SEC Info - QDM International Inc. - ‘10-Q’ for 9/30/21

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		Alternative Formats (Word, et al.) Cautionary Note Regarding Forward-Looking Statements Controls and Procedures Defaults Upon Senior Securities Exhibits Financial Information Financial Statements Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Mine Safety Disclosures Other Information Part I -- Financial Information Part Ii -- Other Information Quantitative and Qualitative Disclosures About Market Risk Risk Factors Signatures Unregistered Sales of Equity Securities and Use of Proceeds
1	1st Page – Filing Submission
"	Cautionary Note Regarding Forward-Looking Statements
"	Part I -- Financial Information
"	Financial Statements
"	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Quantitative and Qualitative Disclosures About Market Risk
"	Controls and Procedures
"	Part Ii -- Other Information
"	Legal Proceedings
"	Risk Factors
"	Unregistered Sales of Equity Securities and Use of Proceeds
"	Defaults Upon Senior Securities
"	Mine Safety Disclosures
"	Exhibits
"	Signatures

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i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ i No ☒

As of November 10, 2021, there were i 209,993 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

This Quarterly Report on Form 10-Q (this “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Notes to Condensed Consolidated Financial Statements
Six Months Ended September 30, 2021 and 2020

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our interim financial statements, including the notes thereto, appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this Report. Our interim financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

From 2016 to 2020, we were a telemedicine company that provides Connect-a-Doc telemedicine kits to schools. Our services aimed to provide alternatives to schools that desire to provide a higher level of healthcare to their students but are unable to keep a full-time school nurse available. In 2020 this business was discontinued and we became a non-operating “shell” company.

Following the change in control in March 2020, we planned to conduct insurance brokerage business in Hong Kong, through either formation or acquisition of an existing insurance brokerage business. To implement our business plan, during 2020, we engaged professionals (legal counsel and accountants) to evaluate the optimal corporate structure for our new business and conduct due diligence on a potential target.

On October 21, 2020, we entered into the Share Exchange Agreement with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI, who is also our principal stockholder and serves as our Chairman and Chief Executive Officer, to acquire all the issued and outstanding capital stock of QDM BVI in exchange for the issuance to Mr. Zheng of 900,000 shares of a newly designated Series C Preferred Stock. The Share Exchange closed on October 21, 2020.

As a result of the consummation of the Share Exchange, we acquired QDM BVI and its indirect subsidiary, YeeTah, an insurance brokerage company primarily engaged in the sales and distribution of insurance products in Hong Kong. Following the closing of the transaction, we have assumed the business operations of QDM BVI and its subsidiaries.

An outbreak of a novel strain of the coronavirus, COVID-19, was identified in China and has subsequently been recognized as a pandemic by the World Health Organization. The COVID-19 pandemic has severely restricted the level of economic activity around the world. In response to this pandemic, the governments of many countries, states, cities and other geographic regions, including Hong Kong, have taken preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes.

With social distancing measures having been implemented to curtail the spread of COVID-19, insurance brokers in Hong Kong, such as YeeTah, which relied primarily on storefront and in-person consultations for new business production faced an immediate slowdown. In addition, Hong Kong has suspended mainland tourists’ free travel and Hong Kong’s current boarding requirements vary based on where the traveler has visited in the past 14 or 21 days and whether the traveler is vaccinated.

Customers from mainland China contributed to a large part of YeeTah’s commissions. Regulations require their physical presence in Hong Kong to complete the policy contract. However, due to the political turmoil and travel restrictions related to the COVID-19 epidemic, mainland Chinese customers have dropped sharply. As a result, YeeTah’s revenue from commissions on new business has decreased significantly. YeeTah’s commissions from renewal premiums have also been materially affected since the mainland Chinese customers have been late in making the renewal payments due to inability to visit Hong Kong to make the payments. Most of YeeTah’s mainland customers do not have Hong Kong bank account and used to pay their premiums through credit card or in cash in person.

