malaysian Customs Department. Failure to comply may result in penalties and fines.
During the financial year ended December 31, 2024, the Company ensured full compliance with all applicable SST regulations. The Company maintained proper records of taxable sales and services to facilitate accurate reporting and timely payment of taxes. No material disputes or non-compliance issues were reported concerning SST obligations.
Management continues to monitor regulatory changes in Malaysia’s indirect tax framework to ensure ongoing compliance and minimize potential tax exposure.
Regulations Relating to Foreign Exchange and Dividend Distribution
Foreign Exchange Regulations
The Company, through its Hong Kong intermediate holding entity, is subject to regulations governing foreign exchange controls and dividend distribution in the jurisdictions where it operates. In Hong Kong, there are generally no foreign exchange controls, and funds can be freely remitted in and out of the region. This facilitates the distribution of dividends from the Hong Kong holding entity to the Company and other shareholders. However, dividend payments from subsidiaries operating in other jurisdictions may be subject to local foreign exchange restrictions, withholding taxes, and regulatory approvals. The Company and its Hong Kong intermediate holding entity must ensure compliance with applicable laws and tax regulations in each operating jurisdiction to ensure the smooth repatriation of profits and distribution of dividends. Proper tax planning and adherence to local statutory requirements are essential to mitigate any potential risks and ensure regulatory compliance across the group structure.
Share Option Rules
The Company, being a Hong Kong intermediate holding entity can operate share option scheme (the “Scheme”) for the purpose of attracting, retaining, and motivating employees, directors, consultants, and other eligible participants, while aligning their interests with those of the Company and its shareholders. The Scheme is established in accordance with the applicable rules and regulations under the Hong Kong Companies Ordinance (Cap. 622) and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). Under the Scheme, the Board of Directors may, at its discretion, grant options to subscribe for ordinary shares in the Company, subject to the terms and conditions set forth in the Scheme. The exercise price, vesting period, and other specific terms of each option grant are determined by the Board, provided that the exercise price shall not be less than the highest of (i) the closing price of the Company’s shares on the date of grant; (ii) the average closing price of the Company’s shares for the five business days preceding the date of grant; and (iii) the nominal value of the Company’s shares. The total number of shares that may be issued under the Scheme shall not exceed 10% of the Company’s issued share capital as of the date of shareholders’ approval, unless refreshed by shareholders in accordance with the Listing Rules. The Scheme is subject to periodic review and compliance with regulatory requirements in Hong Kong.
Regulation of Dividend Distributions
Dividend distributions by the Company are subject to the applicable laws and regulations of Hong Kong, including the Companies Ordinance (Cap. 622), and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). Under Hong Kong law, dividends may only be paid out of profits available for distribution, which generally refers to the accumulated profits of the Company as stated in its unaudited financial statements, after providing for all applicable expenses, liabilities, and reserves. The declaration and payment of dividends are subject to the discretion of the Board of Directors, which considers the Company’s financial performance, cash flow position, future capital requirements, and other relevant factors. Additionally, any dividend distribution is subject to compliance with the Company’s constitutional documents and any restrictions or covenants contained in agreements with lenders or other financing arrangements. There is no withholding tax on dividends paid by a Hong Kong company to its shareholders, regardless of their residence or nationality.
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SEASONALITY
The consulting business in South-East Asia, including key markets like Malaysia and Singapore, experiences notable seasonality driven by cultural, economic, and business cycles. The first quarter often sees slower activity due to the Chinese New Year, which causes a temporary lull in business operations as many clients scale back engagements. Conversely, the second and third quarters generally see a surge in demand as companies refocus on growth initiatives and budget utilization after the holiday period. This is particularly evident in Singapore’s financial and professional services sectors, where mid-year strategy reviews and compliance deadlines fuel consulting needs. In Malaysia, demand often picks up around the government’s fiscal planning period and before the announcement of the national budget. The fourth quarter tends to be a mixed period; while some businesses rush to complete projects before the year-end, others adopt a wait-and-see approach due to budget constraints and preparations for the holiday season. Additionally, the region’s reliance on tourism, manufacturing, and export-oriented sectors can amplify seasonal variations, especially during global economic shifts and peak travel seasons.
INSURANCE
Insurance for consulting businesses in Southeast Asia, including but not limited to Malaysia and Singapore, plays a crucial role in safeguarding firms against various operational risks. Consulting businesses often face potential liabilities arising from professional errors, omissions, or client dissatisfaction, making Professional Indemnity Insurance a critical coverage. This type of insurance protects against legal costs and claims resulting from professional negligence. Additionally, Public Liability Insurance is essential, as it covers third-party injuries or property damage occurring in the course of business operations. In Malaysia, insurance requirements may vary based on the consulting sector and licensing bodies, while in Singapore, businesses are encouraged to maintain comprehensive coverage, especially in industries dealing with financial or legal advisory . With the region’s rapid economic development and growing regulatory frameworks, consulting firms increasingly seek Business Interruption Insurance and Cyber Liability Insurance to mitigate risks associated with data breaches and operational disruptions. As cross-border consulting activities expand, policies offering regional coverage have become more popular, ensuring businesses remain protected across multiple Southeast Asian markets.
CORPORATE INFORMATION
Our principal executive and registered offices are located at 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, telephone number +852-2824 8560.
NEAR-TERM REQUIREMENTS FOR ADDITIONAL CAPITAL
We believe that we will require approximately $1,000,000 over the next 18-24 months to implement our business plan of expanding throughout Hong Kong. For the immediate future, we intend to finance our business expansion efforts through loans from existing shareholders or financial institutions.
AVAILABLE INFORMATION
Access to all of our Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is provided, free of charge, on our website (www.luduson.com) as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. The reports will be provided at no cost to the requester. Each request for these reports should be made to Aphoenity International Holdings Inc., Attention: Secretary, 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong.
Dynamic Stock Transfer, Inc. located at 15233 Ventura Blvd., Suite 710, Sherman Oaks, CA, 91403, telephone number (213) 667-0197 , serves as our stock transfer agent.
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ITEM 1A. RISK FACTORS.
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this document in evaluating our company and its business before purchasing shares of our company’s common stock. You could lose all or part of your investment due to any of these risks.
Risks Relating to the Company
Volatility in Global Interest Rate that is material on our business and may continue to do so for the next twelve months.
Although 2024 marks a period of relative stabilization compared to the peak years of the pandemic, residual challenges and structural shifts continue to affect our operations, client demand, and overall financial performance.
| · | Revenue and Client Demand |
During the height of the pandemic, many businesses reduced discretionary spending, including consulting services, which led to a temporary decline in our revenue. While economic activity has rebounded, some industries we serve, particularly in sectors like retail, travel, and hospitality, are still recovering from prolonged disruptions. Additionally, remote work trends and digital transformation initiatives have altered client needs, increasing demand for technology-driven consulting services while reducing traditional in-person engagements.
| · | Supply Chain and Inflationary Pressures |
Global supply chain disruptions and inflationary pressures, exacerbated by the pandemic, have increased the cost of certain services and operational expenses. While we have taken steps to mitigate these impacts through strategic pricing and cost management, ongoing economic uncertainty continues to pose a risk to profitability.
| · | Regulatory and Compliance Considerations |
The evolving regulatory landscape related to health and safety measures, data security in remote work environments, and government assistance programs has required continued compliance efforts. Any changes in these regulations could impact our cost structure and operational flexibility.
As we move forward, we remain focused on adapting to post-pandemic shifts by enhancing our digital consulting capabilities, optimizing cost structures, and diversifying service offerings. While uncertainties persist, we believe that our strategic investments in technology and human capital position us well for sustained growth in the evolving business environment.
Despite lingering challenges from COVID-19, we are optimistic about the long-term prospects of our industry and our ability to drive value for our clients and stakeholders.
We may be materially and adversely affected by the complexity, uncertainties and changes in South-East Asia regulation of the companies and businesses in the consulting industry.
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Our business generates and processes personal data, and we are required to comply with Personal Data Protection Act (“PDPA”) laws and regulations for managing personal data. These laws and regulations could create unexpected costs, subject us to enforcement actions for compliance failures, or restrict portions of our business or cause us to change our data practices or business model.
Our operations across Southeast Asia are subject to stringent and evolving data privacy and personal data protection laws, including but not limited to Malaysia’s Personal Data Protection Act 2010 (PDPA) and Singapore’s Personal Data Protection Act 2012 (PDPA). These regulations govern the collection, use, storage, and transfer of personal data, imposing strict compliance obligations on businesses operating within these jurisdictions. Failure to adhere to these requirements may result in significant fines, legal actions, and reputational damage. In Malaysia, businesses must obtain consent before processing personal data and ensure adequate safeguards are in place, while in Singapore, companies are required to implement robust data protection policies, conduct regular audits, and report data breaches promptly. Other Southeast Asian countries, such as Thailand, Indonesia, the Philippines, and Vietnam, have introduced or are in the process of strengthening their data protection regimes, increasing the complexity of cross-border operations. Divergent regulatory frameworks and enforcement practices across the region pose operational challenges, requiring continuous monitoring, staff training, and investment in data security infrastructure. Non-compliance with these data protection laws could materially and adversely affect our business operations, expose us to regulatory scrutiny, and undermine stakeholder confidence.
We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers.
We may become subject to a variety of laws and regulations in the South-East Asia regarding privacy, data security, cybersecurity, and data protection. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
We expect to obtain information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers, end users and employees expect that we will adequately protect their personal information.
We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.
Under Malaysia’s Computer Crimes Act 1997 and other related legislation, unauthorized access, theft, or misuse of data, including personal information, is a criminal offense, punishable by fines and imprisonment. Companies operating in Malaysia are required to take reasonable steps to secure their networks and information systems, prevent data breaches, and ensure the lawful processing of personal data. Non-compliance with these data protection and cybersecurity regulations can lead to enforcement actions, reputational damage, and potential disruption to business operations.
Oversea Listing Requirement for local entities
Additional disclosures may be required to ensure that Malaysian investors are adequately informed. Companies are also expected to comply with Bank Negara Malaysia’s (BNM) foreign exchange administration rules when raising funds overseas, particularly regarding the remittance of proceeds and cross-border transactions.
Post-listing, Malaysian entities remain subject to domestic financial reporting and disclosure requirements, alongside the ongoing obligations of the foreign stock exchange. Non-compliance with these requirements may result in regulatory action, fines, or reputational damage, potentially affecting the company’s financial position and market perception.
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If we fail to retain existing or attract new businesses to enter the US Public Listing route, maintain and increase our exposure to South-East Asia emerging entities, or if we are unable to collect accounts receivable in a timely manner, our business, financial condition may be adversely affected.
Our business, financial condition, and future growth prospects may be adversely affected if we fail to retain existing clients or attract new businesses seeking to pursue the U.S. public listing route. Our ability to maintain and expand our exposure to emerging entities across Southeast Asia, including Malaysia, Singapore, Indonesia, Thailand, and other developing markets, is critical to our long-term success. These markets represent significant growth opportunities; however, competition is intensifying, and clients may seek alternative advisory firms or financing avenues.
Furthermore, delays or defaults in collecting accounts receivable from clients could strain our working capital, disrupt cash flows, and impact our profitability. Extended payment cycles or non-payment, particularly from startups and growth-stage companies in emerging markets, could further exacerbate these risks. Failure to address these challenges could materially and adversely affect our business operations and financial performance.
Importance of Fundraising Advisory and Potential Impact.
As a Listing Consultant, our ability to offer clients strategic fundraising options is a critical component of our service offering and is essential to their successful listing and post-listing growth. We facilitate access to various financing avenues, including pre-IPO funding, private placements, bridge financing, and public market capital raising, enabling our clients to secure the necessary working capital to support their business expansion and listing ambitions. Our capacity to identify suitable investors, structure financing solutions, and navigate cross-border fundraising regulations—particularly in Southeast Asia and the U.S.—enhances our value proposition. However, if we are unable to maintain strong relationships with funding partners, or if market conditions deteriorate, limiting access to financing for our clients, our advisory capabilities may be compromised. This could lead to reduced client confidence, delays in listings, and the potential loss of business. Furthermore, if clients are unable to secure sufficient funding through our advisory network, they may resort to less favorable financing terms or alternative consultants, which could materially and adversely affect our business performance and growth prospects.
