GDC

Under the laws of the British Virgin Islands, our BVI subsidiary and a direct subsidiary of GDC, Citi Profit, may pay a dividend to GDC out of profit, provided that in no circumstances may a dividend be paid if this would result in Citi Profit being unable to pay its debts due in the ordinary course of business.
Under the laws of the British Virgin Islands, our BVI subsidiary, Pallas, may pay a dividend to GDC out of profit, provided that in no circumstances may a dividend be paid if this would result in Pallas being unable to pay its debts due in the ordinary course of business.
Under PRC laws and regulations, our PRC subsidiaries, Highlight WFOE (a direct subsidiary of Citi Profit), and Shanghai Xianzhui (a direct subsidiary of Highlight WFOE), may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards and regulations.
Under PRC law, Highlight WFOE and Shanghai Xianzhui may be funded through capital contributions by their immediate parent company or loans, subject to satisfaction of applicable government registration and approval requirements.
GDC is permitted under the laws of Nevada to provide funding to Citi Profit and Pallas through capital contributions or to other companies within our corporate structure through loans without restrictions on the amount of the funds and such funding is not subject to government registration or filing requirements under the laws of the Nevada.
GAAP”), the Company treated Wuge as the consolidated affiliated entity and had consolidated Wuge’s financial statements prior to September 28, 2022.
GAAP, the Company treated Yuan Ma as the consolidated affiliated entity and had consolidated Yuan Ma’s financial results in the Company’s consolidated financial statements prior to June 26, 2023.
GAAP, the Company treated Highlight Media as the consolidated affiliated entity and had consolidated Highlight Media’s financial results in the Company’s financial statements prior to September 26, 2023.
Highlight Media was an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic self-media operation, digital face application, large-scale exhibition services and other businesses.
As of December 31, 2025 and as of the date of this Report, we do not have a VIE structure.
During the fiscal year ended December 31, 2025, GDC made a cash transfer of $11,000 to AI Catalysis Corp.
Other than this transfer, no other assets were transferred between GDC and its subsidiaries.
During the fiscal years ended December 31, 2024, there was no transfer of assets between GDC and its subsidiaries.
The PRC Enterprise Income Tax Law, or the EIT Law, and its implementing rules both became effective on January 1, 2008, and were most recently amended in 2018 and 2019, respectively.
Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China could limit the legal protection available to you and us.
Furthermore, the PRC legal system is based in part on government policies, internal rules, and regulations that may have retroactive effect and the interpretation and implementation of which may continuously evolve.
Given the PRC government’s role in regulating industrial development, the evolving regulatory framework could result in a material change in the operations of Shanghai Xianzhui and/or the value of our common stock.
The PRC government has continuous oversight over the regulatory framework of various industries and may guide and regulate operations in accordance with laws and regulations to further macroeconomic and societal goals, which could result in a material change in the operations of Shanghai Xianzhui and/or the value of our common stock.
The PRC government plays a significant role in regulating industrial development and shaping the macroeconomic environment through implementing relevant policies.
Accordingly, government actions and the implementation of economic policies in the future could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
Therefore, it is the opinion of our PRC counsel, Jiangsu Junjin Law Firm, that we are not required to complete the record filing requirement under the Trial Measures.
See “Risk Factors - Risk Factors Relating to Doing Business in China - The CSRC has released the Trial Measures.
With such rules in effect, , the PRC regulatory authorities may enhance supervision and administration over offerings that are conducted overseas and foreign investment in China-based issuers, which could significantly limit or completely hinder our ability to continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.” As such, the Company’s businesses may be subject to various government and regulatory interference in the provinces in which they operate.
Although the People’s Bank of China regularly manages the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term.
Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen its management in the foreign exchange market.
Unless we are able to pass on these increased labor costs to our customers by increasing the prices of our products and services, our financial condition and results of operations would be materially and adversely affected.
According to Circular 37 and subsequent regulations, prior registration with qualified banks is required for Chinese residents to contribute domestic assets or interests to offshore companies, known as Special Purpose Vehicles (“SPVs”).
The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009), and Amendment 9 (effective on November 1, 2015), Amendment 10 (effective on November 4, 2017) and Amendment 11 (effective on March 1, 2021), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the course of performing duties or providing services or obtaining such information through theft or other illegal ways.
Furthermore, the Personal Information Protection Law (PIPL) promulgated by the Standing Committee of the NPC, which became effective on November 1, 2021, sets forth the fundamental rules for the processing of personal information, emphasizing the principles of legality, propriety, necessity, and good faith.
The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, Cyber Security Law and any other cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business.
As the interpretation and implementation of the Revised Review Measures are continuously evolving, uncertainties exist with respect to their application in specific practices.
Furthermore, on September 24, 2024, the State Council promulgated the Regulations on the Network Data Security Management (the “Data Security Management Regulations”), which became effective on January 1, 2025.
Pursuant to the Data Security Management Regulations, network data processing activities refer to activities such as the collection, storage, use, processing, transmission, provision, disclosure, and deletion of data.
Network data processors refer to individuals or organizations that independently determine the purposes and methods of data processing activities.
Network data processors conducting any data processing activities that affect or may affect national security shall undergo national security review in accordance with relevant national regulations.
It is the opinion of our PRC counsel, Jiangsu Junjin Law Firm, that we will not be subject to cybersecurity review with the CAC, given that: (i) Shanghai Xianzhui does not possess and does not anticipate that it will possess a large amount of personal information in our business operations, (ii) data processed in Shanghai Xianzhui’s business does not have a bearing on national security and thus may not be classified as core or important data by the authorities, and (iii) any cross-border data transfers conducted in our ordinary course of business fall under the exemptions provided by the Provisions on Promoting and Regulating Cross-Border Data Flows.
In addition, for the same reasons, we are not subject to network data security review by the CAC pursuant to the Data Security Management Regulations.
It is the opinion of our PRC counsel, Jiangsu Junjin Law Firm, that because the Company is not a company registered and formed in the territory of China, its continued listing on Nasdaq and future offerings are not “direct overseas offering and listing of domestic enterprises” as defined under the Trial Measures.
As of the date of this Report, it is the opinion of our PRC counsel, Jiangsu Junjin Law Firm, that our PRC operating subsidiaries have received all requisite permissions or approvals to operate the business and no such permissions or approvals have been denied.
It is also the opinion of our PRC counsel, Jiangsu Junjin Law Firm, that except for the business license mentioned in “Item 1.