Since early 2019, a number of political protests and conflicts have occurred in Hong Kong in connection with proposed legislation that would allow local authorities to detain and extradite people who are wanted in territories that Hong Kong does not have extradition agreements with, including mainland China and Taiwan. On June 30, 2020, China’s National People’s Congress Standing Committee passed a national security law for the Hong Kong Special Administrative Region (HKSAR). Hong Kong’s Chief Executive promulgated it in Hong Kong later the same day. Among other things, it criminalizes separatism, subversion, terrorism and foreign interference in Hong Kong. The economy of Hong Kong has been negatively impacted, including the retail market, property market, stock market, and tourism, from such protests.

Under the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong is exclusively in charge of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. We cannot assure you that the Hong Kong protests will not affect Hong Kong’s status as a Special Administrative Region of the People’s Republic of China and thereby affecting its current relations with foreign states and regions.

Our revenue is susceptible to Hong Kong protests as well as any other incidents or factors which affect the stability of the social, economic and political conditions in Hong Kong. For example, as a result of the Hong Kong protests, we experienced a drop in new customers from mainland China beginning in June 2019, which impacted our revenue for the period from June 2019 to June 30, 2020.

It is unclear whether there will be other political or social unrest in the near future or that there will not be other events that could lead to the disruption of the economic, political and social conditions in Hong Kong. If such events persist for a prolonged period of time or that the economic, political and social conditions in Hong Kong are to be disrupted, our overall business and results of operations may be adversely affected.

We are a holding company incorporated in Florida with substantially all of our operation conducted by the operating entity in Hong Kong. Although we conduct limited administrative activities in our principal executive offices located in China, we currently do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity structure with any entity in mainland China. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. Accordingly, we believe the laws and regulations of the PRC do not currently have any material impact on our business, financial condition or results of operations. However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future. If there is significant change to current political arrangements between mainland China and Hong Kong, companies operated in Hong Kong may face similar regulatory risks as those operated in PRC, including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange, conduct its business or accept foreign investment. In light of China’s recent expansion of authority in Hong Kong, there are risks and uncertainties which we cannot foresee for the time being, and rules and regulations in China can change quickly with little or no advance notice. The Chinese government may intervene or influence our current and future operations in Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves. See “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong.” in our Annual Report on Form 10-K for the year ended March 31, 2021, which was originally filed with the Securities and Exchange Commission on July 12, 2021 and was amended on October 22, 2021.

We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. Also, on July 10, 2021, the Cyberspace Administration of China (“CAC”) issued a revised draft of the Measures for Cybersecurity Review for public comments, or the Revised Draft, which required that, among others, in addition to “operator of critical information infrastructure”, any “data processor” controlling personal information of no less than one million users (which to be further specified) which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities.

Except for the Basic Law, national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong. National laws and regulations relating to data protection, cybersecurity and the anti-monopoly have not been listed in Annex III and so do not apply directly to Hong Kong.

We do not believe that we are currently required to obtain any permission or approval from the China Securities Regulatory Commission, CAC or any other regulatory authority in the PRC for our operations, the trading of our securities on the OTC Markets and the issuance of our securities to foreign investors.

Nevertheless, the laws and regulations in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties. To the extent any PRC laws and regulations become applicable to us, we may be subject to the risks and uncertainties associated with the legal system in the PRC, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice.

The following table presents an overview of the results of operations for the three months ended September 30, 2021 and 2020:

Revenue decreased by approximately $27,000 or 59.6% for the three months ended September 30, 2021 as compared to the same period of 2020. The decrease was mainly due to the decrease in the number of customers from mainland China resulting from the prolonged COVID-19 travel restriction and quarantine measures imposed by Hong Kong government during three months ended September 30, 2021.

Cost of sales represented commissions paid to individuals or companies who referred customers to us. The amount decreased by approximately $28,000 or 59.9% for the three months ended September 30, 2021 as compared to the same period of 2020. The decrease was in line with the decrease of revenue.

Gross margin was 0% for the three months ended September 30, 2021 as compared to the 0% for the same period of last year. The gross margin is consistent for both periods.