Our future performance depends to a significant degree upon the continued service of key members of management as well as well-connected Consultants and Key Personnel
We are dependent upon the continued service of Mr. Chun Fong SIM (“Mr. SIM”) , our Chief Executive Officer and Director, and Mr. Eng Wah KUNG (“Mr. KUNG”), our Chief Financial Officer, Secretary and Director. The loss of Messrs. SIM or KUNG or one or more of our other key personnel would have a material adverse effect on our business, operating results and financial condition. We believe our future success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales and product development personnel. We expect to establish an incentive compensation plan for our key personnel to retain their services. We have experienced intense competition for personnel, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and retaining personnel in the future.
Ho Chi WAN, our director and Non-Executive Chairman, beneficially owns approximately or has the right to vote 51.47% of our outstanding common stock. As a result, Ms WAN has a substantial voting power in all matters submitted to our stockholders for approval including:
| · | Election of our board of directors; | |
| · | Removal of any of our directors or officers; | |
| · | Amendment of our Amended Certificate of Incorporation or Bylaws; | |
| · | Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us. |
As a result of her ownership and position, Ms WAN is able to substantially influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by him could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in our company may decrease. Ms WAN’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
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Procurement of Services and Financing Support in Public Listing Advisory
Our ability to successfully deliver public listing advisory services is contingent upon the availability of essential third-party service providers, including legal advisors, auditors, underwriters, valuation experts, and other professionals involved in the listing process. In certain instances, our capability to secure and coordinate these services in a timely and cost-effective manner is critical to meeting client expectations and ensuring the smooth progression of listing mandates. Additionally, our success relies significantly on the expertise and networks of our key personnel, including consultants who possess specialized knowledge of listing regulations and well-established connections within the financial and regulatory ecosystem. Any disruption in securing these external services, or the loss of experienced and well-connected professionals, could delay client projects, erode client confidence, and negatively impact our business performance.
The success of our business depends on our ability to maintain and enhance our brand.
We believe that maintaining, protecting, and enhancing our brand and reputation is of significant importance to the long-term success and growth of our business. Our brand represents the trust and confidence our clients, partners, and investors place in our services, particularly within the highly competitive consulting and public listing advisory sector across Southeast Asia and other markets in which we operate. A strong and recognizable brand allows us to differentiate ourselves from competitors, attract and retain new clients, and strengthen our relationships with existing clients.
Any failure to preserve the integrity of our brand or any negative publicity—whether arising from regulatory issues, client dissatisfaction, adverse market perception, or operational shortcomings—could materially harm our reputation, reduce market demand for our services, and undermine our competitive position. Moreover, as we expand our operations and seek to grow our presence in Malaysia, Hong Kong, and other key markets, consistent brand development and reputation management will remain vital in gaining market acceptance and driving sustainable business performance. We intend to continue investing in marketing, client engagement, and service quality enhancement initiatives to maintain and elevate our brand’s standing, which we believe is a critical factor to our continued success.
We may grow our business through acquisitions in the near future, which may result in operating difficulties, dilution, and other harmful consequences.
We expect to achieve our business plan through a combination of organic growth and acquisitions and investments. We periodically evaluate an array of potential strategic transactions and may make one or more acquisitions in the near future. The process of integrating an acquired company, business, or technology may create unforeseen operating difficulties and expenditures. The areas where we face risks include:
| · | Implementation or remediation of controls, procedures, and policies at the acquired company; | |
| · | Diversion of management time and focus from operating our business to acquisition integration challenges; | |
| · | Cultural challenges associated with integrating employees from the acquired company into our organization; | |
| · | Retention of employees from the businesses we acquire; | |
| · | Integration of the acquired company’s accounting, management information, human resource, and other administrative systems; | |
| · | Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; | |
| · | Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, or other third parties; | |
| · | In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries; and | |
| · | Failure to successfully further develop the acquired product, service or technology. |
Our failure to address these risks or other problems encountered in connection with future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.
Future acquisitions may also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize.
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Other factors can have a material adverse effect on our future profitability and financial condition.
Many other factors can affect our profitability and financial condition, including:
| · | changes in, or interpretations of, laws and regulations including changes in accounting standards and taxation requirements; | |
| · | changes in the rate of inflation, interest rates and the performance of investments held by us; | |
| · | changes in the creditworthiness of counterparties that transact business with; | |
| · | changes in business, economic, and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and, pressure from third-party interest groups; | |
| · | changes in our business and investments and changes in the relative and absolute contribution of each to earnings and cash flow resulting from evolving business strategies, changing product mix, changes in tax rates and opportunities existing now or in the future; | |
| · | difficulties related to our information technology systems, any of which could adversely affect business operations, including any significant breakdown, invasion, destruction, or interruption of these systems; | |
| · | changes in credit markets impacting our ability to obtain financing for our business operations; or | |
| · | legal difficulties, any of which could preclude or delay commercialization of products or technology or adversely affect profitability, including claims asserting statutory or regulatory violations, adverse litigation decisions, and issues regarding compliance with any governmental consent decree. |
Risk Factors Relating to Doing Business in Malaysia
The Malaysian government, along with other regulatory authorities in South-East Asia, exercises significant oversight and discretion over the conduct of business operations, the offering of securities, and foreign investments within their jurisdictions.
Our operations in Malaysia and Southeast Asia are subject to the authority of various regulatory bodies, including the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM), which possess the power to influence business activities, capital markets, and foreign investments. Regulatory interventions or sudden changes in policies could affect our ability to raise capital offshore, attract foreign investors, or proceed with securities offerings. These actions may negatively impact the value of our securities and could impair our financial position.
The regulatory environment in Malaysia and the broader Southeast Asia region is dynamic, with ongoing updates to policies governing investments, corporate practices, and financial markets. Businesses with offshore holding structures, such as ours, must remain adaptable to these regulatory developments to ensure continued compliance and sustain operational and financial flexibility. Failure to comply with new requirements may expose us to penalties or operational disruptions.
We face the risk that changes in the policies of the Malaysia government could have a significant impact upon the business we may be able to conduct in the Malaysia and the profitability of such business.
Additionally, shifts in government priorities or regional geopolitical uncertainties may create obstacles for foreign investors and affect market sentiment. Protective policies or stricter financial controls could limit our access to funding sources or delay expansion initiatives. These uncertainties, coupled with evolving regulations, may pose risks to our growth outlook and shareholder value.
Our interests may be adversely affected by changes in policies by the PRC government, including:
| · | changes in laws, regulations or their interpretation especially with respect to application of PRC tax, labor, currency restriction and other laws to Hong Kong operations; | |
| · | confiscatory taxation or changes in taxation; | |
| · | Currency revaluations or restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise; | |
| · | expropriation or nationalization of private enterprises; and | |
| · | the allocation of resources. |
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Substantial uncertainties and restrictions with respect to the political and economic policies of the Malaysia government and South-East Asia laws and regulations could have a significant impact upon the business that we may be able to conduct in Malaysia and accordingly on the results of our operations and financial condition.
The political environment in Malaysia has experienced periodic changes and transitions in government leadership over recent years, often resulting in shifts in national policies and regulatory priorities. Changes in the ruling administration, shifts in coalition dynamics, or political instability can lead to uncertainty in the business environment. These developments may affect government approaches toward foreign investments, financial regulations, taxation policies, and economic development strategies, all of which could have a direct or indirect impact on our business operations and financial performance.
A change in government leadership or policy direction could result in the introduction of new laws or amendments to existing regulations governing sectors relevant to our business, including the consulting, public listing advisory, and capital markets sectors. For instance, stricter requirements on foreign ownership, limitations on offshore investments, or changes in licensing conditions for professional service providers could restrict our business activities or increase our compliance obligations. Additionally, delays in policy implementation or the reversal of previously approved development plans could disrupt our business strategies or delay project execution.
Political uncertainty in Malaysia may also affect investor confidence and market stability, particularly if it leads to concerns over the future direction of the economy or regulatory framework. This could reduce the willingness of potential clients to proceed with capital-raising activities or public listings, impacting our revenue streams. Furthermore, changes in government-driven incentives or support schemes for businesses operating in Malaysia could alter the cost structure or growth prospects for our operations. Any such political shifts could materially affect our ability to maintain stable business operations, achieve growth objectives, and ultimately influence our financial condition and the value of our securities.
The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer’s public accounting firm within three years. There are uncertainties and potential challenges a Malaysian company could face under the Holding Foreign Companies Accountable Act (HFCAA) that. may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.
The Holding Foreign Companies Accountable Act (HFCAA) requires that the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect and investigate the audit work and practices of public accounting firms for issuers listed on U.S. stock exchanges. If a company’s auditor is based in a jurisdiction where PCAOB is unable to conduct inspections for three consecutive years, the company risks delisting from U.S. securities exchanges. Malaysian companies, particularly those with local auditors unfamiliar with U.S. audit oversight requirements or those operating in an environment where local regulations restrict access to certain audit work papers, may face significant compliance challenges. There is uncertainty as to whether Malaysian authorities will fully cooperate with PCAOB inspection requirements, as Malaysia’s regulatory and confidentiality laws regarding audit practices could potentially conflict with U.S. standards. Any failure by our previous Malaysian auditors to comply with PCAOB inspection requests could result in our company being identified as non-compliant under the HFCAA, leading to potential trading prohibitions or delisting from U.S. exchanges, which could adversely affect the liquidity and value of our securities and restrict our access to U.S. capital markets.
Our previous auditor is located in Kuala Lumpur and is subject to PCAOB inspections with its most recent inspection occurring during 2021. Therefore, it is not subject to the determinations announced by the PCAOB on December 16, 2021. However, in the event the Malaysian authorities subsequently take a position disallowing the PCAOB to inspect our auditor, then we would need to change our auditor. Furthermore, due to the recent developments in connection with the implementation of the Holding Foreign Companies Accountable Act, we cannot assure you whether the SEC or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. The requirement in the HFCA Act that the PCAOB be permitted to inspect the issuer’s public accounting firm within two or three years, may result in the delisting of our securities from applicable trading markets in the U.S, in the future if the PCAOB is unable to inspect our accounting firm at such future time.
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Adverse regulatory developments in Malaysia may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in Malaysia may impose additional compliance requirements for companies like us with Malaysian-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
Our business operations are subject to the regulatory framework in Malaysia, which continues to evolve. Regulatory authorities in Malaysia, including the Securities Commission Malaysia (SC), Bank Negara Malaysia (BNM), Companies Commission of Malaysia (SSM), and other government bodies, periodically introduce new legislation and update existing rules that govern corporate practices, foreign investments, financial services, data protection, taxation, and anti-corruption. Any adverse regulatory developments, such as the imposition of additional licensing requirements, restrictions on cross-border transactions, enhanced taxation policies, or stricter foreign exchange controls, could increase our operational complexity and compliance costs. Such changes may also limit our business flexibility and affect our ability to conduct cross-border financing and investment activities, which are critical to our regional operations and long-term growth.
Additionally, recent regulatory shifts and government enforcement efforts in Malaysia, including heightened anti-corruption measures under the Malaysian Anti-Corruption Commission Act 2009 (MACC Act) and the Corporate Liability Provision (Section 17A), may lead to increased regulatory scrutiny on companies conducting business in Malaysia. This environment could result in additional regulatory reviews or audits of our Malaysian operations, exposing us to potential penalties or reputational harm if any non-compliance is identified.