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Gone since FY2024

Under the laws of the British Virgin Islands, our BVI subsidiary and a direct subsidiary of GDC, Citi Profit, may pay a dividend to GDC out of profit, provided that in no circumstances may a dividend be paid if this would result in Citi Profit being unable to pay our debts due in the ordinary course of business.
Under PRC laws and regulations, our PRC subsidiaries, Highlight WFOE (a direct subsidiary of Citi Profit), and Shanghai Xianzhui (a direct subsidiary of Highlight WFOE), may pay dividends only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations.
Under PRC law, Highlight WFOE and Shanghai Xianzhui may be funded through capital contributions by its immediate parent company or loans, subject to satisfaction of applicable government registration and approval requirements.
GDC is permitted under the laws of Nevada to provide funding to Citi Profit through capital contributions or to other companies within our corporate structure through loans without restrictions on the amount of the funds and such funding is not subject to government registration or filing requirements under the laws of the Nevada.
GAAP”), the Company treated Wuge as the consolidated affiliated entity and has consolidated Wuge’s financial statements prior to September 28, 2022.
GAAP, the Company treated Yuan Ma as the consolidated affiliated entity and has consolidated Yuan Ma’s financial results in the Company’s consolidated financial statements prior to June 26, 2023.
GAAP, the Company treated Highlight Media as the consolidated affiliated entity and has consolidated Highlight Media’s financial results in the Company’s financial statements prior to September 26, 2023.
Highlight Media was an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses.
As of December 31, 2024 and as of the date of this report, we do not have a VIE structure.
During the three months ended March 31, 2025 and the fiscal year ended December 31, 2024, there was no transfer of assets between GDC and its subsidiaries.
During the fiscal years ended December 31, 2023, GDC transferred a total of $2,100,000 to its subsidiary AI Catalysis Corp as capital contribution.
No subsidiary made any dividends or distributions to GDC.
No amounts owed under any VIE agreements were settled.
As of the date of this report, we have no intention of distributing any earnings as dividends to our investors or to settle amounts owned under the previous VIE agreements.
China passed the Enterprise Income Tax Law, or the EIT Law, and its implementing rules, both of which became effective on January 1, 2008.
Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us.
Furthermore, the PRC legal system is based in part on government policies, internal rules, and regulations that may have retroactive effect and may change quickly with little advance notice.
Given the Chinese government’s significant oversight and discretion over the conduct of the business of Shanghai Xianzhui, the Chinese government may intervene or influence its operations at any time, which could result in a material change in the operations of Shanghai Xianzhui and/or the value of our common stock.
The Chinese government has significant oversight and discretion over the conduct of Shanghai Xianzhui and may intervene or influence its operations at any time as the government deems appropriate to further regulatory, political, and societal goals, which could result in a material change in the operations of Shanghai Xianzhui and/or the value of our common stock.
The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
Therefore, it is the opinion of our PRC counsel, Junjin Law Firm, that we are not required to complete the record filing requirement under the Trial Measures.
See “Risk Factors - Risk Factors Relating to Doing Business in China - The CSRC has released the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies (the “Trial Measures”).
With such rules in effect, the Chinese government may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers, which could significantly limit or completely hinder our ability to continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.” As such, the Company’s businesses may be subject to various government and regulatory interference in the provinces in which they operate.
Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term.
Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.
Unless we are able to pass on these increased labor costs to our vehicle buyers by increasing the prices of our products and services, our financial condition and results of operations would be materially and adversely affected.
According to Circular 37, prior registration with the local SAFE branch is required for Chinese residents to contribute domestic assets or interests to offshore companies, known as Special Purpose Vehicles (“SPVs”).
The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the course of performing duties or providing services or obtaining such information through theft or other illegal ways.
The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, CSL and any other cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business.
Given the recency of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.
Furthermore, the CAC released the draft of the Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year.
If the draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, will be required to carry out an annual data security review and comply with the relevant reporting obligations.
It is the opinion of our PRC counsel, Junjin Law Firm, that we will not be subject to cybersecurity review with the CAC, given that: (i) Shanghai Xianzhui does not possess and does not anticipate that it will possess a large amount of personal information in our business operations and (ii) data processed in Shanghai Xianzhui’s business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
It is the opinion of our PRC counsel, Junjin Law Firm, that because the Company is not a company registered and formed in the territory of China, its continued listing on Nasdaq and future offerings are not “direct overseas offering and listing of domestic enterprises” as defined under the Trial Measures.
As of the date of this report, it is the opinion of our PRC counsel, Junjin Law Firm, that our PRC operating subsidiaries have received all requisite permissions or approvals to operate the business and no such permissions or approvals have been denied.
It is also the opinion of our PRC counsel, Junjin Law Firm, that except for the business license mentioned in “Item 1.
It is the further opinion of our PRC counsel, Junjin Law Firm, that no relevant PRC laws or regulations in effect require that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations.
The CSRC has released the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies (the “Trial Measures”).
With such rules in effect, the Chinese government may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers, which could significantly limit or completely hinder our ability to continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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