General and administrative expenses consist primarily of stock-based payments, employee salaries, office rents, insurance costs, general office operating expenses (e.g. utilities, repairs and maintenance) and professional fees. General and administrative expenses increased by approximately $16,000 or 26.5% for the three months ended September 30, 2021 as compared to the same period of 2020. The increase was primarily due to additional legal fees incurred in connection with the Reverse Split in the three months ended September 30, 2021.

As a result of the factors described above, net loss for the three months ended September 30, 2021 increased by approximately 15,000 or 25.0% as compared to the same period of 2020.

The following table presents an overview of the results of operations for the six months ended September 30, 2021 and 2020:

Revenue decreased by approximately $37,000 or 54.8% for the six months ended September 30, 2021 as compared to the same period of 2020. The decrease was mainly due to the decrease in the number of customers resulting from the prolonged COVID-19 travel restriction and quarantine measures imposed by Hong Kong government during the six months ended September 30, 2021.

Cost of sales represented commissions paid to individuals or companies who referred customers to us. The amount decreased by approximately $36,000 or 54.2% for the six months ended September 30, 2021 as compared to the same period of 2020. The decrease was in line with the decrease of revenue.

Gross margin was 0% for the six months ended September 30, 2021 as compared to the 1.3% for the same period of last year. The lower gross margin in 2021 compared to 2020 was because our commission costs for the six months ended September 30, 2020 were relatively lower. During the six months ended September 30, 2021, we slightly increased our commissions for renewals for clients referred by YeeTah Financial from the previous year.

General and administrative expenses increased by approximately $41,000 or 29.0% for the three months ended September 30, 2021 as compared to the same period of 2020. The increase was primarily due to additional legal fees incurred for the Reverse Split in the six months ended September 30, 2021.

As a result of the factors described above, net loss for the six months ended September 30, 2021 increased by approximately $46,000 or 34% as compared to the same period of 2020.

Our reporting currency is the United States dollar. Our operations are principally conducted in Hong Kong where the Hong Kong dollar is the functional currency.

Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the statements of operations and comprehensive income.

The exchanges rate used for translation from Hong Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system in Hong Kong. This pegged rate was used to translate our balance sheets, income statement items and cash flow items for both the three and six months ended September 30, 2021 and 2020.

We have financed our operations primarily through cash generated by operating activities, equity financings and advances from our principal stockholder. We are a holding company and conduct substantially all of our operations through YeeTah, which is our only entity that has cash inflows and outflows. Our expenses are paid directly either by YeeTah or our principal stockholder. There have been no cash and any asset transactions between us and our subsidiaries since the Share Exchange. As of September 30, 2021 and March 31, 2021, we had $29,242 and 35,605, respectively, in cash and cash equivalents, which primarily consisted of cash deposited in banks.

Our working capital requirements mainly comprise of commissions paid to technical representatives and referral fees, office administrative costs and employee salaries. Historically, our capital requirements were generally met by cash generated from our operations, equity financings and funding from our principal stockholder. In light of impact on our operations from the civilian protests in Hong Kong and the COVID-19 epidemic in China and Hong Kong, we undertook certain cost cutting measures, including but not limited to, relocating to a new office with a much lower rent and reducing the number of employees. Discretionary expenditures are also curtailed or reduced to save costs. In addition to adjusting our operating expenditures, we will continue to seek opportunities of equity financings and financial supports from our principal stockholder. Although historically we were successful in obtaining equity financings through the sales of our securities and obtaining loans from our principal stockholder, the availability of such financings when required is dependent on many factors beyond our control, such as the unforeseeable impact from COVID-19 and the recovery of the Hong Kong economy following the civilian protests.

Net cash used in operating activities was approximately $194,000 for the six months ended September 30, 2021, compared to net cash used in operating activities of approximately $163,000 for the same period of 2020, representing an increase of approximately $31,000 in the net cash outflow in operating activities. The increase in net cash used in operating activities was primarily due to an increase of net loss of $46,000 in the six months ended September 30, 2021 as compared to the same period of 2020 and the following major working capital changes:

Net cash used in investing activities was approximately $115,000 for the six months ended September 30, 2020, which was attributable to the cash used in the Share Exchange.

