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What changed in MDJM LTD's 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of MDJM LTD's 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+429 added−964 removedSource: 20-F (2026-04-01) vs 20-F (2025-04-14)

Top changes in MDJM LTD's 2025 20-F

429 paragraphs added · 964 removed · 213 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

64 edited+81 added−322 removed72 unchanged
Biggest changeSubject to the passive foreign investment company rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
Biggest changeSubject to the passive foreign investment company (“PFIC”) rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. 4 Table of Contents Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium account, provided that in no circumstances may a dividend be paid out of the share premium account if this would result in the company being unable to pay its debts due in the ordinary course of business.
Pursuant to the Exclusive Option Agreement, WFOE may at any time and under any circumstances purchase all or part of the equity interests in the VIE when and to the extent permitted by PRC laws. The VIE Agreements were terminated on March 1, 2025. A. [Reserved] B. Capitalization and Indebtedness Not applicable. C.
Pursuant to the Exclusive Option Agreement, former WFOE may at any time and under any circumstances purchase all or part of the equity interests in the former VIE when and to the extent permitted by PRC laws. The VIE Agreements were terminated on March 1, 2025. A. [Reserved] B. Capitalization and Indebtedness Not applicable. C.
Any inability to accurately and timely disclose financial results could harm our business and reputation and cause the market price of our Ordinary Shares to decline. A system of financial controls and procedures is necessary to ensure that information about our financial results is recorded, processed, summarized, and reported in an accurate and timely fashion.
Any inability to accurately and timely disclose financial results could harm our business and reputation and cause the market price of our Class A Ordinary Shares to decline. A system of financial controls and procedures is necessary to ensure that information about our financial results is recorded, processed, summarized, and reported in an accurate and timely fashion.
Item 3. KEY INFORMATION We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in the UK and, prior to March 2025, through the VIE in China.
Item 3. KEY INFORMATION We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our subsidiaries in the UK and, prior to March 2025, through the former VIE in China.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
Our and our UK subsidiaries’ current property and liability insurance policies may not provide adequate or any coverage for such losses, and we or our UK subsidiaries may be unable to renew our insurance policies or obtain new insurance policies without increases in premiums and deductibles or decreases in coverage levels, or at all. 12 Table of Contents If our UK subsidiaries are unable to access funds to maintain the condition and appearance of the hospitality properties that they operate or may operate or manage in the future, the attractiveness of such properties and their and our reputation could suffer and occupancy rates may decline.
Our and our UK subsidiaries’ current property and liability insurance policies may not provide adequate or any coverage for such losses, and we or our UK subsidiaries may be unable to renew our insurance policies or obtain new insurance policies without increases in premiums and deductibles or decreases in coverage levels, or at all. 7 Table of Contents If our UK subsidiaries are unable to access funds to maintain the condition and appearance of the hospitality properties that they operate or may operate or manage in the future, the attractiveness of such properties and their and our reputation could suffer and occupancy rates may decline.
Although our German subsidiary, MD German, has not commenced its operations and has not generated any revenue as of the date of this report, any of the aforementioned factors could materially and adversely affect its development and future business.
Although our German subsidiary, MD German, has not commenced its operations and has not generated any revenue as of the date of this annual report, any of the aforementioned factors could materially and adversely affect its development and future business.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
We do not intend to pay dividends for the foreseeable future. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.
Our UK subsidiaries’ operating results are subject to conditions typically affecting hospitality service providers in the UK, including, among others: ● changes in national, regional, or local economic conditions; ● contraction in the global economy or low levels of economic growth; ● competition from other hotels and vacation rental online marketplace companies; ● the attractiveness of hotels our UK subsidiaries may manage or own to their guests; ● local market conditions such as an oversupply of, or a reduction in demand for, hotel rooms; ● adverse weather conditions, natural disasters, or serious contagious diseases, such as COVID-19; ● the ability of third-party internet and other travel intermediaries who sell hotel rooms to guests to attract and retain customers; ● the availability and cost of capital necessary for us to fund investments, capital expenditures, and service debt obligations; ● delays in or cancellations of planned or future development or refurbishment projects; ● seasonal and cyclical volatility in the hospitality industry; ● changes in desirability of geographic regions of the hotels within our UK subsidiaries’ market, geographic concentration of their operations and customers, and shortages of desirable locations for development; ● the performance of managerial and other employees of our UK subsidiaries’ hospitality services business; and ● increases in operating costs and expenses, particularly rents, due to inflation and other factors.
Our UK subsidiaries’ operating results are subject to conditions typically affecting hospitality service providers in the UK, including, among others: ● changes in national, regional, or local economic conditions; ● contraction in the global economy or low levels of economic growth; ● competition from other hotels and vacation rental online marketplace companies; ● the attractiveness of hotels our UK subsidiaries may manage or own to their guests; ● local market conditions such as an oversupply of, or a reduction in demand for, hotel rooms; ● adverse weather conditions, natural disasters, or serious contagious diseases; ● the ability of third-party internet and other travel intermediaries who sell hotel rooms to guests to attract and retain customers; ● the availability and cost of capital necessary for us to fund investments, capital expenditures, and service debt obligations; ● delays in or cancellations of planned or future development or refurbishment projects; ● seasonal and cyclical volatility in the hospitality industry; 6 Table of Contents ● changes in desirability of geographic regions of the hotels within our UK subsidiaries’ market, geographic concentration of their operations and customers, and shortages of desirable locations for development; ● the performance of managerial and other employees of our UK subsidiaries’ hospitality services business; and ● increases in operating costs and expenses, particularly rents, due to inflation and other factors.
For the fiscal years ended December 31, 2024, 2023, and 2022, for accounting purposes, we controlled and received the economic benefits of the VIE through certain contractual arrangements (the “VIE Agreements”), which enabled us to consolidate the financial results of the VIE in our consolidated financial statements under U.S. GAAP. The VIE Agreements were terminated on March 1, 2025.
For the fiscal years ended December 31, 2024 and 2023, for accounting purposes, we controlled and received the economic benefits of the former VIE through certain contractual arrangements (the “VIE Agreements”), which enabled us to consolidate the financial results of the former VIE in our consolidated financial statements under U.S. GAAP. The VIE Agreements were terminated on March 1, 2025.
Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. It is possible that, however, for our 2025 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income.
Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. It is possible that, however, for our 2026 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income.
As a result, the professionality of the staffs is critical to maintaining the quality and consistency of our services and our brand and reputation. It is important for the UK subsidiaries to attract qualified managerial and other employees who have experience in real estate related services and are committed to their service approach.
As a result, the professionality of the staff is critical to maintaining the quality and consistency of our services and our brand and reputation. It is important for the UK subsidiaries to attract qualified managerial and other employees who have experience in real estate related services and are committed to their service approach.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.
This is especially the case if the shares being placed into the market exceed the market’s ability to take up the increased share issuance. Such an event could place further downward pressure on the price of our Ordinary Shares.
This is especially the case if the shares being placed into the market exceed the market’s ability to take up the increased share issuance. Such an event could place further downward pressure on the price of our Class A Ordinary Shares.
This has improved the prospects for growth-enhancing structural reforms and further integration among EU member states, both viewed as important tools to reduce the Eurozone’s vulnerabilities to future crises. However, given the political uncertainties, e.g., stemming from coming parliamentary and presidential elections in several countries, there remain downside risks to the future economic performance and political cohesion in Europe.
This has improved the prospects for growth-enhancing structural reforms and further integration among EU member states, both viewed as important tools to reduce the Eurozone’s vulnerabilities to future crises. However, given the political uncertainties, for instance, stemming from coming parliamentary and presidential elections in several countries, there remain downside risks to the future economic performance and political cohesion in Europe.
All market transactions with respect to those Ordinary Shares are carried out without the need for any kind of registration by the directors, as the market transactions are all conducted through the Depository Trust Company systems.
All market transactions with respect to those Class A Ordinary Shares are carried out without the need for any kind of registration by the directors, as the market transactions are all conducted through the Depository Trust Company systems.
Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 16 Table of Contents You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
If there are significant short sales of our Ordinary Shares, the price decline that would result from our acquisition activities will cause the share price to decline more, which may cause other shareholders of our Ordinary Shares to sell their shares, thereby contributing to sales of Ordinary Shares in the market.
If there are significant short sales of our Class A Ordinary Shares, the price decline that would result from our acquisition activities will cause the share price to decline more, which may cause other holders of our Class A Ordinary Shares to sell their shares, thereby contributing to sales of Class A Ordinary Shares in the market.
The withdrawal of the UK from the EU (“Brexit”) in particular, but also, the increasing attractiveness to voters of populist political movements in other member states has raised concerns about a potential unwinding of aspects of European integration that could have implication to the German and UK real estate markets our subsidiaries operate in.
Brexit in particular, but also, the increasing attractiveness to voters of populist political movements in other member states has raised concerns about a potential unwinding of aspects of European integration that could have implication to the German and UK real estate markets our subsidiaries operate in.
Our board of directors may, in its sole discretion, decline to register any transfer of any Ordinary Shares which is not fully paid up or on which we have a lien.
Our board of directors may decline to register transfers of Class A Ordinary Shares in certain circumstances. Our board of directors may, in its sole discretion, decline to register any transfer of any Class A Ordinary Shares which is not fully paid up or on which we have a lien.
Investors and Tax Consequences As of the date of this annual report, none of our subsidiaries nor the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders.
Investors and Tax Consequences As of the date of this annual report, none of our subsidiaries nor the Former PRC Entities have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders.
A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of our total issued voting shares. 34 Table of Contents If we are classified as a passive foreign investment company (“PFIC”), United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.
A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of our total issued voting shares. If we are classified as a PFIC, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.
Nasdaq Listing Rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may, follow home country practice in lieu of the above requirements, or we may choose to comply with the Nasdaq requirement within one year of listing.
Nasdaq Listing Rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may, follow home country practice in lieu of the above requirements.
Each unit includes one Ordinary Share, one Series A warrant to purchase one Ordinary Share at an exercise price of $1.35 per share, and one Series B warrant to purchase such number of Ordinary Shares as determined on the Reset Date, as defined therein.
Each unit includes one ordinary share, one September 2024 Series A Warrant to purchase one ordinary share at an exercise price of $1,181.25 per share, and one series B warrant (the “September 2024 Series B Warrants”) to purchase such number of ordinary shares as determined on the Reset Date (as defined therein).
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, MDJH Hong Kong, and our UK subsidiary, MD UK. MD UK will rely on payments from its subsidiaries Mansions and Fernie Castle Culture.
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our UK subsidiary, MD UK. MD UK will rely on payments from its subsidiary Mansions.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may not permit you to enforce a judgment against our assets or the assets of our directors and officers.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the UK may not permit you to enforce a judgment against our assets or the assets of our directors and officers. We do not intend to pay dividends for the foreseeable future.
Brexit may have adverse effects on our business, results of operations, or strategic plans. The UK Government concluded a Trade Cooperation Agreement (TCA) with the EU, which became provisionally applicable on January 1, 2021 and went into force permanently on May 1, 2021, following formal approval by both the UK and the EU.
The UK Government concluded a Trade Cooperation Agreement (TCA) with the EU, which became provisionally applicable on January 1, 2021 and went into force permanently on May 1, 2021, following formal approval by both the UK and the EU.
The trading market for our Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline.
The trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts.
Changes in any of these conditions could adversely affect our UK subsidiaries’ occupancy rates or otherwise adversely affect our results of operations and financial condition. 11 Table of Contents Our UK subsidiaries may not be able to successfully identify, secure, or operate additional hotel properties. In addition to managing the Robin Hill Property and Fernie Castle (see “Item 4.
Changes in any of these conditions could adversely affect our UK subsidiaries’ occupancy rates or otherwise adversely affect our results of operations and financial condition. Our UK subsidiaries may not be able to successfully identify, secure, or operate additional hotel properties.
We may execute similar transactions in the future, and if there are many more of our Ordinary Shares on the market for sale than the market will absorb, the price of our Ordinary Shares will likely further decline, which could result in our inability to regain compliance with the minimum closing bid price required for continued listing on Nasdaq set forth in Nasdaq Listing Rule 5550(a)(2) or repeated inability to meet such requirement. 33 Table of Contents Our board of directors may decline to register transfers of Ordinary Shares in certain circumstances.
We may execute similar transactions in the future, and if there are many more of our Class A Ordinary Shares on the market for sale than the market will absorb, the price of our Class A Ordinary Shares will likely further decline, which could further impair our ability to regain compliance with the minimum closing bid price required for continued listing on Nasdaq set forth in Nasdaq Listing Rule 5550(a)(2), or result in a repeated inability to meet such requirement, and could further adversely affect the trading price and liquidity of our Class A Ordinary Shares on the OTC Markets during the pendency of our appeal of the Nasdaq suspension determination.
Some provisions of our amended and restated memorandum and articles of association, may discourage, delay, or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following: ● provisions that authorize our board of directors to issue shares with preferred, deferred, or other special rights or restrictions without any further vote or action by our shareholders; and ● provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings. 32 Table of Contents If we cannot satisfy, or continue to satisfy, the continued listing requirements and other rules of the Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
Some provisions of our amended and restated memorandum and articles of association, may discourage, delay, or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following: ● provisions that authorize our board of directors to issue shares with preferred, deferred, or other special rights or restrictions without any further vote or action by our shareholders; and ● provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings.
In addition, MD Japan may be required to incur significant costs and expenses, including those incurred for preventive or remedial measures, to deal with the consequences of such external events.
In addition, MD Japan may be required to incur significant costs and expenses, including those incurred for preventive or remedial measures, to deal with the consequences of such external events. As a result, MD Japan’s future business, operating results, and financial condition may be materially and adversely affected.
Although MD Japan has not commenced its operations and has not generated any revenue as of the date of this report and is still in the process of developing its business plan, any of the aforementioned factors could have a material and adverse impact on its development, potential results of operations, future business, and consequently adversely affect our business, financial condition, and results of operations.
Although MD Japan has not commenced its operations and has not generated any revenue as of the date of this annual report and is still in the process of developing its business plan, any of the aforementioned factors could have a material and adverse impact on its development, potential results of operations, future business, and consequently adversely affect our business, financial condition, and results of operations. 9 Table of Contents Our Japanese subsidiary MD Japan’s business operations are exposed to risks of natural disasters, terrorism, and other disruptions caused by external events.
Information on the Company—B. Business Overview—Overview”), we, through the UK subsidiaries, may open or manage more hotels in markets where we have a presence and in other areas in the UK to further grow our business.
In addition to managing the Robin Hill Property and Fernie Castle, we, through the UK subsidiaries, may open or manage more hotels in markets where we have a presence and in other areas in the UK to further grow our business.
As a result, MD Japan’s future business, operating results, and financial condition may be materially and adversely affected. 15 Table of Contents Potential political shocks and uncertainties in the European Union (the “EU”), including the development of Brexit, could have unpredictable consequences for the real estate market and the wider economy, and our German subsidiary’s ability to protect itself against these risks is limited.
Potential political shocks and uncertainties in the European Union (the “EU”), including the development of Brexit, could have unpredictable consequences for the real estate market and the wider economy, and our German subsidiary’s ability to protect itself against these risks is limited.
