Mdjm Ltd's Business Segments

MDJM LTD ("MDJM") is a holding company incorporated in the Cayman Islands with no significant operations of its own. Its operations are conducted through subsidiaries in the United Kingdom, including MD Local Global Limited ("MD UK") and Mansions Catering and Hotel LTD ("Mansions"), a UK company wholly owned by MD UK. Until March 1, 2025, MDJM also operated through a former variable interest entity (VIE) in China, Mingdajiahe (Tianjin) Co., Ltd. ("Mingda Tianjin"), which was controlled by Mr. Siping Xu, the CEO and majority shareholder. The VIE agreements allowing consolidation of Mingda Tianjin's financial results were terminated on that date. MDJM primarily conducts its business through its UK subsidiaries and may depend on dividends and other distributions from them for cash and financing needs; however, as of the report date, no dividends or distributions have been made to MDJM or U.S. investors. The company has raised funds through offerings, with proceeds deposited directly into MD UK's bank account. MDJM's financial statements are consolidated under U.S. GAAP, with currency translations from RMB and GBP to U.S. dollars.

The Group identifies its reportable operating segments in accordance with ASC 280 'Segment Reporting' based on quantitative thresholds of revenue, profit or loss, and assets, each representing 10 percent or more of the combined totals of all operating segments. Segments below these thresholds may also be reported if deemed useful by management. Operating segments are defined as components that generate revenue and incur expenses, with their results regularly reviewed by the chief operating decision maker (CODM) for resource allocation and performance evaluation. The Group applies the management approach, using the internal organization and reporting structure utilized by the CODM to determine reportable segments.