Furthermore, in response to the evolving regulatory landscape in Malaysia and the broader Southeast Asia region, the U.S. Securities and Exchange Commission (SEC) may adopt or strengthen disclosure obligations and oversight measures for companies like ours with operations in Malaysia. These measures could include expanded reporting requirements regarding financial transactions, internal controls, and compliance with anti-corruption and anti-money laundering laws. Any such regulatory developments by the SEC or other U.S. regulatory bodies could increase the complexity of our financial reporting processes, subject us to more rigorous disclosure obligations, and elevate our compliance burden.
The combination of stricter domestic regulations in Malaysia and potential additional scrutiny by U.S. authorities may significantly increase our compliance costs, require the enhancement of our internal compliance systems, and divert management attention from our core business activities. Failure to comply with any newly introduced regulations or disclosure requirements could result in fines, sanctions, reputational damage, or other adverse outcomes, all of which could negatively affect our business operations, financial performance, and the value of our securities.
We face uncertainty with respect to indirect transfers of equity interests in Malaysia resident enterprises by their non-Malaysia holding companies.
We may face regulatory uncertainty with respect to the transfer of equity interests in our Malaysian operating entity held indirectly through our non-Malaysia holding companies, including our intermediate holding entity in Hong Kong. Malaysia’s legal and regulatory framework governing mergers, acquisitions, and the indirect transfer of ownership interests in resident enterprises by foreign entities is complex and subject to interpretation and administrative discretion. Transactions involving offshore transfers of shares or changes in control of non-resident holding entities with underlying Malaysian subsidiary could trigger reporting requirements, tax implications, or regulatory approvals under Malaysian law, including under the Financial Services Act 2013, Income Tax Act 1967, and guidelines issued by Bank Negara Malaysia (BNM) and other authorities.
| · | Potential Regulatory and Tax Implications |
Although there is currently no comprehensive, codified regime specifically addressing indirect offshore equity transfers, Malaysian regulators may scrutinize such transactions to assess whether they result in changes in the ultimate ownership or control of Malaysian resident entities. Any such determination could result in obligations to notify the relevant authorities, reassess tax liabilities, or comply with other regulatory procedures. Failure to make timely disclosures or obtain necessary approvals could expose us to penalties, additional tax assessments, or operational disruptions.
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| · | Impact on Business Operations and Investment Returns |
Any uncertainty or adverse interpretation regarding indirect transfers of our Malaysian equity interests by our offshore holding companies could increase transaction costs, introduce delays in executing corporate restructurings, or limit our ability to efficiently transfer ownership stakes to potential investors. Furthermore, such regulatory uncertainty could adversely affect the valuation and liquidity of our interests in the Malaysian market, which may reduce the attractiveness of our business to foreign investors and impair our ability to raise capital. These factors could materially and adversely affect our business, financial condition, and shareholders’ investment returns.
| · | Ongoing Regulatory Developments |
The regulatory environment in Malaysia and Southeast Asia regarding cross-border equity transactions continues to evolve. We cannot predict whether additional restrictions, reporting obligations, or tax measures targeting indirect offshore equity transfers will be introduced. Any such changes could further increase compliance burdens and create additional uncertainties for our future financing, restructuring, or divestment activities involving our Malaysian operations. We remain committed to monitoring regulatory developments and ensuring compliance; however, any adverse regulatory actions or shifts in policy could materially affect our operational flexibility and overall business performance.
The M&A Rules and certain other South-East Asia regulations may make it more difficult for us to pursue growth through acquisitions.
Our ability to expand our business operations through mergers, acquisitions, or strategic investments in Southeast Asia is subject to various regulatory requirements and government approvals, which may impose significant limitations or delays. In jurisdictions such as Malaysia, Singapore, Indonesia, and other Southeast Asian countries, mergers and acquisitions involving foreign investors are often subject to review by regulatory authorities, including competition regulators, foreign investment bodies, and sector-specific licensing agencies. In Malaysia, for instance, the Malaysian Competition Act 2010 regulates anti-competitive mergers, while the Equity Conditions and Licensing Requirements imposed by certain government agencies may restrict foreign ownership in strategic sectors. Similarly, Singapore’s Competition and Consumer Commission (CCCS) closely monitors transactions that may lessen competition within the market.
Additionally, some Southeast Asian countries maintain foreign equity restrictions and screening mechanisms for foreign investments, particularly in industries deemed sensitive, such as telecommunications, finance, and natural resources. Compliance with these M&A rules often requires obtaining prior approval, conducting due diligence to satisfy ownership and control requirements, and ensuring alignment with national interests or local partner arrangements. These processes can be time-consuming and may result in increased transaction costs or, in some cases, prevent us from completing proposed acquisitions altogether.
Further, regulations on cross-border capital flows and foreign exchange, including those enforced by Bank Negara Malaysia (BNM) and other central banks in the region, may restrict the remittance of funds or impose limitations on financing acquisition activities through offshore sources. Delays or obstacles in securing the necessary approvals for acquisitions could hinder our ability to respond swiftly to market opportunities or execute our growth strategy effectively.
Failure to comply with these M&A regulations or navigate the complexities of regulatory regimes across Southeast Asia could expose us to legal liabilities, fines, or the risk of having transactions nullified. As a result, our plans to expand operations, broaden our service offerings, or strengthen our market position through acquisitions may be significantly constrained, which could materially and adversely affect our business prospects and financial performance.
Regulatory Restrictions on Offshore Investments and Capital Movements in Southeast Asia
Our operations in Southeast Asia, including Malaysia and other jurisdictions, are subject to various regulations governing offshore investment activities by residents, which may limit the ability of our Hong Kong subsidiaries to increase their registered capital, inject funds into our Southeast Asian operating entities, or repatriate profits from these jurisdictions. Regulatory bodies, such as Bank Negara Malaysia (BNM) and other relevant authorities in the region, impose controls on foreign exchange, capital flows, and cross-border transactions, requiring compliance with prescribed limits, reporting obligations, and, in some cases, prior approvals. Any failure to comply with these regulations could result in fines, penalties, or restrictions on our capital movements, and could adversely affect our ability to fund our operations, support business growth, or distribute profits to our shareholders. Changes in these regulatory environments or the imposition of stricter controls could further constrain our financial flexibility and expose us to liability under Southeast Asian laws, which may materially and adversely affect our business, financial condition, and results of operations.
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Malaysia regulation of loans to and direct investment in Malaysia entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.
Our ability to utilize proceeds from offshore financing activities to provide loans to or make direct investments in our Malaysian operating entity through our Hong Kong intermediate holding company may be subject to regulatory approvals and foreign exchange control policies imposed by Malaysian authorities. Under the regulations of Bank Negara Malaysia (BNM), foreign exchange transactions, cross-border investments, and fund transfers involving non-residents may require compliance with specific reporting obligations or prior approval in certain circumstances. Governmental control over currency conversion and foreign investment policies could delay or prevent us from efficiently injecting offshore funds into our Malaysian subsidiary, which could constrain our liquidity, disrupt our capital allocation plans, and hinder our ability to fund operations or pursue business expansion in Malaysia. Any prolonged delay or inability to deploy offshore financing proceeds as intended may materially and adversely affect our financial condition, business growth, and overall operational performance.
Our Malaysia subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.
Our operating entity in Malaysia is subject to local regulations and exchange control requirements that may restrict the free flow of funds, including the remittance of dividends and other payments, to our intermediate holding company in Hong Kong. Any such restrictions could limit the ability of our Hong Kong holding entity to distribute dividends to its shareholders, including directors and other investors, or to fulfill other liquidity needs. While Malaysia generally allows the repatriation of profits, any future changes in foreign exchange policies, taxation, or regulatory requirements could delay or limit dividend payments and other fund transfers. If our Malaysian entity is unable to remit sufficient funds to our Hong Kong intermediate holding company, it may adversely affect our ability to pay dividends to our shareholders and directors in Hong Kong, meet corporate obligations, or fund international business activities, which could, in turn, impact our overall financial condition and shareholder returns.
Governmental control of currency conversion may limit our ability to utilize revenues effectively and affect the value of your investment.
Governmental regulations and controls over currency exchange in certain jurisdictions where we operate, including countries in Southeast Asia, may limit our ability to convert local currencies into other currencies, including U.S. dollars, or transfer funds across borders freely. Restrictions on currency conversion or remittance could impair our ability to utilize revenues generated in those markets effectively to fund our operations, settle obligations denominated in foreign currencies, or reinvest in growth opportunities. Additionally, currency control measures may affect the timing, amount, or feasibility of repatriating profits or dividends to our shareholders. Any such limitations could reduce our operational flexibility, adversely impact our cash flow, and affect the value of your investment in our company. We cannot assure that further foreign exchange restrictions or currency policies will not be introduced, which may further impact our business, financial condition, and results of operations.
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Risks Related to our International Operations
We are subject to risks associated with doing business internationally including compliance with domestic and foreign laws and regulations, economic downturns, political instability and other risks that could adversely affect our operating results.
We conduct our businesses in Malaysia, and have assets located in Hong Kong. We are required to comply with numerous and broad reaching laws and regulations administered by United States federal, state and local, and foreign governmental authorities. We must also comply with other general business regulations such as those directed toward accounting and income taxes, anti-corruption, anti-bribery, global trade, handling of regulated substances, and other commercial activities, conducted by our employees and third-party representatives globally. Any failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, and civil remedies including fines, injunctions, and recalls of our products. In addition, changes to regulations or implementation of additional regulations may require us to modify existing processing facilities and/or processes, which could significantly increase operating costs and negatively impact operating results.
Our operating results may be affected by changes in trade, monetary, fiscal and environmental policies, laws and regulations, and other activities of governments, agencies, and similar organizations. These conditions include but are not limited to changes in a country’s or region’s economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights, changes in the regulatory or legal environment, restrictions on currency exchange activities, currency exchange fluctuations, burdensome taxes and tariffs, enforceability of legal agreements and judgments, other trade barriers, and regulation or taxation of greenhouse gases. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities, and war, may limit our ability to transact business in these markets and may adversely affect our revenues and operating results.
We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.
As a consulting company operating in Malaysia and engaging with clients and business partners across Southeast Asia and internationally, we are subject to various anti-bribery and anti-corruption laws. These include the Malaysian Anti-Corruption Commission Act 2009 (MACC Act), as amended, which imposes strict penalties on companies and individuals involved in corrupt practices, and holds companies liable for the corrupt actions of their employees or associates unless adequate procedures are in place to prevent bribery. In addition, we may also be subject to foreign anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (FCPA) and Hong Kong’s Prevention of Bribery Ordinance (Cap. 201), if we engage with clients, partners, or investors from these jurisdictions.
These laws prohibit offering, promising, or giving anything of value to government officials or business representatives to gain a business advantage. Non-compliance with these regulations, whether intentional or inadvertent, could result in substantial fines, criminal penalties, reputational damage, and restrictions on our ability to conduct business internationally. We have implemented internal controls and compliance procedures; however, there can be no assurance that our policies will always be effective in preventing violations. Any breach of these anti-bribery and anti-corruption laws could materially and adversely affect our business, operations, and financial performance.
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We expect our revenues to be paid in non-U.S. currencies, and if currency exchange rates become unfavorable, we may lose some of the economic value of the revenues in U.S. dollar terms.
Our primary operations are conducted in Malaysia and our operating currency is the Malaysian Ringgit. Since we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates. For instance, if currency exchange rates were to change unfavorably, the U.S. dollar equivalent of our operating income recorded in foreign currencies would be diminished.