If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Ordinary Share is a “penny stock,” which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
The suspension and potential delisting of our Class A Ordinary Shares from Nasdaq and their trading on OTCID Basic Markets have had, and may continue to have, material adverse effects on our business and our shareholders, including the following: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Class A Ordinary Share is a “penny stock,” which will require brokers trading in our Class A Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Share; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
However, in the future, we may consider following home country practice in lieu of the requirements under Nasdaq listing rules with respect to certain other corporate governance standards which may afford less protection to investors. Anti-takeover provisions in our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.
However, in the future, we may consider following home country practice in lieu of the requirements under Nasdaq listing rules with respect to certain other corporate governance standards which may afford less protection to investors.
MD Japan’s risk management policies and procedures may be insufficient to address the consequences of these external events, resulting in its inability to continue to operate a part or the whole of its business.
As with other Japanese companies, MD Japan will be exposed to heightened risks of large-scale natural disasters, particularly earthquakes. MD Japan’s risk management policies and procedures may be insufficient to address the consequences of these external events, resulting in its inability to continue to operate a part or the whole of its business.
The current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, as well as the financial condition of our clients, and we cannot provide any assurances as of the date of this annual report as to whether such actions will occur or the form that they may take. 13 Table of Contents Our financial condition, results of operations, and cash flows was adversely affected by the COVID-19 pandemic during the year ended December 31, 2022.
The current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, as well as the financial condition of our clients, and we cannot provide any assurances as of the date of this annual report as to whether such actions will occur or the form that they may take. 8 Table of Contents Our UK subsidiaries face risks related to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt their operations.
Reasons for the Offer and Use of Proceeds Not applicable. 10 Table of Contents D. Risk Factors Risks Relating to our Business and Industry Our UK subsidiaries’ operating results are subject to conditions typically affecting hospitality service providers in the UK, any of which could reduce our revenue and limit opportunities for growth.
Our UK subsidiaries’ operating results are subject to conditions typically affecting hospitality service providers in the UK, any of which could reduce our revenue and limit opportunities for growth.
Our Company and our subsidiaries do not have any plan to distribute earnings in the foreseeable future. In 2024, net proceeds of $2,426,460 from a private placement with several investors on September 18, 2024, and from the exercise of Series A and B warrants associated with such private placement were not deposited into MDJM’s bank account.
Instead, the proceeds were deposited directly into MD UK’s bank account. In 2024, net proceeds of $2,426,460 from a private placement with several investors on September 18, 2024, and from the exercise of series A warrants (the “September 2024 Series A Warrants”) associated with such private placement were not deposited into MDJM’s bank account.
If we fail to retain our senior management, our business and results of operations could be materially and adversely affected. 14 Table of Contents The UK subsidiaries provide hospitality services, and their staffs interact with customers on a daily basis.
Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain our senior management, our business and results of operations could be materially and adversely affected. The UK subsidiaries provide hospitality services, and their staff members interact with customers on a daily basis.
Prior to March 1, 2025, our Company’s ability to settle amounts owed under the VIE Agreements relied upon payments made from the VIE to WFOE in accordance with the VIE Agreements. For services rendered to the VIE by WFOE under the Exclusive Business Cooperation Agreement, WFOE was entitled to collect a service fee from the VIE.
Prior to March 1, 2025, our Company’s ability to settle amounts owed under the VIE Agreements relied upon payments made from the former VIE to Former WFOE in accordance with the VIE Agreements.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. 31 Table of Contents If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected. 29 Table of Contents Risks Relating to Our Ordinary Shares and the Trading Market Because we are a Cayman Islands company and all of our business is conducted in the PRC through the PRC operating entities and in the UK through our UK subsidiaries, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.
Because we are a Cayman Islands company and all of our business is conducted in the UK through our UK subsidiaries, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.
The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States. Our corporate affairs are governed by our amended and restated memorandum and articles of association, by the Companies Act (Revised) of the Cayman Islands and by the common law of the Cayman Islands.
The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.
On September 18, 2024, we completed a private placement with several investors, wherein a total of 2,722,224 units were issued at an offering price of $0.90 per unit, for a total purchase price of approximately $2.45 million.
On September 18, 2024, we completed a private placement with several investors, wherein a total of 3,112 units were issued at an offering price of $787.50 per unit, for a total purchase price of approximately $2.45 million. The number of shares issued and price per share for these shares are retroactively adjusted to reflect the March 2026 Reverse Share Split.
While we currently expect to continue qualifying as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future. Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
Any reduction in analyst coverage may further impair the liquidity and market price of our Class A Ordinary Shares. 13 Table of Contents Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases. If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to accurately and timely disclose information about our financial results or prevent fraud.
While we currently expect to continue qualifying as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future. 14 Table of Contents If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to accurately and timely disclose information about our financial results or prevent fraud.
Siping Xu, our chairman and chief executive officer, is particularly important to our future success, due to his substantial experience and reputation in the real estate industry. Neither we nor the UK subsidiaries carry, and do not intend to procure, key person insurance on any of our senior management team.
We place substantial reliance on the real estate industry experience and knowledge of our senior management team as well as their relationships with other industry participants. Mr. Siping Xu, our chairman and chief executive officer, is particularly important to our future success, due to his substantial experience and reputation in the real estate industry.
This, however, is unlikely to affect market transactions of the Ordinary Shares held by our public shareholders. Since our Ordinary Shares are listed, the legal title to such Ordinary Shares and the registration details of those Ordinary Shares in the Company’s register of members remain with the Depository Trust Company.
The legal title to such Class A Ordinary Shares and the registration details of those Class A Ordinary Shares in the Company’s register of members remain with the Depository Trust Company.
In addition, five out of our six directors and officers, namely Siping Xu, Mengnan Wang, Yuan Gong, Zhenlei Hu, and Wei Guan, reside in the PRC; another director, Liding Sun, resides in the United States. All or a substantial portion of the assets of our directors and officers are located outside the United States.
We are incorporated in the Cayman Islands and conduct our operations in the UK through our UK subsidiaries. All of our assets are located outside of the United States. In addition, four out of our six directors and officers, namely Siping Xu, Mengnan Wang, Zhenlei Hu, and Wei Guan, reside in the PRC and Mr.
If we or the UK subsidiaries fail to hire, train, and retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected. We place substantial reliance on the real estate industry experience and knowledge of our senior management team as well as their relationships with other industry participants. Mr.
Such outbreaks could significantly impact the real estate industry, which could severely disrupt the UK subsidiaries’ operations and adversely affect their business, financial condition, and results of operations. If we or the UK subsidiaries fail to hire, train, and retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.
If the overall economic climate deteriorates as a result of Brexit or further departures from the Eurozone, MD German’s future business could be adversely affected, and it could incur substantial losses. ​ 16 Table of Contents Risks Relating to Doing Business in the PRC Our current corporate structure and business operations may be affected by the Foreign Investment Law.
If the overall economic climate deteriorates as a result of Brexit or further departures from the Eurozone, MD German’s future business could be adversely affected, and it could incur substantial losses. ​ 10 Table of Contents Risks Relating to Our Ordinary Shares and the Trading Market Our Class A Ordinary Shares have been suspended from trading on Nasdaq and may be delisted, which has had and may continue to have a material adverse effect on our business and the trading and price of our Class A Ordinary Shares.
If the PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to our offshore subsidiaries.
If any of the UK subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. However, none of the UK subsidiaries have made any dividends or other distributions to the Company or any U.S. investors as of the date of this annual report.
The loss of the services of one or more members of our senior management team due to their departure, or otherwise, could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense.
Neither we nor the UK subsidiaries carry, and do not intend to procure, key person insurance on any of our senior management team. The loss of the services of one or more members of our senior management team due to their departure, or otherwise, could hinder our ability to effectively manage our business and implement our growth strategies.
(4) Represents 138,205 Ordinary Shares directly held by Mr. Siping Xu, our CEO and chairman of the board of directors. Investors are purchasing securities of the holding company, MDJM, instead of securities of our operating entities. Our operations are conducted through MD UK and Mansions.
(4) Represents 129 Class A Ordinary Shares held by 11 shareholders of MDJM, each one of which holds less than 5% of voting power, as of the date of this annual report. Investors are purchasing securities of the holding company, MDJM, instead of securities of our operating entities. Our operations are conducted through MD UK and Mansions.
For a description of the VIE Agreements, see “— The VIE Agreements.” The following diagram illustrates our corporate structure as of the date of this annual report: (1) Represents 10,200,000 Ordinary Shares held by our CEO and chairman of the board of directors, Mr. Siping Xu, through MDJH LTD, which is 100% owned by Mr.
Siping Xu, through MDJH LTD, which is 100% owned by Mr. Siping Xu. (2) Represents 158 Class A Ordinary Shares held by Mr. Siping Xu, our CEO and chairman of the board of directors. (3) Represents 158 Class A Ordinary Shares held by Mr. Mengnan Wang, our CFO.
As of the date of this annual report, we have issued an aggregate of 12,918,667 Ordinary Shares in connection with the private placement. In many circumstances, large issuances of equity for companies have the potential to cause a significant downward pressure on the price of ordinary shares.
As of the date of this annual report, we have issued an aggregate of 15,795 ordinary shares (currently traded as Class A Ordinary Shares) in connection with the private placement.
In the past, stockholders have filed securities class action litigation following periods of market volatility.
In the past, shareholders of public companies have often brought securities class action suits against companies following periods of instability in the market price of their securities.
We will make this determination following the end of any particular tax year. ​
We will make this determination following the end of any particular tax year. Risks Relating to Our Capital Structure Our dual class share structure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.
For services rendered to Mingda Tianjin by WFOE under this agreement, WFOE was entitled to collect a service fee approximately equal to the net income of Mingda Tianjin after the deduction of the required PRC statutory reserve. The Exclusive Business Cooperation Agreement would remain in effect for 10 years, unless it was terminated by WFOE with 30-day prior notice.
For services rendered to the former VIE by Former WFOE under the Exclusive Business Cooperation Agreement, former WFOE was entitled to collect a service fee from the former VIE.
This could have a material and adverse effect on the value of your investment in us and the price of our Ordinary Shares.
As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.
Removed
Our securities are securities of MDJM, the offshore holding company in the Cayman Islands, instead of securities of the VIE in China. The VIE structure provided contractual exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies.
Added
The following diagram illustrates our corporate structure as of the date of this annual report: Notes: * All percentages reflect the voting power, instead of the equity interests, held by each of our shareholders, given that each holder of Class B Ordinary Shares will be entitled to 50 votes per one Class B Ordinary Share and each holder of Class A Ordinary Shares will be entitled to one vote per one Class A Ordinary Share. 3 Table of Contents (1) Represents 11,658 Class B Ordinary Shares held by our CEO and chairman of the board of directors, Mr.
Removed
Xu. 3 Table of Contents (2) Represents an aggregate of 207,029 Ordinary Shares held by 12 shareholders of MDJM, each one of which holds less than 5% of our equity interests, as of the date of this annual report. (3) Represents 141,480 Ordinary Shares directly held by Mr. Mengnan Wang, our CFO.
Added
Asset Transfers Between Our Company and Our Subsidiaries As a holding company, we may rely on dividends and other distributions on equity paid by the UK subsidiaries for our cash and financing requirements.
Removed
The VIE Agreements Due to PRC legal restrictions on foreign ownership in the real estate sector, neither we nor our subsidiaries owned any equity interest in Mingda Tianjin.
Added
In the future, cash proceeds raised from overseas financing activities may be transferred by us to the UK subsidiaries via capital contribution or shareholder loans, as the case may be.
Removed
Instead, for accounting purposes, we controlled and received the economic benefits of Mingda Tianjin’s business operation through the VIE Agreements, which enabled us to consolidate the financial results of the VIE in our consolidated financial statements under U.S. GAAP for the fiscal years ended December 31, 2024, 2023, and 2022.
Added
The transfers and distribution among the Company and its UK subsidiaries are as follows: In March 2026, net proceeds of $2.17 million from a registered direct offering were deposited directly into MD UK’s bank account instead of MDJM’s bank account.
Removed
WFOE, Mingda Tianjin, and the Mingda Tianjin Shareholders entered into the VIE Agreements on April 28, 2018. The VIE Agreements were designed to provide WFOE with the power, rights, and obligations to Mingda Tianjin as set forth under the VIE Agreements.
Added
In February 2026, net proceeds of $5.44 million from a public offering were deposited directly into MD UK’s bank account instead of MDJM’s bank account. In February 2025, net proceeds of $324,000 from exercise of the September 2024 Series A Warrants (as defined below) were not deposited into MDJM’s bank account.
Removed
We had evaluated the guidance in Financial Accounting Standards Board Accounting Standards Codification 810 and determined that we were regarded as the primary beneficiary of the VIE for accounting purposes, as a result of our direct ownership in WFOE and the provisions of the VIE Agreements.
Added
Instead, the proceeds were deposited directly into MD UK’s bank account. On January 1, 2023, Mansions entered into a lease agreement with MD UK to rent “Fernie Castle,” a property owned by MD UK, for use as a hotel site. The annual rent for the property is approximately $241,000 (182,500 pounds sterling, exclusive of VAT, payable monthly on the 25th.
Removed
Each of the VIE Agreements is described in detail below: Exclusive Business Cooperation Agreement Pursuant to the Exclusive Business Cooperation Agreement between Mingda Tianjin and WFOE, WFOE provided Mingda Tianjin with technical support, consulting services, intellectual services, and other management services relating to Mingda Tianjin’s day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information.
Added
Mansions is responsible for all operating expenses, as well as maintenance and repairs of the leased property. The lease agreement does not specify a fixed termination date, but either party may terminate the agreement by providing one month’s notice without incurring penalties. Upon termination, the property must be returned to MD UK.
Removed
Additionally, Mingda Tianjin granted an irrevocable and exclusive option to WFOE to purchase from Mingda Tianjin, any or all of Mingda Tianjin’s assets at the lowest purchase price permitted under PRC laws. Should WFOE exercise such option, the parties would enter into a separate asset transfer or similar agreement.
Added
On January 1, 2023, Mansions entered into a lease agreement with MD UK to rent “Robin Hill,” a property owned by MD UK, for hotel operations. The annual rent is approximately $199,000 (151,000 pounds sterling, excluding VAT, and is payable monthly on the 25th. Mansions is responsible for operating expenses, maintenance, and repairs of the leased property.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeTo address such seasonal challenge, the Company seeks to promote the unique cultural value of its assets as an attraction and combines both online and offline business development strategies to minimize the impact of seasonality on business operations.
Biggest changeTo address such seasonal challenge, we seek to promote the unique cultural value of our assets as an attraction and combines both online and offline business development strategies to minimize the impact of seasonality on business operations. 27 Table of Contents Legal Proceedings From time to time, we may become a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract, and labor and employment claims.
On December 16, 2022, Mansions changed its name from “Mansions Estate Agent Ltd” to “Mansions Catering and Hotel Ltd.” MD UK and Mansions submitted requests and information required to expand their business to hotel operations to the Companies House of UK in December 2022. On August 22, 2023, we incorporated Fernie Castle Culture in the UK.
On December 16, 2022, Mansions changed its name from “Mansions Estate Agent Ltd” to “Mansions Catering and Hotel Ltd.” MD UK and Mansions submitted requests and information required to expand their business to hotel operations to the Companies House of UK in December 2022. On August 22, 2023, we incorporated Fernie Castle Culture Limited in the UK.