Net cash generated from financing activities was approximately $187,000 for the six months ended September 30, 2021, which was attributable to the net results of: (i) stockholder advances of approximately $211,000; (ii) share issuance proceeds of $200,500; (iii) repayment of related party of $200,500 and payment of $24,000 issuance costs for share issued in the period.

Net cash generated from financing activities was approximately $270,000 for the six months ended September 30, 2020, which was attributable to the net results of: (i) stockholder advances of approximately $260,000; (ii) repayment of stockholder advances of approximately $10,000; and (iii) capital contribution of $19,747 from a stockholder.

We have no material commitments for the next twelve months. We will, however, require additional capital to meet our liquidity needs.

Please refer to the notes to the Company’s condensed consolidated financial statements included in this Report for details of critical accounting policies. There were no areas requiring significant management judgments and estimates for the periods covered by this Report.

As of September 30, 2021, the Company did not have any material off-balance sheet arrangements that had or were reasonably likely to have any effect on their respective financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our chief executive officer and chief financial officer to allow timely decisions regarding required disclosure.

Under the supervision of our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of September 30, 2021 due to the material weakness in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) lack of proper segregation of duties and risk assessment process; (ii) lack of formal documentation in internal controls over financial reporting; and (iii) lack of independent directors and an audit committee. We will devote resources to remediate these material weaknesses as we grow and such resources required for implementing proper internal controls for financial reporting are available.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are not currently a party to any material legal or administrative proceedings. We may from time to time be subject to legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.

We are a smaller reporting company and accordingly we are not required to provide information required by this Item.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

i Florida		i 59-3564984
(State or other jurisdiction		(IRS Employer
of incorporation or organization)		Identification No.)

i Room 715, i 7F, i The Place Tower C i No. 150 Zunyi Road i Changning District, i Shanghai, i China		i 200051
(Address of principal executive offices)		(Zip Code)

	●	the impact (including travel and entry restrictions and quarantine) of public health epidemics, including the COVID-19 pandemic in China, Hong Kong and the rest of the world, on the market we operate in and our business, results of operations and financial condition;

	●	the impact of political uncertainty and social unrest in Hong Kong and laws, rules and regulations of the Chinese government aimed at addressing such unrest;

	●	the market for our services in Hong Kong and Mainland China;

	●	our expansion and other plans and opportunities;

	●	our future financial and operating results, including revenues, income, expenditures, cash balances and other financial items;

	●	current and future economic conditions in Hong Kong and China;

	●	the future growth of the Hong Kong insurance industry as a whole and the professional insurance intermediary sector in particular;

	●	our ability to attract customers, further enhance our brand recognition;

	●	our ability to hire and retain qualified management personnel and key employees in order to enable them to develop our business;

	●	changes in other applicable laws or regulations in Hong Kong related to or that could impact our business;

	●	our management of business through a U.S. publicly-traded and reporting company and the general reputation and potential scrutiny of U.S. publicly-traded companies with their principal operations in Hong Kong and China; and

	●	other assumptions regarding or descriptions of potential future events or circumstances described in this Report underlying or relating to any forward-looking statements.


	September 30, 2021			March 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	i 29,242		$	i 35,605
Accounts receivable		i 5,557			i 2,250
Prepaid expenses		i 21,925			i 42,526
Deferred assets		i —			i 70,673
Total current assets		i 56,724			i 151,054

Total assets	$	i 56,724		$	i 151,054

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable & accrued liabilities	$	i 19,308		$	i 5,055
Due to related parties		i 526,250			i 556,497

Total current liabilities		i 545,558			i 561,552

Stockholders’ equity deficit:
Preferred stock, $ i i 0.0001 / par value, i i 5,000,000 / shares authorized, i i 545,386 / and i i 913,500 / issued and outstanding		i 54			i 91
Common stock, $ i i 0.0001 / par value, i i 200,000,000 / shares authorized, i 208,084 and i 56,268 shares issued and i 207,611 and i 55,796 shares outstanding		i 624			i 169
Subscription receivable		( i 48,718	)		( i 48,718	)
Treasury stock, i 473 and i 473 shares at cost		( i 60,395	)		( i 60,395	)
Additional paid-in capital		i 9,443,219			i 9,337,310
Accumulated deficit		( i 9,823,618	)		( i 9,638,955	)
Total stockholders’ deficit		( i 488,834	)		( i 410,498	)