We currently do not, but may in the future, implement hedging strategies, such as forward contracts, options, and foreign exchange swaps to mitigate this risk. There is no assurance that our efforts will successfully reduce or offset our exposure to foreign exchange fluctuations. Additionally, hedging programs expose us to risks that could adversely affect our financial results, including the following:
| · | We have limited experience in implementing or operating hedging programs. Hedging programs are inherently risky and we could lose money as a result of poor trades; | |
| · | We may be unable to hedge currency risk for some transactions or match the accounting for the hedge with the exposure because of a high level of uncertainty or the inability to reasonably estimate our foreign exchange exposures; | |
| · | We may be unable to acquire foreign exchange hedging instruments in some of the geographic areas where we do business, or, where these derivatives are available, we may not be able to acquire enough of them to fully offset our exposure; | |
| · | We may determine that the cost of acquiring a foreign exchange hedging instrument outweighs the benefit we expect to derive from the derivative, in which case we would not purchase the derivative and would be exposed to unfavorable changes in currency exchange rates; | |
| · | To the extent we recognize a gain on a hedge transaction in one of our subsidiaries that is subject to a high statutory tax rate, and a loss on the related hedged transaction that is subject to a lower rate, our effective tax rate would be higher; and | |
| · | Significant fluctuations in foreign exchange rates could greatly increase our hedging costs. |
We anticipate increased exposure to exchange rate fluctuations as we expand the breadth and depth of our international sales.
In our financial statements, we translate our local currency financial results into U.S. dollars based on average exchange rates prevailing during a reporting period or the exchange rate at the end of that period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions could result in reduced revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions could result in increased revenue, operating expenses and net income for our international operations.
Because our holding company structure creates restrictions on the payment of dividends, our ability to pay dividends is limited.
We are a holding company whose primary assets are our ownership of the equity interests in our subsidiaries. We conduct no other business and, as a result, we depend entirely upon our subsidiaries’ earnings and cash flow. If we decide in the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries. Our subsidiaries and projects may be restricted in their ability to pay dividends, make distributions or otherwise transfer funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt service, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. If future dividends are paid in the Hong Kong Dollars, fluctuations in the exchange rate for the conversion of any of these currencies into U.S. dollars may adversely affect the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars. We do not presently have any intention to declare or pay dividends in the future. You should not purchase shares of our common stock in anticipation of receiving dividends in future periods.
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It may be difficult for stockholders to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders.
Substantially all of our assets are located in Hong Kong. Moreover, our current directors and officers are dominantly nationals of Hong Kong. All or a substantial portion of the assets of this person are located outside the United States. As a result, it may be difficult for our stockholders to effect service of process within the United States upon this person. In addition, there is uncertainty as to whether the courts of Hong Kong would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities law of the United States or any state thereof or be competent to hear original actions brought in Hong Kong against us or such persons predicated upon the securities laws of the United States or any state thereof.
Risks Related to our Common Stock
Due to the limited trading market for our securities, you may have difficulty selling any shares you purchase in this offering.
While our shares of common stock are quoted on the OTC Pink tier of the OTC Markets Group, Inc., there is presently no meaningful demand for our common stock and virtually no public market exists for the shares being offered in this prospectus. The OTC Pink is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter securities. The OTC Pink is not an issuer listing service, market or exchange. Although the OTC Pink does not have any listing requirements per se, to be eligible for quotation on the OTC Pink, issuers must remain current in their filings with the SEC or applicable regulatory authority. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. If no market is ever developed for our common stock, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all.
Our common stock may become subject to the “penny stock” rules of the sec and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Under U.S. federal securities legislation, our common stock will constitute “penny stock” is if has a market price of less than $5.00 per share, subject to certain exceptions. While the market price of our common stock is currently above $5.00, there can be no assurance that are price will consistently remain above $5.00, given the lack of liquidity in our stock. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Future issuances of our common stock could dilute current stockholders or adversely affect the market.
Our business plan contemplates expanding our operations through acquisitions which may involve significant issuances of our common stock. Future issuances of our common stock may be at values substantially below the price paid by the current holders of our common stock. In addition, common stock could be issued to fend off unwanted tender offers or hostile takeovers without further stockholder approval. Sales of substantial amounts of our common stock, or even just the prospect of such sales, could depress the prevailing price of our common stock and our ability to raise equity capital in the future. Additionally, large share issuances would generally have a negative impact on our share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, further dilute common stock book value, and that dilution may be material.
The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
| · | Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; | |
| · | Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; | |
| · | “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by sales persons; | |
| · | Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and | |
| · | Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. |
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The market price of our common stock may be volatile, and our stock price may fall below your purchase price at the time you desire to sell your shares of our common stock, resulting in a loss on your investment.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including, without limitation:
| · | actual or anticipated variations in our quarterly and annual operating results, financial condition or asset quality; | |
| · | changes in general economic or business conditions, both domestically and internationally; | |
| · | the effects of, and changes in, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or in laws and regulations affecting us; | |
| · | the number of securities analysts covering us; | |
| · | publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; | |
| · | changes in market valuations or earnings of companies that investors deemed comparable to us; | |
| · | the average daily trading volume of our common stock; | |
| · | future issuances of our common stock or other securities; | |
| · | additions or departures of key personnel; | |
| · | perceptions in the marketplace regarding our competitors and/or us; | |
| · | significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; and | |
| · | other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry. |
The stock market and, in particular, the market for financial institution stocks have experienced significant fluctuations in recent years. In many cases, these changes have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations to occur. Increased market volatility may materially and adversely affect the market price of our common stock, which may make it difficult for you to resell your shares at the volume, prices and times desired.
Investing in our Company is highly speculative and could result in the entire loss of your investment.
An investment in our shares is highly speculative and involves significant risk. Our shares should not be purchased by any person who cannot afford to lose their entire investment. Our business objectives are also speculative, and it is possible that we would be unable to accomplish them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully and consult with their attorney, business and/or investment advisor.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this prospectus.
Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.
The Company does not intend to seek registration or qualification of its shares of common stock the subject of this offering in any State or territory of the United States. Aside from a “secondary trading” exemption, other exemptions under state law and the laws of US territories may be available to purchasers of the shares of common stock sold in this offering,
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Anti-takeover effects of certain provisions of Delaware state law hinder a potential takeover of our company.
Though not now, in the future we may become subject to Delaware’s business combination law which prohibits certain business combinations between Delaware corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Delaware law, an “interested stockholder” is any person who is the beneficial owner, directly or indirectly, of fifteen percent or more of the voting power of the outstanding voting shares of the corporation. A corporation is subject to Delaware’s business combination law if it has more than 2000 stockholders or has its securities listed on a national securities exchange. The effect of Delaware’s business combination law is to potentially discourage parties interested in taking control of our company from doing so if it cannot obtain the approval of our board of directors.
Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may never be able to sell shares when desired. Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 1C. CYBERSECURITY.
Currently, the Company addresses cybersecurity through the following general practices:
Risk Awareness and Monitoring:
The Company is actively monitoring potential cybersecurity risks, including external cyber threats and internal vulnerabilities, using available resources and tools. We are committed to keeping abreast of emerging cybersecurity trends to better identify and assess risks to our systems.
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Internal Practices:
The Company enforces basic security measures within the organization, such as password protocols, access controls, and employee awareness regarding secure data handling. Employees are encouraged to be vigilant about cybersecurity threats, including phishing and unauthorized access attempts.
Incident Response Preparedness:
Although a formalized response plan has not yet been adopted, the Company is aware of the importance of being prepared for potential cybersecurity incidents. The Company is taking steps to develop an incident response framework to ensure a timely and effective reaction in the event of a cyber breach.
Third-Party Risk Management:
Cybersecurity Incidents
As of the date of this filing, the Company has not experienced any material cybersecurity incidents, such as data breaches, cyber-attacks, or other disruptions to operations. However, the Company recognizes that cyber threats are ever-present and evolving, and we continue to monitor the situation carefully.
Cybersecurity Policy Development
The Company intends to adopt a formal Cybersecurity Policy in the near future. This policy will be designed to address the increasing cybersecurity risks and provide a structured approach for safeguarding Company data, protecting systems, and ensuring compliance with relevant regulations. the Company plans to implement best practices, invest in security technologies, and develop an internal framework for preventing and responding to potential cyber threats.
ITEM 2. PROPERTIES.
Our corporate office is located at 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong. The office is provided to the Company by the director of the Company free of charge.
We believe that our current facilities are adequate for our current needs. We expect to secure new facilities or expand existing facilities as necessary to support future growth. We believe that suitable additional space will be available on commercially reasonable terms as needed to accommodate our operations.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which we or our subsidiaries are a party or to which any of our or their property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers, affiliates or any owner of record or beneficially of more than 5% of our common stock, or any associate of any of the foregoing, is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(a) Market Information
Shares of our common stock are quoted on the OTCID Market under the symbol “LDSN”. Shares of our common stock began trading on April 1, 2020. As of April 10, 2026, the last closing price of our securities was $0.0011, with little to no quoting activity. There is no established public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained.
The following table sets forth, for the fiscal quarters indicated, the high and low bid information for our common stock, as reported on the Pink Sheets. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
| Quarterly period | High | Low | ||||||
| Fiscal year ended December 31, 2024: | ||||||||
| Fourth Quarter | $ | 0.025 | $ | 0.003 | ||||
| Third Quarter | $ | 0.145 | $ | 0.016 | ||||
| Second Quarter | $ | 0.98 | $ | 0.0172 | ||||
| First Quarter | $ | 1.0875 | $ | 0.1801 | ||||
| Fiscal year ended December 31, 2023: | ||||||||
| Fourth Quarter | $ | 0.597 | $ | 0.1 | ||||
| Third Quarter | $ | 0.401 | $ | 0.163 | ||||
| Second Quarter | $ | 0.65 | $ | 0.35 | ||||
| First Quarter | $ | 1.70 | $ | 1.1614 | ||||
(b) Approximate Number of Holders of Common Stock
As of December 31, 2024, there were approximately 295 shareholders of record of our common stock. Such number does not include any shareholders holding shares in nominee or “street name”.
(c) Dividends
Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors. On January 2, 2020, prior to the consummation of the acquisition of LHCL, LHCL declared and paid dividends of $184,919 to the shareholders. Except as otherwise set forth above, we paid no dividends during the periods reported herein, nor do we anticipate paying any dividends in the foreseeable future.
(d) Equity Compensation Plan Information
None.
(e) Recent Sales of Unregistered Securities
None.
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ITEM 6. RESERVED.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company and its subsidiary for the fiscal years ended December 31, 2024, and 2023. The discussion and analysis that follows should be read together with the section entitled “Cautionary Note Concerning Forward-Looking Statements” and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.
Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Currency and exchange rate
Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “US$” refer to the legal currency of the United States. References to “Hong Kong Dollar” are to the Hong Kong Dollar, the legal currency of the Hong Kong Special Administrative Region of the People’s Republic of China. References to “Malaysian Ringgit” or “MYR” are to the legal currency of Malaysia. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of shareholders’ equity.
Impact of heightened volatility in interest rates
Following the global stabilization of the COVID-19 pandemic, the Company continues to assess any lingering impacts on workforce dynamics and supply chain resilience. However, attention has increasingly shifted toward addressing broader economic uncertainties, particularly the volatility in interest rates and evolving market conditions. Over the past two years, rising interest rates have had a significant global impact, including across Southeast Asia. Higher rates have increased borrowing costs, influenced client spending patterns, and slowed business investments—factors that may directly affect consulting firms like ours.
Monetary authorities across Southeast Asia, including Bank Negara Malaysia and the Monetary Authority of Singapore, have adjusted their policies in response to persistent inflationary pressures and broader macroeconomic developments. The rise in interest rates presents a potential risk to the Company, as it may increase the cost of borrowing, constrain access to affordable financing, and influence the capital expenditure decisions of our clients. These dynamics could result in delays, deferrals, or reductions in consulting project engagements, thereby impacting the Company’s revenue streams.
The Company remains vigilant in closely monitoring interest rate trends and their potential influence on client budgets and market demand. We continue to adopt proactive measures to mitigate these risks, ensuring our business remains resilient and responsive to the evolving economic landscape.
We believe that the Company can generate sufficient cash flow over the next 12 months to implement the revised business plan. We believe that we will need approximately $1.5 million to implement our revised business plan for the 12 months thereafter.
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Results of Operations
Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to continue to operate in the future in the normal course of business. In our consolidated financial statements for the year ended December 31, 2024, it has included a note about our ability to continue as a going concern due to consecutive quarterly losses from operations in 2023 as a result of COVID-19 and rising interest rates. Business closures in South-East Asia and limitations on business operations arising from volatile interest rates has significantly disrupted our ability to generate revenues and cash flow during the fiscal year 2024.