As of the date of the annual report, the remodeling is not yet complete. On December 6, 2022, MD UK entered into a Contract for the Sale of Freehold Land (the “Robin Hill Agreement”) with Pioneer Hotels Limited, a United Kingdom company (“Pioneer”).
As of the date of this annual report, the remodeling is not yet complete. On December 6, 2022, MD UK entered into a Contract for the Sale of Freehold Land (the “Robin Hill Agreement”) with Pioneer Hotels Limited, a United Kingdom company (“Pioneer”).
On January 14, 2022, MD Japan was formed pursuant to Japanese laws. MDJM holds 100% of the equity interest in MD Japan. As of the date of this report, MD Japan has not been operative or generated any revenue. On February 16, 2022, MD German was formed pursuant to German laws.
On January 14, 2022, MD Japan was formed pursuant to Japanese laws. MDJM holds 100% of the equity interest in MD Japan. As of the date of this annual report, MD Japan has not been operative or generated any revenue. On February 16, 2022, MD German was formed pursuant to German laws.
In addition to the traditional agency services provided for the primary real estate market, the PRC operating entities provided integrated agency services that incorporate any stage(s) in the residential real estate project value chain, which ranged from planning and design to marketing and sales, and delivery and after-sale services, where they served both their real estate developer clients, the prospective property buyers, and the property buyers.
In addition to the traditional agency services provided for the primary real estate market, the Former PRC Entities provided integrated agency services that incorporate any stage(s) in the residential real estate project value chain, which ranged from planning and design to marketing and sales, and delivery and after-sale services, where they served both their real estate developer clients, the prospective property buyers, and the property buyers.
MDJM holds 100% of the equity interest in MD German. As of the date of this report, MD German has not been operative or generated any revenue.
MDJM holds 100% of the equity interest in MD German. As of the date of this annual report, MD German has not been operative or generated any revenue.
Box 10240, Grand Cayman, KY1-1002, and the phone number of our registered office is+1 345 949 8599. We maintain a corporate website at ir.mdjmjh.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report.
Box 10240, Grand Cayman, KY1-1002, and the phone number of our registered office is +1 345 949 8599. We maintain a corporate website at ir-uoka.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report.
Mansions implements customized management plans holistically curtailed to the needs of its real estate owner clients. It facilitates a variety of ancillary services, including its real estate marketing and planning services, real estate agency services, advertisement planning services, 24-7 multilingual customer service meeting the demand of an international market, and professional onsite butler team.
Mansions implements customized management plans holistically tailored to the needs of its real estate owner clients. It facilitates a variety of ancillary services, including its real estate marketing and planning services, real estate agency services, advertisement planning services, 24-7 multilingual customer service meeting the demand of an international market, and professional onsite butler team.
The PRC operating entities’ principal business was providing primary real estate agency services. The PRC operating entities derived substantially all of their primary real estate agency service revenue from gross commission income received serving as a broker or sales agent at the closing of real estate transactions.
The Former PRC Entities’ principal business was providing primary real estate agency services. The Former PRC Entities derived substantially all of their primary real estate agency service revenue from gross commission income received serving as a broker or sales agent at the closing of real estate transactions.
Mansions commenced operations in 2021. 51% of the equity interest in Mansions was held by MD UK, 41% of the equity interest was held by Ocean Tide Wealth Limited, a specialist mortgage broker in the United Kingdom, and the remaining 8% was held by Mingzhe Zhang.
Mansions commenced operations in 2021. 51% of the equity interest in Mansions was held by MD UK, 41% of the equity interest was held by Ocean Tide Wealth Limited, a specialist mortgage broker in the UK, and the remaining 8% was held by Mingzhe Zhang.
The parties closed this deal on December 6, 2022. MD UK has finished the renovation of the Robin Hill Property and it was open to the public in March 2023. PRC operations The PRC operating entities generated their revenue primarily through providing primary real estate agency services to their real estate developer clients.
The parties closed this deal on December 6, 2022. MD UK has finished the renovation of the Robin Hill Property and it was open to the public in March 2023. Prior PRC operations The Former PRC Entities generated their revenue primarily through providing primary real estate agency services to their real estate developer clients.
In addition, the Company is committed to preserving traditional heritage and integrating culture into its products, creating consumer experiences that align with the market trend of emphasizing a high-quality lifestyle. ● Integration of British Castles and Eastern Gardens in Real-Life Scenarios.
In addition, the Company is committed to preserving traditional heritage and integrating culture into its products, creating consumer experiences that align with the market trend of emphasizing a high-quality lifestyle. 24 Table of Contents ● Integration of British Castles and Eastern Gardens in Real-Life Scenarios.
For example: ● we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; ● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; ● we are not required to provide the same level of disclosure on certain issues, such as executive compensation; ● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; ● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and ● we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.
For example: ● we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; ● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; ● we are not required to provide the same level of disclosure on certain issues, such as executive compensation; ● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; ● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and ● we are not required to comply with Section 16 of the Exchange Act establishing insider liability for profits realized from any “short-swing” trading transaction.
While we conducted business in the PRC prior to the fiscal year ended December 31, 2024 through the PRC operating entities, including Mingda Tianjin, which was a VIE in the PRC, we have no business operations in the PRC as of the date of this annual report. 36 Table of Contents Mansions engages in the asset management business and expects to provide comprehensive UK real estate-related services, including property leasing, property sales, furnishings, routine property maintenance and management, and hospitality and butler services to overseas real estate owners.
While we conducted business in the PRC prior to the fiscal year ended December 31, 2024 through our Former PRC entities, including Mingda Tianjin, which was a VIE in the PRC, we have no business operations in the PRC as of the date of this annual report. 22 Table of Contents Mansions engages in the asset management business and expects to provide comprehensive UK real estate-related services, including property leasing, property sales, furnishings, routine property maintenance and management, and hospitality and butler services to overseas real estate owners.
Primary real estate agency services refer to agency services provided for the primary real estate market, newly constructed and completed residential and commercial real properties. The PRC operating entities’ primary real estate agency services were for residential and business projects.
Primary real estate agency services refer to agency services provided for the primary real estate market, newly constructed and completed residential and commercial real properties. The Former PRC Entities’ primary real estate agency services were for residential and business projects.
Through Mingda Tianjin and its two branch offices in Chengdu (the “Chengdu Branch Office”) (deconsolidated in 2024) and in Suzhou (deconsolidated in 2022), the PRC operating entities owned and operated a primary real estate agency service business in the following local markets, Tianjin, Chengdu, and Suzhou, which represented 100%, 0%, and 0% of their agency revenue for the year ended December 31, 2023, and represented 95%, 5%, and 0% of their agency revenue for the year ended December 31, 2022, respectively.
Through Mingda Tianjin and its two branch offices in Chengdu (the “Chengdu Branch Office”) (deconsolidated in 2024) and in Suzhou (deconsolidated in 2022), the Former PRC Entities owned and operated a primary real estate agency service business in the following local markets, Tianjin, Chengdu, and Suzhou, which represented 100%, 0%, and 0% of their agency revenue for the year ended December 31, 2023, respectively.
Our principal executive offices are located at Fernie Castle, Letham, Cupar, Fife, KY15 7RU, United Kingdom, and our phone number is +44-01337 810 381. Our registered office in Cayman Islands is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O.
Corporate Information Our principal executive offices are located at Fernie Castle, Letham, Cupar, Fife, KY15 7RU, United Kingdom, and our phone number is +44-01337 829 349. Our registered office in Cayman Islands is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O.
The PRC operating entities primarily generated revenue through sales commissions which were either fixed or progressive. They generated 0%, 29.0%, and 96.4% of their total revenue through their primary agency sales services in fiscal years ended December 31, 2024, 2023, and 2022, respectively. The PRC operating entities commenced their operations in 2002.
The Former PRC entities primarily generated revenue through sales commissions which were either fixed or progressive. They generated 0%, 0%, and 29.0% of their total revenue through their primary agency sales services in fiscal years ended December 31, 2025, 2024, and 2023, respectively. The Former PRC entities commenced their operations in 2002.
Mansions’ introduction and business-related information are made into a complete set of publicity materials, which are delivered and distributed in-person by business personnel and customers. Mansions uses its official website and WeChat official account for online marketing efforts and has created electronic brochures for promotion purposes.
Offline marketing efforts happen mainly in the form of in-person visits and exhibitions. Mansions’ introduction and business-related information are made into a complete set of publicity materials, which are delivered and distributed in-person by business personnel and customers. Mansions uses its official website and WeChat official account for online marketing efforts and has created electronic brochures for promotion purposes.
The PRC operating entities provided primary real estate agency services to real estate developers of mainly residential properties. For the years ended December 31, 2023 and 2022, the PRC operating entities’ average residential property broker commission rate was 0.47% and 0.5%, respectively, which represented the average/standard commission rate earned by primary sales agents in a home sale transaction.
The Former PRC Entities provided primary real estate agency services to real estate developers of mainly residential properties. For the year ended December 31, 2023, the Former PRC Entities’ average residential property broker commission rate was 0.47%, which represented the average/standard commission rate earned by primary sales agents in a home sale transaction.
We believe that the establishment of Mansions is a significant step for our global expansion strategy. Mansions commenced operations in 2021 and generated $48,375 (GBP 37,849), $102,909 (GBP 82,729), and $16,263 (GBP13,207) of revenue during the years ended December 31, 2024, 2023, and 2022, respectively. MD UK commenced its operations in 2021.
We believe that the establishment of Mansions is a significant step for our global expansion strategy. Mansions commenced operations in 2021 and generated $89,664 (GBP67,965), $48,375 (GBP37,849), and $102,909 (GBP82,729), of revenue during the years ended December 31, 2025, 2024, and 2023, respectively. MD UK commenced its operations in 2021.
For the year ended December 31, 2024, the PRC operating entities did not provide primary real estate agency services.
For the years ended December 31, 2025 and 2024, the Former PRC Entities did not provide primary real estate agency services.
MD UK focuses on developing and launching real estate development projects and hospitality programs, including hotel operations. See “—Our Services—The UK Operations.” Mingda Tianjin primarily provided primary real estate agency services to its real estate developer clients.
MD UK focuses on developing and launching real estate development projects and hospitality programs, including hotel operations. See “—Our Services—The UK Operations.” Prior to 2023, we also operated our business through the Former PRC Entities, particularly through Mingda Tianjin, which primarily provided primary real estate agency services to its real estate developer clients.
Property, Plants and Equipment Our principal office is located at Fernie Castle, Letham, Cupar, Fife, KY15 7RU, United Kingdom, which we purchased and have owned since August 5, 2022, pursuant to the Agreement with Braveheart on August 3, 2022. See “—B.
Organizational Structure See “Item 3. Key Information.” D. Property, Plants and Equipment Our principal office is located at Fernie Castle, Letham, Cupar, Fife, KY15 7RU, the United Kingdom, which we purchased and have owned since August 5, 2022.
Item 4. INFORMATION ON THE COMPANY A. History and Development of the Company On October 28, 2020, MD UK was formed pursuant to English laws. MDJM holds 100% of the equity interest in MD UK. MD UK commenced its operations in 2021, focusing on developing and launching real estate development projects and hospitality programs, including hotel operations.
MDJM holds 100% of the equity interest in MD UK. MD UK commenced its operations in 2021, focusing on developing and launching real estate development projects and hospitality programs, including hotel operations. On June 15, 2021, Mansions was formed as a limited company under English laws, engaging in the hotel management business.
The PRC operating entities’ customers were primarily real estate developers. They also served real estate design institutes and agencies, urban planning bureaus of various levels of governments, urban rail transportation companies, and urban infrastructure development companies. The PRC operating entities relied on their developer customers for revenue generated from their services primarily as primary real estate sales provider.
The Former PRC Entities’ customers were primarily real estate developers. They also served real estate design institutes and agencies, urban planning bureaus of various levels of governments, urban rail transportation companies, and urban infrastructure development companies.
The Chengdu Branch Office commenced generating revenue in 2019. The PRC operating entities did not generate any agency revenue for the year ended December 31, 2024.
The Chengdu Branch Office commenced generating revenue in 2019. The Former PRC Entities did not generate any agency revenue for the years ended December 31, 2025 and 2024. As of December 31, 2025, Mingda Tianjin had no employees.
The Ordinary Shares to be issued to the investors have been registered through a registration statement on Form F-3 (File No. 333-282701), initially filed with the SEC on October 17, 2024, and declared effective on October 30, 2024.
We filed a registration statement on Form F-3 (File No. 333-282701) to register the September 2024 Series A Warrants, the September 2024 Series B Warrants, and ordinary shares underlying the September 2024 Series A Warrants and the September 2024 Series B Warrants, which was initially filed with the SEC on October 17, 2024 and declared effective by the SEC on October 30, 2024.
The PRC operating entities’ primary real estate agency services offerings included providing primary agency sales services to residential real estate developers at any stage of the development and sale of a residential real estate project.
The Former PRC Entities’ primary real estate agency services offerings included providing primary agency sales services to residential real estate developers at any stage of the development and sale of a residential real estate project. The Former PRC Entities typically served large and mid-sized real estate developers or promising emerging local developers in the markets in which they operated.
Mansions implements customized management plans holistically tailored to the needs of its real estate owner clients. It facilitates a variety of ancillary services, including its real estate marketing and planning services, real estate agency services, advertisement planning services, 24-7 multilingual customer services meeting the demands of an international market, and professional onsite butler team.
It facilitates a variety of ancillary services, including its real estate marketing and planning services, real estate agency services, advertisement planning services, 24 7 multilingual customer services meeting the demands of an international market, and professional onsite butler team. Mansions also manages the operations of the two hotels that MD UK recently purchased, as described below.
Fernie Castle Culture Limited does not currently have any operation. 38 Table of Contents Mansions engages in the asset management business and expects to provide comprehensive UK real estate-related services, including property leasing, property sales, furnishings, routine property maintenance and management, and hospitality and butler services to overseas real estate owners.
Mansions engages in the asset management business and expects to provide comprehensive UK real estate-related services, including property leasing, property sales, furnishings, routine property maintenance and management, and hospitality and butler services to overseas real estate owners. Mansions implements customized management plans holistically tailored to the needs of its real estate owner clients.
Third-party referral service providers were paid a commission if prospective buyers referred by them successfully closed a real estate purchase from projects the PRC operating entities service. 42 Table of Contents Competition The UK Market Mansions competes both with the five major global real estate companies with accumulated experiences and qualifications, such as Jones Lang LaSalle and Savills, and with agents with longer operation history and lower fees, such as Crown Home Buying & Letting and Hanland Global.
Competition The UK Market Mansions competes both with the five major global real estate companies with accumulated experiences and qualifications, such as Jones Lang LaSalle and Savills, and with agents with longer operation history and lower fees, such as Crown Home Buying & Letting and Hanland Global.
As of December 31, 2024, Mingda Tianjin had no employees. 39 Table of Contents For the years ended December 31, 2024, 2023, and 2022, the PRC operating entities completed the sale of 0 units, 6 units, and 82 units, respectively.
For the years ended December 31, 2025, 2024, and 2023, the Former PRC Entities completed the sale of 0 units, 0 units, and 6 units, respectively.