Total liabilities and stockholders’ deficit	$	i 56,724		$	i 151,054


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2021			2020			2021			2020
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	i 18,608		$	i 46,020		$	i 30,218		$	i 66,900
Cost of sales		i 18,608			i 46,419			i 30,218			i 65,997
Gross profit		—			( i 399	)		—			i 903

Operating expenses
General & administrative expenses	$	i 75,580		$	i 59,740		$	i 183,703		$	i 142,449
Total operating expenses		i 75,580			i 59,740			i 183,703			i 142,449

Loss from operations		( i 75,580	)		( i 60,139	)		( i 183,703	)		( i 141,546	)

Other (income) expense
Finance costs		i 64			( i 77	)		i 960			—
Other (income) expense, net					i 231						( i 3,290	)
Total other expense (income)		i 64			i 154			i 960			( i 3,290	)

Income(loss) before income taxes		( i 75,644	)		( i 60,293	)		( i 184,663	)		( i 138,256	)

Net income(loss)	$	( i 75,644	)	$	( i 60,293	)	$	( i 184,663	)	$	( i 138,256	)

Earnings per share of common stock:
Basic	$	( i 0.36	)	$	( i 1.09	)	$	( i 1.08	)	$	( i 2.51	)
Diluted		( i 0.36	)		( i 1.09	)	$	( i 1.08	)		( i 2.51	)

Weighted average basic & diluted shares outstanding:
Preferred stock		545,386			13,500			i 548,080			i 13,500
Common stock		207,553			55,129			i 170,831			i 55,126


	September 30, 2021			September 30, 2020
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	( i 184,663	)	$	( i 138,256	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		—			i 167
Net (gain)/loss from write-off of fixed assets		—			i 543
Changes in working capital:
Accounts receivable & other receivable		( i 3,037	)		( i 7,277	)
Prepaid expenses		i 20,601			( i 19,925	)
Accounts payable & accrued liabilities		i 14,253			( i 11,785	)
Due to a related party		( i 40,738	)		i 13,574
Net cash used in operating activities		( i 193,854	)		( i 162,959	)

Cash flows from investing activities:
Deferred costs related to reverse acquisition		—			( i 115,000	)
Net cash provided by (used) in investing activities		—			( i 115,000	)

Cash flows from financing activities:
Proceeds borrowed from related parties		i 210,991			i 259,957
Payments to related parties		( i 200,500	)		( i 10,009	)
Share issuance proceeds		i 200,500			—
Costs related to equity financing		( i 23,500	)		—
Contribution from stockholders		—			i 19,747
Net cash provided by (used) in financing activities		i 187,491			i 269,695

EFFECT OF EXCHANGE RATE CHANGES ON CASH		—			—
NET INCREASE (DECREASE) IN CASH		( i 6,363	)		( i 8,264	)
CASH, BEGINNING OF PERIOD	$	i 35,605		$	i 62,780
CASH, END OF PERIOD		i 29,242			i 54,516

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	—		$	—

QDM International Inc. – ‘10-Q’ for 9/30/21

On: Monday, 11/15/21, at 3:23pm ET · For: 9/30/21 · Accession #: 1731122-21-1923 · File #: 0-27251

Previous ‘10-Q’: ‘10-Q’ on 8/10/21 for 6/30/21 · Next: ‘10-Q’ on 2/2/22 for 12/31/21 · Latest: ‘10-Q’ on 2/14/24 for 12/31/23 · 1 Reference: To: QDM International Inc. – ‘8-K12G3’ on 5/1/20 for 4/8/20

Quarterly Report — Form 10-Q

Filing Table of Contents

‘10-Q’ — Quarterly Report

Document Table of Contents

This is an HTML Document rendered as filed. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

1 Previous Filing that this Filing References

Large accelerated filer	☐	Accelerated filer	☐
i Non-accelerated filer	☒	Smaller reporting company	i ☒
		Emerging growth company	i ☐

Cautionary Note Regarding Forward-Looking Statements		ii

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

PART II – OTHER INFORMATION		23

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24

SIGNATURES		25

	Level 1:		Quoted prices (unadjusted) in active markets for identical assets or liabilities.