The success of our business strategy is dependent in part upon the availability of additional capital resources on terms satisfactory to management as we are not generating sufficient revenues from our business operations. Our sources of capital in the past have included advance from stockholders and affiliates. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We anticipate to continuing to rely on equity sales of our common shares and shareholder loans while improving our revenue in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.
The Company is currently refining the second stage of its restructuring plan, focusing on optimizing operations and enhancing strategic initiatives to drive sustainable growth. As part of this transformation, we are actively evaluating new opportunities and aligning our resources to strengthen our market position. In line with these efforts, we will be introducing fresh leadership and innovative perspectives to propel the Company forward. We anticipate announcing our new strategic direction for 2025 in the coming months, marking a significant step in our evolution and commitment to long-term success.
Comparison of the years ended December 31, 2024 and December 31, 2023
The following table sets forth certain operational data for the years ended December 31, 2024 and 2023:
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues, net | $ | – | $ | – | ||||
| Cost of revenue | – | – | ||||||
| Gross profit | – | – | ||||||
| Total operating expenses | (702,499 | ) | (844,429 | ) | ||||
| Operating loss | (702,499 | ) | (844,429 | ) | ||||
| Other expenses | (62,035 | ) | (1,652,131 | ) | ||||
| Loss from continuing operations | (764,534 | ) | (2,496,560 | ) | ||||
| Loss from discontinued operations | (46,353 | ) | (139,669 | ) | ||||
| Net loss | (810,887 | ) | (2,636,229 | ) | ||||
Revenue. We generated $0 revenues for the years ended December 31, 2024 and 2023.
Cost of Revenue. Cost of revenue was $0 for the years ended December 31, 2024 and 2023.
Gross Profit. Gross profit was $0 for the years ended December 31, 2024 and 2023.
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Operating Expenses. We incurred operating expenses of $702,499 and $844,429 for the years ended December 31, 2024 and 2023, respectively. Operating expenses for the two years consisted of general and administrative expenses.
Income Tax Expense. Our income tax expenses for the years ended December 31, 2024 and 2023 was $0 and $0, respectively.
Net Loss. We incurred a net loss of $810,887 and $2,636,229 for the years ended December 31, 2024 and 2023, respectively. Loss from continuing operations was $764,534 and $2,496,560 for the years ended December 31, 2024 and 2023, respectively. The decrease in loss from continuing operations is primarily attributable to the decrease in other expenses in the year ended December 31, 2024. Loss from discontinued operations was $46,353 and $139,669 for the years ended December 31, 2024 and 2023, respectively. The decrease in loss from discontinued operations is primarily attributable to the decrease in operating expense in the year ended December 31, 2024.
Liquidity and Capital Resources
As of December 31, 2024 and 2023, we had cash and cash equivalents of $12,055 and $215,425, respectively.
It is expected to incur significantly greater expenses in the near future as we develop our product offerings or enter into strategic partnerships. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being reporting act company, including directors’ and officers’ insurance and increased professional fees. We believe that we will require approximately $1 to 2 million over the next 12-24 months to implement our business plan. For the immediate future, we intend to finance our business expansion efforts through equity purchases by institutional banks, and loans from existing shareholders or financial institutions.
We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.
Going Concern Uncertainties
The Company has incurred a net loss of $810,887 for the current year. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital and the continued financial support from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.
If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors might lose all of their investment.
The following table sets forth cash flow data for the years ended December 31, 2024 and 2023:
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash used in operating activities | $ | (47,803 | ) | $ | (148,653 | ) | ||
| Net cash (used in) provided by investing activities | (124,286 | ) | 298,438 | |||||
| Net cash (used in) provided by financing activities | (31,281 | ) | 53,585 | |||||
| 29 |
Net Cash Used in Operating Activities.
For the year ended December 31, 2024, net cash used in operating activities was $47,803, which consisted primarily of a net loss of $810,887, decreased by impairment in assets of $62,035, stock-based compensation of $682,382, increase in accrued liabilities and other payables of $25,077, and increased by net cash used in operating activities from discontinued operations of $52,763.
For the year ended December 31, 2023, net cash used in operating activities was $148,653, which consisted primarily of a net loss of $2,636,229, decreased by impairment in assets of $372,208, stock-based compensation of $823,529, loss on debt extinguishment of $1,279,923, increase in accrued liabilities and other payables of $5,506, and increased by net cash used in operating activities from discontinued operations of $133,259.
Net Cash (Used In) Provided by Investing Activities.
For the year ended December 31, 2024, net cash used in investing activities was $124,286, which consisted of net cash used in investing activities from discontinued operations of $124,286.
For the year ended December 31, 2023, net cash provided by investing activities was $298,438, which consisted of net cash provided by investing activities from discontinued operations of $298,438.
Net Cash (Used In) Provided by Financing Activities.
For the year ended December 31, 2024, net cash used in financing activities was $31,281, which consisted primarily of proceeds from related party of $9,143 and net cash used in financing activities from discontinued operations of $40,424.
For the year ended December 31, 2023, net cash provided by financing activities was $53,585, which consisted primarily of proceeds from related parties of $4,994 and net cash provided by financing activities from discontinued operations of $48,591.
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
| 30 |
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with accounting principles generally accepted by the United States of America (“U.S. GAAP”), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
We believe that our accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. Accordingly, the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations are summarized in “Note 2 - Summary of Significant Accounting Policies” in the notes to our consolidated financial statements.
Recent Accounting Pronouncements
See “Note 2 - Summary of Significant Accounting Policies” in the notes to our consolidated financial statements for a discussion of recent accounting pronouncements.
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements thereon are filed pursuant to this Item 8 and are included in this report beginning on page F-1.
| 31 |
APHOENITY INTERNATIONAL HOLDINGS INC.
Aka LUDUSON G INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Aphoenity International Holdings Inc. (Previously known as Luduson G Inc.)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Aphoenity International Holdings Inc. (Previously known as Luduson G Inc.) and its subsidiary (collectively referred to as the “Company”) as of December 31, 2024 and 2023, the related consolidated statement of operations and comprehensive loss, changes in shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2024 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred loss from operation, net current liability and has deficit on total equity that raise substantial doubt about its ability to continue as a going concern. Management’s plan regarding these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2025
April 10, 2026
| F-2 |
APHOENITY INTERNATIONAL HOLDINGS INC.
aka LUDUSON G INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 and 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| As of December 31, | ||||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current asset: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Assets related to discontinued operations-current | ||||||||
| Total current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities and other payables | $ | $ | ||||||
| Due to related parties | ||||||||
| Liability related to discontinued operations-current | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Liability related to discontinued operations-non-current | ||||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Common stock, $ par value, shares authorized at December 31, 2024 and at December 31, 2023, and shares issued and outstanding at December 31, 2024 and 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Shareholders’ equity | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-3 |
APHOENITY INTERNATIONAL HOLDINGS INC.
Aka LUDUSON G INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Other (expenses) income: | ||||||||
| Impairment in assets | ( | ) | ( | ) | ||||
| Loss on debt extinguishment | ( | ) | ||||||
| Total other expenses | ( | ) | ( | ) | ||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Discontinued operations | ||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||
| NET LOSS | ( | ) | ( | ) | ||||
| Foreign currency translation loss | ||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| Net loss per share: | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding | ||||||||
| Basic and diluted | ||||||||
See accompanying notes to consolidated financial statements.
| F-4 |
APHOENITY INTERNATIONAL HOLDINGS INC.
Aka LUDUSON G INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| Common stock | Treasury stock | Additional paid-in | Accumulated | Total shareholders’ | ||||||||||||||||||||||||
| No. of shares | Amount | No. of shares | Amount | capital | deficit | equity | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss for the year ended December 31, 2023 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Shares issued as debt conversion July 12, 2023 | – | |||||||||||||||||||||||||||
| Shares issued as debt conversion July 13, 2023 | – | |||||||||||||||||||||||||||
| Shares issued as stock compensation July 18, 2023 | – | |||||||||||||||||||||||||||
| Shares issued as debt conversion July 31, 2023 | – | |||||||||||||||||||||||||||
| Shares issued as debt conversion August 1, 2023 | – | |||||||||||||||||||||||||||
| Transfer to treasury stock August 15, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Shares issued as price $0.2 as stock compensation August 22, 2023 | – | |||||||||||||||||||||||||||
| Treasury stock was given for the purchase of 25 movie intelligent properties September 21, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Shares issued as debt conversion November 16, 2023 | – | |||||||||||||||||||||||||||
| Effect of acquisition of subsidiaries | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss for the year ended December 31, 2024 | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Shares issued on January 10, 2024, for the purchase of Metaverse Innovation Laboratory | – | |||||||||||||||||||||||||||
| Shares issued on April 5, 2024, at par to Mr. Lap Yan CHEUNG, the Company’s COO for the services provided to the Company | – | |||||||||||||||||||||||||||
| Effect of disposal of subsidiaries | – | – | ||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
See accompanying notes to consolidated financial statements.
| F-5 |
APHOENITY INTERNATIONAL HOLDINGS INC.
Aka LUDUSON G INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Impairment in assets | ||||||||
| Stock based compensation | ||||||||
| Loss on debt extinguishment | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Increase in accrued liabilities and other payables | ||||||||
| Net cash provided by (used in) operating activities from continuing operations | ( | ) | ||||||
| Net cash used in operating activities from discontinued operations | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash provided by (used in) investing activities from continuing operations | ||||||||
| Net cash (used in) provided by investing activities from discontinued operations | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from related parties | ||||||||
| Net cash provided by financing activities from continuing operations | ||||||||
| Net cash (used in) provided by financing activities from discontinued operations | ( | ) | ||||||
| Effect of change in exchange rate | ||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of year | ||||||||
| Cash and cash equivalents, end of year | $ | $ | ||||||
| Supplementary disclosure of significant non-cash transaction: | ||||||||
| Loss on debt extinguishment | $ | $ | ||||||
| Supplementary disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-6 |
APHOENITY INTERNATIONAL HOLDINGS INC.
Aka LUDUSON G INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| 1. | DESCRIPTION OF BUSINESS AND ORGANIZATION |
Luduson G Inc. (“the Company” or “LDSN”) was organized under the laws of the State of Delaware on March 6, 2014 under the name Jovanovic-Steele, Inc. The Company’s name was changed to Baja Custom Designs, Inc. on November 30, 2017. The Company was established as part of the Chapter 11 Plan of Reorganization of Pacific Shores Development, Inc. (“PSD”). On May 8, 2020, we acquired Luduson Holding Company Limited, a limited liability company organized under the laws of British Virgin Islands (“LHCL”). the acquisition was originally for entering into the gaming technology business. The Company’s name was further changed to Luduson G Inc. on July 15, 2020.
On May 29, 2023, the Company disposed of LHCL to Mr. Lan CHAN, a substantial shareholder of the Company at a consideration of $2,821. There was no gain or loss arising from the disposal.
On July 06, 2023, the Company completed the Reverse Takeover of Glamourous Group Holding Limited (“GGHI”), a limited liability company incorporated in the United Kingdom of England and Wales, by the issuance of 320,000,000 common shares to Ho Chi Wan, the sole shareholder of GGHI. The issuance of the shares was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) thereof on the basis that the transaction did not involve a public offering. The shares are subject to restrictions on resale pursuant to Commission Rule 144 under the Securities Act.
The Company issued an equivalent of 91.9% fully diluted shares to the business owner of GGHI, Ms. Ho Chi Wan, in exchange for 100% of GGHI shares and its whole operation. After such a transaction, Ms. Wan gained control of the Company and in effect completed a business combination of GGHI with the Company, resulting in a reverse acquisition (the “Reverse Acquisition”). GGHI includes an experienced team with full employment contracts, expertise, and customer and supplier list, but has immaterial tangible assets and liabilities. The estimated intangible assets, comprising the above, are foreseen to create a big profit for the Company, with more than 1,000 Greater China influencers having a very dominant track record in the Hong Kong movie industry.