For the year ended December 31, 2024, the PRC operating entities did not generate any revenue. For the year ended December 31, 2023, the PRC operating entities’ top customer represented approximately 28% of their total revenue. The accounts receivable from this customer (project) were $0 as of December 31, 2023.
For the year ended December 31, 2023, the Former PRC Entities’ top customer represented approximately 28% of their total revenue. The accounts receivable from this customer (project) were $0 as of December 31, 2023. Marketing and Brand Promotion The UK Market The main marketing promotion methods of Mansions are currently divided into online and offline channels.
On August 3, 2022, MD UK entered into an Offer to Sell (the “Agreement”) with Braveheart Hotels Limited, a United Kingdom company (“Braveheart”).
MD UK focuses on developing and launching real estate development projects and hospitality programs, including hotel operations, which are managed through Mansions. 25 Table of Contents On August 3, 2022, MD UK entered into an Offer to Sell (the “Agreement”) with Braveheart Hotels Limited, a United Kingdom company (“Braveheart”).
For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditure.” On September 18, 2024, we completed a private placement with several investors, wherein a total of 2,722,224 units were issued at an offering price of $0.90 per unit, for a total purchase price of approximately $2.45 million (the “Offering”).
Private Placement in September 2024 On September 18, 2024, we completed a private placement with several investors, wherein a total of 3,112 units were issued at an offering price of $787.50 per unit, for a total purchase price of approximately $2.45 million.
Legal Proceedings Other than the following, we and the PRC operating entities are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows, or financial condition.
We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash flow, or results of operations.
Our Services The UK operations Two of the UK subsidiaries, MD UK and Mansions, commenced operations in August 2021.
The project is expected to require approximately $10 million in capital investment and is targeted for completion in May 2027. Our Services The UK operations The UK subsidiaries, MD UK and Mansions, commenced operations in August 2021.
The PRC Market The PRC operating entities employed a variety of marketing and brand promotion methods to enhance their brand recognition and attract property buyers, including the following: Advertisements. The PRC operating entities had advertising arrangements with various consumer media outlets in the markets that they operated, including television stations, newspapers, and industry publications.
The PRC Market The Former PRC Entities employed a variety of marketing and brand promotion methods to enhance their brand recognition and attract property buyers, including advertisements, following up with prospective buyers who had visited the sales offices of projects for which they acted as primary sales agent, establishing a brand center to maintain and position their brand image, and third-party referrals.
We believe that this cross-cultural innovation not only brings consumers a brand-new cultural experience but also further enhances the Company’s influence in the cultural sector. 37 Table of Contents ● Sustainable Initiative to Preserve Cultural Heritage. Our e-commerce platform, www.uokaus.com, aims to integrate commerce with cultural heritage, featuring handcrafted products that reflect craftsmanship, artistic traditions, and values.
We believe that this cross-cultural innovation not only brings consumers a brand-new cultural experience but also further enhances the Company’s influence in the cultural sector. Growth Strategies We intend to develop our business by implementing the following strategies: ● Eastern-Themed Animation IP Development.
B. Business Overview Overview We operate our business through MD UK and Mansions.
For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditure.” B. Business Overview Overview We operate our business through MD UK and Mansions.
Each unit includes one Ordinary Share, one Series A warrant to purchase one Ordinary Share at an exercise price of $1.35 per share, and one Series B warrant to purchase such number of Ordinary Shares as determined on the Reset Date, as defined therein.
The February 2026 Series A Warrants have a one-year term, immediately exercisable after issuance, and have an initial exercise price of $49.00 per Class A Ordinary Share, which is subject to reset on the Reset Date (as defined therein).
Their revenue was $nil, $41,954, and $434,371 for the years ended December 31, 2024, 2023, and 2022, respectively. Their net (loss) was $(631,355), $(662,821), and $(1,847,047) for the years ended December 31, 2024, 2023, and 2022, respectively. Competitive Strengths We believe that the following strengths differentiate the UK subsidiaries from their competitors: ● Unique Cultural Brand Creation.
Their revenue was $nil, $nil, and $41,954 for the years ended December 31, 2025, 2024, and 2023, respectively. Their net (loss) was $(30,575), $(631,355), and $(662,821) for the years ended December 31, 2025, 2024, and 2023, respectively. On March 3, 2025, the Company’s Board of Directors approved the termination of the VIE Agreements with Mingda Tianjin.
Removed
On June 15, 2021, Mansions was formed as a limited company under English laws, engaging in the hotel management business.
Added
Item 4. INFORMATION ON THE COMPANY A. History and Development of the Company Corporate History MDJM is a Cayman Islands exempted company incorporated on January 26, 2018. MDJM wholly owns MDJH Hong Kong, which was incorporated on February 9, 2018 under the laws of Hong Kong.
Removed
Fernie Castle Culture expects to engage in the management of the brand name of “Fernie” and developing “Fernie” brand name related products and services, including cultural products and services. 35 Table of Contents Mingda Tianjin started offering primary real estate agency services in 2002. Mr. Siping Xu, our chief executive officer, controls 98.27% of Mingda Tianjin.
Added
Prior to August 25, 2025, MDJH Hong Kong held a 100% ownership interest in Mingda Beijing, a limited liability company organized on March 9, 2018 under the laws of the PRC. Mingda Beijing was classified as a wholly foreign-owned enterprise.
Removed
As of December 31, 2024, for accounting purposes, we controlled and received the economic benefits of the VIE through the VIE Agreements, which enabled us to consolidate the financial results of the VIE in our consolidated financial statements under U.S. GAAP. The VIE Agreements are described under “—B.
Added
On April 28, 2018, Mingda Beijing entered into a series of contractual arrangements (the “VIE Agreements”), with Mingda Tianjin and Mingda Tianjin’s shareholders. Mingda Tianjin, a limited liability company organized on September 25, 2002 under the laws of the PRC, changed its name to Mingdajiahe (Tianjin) Co., Ltd. on February 2, 2021.
Removed
Business Overview—The VIE Agreements.” MDJM is a holding company with no business operation other than holding the shares in MDJH Hong Kong, also a pass-through entity with no business operation. WFOE was exclusively engaged in the business of managing the operations of Mingda Tianjin.
Added
Mingda Tianjin conducted MDJM’s primary business operations in China prior to 2023.
Removed
On March 1, 2025, WFOE entered into agreements of termination with Mingda Tianjin and the shareholders of the VIE, pursuant to which the VIE Agreements were terminated. As a result, the financial results of the VIE will not be consolidated in our consolidated financial statements beginning with our annual report for the fiscal year ending December 31, 2025.
Added
Since 2023, Mingda Tianjin has scaled down and ceased the provision of real estate agency services due to changes to the Chinese real estate market and, as of the date of this annual report, Mingda Tianjin has no business operations. 18 Table of Contents On October 28, 2020, MD UK was formed pursuant to English laws.
Removed
In connection with the Offering, we entered into a Securities Purchase Agreement with investors containing customary representations and warranties.
Added
Fernie Castle Culture Limited expected to engage in the management of the brand name of “Fernie” and developing “Fernie” brand name related products and services, including cultural products and services. Fernie Castle Culture Limited did not have any operation. As of the date of this annual report, Fernie Castle Culture Limited has been dissolved.
Removed
We received net cash proceeds of approximately $2.17 million (after deducting the placement agent fee and expenses of the Offering), to be used for working capital and general corporate purposes.
Added
On March 3, 2025, the Company’s board of directors approved the termination of the contractual arrangements with Mingda Tianjin. Subsequently, on March 1, 2025, Mingda Beijing entered into termination agreements with Mingda Tianjin and its shareholders, effectively terminating the VIE Agreements.
Removed
On October 23, 2024, we received a notice from Nasdaq that we failed to comply with the minimum closing bid price requirement set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules as the closing bid price per Ordinary Share had been below US$1.00 for a period of 30 consecutive business days.
Added
As a result, Mingda Beijing ceased providing business support and consulting services to Mingda Tianjin and was no longer considered its beneficial owner.
Removed
The Nasdaq notification letter does not result in the immediate delisting of our securities. Pursuant to Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we have a compliance period of 180 calendar days, or until April 21, 2025 to regain compliance with Nasdaq’s minimum bid price requirement.
Added
On March 5, 2025, the local authorities in Beijing issued a Notice of Deregistration of Equity Pledge to each shareholder of Mingda Tianjin, formally completing the deregistration process and officially ending the contractual arrangements between Mingda Beijing and Mingda Tianjin.
Removed
If we do not regain compliance during such 180-day period, we may be eligible for an additional 180 calendar days, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq except for Nasdaq Listing Rule 5550(a)(2), and provides Nasdaq with a written notice of its intention to cure this deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
Added
On June 23, 2025, the board of directors of the Company approved a resolution to commence the voluntary dissolution of two subsidiaries in connection with the termination and deconsolidation of the VIE structure: Mingda Beijing and MDJH Hong Kong. These entities did not engage in any material business activities other than their role in maintaining the VIE structure.
Removed
The PRC operating entities typically served large and mid-sized real estate developers, such as Ping An Real Estate Co., Ltd., China Vanke Co., Ltd., China Merchants Property Development Co., Ltd., Tianjin Metro Resources Investment Co., Ltd., Jingrui Real Estate (Group) Co., Ltd., Tianjin Real Estate Development (Group) Co., Ltd., Tianjin Teda Development Co., Ltd., and Tianjin City Investment Binhai Real Estate Management Co., Ltd., or promising emerging local developers in the markets in which they operated.
Added
As of the date of this annual report, the dissolution process of MDJH Hong Kong is ongoing. On August 25, 2025, Mingda Beijing was officially dissolved.
Removed
This initiative aligns with our broader efforts to expand the Company’s commercial presence and support cultural appreciation and craftsmanship-based retail. We believe that the platform is more than just a marketplace, as it is designed to offer products that carry historical and cultural significance that go beyond mere functionality.
Added
Each unit includes one ordinary share, one September 2024 Series A Warrant, and one September 2024 Series B Warrant.
Removed
Each item is selected for its artistic authenticity, craftsmanship, and cultural depth, offering consumers an opportunity to own pieces that reflect heritage and traditional values. The newly launched platform serves a global audience and is designed to offer quality lifestyle products that embody the Company’s values.
Added
From October 31, 2024 to November 7, 2024, the investors fully exercised their September 2024 Series B Warrants, resulting in the issuance of a total of 9,781 Ordinary Shares by the Company for a total consideration of $8,518. 19 Table of Contents In February 2025, investors exercised 1,715 September 2024 Series A Warrants at an exercise price of $189 per warrant for a total consideration of $324,000.
Removed
Through carefully curated selections, the Company seeks to share these principles worldwide, providing consumers with products that celebrate tradition, cultural heritage, and craftsmanship .
Added
As of the date of this annual report, we have issued an aggregate of 15,795 ordinary shares (currently traded as Class A Ordinary Shares) in connection with the private placement.
Removed
Growth Strategies Our board of directors has adjusted the growth strategies to reduce the scale of operations of the PRC operating entities and shift our focus onto developing the overseas operations that are currently propelled by our UK, Japanese, and German subsidiaries.
Added
Reverse Share Split in April 2025 On April 28, 2025, at the Company’s extraordinary general meeting, the shareholders of the Company passed the resolution authorizing that each of the 50,000,000 authorized shares in the Company of US$0.001 par value (including all issued ordinary shares and any unissued ordinary shares) each be consolidated on a 25-to-1 basis, such that the Company’s authorized ordinary shares be consolidated from 50,000,000 ordinary shares of US$0.001 par value to 2,000,000 ordinary shares of US$0.025 par value each.
Removed
From 2021 to 2023, the PRC operating entities continually reduced their real estate agency programs and decreased the size of their sales team on relevant projects. Due to such downscaling, the PRC operating entities did not have any operations in China in 2024 and do not have any operations as of the date of this annual report.
Added
Dual Class Restructuring in September 2025 On September 22, 2025, at the 2025 annual general meeting of shareholders of the Company, the shareholders of the Company passed resolutions to authorize, establish and designate two new classes of ordinary shares of US$0.025 par value each, being Class A Ordinary Shares and Class B Ordinary Shares, with each of the Class A Ordinary Shares and Class B Ordinary Shares having the rights and privileges set out in the second amended and restated memorandum and articles of association of the Company, and to redesignate (i) 408,000 authorized and issued ordinary shares held by MDJH LTD as Class B Ordinary Shares; (ii) 660,686 of the authorized and issued ordinary shares, not including those held by MDJH LTD, as Class A Ordinary Shares; and (iii) 931,314 of the authorized but unissued ordinary shares as Class A Ordinary Shares.
Removed
The services provided by the PRC operating entities, including real estate marketing and planning services, real estate agency services, and advertisement planning services, have translated into experiences that may help our other subsidiaries in the UK, Germany, Japan, and other prospective markets to gain competitive advantages.
Added
Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for the following voting and conversion rights: (i) in respect of all matters subject to vote at general meetings of the Company, each holder of Class A Ordinary Shares is entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares is entitled to 50 votes per one Class B Ordinary Share; and (ii) the Class A Ordinary Shares will not be convertible into shares of any other class and the Class B Ordinary Shares will be convertible into Class A Ordinary Shares at any time after issuance at the option of the holder.
Removed
Currently, the UK subsidiaries are the focus of future growth and market expansion, with the following strategies: ● Acquire Properties with Rich Historical Value. The UK subsidiaries started to acquire real properties with rich historical value in the UK in 2022.
Added
Each one Class B Ordinary Share will be Convertible into one Class A Ordinary Share.
Removed
MD UK completed the acquisition of Fernie Castle in August 2022 and the acquisition of the Robin Hill Hotel and the Villa in December 2022. See “—Our Services—The UK Operations.” We plan to continue searching for potential acquisition targets, from medieval castles to buildings from a particular historical period, in the UK and other European countries.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

82 edited+60 added−88 removed52 unchanged
Biggest changeThe provision for income tax for the years ended December 31, 2024, 2023, and 2022 were summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Current ​ $ — ​ $ — ​ $ — Deferred tax adjustment ​ — ​ ​ 10,835 ​ ​ 3,020 Total income tax ​ $ — ​ $ 10,835 ​ $ 3,020 ​ Reconciliation of the statutory income tax rate and the Company’s effective income tax rate for the years ended December 31, 2024, 2023, and 2022, respectively, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ China 2024 2023 2022 Hong Kong statutory income tax rate 16.50 % 16.50 % 16.50 % Valuation allowance recognized with respect to the loss in Hong Kong Company (16.50) % (16.50) % (16.50) % PRC statutory income tax rate 25.00 % 25.00 % 25.00 % Effect of income tax exemptions and reliefs in the PRC companies (25.00) % (25.00) % (25.00) % Effect of valuation and deferred tax adjustments 0.00 % (1.65) % 0.00 % Effective rate 0.00 % (1.65) % 0.00 % ​ ​ ​ ​ ​ ​ ​ ​ United Kingdom ​ ​ ​ ​ ​ ​ ​ UK statutory income tax rate ​ 19.00 % 19.00 % 19.00 % Valuation allowance recognized with respect to the loss in UK ​ (19.00) % (19.00) % (19.00) % Effect of valuation and deferred tax adjustments 0.00 % 0.00 % (1.65) % Effective rate 0.00 % 0.00 % (1.65) % ​ Impact of Inflation In recent years, inflation has not had a material impact on our results of operations.