	Level 2:		Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.

	Level 3:		Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Name of related parties		Relationship with the Company
Siu Ping Lo		Responsible officer of YeeTah and former director of YeeTah (resigned on December 31, 2019)
Huihe Zheng		Principal Stockholder, Chief Executive Officer and Chairman of the Company
YeeTah Financial Group Co., Ltd.		A company controlled by Siu Ping Lo
Tim Shannon		Chief Financial Officer of the Company

	(i)	During the six months ended September 30, 2021 , YeeTah Financial Group Co., Ltd. (“YeeTah Financial”) charged YeeTah US$ i 30,218 (2020: US$ i 65,997) commission expenses in relation to insurance referral services rendered by YeeTah Financial.

	(ii)	During the six months ended September 30, 2021, the Company received i 0nil (2020: US$ i 19,747) in capital contributions from Tim Shannon for working capital uses.

	(ii)	During the six months ended September 30, 2021, the Company received $ i 210,991 (2020: US$ i 259,957) in stockholder advances from Mr. Zheng for working capital uses. The Company repaid Mr. Zheng $ i 200,500 during the six months ended September 30, 2021.

Schedule of Related Party Transactions
	September 30, 2021		March 31, 2021
	US$		US$
Huihe Zheng		i 526,250		i 533,590
YeeTah Financial		—		i 22,907
Total		i 526,250		i 556,497

	September 30, 2021		March 31, 2021
	US$		US$
Huihe Zheng		i 48,718		i 48,718

	For The Three Months Ended			For The Three Months Ended
	September 30, 2021			September 30, 2020
Revenue	$	18,608		$	46,020
Cost of sales		18,608			46,319
Gross profit		—			(399	)
Operating costs and expenses:
General and administrative expenses		75,580			59,740
Total operating costs and expenses		75,580			59,740
Loss from operations		(75,580	)		(60,139	)
Total other income (expenses)		(64	)		(154	)
Net loss	$	(75,644	)	$	(60,293	)

	For The Six Months Ended			For The Six Months Ended
	September 30, 2021			September 30, 2020
Revenue	$	30,218		$	66,900
Cost of sales		30,218			65,997
Gross profit		—			903
Operating costs and expenses:
General and administrative expenses		183,703			142,449
Total operating costs and expenses		183,703			142,449
Loss from operations		(183,703	)		(141,546	)
Total other income (expenses)		(960	)		3,290
Net loss	$	(184,663	)	$	(138,256	)

Number		Description
2.1		Agreement and Plan of Merger, incorporated herein by reference to Exhibit 2.1 to the Company’s Form 8-K filed May 1, 2020
3.1		Articles of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 1, 2020
3.2		Bylaws, incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K filed May 1, 2020
31.1*		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	QDM International Inc.

Dated: November 15, 2021	By:	/s/ *Huihe Zheng*
		Name:	Huihe Zheng
		Title:	President and Chief Executive Officer (Principal Executive Officer)

Dated: November 15, 2021	By:	/s/ *Tim Shannon*
		Name:	Tim Shannon
		Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

This ‘10-Q’ Filing	Date	Other Filings

	3/31/22	10-K
Filed on:	11/15/21
	11/10/21
	10/22/21	10-K/A
For Period end:	9/30/21
	8/10/21	10-Q
	7/12/21	10-K
	7/10/21
	7/6/21
	6/30/21	10-Q, NT 10-K
	5/17/21	4
	4/29/21	8-K
	3/31/21	10-K, 10-K/A, NT 10-K
	10/21/20	4
	9/30/20	10-Q, NT 10-Q
	6/30/20	10-Q
	3/31/20	10-Q
	12/31/19	10-K, NT 10-K
	4/1/18
	12/29/17
		List all Filings