On September 26, 2023, the Company underwent a
group restructuring (the “Group Restructuring”), where GGHI was struck off and disposed of, and where Glamorous Holdings International
Company Limited and Glamourous Holdings Company Limited (HK) (together the “Hong Kong Subsidiaries”) were acquired
from Ms. Ho Chi Wan. The Hong Kong Subsidiaries were
On March 28, 2024, the Company acquired LWH Consulting Sdn Bhd (“LWH Consulting”), a limited liability company incorporated in Malaysia, at no consideration to carry out the provision of listing consulting services for clients with business interests in the Greater Bay Area in China and other parts of the world.
On September 28, 2024, the Company disposed LWH
Consulting, a former
On December 20, 2024, in line with the Company’s revisited investment focus, the Hong Kong Subsidiaries were disposed of to Ms. Ho Chi Wan. Glamourous Pictures Group Limited was acquired from Mr. Man Fai Cheng, the Company’s CEO at no consideration.
| F-7 |
Description of subsidiaries
| Name |
Place of incorporation and kind of legal entity |
Principal activities | Particulars of registered/ paid up share capital |
Effective interest held | ||||
The Company and its subsidiaries are hereinafter referred to as (the “Company”).
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
| · | Basis of presentation |
These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
| · | Use of estimates and assumptions |
In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.
| · | Basis of consolidation |
The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
| · | Cash and cash equivalents |
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
| · | Revenue recognition |
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
| F-8 |
Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:
| · | identify the contract with a customer; |
| · | identify the performance obligations in the contract; |
| · | determine the transaction price; |
| · | allocate the transaction price to performance obligations in the contract; and |
| · | recognize revenue as the performance obligation is satisfied. |
The transaction price for each contract is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised products or services to the customer. Collectability of revenue is reasonably assured based on historical evidence of collectability of fees the Company charges its customers. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. At contract inception, the Company determines whether it satisfies the performance obligation over time or at a point in time.
The Company currently does not derive any revenues.
| · | Income taxes |
The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
| · | Uncertain tax positions |
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended December 31, 2024 and 2023.
| F-9 |
| · | Foreign currencies translation |
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.
The reporting currency of the Company is United States Dollar (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in shareholders’ equity.
Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended December 31, 2024 and 2023:
| December 31, 2024 | December 31, 2023 | |||||||
| Year-end HKD:US$ exchange rate | ||||||||
| Annual average HKD:US$ exchange rate | ||||||||
| · | Comprehensive income |
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in shareholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
| · | Retirement plan costs |
Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related employee service are provided.
| · | Share-based compensation |
The Company follows ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards, including restricted stock units, based on estimated grant date fair values. Restricted stock units are valued using the market price of the Company’s common shares on the date of grant. The Company records compensation expense, net of estimated forfeitures, over the requisite service period.
| · | Debt issued with common stock |
Debt issued with common stock is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt With Conversion or Other Options. The Company recorded the relative fair value of common stock and warrants related to the issuance of debt as a debt discount or premium. The discount or premium is subsequently amortized to interest expense over the expected term of the debt.
| F-10 |
| · | Related parties |
The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
| · | Commitments and contingencies |
The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
| F-11 |
| · | Fair value of financial instruments |
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
| Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, and accrued liabilities and other payables approximate their fair values because of the short maturity of these instruments.
| · | Recent accounting pronouncements |
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
| 3. | GOING CONCERN UNCERTAINTIES |
The Company’s consolidated financial statements
as of December 31, 2024 have been prepared using generally accepted accounting principles in the United States of America
applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company has incurred a net loss of $
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital and the continued financial support from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.
| F-12 |
| 4. | DISCONTINUED OPERATIONS |
On September 28, 2024, the Company disposed LWH Consulting to Ms. Ho Chi Wan. On December 20, 2024, in line with the Company’s revisited investment focus, the Hong Kong Subsidiaries were disposed of to Ms. Ho Chi Wan. The disposal of LWH Consulting and the Hong Kong Subsidiaries, along with the Company’s strategic shift, constitutes discontinued operations under ASC 205-20, Discontinued Operations. Therefore, all of the operations of LWH Consulting and the Hong Kong Subsidiaries have been classified as discontinued operations and are disclosed as such in the Company’s consolidated statements of operations and comprehensive loss. A detailed breakdown of the Company’s results of discontinued operations is presented below.
| December 31, 2024 | December 31, 2023 | |||||||
| Revenue | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| General and administrative | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Loss from discontinued operations before income tax | ( | ) | ( | ) | ||||
| Income tax | ||||||||
| Net loss from discontinued operations | $ | ( | ) | $ | ( | ) | ||
The major components of assets and liabilities related to discontinued operations are summarized below:
| December 31, 2024 | December 31, 2023 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Total assets related to discontinued operations | ||||||||
| Other payables | ||||||||
| Long-term loan payables | ||||||||
| Total liabilities related to discontinued operations | $ | $ | ||||||
| F-13 |
| 5. | PURCHASE OF METAVERSE INNOVATION LABORATORY (THE “PROJECTS”) |
On January 10, 2024, the Company issued shares of common stock to Dr. Kin Fat Chan, the owner of Metaverse Innovation Laboratory (the “Projects”), for the purchase and performance of the Projects. The Projects aim to add to the Company’s metaverse prowess and to develop a highly competitive metaverse, and seamlessly amalgamate movies, games, music, online shows, and KOL interaction. The shares of common stock issued for the Projects were valued at $ per share.
The Projects were
subsequently disposed of to Ms. Ho Chi Wan on December 19, 2024. As of the date of disposal, due to the Company
being unable to recognize economic benefit from the Projects, management determined that the realizable value of the Projects was uncertain.
Accordingly, the Company recorded a full impairment charge of $
| 6. | ACQUISITION OF LWH CONSULTING |
On March 28, 2024, the Company acquired
On September 28, 2024, to align with the Company’s revised investment strategy, the Company disposed LWH Consulting at no consideration to Ms. Ho Chi Wan. There was no operation since acquisition.
| 7. | BUSINESS SEGMENT |
The Company considers its business activities to constitute reportable segment, entertainment and consultancy. The Company’s revenues for the one reportable segment for the years ended December 31, 2024 and 2023 are .
| 8. | MOVIE PROJECTS |
On July 21, 2023, the Company entered into purchase agreements with Mr. Man Fai Cheng (CEO and Director) and Mr. Woon Chun Kwok to acquire the intellectual property rights to 25 original movie storylines and scripts (collectively, the “Movie IP”). The Company intended to utilize these scripts to attract third-party investment and talent for film production.
The issuance of shares of common stock were valued at $ per share.
As of December 31, 2023, due to delays in securing
production financing and the absence of active development, management determined that the immediate realizable value of the Movie IP
was uncertain. Accordingly, the Company recorded a full impairment charge of $
| 9. | AMOUNT DUE FROM (TO) RELATED PARTIES |
As of December 31, 2024 and 2023, the Company
has $
As of December 31, 2024 and 2023, the Company
has $
| F-14 |
| 10. | SHAREHOLDERS’ EQUITY |
Authorized shares
As of December 31, 2024, the authorized share capital of the Company consisted of shares of common stock with $ par value (December 31, 2023: shares of common stock). No other classes of stock are authorized.
Issued and outstanding shares
All shares issued by the Company, except explicitly stated, are issued at a fair value of $, as determined by the fair value per share of the Company at the Reverse Takeover.
On May 30, 2023, the Company approved an
issuance of common shares to Siu Chung Cheung and recipients (“CHEUNG el.”) to settle $
On July 06, 2023, the Company completed the Reverse Takeover of Glamourous Group Holding Limited (“GGHI”), a limited liability company incorporated in the United Kingdom of England and Wales, by the issuance of common shares to Ho Chi Wan, the sole shareholder of GGHI, on July 01, 2023. The issuance of the shares was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) thereof on the basis that the transaction did not involve a public offering. The shares are subject to restrictions on resale pursuant to Commission Rule 144 under the Securities Act. All share transactions are calculated with an effective share price of $ in relation to the value of the Company prior to the Reverse Takeover.
On July 18, 2023, the Company issued shares of its common stock to 2 parties for the services rendered to the Company.
On July 31 and August 1, 2023, the Company respectively issued and shares of its common stock to recipients in regard to the outstanding debt due to Siu Chung Cheung.
On August 15, 2023, the Company’s majority shareholder Ho Chi Wan surrendered shares of its common stock to the Company. The shares are therefore recorded as treasury stock.
On August 22, 2023, the Company issued
shares of its common stock for a total consideration of $
The Company, on July 21, 2023, entered into an Agreement for Purchase of Commercial Movie Projects with the Company’s CEO and Director Man Fai Cheng to purchase 20 commercial movie projects payable by shares of the Company’s common stock. The Company, on July 21, 2023, entered separately into an Agreement for Purchase of Animation Movie Projects with Woon Chun Kwok to purchase 5 animation movie projects payable by shares of the Company’s common stock (the 20 commercial movie projects and the 5 animation movie projects collectively referred as the “Movie Projects”). The shares of common stock were transferred to Man Fai Cheng and Woon Chun Kwok on September 21, 2023 from the Company’s treasury stock.
On November 16, 2023, the Company issued shares of its common stock to a recipient in regard to the outstanding debt due to Siu Chung Cheung.
| F-15 |
On January 10, 2024, the Company issued shares of its common stock to Dr. Kin Fat Chan, the owner of Metaverse Innovation Laboratory (the “Projects”), for the purchase and performance of the Projects.
On April 5, 2024, the Company issued shares of its common stock to the Company’s COO, Lap Yan Cheung for services rendered to the Company.
As of December 31, 2024, common shares were issued and outstanding (December 31, 2023: common shares issued and outstanding).
According to RTO accounting, the financial statement presentation has been presented as if the merger had taken place on January 1, 2022. Therefore, the fully diluted shares as of December 31, 2022 is presented as shares.
On August 26, 2025, the Company’s Board
of Directors approved a reverse stock split of its common stocks issued and outstanding at a ratio of
| 11. | INCOME TAX |
The income tax expense as shown in the accompanying consolidated statements of operations consists of the following:
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Current: | ||||||||
| Domestic | $ | $ | ||||||
| Foreign | ||||||||
| Deferred: | ||||||||
| Domestic | ||||||||
| Foreign | ||||||||
| Income tax expense | $ | $ | ||||||
The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America, BVI, Malaysia, Hong Kong, and other parts of Asia, that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
LDSN is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company in May 2020.
| F-16 |
As of December 31, 2024 and 2023, the operations in the United States of America incurred nil cumulative net operating income which can be carried forward to offset future taxable income. Any net operating loss carry forwards begin to expire in 2038, if unutilized.
ASC 740, Accounting for Income Taxes, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction by jurisdiction basis. The Company’s history of cumulative losses, along with expected future U.S. losses required that a full valuation allowance be recorded against all net deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.
BVI
Under the current BVI law, the Company is not subject to tax on income.
Malaysia
The income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations, and practices. The principal legislation that governs a person’s income tax in Malaysia is the Income Tax Act 1967 (the “ITA”). The regulatory body implementing and enforcing the ITA is the Inland Revenue Board of Malaysia. Pursuant to Section 3 of the ITA, income tax shall be charged for each year of assessment upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia.
Under the ITA, enterprises incorporated in Malaysia are usually subject to a unified 24% enterprise income tax rate while preferential tax rates, tax holidays, and tax exemptions may be granted on a case-by-case basis. The tax rate for small and medium sized companies (generally companies incorporated in Malaysia with paid-in capital of MYR2,500,000 or less, and gross income of not more than MYR50 million) is 17% for the first MYR600,000 (or approximately $150,000), with the remaining balance being taxed at the 24% rate.