Biggest changeReconciliation of the statutory income tax rate and the Company’s effective income tax rate for the years ended December 31, 2025, 2024, and 2023, respectively, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ China ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Hong Kong statutory income tax rate 16.50 % 16.50 % 16.50 % Valuation allowance recognized with respect to the loss in Hong Kong Company (16.50) % (16.50) % (16.50) % PRC statutory income tax rate 25.00 % 25.00 % 25.00 % Valuation allowance recognized with respect to the loss in PRC Company (25.00) % (25.00) % (25.00) % Effect of valuation and deferred tax adjustments 0.00 % 0.00 % (1.65) % Effective rate 0.00 % 0.00 % (1.65) % ​ ​ ​ ​ ​ ​ ​ ​ United Kingdom ​ ​ ​ ​ ​ ​ ​ UK statutory income tax rate ​ 19.00 % 19.00 % 19.00 % Valuation allowance recognized with respect to the loss in UK ​ (19.00) % (19.00) % (19.00) % Effect of valuation and deferred tax adjustments 0.00 % 0.00 % 0.00 % Effective rate 0.00 % 0.00 % 0.00 % ​ Uncertain tax position The management evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions.
Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. The Group elected not to recognize on the balance sheet leases with terms of 12 months or less.
Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. The Group elected not to recognize on balance sheet leases with terms of 12 months or less.
The Group typically only includes the initial lease term in its assessment of a lease arrangement. Options to extend a lease are not included in the Group’s assessment unless there is reasonable certainty that the Group will renew.
The Group typically only includes the initial lease term in its assessment of a lease arrangement. Options to extend the lease are not included in the Group’s assessment unless there is reasonable certainty that the Group will renew.
The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This report contains forward-looking statements. See “Item 5. Operating and Financial Review and Prospects—G.
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This report contains forward-looking statements. See “Item 5. Operating and Financial Review and Prospects—G.
Operating Results Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Change in $ Change in % Revenue ​ $ 48,375 ​ $ 144,863 ​ $ (96,488) (66.61) % ​ Revenue for the year ended December 31, 2024 was $48,375, representing a decrease of $96,488, or 67%, from $144,863 in 2023.
Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ Change in $ ​ ​ ​ Change in % Revenue ​ $ 48,375 ​ $ 144,863 ​ $ (96,488) ​ (66.61) % ​ Revenue for the year ended December 31, 2024 was $48,375, representing a decrease of $96,488, or 67%, from $144,863 in 2023.
Customer deposits held by banks, building societies and credit unions (including in Northern Ireland) in UK establishments that are authorized by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme (FSCS) up to GBP85,000, which was approximately $106,000.
Customer deposits held by banks, building societies and credit unions (including in Northern Ireland) in UK establishments that are authorized by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme (FSCS) up to GBP85,000, which was approximately $114,000.
Our operating results through the UK subsidiaries are subject to general conditions typically affecting the real estate services industry, including changes in governmental policies and laws affecting real estate and real estate financing, uneven economic growth and development across different regions of the UK, supply of and demand for housing and other types of property in local markets, entry barriers and competition from other real estate services companies, and increases in operating costs and expenses due to inflation and other factors.
Trend Information Factors Affecting Our Results of Operations Our operating results through the UK subsidiaries are subject to general conditions typically affecting the real estate services industry, including changes in governmental policies and laws affecting real estate and real estate financing, uneven economic growth and development across different regions of the UK, supply of and demand for housing and other types of property in local markets, entry barriers and competition from other real estate services companies, and increases in operating costs and expenses due to inflation and other factors.
The Group does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures. On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which requires disaggregated disclosure of income statement expenses for public business entities.
The Group does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures. 47 Table of Contents On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which requires disaggregated disclosure of income statement expenses for public business entities.
The Ordinary Shares were valued at $1.27 each, based on the closing market price of the Ordinary Shares on Nasdaq on May 31, 2024. As a result, $1,493,418 was recognized as payroll, payroll taxes and others for the year ended December 31, 2024. Professional fees consist of legal, US GAAP audit, consulting, investors relationship and other U.S.
The Ordinary Shares were valued at $1,111.25 each, based on the closing market price of the Ordinary Shares on Nasdaq on May 31, 2024. As a result, $1,493,418 was recognized as payroll, payroll taxes and others for the year ended December 31, 2024. Professional fees consist of legal, US GAAP audit, consulting, investors relationship and other U.S.
Payroll, payroll taxes, and others were $1,792,080 in 2024, an increase of $1,219,840, or 213%, compared to $572,240 in 2023. The increase in payroll, payroll taxes and others was primarily attributed to stock-based compensation of $1,493,418. On May 31, 2024, the Company issued 1,175,920 Ordinary Shares to 13 employees and officers as part of their 2024 compensation package.
Payroll, payroll taxes, and others were $1,792,080 in 2024, an increase of $1,219,840, or 213%, compared to $572,240 in 2023. The increase in payroll, payroll taxes and others was primarily attributed to stock-based compensation of $1,493,418. On May 31, 2024, the Company issued 1,344 Ordinary Shares to 13 employees and officers as part of their 2024 compensation package.
Due to the downturn in China’s real estate market, management determined that recovery was unlikely and applied a 100% CECL rate to receivables outstanding for over one year in 2024. In accordance with ASU 2016-13, the Group assesses the risk of accounts receivable in all ages and makes reservation for the risk of accounts receivable in all ages.
Due to the downturn in China’s real estate market, management determined that recovery was unlikely and applied a 100% CECL rate to receivables outstanding for over one year in 2024. 32 Table of Contents In accordance with ASU 2016-13, the Group assesses the risk of accounts receivable in all ages and makes reservation for the risk of accounts receivable in all ages.
Currently, the Company does not have any plans to acquire new assets in China. In 2024, the allowance for CECL on trade receivables was $134,960, compared to a recovery of $159,509 in 2023. As of December 31, 2024, the Company had accounts receivable of $134,960 (RMB 971,135), mainly from one vendor.
Currently, the Company does not have any plans to acquire new assets in China. In 2024, the allowance for CECL on trade receivables was $134,960, compared to a recovery of $159,509 in 2023. As of December 31, 2024, the Company had accounts receivable of $134,960 (RMB971,135), mainly from one vendor.
For consolidation purposes, we generally translate assets and liabilities into USD at exchange rates in effect on the balance sheet date, and income statement items at average exchange rates for the reporting period. Adjustments resulting from the translation of their financial statements are recorded as accumulated other comprehensive income (loss).
Our reporting currency is USD. For consolidation purposes, we generally translate assets and liabilities into USD at exchange rates in effect on the balance sheet date, and income statement items at average exchange rates for the reporting period. Adjustments resulting from the translation of their financial statements are recorded as accumulated other comprehensive income (loss).
At the beginning of 2019, China State Administration of Taxation issued a new income tax abatement policy to small business with income tax less than RMB3 million, number of employees less than 300, and total assets less than RMB50 million for the tax periods from January 1, 2019, to December 31, 2021.
At the beginning of 2019, China State Administration of Taxation issued an income tax abatement policy to small business with taxable income of less than RMB3 million, a number of employees of less than 300, and total assets of less than RMB50 million for the tax periods from January 1, 2019 to December 31, 2021.
Cash Flows for the Year ended December 31, 2024, Compared to the Year Ended December 31, 2023 Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets.
Cash Flows for the Year ended December 31, 2025, Compared to the Year Ended December 31, 2024 Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical to the comparable changes reflected on the consolidated balance sheets.
The 81 Table of Contents VAT rate applicable to subsidiaries and consolidated VIE of the Company is 6%. The Company accrues VAT payable when revenue is recognized. The UK government charges VAT on business services and commission. The standard VAT rate is 20%. All income of Mansions in UK will be subject to VAT.
The VAT rate applicable to subsidiaries and consolidated VIE of the Company is 6%. The Company accrues VAT payable when revenue is recognized. The UK government charges VAT on business services and commission. The standard VAT rate is 20%. All income of Mansions in UK will be subject to VAT. The Company accrues VAT payable when revenue is recognized.
When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in the results of operations. ​ ​ ​ ​ ​ Estimated Useful Classification Life Buildings ​ 50 years Building fixtures and furniture 4 to 10 years Office Equipment and Fixtures 3 to 5 years Software 2 or 10 years Vehicles 4 or 5 years ​ 79 Table of Contents Revenue Recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”).
When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in the results of operations. ​ ​ ​ ​ ​ ​ ​ ​ Estimated Useful Classification ​ ​ ​ Life Buildings and leasehold improvement ​ 50 years Building fixtures, furniture and landscaping ​ ​ ​ 4 to 10 years Office Equipment and Fixtures 3 to 5 years Software 2 or 10 years Vehicles 4 or 5 years ​ Revenue Recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”).
Ancillary Services: Revenue from other ancillary services, such as parking and recreational facilities, is recognized at the point in time when the service is provided to the customer. 80 Table of Contents The transaction price for each contract is determined based on the consideration agreed upon with the customer.
Ancillary Services: Revenue from other ancillary services, such as parking and recreational facilities, is recognized at the point in time when the service is provided to the customer. The transaction price for each contract is determined based on the consideration agreed upon with the customer.
The Company’s total unprotected cash in bank amounted to approximately $1,701,000 and $368,000, as of December 31, 2024 and 2023, respectively. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
The Company’s total unprotected cash in bank amounted to approximately $516,000 and $1,701,000, as of December 31, 2025 and 2024, respectively. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.
The exchange rates in effect are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, US Dollar Exchange Rate ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 At end of the period - RMB 7.2993 ​ 7.0999 ​ 6.8987 ​ 6.3524 ​ 6.5378 Average rate for the period ended - RMB ​ 7.1957 ​ 7.0809 ​ 6.7347 ​ 6.4491 ​ 6.9003 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At end of the period – GBP ​ 0.7987 ​ 0.7847 ​ 0.8315 ​ 0.7419 ​ — Average rate for the period ended – GBP 0.7824 ​ 0.8039 ​ 0.8121 ​ 0.7327 ​ — ​ We did not have any foreign currency investments hedged by currency borrowings or other hedging instruments for the years ended December 31, 2024, 2023, and 2022.
The exchange rates in effect are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, US Dollar Exchange Rate ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 At end of the period - RMB 6.9931 ​ 7.2993 ​ 7.0999 ​ 6.8987 ​ 6.3524 Average rate for the period ended - RMB ​ 7.1875 ​ 7.1957 ​ 7.0809 ​ 6.7347 ​ 6.4491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At end of the period – GBP ​ 0.7437 ​ 0.7987 ​ 0.7847 ​ 0.8315 ​ 0.7419 Average rate for the period ended – GBP 0.7580 ​ 0.7824 ​ 0.8039 ​ 0.8121 ​ 0.7327 We did not have any foreign currency investments hedged by currency borrowings or other hedging instruments for the years ended December 31, 2025, 2024, and 2023.
As the Series B warrants are designed for anti-dilution protection, the exercise price was $0.001 per unit. Accordingly, the Company received $8,558 in cash, representing the aggregate par value of the shares issued.
As the September 2024 Series B Warrants are designed for anti-dilution protection, the exercise price was $0.875 per unit. Accordingly, the Company received $8,558 in cash, representing the aggregate par value of the shares issued.
From 1 April 2023, the main rate of corporation tax increased from 19% to 25%, and a new 19% small profits rate of corporation tax was introduced for companies whose profits do not exceed 50,000 pounds sterling (GBP).
From 1 April 2023, the main rate of corporation tax increased from 19% to 25%, and a new 19% small profits rate of corporation tax was introduced for companies whose profits do not exceed 50,000 pounds sterling (GBP). The UK tax year ends on April 5.
Income Taxes The PRC operating entities’ operation in China was governed by the income tax laws of the PRC. The Chinese Corporate Income Tax applies to all companies in China, foreign owned and Chinese owned. It is levied on company profits at a rate of 25%.
Income Taxes The PRC operating entities’ operation in China was governed by the income tax laws of the PRC. The Chinese Corporate Income Tax applies to all companies in China, foreign owned and Chinese owned. It is levied on company profits at a rate of 25%. The Company’s operations in the UK are subject to UK corporation tax.
The warrants are initially measured at fair value upon issuance and are subsequently remeasured at each reporting date, with changes in fair value recognized in the statement of operations. As of December 31, 2024, the fair value of the warrant liabilities was $1,424,932, which is presented as a current liability on the balance sheet.
The warrants are initially measured at fair value upon issuance and are subsequently remeasured at each reporting date, with changes in fair value recognized in the statement of operations. As of December 31, 2025, the fair value of the warrant liabilities was $333,657, which is presented as a current liability on the balance sheet.
Between November 7, 2024, and December 18, 2024, four investors exercised a total of 1,038,889 Series A Warrants, generating cash proceeds of $224,400 for the Company. As of December 31, 2024, 15,975,012 Series A Warrants remained outstanding, with a fair value of $1,424,932 recorded as a current liability.
Between November 7, 2024, and December 18, 2024, four investors exercised a total of 1,188 September 2024 Series A Warrants, generating cash proceeds of $224,400 for the Company. As of December 31, 2024, 18,258 September 2024 Series A Warrants remained outstanding, with a fair value of $1,424,932 recorded as a current liability.
According to the new tax abatement policy, the income tax rate was reduced to 5% for small business with income tax less than RMB1 million, and the income tax rate was reduced to 10% for small business with income tax from RMB1 million to RMB3 million.
According to the tax abatement policy, the income tax rate was reduced to 5% for small businesses with a taxable income less than RMB1 million, the income tax rate was reduced to 10% for small business with taxable income from RMB1 million to RMB3 million.
Other general and administrative expenses related to UK operations were $168,883, representing a decrease of $86,650, or 34%, from $255,533 in 2023, which reflected the Company’s cost-control efforts in the UK. 68 Table of Contents Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Change in US$ Change in % ​ Revenue ​ $ 48,375 ​ $ 144,863 ​ $ (96,488) (67) % Operating expenses ​ 2,838,290 ​ 1,469,020 ​ 1,369,270 93 % (Loss) income from operations ​ (2,789,915) ​ (1,324,157) ​ (1,465,758) 111 % Interest and other income (expense), net ​ 346 ​ 155,796 ​ (155,450) (100) % Gain (loss) on sale of asset ​ (1,369) ​ (12) ​ (1,357) *N/A ​ Gain on deconsolidation ​ 14,404 ​ — ​ 14,404 ​ *N/A ​ Loss on valuation of warrants ​ (493,274) ​ — ​ (493,274) *N/A ​ Gain (loss) on foreign currency transactions ​ 80,603 ​ 18,762 ​ 61,841 330 % Total other income and expenses ​ (399,290) ​ 174,546 ​ (573,836) (329) % Loss before income tax ​ ​ (3,189,205) ​ ​ (1,149,611) ​ ​ (2,039,594) ​ 177 % Provision for income tax ​ — ​ (10,835) ​ 10,835 *N/A ​ Net loss ​ $ (3,189,205) ​ $ (1,160,446) ​ $ (2,028,759) 175 % * N/A, percentage change is not meaningful Total other expenses were $399,290 in 2024, compared to net other income of $174,546 in 2023, reflecting a change of $573,836.
Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ Change in US$ ​ ​ ​ Change in % Revenue ​ $ 48,375 ​ $ 144,863 ​ $ (96,488) ​ (67) % Operating expenses ​ 2,838,290 ​ ​ 1,469,020 ​ ​ 1,369,270 ​ 93 % (Loss) income from operations ​ (2,789,915) ​ ​ (1,324,157) ​ ​ (1,465,758) ​ 111 % Interest and other income (expense), net ​ 346 ​ ​ 155,796 ​ ​ (155,450) ​ (100) % Gain (loss) on sale of asset ​ (1,369) ​ ​ (12) ​ ​ (1,357) ​ *N/A ​ Gain on deconsolidation ​ 14,404 ​ ​ — ​ ​ 14,404 ​ *N/A ​ Loss on valuation of warrants ​ ​ (493,274) ​ ​ — ​ ​ (493,274) ​ *N/A ​ Gain (loss) on foreign currency transactions ​ 80,603 ​ ​ 18,762 ​ ​ 61,841 ​ 330 % Total other income and expenses ​ (399,290) ​ ​ 174,546 ​ ​ (573,836) ​ (329) % Loss before income tax ​ ​ (3,189,205) ​ ​ (1,149,611) ​ ​ (2,039,594) ​ 177 % Provision for income tax ​ ​ — ​ ​ (10,835) ​ ​ 10,835 ​ *N/A ​ Net loss ​ $ (3,189,205) ​ $ (1,160,446) ​ $ (2,028,759) ​ 175 % * N/A, percentage change is not meaningful Total other expenses were $399,290 in 2024, compared to net other income of $174,546 in 2023, reflecting a change of $573,836.
A lease is classified as a finance lease when the lease meets any of the following criteria: (i) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, (ii) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all (90% or more) of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
A contract is a lease or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. 44 Table of Contents A lease is classified as a finance lease when the lease meets any of the following criteria: (i) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, (ii) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all (90% or more) of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
Under the current laws of the Cayman Islands, MDJM is not subject to tax on income or capital gain. Additionally, upon payments of dividends by MDJM to its shareholders, no Cayman Islands withholding tax will be imposed. MDJH Hong Kong was incorporated under the laws of Hong Kong and is subject to the uniform tax rate of 16.5%.
MDJM was incorporated under the laws of the Cayman Islands. Under the current laws of the Cayman Islands, MDJM is not subject to tax on income or capital gain. Additionally, upon payments of dividends by MDJM to its shareholders, no Cayman Islands withholding tax will be imposed.
Critical Accounting Estimates Basis of Consolidation The Company’s consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE, and the branch offices of the VIE.
Critical Accounting Estimates Basis of Consolidation The Company’s consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC.
The ASUs not listed below were assessed and determined to be either not applicable or are expected to have a minimal impact on the Group’s consolidated financial position and/or results of operations.
Recently Issued Accounting Pronouncements The Group considers the applicability and impact of all ASUs. The ASUs not listed below were assessed and determined to be either not applicable or are expected to have a minimal impact on the Group’s consolidated financial position and/or results of operations.
Financing activities On September 18, 2024, the Company completed a private placement with several investors, issuing a total of 2,722,224 units at an offering price of $0.90 per unit, for gross proceeds of $2,450,002. After deducting private placement costs of $256,500, the Company received net cash proceeds of $2,193,502.
On September 18, 2024, the Company completed a private placement with several investors, issuing a total of 3,112 units at an offering price of $787.50 per unit, for gross proceeds of $2,450,002. After deducting offering costs of $256,500, the Company received net proceeds of $2,193,502.
Operating Expenses The following table summarized the PRC operating entities’ operating expenses for the years ended December 31, 2024 and 2023: 67 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Change in US$ % Change Operating Expenses ​ ​ ​ ​ ​ ​ ​ Selling expenses ​ $ — ​ $ 63 ​ $ (63) ​ (100) % Payroll, payroll taxes and others ​ 1,792,080 ​ 572,240 ​ ​ 1,219,840 ​ 213 % Professional fees ​ 453,846 ​ 525,625 ​ ​ (71,779) ​ (14) % Depreciation and amortization ​ 75,501 ​ 76,246 ​ ​ (745) ​ (1) % (Recovery) allowance for CECL – trade receivable, net ​ 134,960 ​ (159,509) ​ ​ 294,469 ​ (185) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other general and administrative ​ 381,903 ​ 454,355 ​ ​ (72,452) ​ (16) % Total operating expenses ​ $ 2,838,290 ​ $ 1,469,020 ​ $ 1,369,270 ​ 93 % ​ The operating expenses for the year ended December 31, 2024 were $2,838,290, reflecting an increase of $1,369,270, or 93%, compared to $1,469,020 in 2023.
The decline was primarily due to two factors: the absence of real estate agent income in 2024, compared to $41,954 in 2023, and because Fernie Castle remained in the design and parliamentary approval phase during 2024, resulting in reduced hotel revenue. ​ 31 Table of Contents Operating Expenses The following table summarized the PRC operating entities’ operating expenses for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ Change in US$ ​ ​ ​ % Change Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ Selling expenses ​ $ — ​ $ 63 ​ $ (63) ​ (100) % Payroll, payroll taxes and others ​ 1,792,080 ​ 572,240 ​ 1,219,840 ​ 213 % Professional fees ​ 453,846 ​ 525,625 ​ (71,779) ​ (14) % Depreciation and amortization ​ 75,501 ​ 76,246 ​ (745) ​ (1) % (Recovery) allowance for CECL – trade receivable, net ​ 134,960 ​ (159,509) ​ 294,469 ​ (185) % Other general and administrative ​ 381,903 ​ 454,355 ​ (72,452) ​ (16) % Total operating expenses ​ $ 2,838,290 ​ $ 1,469,020 ​ $ 1,369,270 ​ 93 % ​ The operating expenses for the year ended December 31, 2024 were $2,838,290, reflecting an increase of $1,369,270, or 93%, compared to $1,469,020 in 2023.
On August 26, 2024, the Company issued 23,360 Ordinary Shares to another third-party consultant as consideration for signing a service contract for the Ancient Eastern Garden project at Fernie Castle in Scotland, UK. The shares were valued at $1.12 per share, based on the closing market price of the Ordinary Shares on Nasdaq on August 26, 2024.
On May 14, 2024, the Company issued 27 Ordinary Shares to a third-party consultant as consideration for signing a service contract for the Ancient Eastern Garden project at Fernie Castle in Scotland, UK. The shares were valued at $927.50 per share, based on the closing market price of the Ordinary Shares on Nasdaq on May 14, 2024.
Dollars. Foreign currency-denominated results of operations and cash flows are translated at the average exchange rate during the reporting period. Assets and liabilities in foreign currencies are translated at the exchange rate in effect at the balance sheet date, while equity in the functional currency is translated at the historical rate of exchange at the time of capital contribution.
Assets and liabilities in foreign currencies are translated at the exchange rate in effect at the balance sheet date, while equity in the functional currency is translated at the historical rate of exchange at the time of capital contribution.
The 2022 expenditures were primarily related to real properties purchased in the UK. Contractual Obligations As of December 31, 2024, the Company had 15,975,012 Series A warrants outstanding, which were issued in connection with the private placement completed on September 18, 2024. The Company classifies these outstanding warrants as liabilities on the balance sheet due to their derivative characteristics.
Contractual Obligations As of December 31, 2025, the Company had 16,543 units of September 2024 Series A Warrants outstanding, which were issued in connection with the private placement completed on September 18, 2024. The Company classifies these outstanding warrants as liabilities on the balance sheet due to their derivative characteristics.
Of the total Series B warrants exercised, 6,861,114 units of Series B warrants were determined by the floor price of $0.216 per share, while 1,696,440 units were determined by a price of 90% of the lowest trading price of the Ordinary Shares over the preceding ten-day period, which was slightly higher than the floor price.
Of the total September 2024 Series B Warrants exercised, 7,842 units of September 2024 Series B Warrants were determined by the floor price of $189.00 per share, while 1,939 units were determined by a price of 90% of the lowest trading price of the Ordinary Shares over the preceding ten-day period, which was slightly higher than the floor price.
Although we have not been materially affected by inflation since our inception, we can provide no assurance that we will not be affected in the future by higher rates of inflation in China or in the UK. If inflation rises, it may materially and adversely affect the PRC operating entities or the UK subsidiaries and our business.
Although we have not been materially affected by inflation since our inception, we can provide no assurance that we will not be affected in the future by higher rates of inflation in China or in the UK.
Most of our cash resources were used to fund our revenue related expenses, such as salaries and commissions paid to the PRC and the UK operating entities’ sales force, daily administrative expenses, and the maintenance of regional offices.
Most of our cash resources were used to fund our revenue related expenses, such as salaries and commissions paid to the PRC and the UK operating entities’ sales force, daily administrative expenses, and the maintenance of regional offices. As of December 31, 2025, we had cash and cash equivalents of $700,479.The working capital totaled $457,715.
Mansions also provides management services to tenants and collects service fees. Management service fees are recognized on a monthly basis. The prepayment of monthly service fee is recorded as deferred income. The Group engages in the hotel business through its UK subsidiaries, which began operations in May 2023. Revenue from hotel operations is recognized in accordance with ASC 606.
The prepayment of monthly service fee is recorded as deferred income. The Group engages in the hotel business through its UK subsidiaries, which began operations in May 2023. Revenue from hotel operations is recognized in accordance with ASC 606.
All significant inter-company accounts and transactions have been eliminated on consolidation. The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE.
The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE.
The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. All of the Group’s operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment.
The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments.
For the fiscal years ended December 31, 2024, 2023 and 2022, transaction gains of $80,603, $18,762, and $43,548, respectively, were recorded in the consolidated statements of operations and comprehensive income (loss). ​ The following table outlines the currency exchange rates used in the consolidated financial statements: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, ​ 2024 2023 2022 1 US$ = RMB ​ ​ ​ ​ ​ ​ At end of the period - RMB 7.2993 7.0999 6.8987 Average rate for the period ended - RMB 7.1957 7.0809 6.7347 ​ ​ ​ ​ ​ ​ ​ 1 US$ = GBP ​ ​ ​ ​ ​ ​ At end of the period - GBP 0.7987 0.7847 0.8315 Average rate for the period ended - GBP 0.7824 0.8039 0.8121 ​ Concentration Risk The Company’s subsidiary in the UK has bank accounts in the UK.
For the years ended December 31, 2025, 2024, and 2023, a transaction loss of ($36,675), a gain of $80,603, and a gain of $18,762, respectively, was recorded in the consolidated statements of operations and comprehensive income (loss). ​ 46 Table of Contents The following table outlines the currency exchange rates used in the consolidated financial statements: ​ ​ ​ ​ ​ ​ ​ ​ 1 US$ = RMB ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 At end of the period – RMB 6.9931 7.2993 7.0999 Average rate for the period ended – RMB 7.1875 7.1957 7.0809 ​ ​ ​ ​ ​ ​ ​ 1 US$ = GBP ​ ​ ​ ​ ​ ​ At end of the period – GBP 0.7437 0.7987 0.7847 Average rate for the period ended – GBP 0.7580 0.7824 0.8039 ​ Concentration Risk The Company’s subsidiaries in the UK have bank accounts in the UK.
This is computed by dividing net earnings by the combination of dilutive ordinary share equivalents. ​ As of December 31, 2022, the Company had a total of 126,082 units of underwriter’s warrants outstanding, exercisable at a price of $6.25 per warrant. The closing price of the Company’s Ordinary Shares was $1.51 as of December 31, 2022.
This is computed by dividing net earnings by the combination of dilutive ordinary share equivalents. ​ As of December 31, 2025, the Company had a total of 16,543 units of September 2024 Series A Warrants outstanding, exercisable at a price of $189 per warrant. The closing price of the Company’s ordinary shares was $72.45 as of December 31, 2025.
The increase in our net loss in 2024 mainly resulted from a $96,488, or 67%, decline in revenue, a $1,369,270, or 93%, increase in operating expenses, and a $573,836, or 329%, increase in other expenses, as discussed above.
The increase in our net loss in 2024 mainly resulted from a $96,488, or 67%, decline in revenue, a $1,369,270, or 93%, increase in operating expenses, and a $573,836, or 329%, increase in other expenses, as discussed above. Taxation We are not required to file United States Income Tax returns since we have no United States operations.
Since the exercise price of the warrants exceeded the share price, the warrants had no dilutive impact. The Company incurred net losses for the year ended December 31, 2022. Consequently, all potentially dilutive securities were excluded from the computation of diluted shares outstanding, as they would have had an anti-dilutive effect. The underwriter’s warrants expired on November 13, 2023.
Since the exercise price of the warrants exceeded the share price, the warrants had no dilutive impact. Consequently, all potentially dilutive securities were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive effect.
On May 14, 2024, the Company issued 23,360 Ordinary Shares to a third-party consultant as consideration for signing a service contract for the Ancient Eastern Garden project at Fernie Castle in Scotland, UK.
As a result, $24,761 was recognized as construction in progress. On August 26, 2024, the Company issued 27 Ordinary Shares to another third-party consultant as consideration for signing a service contract for the Ancient Eastern Garden project at Fernie Castle in Scotland, UK.
The Series A warrants are set to expire on March 18, 2027. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Numerator for earnings per share: ​ ​ ​ Net income (loss) attributable to the Company’s ordinary shareholders ​ $ (3,189,205) ​ $ (1,160,446) ​ $ (2,154,084) Denominator for basic and diluted earnings per share: ​ — ​ — ​ — Basic and weighted average ordinary shares ​ 14,688,872 ​ 11,675,216 ​ 11,675,216 Per share amount ​ — ​ — ​ — Per share - basic and diluted ​ $ （0.22) ​ $ (0.10) ​ $ (0.18) ​ Comprehensive Income The Company follows ASC 220-10, “Reporting Comprehensive Income,” which requires the reporting of comprehensive income in addition to net income.
The September 2024 Series A Warrants are set to expire on March 20, 2028. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Numerator for earnings per share: ​ ​ ​ ​ ​ ​ Net loss attributable to the Company’s ordinary shareholders ​ $ (41,321) ​ $ (3,189,205) ​ $ (1,160,446) Denominator for basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ Basic and weighted average ordinary shares ​ 30,374 ​ 16,788 ​ 13,343 Per share amount ​ ​ ​ ​ ​ ​ Per share - basic and diluted ​ $ (1.36) ​ $ (189.97) ​ $ (86.97) ​ Comprehensive Income The Company follows ASC 220-10, “Reporting Comprehensive Income,” which requires the reporting of comprehensive income in addition to net income.
Management believes that the Company’s current cash position, together with other components of working capital, will be sufficient to support operations and meet obligations as they become due over the next 12 months from the issuance date of this annual report, assuming the successful execution of our business plans.
Management believes that the Company’s current cash position, together with other components of working capital, and the proceeds from the offerings successfully closed on February 11, 2026 and March 2, 2026, will be sufficient to support its operations and meet its obligations as they become due for at least the next 12 months from the date of issuance of this annual report.
According to the National Bureau of Statistics of China, the consumer price index in China increased by 0.2%, 0.2%, and 2.0%, in 2024, 2023, and 2022, respectively. According to the Office for National Statistics, the consumer price index in the UK increased by 3.3%, 6.8%, and 7.9%, in 2024, 2023, 72 Table of Contents and 2022, respectively.