As of December 31, 2024 and 2023, the operations in the Malaysia incurred cumulative net operating income which
can be carried forward to offset future taxable income. Any net operating loss carry forwards begin to expire in 2038, if unutilized.
Hong Kong
The income tax provision in respect of operations in Hong Kong is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations, and practices. The principal legislation that governs a person’s profits tax in Hong Kong is the Inland Revenue Ordinance (Cap. 112) (the “IRO”). The regulatory body implementing and enforcing the IRO is the Inland Revenue Department. Pursuant to Section 14 of the IRO, profits tax shall be charged for each year of assessment upon the profits of any person from any trade, profession or business carried on in Hong Kong arising in or derived from Hong Kong (territorial source principle).
Under the IRO, corporations incorporated in Hong Kong are subject to profits tax under a two-tiered structure: 8.25% on the first HKD2 million of assessable profits and 16.5% on the balance above HKD2 million (with only one entity per connected group eligible for the two-tiered benefit). Preferential tax concessions, exemptions and deductions may be granted under specific provisions or case-by-case approvals. Offshore-sourced profits, capital gains, dividends and interest income are generally not subject to Hong Kong profits tax.
As of December 31, 2024 and 2023, the operations in Hong Kong incurred cumulative net operating losses which can be carried forward to offset future taxable income. Any net operating loss carryforwards begin to expire after 8 years if unutilized (generally available for up to 8 years of assessment from incurrence).
| F-17 |
| 12. | NET LOSS PER SHARE |
Basic net loss per share is computed using the weighted average number of common shares outstanding during the year. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2024 and 2023:
| Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss attributable to common shareholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding – Basic and diluted | ||||||||
| Net loss per share – Basic and diluted | $ | ) | $ | ) | ||||
| 13. | PENSION COSTS |
The Company is required to make contribution under
a defined contribution pension scheme for all of its eligible employees in Hong Kong. The Company is required to contribute a specified
percentage of the participants’ relevant income based on their ages and wages level. The total contributions made were $
| 14. | RELATED PARTY TRANSACTIONS |
During the year ended December 31, 2023, Man Fai
Cheng and Ho Chi Wan made advancements of $
On December 20, 2024, in line with the Company’s
revisited investment focus, the Hong Kong Subsidiaries were disposed of to Ms. Ho Chi Wan. The Company disposed
of the Hong Kong Subsidiaries to its majority shareholder, Ms. Ho Chi Wan for no consideration. In accordance with common control accounting,
the carrying amount of the net liabilities disposed of ($
During the year ended December 31, 2024, Man Fai
Cheng made advancements of $
As of December 31, 2024, the Company has no other related party transactions.
Amounts to from (to) related parties
As of December 31, 2024 and 2023, the Company
has $
As of December 31, 2024 and 2023, the Company
has $
| F-18 |
| 15. | CONCENTRATIONS OF RISK |
The Company is exposed to the following concentrations of risk:
| (a) | Economic and political risk |
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
| (b) | Exchange rate risk |
The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
| 16. | COMMITMENTS AND CONTINGENCIES |
As of December 31, 2024 and 2023, the Company has no material commitments or contingencies.
| 17. | SUBSEQUENT EVENTS |
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2024, up through the date the Company issued the consolidated financial statements. The Company has determined that there are no material subsequent events that require adjustment or disclosure to the consolidated financial statements, except for those disclosed below and elsewhere in these consolidated financial statements.
On October 1, 2025, the Company effected a business combination with Aphoenity International Holdings Inc, a Wyoming entity, which subsequently succeeded the prior Delaware entity as holding company of the group structure. Aphoenity International Holdings Inc’s board of directors and officers are composed of the same members as Luduson G Inc., and its shareholding structure is identical to Luduson G Inc. at the time it succeeded Luduson G Inc. as holding company of the group structure.
| F-19 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Under the direction of our Chief Executive Officer and our Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) there continue to be material weaknesses in the Company’s internal controls over financial reporting, that the weaknesses constitute a “deficiency” and that this deficiency could result in misstatements of the foregoing accounts and disclosures that could result in a material misstatement to the financial statements for the period covered by this report that would not be detected, and (ii) accordingly, our disclosure controls and procedures were not effective as of December 31, 2024.
However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Management’s Annual Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. During our assessment of the effectiveness of internal control over financial reporting as of December 31, 2024, management identified significant deficiencies related to (i) the U.S. GAAP expertise of our internal accounting staff and chief financial officer, (ii) our internal audit functions and (iii) a lack of segregation of duties within accounting functions. Although management believes that these deficiencies do not amount to a material weakness, our internal controls over financial reporting were not effective at December 31, 2024.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.
| 32 |
In light of these material weaknesses, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the year ended December 31, 2024 included in this Annual Report on Form 10-K were fairly stated in accordance with the U.S. GAAP. Accordingly, management believes that despite our material weaknesses, our consolidated financial statements for the year ended December 31, 2024 are fairly stated, in all material respects, in accordance with the U.S. GAAP.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
During the year ended December 31,
2024, no director or officer of the Company
Officer & Director Trading Policy
The Company has not yet adopted a formal Officer and Director Trading Policy. However, we recognize the importance of having clear guidelines for the trading of Company securities by our directors, officers, and employees.
In the future, the Company intends to formalize an Officer and Director Trading Policy, which will address, among other things:
Blackout Periods: Restrictions on trading during certain periods, particularly before the release of financial results or material events.
Pre-clearance of Transactions: Requirements for approval of transactions by Company officers before trading.
Restrictions on Speculative Transactions: Prohibitions on activities such as short selling or margin trading.
While a formal policy has not yet been implemented, we are committed to developing appropriate guidelines to enhance governance and reduce legal and reputational risks related to insider trading.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
None.
| 33 |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Set forth below are the present directors and executive officers of the Company. Note that there are no other persons who have been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers. There are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person was selected as a director or an officer. Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and have qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
| Name | Age | Positions | ||||
| Chun Fong SIM | 45 | Chief Executive Officer, Director | ||||
| Eng Wah KUNG | 63 | Chief Financial Officer, Secretary, Director | ||||
| Lap Yan CHEUNG | 56 | Chief Operating Officer, Director | ||||
| Ho Chi WAN | 45 | Non-Executive Chairman, Director | ||||
Biographies
Set forth below are brief accounts of the business experience during the past five years of each director, executive officer and significant employee of the Company.
Chun Fong SIM, age 45, replaced Mr Man Fai CHENG as the Chief Executive Officer on May 28, 2025. Mr. Sim is a highly accomplished leader with nearly two decades of distinguished experience in the finance and insurance industry. Mr. Sim most recently served as an Executive Director in a multinational corporation, a role that capped a 19-year career encompassing senior directorships with leading financial institutions. Educated in Singapore with a foundation in Engineering, Mr. Sim combines analytical precision with strong financial expertise. His professional focus has centered on advancing key organizational growth pillars, including strategic talent development, operational efficiency, and the formulation of effective sales and market expansion strategies. Mr. Sim also brings substantial regional experience, having cultivated strong partnerships across Thailand, Malaysia, and China. His extensive cross-border network and proven leadership will play a critical role in strengthening the Company’s regional growth strategy and driving expansion initiatives across Asia.
Eng Wah KUNG, age 63, joined us as our Chief Financial Officer, Secretary and Director on May 25, 2023. He holds a First Class Diploma in Hotel Management from Les Roches, Switzerland. He was the General Manager with Hic Inn, Cambodia prior to joining the Company. Mr. Kung has been a general manager for several Southeast Asian hotel operations companies since year 2003, including Nha Trang Lodge, Vietnam and NCL Cambodia Pte Ltd. He has over 33 years in the senior general management position in the Meetings/Incentives/Convention/Exhibition industry. He is responsible for over-seeing the future MICE operations of the Company using his extensive skills, knowledge and experience. In fact, Mr. Kung has established good working relationships with the central governments and local authorities of Cambodia, Vietnam and Malaysia.
Lap Yan CHEUNG, age 56, joined us as our Chief Operating Officer and Director on May 25, 2023. Mr. Cheung has over 32 years of experience in the game industry. In addition to the development of video and PC games, he is also experienced in the marketing, promotion and monetization of mobile and social games. He was the pixel character designer of the world-famous Tamagotchi. He collaborated with Japanese game publisher CAPCOM and mobile phone designer Nokia to release “Street Fighter WAP” game. In 2014, he continued to expand the value of game markets, as he took the mission of promoting e-sports in Southeast Asia as the Vice President of Asia-Pacific E-Sports Association on December 1, 2016.
| 34 |
Ho Chi WAN, aged 45, joined us as our Non-Executive Chairman and Director on May 25, 2023. Ms. Wan has about 20 years of experience in the entertainment industry. She built herself a strong connection with Hong Kong and Mainland artists, media companies, iconic movie directors and scriptwriters of the Hong Kong movie Golden Era, to the latest high-on-demand Mainland short movies, variety shows to beauty pageant organizers. Ms. Wan was awarded numerous distributorships in the past, including a few of the popular Chinese platforms, such as Bigolive - a live streaming platform and social networking app that allows users to broadcast and view live videos, similar to Tiktok, popular among youngsters of the Chinese community. All her connections and renewable distributorships will be put in the Group upcoming.
Family Relationships.
There are no family relationships between any of our directors or executive officers.
Involvement in Certain Legal Proceedings
No executive officer or director has been involved in the last ten years in any of the following:
| · | Any bankruptcy petition filed by or against any business or property of such person, or of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
| · | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| · | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; | |
| · | Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | |
| · | Being the subject of or a party to any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, including but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; or | |
| · | Being the subject of or a party to any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
| 35 |
Board Committees and Audit Committee Financial Expert
We do not currently have a standing audit, nominating or compensation committee of the board of directors, or any committee performing similar functions. Our board of directors performs the functions of audit, nominating and compensation committees. As of the date of this report, no member of our board of directors qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act. We hope to attract a director who qualifies as an “audit committee financial expert” as our business operations mature.
Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors.
There have not been any material changes to the procedures by which security holders may recommend nominees to the registrant’s board of directors since December 31, 2024.
Code of Ethics
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer principal accounting officer or controller in light of our Company’s current stage of development. We expect to adopt a code of ethics in the near future.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Philosophy and Objectives
Currently, our executive directors and officers do not receive compensation for services provided in such capacities. We anticipate providing cash compensation for services in the future to our executive officers and directors. We expect to establish an incentive compensation plan as our company matures. We expect that our executive compensation philosophy will be to create a long-term direct relationship between pay and our performance. Our executive compensation program will be designed to provide a balanced total compensation package over the executive’s career with us. The compensation program objectives will be to attract, motivate and retain the qualified executives that help ensure our future success, to provide incentives for increasing our profits by awarding executives when corporate goals are achieved and to align the interests of executives and long-term stockholders. We expect the compensation package of our named executive officers to consist of the following main elements:
| 1. | base salary for our executives that is competitive relative to the market, and that reflects individual performance, retention and other relevant considerations; | |
| 2. | incentive compensation consisting of stock options, restricted stock and the like; and | |
| 3. | discretionary bonus awards payable in cash and or securities of the Company tied to the satisfaction of corporate objectives. |
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Process for Setting Executive Compensation
As we do not have Compensation Committee, our Board will be responsible for developing and overseeing the implementation of our philosophy with respect to the compensation of executives and for monitoring the implementation and results of the compensation philosophy to ensure compensation remains competitive, creates proper incentives to enhance stockholder value and rewards superior performance. The Board will annually review and approve for each named executive officer, and particularly with regard to the Chief Executive Officer, all components of the executive’s compensation. The Board may award discretionary bonuses to each of the named executives, and reviews and approves the process and factors (including individual and corporate performance measures and actual performance versus such measures) used by the Chief Executive Officer to recommend such awards. Additionally, the Board will review and approve the base salary, equity-incentive awards (if any) and any other special or supplemental benefits of the named executive officers.