According to the Office for National Statistics, the consumer price index in the UK increased by 3.6%, 3.3%, and 6.8%, in 2025, 2024, and 2023, respectively.
If contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on their relative standalone selling prices. Segment Information The Group uses “the management approach” in determining reportable operating segments.
If contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on their relative standalone selling prices.
Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, allowance for doubtful accounts, assumptions related to the consolidation of entities in which the Group holds variable interests, valuation allowance on deferred tax, valuation on stock based compensation and valuation on derivative liabilities. 78 Table of Contents Fair Value of Financial Instruments The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”).
Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, allowance for doubtful accounts, assumptions related to the consolidation of entities in which the Group holds variable interests, valuation allowance on deferred tax, valuation on stock - based compensation and valuation on derivative liabilities.
The shares were valued at $1.06 per share, based on 74 Table of Contents the closing market price of the Ordinary Shares on Nasdaq on May 14, 2024. As a result, $24,761 was recognized as construction in progress.
The shares were valued at $980.00 per share, based on the closing market price of the ordinary shares on Nasdaq on August 26, 2024. As a result, $26,164 was recognized as construction in progress.
Cash Flows for the Year ended December 31, 2023, Compared to the Year Ended December 31, 2022 Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets.
In addition, the Company received $232,958 from the exercise of September 2024 Series A Warrants and September 2024 Series B Warrants issued in connection with the private placement. 38 Table of Contents Cash Flows for the Year ended December 31, 2024, Compared to the Year Ended December 31, 2023 Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets.
Since the amount being withheld was the risk of loss from the sales transaction, the Group recorded the amount withheld by developers as deferred income and would recognize the income when the withholding period had passed, and the amount withheld was confirmed by the developers.
Since the amount being withheld was the risk of loss from the sales transaction, the Group recorded the amount withheld by developers as deferred income and would recognize the income when the withholding period had passed, and the amount withheld was confirmed by the developers. 43 Table of Contents The Group engages in the business of managing rental property via its UK subsidiary Mansions commenced in August 2021.
Cash in PRC denominated in RMB may not be freely transferable to out of the PRC because of exchange control regulations or other reasons. Such restricted cash amounted $193, $65, and $74,320 as of December 31, 2024, 2023, and 2022, respectively. Property and Equipment, Net Property and equipment are carried at cost, less accumulated depreciation.
Cash in the PRC denominated in RMB might not be freely transferable to out of the PRC because of exchange control regulations or other reasons. Such restricted cash amounted to $0 and $193 as of December 31, 2025 and 2024, respectively.
Capital Expenditures We incurred capital expenditures of $35,748, $106,544, and $3,140,798 for the years ended December 31, 2024, 2023, and 2022, respectively. The capital expenditures in 2024 were primarily related to our UK operations, for the improvements and renovations of real properties. The capital expenditures in 2023 were primarily related to the building fixtures, facilities, landscaping, and improvement.
The capital expenditures in 2025 and 2024 were primarily related to our UK operations, for the improvements and renovations of real properties. The capital expenditures in 2023 were primarily related to the building fixtures, facilities, landscaping, and improvement.
These warrants are initially measured at fair value upon issuance and are subsequently remeasured at each reporting date, with changes in fair value recognized in the statement of operations.
The Company accounts for its outstanding September 2024 Series A Warrants as liabilities on the balance sheet. These warrants are measured at fair value upon issuance and subsequently remeasured at each reporting date, with changes in fair value recognized in the statement of operations.
Foreign Currency Translation The Company’s principal operations are based in the UK, and, before the fiscal year ended December 31, 2024, also in the PRC. Its financial position and operational results are determined by using GBP as functional currencies, and by using RMB, before the fiscal year ended December 31, 2024. However, the consolidated financial statements are presented in U.S.
Foreign Currency Translation The Company’s principal operations are based in the UK and the PRC. Its financial position and operational results are determined by using GBP and RMB as functional currencies. However, the consolidated financial statements are presented in U.S. Dollars. Foreign currency-denominated results of operations and cash flows are translated at the average exchange rate during the reporting period.
The Group engages in the business of managing rental property via its UK subsidiary Mansions commenced in August 2021. Mansions receives a one-time referral fee from tenants, based on a certain percentage of total leased value of lease agreement. The Group recognizes the revenue, when: a) the lease agreement is effective and b) the tenant made its first payment.
Mansions receives a one-time referral fee from tenants, based on a certain percentage of total leased value of lease agreement. The Group recognizes the revenue, when: a) the lease agreement is effective and b) the tenant made its first payment. Mansions also provides management services to tenants and collects service fees. Management service fees are recognized on a monthly basis.
Economic and Political Risks Our current operations are conducted through the UK subsidiaries in the UK. Accordingly, our business, financial conditions, and results are influenced by political, economic, and legal environment of the UK.
Our operating results are more directly affected by company-specific factors, including the UK subsidiaries’ revenue growth and ability to effectively manage their operating costs and expenses. Economic and Political Risks Our current operations are conducted through the UK subsidiaries in the UK. Accordingly, our business, financial conditions, and results are influenced by political, economic, and legal environment of the UK.
In addition, the Company received $232,958 from the exercise of Series A and Series B warrants, which were issued as part of the private placement. From October 31, 2024 to November 7, 2024, the investors fully exercised their Series B warrants, resulting in the issuance of a total of 8,557,554 Ordinary Shares by the Company.
From October 31, 2024 to November 7, 2024, the investors fully exercised their September 2024 Series B Warrants, resulting in the issuance of a total of 9,781 Ordinary Shares by the Company.
Translation adjustments resulting from period-to-period exchange rate fluctuations are included as a separate component of accumulated other comprehensive income (loss) in the consolidated balance sheets and statements of changes in shareholders’ equity. 83 Table of Contents Foreign currency transactions are translated into the functional currency at the exchange rates prevailing on the transaction dates.
Consequently, amounts reported on the consolidated statements of cash flows may not align precisely with changes in corresponding balances on the consolidated balance sheets. Translation adjustments resulting from period-to-period exchange rate fluctuations are included as a separate component of accumulated other comprehensive income (loss) in the consolidated balance sheets and statements of changes in shareholders’ equity.
Under Hong Kong tax law, it is exempted from the Hong Kong income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on the remittance of dividends. MDJH Hong Kong did not have significant activities in Hong Kong in 2024, 2023, and 2022. MD UK, Mansions, and Fernie Castle Culture were incorporated in the UK.
MDJH Hong Kong was incorporated under the laws of Hong Kong and is subject to the uniform tax rate of 16.5%. Under Hong Kong tax law, it is exempted from the Hong Kong income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on the remittance of dividends.
The exercise price of Series A Warrants was adjusted downward from the original $1.35 per share to $0.216 per share following the exercise of the Series B Warrants. Consequently, the total number of Series A Warrants increased from 2,722,224 to 17,013,901.
The exercise price of September 2024 Series A Warrants was adjusted downward from the original $1,181.25 per share to $189.00 per share following the exercise of the September 2024 Series B Warrants. Consequently, the total number of September 2024 Series A Warrants increased from 3,112 to 19,446.
Any resulting gains or losses are recognized in the results of operations as they occur.
Foreign currency transactions are translated into the functional currency at the exchange rates prevailing on the transaction dates. Any resulting gains or losses are recognized in the results of operations as they occur.
Cash held in the UK is denominated in British pound sterling and is freely transferable out of the UK. The Group maintains cash and cash equivalents with various commercial banks within the PRC. The Company has not experienced any losses in the bank accounts and believes it is not exposed to any risks on its cash held in PRC banks.
Cash held in the UK is denominated in British pound sterling and is freely transferable out of the UK. 42 Table of Contents The Group maintained cash and cash equivalents with various commercial banks within the PRC.
The value of the assets located in the UK accounted for 100%, 95%, and 79% of the Group’s total consolidated assets as of December 31, 2024, 2023, and 2022, respectively. Lease ASC 842 requires the Group to determine whether a contract is a lease or contains a lease at the inception of the contract, considering all relevant facts and circumstances.
Lease ASC 842 requires the Group to determine whether a contract is a lease or contains a lease at the inception of the contract, considering all relevant facts and circumstances.
For the year ended December 31, 2023, the Company repaid short term loans in the amount of $363,089.
For the year ended December 31, 2023, the Company repaid short term loans in the amount of $363,089. Capital Expenditures We incurred capital expenditures of $362,526, $35,748, and $106,544, for the years ended December 31, 2025, 2024, and 2023, respectively.
The following table sets forth a summary of changes in our working capital for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Working Capital 2024 2023 Change in $ Change in % Total current assets ​ 1,944,193 ​ ​ 682,509 ​ ​ 1,261,684 ​ 185 % Total current liabilities ​ 1,626,410 ​ ​ 122,037 ​ ​ 1,504,373 ​ 1,233 % Working Capital ​ $ 317,783 ​ $ 560,472 ​ $ (242,689) ​ (43) % ​ Working capital was $317,783 as of December 31, 2024, representing a decrease of $242,689, or 43%, compared to $560,472 as of December 31, 2023.
The following table sets forth a summary of changes in our working capital for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Working Capital ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change in $ ​ ​ ​ Change in % Total current assets ​ 837,297 ​ ​ 1,944,193 ​ ​ (1,106,896) ​ (57) % Total current liabilities ​ 379,582 ​ ​ 1,626,410 ​ ​ (1,246,828) ​ (77) % Working Capital ​ $ 457,715 ​ $ 317,783 ​ $ 139,932 ​ 44 % ​ Working capital was $457,715 as of December 31, 2025, representing an increase of $139,932, or 44%, compared to $317,783 as of December 31, 2024.
As a result, $26,164 was recognized as construction in progress, The Group received $nil and $1,384 proceeds from the disposal of partial assets located in the PRC in 2024 and 2023, respectively. The Group received repayment of $nil and $66,376 from a loan receivable for the years ended December 31, 2024 and 2023, respectively.
The shares were valued at $980.00 per share, based on the closing market price of the Ordinary Shares on Nasdaq on August 26, 2024. As a result, $26,164 was recognized as construction in progress, ​ The Group received $nil and $1,384 proceeds from the disposal of partial assets located in the PRC in 2024 and 2023 , respectively.
Net cash used in operating activities for the year ended December 31, 2022 was $1,587,117, consisting of a net loss of $2,154,084, noncash positive adjustments of $411,897, and a net positive adjustment in our operating assets and liabilities of $155,070.
Net cash used in operating activities for the year ended December 31, 2024 was $1,060,717. This consisted of a net loss of $3,189,205, non-cash positive adjustments of $2,103,515, and a net positive adjustment in operating assets and liabilities of $24,973.
Impact of Foreign Currency Fluctuations The subsidiaries in the UK maintain their books and records in GBP, while the subsidiaries in China and the VIE maintain their books and records in RMB. Our reporting currency is USD.
If inflation rises, it may materially and adversely affect the PRC operating entities or the UK subsidiaries and our business. 35 Table of Contents Impact of Foreign Currency Fluctuations The subsidiaries in the UK maintain their books and records in GBP, while the former subsidiaries in China and the former VIE maintained their books and records in RMB.
The UK subsidiaries’ operation in UK is governed by the income tax laws of the UK. The normal rate of corporation tax is 19% for the financial year beginning April 1, 2022.
The normal rate of corporation tax was 19% for the financial year beginning April 1, 2021 and was maintained at this rate for the financial year beginning April 1, 2022.
Expenses related to UK operations were $255,533, representing a significant increase of $147,031, or 136%, from $108,502 in 2022, which reflected the Company’s efforts to strengthen its operations in the UK.
Other general and administrative expenses related to UK operations were $168,883, representing a decrease of $86,650, or 34%, from $255,533 in 2023, which reflected the Company’s cost-control efforts in the UK.
Mansions was 49% owned by two unrelated parties as of December 31, 2021. On May 20, 2022, the Company acquired the 49% equity interests owned by the two unrelated parties. Per Share Amounts The Company computes per share amounts in accordance with ASC Topic 260 “Earnings per Share” (EPS), which requires presentation of basic and diluted EPS.
There were no such interest and penalties for the years ended December 31, 2025, 2024, and 2023. 45 Table of Contents Per Share Amounts The Company computes per share amounts in accordance with ASC Topic 260 “Earnings per Share” (EPS), which requires presentation of basic and diluted EPS.
The negative adjustments included: a $2,051 increase in other receivable, a $207,250 decrease in accounts payable and accrued expenses, majorly payroll and bonus payable, and a $5,637 decrease in VAT and other tax payable.
The positive adjustments included: a $9,374 decrease in accounts receivable, a $2,536 decrease in other receivable, an increase in accounts payable and accrued expenses of $113,976, an increase in VAT and other tax payable of $4,424, and an increase in related party payable of $3,444.
C. Research and Development, Patents and Licenses, etc . Research and Development For the years ended December 31, 2024, 2023, and 2022, the PRC operating entities did not spend funds on research and development. Intellectual Property The PRC operating entities have registered the trademark “Mingda Jiahe” in China.
Therefore, the Company did not apply the ASC 842 lessee and lessor accounting to the leases between Mansions and MDJM UK. C. Research and Development, Patents and Licenses, etc . Research and Development For the years ended December 31, 2025, 2024, and 2023, we did not spend funds on research and development.
Comparison of Results of Operations for the Years Ended December 31, 2023 and 2022 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Change in $ Change in % Revenue ​ $ 144,863 ​ $ 450,634 ​ $ (305,771) (68) % ​ The revenue for the year ended December 31, 2023, was $144,863, a decrease of $305,771, or 68%, from $450,634 in 2022.
Operating Results Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change in $ ​ ​ ​ Change in % ​ ​ ​ Revenue ​ $ 89,664 ​ $ 48,375 ​ $ 41,289 85 % ​ Revenue for the year ended December 31, 2025 was $89,664, compared to $48,375 in 2024, representing an increase of $41,289, or 85%.
A part of the Group’s revenue was generated through the VIE for the reporting periods, which was subject to PRC income taxes. The Group’s subsidiary in the PRC is subject to a standard tax rate of 25%.
The Group conducted substantially of its business in the PRC through its VIE and subsidiaries prior to 2023. The operating entities located in the PRC are subject to PRC income taxes, a standard tax rate of 25%.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeIn computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants, or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
Biggest changeIn computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants, or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A ​ Class B ​ ​ ​ ​ ​ Ordinary ​ Ordinary ​ ​ ​ ​ ​ Shares ​ Shares ​ ​ ​ ​ ​ Beneficially ​ Beneficially ​ Voting ​ ​ ​ ​ ​ Owned* Owned Power* ​ ​ ​ Number ​ ​ ​ % ​ ​ ​ Number ​ ​ ​ % ​ ​ ​ % ​ Directors and Executive Officers (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ Siping Xu (2) 158 0.01 % 11,658 100.00 % 32.15 % Mengnan Wang (3) 170 0.01 % — — ​ 0.01 % Bo Wang ​ — ​ — ​ — ​ — ​ — ​ Zhenlei Hu — — ​ — — ​ — ​ Liding Sun — — ​ — — ​ — ​ Wei Guan — — ​ — — ​ — ​ All directors and executive officers as a group (six individuals): 328 0.02 % 11,658 100.00 % 32.16 % 5% or Greater Shareholders (1) : ​ ​ ​ ​ ​ ​ ​ ​ Siping Xu (2) 158 0.01 % 11,658 100.00 % 32.15 % * The Class B Ordinary Shares are convertible into Class A Ordinary Shares at any time after issuance at the option of the holder on a one-to-one basis.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The corporate governance and nominating committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
B oard Practices Pursuant to our amended and restated articles of association, the minimum number of directors shall consist of no less than one person unless otherwise determined by the shareholders in a general meeting. Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if any is held.