We expect our Chief Executive Officer to periodically provide the Board with an evaluation of each named executive officer’s performance, based on the individual performance goals and objectives developed by the Chief Executive Officer at the beginning of the year, as well as other factors. The Board will provide an evaluation for the Chief Executive Officer. These evaluations will serve as the bases for bonus recommendations and changes in the compensation arrangements of our named executives.
Our Compensation Peer Group
We expect to engage in informal market analysis in evaluating our executive compensation arrangements. As the Company and its businesses mature, we may retain compensation consultants that will assist us in developing a formal benchmark and selecting a compensation peer group of companies similar to us in size or business for the purpose of comparing executive compensation levels.
Program Components
We expect our executive compensation program to consist of the following elements:
Base Salary
Our base salary structure will be designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. The base salary for each named executive officer will reflect our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and informal market data regarding comparable positions within similarly situated companies. In determining and setting base salary, the Board will consider all of these factors, though it will not assign specific weights to any factor. The Board will generally review the base salary for each named executive officer on an annual basis. For each of our named executive officers, we expect to review base salary data internally obtained by the Company for comparable executive positions in similarly situated companies to ensure that the base salary rate for each executive is competitive relative to the market.
Discretionary Bonus
The objectives of our bonus awards will be to encourage and reward our employees, including the named executive officers, who contribute to and participate in our success by their ability, industry, leadership, loyalty or exceptional service and to recruit additional executives who will contribute to that success.
Each of our named executive officers will be eligible for consideration for a discretionary cash bonus. The Chief Executive Officer will make recommendations regarding bonus awards for the named executive officers and the Board provides the bonus recommendation for the Chief Executive Officer. However, the Board/Compensation Committee will have sole and final authority and discretion in designating to whom awards are made, the size of the award, if any, and its terms and conditions. The bonus recommendation for each of the named executive officers depends on a number of factors, including (i) the performance of the Company for the year, (ii) the satisfaction of certain individual and corporate performance measures, and (iii) other factors which the Board may deem relevant. The Company did not award any cash bonuses during fiscal year 2024.
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Stock Holdings
The Board recognizes the importance of having a portion of the named executive officers’ compensation be paid in the form of equity, to help align the executives’ interests with the interests of the Company’s shareholders. Initially, we expect the Board to emphasize the cash-based portion of our compensation program over a stock program because it believes the discretionary nature of the cash-based compensation gives it the needed flexibility to factor in and reward the attainment of longer-term goals for the Company and the executives, as the Board deems appropriate.
We have not timed nor do we plan to time our release of material non-public information for the purpose of affecting the value of executive compensation.
| Summary Compensation Table |
The following summary compensation table sets forth the aggregate compensation we paid or accrued during the fiscal years ended December 31, 2024 and 2023 to (i) our Chief Executive Officer (principal executive officer), (ii) our two most highly compensated executive officers other than the principal executive officer who were serving as executive officers on December 31, 2024 and 2023, whose total compensation was in excess of $100,000, and (iii) up to two additional individuals who would have been within the two-other-most-highly compensated but were not serving as executive officers on December 31, 2024.
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Equity Awards ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||
| Man Fai CHENG (1) | 2024 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| (Chief Executive Officer and Director) | 2023 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| Eng Wah KUNG (2) | 2024 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| (Chief Financial Officer, Secretary and Director) | 2023 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| Lap Yan CHEUNG (3) | 2024 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| (Chief Operating Officer and Director) | 2023 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
_______________
| (1) | Man Fai CHENG has served as our Chief Executive Officer and Director since May 25, 2023 until May 28, 2025 where he was replaced by Chun Fong SIM. |
| (2) | Eng Wah KUNG has served as our Chief Financial Officer, Secretary and Director since May 25, 2023. |
| (3) | Lap Yan CHEUNG has served as our Chief Operating Officer and Director since May 25, 2023. |
Narrative disclosure to Summary Compensation
Our executive officers are not parties to employment agreements with the Company. As the Company matures, we expect to enter into compensation arrangements in the near future.
Other than set out above and below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We expect to establish one or more incentive compensation plans in the future. Our directors and executive officers may receive securities of the Company as incentive compensation at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
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Equity Awards
There are no unvested options, warrants or convertible securities outstanding.
At no time during the last fiscal year with respect to any of any of our executive officers was there:
| · | any outstanding option or other equity-based award repriced or otherwise materially modified (such as by extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined; | |
| · | any waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock incentive plan compensation or payouts; | |
| · | any option or equity grant; | |
| · | any non-equity incentive plan award made to a named executive officer; | |
| · | any nonqualified deferred compensation plans including nonqualified defined contribution plans; or | |
| · | any payment for any item to be included under All Other Compensation in the Summary Compensation Table. |
Compensation of Directors
During our fiscal year ended December 31, 2024, we did not provide compensation to any of our employee directors for serving as our director. We currently have no formal plan for compensating our directors for their services in their capacity as directors, although we may elect to issue stock options to such persons from time to time. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.
Grants of Options and Similar Equity Awards
During the year ended December 31, 2024, the Company did not grant any stock options, restricted stock units, or other similar equity awards to any named executive officer or director.
The Company maintains policies and procedures designed to prevent the granting of equity awards while in possession of material nonpublic information (“MNPI”).
Equity awards, if and when granted, are generally made during open trading windows following the public release of financial results, and require confirmation that recipients are not aware of any MNPI at the time of the grant.
The Company does not have a practice of timing the grant of equity awards to coincide with the release of MNPI.
Insider Trading Arrangements and Policies
During the year ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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Until a formal policy is in place, the Company’s directors, officers, and employees are required to adhere to the following general principles regarding insider trading:
Material Nonpublic Information (MNPI):
Trading in the Company’s securities based on material nonpublic information is strictly prohibited. Material information is any information that could affect the price of the Company’s securities and that has not been disclosed to the public.
Prohibition Against Tipping:
Insiders are prohibited from sharing material nonpublic information with others who may use it to trade in the Company’s securities.
Legal Consequences:
Violations of insider trading laws can result in severe civil and criminal penalties. The Company urges all insiders to avoid any actions that could lead to insider trading or the appearance of improper conduct.
The Company is in the process of evaluating the adoption of a formal Insider Trading Policy, which will be designed to prevent insider trading and to protect the Company and its employees from legal and regulatory risks. We expect to adopt this policy in the near future.
Compensation Risk Management
Our Board of directors and human resources staff conducted an assessment of potential risks that may arise from our compensation programs. Based on this assessment, we concluded that our policies and practices do not encourage excessive and unnecessary risk taking that would be reasonably likely to have material adverse effect on the Company. The assessment included our cash incentive programs, which awards non-executives with cash bonuses for punctuality. Our compensation programs are substantially identical among business units, corporate functions and global locations (with modifications to comply with local regulations as appropriate). The risk-mitigating factors considered in this assessment included:
| · | the alignment of pay philosophy, peer group companies and compensation amounts relative to local competitive practices to support our business objectives; and | |
| · | effective balance of cash, short- and long-term performance periods, caps on performance-based award schedules and financial metrics with individual factors and Board and management discretion. |
Compensation Committee Interlocks and Insider Participation
We have not yet established a Compensation Committee. Our Board of Directors performs the functions that would be performed by a compensation committee. During the fiscal year ended December 31, 2024, none of our executive officers has served: (i) on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our board of directors; (ii) as a director of another entity, one of whose executive officers served on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of the registrant; or (iii) as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the company.
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Compensation Committee Report
Our board of directors has reviewed and discussed the Compensation Discussion and Analysis in this report with management. Based on its review and discussion with management, the board of directors recommended that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for the year ended December 31, 2024. The material in this report is not deemed filed with the SEC and is not incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made on, before, or after the date of this Report on Form 10-K and irrespective of any general incorporation language in such filing.
Submitted by the board of directors:
Chun Fong SIM
Eng Wah KUNG
Lap Yan CHEUNG
Ho Chi WAN
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of December 31, 2024 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers (as defined under Item 402(m)(2) of Regulation S-K), and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
| Name of Beneficial Owner (2) | Amount and Nature of Beneficial Ownership (1) |
Percent of Class | ||
| Officers and Directors | ||||
| Man Fai CHENG (3) | 20,000,000 | 3.55% | ||
| Lap Yan CHEUNG (4) | 55,000,000 | 9.76% | ||
| Ho Chi WAN (5) | 290,000,000 | 51.47% | ||
| All executive officers and directors as a group (3 persons) | 365,000,000 | 64.78% | ||
| Shareholders Holding In Excess of 5% | ||||
| nil |
| (1) | Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of December 31, 2024. Applicable percentage ownership is based on 563,519 shares of common stock outstanding as of December 31, 2024, and any shares that such person or persons has the right to acquire within 60 days of December 31, 2024, is deemed to be outstanding for such person, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. |
| (2) | Unless otherwise noted, the business address of each beneficial owner listed is 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse. |
| (3) | Man Fai CHENG was appointed to serve as our Chief Executive Officer and Director effective May 25, 2023. On May 28, 2025, the Company replaced Man Fai CHENG with Chun Fong SIM to serve as our Chief Executive Officer and Director. |
| (4) | Lap Yan CHEUNG was appointed to serve as our Chief Operation Officer and Director effective May 25, 2023. |
| (5) | Ho Chi WAN was appointed to serve as our Non-Executive Chairman and Director effective May 25, 2023. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Other than as disclosed below, there are no transactions during our two most recent fiscal years ended December 31, 2024, and December 31, 2023, or any currently proposed transaction, in which our Company was or to be a participant and the amount exceeds the lesser of $120,000 or one percent of the average of our Company’s total assets at year end for our last two completed years, and in which any of our directors, officers or principal stockholders, or any other related person as defined in Item 404 of Regulation S-K, had or have any direct or indirect material interest.
We have not adopted policies or procedures for approval of related person transactions but review them on a case-by-case basis. We believe that all related party transactions were on terms at least as favorable as we would have secured in arm’s-length transactions with third parties. Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons.
Director Independence
Our board of directors currently consists of Chun Fong SIM, our CEO, Eng Wah KUNG, our CFO, Lap Yan CHEUNG, our COO, and Ho Chi WAN, our Non-Executive Chairman. Our directors do not qualify as an independent director under the published listing requirements of the NASDAQ Stock Market or the NYSE because they are executive officers of the Company. As of the date hereof, we have not adopted a standard of independence nor do we have a policy with respect to independence requirements for our board members or that a majority of our board be comprised of “independent directors.”
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Our board of directors does not have an audit committee. The functions customarily delegated to an audit committee are performed by our full board of directors. Our board of directors approves in advance, all services performed by our auditor, but have not adopted pre-approval policies or procedures. Our board of directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s independence, and has approved such services.
The following table sets forth fees billed by our auditors during the last two fiscal years for services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, services by our auditors that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as audit fees, services rendered in connection with tax compliance, tax advice and tax planning, and all other fees for services rendered.
| December 31, 2024 | December 31, 2023 | |||||||
| Audit fees | $ | 10,974 | $ | 11,367 | ||||
| Audit related fees | – | – | ||||||
| Tax fees | – | – | ||||||
| All other fees | – | – | ||||||
| Total | $ | 10,974 | $ | 11,367 | ||||
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this report:
| (1) | Financial Statements |
Financial Statements are included in Part II, Item 8 of this report.
| (2) | Financial Statement Schedules |
No financial statement schedules are included because such schedules are not applicable, are not required, or because required information is included in the financial statements or notes thereto.
| (3) | Exhibits |
| Exhibit Number | Description |
| 21 | List of Subsidiaries* | |
| 31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
| 31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
| 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 * | |
| 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 * | |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted in inline XBRL, and included in exhibit 101). |
_______________________
| * | Filed Herewith. |
ITEM 16. FORM 10-K SUMMARY.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.
| April 10, 2026 | APHOENITY INTERNATIONAL HOLDINGS INC. | |
| By: | /s/ Chun Fong SIM | |
| Chun Fong SIM | ||
| Chief Executive Officer | ||
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