B oard Practices Pursuant to our second amended and restated articles of association, the minimum number of directors shall consist of no less than one person unless otherwise determined by the shareholders in a general meeting. Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if any is held.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; 50 Table of Contents ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The corporate governance and nominating committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 51 Table of Contents D.
All of our executive officers are appointed by and serve at the discretion of our board of directors. Qualification There is currently no shareholding qualification for directors. 87 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee.
All of our executive officers are appointed by and serve at the discretion of our board of directors. Qualification There is currently no shareholding qualification for directors. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee, and a corporate governance and nominating committee.
Name Age Position(s) Siping Xu ​ 47 ​ Chief Executive Officer, Chairman, and Director Mengnan Wang ​ 45 ​ Chief Financial Officer Yuan Gong ​ 52 ​ Director Zhenlei Hu ​ 53 ​ Independent Director Liding Sun ​ 53 ​ Independent Director Wei Guan ​ 55 ​ Independent Director ​ The following is a brief biography of each of our executive officers and directors: Mr.
Name ​ ​ ​ Age ​ ​ ​ Position(s) Siping Xu ​ 47 ​ Chief Executive Officer, Chairman, and Director Mengnan Wang ​ 45 ​ Chief Financial Officer Bo Wang ​ 54 ​ Director Zhenlei Hu ​ 53 ​ Independent Director Liding Sun ​ 53 ​ Independent Director Wei Guan ​ 55 ​ Independent Director ​ The following is a brief biography of each of our executive officers and directors: Mr.
None of our employees are subject to collective bargaining agreements governing their employment with us. We believe our employee relations are good. E.
None of our employees are subject to collective bargaining agreements governing their employment with us. All of our employees are full-time. We believe our employee relations are good. E.
Wang is an experienced professional who has been working in the area of finance for 17 years. Mr. Wang holds a Bachelor’s degree in 85 Table of Contents Computer Science from Tianjin University of Commerce Boustead College, and a Master of Business Administration degree in International Business Management from IPAG Business School. Mr.
Wang is an experienced professional who has been working in the area of finance for 17 years. Mr. Wang holds a Bachelor’s degree in Computer Science from Tianjin University of Commerce Boustead College, and a Master of Business Administration degree in International Business Management from IPAG Business School. Mr. Bo Wang has served as our director since November 2025. Mr.
Percentage of beneficial ownership of each listed person is based on 26,716,523 Ordinary Shares outstanding as of the date of this annual report. Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary Shares.
Percentage of beneficial ownership of each listed person is based on 1,230,890 Class A Ordinary Shares and 11,658 Class B Ordinary Shares outstanding as of the date of this annual report. Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary Shares.
Liding Sun, Zhenlei Hu, and Wei Guan satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and 88 Table of Contents Rule 10A-3 under the Securities Exchange Act.
Corporate Governance and Nominating Committee. Our corporate governance and nominating committee currently consists of Liding Sun, Zhenlei Hu, and Wei Guan. Wei Guan is the chairperson of our corporate governance and nominating committee. Liding Sun, Zhenlei Hu, and Wei Guan satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act.
Sun has been the director of software development at CoreIp Solutions, a technology solution consulting firm offering technology solutions across multiple industries since January 2011. Mr. Sun holds a Master’s degree and a Bachelor’s degree in Computer Science, both from UCLA. Mr. Wei Guan has served as our independent director since May 18, 2018. Mr.
Hu received his bachelor’s degree in Audit from Tianjin University of Finance and Economics in 1995. Mr. Liding Sun has served as our independent director since May 18, 2018. Mr. Sun has been the director of software development at CoreIp Solutions, a technology solution consulting firm offering technology solutions across multiple industries since January 2011. Mr.
Of the 1,175,920 shares issued, 285,960 shares were allocated to the executive officers, with a total value of $363,169. For the year ended December 31, 2024, we paid an aggregate of $31,874 as compensation to our executive officers and directors. None of our non-employee directors have any service contracts with us that provide for benefits upon termination of directorship.
For the year ended December 31, 2025, we paid an aggregate of $10,940.02 as compensation to our executive officers and directors. None of our non-employee directors have any service contracts with us that provide for benefits upon termination of directorship.
We have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers. 86 Table of Contents Employment Agreements On May 28, 2018, we entered into employment agreements with our executive officers.
We have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers.
To our knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), by any foreign government, or by any other natural or legal person(s) severally or jointly. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. ​ F.
To our knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), by any foreign government, or by any other natural or legal person(s) severally or jointly.
Siping Xu, our Chief Executive Officer, was automatically renewed for another term of three years on May 28, 2021, and provides for an annual salary of $44,386.79. Our employment agreement with Mengnan Wang, our Chief Financial Officer, was automatically renewed for another term of three years on May 28, 2021, and provides for an annual salary of $22,193.39. C.
Our employment agreement with Mengnan Wang, our Chief Financial Officer, was automatically renewed for another term of three years on May 1, 2024, and provides for an annual salary of $1.00. 49 Table of Contents C.
Zhenlei Hu has served as our independent director since January 2020. Mr. Hu has served as an audit partner at ShineWing Certified Public Accountants Co., Ltd. Tianjin Branch since December 2019. From September 2014 to November 2019, Mr. Hu served as an audit partner at Ruihua Certified Public Accountants Tianjin Branch. From May 2008 to August 2014, Mr.
From September 2014 to November 2019, Mr. Hu served as an audit partner at Ruihua Certified Public Accountants Tianjin Branch. From May 2008 to August 2014, Mr. Hu served as an audit partner at Zhongrui Yuehua Certified Public Accountants Tianjin Branch (now part of Ruihua Certified Public Accountants). Mr.
D. E mploye es As of December 31, 2024, 2023, and 2022, we had 0, 11, and 11, employees for Mingda Tianjin and its branch offices, which are all located in the PRC. As of December 31, 2024, 2023, and 2022, we had two, three, and one employees for our UK subsidiaries, respectively.
E mploye es As of December 31, 2025, 2024, and 2023, we had 10, two, and three employees, respectively. As of December 31, 2025, 2024, and 2023, we had 0, 0, and 11 employees for the Former PRC Entities, respectively, who were all located in the PRC.
Guan received his bachelor’s degree from Capital University of Economics and Business in 1993. Mr. Guan received his postgraduate degree in Regional Economics from the Renmin University of China in 2001. Mr. Guan received his master’s degree in Business Administration from Foreign Economic and Trade University in 2006.
Guan worked for the Boutique Shopping Guide newspaper and its World magazine as an engineer. Mr. Guan received his bachelor’s degree from Capital University of Economics and Business in 1993. Mr. Guan received his postgraduate degree in Regional Economics from the Renmin University of China in 2001. Mr.
Guan co-founded Beijing Jingguanxuan Marketing Development Co., Ltd. as one of its shareholders and has served as its deputy managing director since October 2015. From March 1997 to October 2015, Mr. Guan worked for the Boutique Shopping Guide newspaper and its World magazine as an engineer. Mr.
Sun holds a Master’s degree and a Bachelor’s degree in Computer Science, both from UCLA. Mr. Wei Guan has served as our independent director since May 18, 2018. Mr. Guan co-founded Beijing Jingguanxuan Marketing Development Co., Ltd. as one of its shareholders and has served as its deputy managing director since October 2015. From March 1997 to October 2015, Mr.
Hu served as an audit partner at Zhongrui Yuehua Certified Public Accountants Tianjin Branch (now part of Ruihua Certified Public Accountants). Mr. Hu received his bachelor’s degree in Audit from Tianjin University of Finance and Economics in 1995. Mr. Liding Sun has served as our independent director since May 18, 2018. Mr.
Wang received his Bachelor’s degree in accounting from Beijing Institute of Business (now known as: Beijing Technology and Business University) in 1993. 48 Table of Contents Mr. Zhenlei Hu has served as our independent director since January 2020. Mr. Hu has served as an audit partner at ShineWing Certified Public Accountants Co., Ltd. Tianjin Branch since December 2019.
Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. B. C ompensation of Directors and Executive Officers On May 31, 2024, the Company issued 1,175,920 shares to thirteen employees and officers as part of their 2024 compensation package.
C ompensation of Directors and Executive Officers On May 31, 2024, the Company issued 1,344 shares to 13 employees and officers as part of their 2024 compensation package. Of the 1,344 shares issued, 328 shares were allocated to the executive officers, with a total value of $363,169.
Removed
Yuan Gong has served as our director since October 28, 2024. Mr. Gong served as the Chief Financial Officer of Tungray Technologies Inc (Nasdaq: TRSG) from February 2023 to September 2024. Mr. Gong has served as an advisor for Weitian Group since December 2020.
Added
Wang has over 20 years of business and managerial experience in the educational service industry. Mr. Wang founded Spark Learning Limited in July 2013 and has since served as its director. The company offers continuing professional development training, educational consultancy, and educational collaboration and exchange programs between the United Kingdom and China. From April 2006 to May 2012, Mr.
Removed
Previously, he served as the Chief Financial Officer of Guoyi Capital Management Co., Ltd. from January 2018 to September 2020. Before that, he served as a Partner at Jessie International LLC between March 2008 and December 2017.
Added
Wang served as the head of iNet (International Networking for Educational Transformation) China of Specialist Schools and Academies Trust, a UK-based educational organization. From May 2003 to March 2006, Mr. Wang served as the vice president of Sunwah Education Foundation, a Hong Kong based education philanthropy organization. Mr.
Removed
From December 2009 to December 2011, he served as the Chief Financial Officer in China Energy Corp., which is a client of Jessie International Consulting (“Jessie International”). From July 2008 to December 2009, he was the Vice President in Capital Markets for China Integrated Energy, which was also a client of Jessie International.
Added
Guan received his master’s degree in Business Administration from Foreign Economic and Trade University in 2006. Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. B.
Removed
From September 2007 to March 2008, he was the Board Secretary and Director of Investor Relations of Xinyuan Real Estate Co., Ltd. (NYSE: XIN). Mr. Gong graduated from Peking University in 1997 with a Bachelor of Art degree in English Language and from the University of Delaware in 2003 with an MBA. He is a Chartered Financial Analyst. Mr.
Added
On February 10, 2026, the board of directors of the Company approved a resolution authorizing the payment of bonuses totaling $140,000, consisting of $15,000 each to eight senior managers and $10,000 each to two additional senior managers, in recognition of services rendered to the Company. These individuals had previously entered into zero-payroll agreements with the Company.
Removed
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee currently consists of Liding Sun, Zhenlei Hu, and Wei Guan. Wei Guan is the chairperson of our nominating and corporate governance committee.
Added
The bonuses were paid on February 13, 2026. Employment Agreements On May 28, 2018, we entered into employment agreements with our executive officers.
Removed
Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned by them.
Added
Siping Xu, our Chief Executive Officer, was automatically renewed for another term of three years on May 1, 2024, and provides for an annual salary of $1.00.
Removed
As of the date of the annual report, we have one shareholder of record holding beneficial ownership of 5% or more, who is not located in the United States. 89 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ Beneficially Owned ​ ​ Number ​ Percent Directors and Executive Officers (1) : ​ ​ Siping Xu (2) 10,338,205 38.70 % Mengnan Wang (3) 151,480 0.57 % Zhenlei Hu — — % Liding Sun — — % Yuan Gong — — % Wei Guan — — % ​ ​ ​ ​ ​ ​ All directors and executive officers as a group (six persons): 10,489,685 39.26 % ​ ​ ​ ​ ​ ​ 5% Shareholders (1) : ​ ​ ​ Siping Xu (2) 10,338,205 38.70 % (1) Unless otherwise indicated, the business address of each of the individuals is Fernie Castle, Letham, Cupar, Fife, KY15 7RU, United Kingdom.
Added
The number and percentage of Class A Ordinary Shares exclude Class A Ordinary Shares convertible from Class B Ordinary Shares as the beneficial ownership of Class B Ordinary Shares is presented separately.
Removed
(2) Mr. Siping Xu, our Chief Executive Officer and chairman of the Board, is also the 100% owner of MDJH LTD, which holds 10,200,000 Ordinary Shares. Mr. Siping Xu also holds 138,205 Ordinary Shares directly. (3) Mr. Mengnan Wang is the 100% owner of MNCC LTD, which holds 10,000 Ordinary Shares. Mr. Mengnan Wang also holds 141,480 Ordinary Shares directly.
Added
(1) Unless otherwise indicated, the business address of each of the individuals is Fernie Castle, Letham, Cupar, Fife, KY15 7RU, United Kingdom. 52 Table of Contents (2) The number of Class A Ordinary Shares beneficially owned represents 158 Class A Ordinary Shares held by Mr.
Added
Siping Xu, our Chief Executive Officer and chairman of the Board as of the date of this annual report. The number of Class B Ordinary Shares beneficially owned represents 11,658 Class B Ordinary Shares held Mr. Siping Xu, our Chief Executive Officer and chairman of the Board as of the date of this annual report.
Added
(3) The number of Class A Ordinary Shares beneficially owned represents 170 Class A Ordinary Shares, consisting of 158 Class A Ordinary shares held by Mr. Mengnan Wang directly and 12 Class A Ordinary Shares held by MNCC LTD, a company 100% owned by Mr. Mengnan Wang and located at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.
Added
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. ​ As of the date of this annual report, approximately 99.99% of our issued and outstanding Class A Ordinary Shares are held in the United States. ​ F.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness Overview—The VIE Agreements.” Other Material Transactions with Related Parties We did not have any material transactions with related parties in 2024, 2023, and 2022. 90 Table of Contents C. Interests of Experts and Counsel Not applicable. ​
Biggest changeWe have not entered into any related party transactions since July 1, 2025. 53 Table of Contents C. Interests of Experts and Counsel Not applicable. ​
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Ma jor Shareholder s See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. R elated Party Transactions Employment Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.” The VIE Agreements See “Item 4. Information on the Company—B.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Ma jor Shareholder s See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. R elated Party Transactions Employment Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.” The VIE Agreements See “Item 3.
Added
Key Information.” Other Material Transactions with Related Parties The following summarizes our related party transactions for the fiscal years ended December 31, 2025, 2024, and 2023. On May 31, 2024, the Company issued 164 ordinary shares to Mr. Siping Xu, the CEO, as part of his 2024 compensation package.
Added
The shares were valued at $1,111.25 each, based on the closing market price of the ordinary shares on Nasdaq on that date, resulting in a total share-based compensation of $181,585 for Mr. Xu. On May 31, 2024, the Company issued 164 ordinary shares to Mr. Mengnan Wang, the CFO, as part of his 2024 compensation package.
Added
The shares were valued at $1,111.25 each, based on the closing market price of the ordinary shares on Nasdaq on that date, resulting in a total share-based compensation of $181,585 for Mr. Wang. As of December 31, 2024, the Company owed $3,395 to its officers for unreimbursed business expenses. The business expenses were reimbursed in 2025.